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GUILTY: GALLEON Brown aide:


Labour needs

MAN FACES JAIL growth plan


POLITICS
BY DAVID CROW
ONE OF Gordon Brown’s top economic
ENFORCEMENT advisers has called on Labour to pres-

BY STEVE DINNEEN ent an alternative to the government’s


plan to cut the deficit through spend-
THE BIGGEST insider dealing case in ing cuts instead of “carping” .
hedge fund history ended yesterday Writing in City A.M., Dan Corry, who
with Raj Rajaratnam, the Svengali-like was a member of Brown’s Downing
boss of Galleon Group, being convicted Street policy unit, said it was “very
of fraud and conspiracy. easy to fall into the trap of having a
Rajaratnam now faces up to 19 and gleeful grin not when unemployment
a half years behind bars for master- falls but when it rises”.
minding a vast conspiracy that traded Corry’s comments came as the Bank
on illegal information on companies of England lowered its growth fore-
including Google, Intel and Hilton, casts yesterday. It now predicts growth
netting the tycoon tens of millions of of about 1.7 per cent in the four quar-
dollars. ters to the end of this year, down from
The ruling brings to an end the its February forecast of two per cent.
most high profile financial prosecu- Growth in the year ending 2012 will
tion since Bernie Madoff was slapped now be around 2.5 per cent, the Bank
with a 150 year sentence for his $65bn expects, lower than its previous esti-
Ponzi scheme in 2009. mate of closer to three per cent.
Questions will now be asked about Ed Balls, Labour’s shadow chancel-
how the compliance systems of some lor, seized on the downgrade as proof
of the world’s biggest financial institu- the planned spending cuts “will make
tions allowed Rajaratnam’s network of it harder to get the deficit down”.
contacts to access its treasure-trove of But Corry, now at FTI Consulting,
confidential information. Galleon boss Raj Rajaratnam goes down with his ship as he is found guilty of fraud and conspiracy said: “Balls has to do more than carp,
High profile figures from Goldman more than critique. While it may be
Sachs, McKinsey and Moody’s all fea- dential information when he was a investor, who says he will appeal, was fessional who has operated a business right to point out that... this recovery is
tured in the sprawling case, which director at the bank. He denies the undone by his own hubris. The govern- largely based around access to price going to be much less strong than
spanned nine months and included a claims. Deep Shah, a lowly junior ana- ment covertly recorded discussions in sensitive information that had been those in the 80s and 90s, that will not
wealth of secretly recorded wiretap lyst at Moody’s who is now on the run, which he bragged about the size and obtained inappropriately. convince voters that Labour could
evidence. Former McKinsey director stands accused of tipping yet another accuracy of his network of sources. “This makes it stand out from other have done better or would do better in
Anil Kumar pleaded guilty to passing Rajaratnam mole. Robert Falkner, financial services lit- cases. It is an area that, to date, prose- the future.”
inside information to Rajaratnam in Rajaratnam’s conviction marks an igation partner at Reed Smith, told City cutors have not been very successful “Balls and [Ed] Miliband will only get
exchange for about $2m (£1.2m). incredible fall from grace for a man A.M. this case is especially significant in, despite widespread suspicions that Labour ready as a potential party of
Rajat Gupta, a former Goldman once seen as one of the brightest stars because of the sheer scale of some insider trading is going on.” government again if they spend time
Sachs director who also went on to on Wall Street, whose Galleon fund Rajaratnam’s operation. He said: He added: “The Financial Services developing and articulating what
work for McKinsey, was last week managed more than $7bn in assets. “Often in these cases you find one or Authority would love to nail a case like Labour’s economic strategy for growth
accused by the SEC of passing on confi- In the end, the Sri Lankan-born two rogue individuals. But this is a pro- this in the UK.” is, and why it can work.” MORE: P6-7

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28/02/11 - 03/04/11 is 105,180

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2 News CITYA.M. 12 MAY 2011

Gulliver’s off to quiet start at HSBC NEWS | IN BRIEF


Cisco down as results disappoint
Network giant Cisco Systems warned of
continuing weak growth last night as it
don their appeal against the com- ratio down. HELICOPTER CRASH posted a 17.6 per cent fall in net profit in
plaint measures. Osório is causing a But the real message is on focus; As the Kremlin-backed company the three months to April, compared
stir in banking circles, with some focus on the most profitable coun- Russian Helicopters pulled its $500m with the same period in 2010. Profit fell
already comparing him to his tries to be in and a focus on the most London flotation yesterday, as we said to $1.8bn (£1bn) from $2.2bn in 2010
Portuguese compatriot the football profitable businesses to be in. it would the day before, its chief exec- despite sales revenue rising 4.8 per cent
manager Jose Mourinho, the self-pro- In Hong Kong and the UK, for utive came out with a curious state- to $10.9bn in the quarter. But Cisco
claimed Special One. Life is unlikely example, HSBC will continue to build ment. “We believe market shares fell three per cent in late trading
to be quiet in UK banking while on its large retail presence but in participants will benefit from more after chief executive John Chambers
EDITOR’S LETTER Osório is around. many parts of the world, where it is time to reflect upon the true value said revenues would be only between
Gulliver is a different proposition. sub-scale, it will exit. HSBC currently and growth potential of our busi- zero and two per cent higher in the next
DAVID HELLIER There will be change at HSBC, but it is has 296,000 employees in 87 coun- ness,” he said. quarter, below analyst consensus esti-
likely to come about in an evolution- tries but the bank has said that at Sorry to state the obvious, but I reck- mates.

I
N the ever changing world of ary rather than revolutionary way. least 39 of those countries are ear- on investors spent a month reflecting
banking, it was the turn of Yesterday around 100 investors and marked for possible exit. on the group’s true value and too BA cabin crew spat nears end
HSBC’s new chief executive shareholders took the lift to the 41st Advisers say that Gulliver is intent many of them decided they didn’t The dispute between British Airways
Stuart Gulliver yesterday to floor of the bank’s Canary Wharf on bringing in some of the initiatives want any of it. End of. and its cabin crew could come to an end
inform investors of his bank’s strategy headquarters to hear Gulliver and 17 he presided over as head of global today, when the Unite union is expected
for the future. In recent weeks, both of his top managers talk about focus, banking – selling unprofitable arms, CITY A.M. AWARDS to present the terms of a peace deal to
Bob Diamond of Barclays and António connectivity and efficiency savings. keeping costs down and letting go the Entries to our annual awards are due its members. An email to members of
Horta-Osório of Lloyds Banking The day lasted from nine in the morn- least efficient five per cent of employ- in by Friday week, so please hurry if the British Airlines Stewards and
Group, have had a turn at imposing ing until 6.20 in the afternoon and ees every year – to the bank as whole. you or your company want to be a Stewardesses Association said yester-
their personalities at their new posts. the sessions broke only for occasional All in all, it sounds pretty sensible prizewinner at one of the City’s most day that talks between the airline and
Osório has caused the biggest refreshments. as a strategy and could well enhance prestigious events. unions to end the 18-month dispute
splash, dramatically reversing his Cost cuts are essential, was one shareholder value. But my money’s Details of the entry process are “have now concluded to the satisfaction
bank’s policy on the mis-selling of message, with between $2.5bn and on Osório to create the most head- available at the website address: of both parties”. Unite declined to com-
payment protection insurance, and in $3.5bn cut from the annual cost base lines and best performance in the www.cityamawards.com. ment on the status of talks last night,
effect causing all his rivals to aban- in an effort to bring the cost income years ahead. MORE HSBC: P 4-5 david.hellier@cityam.com while BA said talks were continuing.

7th Floor, Centurion House,


24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Red-tape war
on work rules
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
EMPLOYMENT chipped in: “I say to the business com-

Lifestyle Editor Zoe Strimpel


Sports Editor Frank Dalleres BY KATIE HOPE munity ... don’t be passive observers. McDonalds’s UK chief Jill McDonald believes workplace training can replace a degree
Art Director Craig Gaymer Don’t stay on the sidelines. Get stuck in

University not only option


Pictures Alice Hepple IN A bid to counter accusations that it to the argument.”
Commercial is not doing enough to reduce red tape, Unions panned the proposals, saying
Sales Director Jeremy Slattery the government yesterday revealed it would be harder for staff to chal-
Commercial Director Harry Owen plans to review three key areas of lenge unfair treatment. Unison
employment law. demanded “urgent talks” with govern-
Head of Distribution Nick Owen
The government is considering ment over the plans.
reducing the 90-day required consulta- Meanwhile, in a report out today the EMPLOYMENT “We need to remove the snobbery

Distribution helpline tion period over collective redundan- CBI revealed that workplace absence that does down workplace learning,”
If you have any comments about the distribution BY ALISON LOCK
of City A.M. Please ring 0207 015 1230, or email cies, as well as capping compensation in rose last year, with each UK employee she told the Institute of Directors
distribution@cityam.com discrimination awards at employment taking an average of 6.5 days off sick – THE UK chief executive of McDonald’s conference. “For many put off by high
tribunals. Businesses have criticised a total of 190m working days – cost- called for an end to snobbery sur- fees, this could and should be the
Editorial Statement both as a disincentive to hire. It is also ing employers an estimated £17bn. rounding university degrees yester- route they take.”
This newspaper adheres to the system of mulling a simplification of the TUPE day, arguing that many workers McDonald’s has pioneered training
self-regulation overseen by the Press Complaints Regulations, designed to protect Chancellor George would be better off learning through programmes for its staff to counter
Commission. The PCC takes complaints about the employee terms when a business is sold. their job. its association with dead-end roles,
editorial content of publications under the Editor’s Osborne told business
Code of Practice, a copy of which can be found at Employment relations minister Jill McDonald said young people which have become known as
www.pcc.org.uk Edward Davey said the reforms would groups to “get stuck should not see a degree as their only McJobs, and McDonald said 16,000 of
Printed by Newsfax International,
“make it easier for businesses to take in” to debating change option and should consider a job the 85,000-strong UK workforce were
Beam Reach 5 Business Park, on staff and grow.” in employment laws with an employer such as McDonald’s currently training for qualifications.
Marsh Way, Rainham, Essex, RM13 8RS Chancellor George Osborne also that will offer them training. DIARY: P13

