BUSINESS WITH PERSONALITY

THE MAN
ALASTAIR COOK EYES WHO RUNS
UP ENGLAND CAPTAINCY THE IVY
ASHES HERO INTERVIEW P29 RESTAURANTS
P27
Issue 1,367 Tuesday 19 April 2011 www.cityam.com FREE

SINKING SHIPS
■ S&P’s downgrade
of US debt outlook
■ US told it must
slash budget deficit
■ Eurozone yields
soar as sovereign
dipped over
2%, but
recovered
EURO
to close
rocks global markets or lose AAA-rating debt crisis intensifies DOW
down 1.14%
VS
YEN

WORLD ECONOMY expected to reject the Republicans’ lat- unprecedented levels, with two-year
▲

BY JULIAN HARRIS AND JULIET SAMUEL
SOVEREIGN debt fears gripped mar-
kets on both sides of the Atlantic yester-
day, after the US’s triple-A debt rating
was put on a negative outlook by rat-
ings agency Standard & Poor’s and
investors moved to price in a Greek
restructuring as early as June.
Greece’s deteriorating public
finances have sparked worries that a
restructuring could set off a chain reac-
tion of bank collapses and threaten the
viability of the single currency.
And in Washington, S&P’s shock
warning was provoked by the “materi-
al risk that US policymakers might not
reach an agreement” over how to solve
its colossal government deficit.
The US government’s debt stands at
$14.27 trillion (£8.8 trillion) while the
annual deficit is around $1.4 trillion.
Debt is predicted to reach 84 per
cent of GDP by 2013, S&P announced in
its statement yesterday.
“We see the path to agreement as
challenging because the gap between
the parties remains wide,” S&P said, in
reference to ongoing clashes between
Democrat and Republican proposals
for deficit reduction.
The Democrat-controlled Senate is
est proposal to slash $5.8 trillion of fed-
eral spending in the next 10 years.
Last week President Obama attacked
the proposals, which would involve
reforms to America’s large state-fund-
ed healthcare programme, Medicare.
Even if a settlement is reached,
“implementation could take time,”
S&P warned. And future politicians
“could decide to at least partially
reverse fiscal consolidation”, it added.
Obama’s government swiftly hit
back at the accusation.“We believe
S&P’s negative outlook underestimates
the ability of America’s leaders to come
together to address the difficult fiscal
challenges facing the nation,” said
Mary Miller, a senior Treasury official.
Shorter-dated US Treasury debt
prices rose as investors scrambled for
the lowest-risk investments. But even
though 30-year bonds reversed early
gains to trade negative in price, the 10-
year yield remained comfortably under
3.5 per cent and 10-year prices posted
modest gains in the afternoon.
In Europe, reports that Germany is
not expecting Greece to make it
through the summer without
defaulting on its debt caused turmoil
in debt markets.
The yield on Greek debt reached
rates soaring over 20 per cent. dipped to 116.72
The cost of insuring Athens’ paper yen (from Y119.96
has also risen to eye-watering levels: it on Friday)
now costs more than €1.15m (£1m) to 2 years at 20.3%
insure €10m of five-year Greek debt
with a five-year credit default swap.
The Eurozone does not have a plan
for how to handle a default, with fears
for the single currency sending yields GREEK fell 1.3% in
up even in Spain, which analysts had BOND the futures
declared to be immune to contagion. YIELD
Madrid saw demand drop, selling market to
€4.7bn of 12- and 18-month bonds. The OIL $121.84 a
average yield of 2.77 per cent was a sub-
stantial increase on the 2.13 per cent at barrel
its last equivalent sale.
Analysts expect the resulting hair-
cuts on Athens’ debt to set off another
financial crisis in Greece, where
domestic banks have heavy exposure to
the sovereign.
International banks will also suffer: SPANISH
Barclays has €4.6bn of exposure to BOND
YIELD
Greek debt and Societe Generale has
GOLD hit a high of
€4bn of exposure.
Meanwhile, a rush to “safe havens” PRICE $1,497.20 an ounce.
saw gold rally, touching $1,497.20 an Spot gold rose 0.8
ounce. Brent Crude dropped to a ses-
sion low of $121, also affected by per cent to
Sunday’s announcement of a cut in 2 years at 3.6% $1,495.60 an ounce
March’s output from Saudi Arabia.
MORE: ALLISTER HEATH P2

FTSE 100 ▼5,870.08 -125.93 DOW ▼12,201.59 -140.24 NASDAQ ▼2,735.38 -29.27 £/$ 1.62 ▼-0.01 £/¤ 1.14 ▲+0.01 ¤/$ ▼1.42 -0.02 Certified Distribution
28/02/11 - 03/04/11 is 105,180
 2 News
Decision time for profligate America
EDITOR’S LETTER
ALLISTER HEATH
IT pains me deeply to have to write this
but America could already be in termi-
nal decline. Like in many other
Western countries, a short-termist and
self-interested political elite has con-
vinced a deluded electorate that low-
ish levels of tax can go hand-in-hand
with exploding amounts of public
spending, forever. They can’t. America
faces three choices: either long-term
bankruptcy; or the adoption of a
European style social democracy with
much higher taxes funding a bloated
welfare state, as many Democrats
would like; or the unwinding of many
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WHAT THE OTHER PAPERS SAY THIS MORNING
UKRAINE’S RICHEST MAN SNAPS UP A
WINDOW ON HYDE PARK FOR £136M
Rinat Akhmetov, Ukraine’s richest
man, has bought the UK’s most
expensive flat at the One Hyde Park
residential development in London’s
Knightsbridge. Akhmetov was behind
the purchase of the penthouse, which
sold for £136.6m. The identities of
buyers at One Hyde Park have been
one of London’s best-kept secrets,
closely guarded by confidentiality
agreements with developers and pro-
tected by offshore ownership struc-
tures and Swiss corporate advisers.
PGI TAKES UP A MAJORITY STAKE IN
FINISTERRE CAPITAL
US asset manager Principal Global
Investors has taken a majority stake
in Finisterre Capital – netting the
London-based hedge fund’s five
founders an estimated $52m (£32m).
The move is another example of long-
spending programmes and the return
to a small government model, as pro-
posed by the Republicans’ Paul Ryan.
Given that the US budget deficit will
be close to 10 per cent of GDP this year,
and that the IMF thinks the US will
eventually need a fiscal consolidation
worth 11.3 per cent of GDP to stabilise
the national debt, Standard & Poor’s
was right to slap a negative outlook on
America’s AAA credit rating yesterday.
America’s fiscal challenge is even
greater than that facing the UK or
most other rich nations, as document-
ed by Michael Tanner of the Cato
Institute in his paper, Bankrupt:
Entitlements and the Federal Budget.
Over the past 40 years, federal spend-
ing (excluding states and local govern-
ments) has averaged about 21 per cent
of GDP, while revenues have been
roughly 16.6 per cent of GDP, leaving a
smallish structural deficit (the highest
ever tax take was 20.6 per cent of GDP
in 2001). That deficit wasn’t ideal – but
it wasn’t a catastrophe either because
the economy grew by roughly that
AV campaign
support falls
POLITICS
▲
BY STEVE DINNEEN
CAMPAIGNERS supporting a change
to voting rules are set to suffer an
embarrassing defeat in next month’s
referendum according to a new
Guardian/ICM poll.
The Lib Dem-backed motion to
introduce the alternative vote (AV),
which is also supported by senior
Labour politicians, trails the No cam-
paign by 16 points, after leading by
two points just two months ago.
The poll follows a week of growing
animosity between the two sides,
with George Osborne questioning the
involvement of the Electoral Reform
Society in the Yes campaign.
Three quarters of Conservatives are
planning to vote against the change
and a small majority of Labour sup-
porters are also opposed. Two thirds
awaited hedge fund and asset man-
agement industry consolidation.
VOLKSWAGEN REVAMPS BEETLE
Volkswagen has unveiled the first
redesign of the Beetle since the
German carmaker relaunched its
best-known model in 1998. The style
of the latest incarnation draws on the
shape of the original Beetle, which
made its debut in 1938, before being
revamped 60 years later as the New
Beetle.
EVACUATION OF MISURATA BEGINS
International aid agencies began to
evacuate thousands of stranded civil-
ians from the besieged rebel city of
Misurata yesterday, despite continued
shelling of its population by Libyan
government troops. As efforts intensi-
fied to contain the humanitarian cri-
sis Libya’s third largest city, about
1,000 people boarded a ship sent by
the International Organisation for
Migration, a UN agency.
same amount, which meant that the
debt to GDP ratio was relatively con-
trolled. However, the tax take now is
just 14.9 per cent or so – while spend-
ing has soared, mostly permanently.
The problem is 0this is not merely
cyclical: a recovery would increase
receipts and cut spending, but not by
enough – and if there is no change to
current policies, Tanner calculates, by
2050 federal government spending
will exceed 42 per cent of GDP. Adding
in state and local spending, the state in
its entirety would consume nearly 60
per cent of everything produced in the
US. Assuming it hadn’t gone bust by
then, America would have been trans-
formed into a socialist country, a point
made by Dambisa Moyo in her best-
selling How the West was Lost.
The main reason why spending is
out of control are “entitlement” pro-
grammes, especially social security
(state pensions) and Medicare (health
care for pensioners), which provide the
middle classes with vast benefits – and
as such have been deemed untouch-
of Lib Dems will vote in favour of AV.
A significant number of people –
23 per cent – say they are still unde-
cided.
The latest poll, unlike those preced-
ing it, includes Northern Ireland. This
group was expected to vote in favour
due to differences in their voting sys-
tem, making the latest poll even
more depressing for the Yes camp.
National voting intentions swung
slightly in favour of Labour, with 37
per cent, compared to the Tories on
35 per cent, down two, and the Lib
Dems trailing on 15 per cent.
Animosity intensified
this week, with
chancellor George
Osborne hitting out at
the Yes campaign
BRANSON TO CREATE SANCTUARY FOR
LEMURS
Sir Richard Branson has triggered a
conservation row over a plan to
import lemurs to the Caribbean, half
a world away from their natural habi-
tat in Madagascar. The British entre-
preneur said ringtailed lemurs would
be transported and released into the
rainforest of Moskito island, a tropi-
cal hideaway he owns in the British
Virgin Islands.
PRICES FOR AGRICULTURAL LAND HIT
RECORD HIGH
Agricultural land prices in Britain
have hit record levels following the
surge in global food prices, according
to figures from Savills. An acre of
prime arable land in East Anglia is
fetching up to £8,500 compared with
around £3,000 in 2005, with demand
driven by the dramatic increase in
wheat prices over the past year.
able (and were increased hugely by
Bush, whose spending policies would
have made even Gordon Brown blush).
Yet by 2050, those two programmes
plus Medicaid will consume 18.4 per
cent of GDP as the population ages and
the cost of medical care rockets.
The left’s answer is higher taxes. But
in a report from the Mercatus Center
at George Mason University, Veronique
de Rugy and Jason J. Fichtner calculate
that the bottom 50 per cent of earners
pay a mere 2.7 per cent of federal
income tax revenues. The top one per
cent already pay 38 per cent and the
top 10 per cent pay 69.9 per cent. A bit
more tax could be wrung out of the
system – but only a national value
added tax would raise real money.
If that were to happen, however, the
battle would have been won by those
seeking to turn America into a
European style social democracy, in
itself a recipe for gentle decline. It’s
decision time for America.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Pietro Ferrero, joint chief executive of chocolate-maker Ferrero, died yesterday
Ferrero Rocher chief dies
CONSUMER
▲
BY EUGENIO MONTESANO
PIETRO Ferrero, joint chief executive
of the Italian chocolate-making
group Ferrero, has died in an acci-
dent.
The confectionery giant behind
Nutella spread and Rocher chocolates
said in a statement that Pietro, 48,
was riding a bike during a training
run in Cape Town while on a business
trip to South Africa when he fell off.
Ferrero, which in over 60 years has
RESPITE FOR SOUTHERN CROSS ON
COVENANTS
Embattled care homes operator
Southern Cross saw its shares surge
7.1 per cent after it reached an agree-
ment with lenders to postpone
covenant tests by a month. The com-
pany said its lenders were aware of an
“impending covenant breach” and
therefore agreed terms that would
allow it to postpone a covenant test
until 31 May.
ORANGE TELLS CALL CENTRE WORKERS
THEY CAN KEEP THEIR JOBS IF THEY
RELOCATE TO THE PHILIPPINES
Orange has apologised after telling its
employees they could only keep their
call centre jobs if they moved to new
offices... in the Philippines. The firm
told 40 night shift workers at its
Darlington call centre that they could
take alternative, less lucrative roles, or
relocate 7,000 miles to Manila.
CITYA.M. 19 APRIL 2011
NEWS | IN BRIEF
Twitter in talks to buy Tweetdeck
Twitter is believed to be in advanced
talks to buy TweetDeck for around
$50m (£30.7m). TweetDeck – a third-
party app designed to integrate with
Twitter – filters conversations based on
keywords and messages, while allowing
users to write tweets in excess of the
default 140 character limit. TweetDeck
has at least 15 employees, the majority
of which are located in the UK. Twitter
and TweetDeck have worked closely
together in the past, according to the
Wall Street Journal which originally
reported the talks. A Twitter spokesman
declined to comment.
GLG to limit size of key fund
GLG Partners, a hedge fund firm with
$23bn (£14bn) of assets under manage-
ment, is closing its market neutral fund
to new investors when it grows beyond
$1bn. A spokesperson confirmed the
move to City A.M. last night, adding that
the move doesn’t mark a change in fund
management strategy for the company,
but said that it was a move specifically
related to performance, with this size
optimal in enabling it to exit or enter
new positions relatively quickly.
turned itself into a €6bn (£5.25bn)
business without making an acquisi-
tion, has recently expressed its inter-
est in buying Parmalat, the
multinational Italian dairy and food
corporation, to keep it out of foreign
hands.
The business is still family-owned
and patriarch Michele Ferrero, son of
company founder Pietro Ferrero, the
man who invented Nutella in 1946, is
Italy’s richest man with a personal
wealth of $17bn (£10.45bn), according
to Forbes.
NOMURA PLANS SHAKE-UP IN EUROPE
Nomura is set for a shake-up of its
senior ranks in Europe as part a
wholesale review of its staff, accord-
ing to people familiar with the situa-
tion. The Japanese bank plans to
replace underperformers and cut
employees in areas where it decides it
can't afford to compete. William
Vereker, co-head of global investment
banking at Nomura, is understood to
be keen to “upgrade the talent pool,”
according to one person close to the
bank.
BMW HALTS SHIPMENTS TO
ARGENTINA
Germany’s BMW AG suspended
exports to Argentina because of
import restrictions imposed by the
South American country’s govern-
ment, a spokesman said yesterday.
Currently around 700 BMW vehicles
are stuck in Argentine customs.
CITYA.M. 19 APRIL 2011 News 3

Banks cleared after

The Lloyd’s build-
ing at the heart of
the City

Picture:

probe into Parmalat

Micha Theiner
/ City A.M.

investors at the time of the Parmalat

▲
BANKING
BY HARRY BANKS
A COURT in Milan has cleared
Citigroup, Bank of America,
Deutsche Bank and Morgan Stanley
of market-rigging in a high-profile
trial related to the 2003 collapse of
food giant Parmalat.
The four international banks had
been charged for allegedly helping
the Italian food group mislead
scandal, dubbed Europe’s Enron.
An Italian prosecutor had asked
earlier this year that they should be
fined and that about €120m (£105m)
of their profits should be impound-
ed.
The four banks had repeatedly
denied any wrongdoing. The Milan
court also cleared all the executives
at the four banks that had been
charged in the trial.

Hammerson’s
Nelson to be
Lloyd’s chair
build on its position as the pre-emi-
▲

INSURANCE
BY ALISON LOCK
JOHN Nelson, chairman of shopping
centre developer Hammerson, was
named the next chair of the Lloyd’s of
London insurance market yesterday.
Nelson, who is also deputy chair-
man of home improvement firm
Kingfisher, will take over from long-
standing chair Lord Levene in October.
He will receive a £525,000 salary
plus benefits for the post, which will
take up about three days of his time
per week, Lloyd’s revealed. He will
retire from Kingfisher this year.
“It is a great honour for me to
accept this role and I look forward to
playing my part in steering the
world’s leading insurance market
through the next stage of its evolu-
tion,” he said in a statement.
Richard Ward, Lloyd’s’ chief execu-
tive, said: “John’s business experience
makes him the perfect candidate to
take on this role and help Lloyd’s
nent market for specialist insurance.”
A chartered accountant and invest-
ment banker, Nelson’s City career
spans more than 30 years at
Kleinwort Benson and then Lazard,
where he was head of corporate
finance and vice chairman. He
became chairman of Credit Suisse
First Boston Europe in 1999 but
retired in 2002 and took a series of
directorships in major UK companies.
As Hammerson chairman, Nelson
successfully led it through a difficult
recession and £584m rescue rights
issue in 2009 to a strong recovery.
Levene, a former government advis-
er and banker, steps down after nine
years leading Lloyd’s.
He is widely credited with restoring
the group to financial health and
expanding it into major emerging
economies. He also oversaw its adop-
tion of new technologies on the trad-
ing floor, replacing the brokers’
paper contract slips with iPads.