WHAT THE OTHER PAPERS SAY THIS MORNING


FRANCE TO BAN FRACKING OF FOSSIL
FUELS
French lawmakers have voted to ban a
MP TALKS TOUGH OVER SSE MIS-SALE controversial technique used to ALLEN & OVERY SETS TREND FOR BANK OF ENGLAND DISMISSES SPRINT SAYS T-MOBILE DEAL
The UK’s big gas and electricity sup- extract shale gas and oil that oppo- FREEZING PAY OF ALL NEWLY STARBUCKS’ ATTACK ON COFFEE THREATENS ITS EXISTENCE
pliers should be forced to repay any nents say contaminates the environ- QUALIFIED CITY LAWYERS SPECULATORS AT&T Inc.'s chief executive, Randall
profits made by mis-selling their ment. If the vote by the lower house Allen & Overy blamed a “flat” com- Bank of England policymakers doused Stephenson, defended his ambitious
products on the doorstep, the chair- of parliament passes the Senate next mercial legal market for its decision to talk that speculators are harming the $39 billion takeover of T-Mobile USA
man of an influential House of month, France will be the first coun- freeze salaries for junior lawyers yes- economy by forcing up commodity before skeptical lawmakers while
Commons committee has suggested. try to ban hydraulic fracturing, also terday. Pay for newly qualified solici- prices. Charlie Bean, the deputy rival Sprint Nextel said the merger
Scottish and Southern Energy was known as fracking. The process tors at the City law firm will be held at Governor, and Paul Fisher, the execu- threatened its existence as a stand-
found guilty of unfair trading on injects water, chemicals and sand £61,000 while rates for lawyers at tive director of markets, said prices alone company. Democrats on the
Tuesday after its door-to-door sales into rock formations to break them other levels of the pay ladder will also tend to be underpinned by “funda- Senate Judiciary panel expressed the
agents used a “misleading” script to open and extract fossil fuel deposits. stay the same as last year, Britain’s mentals”. Addressing the recent crash most doubts about the deal, saying
sign up customers. fourth-biggest law firm said. Other and mini-rebound, Mr Fisher said: they didn't want to reconstitute the
GOOGLE THREAT TO SHUT SWISS City law firms are likely to follow. “There’s always clearly some froth in “Ma Bell” monopoly.
TOYOTA SUFFERS FROM STRONG YEN STREET VIEW markets.”
Toyota has pleaded for relief from the Google is threatening to shut down its OFGEM GETS BLAME FOR A LOSS OF GOOGLE TO LAUNCH CHROME LAPTOPS
strong yen as it seeks to repair the Street View mapping service in TRUST IN BIG SIX JAPAN TO INJECT FIVE TRN YEN INTO IN JUNE
financial damage from March’s earth- Switzerland unless the country’s Britain’s top energy suppliers round- TEPCO NUCLEAR COMPENSATION FUND Google previewed the first laptops
quake and tsunami, a call that could supreme court overturns a ruling ed on Ofgem yesterday, claiming that Japan's government is planning to running the company's Chrome oper-
add to pressure on Japan’s govern- requiring an absolute guarantee of the regulator bore responsibility for inject about ¥5trillion (£37.4bn) into a ating system, machines that will go on
ment to resume intervention in the anonymity for people photographed. eroding consumers’ trust in them. fund to help Tokyo Electric Power com- sale next month as part of the Internet
currency market. Chief financial offi- Withdrawing Street View from an The companies are unhappy with the pensate victims of the crisis at its giant’s challenge to Microsoft’s
cer Satoshi Ozawa said Toyota had entire country would be Google’s populist tone adopted in the media nuclear plant and save Asia’s largest Windows franchise. The computers,
“reached the limits of our ability to biggest retreat to date in response to by Ofgem’s chief executive Alistair utility from ruin. The scheme is unveiled at a Google conference, are
manufacture in Japan”. complaints over privacy violations. Buchanan. designed to protect bondholders. dubbed “Chromebooks”.
CITYA.M. 12 MAY 2011 News 3

Protests in Athens
as EU debates aid
to understand whether the debt-rid-


EU ECONOMY
BY ALISON LOCK den country may need further aid.
Concerns mounted in the market
GREECE descended into violent anti- and the euro fell against both the
austerity protests as European Union pound and dollar at various stages yes-
and International Monetary Fund terday over concerns that Greece may
auditors arrived in Athens to assess require billions of fresh bailout funds
the strength of its finances yesterday. just a year after receiving a €110bn
As a 10,000-strong union protest (£96bn) international loan.
over public spending cuts disintegrat- Officials denied reports that the EU
ed into clashes with police, the bailout was considering offering Greece a fur-
Greek police in riot gear clashed with protestors angered by government austerity cuts in Athens Picture: REUTERS audit team started a week of meetings ther €60bn in aid.

Oil price fall


fuels hopes of
cheaper petrol
Monday for the first time since last

ENERGY
BY ALISON LOCK August. Tesco said then that most stores
would cut petrol by 1p per litre (ppl)
CRUDE oil prices dropped below $100 a and diesel would fall by up to 3ppl.
barrel and US petrol futures slumped Poor industrial data from China and
yesterday, fuelling hopes that UK fore- an unexpected rise in US fuel stocks
court prices may fall substantially soon. prompted a fall in wholesale fuel prices
Crude futures plunged more than so great it triggered a circuit breaker on
five per cent in the week’s second major the Chicago Metals Exchange that saw
oil price fall, with light sweet crude for futures trading blocked for five min-
June hitting a low of $97.50 (£59.55). utes. A group of 17 US senators also
Brent crude traded at a low of $111.95 wrote to energy regulator the
per barrel, substantially down from Commodity Futures Trading
highs of $126 seen at the end of April. Commission calling for more action to
The downward pressure sparked end oil price speculation.
hopes that UK petrol prices may fall in The fall in energy stocks also hit the
sympathy, though Brian Madderson, Dow, which closed one per cent lower.
chairman of RMI Petrol, which repre- US TRADE GAP, CHINESE DATA: P21
sents independent fuel providers, said a
sustained downward trend was not yet ANALYSIS l Brent Crude Oil Futures
clear. 130
$
“In the short term it is the UK whole- 125 113.35
sale cost of fuel that determines prices 11 May
at the pump, not the cost of Brent 120
crude,” he said. “Wholesale prices have 115
been extremely volatile over the past 110
week or so, with daily moves of both
105
plus and minus 2p-per-litre – so the
trend is hard to fathom.” 100
UK retailers Tesco, Asda and 95
Morrisons cut their petrol prices on 14 Feb 4 Mar 24 Mar 13 Apr 3 May

Germany backs Lib Dem Lords


Draghi for ECB reject police law

EU ECONOMY POLITICS
BANK of Italy governor Mario Draghi GOVERNMENT plans to introduce
won the blessing of German chancel- elected police commissioners were
lor Angela Merkel to become the next thrown out of the House of Lords yes-
president of the European Central terday thanks to the support of 13
Bank (ECB) yesterday. Liberal Democrat peers, in an embar-
Draghi, who will replace Jean- rassing defeat for the coalition.
Claude Trichet in October when his Peers voted 188 to 176 in favour of
eight-year term ends, will have to lead an amendment wiping out the clause
the ECB through interest rate rises to on allowing US-style elected crime
counter inflation in the trading bloc, commissioners from the Police
as well as an ongoing sovereign debt Reform Bill.
crisis among peripheral nations. The defeat of the coalition policy
Merkel told Die Zeit newspaper that came despite Lib Dem leader Nick
Draghi “stands very close to our agen- Clegg’s efforts to whip peers into
da of stability and solid economics.” opposing the amendment. The bill
He will be nominated on 16 May. will now return to the Commons.
4 Focus on HSBC CITYA.M. 12 MAY 2011

Gulliver: Commercial GULLIVER’S TRAVELS

banking is our DNA


ing alone… We clearly have a cost would look for an “exit” from busi-
BANKING problem.” But he said the cost-cutting nesses that offered neither returns
$500m

BY JULIET SAMUEL would have to go beyond tinkering nor a solid deposit base, he said only
measures like cutting down on hotel that specific sales would be
HSBC unveiled a strategic overhaul laundry expenses during business announced over the coming months. Pre-tax profits
yesterday that will see the bank cut up trips: “It takes an awful lot of socks to However, a sale of the bank’s US
to $3.5bn (£2.14bn) in costs, cut “sub- get to $2.5bn.” credit cards business looks all but cer- North America
scale” retail operations and review its In a presentation that offered tain. Gulliver said it was “not fully
presence in 39 countries. “selected examples” of how the bank aligned with strategic customer base”
“We are not going to try to be all would achieve its income-to-cost ratio and that it required further invest-
things to all people in all markets,” target of 48-52 per cent by 2013, ment for which “HSBC’s appetite is
said chief executive Stuart Gulliver as finance director Iain Mackay prom- limited”. He would give no details of
he launched a plan to refocus the firm ised to save $300m by shutting down other disposals, except to deny that
on commercial banking, which he head offices, $275m by overhauling the bank has plans to sell its 16 per
called its “DNA”. the bank’s IT and $100m from a cent stake in Chinese insurer Ping An.
“Sometimes we struggle to explain “reduction of paperwork”. ANALYSIS l HSBC Holdings
why we’re in 87 countries. We have But investors were told not to 740
allowed the market to view us as a expect cuts in other areas: while p
720
retail bank,” he told an all-day gather- expenses rose $1.5bn between 2009
ing of investors and analysts in the and 2010 due to “wage inflation”, 700
bank’s Canary Wharf headquarters. Gulliver said HSBC was “not going to 680
646.10
11 May
He added that in fact, the lion’s compromise on talent” and would 660
share of the bank’s profits stem from continue to increase costs for recruit-
commercial and wholesale activities. ing purposes. 640
Highlighting its ballooning cost Investors keen for details of asset 620
base, he said: “We’ve got multiple lay- disposals were disappointed, however.
ers of head offices – two in this build- While Gulliver said that the bank ANALYSIS l HSBC Holdings
740
720
700
680
660
640
620
600
p

14 Feb 4 Mar 24 Mar


646.10
11 May

13 Apr
600
9 May
14 Feb 4 Mar 24 Mar 13 Apr 9 May
$1.8bn
Pre-tax profits
Latin America
Lots of platitudes but little red meat
WITH around £1.5 trillion of assets tight-lipped about what assets the least 12.5 per cent was well-trailed,
on its balance sheet, HSBC is practi- bank plans to flog, save for yet as was the goal of reducing the cost
cally the size of a country. Perhaps another “review” of some US opera- efficiency ratio – which is stubborn- THE MANAGEMENT | THE EXECUTIVES CHARGED WITH OVERHAULING HSBC
that’s why most of the ideas tions, and the number of jobs it is ly high – to at least 52 per cent.
unveiled at yesterday’s hotly-antici- going to cut. The bank must surely It is strange that yesterday was
pated “strategy day” seem to have have a plan for cutting red meat if it such a damp squib. Stuart Gulliver, CHIEF executive Stuart Gulliver said yesterday that HSBC’s top executives would be evaluated based on a
been stolen from a Whitehall effi- is serious about saving at least the recently-installed chief execu- new “report card” that would put “courageous integrity” at the heart of its dealings, which he added was
ciency review. $2.5bn by 2013, but it certainly did- tive, has coveted the top job for “not some happy clappy strap-line”. The strategy they will have to implement involves evaluating the
First there was the £100m saving n’t let investors in on the secret yes- many years, and made no secret of bank’s businesses on the basis of their returns, efficiency and “connectivity”. Comparing the bank’s global
that will come from a “reduction of terday. the fact. Investors were expecting an footprint to the networks of a telecoms company, Gulliver said that its most profitable activities “rely on
paperwork”. A further £300m will Despite 200 pages of presenta- explosion of ideas, underpinned by the network, the network of branches that we have and the position we have in more than 80 countries. I
be saved by “de-layering and simpli- tions that took nine hours to get radical thinking, not platitudes and strongly believe we do benefit from a network effect”.
fying regional structures” (whatever through, there was remarkably little techno-babble.
that means). Then there is the de that was new in yesterday’s During his three decades of loyal
rigueur overhaul of the bank’s com- announcements. We do know that service to HSBC, Gulliver has demon-
puter system; investors weren’t told the bank is likely to quit retail bank- strated a huge amount of patience.
how much this novel idea will save ing in Poland, Spain and Italy, like it Now he needs to up the tempo.
in the end, but they were led to has in Russia and that – surprise, david.crow@cityam.com
believe it will slash a huge amount surprise – it wants to divert capital
from costs. to fast growing emerging
Just like Whitehall mandarins,
HSBC executives were curiously
economies: who wouldn’t? But the
new return on equity target of at
BOTTOMLINE Alan Keir head of Brian Robertson Chris Meares CEO, Emilson Alonso
Analysis by David Crow
commercial banking CEO Europe global private banking CEO, Latin America
CITYA.M. 12 MAY 2011 Focus on HSBC 5

AT A GLANCE: THE MAIN POINTS


● RETURNS structure” to “consistent business models”, it will save $90m in Europe by exiting
The bank reiterated its 12 to 15 per cent enabling shared IT. A broader IT overhaul retail businesses in Russia, save $180m to
$4.3bn return on equity target, saying it would
achieve this by concentrating on growing
will consolidate hubs and move infrastruc-
ture to cheaper locations. The bank will
$200m by exiting pension businesses in
Mexico and Costa Rica, “review” US cards
Pre-tax profits its private bank and wealth management also shut down surplus head offices and and retail businesses for a likely sale of
Europe divisions as well as investing heavily in get rid of extra managers. parts and announce other disposals of low-
ASIAN HUB: HONG KONG Asia, including in wage costs and new returns businesses in due course.
branches, with China and India the top pri- ● LIQUIDITY
orities for retail banking growth. HSBC intends to maintain a 90 per cent ● CORPORATE GOVERNANCE
ceiling on its loans-to-deposits ratio and The strategy day is to become annual and
NETWORK HQ: LONDON ● COSTS will consider keeping low-returns business- the bank will continue with full quarterly
Reiterated target for cost-to-income ratio es if they contribute significantly to group earnings updates. It will introduce a new
of 48 to 52 per cent (versus 61 per cent funding. “report card” for executives who will be
last quarter) by 2013. In order to do so, asked to display “courageous integrity”.
Gulliver said the bank would cut $2.5bn to ● DISPOSALS This will involve both concrete targets and
$3.5bn in expenses by 2013. This would be Little new information was divulged, but a shift from “command and control” to a
achieved by shifting from a “loose, federal the bank summarised its decisions so far: “values” culture.

$11.6bn
$900m Pre-tax profits
Asia
Pre-tax profits
Middle East and
north Africa
The 160 hours our business
advisers spend training

* 2010 figures 28 hours


of technical stuff

20 hours
learning how to treat
customers really, really well

30 hours
on how to speed things
through the system

Peter Wong Iain Mackay Group Simon Cooper CEO Middle


CEO Asia finance director East & North Africa 4 hours
of well-earned coffee breaks

35 hours
on the nuts and bolts of
all our products

Niall Booker Samir Assaf CEO global Paul Thurston CEO retail bank- 25 hours
CEO North America banking & markets ing and wealth management understanding which tariffs
are best for your business

18 hours

Tepid response to
of fine-tuning all these skills

4 hours
of hot-off-the-press updates

strategy overhaul Our UK-based business advisers have plenty of know-how.


So they can find you the right package. At the right price.
shareholder value from the mainland

BANKING
China strategy. In our view, these are
INVESTORS hoping for a radical vision critical to drive a sustained re-rating
from HSBC at its strategy day from here.”
expressed disappointment yesterday However, most analysts are still bull-
and the bank’s shares fell back to close ish on the stock, citing the bank’s
down 1.54 per cent lower for the day. exposure to high-growth markets as
BNP Paribas’ Sin Fai Lam sum- the main reason.
marised the review as “reiteration, no The bank said that it would use dis- 0800 781 1328
revolution” and called the stock “a bor- posals to mitigate the impact of Basel Visit o2.co.uk/yourbusiness
ing yielder” while Seymour Pierce’s III capital requirements and offered a
Bruce Packard said of its headline fig- moderate assessment of the interim or text ADVISER to 61002
ures: “Most of these targets have report released by the Independent
already been outlined.” Commission on Banking: “We’re wait-
After viewing the main points, RBS ing to see how much bail-in debt we
analysts concluded: “We see little have to hold... The ringfence proposals
explicit emphasis on group revenue are what was expected,” said chairman
growth or on how to create more Douglas Flint. You can call our business advisers free from O2 mobiles during opening hours. Terms apply to all our packages, see o2.co.uk
6 Focus on Inflation Report CITYA.M. 12 MAY 2011

UK’s trade gap


ANALYSIS l Growth and inflation forecasts for the second quarter of 2012

Interest rate 4
Growth revised down

Probability
Inflation revised up

4
Probability
May Forecast
February Forecast
widens despite
hike looms as strong services
May Forecast
February Forecast
3 3

inflation soars
2 UK ECONOMY


2

HOPES of an export-led recovery were


dealt a minor blow yesterday, as the
1 1 UK’s trade deficit was shown to have
widened in March.
The deficit in goods and services
grew to £3bn in March, from £2.7bn

UK ECONOMY despite dovish anticipations prior to 0 0 in February, while visible exports fell
the report’s publication. -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 by 3.4 per cent compared to February.
BY JULIAN HARRIS
“This report hints at risks of earlier GDP % CPI % Services exports continued to grow,

Economy to expand less


THE BANK of England risks missing its rate hikes,” said ING’s James Knightley. however, with the UK’s surplus on
inflation target for most of the next Downbeat news on first-quarter services coming in at £4.7bn, £400m
two years, it admitted yesterday, growth in higher than the previous month.
raising expectations that it will hike recent weeks “Despite March’s drop in export

than expected, Bank says


interest rates this year. had caused volumes, UK exporters are relatively
Consumer price inflation is “more markets to upbeat, particularly as there is now
likely than not to remain above the tar- push back some evidence of a rebound in
get throughout 2012,” the Bank said in their expec- demand for UK products in the US,”
its Inflation Report, launched yester- tations for the said Kah Chye Tan of Barclays
day. The consumer price index came BoE’s first rate Corporate.
in at four per cent in March, twice the rise since 2007 UK ECONOMY hikes or spending cuts if he wishes to Despite March’s setback, the UK

Bank’s two per cent target. into next year. BY JULIAN HARRIS eliminate the deficit by the end of deficit still narrowed across the first-
“There is a good chance that infla- But sterling Parliament, Kirby expects. quarter of the year, and exporters
tion will reach five per cent later this overnight interest GROWTH forecasts by the Bank of Even excluding the effect of the have become more confident going
year,” the Bank, led by governor rate swap rates England are now even weaker than in heavy snow in December, the econo- into the second-quarter according to
Mervyn King (pictured), now fears. showed markets February, worsening the headache my has been virtually stagnant for a survey by Travelex.
New projections show inflation eas- almost fully for its monetary policy committee the last six months, the Bank thinks. “Interest rates play a strong role in
ing to the two per cent rate around pricing a rate and endangering chancellor George Yet some doubt appeared to be cast determining the strength of curren-
March 2013, assuming interest rates hike in Osborne’s deficit reduction plan. over recent Office for National cies and we can clearly see this play-
rise at levels expected by the markets. November, and “The Bank’s forecasts are moving Statistics GDP figures. “Business sur- ing out in April,” said Travelex
If rates do not rise, inflation “is more fully by towards our less optimistic projec- veys and the growth in employment director David Sear.
likely to be above target than below it”, December, tions,” said Simon Kirby of the over recent months suggest that “Not only has the European Central
even two years ahead. although many National Institute for Economic and underlying activity may have been Banks’ hawkish approach hugely sup-
The market expectations used by the economists expect Social Research (NIESR). Chancellor stronger than indicated by official ported the euro, it has also energised
Bank include a rate hike this year, an earlier move. Osborne will need even greater tax output data,” the Bank said. UK exporters.”
CITYA.M. 12 MAY 2011 News 7

Balls must offer alternative instead of carping


group of countries, or that the real tax What you need to do is to present policy when the financial crash kicked may be right to point out that even on
take was up (even if real post tax wages your overall view as to how to make in and eventually got to the safer OBR forecasts this recovery is going to
were rising). the economy strong, to stick to that, to ground of tucking in behind a more be much less strong than those in the
That for good or bad, is the lot of the criticise the government for not doing traditional Tory policy of deficit reduc- 80s and 90s, that will not convince vot-
opposition economic spokesperson. that – whatever it is – but to leave tion and public spending cuts. ers that Labour could have done better
Now Labour and Ed Balls have that yourself room to welcome good news Balls and Miliband have been going or would do better in the future.
role to play. It is almost their constitu- from wherever it comes. hard on arguing that the economy is So while the weekly and monthly
tional duty to point out the weakness- And as importantly you have to at risk from cuts that go too far too round of responses to data must go on,
COMMENT es in the situation and on the avoid being trapped, cornered by the fast. They may well be right but as they Balls and Miliband will only get
strengths, to point to the signs of turn of events. The Conservatives near- will know, however bad things are Labour ready as a potential party of
DAN CORRY gloom and doom not the signs of ly got trapped in Labour’s “success” now – partly due to the coalition poli- government again if they spend time
emerging “green shoots”. And of years, claiming it was all about to fall cies – eventually growth will return. At developing and articulating what

E
VERY time there is new course that is legitimate not least as apart and arguing, if anything, for that point Tory politicians, business- Labour’s economic strategy for growth
economic data, a ritual plays out. they strongly believe that the govern- more spending and less banking regu- men and commentators will turn is, and why it can work. That is the real
The government welcomes the ment is following the wrong policy. lation. But Osborne and Cameron round and say “told you so”. task ahead and they need to get to it.
numbers, but shadow ministers But it is very easy to fall into the trap neatly managed to escape at the last That is why Balls has to do more Dan Corry works for FTI Consulting and is a
claim they aren’t what they seem and of having a gleeful grin not when minute into a critique of government than carp, more than critique. While it former Treasury and Downing Street adviser
that gloom is just around the corner. I unemployment falls but when it rises,
remember it well from my time advis- not when GDP gets back on track but
ing former Prime Minister Gordon when it turns out not to have risen at
Brown. all over the last six months. “Talking
For almost a decade Tory shadow the economy down” is the accusation
chancellors had to grit their teeth in and it is something that the public do
the face of good economic news. not like.
Remember them saying that they How do you avoid it then? It is not
were overjoyed that growth was con- easy. If you say anything positive then
tinuing, inflation was low and employ- the government will leap on it as an
ment was hitting record levels? Of
course you don’t. They struggled to
argue that underneath the surface
admission that they are doing the
right things and that your policy is
therefore in tatters. So in all
Your business can talk to
things were not well (maybe more
right than they knew) that growth was
less strong than some other country or
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CITYA.M. 12 MAY 2011 News 9

Ocado tumbles after sales slowdown


to increase weekly order capacity.” its IPO valuation by 20 per cent, in a incremental sales.”