City veteran tries insurance

INSURANCE served as a non-executive director at
▲

BY ALISON LOCK BT, and is now chairman of real

INVESTMENT banker turned indus-
try leader John Nelson is to fill the
large shoes left by Lloyd’s chairman
Lord Peter Levene from October.
A City grandee whose finance
career started at Kleinwort
Benson and continued at
Lazard, where he ran its
corporate finance divi-
sion for 13 years, Nelson
is now best known for
his leadership of bell-
wether UK companies.
He retired from
finance in 2002 after
three years as chairman
of Credit Suisse First
Boston Europe, saying he
did not want to miss the
opportunity to do
other things in
business.
He has
since
JOHN NELSON
estate giant Hammerson and
deputy chair of DIY specialist
Kingfisher.
Nelson has remained a voice in
the City, advising European buyout
house Charterhouse, and has held
non-executive roles at JP
Morgan Cazenove and
Woolwich in the past.
While he has not
worked in insurance
before, nor had Levene
upon his arrival. Levene
describes Nelson as “an
experienced businessman
with a successful record”.
Levene, who joined
Lloyd’s nine years ago, is its
longest-serving chairman in
125 years. He is also chair-
man of new bank
NBNK.
 4 News
Nomos prices
share offer to
raise £443m
▲
CAPITAL MARKETS
BY RICHARD PARTINGTON
RUSSIAN private bank Nomos has
priced its London share offer at the
higher end of expectations, as the fal-
tering market for listings in the capital
begins to show signs of life.
Nomos will look to sell ordinary
shares in Moscow for $35 (£21) apiece,
while it will sell global depository
receipts (GDRs) for $17.50 per unit in
London, valuing the business at
$3.2bn.
The combined proceeds from the
initial public offering (IPO) for the
bank will be $718m (£443m) before the
exercise of an over-allotment option.
The bank, which is Russia’s eighth
biggest by total assets, had initially
looked for between $32 and $37 per
ordinary share and $16 to $18.50 per
GDR.
Demand for the offer quickly filled
the order books of bankers at
Deutsche, Credit Suisse, Citi and VTB
Capital, leading to a tightening of the
price range late last week.
Slovakian businessman Roman
Korbacka will sell down almost all of
his stake in the bank, and could exit
Nomos completely if he exercises his
over-allotment option.
Meanwhile, billionaire oligarch
Alexander Mamut, who is best known
in Britain as the backer of blogging site
Livejournal, will become a cornerstone
investor in the firm when its shares
start trading early next week.
The deal could help to kick-start
London’s IPO market, following a tor-
rid few weeks for stock market listings
in the capital.
Several floats, including those of fel-
low Russian firm Euroset and British
vacuum technology group Edwards,
have been put on hold due to uncer-
tain market conditions.
Observers are also hoping a success-
ful listing by commodities colossus
Glencore could bolster investor
appetite for IPOs. The Swiss firm
unveiled its $11bn blockbuster offer-
ing last week, and is set to complete
next month.
MORE ON GLENCORE’S IPO: PAGE 9
Louis Vuitton parent LVMH has seen strong demand in Europe
LVMH bags massive profit
CONSUMER
▲
BY EUGENIO MONTESANO
LVMH, the world’s biggest luxury
retailer, posted a higher than expected
17 per cent jump in sales for the first-
quarter of 2011 yesterday, boosted by
double-digit revenue growth across all
segments.
Demand for its luxury line-up,
which includes brands like Louis
Vuitton, Givenchy, Moet and Chandon
and Christian Dior, delivered huge
returns as sales for the first three
Picture: GETTY
months of the year were €5.25bn
(£4.6bn), up from €4.47bn a year earli-
er, and a profit of €3.03bn.
Analysts had expected the three
months to March sales to be €4.97bn.
Organic growth reached 14 per cent,
the company said, above the expected
range of seven to 11 per cent.
The France-headquartered company
has reported strong performances in
the United States, Europe and Asia,
despite the earthquake that recently
shocked Japan – a key luxury market
for the company.
CITYA.M. 19 APRIL 2011
Bumper three
months for oil
firm Halliburton
ENERGY
▲
OIL services giant Halliburton beat
Wall Street forecasts with its quarterly
results yesterday, despite a $105m
(£64.6m) revenue hit from interna-
tional unrest and disruption.
Halliburton, which offers engineer-
ing, maintenance and equipment for
oil firms, reported net income of
$557m, excluding a $46m charge
linked to sanctions in Libya.
Production revenue for the first
three months of 2011 rose 62 per cent
on last year to $3.2bn, with continued
growth in unconventional oil sources
such as shale gas and heavy oil more
than making up for political issues in
northern Africa and the ban on deep-
water drilling in the Gulf of Mexico.
Halliburton was a contractor on the
Deepwater Horizon rig, which killed
11 workers and caused environmental
havoc when it exploded last April.
Drilling and evaluation revenue at
Halliburton rose 17 per cent to $2.1bn,
partly due to the start of work with
Exxon in Iraq.
“Going forward, I feel even more
confident about the prospects of our
North America business in 2011 and
beyond,” said chief executive Dave
Lesar. “We believe there is upside for
both revenue and margins as we
respond to the continued increases in
service intensity.”
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6 Focus on Citigroup
FAST FACTS | US BANK RESULTS SO FAR
● JP Morgan Chase kicked off the first-
quarter reporting season last Wednesday
with a dramatic recovery in earnings com-
pared to the start of 2010. Pre-tax profits
jumped 78 per cent to $8.06bn (£4.95bn).
● The investment bank recorded its second
most profitable quarter ever, with fees rev-
enue up 23 per cent on the first-quarter of
2010 at $1.79bn.
● The retail bank saw earnings drop, but
still made money, with pre-tax profit coming
in at $1.49bn.
● JP Morgan Chase was the first bank to
estimate its core tier one capital ratio under
stringent Basel III rules, putting it at 7.3 per
cent, above the overall minimum but likely
below the 10 per cent minimum for systemi-
cally important financial institutions.
● Earnings per share came in at $1.28, at
the high end of analysts’ expectations.
● Bank of America Merrill Lynch (BAML) was
next, reporting last Friday. It posted a surpris-
ingly sharp drop in first-quarter profits as
home foreclosures hit its mortgage business.
● Despite making a profit of $2bn
(£1.23bn), BAML, the largest US bank, lost a
staggering $2.39bn on its portfolio of home
loans.
● Income in the bank's retail division fell 49
per cent as service charges plunged, though
deposits were up.
● Investment bank revenue and profit also
fell from last year’s record quarter. Sales and
trading revenue was down 30 per cent, but
overall investment banking income was up
24 per cent.
● Earnings per share came in at the low end
of analysts’ expectations at $0.17.
Citi chief executive
Vikram Pandit still
has a herculean
task ahead
Picture: REUTERS
Revenues fall
at Citigroup
as costs rise
▲
BANKING
BY JULIET SAMUEL
CITIGROUP yesterday revealed a
slump in revenues and profits in its
quarterly results compared to last
year, emphasising the bank’s ongoing
fight to rein in its backlog of strug-
gling consumer business lines.
Revenues dropped 22 per cent year-
on-year to $19.7bn (£12.1bn), but the
figure was a seven per cent improve-
ment on the fourth-quarter of 2010.
Its cards business and retail bank-
ing lost 15 per cent of revenues and
seven per cent of sales compared to
last year.
Costs in the group’s core business
rose for the third consecutive quarter
to $9.6bn, despite a fall in credit costs,
with the bank blaming “higher spend-
ing on marketing and technology” in
North America. Compensation and
benefits costs rose four per cent to
$6.16bn.
The bank tried to sell an optimistic,
high-growth story to investors in its
presentation for analysts, highlight-
ing that “emerging markets repre-
sented over 50 per cent of Citicorp’s
earnings before tax”.
Patchy progress across the group’s
businesses continues to dog Pandit
C
ITI’S stock price shot up out of
the gate yesterday, rising to
$4.50 by lunchtime in New
York (or $45, as we’ll learn to
call it soon after the group’s upcom-
ing “reverse stock split”, which
merges every ten shares into one).
That a 5.7 per cent slump in pre-
tax profits was enough to beat expec-
tations points to chief executive
Vikram Pandit ongoing problems in
dragging this banking behemoth
out of the doldrums.
Admittedly, it wasn’t all glum
news: mortgage delinquencies have
continued a steady downward trend
and Citi Holdings has managed to
shift enough non-core assets to feed
through to less damaging losses on
CITYA.M. 19 APRIL 2011
But the figures show that the
Citicorp division’s pre-tax profits from
developing economies increased only
slightly from $2.9bn to $3.2bn.
Instead, recovery in pre-tax profits in
advanced economies fuelled the
improvement at the end of 2010,
jumping from $1bn to $2.9bn.
Citi Holdings, the group’s non-core
division, continued steady progress in
shrinking its balance sheet, with
assets decreasing by 6.2 per cent on
the previous quarter to $337bn.
In total, Citigroup plans to sell
$12.7bn of bad assets, such as sub-
prime loans and mortgage-backed
securities, which it said carried a “dis-
proportionately high” risk weighting
under the new Basel III capital rules.
ANALYSIS l Citigroup
5
$ 4.42
4.9
18 Apr
4.8
4.7
4.6
4.5
4.4
4.3
24 Jan 11 Feb 15 Mar 13 Apr
the bottom line.
But on the core side, steady
improvement seems elusive. Even
the bank’s non-retail businesses
went backwards compared to last
year, with revenues in investment
banking down 19 per cent and equi-
ty and fixed income dropping nine
and 22 per cent respectively.
American retail banks are having
a tough time, but Citi’s patchy recov-
ery extends beyond its consumer
business lines. Even with the return
of its dividend next quarter, Citi is
hard to get excited about.
BOTTOMLINE
Analysis by Juliet Samuel
CITYA.M. 19 APRIL 2011 News 7

Jupiter funds CITY VIEWS: COULD THE US CREDIT OUTLOOK DOWNGRADE

TRIGGER ANOTHER CRISIS? Interviews by Eugenio Montesano IN ASSOCIATION WITH

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“No, I think the institutions “Yes, I think there are many “Yes. It could, because it dam-
are better prepared, but fund- indicators of a possible dou- ages market confidence.
ing will be more expensive ble dip recession in the US. And Obama has his share of
now. Obama is I’m surprised the responsibilities –
▲

ASSET MANAGEMENT redeem part of their portfolio. not taking the UK didn’t get his administration
BY RICHARD PARTINGTON Jupiter had attracted £772m of new
money in the last quarter of 2010 and hard line like the downgraded as is not managing
JUPITER, the fund management firm £509m in the corresponding quarter UK has, but their well after posting the day – it’s not
run by Edward Bonham Carter (pic- a year ago. recovery looks its growth fig- taking tough
tured), brother of actress Bonham Carter’s firm said
Helena, has seen £333m of it expected its business to more sta- ures for decisions.”
net inflows over the first continue “in line with ble.” 2011.”
three months of this year management expecta-
despite volatile market tions”. Chief executive
conditions. Bonham Carter
The strong inflows,
helped by demand
from international
added: “Against
backdrop of volatile
markets and falling
a
Major Actelion investor backs board over activist
investors, boosted UK consumer dispos-
assets under manage- able income, Jupiter PHARMACEUTICALS favour the board, after 5.5 per cent commitment of their management or
▲

ment (AUM) to £24.5bn. has had a steady start shareholder Rudolf Maag voiced his the veracity of their board,” it said. “We
Mutual funds con- to 2011.” ACTIVIST hedge fund Elliott Advisors support last month. won’t change our minds now.”
tributed fresh investments Numis analyst James suffered a setback in its battle with “We have managed our investment Elliott, which holds around seven
worth £397m, driven by Hamilton said: “We Swiss biotech company Actelion yes- in Actelion actively over many years per cent of the firm, wants seven
the asset manager’s fund of believe another positive terday after a major shareholder and have enjoyed excellent returns,” members of the board to step down,
fund range. quarter for mutual fund backed the firm’s board. Zurich-based BB Biotech, a pure- including founder Jean-Paul Clozel,
It suffered outflows flows, despite a slowdown BB Biotech, which holds almost five biotech investor, said in a statement. and six directors of its choice to join.
of £71m, caused across the industry, under- per cent of Actelion’s shares, said it BB Biotech admitted it had been It has complained of poor corpo-
by a single lines the quality and would back all the board’s proposals “disappointed” by the results of some rate governance, criticised Actelion’s
client who resilience in the annual meeting on 5 May. past decisions taken by the board. drug pipeline and demanded a strate-
decided of the busi- It means about 15 per cent of “But we have never doubted the gic review viewed widely as a call for a
to ness.” Actelion’s shareholders now publicly competence of Actelion’s scientists, the sale or merger with another firm
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 8 News CITYA.M. 19 APRIL 2011

Fujitsu may not hit

broadband target
broadband rollout in order to hit rors” over its insistence BT should

▲
EXCLUSIVE
BY STEVE DINNEEN
THE TRUE cost of rolling out fibre
broadband to 5m homes in rural
areas could dwarf the figures
being discussed by Fujitsu, accord-
ing to industry experts.
Analysts at RBS have placed the
cost of providing fibre-to-the-prem-
ises (FTTP) to rural areas at around
£4.5bn – far above the £1.5bn to
£2bn projected by Fujitsu.
The Japanese hardware and IT
services company says it will need
to secure £500m of the £830m gov-
ernment funding earmarked for
the 5m homes target and will
pump in between £1bn and £1.5bn
of its own money.
However, industry sources say
there is no guarantee Fujitsu will
be able to secure the funding, for
which it will face fierce competi-
tion from rivals when it is released
in sections by the government.
The Japanese firm admitted the
entire project will be unviable if a
certain level of funding is not
secured, but was unable to disclose
the tipping point.
Sources at rival provider BT have
accused Fujitsu of “smoke and mir-
slash its wholesale prices for using
its duct and pole infrastructure as
part of the deal.
A Fujitsu spokesman told City
A.M.: “We have seen several price
estimates for the project but we
have studied this in depth and
think we have priced it right.”
Fujitsu is currently involved in a
£700m legal action with the NHS
over the failed project to electroni-
cally store the health records of
millions of UK patients. A
spokesman said this will not
impact on the broadband project.
MORE: GEEK SPEAK P26

Kheraj back at Barclays

BANKING chief executive of its international opera-

▲
BY ALISON LOCK
HIGH-flying banker Naguib
Kheraj is to return to his alma
mater Barclays as a part time sen-
ior adviser, the bank said yesterday.
Kheraj, who spent ten years at
Barclays from 1997, including three
years as its group finance director-
from 2004, has returned to advise it on
“a range of commercial and policy mat-
ters”, the bank said.
He is also taking the title
vice chairman, but will not
have a seat on the board.
The appointment follows
his surprise exit from Lazard
tion, to focus on his philanthropic work.
Kheraj, a protege of chief executive Bob
Diamond, has held a string of top positions
at banks, including chief executive at
JPMorgan Cazenove, asset manager Robert
Fleming and Salomon Brothers, which
became part of Citigroup.
He said: “This is a business and manage-
ment team I know well and admire. I look
forward to playing a part in ensuring
Barclays continued success.”
His advisory role at Barclays will take up
less than 30 per cent of his time, alongside
which he will continue to chair the
National Committee of the Aga Khan
Foundation (UK) and the Endowment
Committee of the Aga Khan Development

@
after just two months as Network.
NAGUIB KHERAJ

@ MORE NEWS
NEWS | IN BRIEF
Walmart moves to social media
Wal-Mart said yesterday it had agreed
to buy social media company Kosmix
for an undisclosed sum, as the world’s
largest retailer aims to win over more
ONLINE AT tech-savvy US shoppers. Wal-Mart
said Kosmix’s founders and team will
www.cityam.com operate as part of a newly formed
group called @WalmartLabs that will
create technologies and businesses
around shopping online or with smart
phones.
NHS patients taking up choices
Many patients are actively exercising
their right to choose where to receive
NHS-funded treatment, according to
new research by the Royal Economic
Society. The study, which analysed
data on the choices made by more
than 50,000 NHS patients, found out
that four out of ten hip replacement
patients choose not to receive treat-
ment at their nearest hospital.
CITYA.M. 19 APRIL 2011 News 9

Looking for an independent voice on Glencore

INSIDE TRACK
DAVID HELLIER
AMONG all the many big beasts advis-
ing on the forthcoming flotation of
commodities trader Glencore, one
firm stands out in its unusualness
and lack of big beastliness, and that is
Liberum Capital.
Liberum is an employee-owned
investment bank whose Latin name
means independent, whereas the rest
of the advisers – including Credit
Suisse, Morgan Stanley, Bank of
America Merrill Lynch, BNP Paribas,
Barclays Capital, Societe Generale and
UBS – are all the bulge bracket banks,
who offer placing power, share distri-
bution and underwriting services
alongside their advisory capabilities.
In a world where relationships are
still all important, Liberum’s link to
Glencore is Michael Rawlinson, a
board director who heads the mining,
resources and energy team. He joined
from Cazenove after its merger with
JP Morgan. There he had worked on
the initial public offerings of BHP
Billiton, Xstrata, Vedanta and Anglo
American.
Rawlinson also worked on the
flotation of the Russian aluminium
group Rusal, where Glencore chief
executive Ivan Glasenberg is a direc-
tor, and with Vallar, the mining
group run by Nathaniel Rothschild.
As one adviser to the Glencore float
put it: “Michael is a superb authority
in the sector and he gives very
straight advice.”
Last July Liberum came up with a
$60bn (£37bn) figure for Glencore’s
valuation, which has since become a
benchmark. As we wrote yesterday,
analysts at Credit Suisse and Barclays
Capital have now suggested that
Glencore could be worth as much as
£48bn (including new money raised).
As yet, there is little research from
analysts whose banks are not on the
syndicate. But one industry afficiona-
do who does have a view is Standard
Bank’s mining analyst Peter Davey,
who told me yesterday: “Glencore
doesn’t deserve a premium rating.
“I think it should price at a dis-
count to the miners. With them, you
have real tangible earnings whereas
here, a lot of the money is earned by
traders who own the company and
might leave after a time.”
With so little UK M&A happening
at the moment, it looks likely that
this Glencore flotation will dominate
much of the discussion in the City
over the next few weeks and there
will be a heated debate over valuation
(as well as the group’s corporate gov-
ernance record), with some going for
the £48bn or so figure and others,
such as Davey, arguing for something
closer to £35bn. It will be fascinating
to see whether any of the syndicate
member banks agree with Davey’s
lower figure.
Just don’t hold your breath.