RETAIL The grocer, which predominantly desperate eleventh hour bid to keep Ocado was set up by former
BY STEVE DINNEEN sells the products of upmarket grocer the float alive. Goldman Sachs bankers Tim Steiner
Waitrose, said the glut of recent pub- It eventually hit the bottom end of (pictured right), Jason Gissing and
OCADO led the FTSE 250 fallers yes- lic holidays also hit its sales. its 180-200p a share – far below its Jonathan Faiman.
terday, with its shares dropping over It added it has leased a 100,000 initial range of 200-275p a share.
nine per cent after it admitted its square foot warehouse close to its Some analysts baulked at even the ANALYSIS l Ocado Group
260
sales were checked by capacity con- main distribution centre in Hatfield, lower price, slapping a value of p
straints. north of London, from which to around 120p a share on the firm. 250
Ocado’s growth slowed from 24 per develop its non-food business. However, after hitting a closing low 240 211.00
cent in its first-quarter to 18 per cent A second core warehouse is under of 123p, it has seen its share price 11 May
230
in the last three months. It says it construction in Warwickshire, due to creep up, hitting a high of 285p in 220
expects sales to grow by 21 per cent in be finished by the end of 2012. February.
the first half of the year. The slump sent Ocado’s shares, Numis analyst Andrew Wade said: 210
An Ocado spokesman said: “The down 211p yesterday, fuelling fears “With new kit being installed, we 200
Hatfield customer fulfilment centre that they could eventually fall below expect a re-acceleration in the second
190
remains capacity constrained in the their 180p flotation price. half, and are encouraged by the 14 Feb 4 Mar 24 Mar 13 Apr 9 May
Ocado co-founder Tim Steiner saw its
near term. Investment is continuing Last year Ocado was forced to slash impressive EBITDA conversion on shares slump seven per cent yesterday
ANALYSIS l Ocado Group
260
p
250
240 211.00
11 May
230
220

210
200

190
14 Feb 4 Mar 24 Mar 13 Apr 9 May

Sainsbury’s
shifts focus Why we make our business
to non-food He said: “This will be the shape of
contracts flexible

RETAIL
things to come as we look at non-
BY JOHN DUNNE
food. By 2020, 40 per cent of sales will
SAINSBURY’S yesterday said 40 per be from non-food.” King denied ana-
cent of its sales would be “non-food” lyst concerns about financial con-
by 2020 as it increasingly relies on straints on future expansion, saying
clothing and other products for the group had “plenty of funding”.
growth. Credit Suisse analysts were disap-
The supermarket chain is in the pointed by a 14 basis point increase
middle of huge expansion with in Sainsbury’s underlying operat-
clothing and general merchandise ing margin, which they contrast-
being given more space. ed with a bigger rise at Wm
Sainsbury’s reported a 12.8 per Morrison Supermarkets. Net
cent jump in annual pre-tax debt rose to £1.8bn from £1.5bn
profits to £827m as it unveiled its last year and is expected to hit
strategy. £2bn by the end of next
Staff

Like-for-like sales for the year year.


to 19 March were up by 2.3 But the company said
per cent. The group also said its expansion would even-
that it had won market tually ensure that figure
share from rivals, taking was reined in. On the con-
it from 16.1 to 16.3 per sumer outlook, King said:
cent. But chief executive “Things are tough and con-
Justin King (pictured) said sumers are being careful.
growth of non-food sales – “However, as Easter
which are growing three showed, they do have
times faster than food – need- money available to spend
ed to be developed. on special occasions.”

ANALYST VIEWS: IS THE GROWTH SEEN AT Jan Feb Mar Apr May Jun Jul Aug

SAINSBURY’S SUSTAINABLE? Interviews by John Dunne

RICHARD HUNTER | HARGREAVES LANSDOWN

“ Sainsbury is positioning itself for further growth, especially in the areas


of convenience stores, online business, and an increasing move into non-food prod-
ucts. On the downside, wider economic uncertainty remains and cheaper selling
prices do not always equate to higher profits, since margins are squeezed.
Your business can change size quickly. So we change with you.

CLIONA LYNCH | VERDICT RESEARCH ” We’re flexible because you need to be.



Sainsbury's growth in sales has been fuelled largely by expansion, with
new space contributing 2.6 per cent to overall growth. Elsewhere trends in top-up
shopping are boosting convenience stores with customers buying little and often,
while the “Feed your family for £50” campaign is hitting the right note. 0800 781 1328

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While Sainsbury's increased its full-year dividend by 6.3 per cent to 15.1p
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10 News CITYA.M. 12 MAY 2011

More work placements will benefit London


education capitals, where people flock the workforce. Doing this has social that it is a cost-effective way to recruit, The government has said that it wants
from far and wide to improve their benefits, but helping upskill the work- train and retain a skilled and dedicat- to allow employers to take young
skills, and yet it has a large pool of force is also in employer’s self-interest. ed workforce. Big names like Microsoft unemployed people for short unpaid
unskilled workers. Two of the most It is not something that schools and and HSBC are now embracing appren- placements without them losing their
commonly expressed concerns of busi- colleges can do in isolation. ticeships – and more financial services unemployment benefits: it is clearly
nesses and the young are in reality In the past year we have been cam- firms are set to follow. Thanks to this better that they go into a workplace
mirror images of each other – employ- paigning to increase the level of campaign, apprenticeships have been than sit at home. Many employers have
ers complain they cannot get the apprenticeships in London, up from rising far faster in London than else- told us they are enthusiastic about
workers with the skills they need, its historic low level, with a target of where. this, while for the young unemployed
VIEW FROM CITY HALL while young people (and their parents) 20,000. With help from consultants at But there is more we can do. Many the benefits of this experience and
ANTHONY BROWNE fret they won’t get the opportunities
they need to get ahead in life.
Accenture, we have shown employers
that apprenticeships can be reconfig-
young people – particularly those who
grew up in workless households – have
subsequent opportunities are obvious.
London employers have embraced
IT IS the age-old paradox of London. As the Prime Minister will ured to be appropriate to the modern little insight about the world of work. apprenticeships: for the same reasons,
The city is a global economic power- announce today with the Mayor in the service sector economy, not just tradi- They need to experience work first they should now embrace work place-
house, a job-creation machine, but has Olympic Park, there is a solution. tional areas such as manufacturing. hand to raise their aspirations – there ments for the young unemployed.
stubbornly high unemployment. It is Employers need to help make people London companies have responded is no better cure for demotivation than Anthony Browne is an adviser to the
one of the world’s great training and job-ready, and a valuable addition to with enthusiasm because they can see seeing something worth striving for. Mayor of London

DTZ shares soar on hopes of bid


ily trust Saint George Participations,


PROPERTY
said it was holding discussions with
BELEAGUERED property adviser DTZ parties that had made approaches
Holdings saw its shares soar almost but cautioned that discussions were
40 per cent in trading yesterday after at a very early stage.
it said it had received a possible offer. DTZ has suffered continued share
DTZ said it had received “a number price declines in the past year and
of approaches for investment…includ- made a £6m pre-tax loss in the half-
ing a possible offer” for the company. year to October 2010. Its share price
DTZ, majority-owned by French fam- closed 22 per cent up at 39p.

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CITYA.M. 12 MAY 2011 News 11

Sportingbet in
Pru profits up talks to buy its
as US and Asia Australian rival

demand soars
LEISURE


ONLINE gaming firm Sportingbet is in
advanced talks to buy Australian peer
Centrebet in a £117m all-share deal.
The British firm is considering a bid
of A$2 (60p) per share, although said
there was no certainty a transaction

INSURANCE to be reined in to prevent the busi- would be completed.


BY ALISON LOCK ness from becoming too large. Any purchase of Centrebet, which is
“We will continue to closely moni- Australia’s fourth-largest online gam-
BURGEONING sales in the US and tor developments in this market with bling firm, would be dependent on
Asia pushed Prudential’s profits up 17 a clear focus on profitability rather Sportingbet raising the funds to take it
per cent in the first-quarter of 2011, it than market share,” he said. Sportingbet chief Andrew McIver is in advanced talks to buy Aussie peer Centrebet over.
said yesterday. Prudential’s Asia performance was One option for Sportingbet could be
New business profits at the life held back by India, where stringent to sell about £125m of stock to fund
insurance and pensions giant rose to new regulation caused sales to fall 58 ADVISER: ORIEL SECURITIES the offer, according to reports.
£498m from £427m in the first-quar- per cent and slowed the region’s sales The firm, led by Andrew McIver, said
ter of 2010 while new business sales growth to just two per cent. it expected the acquisition to add to its
increased by ten per cent to £888m. Excluding India, Asian sales were up EMMA GRIFFIN work with DTZ, the real estate firm earnings in the first full-year post inte-
Higher-than-expected demand for 17 per cent, led by Singapore where currently fielding takover interest. gration.
variable annuities in the US and dou- they rose 42 per cent. UK sales were ORIEL The reputation of Oriel Securities The deal would also give the firm
ble-digit sales in nine Asian markets £199m, a three per cent rise on 2010. has grown since it was established as a greater exposure in Australia, diversi-
drove the growth, it said in its interim
SECURITIES boutique investment bank and broker- fying its geographical income from
management statement. ANALYSIS l Prudential age in 2002. In 2009, it completed the regulated markets.
The results beat consensus market 780
p
765.00 £220m stock market float of Max Family-owned Centrebet has been
expectations for £456m in new busi- 11 May ORIEL Securities is the adviser to Property Group, and has worked on searching for a buyer in recent
760
ness profit and sales revenues of Sportingbet on its deal talks with several other equity raisings. months, and said in March that it had
£854m. Jackson National, its US busi- 740 Australian online gambling peer Advising Centrebet is Greenhill received a number of proposals from
ness, saw revenues jump 26 per cent 720
Centrebet. Caliburn, the Australian division of Wall interested bidders.
to £322m in the quarter as retirees Emma Griffin is leading the team of Street investment bank Greenhill. Sportingbet’s purchase would fol-
snapped up more variable annuities. 700 advisers from the boutique firm, and is Bryan Pearson is leading the team low UK-based rival Paddy Power in con-
“The retiring ‘baby boomers’ have a 680
joined by Jonathan Walker and Ashton from Greenhill Caliburn. He joined the solidating the Australian gambling
strong appetite for protection,” chief Clanfield on the deal. firm in 2008 from CIBC World market, after the firm purchased a
executive Tidjane Thiam said – but 660 Griffin is also leading Oriel’s advisory Markets in London. controlling stake in Aussie peer
14 Feb 4 Mar 24 Mar 13 Apr 9 May
admitted that the growth may have Sportsbet in the middle of last year.

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12 News CITYA.M. 12 MAY 2011

Outflows put
ANALYSIS l RAB Capital
20 July 2007: RAB’s share price hits an
p all-time high of 125p per share.
August 2007: Banks become wary of lending to one another due to market fears over
120 exposure to the high-risk US “sub prime” mortgage market.

pressure on
September 2007: Customers stage a run on Northern Rock. RAB, which held a
100 8.18 per cent stake in the lender, suffers as a consequence.
18 February 2008: Labour chancellor Alistair 6 April 2011: RAB says
Darling nationalises Northern Rock. investors will seek to
80 withdraw almost
11 September 2008: RAB locks investors in its $400m from its $500m

RAB to delist
Special Situations fund in for three years. Special Situations fund
60 when the gate is opened
12 November 2008: RAB’s share price hits an on it in October.
all-time low of 6.5p per share.
40
21 January 2009: RAB reveals a $5.3bn plunge in
assets under management over 2008.
20
the AIM market.


HEDGE FUNDS
The beleaguered company had
BY RICHARD PARTINGTON already said it stands to lose $400m
6
ANALYSIS l RAB Capital

120

100

80

60

40

20

6
p

Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011
Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 TROUBLED hedge fund RAB Capital (£245m) of cash from its $500m flag-
has said its days as a publicly quoted ship Special Situations fund in
company could be numbered. October.
The firm, once a pin-up for London’s Investors had sought to withdraw
finance boom, said it had received the money at the height of the
fresh redemption requests and that financial crisis, although
one of its key fund managers is to agreed with management to
leave the company. lock the funds in until the
Gavin Wilson, co-manager of end of 2011.
RAB’s Energy and Octane A series of ill-fated invest-
funds, will leave the firm for ments, including a stake in
personal reasons, meaning Northern Rock, made RAB
investors are likely to pull out one of the biggest hedge
of his $250m Energy fund. fund casualties of the crash.
RAB, led by Charles Kirwan- Assets under management
Taylor (pictured), said the at the firm stood at $1.06bn
developments meant it at the end of last year,
would consider whether compared to $7bn at
to delist from its place on the end of 2007.

Rathbones breaks £16bn


assets under management
through a difficult period for share

ASSET MANAGEMENT
trading.
WEALTH manager Rathbone Brothers Rathbones’ investment manage-
has increased its assets under manage- ment net operating income hit
ment (AUM) to more than £16bn for £33.9m in the first-quarter, up 12.3 per
the first time. cent on a year earlier.
The historic fund house said its asset Net interest and other income for
pool had hit £16.04bn in the first three the firm fell to £2.6m in the three
months of this year, up 2.6 per cent months to 31 March, down 3.7 per
from the £15.6bn it held at the end of cent on the same period in 2010.
2010. Chairman Mark Powell said:
The increase compares to a 1.8 per “Despite a particularly uncertain eco-
cent increase in the FTSE 100 Index for nomic environment, Rathbones has
the same period, as markets struggle achieved excellent growth.”

The coalition is one year old: How


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The Capitalist
CITYA.M. 12 MAY 2011 EDITED BY 13
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
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on Twitter: @citycapitalist

RADIO SILENCE BY SKY


BOSS ON MURDOCH BID
INNOVATION was the theme for ing “Gerald Ratner-like” comments
BSkyB chief executive Jeremy such as the remark made by Lord
Darroch at the Institute of Directors’ Sainsbury that the Club Card was
convention yesterday, where fellow just an “electronic version of Green
speakers included McDonald’s chief Shield stamps” before launching his
executive Jill McDonald, chancellor own, unsuccessful, version.
George Osborne and shadow chan- “I am forever grateful to Sainsbury,”
cellor Ed Balls. said MacLaurin. “He launched his
“The most successful businesses are first loyalty card 18 months later than
those that constantly seek to adapt Tesco and then had to close it.”
and renew themselves,” said Darroch, MacLaurin also hit back at the Left to right: Shadow chancellor Ed Balls, McDonald’s CEO Jill McDonald, Chancellor George Osborne Pictures: Micha Theiner/City A.M.
as he charted the broadcaster’s jour- claim made in yesterday’s Capitalist
column by Robin Brown, chief
accountant at Morrisons, that: “We
don’t sense that our competitors
are making money from their
online businesses.”
“I don’t know where [Brown] got his
facts from,” responded MacLaurin,
pointing out that Tesco was the first
into the online market with Tesco
Direct, which did in fact start to make
money from the late 1990s. When he
was in charge, naturally.

FIT FOR PURPOSE


HOWEVER, MacLaurin is showing
All change: BSkyB CEO Jeremy Darroch no sign of slowing down as he works
through his eighth decade. “I am
ney from its birth in 1989, when air- feeling quite fit and well thank
time on the UK’s four TV channels you,” he told the IoD’s chief operat-
was so limited only half an England ing officer Andrew Main-Wilson,
international game could be shown to who remarked how “active” he is.
make space for Neighbours. In fact, the retirement age of 65 is
“We need to make our products officially “over”, said the 73-year-old.
obsolete before someone else does,” “If you are fit and well you can go on
he added. “Believe me, one phone- for another ten years. Get on the
call to cancel a subscription is a hell phone to a headhunter and find
of a motivator.” something that suits you.”
However, the most interesting part In MacLaurin’s case, that means
of Darroch’s speech was what he did-
n’t say. As the full takeover of BSkyB
by Rupert Murdoch’s News Corp
moves into the end game, there was
absolutely no mention of the multi-
billion-pound deal, possibly the
largest-ever elephant to sit in the cor-
ner of the O2 Arena.
Instead, Darroch settled for lavish-
ing praise on BSkyB’s biggest share-
holder, which has stuck with the
broadcaster even though at one point
it was losing £14m per week, almost
“taking News Corp to the wall in the
process”, recalled Darroch.
“News Corp bet the farm on BSkyB;
it believed in it and provided an
incredibly powerful continuity for the
business,” he gushed. “There was no Pace-maker: Lord MacLaurin of Knebworth
greater supporter of our move into
HD, because they could see the long- fitting in two non-executive director-
term benefit of the strategy.” ships, lecturing the MBA students at
Bath University and chairing his for-
mer school Malvern College between
FIRST PAST THE POST appearances in the House of Lords.
MEANWHILE, Lord MacLaurin, the Taking on the turnaround chal-
former chairman of Tesco, Vodafone lenge of one more struggling public
and the England and Wales Cricket company – having taken Vodafone
Board, also declared himself “pro- from a £3bn to a £30bn turnover busi-
Murdoch” – despite initial misgiv- ness within two years – is out,
ings when BSkyB paid £300m to take though. “My wife Paula would have
live England home Test something to say about that,” he said.
matches off terrestri-
al television.
“He is an inno-
vator,” echoed
SHOW TUNES
WHOEVER chose the music at the
MacLaurin. “And convention had a sense of humour –
this world needs the TUC general secretary Brendan
innovators, Barber (left) came on stage to
whether you are Children of the Revolution, while
selling baked MacLaurin entered to the sound of
beans or broad- the Test Match theme tune.
casting.” And for Jeremy Darroch, as News
So what is the Corp’s newspaper business is inves-
secret of successful tigated following alle-
retailing? “Listening gations of phone
to customers,” said hacking at its
MacLaurin. tabloids?
That, and Paparazzi
avoid- by Lady Gaga.
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CITYA.M. 12 MAY 2011 News 15

Brazil allows BP purchase


Macondo well, which delayed approval Mexico. The ANP held up approval for


ENERGY
of its 2010 purchase of Brazilian assets. the Brazil purchase after the Macondo
BY HARRY BANKS “After leading the process of con- accident because it wanted to see how
BRAZIL’S energy regulator ANP said taining the Gulf of Mexico spill ... BP BP would respond to the incident.
yesterday it has approved BP’s pur- has shown itself today to be one of the The company said in October it
chase of assets from US-based Devon, a most prepared companies in terms of agreed to sell oil and gas fields in
deal that was slowed by its massive operational security in deep waters,” Vietnam and Venezuela to its Russian
Gulf of Mexico oil spill. the ANP said in a statement. joint venture TNK-BP for $1.8bn, and in
The approval comes after BP sold In March 2010 BP agreed to pay November said it was selling its stake
assets around the world to help pay for $7bn (£4.28bn) for Devon assets in in Argentine oil and gas group Pan
BP chief executive Bob Dudley has won approval for plans in Brazil Picture: REUTERS the effects of the oil spill at the Brazil, Azerbaijan and the Gulf of American Energy.