Trading arm
is the key to
miner’s value
But mining investors are wary of
▲

COMMODITIES
BY JULIET SAMUEL
NEGOTIATIONS over Glencore’s valua-
tion are set to focus on the mining
giant’s trading arm as commodity
investors worry about the possible
departure of key traders and the intan-
gible nature of the people side of the
business.
“When you have hard assets you
know the price for a metal and on that
basis you are able to have a relatively
high level of certainty,” Olivetree
Securities’ Christian Georges told City
A.M. “Whereas with trading... there’s a
question mark over the ability of a
trader to get it right.”
Glencore argues that its trading
arm should add a premium to its
value because it makes its “earnings
less volatile than those of equivalent
pure commodity producers”.
Its sizeable share of the market for
traded commodities – it trades 60 per
cent of marketable zinc and 50 per
cent of marketable copper – could
also give the company a degree of
pricing power, although there is no
suggestion that it could manipulate
the market.
buying into a trading arm where
many of the key figures could cash out
after a few years. “There’ll be a little bit
of pressure on pricing because fund
managers won’t want to feel they’re
taken advantage of,” says Renaissance
Capital’s Jonathan Williams.
Many have compared Glencore’s
float to that of Goldman Sachs in
1999, with one industry source saying:
“They’re seen as flash and arrogant, a
bit like the Goldman Sachs of the
industry.”
A third sky-high valuation from one
of the banks on the deal emerged yes-
terday, with Bank of America Merrill
Lynch analysts valuing the company
at a maximum of $70bn (£43bn) in
addition to the $9-$11bn to be raised
by the float. Barclays Capital and
Credit Suisse have put similarly high
values on the firm.
Oriel Securities’ Charles Cooper says
that Glencore’s equities assets, which
include stakes in Rusal and Xstrata,
were worth $20bn alone. But on corpo-
rate governance he said: “Who would-
n’t have concerns with a company
with stakes in state-run mining enter-
prises from Armenia to Zimbabwe?”

Texas Instruments disappoints

as Japan weighs on production
versus a typical nine per cent or more
▲

TECHNOLOGY
TEXAS Instruments yesterday warned
of slower-than-typical quarterly sales
growth as it scrambles to restart pro-
duction after Japan’s massive earth-
quake, and said it was unclear when
the supply of the silicon and wafers it
needs will return to normal.
Shares of the chip maker, which
plans to buy National Semiconductor
Corp for $6.5bn (£4bn) in a bid to
expand its hold over a booming ana-
log chip market, slid 2.5 per cent after
Texas’ earnings were also hurt by
quake-related expenses.
Texas is projecting growth of about
five per cent for the current quarter,
as the company contends with supply
shortages as well as damage to its
own factories.
Texas on Monday forecast second-
quarter earnings of 52 cents to 60
cents per share on revenue of $3.41bn
to $3.69bn. Analysts had expected rev-
enue of $3.52bn.
Its first-quarter earnings also
missed Wall Street expectations by a
penny. Profit in the first-quarter rose
to $666m, or 55 cents per share, from
$658m, or 52 cents per share, in the
year-ago quarter. Revenue rose six per
cent to $3.39bn from $3.21bn, in line
with the average analyst expectation
for $3.39bn.
 10 News CITYA.M. 19 APRIL 2011

NEWS | IN BRIEF
Inflation on course to rise than disruption to their businesses, a sur- negative territory in every quarter last
Cut business tax
to 18pc, says CBI
Global inflation is set to rise to 3.8 per vey of 501 business owners and financial year.
cent in 2011 from 3.4 per cent last year decision makers by the market research
and could hamper growth perspectives agency BDRC Continental showed yester- Emerging economies hoard dollars
for the world economy, research by day. However, 45 per cent remain scepti- US dollar reserves in emerging economies
Lloyds Bank Corporate Markets claimed cal about any economic boost over the have more than doubled in the last
yesterday. The World Economic Quarterly bank holidays. decade to maintain undervalued
report forecast a moderate expansion for exchange rates and defend their export
G10 economies to grow 2.3 per cent this Small firms downbeat on jobs

▲
competitiveness, according to research UK ECONOMY
year, and improve in 2012 to reach 2.7 Employment at small firms took a knock by the Royal Economic Society (RES). BY JULIAN HARRIS 50p rate “as soon as public finances
per cent. It also predicts a steady and in the first three months of the year, the However, this has not prevented their allow”, said Cridland, who praised the
strong performance from emerging 10 Federation of Small Businesses (FSB) said share prices from falling during the global CORPORATION tax should be cut to 18 review into the amount of revenue it
(E10) countries, growing by 7.1 per cent yesterday. A negative balance of -6.5 per financial crisis just as much as they did in per cent in order to give a much-need- raises for the exchequer.
this year and 6.9 per cent next year. cent of companies reported a decreased high-income countries, the research ed boost to the UK’s global competi- An independent study by the Adam
headcount in the first-quarter, the FSB’s revealed. The correlation between tiveness, the Confederation of British Smith Institute has found that the
Mixed views on bank holidays latest index showed. The figure was reserves and the pressure of outflows Industry (CBI) will demand today. higher rate causes tax revenues to fall,
Almost one third (30 per cent) of the worse than expected, after a negative during the crisis seems to be negative, Britain’s attractiveness plummeted as business moves elsewhere.
UK’s small and medium sized enterprises balance of just -2.5 per cent expecting and in 75 per cent of the developing between 2000 and 2010, the CBI said. Reversing the UK’s growing regula-
expect the two consecutive bank holiday any reductions in staff at the end of economies studied, share prices in the The clock is ticking on the govern- tory burden is more difficult,
weekends in April to bring more benefits 2010. The confidence index remained in banking sector had peaked before 2008. ment to halt the decline and prevent Cridland said, comparing the task to
businesses from departing these “turning around a tanker”.
shores, CBI chief John Cridland said. “One company told us how it had
Levels of personal tax, business tax, complied with disability regulations
and excessive regulations have hit the by installing an access ramp to its
UK’s appeal as a place to do business, premises,” the CBI’s report says, “only
according to a CBI survey. to be fined by another government

Roll on summer!
A negative balance of 84 per cent of
senior FTSE leaders cited personal tax
levels as harming the UK’s attractive-
ness since 2000, the survey revealed.
“The 50p tax rate on earnings over
£150,000 is seen as a critical blocker
on both attracting internationally
mobile staff to the UK, and keeping
top UK talent here,” the CBI claimed.
The government should reduce the
body and told to take it away again
because it was a listed building.”
Business secretary Vince Cable
responded to the report by defending
the UK’s attractiveness to investors.
“The UK inward investment regime
is amongst the most welcoming in the
world and remains one of the top
three recipients of foreign direct
investment in the world,” Cable said.

We fly from Gatwick, Luton and Stansted. Price correct as at 12 April 2011. Flights available to book now
for travel between 12 April and 29 October 2011. Variable charges for hold baggage apply and
some payment methods attract a handling fee. See website for details.
CITYA.M. 19 APRIL 2011 News 11

THE CLOCK IS TICKING | THE GOVERNMENT URGENTLY NEEDS TO PROVE THAT BRITAIN IS OPEN FOR BUSINESS, INDUSTRY LEADERS ARGUE BRITAIN’S PLACE IN THE WORLD
● Foreign investment in the UK fell
DAVID SPROXTON, CO-FOUNDER, JOHN CRIDLAND, DIRECTOR GENERAL, LUCY ARMSTRONG, CHIEF EXECUTIVE from $186.4bn (£114.6bn) in 2007 to
$45.7bn in 2009, as the recession
AARDMAN ANIMATIONS CONFEDERATION OF BRITISH INDUSTRY OFFICER, THE ALCHEMISTS took its toll.
“Smaller firms ● Between eight per cent and 12
“Delivering band- per cent of UK companies have not
width at a truly need to be able yet decided where their primary
industrial scale is to access both location will be in five years, a CBI
and Deloitte survey found.
a truly essential short and long
ingredient for term finance. ● The UK was ranked 89th out of
139 by the World Economic Forum
driving creative Many firms have for having the biggest regulatory
industries for- shown good rela- burden on business, on a par with
“Many business leaders are telling us that Nigeria.
ward, and ensur- tionships with
the UK no longer holds the same attrac- ● In maths education rankings, the
ing the UK isn’t the banks are still
tion it once did, and are unsure whether UK lags behind France, Germany, the
left behind.” possible today.” Netherlands, Japan and many other
they need to be here at all.” peer countries.

IAN POWELL, CHAIRMAN AND SENIOR
PARTNER, PRICEWATERHOUSECOOPERS
“We need to create a regulatory and fiscal
environment that gives global business
confidence to back the UK as the place for
major investments.”
ROBERT HIGGINBOTHAM, CEO EUROPE, ● In science, the UK ranks below
ANDREAS GOSS, CHIEF EXECUTIVE, Germany, the Netherlands, Korea and
SIEMENS UK FIDELITY INTERNATIONAL Japan, yet ahead of some other peer
countries, such as France and the US.
“A serious risk is ● The UK’s top rate of income tax is
the lack of skills in higher than in France, Germany, the
US, Brazil, Switzerland and many
engineering and other countries.
science, vital for
● Of 16 measures of attractiveness
the innovation to business, the UK fell back in 11 of
needed to be these between the years 2000 and
2010 including personal tax, busi-
competitive in a “A marginal tax rate of 62 per cent for ness tax and regulation.
global market. our most mobile employees, including NI, ● The internet, if taken as a sector
Plus, the 50p tax does nothing to encourage enterprise or of the economy, would now be a
rate is very high.” retain expertise and skills.” larger contributor to GDP than con-
struction, education and transport.
CITYA.M. 19 APRIL 2011
J&J in £12bn
merger talks
with Synthes
▲
PHARMACEUTICAL
BY STEVE DINNEEN
SWISS medical device maker Synthes
yesterday confirmed it is in takeover
talks with Johnson & Johnson (J&J)
over a deal that could value the firm
at about $20bn (£12.3bn).
The move would be J&J’s biggest
ever acquisition, giving it a leading
position in equipment to treat trau-
ma. Synthes, which posted sales of
$3.7bn in 2010, makes nails, screws
and plates to fix broken bones, as well
as artificial spine discs.
A Synthes spokesman said: “In
response to market speculation,
Synthes confirms that it is engaged in
discussions with Johnson & Johnson
about a potential business combina-
tion transaction.”
A spokesman for J&J declined to
comment.
Key to any deal will be Synthes
chairman Hansjoerg Wyss – the sec-
ond-richest person in Switzerland,
with a net worth of $6.4bn according
to Forbes. Wyss holds 40 per cent of
Synthes directly and another eight
per cent through family trusts. Some
analysts doubt he will be willing to
play ball with J&J, which would effec-
tively kill off the deal.
Shares in British knee and hip
maker Smith & Nephew (S&N) fell
more than three per cent on the news
that J&J is looking elsewhere.
Last year the firm confirmed it had
rejected a £7bn bid from Johnson &
Johnson and investors had hoped the
US giant would come back with a big-
ger offer. One option for S&N could be
a tie-up with US rival Biomet.
ANALYSIS l Synthes 146.50
140
CHF 18 Apr
135
130
125
120
115
24 Jan 14 Feb 7 Mar 28 Mar
J&J boss William Weldon appears to have lost interest in UK firm Smith & Nephew
ADVISER: CREDIT SUISSE
It is acting as financial adviser to
SYNTHES ADVISER fellow medical firm Community Health
Systems, which recently increased its
CREDIT SUISSE offer for Tenet Healthcare Corporation.
It is also acting as joint global co-ordi-
nator and bookrunners on the
Glencore flotation, which is due to
close in May.
SYNTHES has not officially confirmed Credit Suisse advised Prudential on
which banks it has hired to advise it on its failed $35.5bn (£23bn) bid for AIA
the possible Johnson & Johnson (J&J) last year and then advised AIA on its
takeover but City A.M. understands it successful IPO in Hong Kong in
will be using its regular bank Credit October, where it was valued at more
Suisse. than $35.5bn.
The Swiss bank last month retained Credit Suisse, Synthes and J&J all
its top spot for M&A advisory work. declined to comment.
15 Apr
News 13
Goldman Sachs
tops high yield
bond league
CAPITAL MARKETS
▲
GOLDMAN Sachs has moved to top
place for the first time since 2002 in
the table for issuance of high yield
bonds.
The US investment bank has dis-
placed Deutsche Bank – perhaps only
temporarily because these positions
have a habit of changing quickly –
after completing a deal for the leisure
group GEO.
Goldman’s other recent deals have
included bond issues for Boparan, the
chicken producer that has taken over
Northern Foods, the clothing group
Matalan, the drinks group Pernod
Ricard and Phones 4 U.
A record number of high-yield
bonds were issued last year, and vol-
umes this year are already surpassing
that, according to data from Dealogic.
Globally, $354bn (£218.2bn) of high-
yield bonds were issued last year, of
which $62bn came from European
issuers – also a record, according to
the data provider.
Bond issuance this year is running
at roughly twice the rate of last year,
the data suggests.
Goldman has taken pole position
with an 11 per cent share since the
start of the year. Deutsche Bank is cur-
rently claiming 10.7 per cent, accord-
ing to Bloomberg data, with Credit
Suisse having an 8.8 per cent share.
 The Capitalist
14 EDITED BY CITYA.M. 19 APRIL 2011
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist

Left: Tim Bullman from

Mint Partners, Lawson
Muncaster from City
A.M., Andrew Palmer
from World Spreads,
Chris Amor from OMD
UK, and City A.M. golf
columnist and former
pro Sam Torrance

Below left: Post-game

drinks on the terrace at
Kingswood

Right: Former England

Test cricketer Andy
Lloyd and John
Maloney of Maxus

Below right: Former

World Cup footballer
Trevor Steven

Pictures:
Micha Theiner/
City A.M.

CITY A.M. BIG HITTERS

TEE UP TO MAKE GOLF
DAY GO WITH A SWING
THE first City A.M. Golf Day took place
at Kingswood Golf & Country Club in
Surrey, designer James Braid’s “finest
parkland golf course in England”.
Braid, the five-times British Open
champion who is famous for his golf
courses at Carnoustie, Gleneagles
and Hankley Common, built
Kingswood in the 1920s during
the same building boom as
Surrey’s other private estates
such as Wentworth, St George’s
Hill and Coombe Hill.
Over the past three winters,
the bunkering on the champi-
onship course has been com-
pletely remodelled to adjust to
today’s longer hitters, and City A.M.’s
40 big shots wasted no time step-
ping up to the bar under the
expert eye of City A.M.’s columnist
Sam Torrance OBE, the 44 times
Clockwise from above: Pro winner.
John Stevens from The pressure built up after
Mindshare, Ben Dowding every shot as the players fol-
from Epsom Racecourse, lowed the scores live on
Martin Williams from their handheld devices, but
Gaucho (standing), and it wasn’t long before City
Steve Booth from Arena A.M.’s Martin Muncaster
Media (left) with Sam Torrance and Chris Amor from
Omnicom agency OMD
UK emerged as the fron-
trunners in the individ-
ual competition.
The contest was so
close it came down to the
last putt on the last hole,
where Muncaster three-
putted to lose by one to
Amor, who is as we speak
clearing his diary to fix up
his prize of a round of golf
against Torrance – just as
soon as the former pro
recovers from his shoulder
complaint.
Muncaster, who came
second on the countback
after tying on 38 points
with Joel Williams from
the Gaucho restaurant
group, said: “The pressure got to me
as I knew that I needed to make the
hole in two putts to win, but I rolled a
two-and-a-half footer around the cup
to miss out.”
Further down the individual
leaderboard, former England crick-
eter Andy Lloyd came in twelfth place
with 33 points, and footballing leg-
end Trevor Steven finished in twenty-
eighth place with 28 points.
The three players calling them-
selves Red Rum – Mark Taylor from
MT Squared, Steve Booth from Arena
Media and Jim Kelly from Welbeck
Group – won the team contest, while
honourable mentions go to Kelly,
who won the longest drive on hole
six, and John Stevens from
Mindshare, who got closest to the pin
on the seventeenth.
City A.M. thanks Kingswood,
Callaway, Golf Buddy, VPAR and Your
Golf Travel, who made the day possi-
ble. Full results can be seen at
http://corporate.vpar-
golf.com/live/cityam. Ben Dascombe from Brand Links
(above) and Gary Thompson from
World Spreads (below)
GOLF ON THE HOUSE
Kingswood Golf & Country Club
offers full annual membership at
£699 for the club’s pay-as-you-go
scheme where golfers can book all
tee times, play in all tournaments
and access maximum advanced
booking rights. Country Club mem-
bership costs £299 and offers more
restricted rights, but players can still
book weekend times before 7.30am
and after 11.30am, and will receive
four vouchers to play within the peak
weekend tee times. So come along
for a round of golf in April or May,
when joining fees are reduced by 50
per cent – as an extra incentive, if
City A.M. readers decide to sign up,
the first round is on the house. For
full membership details, see www.
kingswood-golf.co.uk.
CITYA.M. 19 APRIL 2011
Chelsea owner’s son buys
£3m stake in oil investor
▲
ASSET MANAGEMENT
BY RICHARD PARTINGTON
THE 20-year-old son of Chelsea
Football Club owner Roman
Abramovich has followed his father
into the oil and gas business by pur-
chasing a stake in an investment vehi-
cle specialising in the energy sector.
Arkadiy Abramovich, who is the
Russian oligarch’s oldest son, has
bought a 26 per cent stake in Crosby
NEWS | IN BRIEF
Pubs outperforming retail sales
Growth among the UK’s leading restau-
rant and pub groups slowed in March, but
the market still comfortably outper-
formed retail, according to the latest
Coffer Peach Business Tracker figures.
The research shows like-for-like sales
grew 0.9 per cent in March, with total
sales, which include new site openings, up
3.4 per cent on March 2010. March sales
were 22.3 per cent ahead of February,
Asset Management for £3m.
The purchase, undertaken through
his investment vehicle ARA Capital,
caused shares in the AIM-listed invest-
ment firm to rocket yesterday.
Abramovich bought the stock from
Irish energy tycoon John McKeon, the
entrepreneurial founding sharehold-
er of Circle Oil, and investment
banker Ilyas Khan.
The pair still hold significant stakes
in the company, which is incorporat-
though March was a five-week month
compared to a four-week February.
Capital Pub Co to resume dividend
The Capital Pub Company expects its full-
year results to be in line with market fore-
casts and the firm will resume paying
dividends, it said yesterday. The company
said London has remained a buoyant mar-
ket and its pubs, including the Marquis of
Granby, have traded strongly.
News 15
ed in the Cayman Islands.
Based in Hong Kong, the vehicle
will focus on investments in natural
resources in Australia, as well as
North and South America.
Roman Abramovich built his
Russian oil and gas empire during the
early 1990s, amassing a fortune esti-
mated at around £7.4bn.
Shares in Crosby closed up 48 per
cent at 4.72p per share.
Arkadiy Abramovich (left) is following in his father Roman’s footsteps Picture: REX
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 16 News CITYA.M. 19 APRIL 2011