CGNPC may E.ON sales


relaunch bid hit by fall in
for Kalahari IN PARTNERSHIP WITH customers


M&A ENERGY
BY HARRY BANKS BY HARRY BANKS
STATE-OWNED China Guangdong WARMER weather and fewer cus-
Nuclear Power (CGNPC) is studying tomers in some German regions
whether to come back in three curbed first-quarter sales at E.ON’s gas
months with a fresh bid for uranium unit compared with a year earlier, the
miner Kalahari Minerals, after with- utility said yesterday.
drawing an offer following opposition As the German gas market leader,
from UK regulators. E.ON’s activities are a benchmark for
“Our business department is studying the health of central European gas
it. We don’t have a result yet,” said a markets.
CGNPC spokesman. Its Global Gas division sold 244.6bn
CGNPC had withdrawn its bid for kilowatt hours of gas in the three
Kalahari after the Takeover Panel said months to March compared with
it would not allow the Chinese compa- 252.4bn kWh in the same 2010 period,
ny to lower its £756m offer. CGNPC according to its quarterly report.
hoped to cut its bid in light of uncer- E.ON’s German sales, which
tainty in the uranium industry follow- accounted for 55 per cent of the total,
ing Japan’s nuclear problems. reported 13bn kWh lower gas sales,
Shares in Kalahari and its 43 per due mainly to “customers losses and
cent-owned Australian-listed Extract weather related influences”.
Resources fell on the decision, National German gas consumption
although some analysts said they last year rose 4.2 per cent to 942.3bn
expected CGNPC could return with a kilowatt hours.
fresh offer in the next three to six E.ON’s Global Gas division categoris-
months or bid directly for Extract. es sales via its own regional firms and
“We think there is a reasonable those to industry and distributors in
Paul McCartney (‘Mike’s Brother’) by Sam Walsh © estate of Sam Walsh

chance CGNPC will make a new bid Germany, Europe’s biggest single gas
for Kalahari after three to six months market, and in Hungary.
have elapsed, or CGNPC may be more It also holds responsibility for pro-
direct and make a bid for Extract,” curement, storage and transport of
RBC analyst Adam Schatzker said. pipeline and liquefied natural gas.
CGNPC must wait three months The unit’s earnings before interest,
before returning with a revised bid
under UK regulations.
State-owned CGNPC made an infor-
Guess who I saw last night? tax, depreciation and amortisation fell
by 83 per cent to €138m (£120m) in the
three months due to margin pressure
mal move on Kalahari in March. in the wholesale sector.
ANALYSIS l Kalahari Minerals
Enjoy art, music, drinks, tours, talks and workshops
ANALYSIS l E.ON
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14 Feb 4 Mar 24 Mar 13 Apr 9 May 2 Mar 22 Mar 11 Apr 29 Apr

Wood Group gets boost from US shale Trading improves at Drax


demand for its services from the US tain oil and gas fields after the gov- electricity, however, warned that

ENERGY ENERGY
BY HARRY BANKS shale gas industry. ernment raised taxes in March. markets remained volatile and that
The company, which rejoined the Wood Group, which also provides DRAX, the operator of the UK’s it remained “cautious” in its out-
BRITISH energy services firm John FTSE 100 in March, said the number maintenance services to oil facilities largest coal-fired power station, said look.
Wood Group has shrugged off delays of projects to design and build facili- and power plants, said it had recently trading conditions in commodity In February, chief executive
to projects and the impact of a tax ties to extract oil and gas was rising. suspended work on a $20m (£12.2m) markets had improved this year, Dorothy Thompson said the outlook
hike in the North Sea, and said it is But it added that some projects project off the coast of Libya because three months after it said rising was “difficult”, after coal prices
on track to meet full-year expecta- were still seeing delays. of ongoing unrest in the country. coal prices could hurt the firm’s started to increase towards the end
tions. Project activity in the North Sea to Shares in the Group fell 0.7 per margins. of last year.
Wood Group said yesterday that it date had been healthy, said Wood cent to close 5p down at 675p, in line Drax, whose coal-fired power sta- Shares in Drax closed 0.2 per cent
saw good growth in the first four Group, adding that contracts could with an overall fall in the FTSE 100 tion in North Yorkshire supplies up, climbing 0.8p to finish at 457.6p
months of the year, boosted by strong be delayed as companies reassess cer- Index. about seven per cent of the UK’s yesterday.
CITYA.M. 12 MAY 2011 News 17

CITY VIEWS: WOULD YOU SUPPORT THE CREATION OF A PRIVACY LAW?


Interviews by Richard Partington
FirstGroup holds out for
GRAHAM WOODRUFF | AMERSHAM long-term train contract
“No. I ignore it all anyway, but I don’t doubt that people are interested in the private lives
of celebrities. There are limits and the press does cross them at times. Any change would The bus and rail operator , which


TRANSPORT
has a work force of 130,000 employ-
have to look into the issues thoroughly. If the wronged person wants to talk then they BRITISH transport operator ees, reported pre-tax profit for the
should be allowed. Celebrities have to accept the risks of being famous sometimes.” FirstGroup has said it will not take fiscal year fell 27 per cent to
up the option to extend its First £127.2m from £175.3m a year earli-
Great Western franchise for three er, even though revenue edged up
MARILIZE OTTO | MITSUI SUMITOMO years beyond 2013 so it can bid for a 2.7 per cent to £6.43bn from
longer-term deal. £6.26bn. Net profit fell to £103.2m
“We have made the commercial from £132.1m.
“It depends, the public needs to be aware. If anything, the current laws make it easier decision not to take up the option to It increased the final divided by
for people to get away with things. Twitter has made a mockery of superinjunctions. It extend the First Great Western fran- 7.1 per cent to 15p and said the out-
chise for a further three years,” look was positive despite fragile con-
shouldn’t be controlled, even though it’s like any other media platform. There should be FirstGroup’s chief executive Tim sumer confidence.
some restrictions but we should also be allowed freedom of expression.” O'Toole said yesterday. “Looking ahead the economic out-
“With our unique knowledge of look remains uncertain,” said
the franchise we believe we are best O’Toole. “But the group has good
DAVID CORRADINE | CATLIN placed to manage these projects and prospects in all of its key markets to
capture the benefits through a continue to deliver long-term value
longer-term franchise.” for shareholders,” he said.
“Yes. It should be changed, though to make it easier for things to be made public. The company said it would contin- Shares in FirstGroup, which have
Superinjunctions seem to be exclusively for the wealthy. Twitter makes it pointless to cover ue to operate its key franchise, which risen eight per cent in the last
runs into central London from Wales month, closed up 2.2 per cent at
these things up. It should be brought in line with other media but all types should be made and the west of England, until 351.8p yesterday, valuing the compa-
quite open. It’s the freedom of the press.” March 2013. ny at around £1.6bn.

ITV slumps NEWS | IN BRIEF


Wragge & Co on the rebound as income rises 16pc
Law firm Wragge & Co has reported a 16 per cent rise in tun-

after gloomy rover for the year ending 30 April, with income hitting £112m
compared to last year’s £96.2m. The firm has not yet released
details of its profits per equity partner, but says figures should
match the increase in turnover. “In terms of economic condi-
tions, the past couple of years have been the toughest I have
experienced,” said managing partner Ian Poole. “Rather than

ad forecast batten down the hatches, we made a number of strategic


investments – adding some excellent new people, deepening
our sector focus and increasing our international footprint.
Although conditions continue to be challenging, these deci-
sions are paying off.”

Bowleven finds oil in Cameroon


British oil explorer Bowleven said it found more oil at a key

MEDIA high of 93p in March after it exploration well off the coast of Cameroon and increased its
BY STEVE DINNEEN announced its full-year 2010 profits oil-in place estimates, sending its shares up two per cent. The
trebled to £321m, with ad revenue Africa-focused company said most of the hydrocarbon-bear-
ITV slumped to its lowest price since surging back 16 per cent to £1.5bn. ing targets were found in the lower and deep regions of the
January during trading yesterday after Yesterday shares closed 5.3 per cent Omicron part of the Sapele-1 well. It increased its oil-in-place
spooking investors with a gloomy out- lower at 71.9p. estimates for a section of the Deep Omicron to 65-430m bar-
look for the advertising market. Chief executive Adam Crozier once rels. The well confirmed the presence of reservoir and hydro-
The drop was despite robust figures again stressed his plan to reduce ITV’s carbons in the offshore Douala Basin, extending the shallower
from ITV’s first-quarter, which saw reliance on volatile TV advertising. ITV chief executive Adam Crozier wants to reduce his firm’s cretaceous play significantly offshore, the company said.
group revenues rise 11 per cent to reliance on core TV ad revenue.
£500m. ITV television advertising ANALYSIS l ITV Bank of America focuses on mortgage problems
jumped 12 per cent, beating the over- 95 Bank of America is working to improve profits by reducing its
all market increase of 10 per cent.
90
p
71.90 “Whilst the recovery in television adver- number of problem mortgages and cutting other expenses,
However, advertising could slump 11 May chief executive Brian Moynihan told shareholders yesterday.
by up to a fifth in June on tough com-
85
tising is clearly very helpful, it also serves Moynihan, speaking at the company’s annual meeting in
parisons, due in part to last year’s foot- downtown Charlotte, said the mortgage business of the
ball World Cup, and persistently tough 80
to remind us just how volatile this mar- largest US bank by assets is “still struggling mightily” as it
market conditions, the firm warned. slowly crawls out from under billions in soured home loans.
This could result in first-half ad rev- 75 ket can be,” said Adam Crozier last “There’s still a lot of work ahead to get through this,”
enues growing by just one per cent Moynihan told shareholders. At the meeting, shareholders
despite the bright first-quarter. 70
14 Feb 4 Mar 24 Mar 13 Apr 9 May
month, before the advertising warning. elected all 13 director nominees onto the board of directors.
ITV shares hit a three year closing No shareholder proposal gained enough support to pass.

UK housebuilders lifted by a rise Bank holidays give boost


in profits as market improves to Gatwick load factor
apartments. Mark Clare (right), for almost six days.

PROPERTY TRANSPORT
BY HARRY BANKS Smaller rival Bovis, which also post- group chief execu- Though an additional 702,500 pas-
ed a trading update, said the market tive of Barratt. BANK holiday travel has helped boost sengers travelled from the airport in
BRITISH housebuilders Barratt and had remained stable, with visitor Bovis also said Gatwick airport’s load factor to a April 2011, the number of people
Bovis Homes both said they expected numbers up 20 per cent and sales it expected its record 79.7 per cent high, as passen- unable to travel during the restric-
to report a rise in profit after a pick-up rates up marginally. profit to ger numbers jumped by more than tions last year was approximately
in sales, although activity will remain Barratt said it was comfortable with increase in 700,000 in April compared to the 600,000.
limited by tight mortgage availability. market estimates of around £130m 2011 due to a same period last year. The most popular destination for
Barratt Developments, Britain’s for full-year operating profit, com- 15 per cent Average load factors climbed 3.2 passengers getting away over the dou-
largest housebuilder by volume, said pared with the £90m it posted for increase in percentage points from last year, after ble bank holiday period in April was
yesterday sales rates returned to nor- 2009-10. site num- April 2010 numbers were hit by dis- Malaga, boosted by British Airways
mal levels from 1 January to 8 May, “We are encouraged by the bers and ruption from the ash cloud from doubling its service to the southern
with private selling prices up four per improvement in market conditions b e t t e r Icelandic volcano Eyjafjallajökull Spanish city after moving the route
cent, driven by a move to houses from we've seen since the start of 2011” said prices. which closed airspace above Gatwick back to Gatwick from Heathrow.
18 Consumer News CITYA.M. 12 MAY 2011

Restaurant Group in sales lift Carlsberg toasts a swing back to


Russian growth as profit jumps
remained broadly in line with its year, closed 7.8 per cent lower yester-