Watchdog blocks
Deutsche unit sale
sue this complex transaction” fol- told City A.M.: “We have to check

▲
BANKING
BY ALISON LOCK
DEUTSCHE Bank was forced to
scrap the sale of its subsidiary BHF
to Liechtenstein bank LGT yesterday
after the German financial regula-
tor blocked the deal on tax evasion
concerns.
Sources familiar with the situa-
tion told City A.M. that watchdog
BaFin had doubts over the reliabili-
ty of LGT’s funding sources given its
history of probes for tax evasion.
LGT, which had targeted BHF
mainly for its wealth management
arm, said it had decided “not to pur-
lowing discussions with BaFin. whether the buyer has reliable
LGT has been under German reg- funds and the sources of the money
ulators’ spotlight since 2008, when that it was investing were solid.”
client data stolen from it revealed
that former Deutsche Post chief ANALYSIS l Deutsche Bank
executive Klaus Zumwinkel had a 50
€
trust with the group. LGT paid a
€50m (£44m) fine last December to 40.00
settle the regulators’ tax probe, and 18 Apr
46
did not admit guilt. Zumwinkel
admitted tax evasion and received a
suspended jail sentence. 42
In a statement, Deutsche Bank
said it “regrets the fact that the
transaction did not come about”. 38
BaFin spokesman Ben Fischer 24 Jan 11 Feb 3 Mar 23 Mar 12 Apr

Emerging markets Samsung sued by

set to see a boom Apple over phones

▲
TECHNOLOGY
▲

PRIVATE EQUITY

EMERGING markets could experience a private equity
boom over the next two years, as investors turn to devel-
oping economies for better returns, a global survey has
found.
Typical investors surveyed expected to hold between
16 and 20 per cent of their global private equity portfo-
lios in emerging markets by 2013, according to the latest
research from Emerging Markets Private Equity
Association (EMPEA) and Coller Capital.
Investors currently hold between 11 and 15 per cent
in emerging markets, the review of 156 private equity
investors in North America, Europe and Asia finds.
APPLE has sued rival Samsung Electronics claiming that
Samsung’s Galaxy line of mobile phones and tablet
“slavishly” copies the iPhone and iPad, according to
court papers.
Galaxy products use Google’s Android operating sys-
tem, the lawsuit says, which directly competes with
Apple’s mobile software. However, Apple’s claims
against Samsung focus on Galaxy’s design features, such
as the look of its screen icons.
The lawsuit, filed on Friday, alleges Samsung violated
Apple’s patents and trademarks. “This kind of blatant
copying is wrong,” Apple spokeswoman Kristin Huguet

@
The survey also found that Brazil has overtaken China said in a statement. A Samsung representative could not
as the most attractive market for investors this year. immediately be reached for comment.

@ MORE NEWS
NEWS | IN BRIEF
Knight Frank agents form firm
Three former Knight Frank agents and
an ex-surveyor for the property firm
have set up their own company,
Companies House documents show.
ONLINE AT Agents Nigel Gillingham, Tracey
www.cityam.com Pollard and Woody Bruce, alongside
surveyor Rupert Bentley Smith, are
listed as the sole directors of Bruce
Gillingham Pollard. The agents left
Knight Frank last month and have
already secured several shopping and
restaurant leasing mandates.
N&P slapped with £1.4m fine
The FSA has fined mutually owned
savings and loans company Norwich &
Peterborough £1.4m for poor client
advice on products sold by the failed
Keydata company. The watchdog said
in a statement yesterday that N&P has
also agreed to set aside some £51m to
pay out to customers in relation to the
affair.
CITYA.M. 19 APRIL 2011
EUROTUNNEL REVENUES JUMP AFTER ASH CHAOS
Desire hit as
it fails to find
Falklands oil
▲
ENERGY
BY HARRY BANKS
OIL explorer Desire Petroleum yester-
day admitted that it had not found oil
at its latest well in the Falkland Islands
and needs fresh funds for any further
drilling, wiping over half the value
from its shares.
AIM-listed Desire’s shares tumbled
60.6 per cent to close at 15.75p yester-
day, sending it to the bottom of the
London market fallers and knocking
more than £200m from its value to
leave it with a market cap of just
£136.9m.
Desire said while its latest well,
named Ninky, had oil shows and had
found a thin zone of oil, the fuel was
in a poor quality reservoir and conse-
quently the well will be plugged and
abandoned.
Desire said its remaining funds of
£22m would not stretch to pay for
another well.
“Given our continuing confidence
that oil will be discovered on Desire’s
acreage, further wells will need to be
drilled,” said Desire’s chairman
Stephen Phipps in a statement yester-
day, hinting at a cash-raising drive to
follow September’s £22.8m share plac-
Tullow to sue EnCore to spin
Heritage in UK off exploration
▲
OIL & GAS
EXPLORER Tullow Oil is suing its for-
mer partner in Uganda, Heritage Oil,
to recover $313m (£192.7m) that
Tullow paid to cover tax on fields it
bought from Heritage.
Uganda said Heritage was liable for
capital gains taxes on the sale, which
the Jersey-based company, led by for-
mer mercenary boss Tony
Buckingham, denies.
Tullow paid the government the
$313m to secure approval of the
change in field ownership, and is now
seeking to get the money back from
Heritage through the High Court in
London.
News 17
GROUPE
Kenmare is bullish
as its losses narrow
Eurotunnel’s first-
quarter 2011 total
revenues have
risen to €179.2m
(£157m), excluding
insurance indemni-
ties, a growth of 24
per cent compared started work at the Moma titanium
▲
MINING
with 2010. A BY HARRY BANKS mineral mine in Mozambique in
Eurotunnel 1987, said the mine was operating
spokesman said IRISH mining firm Kenmare well and production was broadly in
that passenger Resources yesterday posted a narrow- line with expectations.
numbers had er full-year loss yesterday, driven Pre-tax losses for 2010 were $16.3m
stayed strong after mainly by foreign exchange gains and (£10m), compared with $30.4m a year
increasing during stronger demand from Europe and ago. The results were boosted by forex
last year’s ash Asia, and said it was on track to gains of $16.7m, compared with a
cloud. increase its production capacity by 50 forex loss of $2.9m last year.
Picture: REUTERS per cent in 2012. Revenue rose more than three
@
The Dublin-based miner, which times to $91.6m.
FOR MORE NEWS
www.cityam.com
ing.
Analysts said the failure does not
spell the end of the Falklands as a
“Recognition for this campaign is marvellous.
lucrative oil prospect.
“Today’s news doesn’t have any deci- We are privileged and it’s splendid to be a
sive impact on the Falkland Islands as
a whole, in terms of their viability as a part of CITY A.M.’s first awards.”
petroleum province but it raises issues
specifically for Desire,” said Mirabaud AVIVA (Business Marketing Campaign of the Year)
Securities analyst Alex Martinos.
A large discovery made by
Rockhopper at its Sea Lion well in the
Falklands in 2010 has raised hopes
that a new hydrocarbon basin will be
opened up, but so far no other firm
has managed to strike commercial oil.
Exploration in the area has sparked
protests from Argentina, which claims
sovereignty over the islands.
ANALYSIS l Desire Petroleum 15.75
45 p 18 Apr
40
35
30
25
20
15
10
12 Apr 13 Apr 14 Apr 15 Apr 18 Apr
What will you say?
Enter the City A.M. Awards 2011 and you could be
recognised as one of the City’s great personalities
or companies of the year.
Visit our website to see how you can enter:
www.CityAMAwards.com
OIL & GAS For more information, please contact Jo Pead:
020 8267 4043 / jo.pead@cityamawards.com
BRITISH oil and gas explorer EnCore
Oil has said it is spinning off its explo-
ration assets into a new company as it
focuses on its key projects in the UK
headline sponsor champagne reception sponsor
North Sea.
The new company, XEO
Exploration, will be listed on the
Alternative Investment Market (AIM) official venue partner sponsors
towards the end of May.
EnCore’s exact percentage share-
holding in XEO would depend upon
the amount of funds raised by XEO,
the company said.
EnCore finance chief Eugene
Whyms will become the chief execu-
tive of XEO.
 18 News
Alterian soars despite revision
▲
TECHNOLOGY
BY STEVE DINNEEN
SHARES in marketing software
provider Alterian surged over 17 per
cent yesterday to close at 113p despite
the firm saying its revenues would be
lower than previously thought.
The market was buoyed when the
company, which counts AstraZeneca
and Jaguar Land Rover among its cus-
tomers, did not issue a third profit
warning in a month in its latest trad-
ing update.
It now expects revenue to be
around £37m and says that profits
will be flat on last year.
Philips seals
China TV deal
as profit slips
▲
RETAIL
BY JOHN DUNNE
PHILIPS is offloading part of its TV
arm in the first step by new chief
executive Frans van Houten to boost
flagging profit at Europe’s biggest
consumer electronics maker.
Philips is moving its loss-making
TV business into a joint venture with
Hong-Kong based monitor maker TPV
and has the option to sell out.
The deal means that the Chinese
company now owns 70 per cent of the
TV arm.
The Dutch group, which did not
disclose financial details of the deal,
has struggled to compete with lower-
cost Asian rivals Samsung and LG
Electronics after once being one of
the market leaders.
Van Houten, a restructuring expert
who took over as chief executive this
month, said he is assessing the prof-
itability of Philips’ 400 or so business
areas and “taking the blanket off” its
laggards, a hint that further divest-
ments could be on the cards.
“We are not yet firing on all cylin-
ders...There’s much unlocked poten-
tial in Philips,” Van Houten said.
Philips did not give a value for the
deal, saying it would receive a
Shares in European gaming firms surge Telenor could soon lose
post US crackdown on gambling sites sway over Vimpelcom
▲
GAMING
BY STEVE DINNEEN
SHARES in online gaming firms that
have avoided the US crackdown
surged yesterday, with European
firms set to be the big winners.
Shares in Bwin.Party, the firm
formed by the recent merger between
Bwin and poker site PartyGaming,
jumped by almost 30 per cent.
888 recouped losses suffered after
merger talks with Ladbrokes broke
down last week. Software provider
Chairman Keith Hamill said: “In
spite of this serious setback, I still
believe that the company has good
and competitive products addressing
good markets and many very able
people.”
Alterian stock slumped more than
a third last week after its second prof-
it warning in just over a week.
It said its full-year results would be
“materially lower” than anticipated.
Earlier this month its shares lost
almost a fifth of their value after issu-
ing a profit warning owing to the
delay of a £4m licensing contract,
which will cut ten per cent off its full-
year revenues and profits.
deferred payment from TVP.
All 3,600 employees at the TV busi-
ness will transfer to the Hong Kong
company.
TPV, which controls about 33 per
cent of the global computer monitor
market, posted a near 20 per cent rise
in 2010 profit.
Van Houten said that Philips,
which competes with Germany’s
Siemens and General Electric in the
healthcare and lighting business is
”
not planning to switch away from
consumer goods.
Siemens has been concentrating
more on industrial customers.
Philips indicated that it was look-
ing for a new path for its TV business
in September last year, as part of a
shake-up of the business.
”
ANALYSIS l Philips
€ age were expecting 29 cents per share.
25.5
25
24.5
24 20.75
18 Apr
23.5
23
22.5
22
”
21.50
21.0
20.5
24 Jan 7 Feb 28 Feb 21 Mar
Playtech also made big gains after the
shock US action, which claimed gam-
ing firms PokerStars, Full Tilt Poker
and Absolute Poker had tricked banks
into committing “elaborate criminal
fraud”. The sites’ founders could face
20 years in prison if found guilty.
Execution Noble analyst Geetanjali
Sharma said: “The US facing opera-
tors have been a drain on the prof-
itability of the European operators.
The closure of the main competitors’
operations and the US legal proceed-
ings initiated against them should ben-
CITYA.M. 19 APRIL 2011
France Tel and Deutsche
The bombshell led to the resigna-
Tel join forces to cut costs
tion of its founder and chief executive
David Eldridge, who had led Alterian
▲
since founding it 14 years ago. TELECOM and operated venture in the coming
weeks, subject to board approval and
ANALYSIS l Alterian FRANCE Telecom and Deutsche antitrust clearance.
220
p
113.00 Telekom plan to jointly buy network “The new joint venture will offer a
18 Apr gear, mobiles and other information more efficient sourcing organisation
technology to save money, the two that will lead to more effective part-
180 groups said yesterday. nerships with suppliers,” said Olaf
The project has the potential to save Swantee, executive vice-president at
140
about €1.3bn (£798m) annually after France Telecom.
three years -- a little under €900m for The tie-up is the latest step in an ini-
France Telecom and around €400m for tiative the groups unveiled in
100 Deutsche, they said. February, which identified five areas
The companies plan to finalise the of cooperation, including radio access
24 Jan 11 Feb 3 Mar 23 Mar 12 Apr formation of a 50-50 jointly owned network sharing in Europe.
NEWS | IN BRIEF
DDD posts full-year loss
DDD Group yesterday posted a full-year
loss, but said the current year started in
line with expectations, with growing
demand for its 2G-to-3G conversion tech-
nology for desktops and TVs. Last month,
the company said it hopes to break even
in 2011 and post a first profit in 2012 as
demand grows for 3D televisions, person-
al computers, and mobile phones. Pre-tax
loss from continuing operations for 2010,
was £921,000, compared with
£842,000 the year before. Revenue was
up 12 per cent to £1.3m.
GE and Google invest in wind farm
Chief executive Frans Van Houten is revamping the retailer. General Electric, Google, and two
Japanese partners will invest about
ANALYST VIEWS: IS PHILIPS ON THE RIGHT $500m (£307.6m) in a wind farm under
construction in Oregon, the partners
TRACK WITH ITS SHAKE UP? Interviews by John Dunne said yesterday. The $2bn Shepherds Flat
project, due to be completed next year,
will stretch over 30 square miles of
north-central Oregon and generate
JONATHAN JACKSON | KILLIK & CO enough energy for 235,000 US homes.
“
The site’s developer is Caithness Energy.
Philips is well positioned to take advantage of increasing income levels GE said the collaboration is part of its
and the expansion of the middle class. In addition, its healthcare and lifestyle strategy of drawing private investment
products play to the trend of an ageing population driving increased spending on to the US wind market. GE and Google
health and well-being. ‘Buy’. are partnering with the US unit of
Japan’s Sumitomo and a unit of Itochu.
VICTOR BARENO | SNS SECURITIES Strong quarter for TD Ameritrade
TD Ameritrade yesterday said net
“
income increased 5.6 per cent to
TPV Technology was a logical partner, as it was one of Philips’ most $171.7m (£105.6m), or 30 cents per
important outsourcing partners. The key was to get the TV business off the com- share, in the second-quarter that ended
pany’s profit and loss sheet. In Europe, austerity measures have some impact in 31 March, from $162.m, or 27 cents per
Southern Europe and the UK but Northern Europe is on track. share, a year earlier. Analysts on aver-
Revenue rose 13 per cent to $718.2m,
beating Wall Street estimates of
MARTIN PROZESKY | SANFORD BERNSTEIN $703.6m. Omaha, Nebraska-based TD
“
Ameritrade said clients added a net
$11.5bn in new funds in the quarter, an
My expectation is that it is not likely to get a lot of value out of the increase of 13 per cent from a year earli-
er. Clients made an average of 439,158
joint venture. The TV business would probably continue to lose market share, but
the deal is positive on the whole. trades per day, compared to 378,714 a
15 Apr year earlier.
efit European listed operators.” Egyptian owner Naguib Sawiris 30.6
▲
TELECOMS
per cent of voting shares in the united
ANALYSIS l Bwin Party NORWAY’S Telenor faces losing its group.
220 influence over Russian mobile opera- The 2009 agreement, thrashed out
p
170.00 tor Vimpelcom after fellow leading after years of courtroom and board-
18 Apr shareholder Altimo said it wants to room battles between Telenor and
scrap the company’s shareholder Russian billionaire Mikhail Fridman’s
180 agreement to reflect the Russian tele- Altimo, was designed to give Altimo
com group’s recent blockbuster and Telenor roughly equal say in
merger. Vimpelcom. One of the key elements
140
Vimpelcom last week closed a $6bn of the agreement was a balanced
(£3.7bn) cash-and-shares deal for 51.7 boardroom, with three independent
per cent of Orascom Telecom and 100 directors balancing Altimo and
24 Jan 2 Feb 22 Feb 14 Mar 12 Apr per cent of Italy’s Wind, giving their Telenor’s three directors a piece.
CITYA.M. 19 APRIL 2011
Nestle expands in China deal
RETAIL
▲
BY HARRY BANKS
NESTLE, the world’s biggest food com-
pany, yesterday agreed to take a 60
per cent stake in China’s Yinlu Foods
Group for an undisclosed price,
becoming the latest multinational to
target China’s fast-growing food and
beverage sector.
Family-owned Yinlu had sales of
about SwFr750m (£515m) in 2010,
Nestle said in a statement yesterday.
Nestle did not disclose financial
details of the deal and said it was sub-
Online retail
sucks life out
of high street
RETAIL
▲
BY JOHN DUNNE
ONLINE retail is growing six times
faster than high street sales and is
forecast to hit £37bn a year by 2014,
according to a retail survey.
The rapid expansion is hitting high
street retailers who are struggling to
remain competitive with 40,000
shops closing over the past decade.
Smartphones are fuelling the rapid
online sales growth as customers
place orders on-the-go.
The Webloyalty Online Retail
Report by Verdict Research predicts
that current internet spending will
grow by £14bn from 2010 to 2014.
Many more familiar brands will
disappear from town centres as a
growing number of retailers close
shops and trade solely on websites,
according to the research.
Chains including Woolworths,
Etam, Littlewood and Zavvi (all pic-
tured right) have already moved
online after their stores were closed
following plummeting sales and
ject to regulatory approval in China.
Yinlu, from China’s southeastern
Fujian province, is known for its
peanut milk and instant porridge
products.
Analysts said the deal is most likely
to be approved because Yinlu oper-
ates in a niche segment of the market
despite being a brand with a large
regional presence.
In 2009, China’s regulators killed
Coca Cola’s bid to buy well-known
juice maker China Huiyuan Juice
Group on monopoly concerns.
“There is a decent chance the deal
expensive overheads.
Just over half of UK consumers cur-
rently use their mobiles during the
purchasing process, but in the next
five years this is expected to hit 80 per
cent, according to the research.
Neil Saunders, an analyst at
Verdict said: “Shoppers after a better
deal will use their mobile to compare
and find prices.
“Retailers that survive on the high
street will be those that combine
their online stores with mobile apps
that offer shoppers a better deal
using location-based offers.”
Almost half of all Brits own a
smartphone – which will be how
shoppers locate and compare the best
prices in the very near future, he said.
This move away from the high street
is also reflected by the continued
growth of out-of-town shopping cen-
tres. Out of town retail space grew 34
per cent from 2000 to 2009, while high
street space shrank by 8.9 per cent, the
research found. The move was trig-
gered by the soaring costs of rents and
rates, according to the report.
Consumer News 19
Production resumes at
will get approved because it is not a
Toyota plants hit by quake
complete takeover. But there will still
be some regulatory scrutiny because
right now the government is wary of service parts and found no abnormal-
▲
AUTOMOTIVE
foreign companies making too much ities.
money here,” said Shaun Rein, man- JAPANESE carmaker Toyota said yes- Of the Toyota group’s 18 assembly
aging director of China Market terday it had resumed operations at plants in Japan, three had already
Research Group. all its domestic plants, which had been in operation and the rest
Nestle has been operating in China been shut down since the earthquake resumed production yesterday,
for more than 20 years and employs and tsunami on 11 March, with pro- according to a statement from the
14,000 people. duction volume still at around 50 per firm.
Analysts said the deal is beneficial cent due to a parts shortage. “The plants are operating with
to both Nestle and Yinlu. It provides Toyota said it had started measur- about 50 per cent of production due
Nestle a way into a different market ing radiation levels of its export vehi- to the shortage of auto parts,” a
segment, they said. cles, parts for overseas assembly and Toyota spokeswoman said.
NEWS | IN BRIEF
Motor misery over Easter hols
London motorists hoping to escape to
the north over Easter are set for mas-
Online retail sales
are predicted
sive delays, as the government admitted
that the M1 motorway is likely to remain
partially closed over the bank holiday
weekend. Two northbound lanes and one
lane going south were shut yesterday in
Borehamwood, north London, as emer-
to exceed
£37bn
a year by 2014.
gency repair work continued on a bridge
badly damaged by a fire at a nearby
scrapyard. Roads minister Mike Penning
said the road between junctions one and
four might not reopen until the middle
of next week.
Boris picks new deputy mayor
Mayor of London Boris Johnson has
Internet spending appointed Edward Lister, the
will grow by Conservative leader of Wandsworth
Council, as his deputy mayor following
£14bn
(61 per cent) from
the death of Sir Simon Milton. Lister will
step down from Wandsworth Council,
where he has been a councillor since
1976, to work as Johnson’s chief of staff
2010 to 2014 and deputy mayor for planning. Milton
died suddenly last week, aged 49.
Funds of hedge funds shrinking
The average fund of hedge funds
shrank in the last three months,
40,000
stores have already
according to figures from alternative
assets researcher Preqin. The mean
fund of hedge funds has $2.18bn
(£1.34bn) in assets under manage-
abandoned the ment – down more than 20 per cent
high street in the since 2010 and compounding an aver-
last decade age 24 per cent loss between 2008
and 2009. Preqin estimates that the
industry now has $910bn of assets
under management, down from $1.25
Source: Verdict Research trillion in 2008 before the financial cri-
sis hit, though it expects growth during
the next financial year, it says.