CONSUMER
expectations. day at 303.3p. “We see that the Russian economy


BY HARRY BANKS CONSUMER
“Trading conditions during 2011 Analysts at Liberum Capital said and the Russian consumer is doing
RESTAURANT Group yesterday said look set to continue to be similarly the company may have to look to DANISH brewer Carlsberg yesterday better and better, and that is positive
its total sales for the first 18 weeks of challenging to those we experienced new sites to deliver earnings per said a recovery in east European for our business,” chief executive
the new financial year grew 5.5 per during 2010, with consumer senti- share for investors. The group demand helped drive a 38 per cent Jorgen Buhl Rasmussen said.
cent, but warned of tough market ment remaining cautious and expects to open between 22 and 27 rise in first-quarter profits, endorsing “From mid-2010 we started to see
conditions ahead due to fragile con- household inflation and disposable new sites this year. its emerging market focus and send- an improvement in the Russian econ-
sumer confidence. income still under pressure,” chair- Greg Feehely at Altium said of the ing its shares to a near-record high. omy. The Russian consumer is doing
The company, which owns the man Alan Jackson said in a state- share-price fall-off: “We would view The brewer met forecasts yesterday better and is more ready to spend
Garfunkel’s and Frankie & Benny’s ment. this as an opportunity to add to as its biggest market returned to again,” Rasmussen added.
chains, said yesterday sales of restau- Restaurant Group shares, which holdings in a quality self-funded growth and said it expected Russian Carlsberg’s B shares gained 2.6 per
rants open for at least a year were have gained 20 per cent of their operator with a decent dividend beer volume to grow between two cent yesterday to close at 608 Danish
0.5 per cent ahead, while margins value since the beginning of the yield and a fast-falling level of debt.” and four per cent this year. crowns.

Tesco names POSH GOODS BOOST SALES AT HERMES NEWS | IN BRIEF


Morrisons FD gets £1.25m bonus
Supermarket chain Morrisons gave
finance director Richard Pennycook a

City grandee £1.25m bonus in shares last year


according to its annual report.
Pennycook was one of the contenders
for the chief executive job when Marc
Bolland left the company for Marks &
Spencer, but he lost out to Dalton

as new chair Philips. He was paid £981,000 for 2010


before the bonus.

Kesa cuts as Comet struggles


Electricals retailer Kesa yesterday
posted a further plunge in sales at its
loss-making Comet unit in the UK and
studying at the University of London said it would accelerate change at the

RETAIL
and the University of Manchester. chain in an attempt to revive its for-
BY JOHN DUNNE He went to Schroders in 1986 and tunes. Kesa, the subject of private equi-
TESCO yesterday announced that Sir rose to head of corporate finance, ty bid speculation amid stake-building
Richard Broadbent will become its working closely with Sir Win Bischoff, by activist investor Knight, said it
next chairman. who was then chairman. would meet market expectations for
Sir Richard (pictured), who is deputy In 2000, under then Prime Minister 2010-11 profit, reduced after a
chairman at Barclays, will join Tesco as Tony Blair, he was the first non-civil January profit warning. It confirmed
a non-executive director in July. servant to serve as permanent secre- that costs would be cut. Kesa blamed
He will take over the reins from tary of customs and excise. weak consumer demand for Comet's
Tesco chairman David Reid, who Reid first joined the board of Tesco woes particularly following January's
retires in November. in 1985 and has been chairman since increase in VAT sales tax, and said it
The City grandee was tipped to take March 2004. was planning for the unit's like-for-like
over at insurer Aviva before opting to He has also held the roles of finance sales to be negative in 2011-12. “The
take up the challenge at Tesco. director and executive deputy chair- UK is the toughest market, in my view,
The chairman-elect described Tesco man during his career at the retailer. in Europe as we speak. Not only in
as an “innovative and growing global Tesco, which has more than 5,000 terms of macro environment... but also
business”. “I look forward to working stores in 14 countries, posted a 14 per in terms of electrical retail,” Kesa said.
with a great team and playing my part cent rise in net profit last year.
in helping guide Tesco to further suc- Reid, who became chairman of the Greggs gets a boost over Easter
cess in the future,” said supermarket in 2004 and has served High street baker Greggs said like-for-like
Sir Richard. on the Tesco board since 1985 in an sales growth of 0.8 per cent over the past
The 58-year-old, executive role, said: “I am sure that 18 weeks “reflected good Easter trading
who is in his with Richard’s wide expertise, his and the favourable weather”. Chief execu-
third term at board experience and his personal tive Ken McMeikan said that having suc-
Barclays after qualities he will contribute greatly to cessfully targeted the UK breakfast
joining the the future growth of the group. Good market in 2010 with meal deals combin-
board in 2003, management succession is very impor- ing sausage or bacon rolls with tea and
would also have tant to Tesco and this appointment is coffee, the firm has identified healthy
been a strong can- the result of a thorough process led by foods as an area to drive growth. The
didate to take over Patrick Cescau and endorsed by all company plans to sell salads, fruit and
as chairman of the members of the board.” pasta alongside its traditional sausage
bank. The move completes an all-new FRENCH luxury goods group Hermes has posted a 20.7 per cent rise in first-quarter sales rolls, pasties and doughnuts as it eyes a
He began his line-up at the top of Tesco. at constant exchange rates, driven by surging demand for its watches and leather goods slice of the healthy eating market. "We
career at the Phil Clarke replaced Sir in Europe and Asia. Overall, Hermes sales in the three months to 31 March rose 25.5 per think there is still more opportunity for
Treasury Terry Leahy as chief cent to €637.1m (£541m). The maker of silk scarves and €10,000 crocodile leather hand- Greggs around the healthier market,
in 1975 executive earlier this bags said sales in Japan, its biggest foreign market, were flat and reiterated its forecast things like side salad pots, fresh fruit pots,
after year. for full-year sales growth of eight to ten per cent. Picture: REX pasta pots and yoghurts,” he said.
CITYA.M. 12 MAY 2011 News 19

ANALYSIS l Maersk 2011 first quarter results

Pre-tax profits of

$2.753bn $14.48bn
Revenue: Average freight rate
per 40 foot container:
Moller-Maersk boosted by oil
( 53 per cent) 10 per cent $2,908
2 per cent

CONTAINER DIVISION:
Profit: $438m
prices as profits top forecasts
($169m in Q1 2010) repeated guidance for a “satisfactory” (first-quarter) result, but we also


SHIPPING
BY HARRY BANKS result in the container shipping busi- realise that this is one quarter, and
ness, also lower than last year. we will be struggling with a lot of
DANISH shipping group AP Moller- First-quarter pre-tax profit was challenges during the rest of the year,
Maersk reported first-quarter net $2.753bn (£1.69bn), up 53 per cent on including lower rates,” Andersen said.
profit at the top end of expectations the same quarter a year ago. Maersk, whose fleet carries 15 per
yesterday, helped by higher than “We are convinced that we will cent of all seaborne containers and is
expected freight rates and oil prices. deliver a very good result again in seen as a barometer of global trade,
The owner of Maersk Line, the 2011 even though we expect it to be kept a forecast for 2011 container
world’s biggest container shipping below the result of 2010,” chief execu- shipping demand to grow by between
firm, reiterated that 2011 earnings tive Nils Smedegaard Andersen said. six and eight per cent.
would be lower than 2010 and also “We are really pleased with the

OIL & GAS DIVISION: TERMINAL DIVISION:


Profit: $512m Profit: $139m
“ Recognition for this campaign is marvellous.
($450m in Q1 2010) ($114m in Q1 2010) We are privileged and it’s splendid to be a
TANKERS AND OTHER SHIPPING:
Profit: $213m
part of CITY A.M.’s first awards.”
($115m Q1 2010) Aviva (Business Marketing Campaign of the Year)
OIL OIL OIL OIL OIL OIL OIL OIL OIL

Toyota hit by
supply doubts
lion), compared with an average esti-

AUTOMOTIVE
BY HARRY BANKS mate of 94.6bn yen from 17 analysts
who revised their numbers after the
TOYOTA Motors posted a 52 per cent quake.
fall in quarterly operating profit yes- Fourth-quarter net profit, which
terday and gave no annual forecasts, as includes earnings made in China, fell
expected, as it struggles to measure 77 per cent to 25.4bn yen.
the scope of the disruption to produc- Among Japan’s top car makers,
tion after the 11 March earthquake. Toyota is most exposed to disruption,
The world’s biggest automaker is making 38 per cent of its cars at home
facing another tough year as a severe compared to 25 per cent for Honda
shortage of parts caused by Japan’s Motor and Nissan Motor.
biggest earthquake on record ham-
mers production just as it was putting
its recall woes behind it.
Koichi Ogawa, chief portfolio man-
ager at Daiwa Investments, said: “The
focus going ahead for Toyota is what it
What will you say?
Toyota has said it expects to return expects its forecast to be and right now
to full production by November or it is very unclear, especially if it can Enter the City A.M. Awards 2011 and you could be
December from less than half of only can operate at 50 per cent capaci- recognised as one of the City’s great personalities
planned volumes now, but has ty between April and June, which will
stopped short of specifying how fast it make it hard for it to lift profits.” or companies of the year.
would get there. It denied reports that “I expect (profits) to recover in the Visit our website to see how you can enter:
normal production would come two second half and to grow next year, but
to three months earlier than planned. Toyota needs to rethink its global pro- www.CityAMAwards.com
Toyota said its January-March oper- duction strategy in the mid-term.” or for more information, please contact Jo Pead:
ating profit was 46.1bn yen ($570 mil- 020 8267 4043 / jo.pead@cityamawards.com

ArcelorMittal lifted by demand in


US as revenue hits pre-crisis levels
headline sponsor champagne reception sponsor
ore and coking coal costs.