 

 
    

  


 
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 20 News CITYA.M. 19 APRIL 2011

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

Ladbrokes
Ladbrokes has appointed Ian Bull as chief finan-
cial officer, effective from 4 July, when he will
report to Ladbrokes chief executive Richard
Glynn. Bull joins Ladbrokes from Greene King,
where he was group finance director from
2006, contributing to the expansion of the busi-
ness through organic growth and the acquisition
of 2,500 pubs across the UK. Prior to Greene
King, Bull held positions at BT, The Walt Disney
Company and Whitbread.
Deloitte elected to the company’s board of part-
Anna Marks, an audit partner based in ners in the UK. The business advisory
Deloitte’s Reading office, has been firm has also appointed charity special-
ist Reza Motazedi to lead and expand
the firm’s charity practice. Motazedi
joins Deloitte from RSM Tenon.
Mercer
Russell Lee has joined Mercer as a sen-
ior consultant in its financial strategy
group business. Lee joins Mercer from
QED Equity, where he helped hedge and
restructure $40bn (£24.6bn) of risk
assets for banks during his three years
as principal.
Cushman & Wakefield
The real estate broker has appointed
Yahya Abdulla to its EMEA capital mar-
kets team in London. Abdulla joins from
Al Salam Bank in Bahrain, where he
was an assistant vice president in the
investments team.
Lo-Q
The AIM-listed provider of virtual queu-
ing systems for theme parks has
appointed John Weston, the former
chief executive of British Aerospace
and BAE Systems, as chairman, effec-
tive from 1 May.
Towergate
The insurance group has promoted non-
executive director Alastair Lyons, to the
job of non-executive chairman. Peter
Cullum, the current executive chairman,
will step into the role of non-executive
deputy chairman.
FinnCap
The specialist broker has appointed
Lorne Daniel as a director of research in
the technology research team. Daniel
has previously worked at Arden
Partners, Evolution Securities, Seymour
Pierce and Citi Quilter.
Spencer Stuart
The executive search firm has appoint-
ed Tessa Bamford to its UK Board
Services Practice as a consultant.
Bamford was recently appointed as
non-executive director of Wolseley.

To appear in CITYMOVES please email your career

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

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

ANALYSIS l Standard Life ANALYSIS l Resolution 294.74

250
ANALYSIS l Whitbread
p 320 p 18 Apr 1,900 p
205.30 1,649.00
230
18 Apr 300
18 Apr
1,800
280
210 1,700
260
1,600
190 240
24 Jan 11 Feb 3 Mar 23 Mar 12 Apr 24 Jan 11 Feb 3 Mar 23 Mar 12 Apr
24 Jan 11 Feb 3 Mar 23 Mar 12 Apr

STANDARD LIFE RESOLUTION WHITBREAD

Citigroup rates the insurance and pensions group “hold / medium risk” with
a target price of 200p – a reduction of 18p as the broker expects lower
earnings in the coming year. Citi thinks profit momentum will weaken this
year, with significant capital expenditure and margin pressures set to
dampen growth. The broker is also concerned that Standard Life’s financial
adviser-led distribution could price it out of certain products.
UBS has downgraded the insurance vehicle to “neutral” with a 12-month
target price of 300p. The broker has adjusted its stance now that
Resolution has scaled back its M&A activity, and thinks the firm’s operating
performance is not improving as expected. UBS has calculated that the
firm could pay a 109p special dividend and remain within its target gearing
range, though it would still be at a higher price to earnings ratio than peers.
Deutsche Bank maintains its “buy” rating with a target price of £21 ahead
of the hotel and coffee shop owner’s final results on 28 April. The broker
forecasts strong full-year figures, with both like-for-like sales and expansion
driving profits. Deutsche also expects a double-digit increase in the divi-
dend, but isn’t expecting big strategy changes. The broker dismisses con-
cerns about cost inflation hitting Costa as a “storm in a coffee cup”.

US rate warning hammers Downgrade sparks

FTSE to April’s lowest close sell off on Wall St
earnings?’ And I personally don’t poured cold water on speculation since July 2007.

THELONDON believe it has.

“What this is a shock to the sys-
that J&J was targeting S&N.
S&N shares traded 269 per cent of THENEW YORK “The global economy is becoming
increasingly unstable yet investors in

REPORT
tem... but more than anything else,
it’s a galvanising moment. It’s a mes-
sage to Congress to smarten up, get
your act together and then there
REPORT
their 90-day daily average. the US have been either excessively
On the upside, Serco was one of optimistic at worst or at best, compla-
only two blue-chip gainers, up 0.1 per cent,” said Bruce Bittles, chief invest-
cent, with contracts for difference ment strategist of Robert W Baird &

B
RITAIN’S top shares fell sharply won’t be any problem,” he added. specialists Galvan rating the stock a Co.

yesterday as ratings agency S&P
cut its US credit outlook to neg-
ative, but some investors doubt
this will spur a much more signifi-
cant flight from risky assets than
already seen.
The FTSE 100 closed down 125.93
points, or 2.1 per cent, at 5,870.08, its
lowest close since 23 March.
Just two companies in the FTSE 100
saw their shares gain yesterday -
WPP, up 0.14 per cent, and Serco,
which gained 0.09 per cent.
The FTSE 100 volatility index, a
barometer of investor anxiety,
jumped nearly 26 per cent yesterday,
its biggest one-day percentage gain
since November 2009.
The higher the index, the lower
investor appetite for risky assets such
as stocks.
S&P downgraded its credit outlook
for the United States to negative from
stable, citing a risk that policymakers
may not reach agreement on a plan
to slash the huge federal budget
deficit.
Mike Lenhoff, chief strategist at
Brewin Dolphin, which has £25bn of
assets under management, said:
“People will have to say, ‘Well look,
has this really altered the outlook for
Yesterday’s move by S&P served to
further unnerve investors already
dealing with worries about Eurozone
debt, with a focus on Greece where
markets are concerned the country
will eventually need to restructure
its debt.
Adding to worries, Finland’s True
Finns anti-euro party, which was
voted into a powerful role in the
Helsinki parliament at the weekend,
said it expected the EU to change
plans for a bailout of Portugal.
Banks were pressured, with
Barclays, which has a big exposure to
Iberian debt, leading the sector
lower, off 3.6 per cent, trading 151
per cent of its 90-day daily average.
A broker downgrade by UBS
weighed on Resolution, down 4.8 per
cent.
Inflationary pressures weighed on
mining stocks after China raised
banks’ reserve requirements on
Sunday for the fourth time this year,
to keep its overheating economy in
check.
British orthopaedics company
Smith & Nephew shed three per cent
after Swiss medical device maker
Synthes said it was in merger talks
with Johnson & Johnson, which
“buy” and highlighting technical fac-
tors as supportive.
Joshua Raymond, market strategist
at City Index, said that if anything,
S&P “is probably only stating official-
ly what many in the market are
already thinking”.
“Whether or not this is likely to
herald a wider move to risk aversion
than the short-term move we have
already started to witness remains to
be seen,” he said.
Technical analysis for the FTSE 100
was bearish, with Michael Hewson,
market analyst at CMC Markets, say-
ing a break below a 5,860 support –
the 2 March and 24 February lows –
could signal a move back towards the
200-day moving average of 5,720.
ANALYSIS l FTSE
6,100
5,870.08
6,000
18 Apr
5,900
5,800
5,700
5,600
17 Jan 4 Feb 24 Feb 16 Mar
T
HE US stock market tumbled in
heavy volume yesterday as
Standard & Poor’s downgraded
the credit outlook of the United
States, adding to worries about the
global economy after China moved to
curb liquidity.
Investors also focused on Greece,
where financial markets are increas-
ingly convinced the country will have
to renegotiate the terms of its public
debt. Greek officials denied that some
form of debt rescheduling was immi-
nent.
The Dow Jones industrial average
dropped 140.24 points, or 1.14 per
cent, to 12,201.59. The Standard &
Poor’s 500 index lost 14.54 points, or
1.1 per cent, to 1,305.14. The Nasdaq
Composite Index fell 29.27 points, or
1.06 per cent, to 2,735.38.
The S&P 500 fell below 1,300 for the
first time since 24 March, and some
in the market see a close below that
level as a trigger of future losses.
Short-term support is seen near the
1,285 area.
The CBOE Volatility Index, better
known as Wall Street’s fear gauge,
surged more than 17 per cent, its
largest percentage jump since 16
5 Apr March. It closed on Friday at its lowest
S&P downgraded its outlook on the
United States credit rating to nega-
tive, saying it believes there’s a risk US
policymakers may not reach agree-
ment on how to address the country’s
long-term fiscal pressures.
The stock market’s vulnerability
was demonstrated by its strong sell-
off. Comparatively, the reactions of
the US Treasury debt and dollar mar-
kets were more subdued.
On Friday, the S&P 500 fell for a sec-
ond week as concern spread that
growth expectations may have to be
trimmed.
As investors move to companies
expected to outperform in uncertain
economic times, the defensive S&P
500 sectors like utilities, consumer
staples and healthcare posted the
smallest losses in yesterday’s slide.
Caterpillar, hurt both by expecta-
tions of ballooning funding costs and
China’s move to harness liquidity, slid
4.2 per cent.
Among the companies reporting
earnings yesterday, Halliburton, the
world’s second-largest oilfield services
company, gained 1.7 per cent, and
drugmaker Eli Lilly fell 1.4 per cent.
Citigroup rose 0.7 per cent following
its results.
CITYA.M. 19 APRIL 2011 21

Wealth Management | Markets

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 22 Wealth Management | Contracts for Difference
Pharma’s mega-trends
should unlock returns
Traders should profit
as the stage is set for
the pharmaceutical
giants to rise again,
writes Philip Salter
S
TAGNATING product development,
a tough regulatory climate and pres-
sures from generic producers have
seen the profits of the pharmaceuti-
cal industry take a hit in the last decade.
However, the next chapter in the story
should see a reversal, as big pharma takes
advantage of ageing populations, the
growth of emerging markets and a biotech
revolution.
Over the last decade, investing in big
pharma has not been profitable. Michael
Hewson of CMC Markets points out that
both GlaxoSmithKline and AstraZeneca
plummeted. The former dropped from
1,700p in 2001, hitting a low of 980p in
mid-2008, and is still languishing below
1,250p. Regulations have proved a serious
impediment to growth, both in the
lengthy process to get new drugs to market
and the limitations on drugs allowed to be
marketed as new. The generic industry has
also hit profits. GlaxoSmithKline chief
executive Andrew Witty has stated that we
are living through a “patent cliff”, with
around $200bn of earnings opening up to
generic producers between 2008 and 2012.
But there is light at the end of the tun-
nel. Ageing populations in developed
economies and growing wealth in develop-
ing markets mean that demand should
grow. India’s Associated Chambers of
Commerce and Industry (Assocham)
expects that by 2015 the Indian pharma-
ceutical industry will reach $20bn. UK
pharma companies should be able to cash
in. Neil Woodford, the influential fund
manager of Invesco Perpetual, said in
February that the industry is “being given
away by the stockmarket.” He has skin in
the game, with over $4bn of the $17bn he
manages invested in the sector. Living leg-
end Jim Mellon predicts a mega-trend in
bioscience. He is so convinced he will soon
have a book out on the subject. Crucially,
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When trading forex, it is possible to lose more than your
initial deposit.
A biotech revolution would be the right prescription for big pharma
biotechnology is not easily copied, so this
could see a huge reversal in the fortunes of
the industry.
Recently there have been some big
moves in the pharmaceutical industry.
Last Monday, GW Pharmaceuticals
jumped 3.1 per cent to 108p as news that it
signed up Novartis to sell Sativex, its
cannabis derived drug for treating the
spasticity caused by multiple sclerosis.
Also, it was confirmed yesterday that
Johnson & Johnson is in talks to buy
Synthes, the American manufacturer of
medical devices. Both have risen in
response to the talks. This is part of the
ongoing consolidation and collaboration
across the sector, which traders can profit
from. Smith & Nephew’s shares took a dive
on the news that its Johnson & Johnson
takeover looked unlikely.
In deciding whether to go long or short
Picture: GETTY
on a particular stock, patent contracts and
legal battles need to be taken into account,
particularly for the short-term trader. Also,
with the consolidation through mergers
and acquisitions continuing across the sec-
tor, traders will need to be prepared for
jumps in the stock price. These could offer
either a nasty or nice surprise depending
upon whether the position is long or short.
For traders that want to take a bet on the
whole sector, IG Markets offers spreads on
pharmaceuticals and biotech stocks across
the FTSE 350.
Although pharmaceutical stocks are
viewed as defensives, as the sector is in flux
it offers the trader the opportunity to cash
in on any volatility. In the short-term, it
looks to still have a way to go to make a
full recovery, but if Woodford and Mellon
are right, a well-timed CFD would see prof-
its from a sector returning to health.
CITYA.M. 19 APRIL 2011
LOSING A GRIP
ON THE WALL
OF WORRY
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
I
NVESTORS are struggling to keep abreast of
all the major issues currently weighing on
financial markets. Geopolitically, the situation
in Libya is growing more desperate; tensions
are still building across the Middle East; the dis-
ruption to Japan’s economy and global supply
chains due to last month’s earthquake and tsuna-
mi has been severe. On top of this, the situation at
the Fukushima nuclear facility appears critical.
On the economic front, after years of loose
monetary policy, interest rates are rising around
the world. The ECB is acting to curb inflation,
which threatens the core Eurozone members,
even as the peripheral countries struggle to
grow thanks to rising bond yields and austerity
measures. At the weekend, China hiked its
reserve requirement ratio for the fourth time this
year, despite news of sharp falls in house prices
in Beijing and elsewhere. Then, suddenly, all eyes
turned back to the US as Standard & Poor’s put
the country’s debt rating on a negative outlook.
The major US stock indices are beginning to
struggle as they climb this “wall of worry.” On
top of everything else, they have a fresh earnings
season to contend with. After an inauspicious
start last week when Alcoa, JPMorgan, Google
and Bank of America all managed to disappoint
the market in one way or another, the first quar-
ter earnings season now shifts up a gear. Over
one fifth of companies in the S&P 500 report
this week, and the pace accelerates through to
the end of April. By 6 May, over 80 per cent of
the largest 500 US corporations will have
released their earnings and this could prove to
be a major influence over how equities perform
over the next few quarters.
US corporate profit margins are close to
record highs. Earnings have grown following
years of job cuts and other cost-cutting meas-
ures. Yet despite all the fiscal and monetary
stimulus, the wider economy has failed to recov-
er and analysts are cutting their GDP estimates
for the year. Corporate profit margins are going
to come under pressure as rising input costs take
their toll, yet analysts’ earnings and revenue
expectations remain elevated. So with US stock
indices backing off from recent highs, a few sig-
nificant earnings disappointments could mark
the end of the two-year bull run.
gftuk.com | FOREX
free phone 0800 358 0864
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regulated by the Financial Services Authority.
CD03UK.150.040511
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 %            " $! %    
%  !   
     %   ### %$!#
 24 Wealth Management | Contracts for Difference
Seeking out
the resources
to keep up with
global demand
With global infrastructure needs fuelling a
continuing rise in commodity prices, the race
is on to find new deposits, writes Craig Drake
G
OLDMAN Sachs may have slowed
the charge of the commodity bulls
last week by suggesting that
investors take profits on a basket
trade of crude oil, cotton, copper, soy-
beans and platinum that it recommended
in late 2010, but this week the markets
have carried on regardless. But with polit-
ical turmoil affecting the established com-
modity rich countries, there is a worry
about the future of this rally as well as a
push for new mining opportunities.
Evy Hambro, manager of BlackRock
World Mining Trust, says “in terms of
recent geopolitical factors and natural dis-
asters, it’s important to maintain a broad
macro view when looking at the markets.
However, these recent events are likely to
have a positive effect across the commodi-
ties spectrum, as nuclear power plants
need to be rebuilt and investors tradition-
ally turn to gold in periods of uncertainty
and instability as a way of preserving
wealth.”
Political instability, by its very nature, is
not something that an investor should be
pegging his hopes for steady returns on.
Commodity investors, particularly in gold
and silver, will rightly be questioning
whether this is a bubble we are seeing or
whether there is potential for future
growth once the furore in the Middle East
dies down. Will Smith, manager of City
Natural Resources and portfolio manager
of Geiger Counter takes the view that
there will be continued demand from
emerging markets, however identifying
any potential bubbles can be a difficult
task: “We believe the sectoral bull market
in most commodities is intact. This does
not mean prices go up in a straight line,
THE TIPSTER
MORRISON ON
THE MARCH TO
MEND MARKET
S
HARES in supermarket Morrison have
been on the rise since the end of March,
as shoppers still favour promotions in
an attempt to offset the squeeze on
income from rising prices. Products on pro-
motion account for 40 per cent of sales,
which is now at a record high. They are real-
ly bringing the competition to the market.
Capital Spreads quotes 286.6p-287.1p.
It was a crazy roller-coaster ride yester-
day at 2pm when S&P announced that it
was reducing the outlook on the US to nega-
tive. The dollar initially plunged, precious
metals rallied, while US indices and crude
dived. CFD traders piled in to the momen-
tum of the fall in the Dow, as it fell through
CITYA.M. 19 APRIL 2011
and there are going to be periods of under-
performance. Frankly, bubbles can only be
clearly identified when they have burst.”
Rather than a short term effect created
by government input, such as QE2 in the
US or its potential sequels, Will Smith sees
the commodities rally as having firm foot-
ing in reality: “QE has clearly been sup-
portive of economies and the things we
are monitoring are the potential for QE3
which might generate too much exuber-
ance or conversely government policies
that seek to restrain economic activity.
Our underlying optimism is based on the
infrastructure needs of both developing
and developed economies and the inabili-
ty of the supply side to match growing
demand.”
But with this constant difficulty in
keeping up with demand, eyes are on
where the next big opportunities will
arise. Those who pick the iron ore interests in Cameroon and suitable, but only if you’ve really done
Cameroon is typical of the frontier right mining stocks Aureus Mining is involved in gold explo- your homework. If you’ve got a handle
countries targeted by mining companies. could find a rich seam ration. Sundance Resources, quoted on and think that you know what you’re
Its economy has in recent years been dom- of profits the ASX, holds the Mbalam iron ore proj- doing you may take a risk, but you should
inated by the oil and agriculture indus- Picture: REUTERS ect. Mega Uranium is currently exploring be prepared for them to fail. Sectoral CFDs
tries but there are hopes that significant for the nuclear fuel and Geovic is involved may be better for those wishing to take a
mineral mining opportunities exist. in exploration for cobalt. position on the commodities sector as a
Underexplored for mineral resources, And herein lies the problem for retail whole. Similarly, if you look at the large
Cameroon is considered to be more stable investors. Picking winners in an environ- mining conglomerates, these tend to be
than some of its neighbours and due to its ment of high speculation is a risky driven more by demand for industrial
oil resources has one of the better approach for the average investor. While metals over gold and silver.”
economies in sub-Saharan Africa. Through there may be a high upside potential for In short, if you have a CFD quoted stock
its agricultural and exporting history, it mining equities that strike gold – be that that you like the look of and are prepared
has a number of ports that could be literally or metaphorically – there is also a to take the risk, then there is a potential
expanded to accommodate the exports large potential for downside. Political tur- for a big return. However, with demand
from a mining industry. moil, lower than projected grades of ore likely to outstrip supply for the foresee-
There are few mining companies active or Rumsfeldian “unknown unknowns” able future, a CFD on the long term per-
in Cameroon to date. Some, however, are could all cause an upset. According to formance of the sector as a whole could be
currently dipping their toes in the water. David Morrison, CFD market strategist for a good choice for those who wish to tread
AIM and TSK-quoted Afferro Mining has GFT, “individual mining stocks may be more cautiously.
12,200 support. With the downtrend After a jump in its
resumed from last week it looks like we may
see 12,000 before we see 12,300 again.
price, William Hill
could be heading for
Spread Co offers 12,124-12,125 on the
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a fall
After tipping William Hill at 180p a week
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Markets may be winding down in Europe
for the Easter break but across the Atlantic
the first quarter earnings season continues
to gather pace. Telecoms giant AT&T is due
to publish results on Wednesday and the
sector certainly isn’t short of its fair share of
M&A news. Top of the list right now is the Markets price is $30.22-$30.23. may be on the cards in the shorter-term, but
mooted alliance between AT&T and T- $1,500/oz is comfortably in sight for gold many clearly believe that the longer-term
Mobile, although with the regulatory hurdles as the old threat of global inflation ramps up trend is firmly established. Current IG
likely to be high, any merger is far from a prices, whilst renewed concerns over the Markets price on spot gold is $1,495.36-
done deal. Positive signals however could sovereign debt situation also add to investor $1,495.86.
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 Lifestyle
26
| Health & Beauty
Summer glow essentials
Think pastel shades, juicy lips,
shimmering skin and bright eyes
this season, says Zoe Strimpel
1 2 5
3
Get the look
4 1 YSL Volupte Sheer Candy Glossy Lip Balms, £21 at Harrods. www.harrods.com
2 Nars Velvet Gloss Lip Pencils, £17.50 each at John Lewis, House of Fraser and Selfridges
3 Urban Decay stardust eyeshadow in Griffith, £15, www.asos.com
4 Benefit Bella Bamba blush, £23.50, www.benefitcosmetics.co.uk
5 Clinique Chubby stick in chunky cherry, £14.00, www.clinique.co.uk; www.selfridges.com
6 Illamasqua’s toxic duo nail varnish, £21 for a set of two, www.selfridges.com
7 Sheseido bronzer, £32, www.houseoffraser.co.uk
8 Nubo White Diamon radiance cream, £85 at Harrods, released in May. www.harrods.com
9 Guerlain meteorites pearls light-diffusing perfecting primer, £42, www.debenhams.com
10 Lancome Le Crayon Kohl in curacao, £15.50, Boots and other beauty counters
Why Fujitsu’s broadband plan will probably fail
GEEK
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8
7 CITY DAD
F
UJITSU is planning to roll out
superfast broadband to 5m
rural homes. That’s good,
right? Broadband for you,
broadband for me, broadband for
everybody. We can all meet in a
chat-room and discuss how great it
is that someone in a bothy in rural
Aberdeenshire can download the
back-catalogue of My Family instead
of being forced to stare interminably
into the fire like a rabbit caught in
the headlights of modern civilisation.
While Fujitsu is playing its cards
very close to its chest in terms of
where it will build this infrastruc-
ture, and what “rural” even really
means, it seems it will be targeting
the “final third” of the UK left after
BT connects the rest of the country
by 2015. We’re talking some seri-
ously isolated areas here; Welsh
valleys and Cumbrian mountain-
sides. And all Fujitsu says it needs
to drag these people kicking and
screaming from their Kafkaesque
nightmare is £500m of the £830m
of government money earmarked
for the roll out of next generation
internet.
Being a selfish, navel-gazing city
dweller, the argument that we
shouldn’t be spending quite so
much to connect some of these
places holds some sway. Small and
medium-sized towns, the places
worst hit by the recession, need the
investment that follows broadband
roll-out more desperately than just
9 child’s anger
10
about anyone – but should we real-
ly be paying for the next generation
internet of someone choosing to
live in the rolling hills of
Northumbria? These people are
greeted every morning by crisp
clean air and ride to work through
fields of daisies on the backs of wild
horses, while city dwellers are
forced to wade face deep through a
fetid sea of human slurry. Surely we
should at least be able to dazzle
them with our technology like
Neanderthal man waving a flaming
torch at an angry ape?
But this is largely redundant
when you consider it looks unlikely
that Fujitsu will be able to fund its
ambitious plans. Firstly, it would
need to win almost all of the public
money, which will be released in
small chunks for local governments
to bid for and despite going head-
to-head with BT. Fujitsu has admit-
ted that if public funding falls
below a certain level it may be
unable to proceed. It also relies on
BT reducing the amount it charges
for access to its duct and pole infra-
structure, which analysts are scep-
tical about.
Finally, Fujitsu has remained
tight-lipped on whether there will
be a premium charged for people
living in rural areas for the privilege
of this network. While the point of
the project is to help remove the
digital divide, this could risk erect-
ing yet another barrier.
CITYA.M. 19 APRIL 2011
Episode 10:
cannons and a
T
HE case is empty. Nelson’s delicate
Trafalgar coat has been removed for con-
servation. I remember it vividly, with its
four orders of chivalry and with the entry
hole of the fatal musket ball, fired by a sniper
from high in the rigging of the French ship
Redoubtable, just beneath the left epaulette of
the vice admiral’s undress uniform.
Noel drags me away. “Come on dad, there’s a
games place.” That’s new. But then it has been
more than 20 years.
Emma’s begun an ante-natal yoga class and
has next term’s lesson plans to prepare. I’ve
taken a couple of days’ leave and am occupying
Noel. Supposedly.
Today I thought we’d do “educational”; some-
thing beyond how to hit a delicate pass with the
outside of the foot. And armed with just an
ancient mobile phone from the back of a draw-
er, I’m un-contactable by either Rupert
Carmichael or Sandy. Only Emma has the num-
ber.
In the interactive gallery Noel tires of loading
cargo into the hold of a merchant ship and is
soon aiming and firing a cannon. I stand at his
shoulder, resisting the temptation to offer sug-
gestions. Or commands. Well, Nelson’s gunners
were disciplined but also trusted.
“Good shot” I offer, as Noel finds his range.
He is unmoved, steadfast and immediately aims
and fires again. He finds his target once more.
I’m impressed. Perhaps he’s found his métier.
“That was the twins” he mutters.
“What? The… oh. Noel…” I place a hand on his
shoulder. Noel jerks it away and as he does so, a
further round splashes harmlessly in the sea. He
stands, turns and faces me, belligerently.
“What?”
“You can’t fire a cannon at the twins Noel.”
“Don’t be stupid dad. They’re not even born
yet.”
“No but…Well, war is terrible.”
“Then why are you always telling mummy
about fighting battles at work.”
“That’s different.” Fortunately Noel interrupts
me, for I have nowhere else to retreat to.
“Anyway, if I hate the twins can we recycle
them?” he asks, pressing home his advantage
and brilliantly trapping me in a pincer move-
ment between militarism and environmentalism.
I stagger backwards, as if slammed by the recoil
of the cannon. I look down at my beautiful son.
The gallery is buzzing.
This strategic moment
goes unseen.
The mobile phone
beeps. I reach into
my pocket, punch-
drunk. “How are my
two favourite men?
Missing you both.
Hope you’re home
soon. Exx”.
City Dad will be
continued on 10 May.
See past City Dad
columns at
www.cityam.com.
CITYA.M. 19 APRIL 2011
Theatreland’s most alluring oyster bar
There’s nowhere
more glamorous for a
taste of the sea and a
glass of fizz, says
Zoe Strimpel
J Sheekey Oyster Bar
28-32 St Martin's Court, WC2N 4AL
Tel: 020 7240 2565,
j-sheekey.co.uk/oyster-bar
FOOD hhhhi
SERVICE hhhhh
ATMOSPHERE hhhhi
Cost per person without wine: £35
O
K, I admit it. We’ve got a bit of a
Caprice Holdings love-in today – a
review of the J Sheekey Oyster Bar
and an interview with the Ivy’s
director, below.
Far be it from us to lavish unwarranted
praise, but the Caprice group’s restau-
rants – which also include Le Caprice,
Daphne’s and Scott’s – have a wondrous
ability to draw devotion from punters and
celebrities alike. Even Marcus Wareing,
with his Michelin stars and perfect
reviews, claims they’re his most-admired
in London. So it was high time we
reviewed Sheekey’s Oyster Bar, which
opened in 2008, somewhat quietly, in a
room off the side of the cosy Sheekey’s.
Like the Ivy (also doused in the romance
of theatreland), J Sheekey is always full to
bursting with punters and glitterati (and
literati – I saw Zadie Smith in there the
other day) eating the likes of whole sea
bass, lemon sole and crab. Meanwhile, at
the Oyster Bar, theatregoers can grab a
Fine de Claire or three and a glass of
champagne and stroll next door for cur-
tain up.
Or you can spend four hours there, as
we did on Saturday night, sipping fizz
Secrets of success: meet
the man who runs the Ivy
Zoe Strimpel chats to Fernando
Peire, gatekeeper of the most
sought-after restaurant in Britain
WHAT’S THE KEY TO THE IVY’S ENDURING,
RAGING, CULTISH SUCCESS?
The juxtaposition of people; you’re rarely
going to find that in another restaurant.
Celebrities next to tourists and regular
Londoners. Then it’s focus on the cus-
tomer. That’s the key to a good restau-
rant. Each day we look at what went
wrong and see how we can correct it.
HOW DID YOU GET TO WHERE YOU ARE?
When I was at school, I worked in restau-
rants. At university, I worked three nights
a week in a restaurant. I got most of my
experience at a restaurant in Manchester
– waiter, then barman, then maitre d’
then manager. I loved the work so much I
Restaurants
from saucers, trying a few wines by the J Sheekey Oyster Bar
glass as you follow your tastebuds and is a perfect place to
your nose (all wines are available by glass go before or after the
and carafe which is pretty rare). Time theatre.
rushes into a vortex of pleasure and ani-
mation in the dusky light of the bar.
Neither my guest nor I were big oyster
lovers – and I am terrified of being sick –
but we were clearly in very safe hands.
Guided by the unobtrusively attentive
man behind the bar (people like him are
the key to all the restaurants’ raging popu-
larity) we went for some Irish Strangford
Lough rocks and some fines de Claire – a
cleansing wash of oceanic protein made
piquant with shallots and Tabasco. Some
Gruner Veltliner, forcibly recommended,
went well.
Next was a whole cock crab (yes, we
were amused by the name too) – served
high on a platter in all its shell-bound
enormity, but with the carapace thought-
fully loosened enough to make for easy
retrieval of flesh. I got stuck into creamy
brown meat and soon felt fuller than I
never wanted to leave.
HAS THE RECENT DOWNTURN BEEN A
CATASTROPHE FOR LONDON EATERIES?
I’ve seen restaurants close, but mostly
because they weren’t good. Same with
Woolworths – it closed because it was
crap.
THE IVY IS OPENING IN DUBAI – WON’T
THAT DILUTE THE BRAND?
I don’t think it will detract. But it will be
different – you’re not going to get Diana
Rigg followed by Sienna Miller coming in
on a typical night.
WHAT’S YOUR FAVOURITE PART OF THE JOB?
Developing staff. Some of the commis
chefs I hired have become big shots in
Caprice Holdings.
WHAT ARE YOUR FAVOURITE RESTAURANTS?
I like family restaurants and cheap and
cheerful ones – Yala Yala, a Lebanese
thought possible from crab. Some time
later, octopus with chorizo arrived (we’d
been tantalised by the odour of its prepa-
ration) – tender, fragrant little white
wheels surrounded by garlicky meat and
broth. Razor clams were also meatier than
usual, with a welcome heft and alpha
punch. The evening tapered off with
brown shrimps with shredded cabbage
and rapeseed oil. Pungent and cleansing.
There are catches of the day if you want
fish and a nice dessert selection – choco-
late torte, steamed sponge pudding and
the Caprice classic – berries with white
chocolate sauce.
The rise of bar eating in London is wel-
come – high quality food served informal-
ly while you watch it being cooked is chic
and fun. The only downside is that at
Sheekey’s the stools are very close togeth-
er, so if you’re having a particularly inter-
esting conversation, expect to be
shamelessly ogled. If you can get over this,
there’s nowhere nicer to stop by for a taste
of the British coast.
street food restaurant (Green Court,
Soho) and Harbour City (Great
Marlborough Street) for cheap and deli-
cious dim sum are my favourites. I like
the value thing. I wouldn’t be at the Ivy
otherwise.
ARE YOU FRIENDS WITH LOADS OF YOUR
CELEBRITY GUESTS?
They’re my “restaurant friends” rather
than my friends. I don’t invite them
round to my house.
IS THE IVY ALWAYS BOOKED?
As much as we want – we like to keep the
option for spontaneity – it gives it
vibrancy.
PORSCHE 27
911 TARGA
IN MOTORING
TOMORROW
FOOD & BOOZE
NEWS
ZOE STRIMPEL
FRY-UP FLAVOUR EASTER EGGS
The roars of delight that went up in the City
A.M. offices on hearing of breakfast-themed
Artisan du Chocolat easter eggs (see pic
below) were probably heard across the City.
Bacon, mushroom and tomato may not sound
like the most enticing trio of chocolate flavours
to normal people, but to us they certainly
sound worth a try. English Breakfast Eggs
(trio) £7.50. Exclusively at Selfridges London.
Call 0800 123400.
WILLIAM CURLEY DOES EASTER, TOO
More chocolate news: if you’re looking for a
good Easter gift to give a chocoholic, you can’t
go wrong with chocolatier William Curley. Buy
your sweetheart membership of the Curley
Chocolate Club, a monthly subscription where-
by members receive an exquisite selection of
chocolates, biscuits and treats to their door each
month. Alternatively, splurge on a Curley Easter
Egg – flavours include cinder toffee, roast gian-
duja almonds, crystallized orange dipped in dark
chocolate and caramelized Piedmont hazelnuts.
Eggs start at £30. Chocolate Club is from from
£65 for three months. www.williamcurley.co.uk
MALBEC MADNESS
As Argentina seeks to
promote its excellent
array of Malbec wines,
this darkest and juiciest
of grapes is being cele-
brated around town this
week, following World
Malbec Day on Sunday.
Restaurants including Gaucho
and Black and Blue will offer
masterclasses and tastings
this week. For other events
and tastings in London and
abroad, see www.malbec-
worldday.com
WHAT’S THE BEST WAY TO GET A TABLE AT
THE IVY LAST-MINUTE?
Try between 8:30 and 9:30. Be nice, offer
to have a drink at the bar, and we’ll
always try to find a space for you, no mat-
ter what you’re wearing.
WHAT’S BEST TO EAT AT THE IVY?
Start with the crab, it’s so clean. Then
have the roast poulet for two, stuffed
with foie gras. For dessert, I’d go for the
sorbet. It’s to die for.
BEST COCKTAIL?
The Twinkle – it’s elderflower, cham-
pagne, and a twist of lemon.
1-5 West Street, WC2H 9NQ. www.the-ivy.co.uk
 28 Lifestyle | TV& Games CITYA.M. 19 APRIL 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
6.55pm Party Election
Broadcast
7pm The One Show
7.30pm EastEnders: BBC News
8pm Holby City
9pm CHOICE Candy Cabs
10pm BBC News 10.25pm
Regional News 10.35pm The Baby
Born in a Concentration Camp
11.05pm FILM The Love Letter
1999: Weatherview 12.35am Sign
Zone: Michel Roux’s Service 1.35am
Who Does What? 2.35am Pleasure
and Pain with Michael Mosley
3.35am Great British Railway
Journeys 4.05am-6am BBC News
6pm Eggheads: Quiz show,
hosted by Dermot Murnaghan.
6.30pm Great British Menu
7pm Live Snooker: The World
Championship: Peter Ebdon v
Stuart Bingham and Mark
Allen v Matthew Stevens.
8pm Britain’s Next Big Thing
9pm Filthy Cities
10pm Later Live – with Jools
Holland
10.30pm Newsnight: Weather
11.20pm Snooker: The World
Championship
12.10am Snooker Extra
2.10am BBC News 4am-6am BBC
Learning Zone
6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.25pm Party Election 6.30pm Hollyoaks 6.25pm OK! TV
Broadcast 7pm Channel 4 News 7pm 5 News at 7
6.30pm ITV News 7.55pm 4thought.tv 7.30pm Extraordinary Dogs: 5
7pm CHOICE Emmerdale 8pm Supersize vs Superskinny News Update
7.30pm Military Driving School 9pm The Sex Education Show: 8pm Tutankhamun: The
8pm Countrywise Stop Pimping Our Kids Mystery Revealed: 5 News at 9
9pm The Reckoning 10pm CHOICE Campus 9pm CSI: Crime Scene
10pm ITV News at Ten 11.10pm Pete Versus Life 11.45pm Investigation
10.30pm London News School of Comedy 12.15am UK & 10pm CSI: Miami CANDY CABS
10.35pm FILM The Hitcher: Ireland Poker Tour 1.15am Superbike 10.55pm CSI: NY BBC1, 9PM
World Championship 2011 1.45am 11.55pm CSI: Crime Scene Jackie and Elaine are summoned to
Horror remake, starring Sean an employment tribunal to face a
The Grid 2.10am Formula Ford Investigation 12.55am
Bean. 2007. Championship 2.35am KOTV Boxing SuperCasino 4am Meals in charge of discriminating against men.
12.05am The Zone; ITV News 3.05am Freesports on 4 3.30am Moments 4.10am How Not to Last in the series.
Headlines Sailing 3.55am ITU Triathlon Decorate 4.55am Animal Rescue
2.10am Crossing Jordan 4.50am Wogan’s Perfect Recall Squad 5.10am Wildlife SOS
3am-5.30am ITV Nightscreen 5.15am-6.10am Full Metal Challenge 5.35am-6am House Doctor

SKY SPORTS 1 BRITISH EUROSPORT 11pm Criminal Minds 12am Ghost 12.55am How I Met Your Mother 5.30am-6am Destroyed in
SATELLITE & CABLE

7pm Sports News 7.30pm Live
Football Special 10pm Revista De
La Liga 11pm A League of Their
Own 12am Football Asia
12.30am Football Special 2am
Revista De La Liga 3am Football
Asia 3.30am Football Special
5am-6am Revista De La Liga
SKY SPORTS 2
7pm Karting 7.30pm Live
Greyhound Racing 10pm Poker
11pm FIA GT1 World
Championship 12am Ladies
European Tour Golf 1am Pool
2am FIA GT1 World
Championship 3am-4am Ladies
European Tour Golf
SKY SPORTS 3
7pm Cycle Sports World 7.30pm
British Basketball 9.30pm Cycle
Sports World 10pm Golfing
World 11pm British Basketball
1am Karting 1.30am-2am Cycle
Sports World
5.30pm Live WTA Tennis 7.15pm
Live Snooker: The World
Championship 10pm Extreme
Sports: Freeride Spirit 10.30pm
World Series by Renault 11pm
Motorcycling 12am-12.30am
Snooker: The World
Championship
ESPN
7pm ESPN Kicks: FA Cup 7.15pm
Live Premiership Rugby Union
10pm Premier League Review
11pm Russian Premier League
Review 11.30pm Live Major
League Baseball 2.30am ESPN
Game of the Week 3am ESPN
Press Pass 3.30am Planet Speed
4am Premier League Review
5am-6am Eredivisie Review
SKY LIVING
7pm CSI: Crime Scene
Investigation 8pm Cougar
Town 8.30pm Hot in Cleveland
9pm Katie 10pm The Hunks
Whisperer 1am CSI: Crime Scene
Investigation 2.40am Charmed
4.20am Nothing to Declare
5.10am-6am Maury
BBC THREE
7pm Total Wipeout 8pm Don’t
Tell the Bride 9pm So What If My
Baby Is Born Like Me? 10pm
EastEnders 10.30pm White Van
Man 11pm Family Guy 11.45pm
The Undercover Princes 12.45am
White Van Man 1.15am So What
If My Baby Is Born Like Me?
2.15am Total Wipeout 3.15am
The Undercover Princes 4.15am
Freak Like Me 4.45am-5.15am
Bizarre ER
E4
7pm Hollyoaks 7.30pm Friends
9pm 90210 10pm The Cleveland
Show 10.30pm The Ricky Gervais
Show 11pm Bob’s Burgers
11.30pm The Cleveland Show
12am The Big Bang Theory
1.40am My Name Is Earl 2.25am Seconds
Ugly Betty 3.05am Important
Things with Demetri Martin DISCOVERY HOME &
3.30am Beehive 4am The Class
4.20am Style Her Famous
HEALTH
4.45am-6am Switched
7pm A Baby Story 8pm 18 Kids EMMERDALE
and Counting 9pm Embarrassing ITV1, 7PM
HISTORY Illnesses 10pm Britain’s Fattest John tells Declan he will be able to
7pm America: The Story of the Man 11pm Trauma Unit 12am raise the funds to buy Butler’s Farm in
Embarrassing Illnesses 1am a month, and Kelly informs Jimmy she
US 8pm Monumental Challenge
Britain’s Fattest Man 2am is leaving the village.
9pm Monster Moves 10pm Mega
Movers 12am Monster Moves Trauma Unit 3am 18 Kids and
1am Monumental Challenge 2am Counting 4am Bringing Home the
Mega Movers 3am America: The Babies 5am-6am A Baby Story
Story of the US 4am Universe
5am-6am Ice Road Truckers SKY1
8pm Live to Dance 9pm FILM
DISCOVERY Beverly Hills Cop III 1994.
8pm How It’s Made 9pm 11.05pm Fringe 12.05am Brit
Wheeler Dealers 10pm HMS Ark Cops: Frontline Crime UK 1am
Royal 11.30pm Disaster Customs UK 1.50am Border CAMPUS
Eyewitness 12am Get Out Alive Invasion USA 2.40am Cold Case CHANNEL4, 10PM
1am Trawler Wars 2am Future 3.30am The Hades Factor A ruthless restructuring guru arrives
Weapons 3am Greatest Tank 4.20am Myths, Monsters at Kirke University, and Jonty asks
Battles 3.50am The First World and Hobbits 5.10am-6am Bill serial womaniser Matt to woo her in
War 4.40am Treasure Quest Bailey’s Birdwatching Bonanza an effort to save his job.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
11 29 21 12 8 37 
10 22
6 3 23   
45
Place the numbers from 1 to 9 in each empty cell so that each 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 15 9
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 15 9
   
above or to the left of it. 3 29 19 6
You can only use the digits 1-9 4 4 14  
   and you must not use the
13 23 15
45  
same digit twice in a block.
 The same digit may occur 5 16 11  
6 11
     more than once in a row or
column, but it must be in a
8
21 10
3
24 17
  
20 35
     separate block.
7
45
   7 12
 

     ACROSS DOWN
1 Collection of things (5) 1 Small informal
    
 WORDWHEEL N N
3 Small plant-sucking
insect (5)
7 Vendor (6)
restaurant (6)
2 Pass between
mountain peaks (3)
Using only the letters in the Wordwheel, you have 9 Unorthodox or 4 Preserved in vinegar (7)
   ten minutes to find as many words as possible,
I T false religion (4) 5 Obligation (4)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A 10 Boat built by Noah (3)
11 Moulders (4)
6 Woman’s
undergarment (9)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
A O 13 Prune, cut back the
growth of (3)
8 Espresso coffee
with milk (5)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
C R 15 Ballroom dance in 12 Bloated (7)
double time (3-4) 14 Form of musical
QUICK CROSSWORD 1 7 6 2 1 6 17 Star sign between entertainment (5)
S I G H T D I A R Y
4 5 7 9 1 3 8 SUDOKU          Cancer and Virgo (3) 16 Those who travel on the
6 9 8 4 9 8 2 18 Floor on a boat (4) piste, for example (6)
H O O S O         
2 1 5 3 2 7 9 1
O M I T S N E H R U          20 Caustic washing 19 Domesticated
A P O N T 5 9 8 3 1 4 2
L E M O N S Q U A S H 1 3 8 9 3 6 9
         solution (3) bovine animals (4)
21 Opaque gem (4) 23 Solemn pledge (3)
WORDWHEEL
V T C M K         
8 6 9 7 4 5 6
C A M A R A D E R I E         
O T R R N
3 2 1 7 9 5 7 8 22 Cause extensive
        
R A Z O R F A B L E
9 4 3 2 6 1 3 The nine-letter word was destruction (6)
2 5 1 8 3 4 9         
K O I T M
HAIRBRUSH 24 Act ostentatiously (5)
S N O O P F E R R Y 4 9 8 2 1 7         
25 Pitchers (5)
 Sport
29
SPURS ARE READY TO KILL
OFF ARSENAL’S TITLE HOPES
ASSOU-EKOTTO SURE OF DERBY DAY
JOY AT WHITE HART LANE: PAGE 30

Cook says it’s time to forget Ashes

win and look to an Indian summer
The man who would
be captain tells James
Goldman it’s time for
England to focus on
becoming world’s best

A
LASTAIR COOK is skilled when it
comes to anticipating what’s com-
ing his way. As an opening bats-
man, being able to predict the
moment at which a fast bowler is readying
himself to produce a delivery designed to
inflict physical pain is part of the battle.
As Cook’s record in Australia this winter
would testify, he’s got that part of the
game, and many others, down to a fine art
but his powers of foresight appear to
extend beyond the field of play.
“I knew I’d get asked and I know what
you’re trying to get me to say,” said Cook
when the issue of the England captaincy, a
role he has seemingly been groomed for
ever since he was parachuted into the side
in India five years ago, is raised.
While the stock of those Test players
who were part of England’s post-Ashes
World Cup travails in the subcontinent
has taken something of a dent, Cook’s
already stellar status has been elevated
again, as a result of his non-involvement,
to a level whereby he’s considered the
practical alternative to Andrew Strauss,
who is considering his position as the cap-
tain of England’s 50 over side.
Although keen to protect his great
friend and opening partner, when pressed
further on whether the idea of captaincy
and the additional pressures and
demands it brings appeals, Cook is
unequivocal in his response.
“It’s a bit of a loaded question and in my
mind Straussy is still the captain, but you about the sort of form he was in when he Cook has captained significant period of time we won’t rest. ly represent “special” but it would be safe
wouldn’t turn it [the captaincy] down if left Australia for home, while the bulk of England once before “In 2005 they built up to that Ashes to assume a series win over MS Dhoni’s all
it’s offered to you,” he said. “Leading up to his Ashes winning team-mates jetted off to on last year’s tour of series and won, but never played together conquering side won’t be greeted with the
the World Cup that one-day side had been the World Cup. Bangladesh again. We’re lucky and privileged not to be same sort of fanfare that the Ashes victory
very settled, like the Test team and had The raw statistics, even four months in that position. Of course, Colly has over a substandard Australia was.
won a few series back-to-back. But it will be after the event, are still scarcely compre- Picture: retired so we’ve lost one of our key compo- England’s obsession with beating the
interesting to see what happens now. hendible. The 26-year-old began the tour Micha nents but hopefully the nucleus is going old enemy borders on the unhealthy in
“Of course the idea of leading the side regarded as the side’s weakest link and Theiner to stay together. some eyes. Cook admits the biggest sur-
appeals to me and I very much enjoyed ended it with 776 runs in the bank from /City A.M. “We’ve got a few players on the verge of prise since his return in January has been
doing it when I went to Bangladesh. I like seven innings as England won a series in 30 or around there with a lot of experi- “meeting so many people who’d given up
to challenge myself constantly and if you Australia for the first time in 24 years. ence behind them who really are so many hours of sleep to watch us play”.
get an opportunity to take it you’d proba- While Cook concedes it was “disap- approaching the peak years of their While England’s supporters could be
bly be left with a big regret at the end of pointing not to be selected for the careers. There’s a real natural balance in forgiven for feeling groggy following their
your career if you had turned it down.” World Cup on the basis of that form” this side and if the nucleus can stay strong winter exploits, so too can the players,
That Cook is being touted as a possible he acknowledges the time for we can do something special. The motiva- some of whom were on tour for five
leader of the limited overs side, despite reflection and self-congratulation tion is definitely there. months. It’s an issue that needs to be
the fact he has been in the one-day wilder- is over; a pivotal summer in the “India have dominated really and it’s up urgently addressed, says Cook.
ness for just over a year, speaks volumes development of this England side to us to knock them off their perch. Any “The schedule was wrong,” he said. “You
is almost upon us. team which can boast the likes of Sehwag, can’t complain too much because you’re
CAREER REVIEW | ALASTAIR COOK Sri Lanka first and then India, Tendulkar, Dravid, they are once in a gen- doing what you love, but there are times
World Cup winners and the No1 eration players and they’ve got them all in when it gets incredibly tough.
Mar 2006: Makes England debut in India and ranked Test side, are the visitors to these their top order. “We had the opportunity to do some-
shores and realists would suggest that “If we can play as well as we did against thing very special by winning an Ashes
scores a century in the second innings. both will offer a greater threat to Australia we know we are a very tough series in Australia. We wouldn’t swap it
Jan 2007: Endures difficult tour of Australia England’s progress than the disfunc- side to beat, especially at home.” but I don’t think it makes sense. It’s mad.”
as England are thumped 5-0. tional Australian side Cook helped put Lowering India’s colours would certain- Should Cook inherit the captaincy from
Feb 2009: Ends a run of 15 Tests without a to the sword in the winter. Strauss his world is likely to get madder
That said, England are well placed to still. His track record, however, suggests
century with 139* against West Indies. challenge the subcontinent’s suprema- “Becoming the No1 team in he’s got the ability to anticipate and deal
Aug 2009: Part of the England side that wins cy. This side, unlike their 2005 predeces- with the pitfalls of the position.
back the Ashes, but makes only one 50. sors, whose Ashes win was the end rather the world really means a lot Rankin has partnered with Samsung and
than the start of their story, are yet to Intel to launch the Series 9 notebook with 2nd
Mar 2010: Captains England on their success- reach their peak, according to Cook. to us. Until we get there generation Intel Core i5 Processor which com-
ful tour of Bangladesh. He said: “This No1 goal, being the bines smart PC performance and seamless
Jan 2011: England win back the Ashes thanks best in the world, really means a lot and stay there for a period visuals, with a collection of technology
to us. We don’t want to win isolat- inspired photographs featuring Alastair
in part to Cook’s 776 series runs, including an
unbeaten double century in Brisbane.
ed series here and there and until of time we won’t rest.” Cook. The notebook is now available from
we get there and stay there for a major retailers across the UK.
 30 Sport CITYA.M. 19 APRIL 2011

We’ll deliver
killer blow to
Rangers are Arsenal, say
nearly there Tottenham
▲

FOOTBALL
QPR 0 BY FRANK DALLERES for the first time in their history and,
having sampled the big time, Assou-
TOTTENHAM defender Benoit Assou- Ekotto believes they can do the same
DERBY COUNTY 0 Ekotto insists his team will hammer
the final nail into Arsenal’s faltering
in the current run-in.
“We can do it,” he said. “City lost
Premier League title bid when the bit- against Liverpool last time and teams
FOOTBALL
▲

QUEENS PARK RANGERS manager
Neil Warnock paid Derby veteran
Robbie Savage a backhanded compli-
ment as the former Wales interna-
tional helped spoil the promotion
party at Loftus Road.
Savage was magnificent in helping
to stifle the Championship’s player of
the season, Adel Taarabt, as Derby
escaped with a point from the home
of the leaders.
Taarabt hurled a water bottle in
frustration as he stomped off having
been substituted with 20 minutes to
go and Savage still chirping away at
him.
Warnock, whose side will clinch
promotion back to the Premier
League with a win over Cardiff at the
weekend after a 15-year absence, said:
“You either love him [Savage] or
loathe him – he’s a bit like me.
“When you look at his ability he’s
done fantastically to make the living
he has. He’s long past his sell-by date
but he does a job. He’s been superb.”
The 37-year-old Savage, who is set to
retire at the end of the season added:
“Taarabt’s a talent, but sometimes
when it is not going his way he can
have a little strop like he did tonight.
“But he deserves to be the player of
the year because he has got great skill
and great ability and he’s very good
on his day. I would have preferred
him to stay on because he was not
doing anything in the game.”
ter north London rivals collide tomor-
row night.
Spurs have all the motivation they
need to take maximum points, as a
win would lift them level with
fourth-placed Manchester City, their
chief rivals for Champions League
qualification.
But as an added incentive Harry
Redknapp’s men could inflict further
damage on the Gunners’ bid to catch
leaders Manchester United, which
suffered a severe blow in Sunday’s
draw with Liverpool.
Arsenal could find them-
selves nine points
behind by kick-off at
White Hart Lane if
United win tonight,
and Assou-Ekotto
b e l i e v e s
Tottenham are
primed to repeat
their victory over
their neighbours at
Emirates Stadium ear-
lier this season.
“It will be a massive
game and when you see what we
did at Arsenal, we know we can do
the same at home,” said the full-back,
part of the team who came from two
goals down to beat the Gunners in
November.
“We will have our supporters
behind us and we believe we can beat
any team at White Hart Lane.”
Spurs finished last season strongly
to secure Champions League football
will have problems at this time of the
season. Anything is possible.”
United visit Newcastle tonight look-
ing to take another huge step towards
claiming an English record 19th top-
flight title, although Arsenal goal-
keeper Wojciech Szczesny has not
given up yet – provided his side can
win tomorrow.
They make the short trip up the
Seven Sisters Road still smarting from
the setback against Liverpool, which
saw Dirk Kuyt deny the Gunners a
precious win with an improbable
equaliser in the 12th minute of
stoppage time.
“It is still possible for us to
win the title, but we have
to say we dropped two
points and it’s terribly
disappointing. We are all
gutted,” said Szczesny.
“However, we still have
to play Manchester
United and they also have
to play Chelsea. They will
drop points. We believe we are
good enough to win every game
from now until the end of the season,
so we believe we can do it.”
Szczesny believes facing Spurs
could inspire the reaction Arsenal
need. He added: “Tottenham is a very
good game for us to come back from
a big disappointment, and we owe it
to the fans as well because they are
obviously very disappointed about
what happened. We owe them a
result at White Hart Lane.”

Pietersen sets his sights on Alastair

being back for Sri Lanka Test Cook
against Sri Lanka on 26 May. following their winter success in “ENGLAND WON’T
▲

CRICKET
BY TOM CLARKE “I’ll start playing probably in the Australia.

ENGLAND batsman Kevin Pietersen

has confirmed he will be available for
his country this summer despite
admitting he has enjoyed his time
away from the game.
The former captain has been recov-
ering from an operation on a hernia
problem which caused him to fly
home from the World Cup in March
before the team’s quarter-final exit at
the hands of Sri Lanka.
Rather than compete in the Indian
Premier League, Pietersen, who turns
31 in June, has been taking a break
from the game but intends to be fit
for the first Test of the summer
middle of May and try and get ready
to prove my fitness for the first Test
match,” he said. “I’m rehabbing
three, four, five times a week trying to
get things right, just making sure I
get myself right, get myself strong,
get myself fit.
“I’ve not had a break like this for
seven years playing for England. It’s
something I’ve really enjoyed.”
Pietersen’s England team-mate
Stuart Broad, who was also forced to
leave the World Cup early with a bro-
ken rib, intends to regain his fitness
by playing for Nottinghamshire at the
start of next month and insists this is
a crucial summer for English cricket
“It is going to be a huge summer
for us with India and Sri Lanka com-
REST UNTIL WE’RE
ing over,” Broad said. “We have a
chance to become world No1 but only
THE WORLD’S
if we win our matches.”
Broad, meanwhile, revealed his
BEST”
future ambitions to captain England
but backed current skipper Andrew
PAGE 29
Strauss to continue to lead the one-
day team.
“I would love to do it at some
stage,” said Broad. “But my personal
belief is that Straussy should keep
going. I believe there is a lot more to
come from him. He has a lot to offer
as England captain in all formats of
the game.”
CITYA.M. 19 APRIL 2011
VINTAGE BOTTLERS
Arsenal’s late collapse against Liverpool
was their latest failure to win when it
mattered most. However, the following
teams give them a run for their money in
the capitulation stakes.
After a disappointing few seasons, 2007
was set to be the year for Lancashire, led
by Mark Chilton. Leading the County
Championship First Division going into
the final game, they lost against Surrey,
in turn handing the title to Sussex.
Newcastle were 12 points clear in the
Premier League in 1995/96 season and
still top in late March but a 1-0 home loss
to Manchester United and a famous 4-3
defeat by Liverpool saw Kevin Keegan’s
side crumble and United take the title.
Needing one more victory to beat the
Boston Red Sox in the 2004 American
League Championship series, the New
York Yankees and Alex Rodriguez (above)
imploded, becoming the first team to lose
a best-of-seven series having led 3-0.
Henson comeback hit as
Toulon ban Wales centre
▲
RUGBY UNION
BY TOM CLARKE
WALES star Gavin Henson’s hopes of
returning to the Test side ahead of
this year’s World Cup have taken a hit
after he was given a one-week suspen-
sion by his club side Toulon.
The 29-year-old has only started two
games for his new team but Toulon
confirmed yesterday that Henson
would be sidelined for a week follow-
ing "non compliance with the code of
conduct set by the club".
The big-spending French side, who
signed Henson on a short-term con-
tract in February, refused to give any
more details but reports have suggest-
ed he was involved in a scuffle with
team-mates.
Henson, whose preferred position
Wenger will be pardoned but
must rip it up and start again
COMMENT
FRANK DALLERES
C
HANGE is in the air at Arsenal,
and not only in the boardroom.
With Arsene Wenger’s men fail-
ing to convert decent form and
promising situations into an actual
trophy for the sixth season in a row,
there is a growing feeling that the tip-
ping point has finally been reached
and that major changes are needed
over the summer.
Because as incredible as the cir-
cumstances of Sunday’s 1-1 draw with
Liverpool were, certain features of
that capitulation have become calling
cards for this team. They are special-
ists at squandering leads, masters of
creating mayhem in their own penal-
ty area. A 102nd-minute equaliser was
only a matter of (stoppage) time.
Even facets traditionally strong
under Wenger have waned. They are
not the attacking force they once
were, as evidenced by their failure to
penetrate defences who show a mod-
icum of resilience.
Theo Walcott aside, they desperate-
ly lack pace going forward, and do
not have a striker who regularly plays
on the shoulder of the last man.
Where once Wenger’s Arsenal
would transform defence into a goal
inside 10 seconds, a vintage Gunners
breakaway strike has become rarer
than a Manuel Almunia clean sheet.
EXASPERATING
And let’s debunk the myth that they
are good to watch. Ask an Arsenal fan
whether they have enjoyed sitting
through the last half a dozen seasons.
There is nothing enjoyable about see-
ing your team toy with success only to
blow it. Again. In ever more exasperat-
ing fashion.
So depressingly predictable has it
become that increasing numbers of
is centre but can also play fly-half and
full-back, has had problems on and
off the pitch in the last 18 months.
Following injury and the break-up
of his relationship with singer
Charlotte Church, with whom he has
two children, he took an extended
break from rugby.
He returned to the game in
December with Saracens but was
released after just four appearances.
With the World Cup on the hori-
zon, Henson had been hoping for a
return to the fold after two years in
the international wilderness.
Henson scored a try on his Toulon
debut against Stade Francais two
weeks ago and helped his side to a 21-
9 victory over Toulouse at the week-
end but will now miss next week’s
key clash with Perpignan.
REVOLVING DOOR | WHO COULD LEAVE THE EMIRATES THIS SUMMER?
Wojciech Szczesny, Bacary Sagna,
Jack Wilshere, Johan Djourou,
Theo Walcott, Robin van Persie,
Thomas Vermaelen, Alex Song
Cesc Fabregas, Andrey Arshavin,
Samir Nasri, Gael Clichy, Lukasz
Fabianski, Abou Diaby, Marouane
Chamakh, Carlos Vela
Emmanuel Eboue, Tomas Rosicky
Denilson, Nicklas Bendtner,
Sebastien Squaillaci,
Manuel Almunia
lovelorn supporters believe Wenger is
the root of too many failings. The big
question is whether new majority
shareholder Stan Kroenke is ready to
axe the Frenchman.
It looks highly unlikely. Kroenke is
a cautious type and called Wenger “a
wonderful manager” only last week.
But more importantly, it would be
too dangerous for his own popularity.
Sacking a pillar of the club weeks
after taking control would not be
Murray’s place in Barcelona rests
on results of scan on injured elbow
TENNIS
▲
BRITISH No1 Andy Murray will
decide today whether or not
his elbow is in a good
enough condition for him
to be able participate in
Barcelona this week.
Murray required a pain-
killing injection prior to
last Saturday’s Monte Carlo
Masters semi-final defeat
against Rafael Nadal and
yesterday underwent a
scan.
And with Masters 1000
tournaments to follow in
Madrid and Rome ahead of
the French Open, which
starts on at the end of next
month, Murray is wary of
causing the elbow further
good PR for an American who has
only been to a handful of Arsenal
games.
So it will fall to Wenger to fix his
own faults. There is certainly no
shortage of candidates to be moved
on from the playing squad: Denilson
and Abou Diaby to name two. With
fan morale at a low and a reshuffle
taking place in the boardroom, there
may never be a better time for him to
rip it up and start again.
damage. “I’ve seen the doctor here
and been getting a lot of treatment
from my physio the last few days, and
I don’t think it’s anything serious,” he
said.
“Whether or not I’ll be able to play
this week, I’m not sure. I haven’t hit
any balls since Monte Carlo but I’m
going to practise today in the morn-
ing and see how it is, and then I’ll
make a decision after that.”
Should he take up his place
in the draw, Murray has a bye
in round one as the second
seed and will face Juan
Carlos Ferrero or Xavier
Malisse in round two.
Top seed and five-
times Barcelona champi-
on Nadal is in the other
half of the draw along
with world No5 Robin
Soderling.
Sport 31
SPORT | IN BRIEF
Classics blow for Dubai Prince
HORSE RACING: Dubai Prince will miss
the 2,000 Guineas and Investec Derby
at Epsom after suffering a setback in
training. A minor injury will keep the 14-
1 Derby chance out of competition for
the next few weeks but Godolphin rac-
ing manager Simon Crisford confirmed
he will return later in the season.
Whitmarsh hails Hamilton win
FORMULA ONE: McLaren team principal
Martin Whitmarsh believes Lewis
Hamilton’s win in the Chinese Grand Prix
is the perfect platform for success
ahead of the European season. “It’s a
fantastic boost for the team. It will only
motivate us to achieve even greater
things in Turkey next month,”
Whitmarsh said.
Fulham wrap up Sidwell deal
FOOTBALL: Fulham midfielder Steve
Sidwell has signed a new contract which
will keep at the club until the summer of
2014. Sidwell, 28, had been on a six
month contract after signing in January
but has earned a new deal after
impressing Fulham manager Mark
Hughes in eight first-team appearances.
Hendry beats Perry in thriller
SNOOKER: Seven-time world champion
Stephen Hendry survived a Joe Perry
fightback to win an epic first round
match 10-9. Hendry capitalised on
Perry’s miss on the brown to win the
decider. “I’ve got a big decision to make
at the end of the season, I might even
retire if I win this tournament,” said
Hendry. Elsewhere, Ronnie O’Sullivan
leads Dominic Dale 7-2.
Results
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SPORTS EDITOR FRANK DALLERES
email sport@cityam.com
 F
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