MINING
The Luxembourg-based group said
WORLD number one steelmaker it expected global steel consump-
official venue partner sponsors
ArcelorMittal predicted a post-crisis tion would grow 6.5 to seven per
high for profits in the second quar- cent this year, with the strongest
ter, helped by strong US demand growth of up to 10 per cent in North
after a sharp rebound at the start of America.
the year. ArcelorMittal said second-quarter
The maker of six to seven per cent core profit should be $3-$3.5bn (£1.8-
of the world’s steel met first-quarter £2.1bn), the highest level since third
earnings forecasts yesterday as quarter of 2008, just before the glob-
prices caught up with a spike in iron al steel sector went into freefall.
20 News CITYA.M. 12 MAY 2011

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

office. Rab joins from Hogan Lovells, of Egg, as chief financial officer. SWIP wholesale distribution team.
BNY Mellon where she was co-leader of the firm’s Thiem joins from Gartmore, where he
BNY Mellon has appointed Arthur Certosimo as antitrust compliance group. Dundas & Wilson was discretionary account director.
chief executive of global markets to lead the The law firm has promoted four sen-
bank’s foreign exchange, capital markets and Irwin Mitchell ior associates to its partnership. The State Street Corporation
derivatives trading businesses worldwide. The law firm has appointed Sue Wilson associates are technology and com- The financial services provider has
Certosimo, currently chief executive of alterna- as a property litigation consultant in its mercial advisory senior associate Alan appointed Craig Butterworth to head of
tive, broker-dealer and Treasury services, will London office. Wilson was previously a Nelson, property finance senior asso- fixed income sales for EMEA. He joins
succeed Richard Mahoney, who will retire at the partner in the property litigation team ciate Darren Craig, real estate senior from RBS, where he held the position of
end of June. Brian Ruane, currently head of at Lawrence Graham. associate Shane Toal and commercial managing director, head of flow rates
alternative investment services, will become dispute resolution senior associate sales, UK funds and hedge funds.
CEO of alternative and broker-dealer services. Essence Digital Gemma Lampert.
Digital media agency Essence, which Espírito Santo Investment Bank
has secured billings of £90m this year SWIP Andrew Lim has been hired as an ana-
King & Spalding merger control investigations in from clients including Google, eBay and Scottish Widows Investment lyst in the banking team. Lim joins from
Suzanne Rab, a competition lawyer Europe and the UK, has joined King & Expedia, has appointed Mark Partnership has appointed Nick Thiem Matrix Corporate Capital, where he led
with expertise in cartel, market and Spalding as a partner in its London Nancarrow, the former chief executive as head of discretionary sales in the the European banks team.

To appear in CITYMOVES please email your career


SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7092 0053
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 Reckitt Benckiser 3440.00 ANALYSIS l BG Group ANALYSIS l Marks & Spencer 342.30
3500 p 11 May 1600 p 1367.00 400
p 11 May
11 May
3400 1550 390
380
3300
1500 370
3200 360
1450
3100 350
1400 340
3000
330
2900 1350 320
14 Feb 4 Mar 24 Mar 13 Apr 9 May 14 Feb 4 Mar 24 Mar 13 Apr 9 May 14 Feb 4 Mar 24 Mar 13 Apr 9 May

RECKITT BENCKISER BG GROUP MARKS & SPENCER


Goldman Sachs rates the consumer goods producer “buy” but has taken Credit Suisse rates the oil explorer “outperform” and has cut its target JP Morgan Cazenove has upgraded the retailer from “underweight” to
the firm off its “conviction buy” list, and has cut its 12-month target price price by 80p to £17.10. The broker was disappointed by the firm’s results on “overweight” and has hiked its target price by 150p to 460p. The broker is
by 160p to £41.70. The broker thinks the firm contains an increased execu- Tuesday and has lowered its 2011 estimates by eight per cent to reflect impressed by M&S’s proactive pricing strategy, and thinks its outperfor-
tion risk following a change in management, though recent quarterly lower volume guidance and higher UK taxation. BG Group remains the bro- mance in the last year has until now been overshadowed by worries over
results were encouraging. Goldman is still confident that Reckitt will out- ker’s core holding for long-term energy investors, though it now expects a inflation. The current share price rise has been in line with peers, not yet
perform the wider consumer products market over the next year. pause in the firm’s share price. reflecting the self-propelled recovery story at the firm, JP Morgan adds.

FTSE 100 sinks below 6,000 Commodities lead


as banks and miners tumble Wall Street down
risk appetite faded. advertising growth forecast to two exchange-traded fund dropped 8.3

THELONDON Banks were also down. Global


heavyweight HSBC fell 1.5 per cent
per cent.
On the upside, Burberry rose 2.7 THENEW YORK per cent at $34.39.
Worries about global demand have

REPORT REPORT
after the publication of a strategic per cent, after fellow luxury goods fed losses in energy and materials
review that followed Monday’s first- companies Bulgari and Hermes post- shares. The S&P energy sector is now
quarter results. ed strong first-quarter sales. down 7.8 per cent since the start of
Other stocks were down due to Marks & Spencer added 0.8 per the month.

C
OMMODITY and banking them going ex-dividend. These cent after JPMorgan Cazenove’s In a sign of weakness, the S&P 500

U
stocks dragged the FTSE 100 included BP, Inmarsat, Morrison upgraded its recommendation and S stocks almost erased a three- broke below 1,340, a key technical
back below the 6,000 level yes- Supermarkets, Randgold Resources, price target for the retailer (see Best day rally yesterday as energy and level, and some analysts said a close
terday, with these sectors pres- Rexam, Royal Dutch Shell, Sage, of the Brokers, above). commodity shares sank, feeding below 1,330 would be bearish for the
sured by Greece’s debt problems and Unilever and Whitbread. Elsewhere, Reed Elsevier climbed worries over the market’s ability market.
uncertainty over global economic The US trade deficit widened 1.8 per cent after the Anglo-Dutch to stay on an upward path. The Dow Jones industrial average
growth. more than expected in March, which publisher’s investor day on Tuesday, The second major breakdown in was down 130.33 points, or 1.02 per
London’s blue chip index closed could prompt analysts to trim their which Credit Suisse said “marked a commodities in a week fuelled selling cent, at 12,630.03. The S&P 500 Index
down 42.89 points, or 0.7 per cent, at estimates of already weak first-quar- significant turning point in the com- in other risky assets, including stocks. was down 15.08 points, or 1.11 per
5,976.00, having hit a one-week clos- ter US economic growth. pany’s communication strategy”. A stronger dollar and data showing a cent, at 1,342.08. The Nasdaq
ing high on Tuesday. Wall Street was lower as the UK Defensive stocks were also chased rise in US fuel supplies sent crude oil Composite Index was down 26.83
Atif Latif, director of trading at market closed after Walt Disney’s higher by investors with power com- prices down more than five per cent, points, or 0.93 per cent, at 2,845.06.
Guardian Stockbrokers said: “Most of quarterly results missed expecta- pany International Power and drug- and the Standard & Poor’s energy The 1,340 level roughly coincides
the weakness is based on selling on tions. maker Shire up 1.8 and 2.3 per cent index slid three per cent. with the 20-day average, which the
the back of more fiscal tightening Richard Batty of Standard Life respectively. “A lot of money is tied up into market has closed above since April
expected in China post CPI numbers Investments warned expectations Outside of the top flight, FTSE All- things like exchange-traded funds 20. If the S&P 500 closes below that
... coupled with chatter around for profit growth for global corpo- Share property firm DTZ was the top and mutual funds that track a broad average, the Bollinger bands chart
Greece, in particular that there is rates has peaked. riser, gaining 21.9 per cent after it array of stocks and not just commodi- shows a near-term target just above
still no consistent message coming “While the Q1 2011 profits cycle revealed takeover interest from an ties. Some of this could be a shift out 1,300. The S&P 500 index is still up
through from EU officials.” has been robust, with outcomes unnamed party. of equities in general, but especially 27.9 per cent since the start of
Bank of England deputy governor ahead of initial expectations, energy and commodities,” said September, roughly when the mar-
Charles Bean warned of the poten- investors are rightly worried about ANALYSIS l FTSE 5,976.00 Bryant Evans, investment adviser and ket’s recent rally began.
tial for messy consequences from the outlook in view of policy head- 6,100 11 May portfolio manager at Cozad Asset After the market’s close, shares of
the Eurozone debt crisis that is cur- winds such as tighter fiscal and 6,000 Management in Champaign, Illinois. Cisco dipped 2.1 per cent to $17.40 as
rently centred around Greece. monetary policy, plus a harsher reg- About five stocks fell for every one the company reported results and
He also said commodity price ulatory environment. Indeed, expec- 5,900 that rose on the New York Stock warned of another weak quarter.
volatility was very much on the tations for profit growth have been 5,800
Exchange, a broad exodus signalling In the foreign exchange market,
radar of the G20, as the Bank of moderating recently.” investors saw little value in most the euro dropped to a three-week low
England raised its medium-term Back among the blue chips, ITV 5,700 industries. against the dollar as investors
inflation forecast. shed 5.3 per cent after the free-to-air 5,600
The Energy Select Sector SPDR unwound risky trades in commodi-
Integrated oils and miners topped broadcaster said ad sales in May and Fund fell 2.9 per cent to $74.28 while ties and higher-yielding currencies
the list of blue chip fallers, sliding in June will be down on a year ago, 5,500 the US oil fund lost 4.2 per cent to and bought back the greenback in a
tandem with commodity prices as prompting UBS to halve its full-year 7 Feb 25 Feb 17 Mar 6 Apr 28 Apr $39.35 and the iShares silver flight to quality bid.
CITYA.M. 12 MAY 2011 Economics 21

Eurozone chiefs
US trade gap warn over fresh
worsened by price pressures

high oil prices


EUROZONE ECONOMY


INFLATION pressures in the Eurozone
are continuing to build, European
Central Bank (ECB) officials said yes-
terday.
The pace of inflation in the 17-
country bloc climbed to 2.8 per cent
last month, the highest since late

US ECONOMY March to $172.7bn, surpassing the 2008. Price pressures in the


BY JULIAN HARRIS record set in July 2008 before world Eurozone’s powerhouse economy,
trade took a sharp downturn. The Monetary tightening could squeeze China’s demand for petrol Picture: REUTERS Germany, came in at 2.7 per cent for
AMERICAN exports set a record in March export rise was the biggest April in the pan-European har-

Higher inflation in China


March, buoyed by the weak dollar and month-to-month gain in 17 years, the monised measure – a slight upward
strengthening global demand, it was Commerce Department said. revision from the first estimate of 2.6
revealed yesterday. The dollar has fallen 5.2 per cent per cent.
Yet the country’s trade gap widened against a basket of currencies since “Markets do currently anticipate a

sparks fear of rate hikes


further, as oil prices pushed up the the beginning of the year, boosting gradual withdrawal of the monetary
import bill by almost five per cent. prospects for exports. accommodation. I personally think
The US trade deficit grew to A fresh two-and-a-half-year high was that is no unreasonable assumption,
$48.2bn (£29.2bn), its widest level recorded in American job openings, given the clear upside risks to price
since June 2010. which rose 99,000 to 3.12m, the high- stability,” Belgian central bank gover-
“The level of exports has finally est since September 2008. nor Luc Coene told a banking seminar.
returned to pre-recession levels,” said Meanwhile, the US government’s ASIAN ECONOMY China’s soaring trade surplus, And Juergen Stark, a senior ECB

Paul Dales of Capital Economics. budget deficit came in at $40.48bn for BY JULIAN HARRIS reaching $11.4bn (£6.97bn) in April, official, warned against the assump-
“But the surveys suggest that April, roughly in line with expecta- had already stoked expectations of tion that the central bank will not
imports will continue to grow at a tions. BRENT crude slipped yesterday, partly upcoming monetary tightening. hike rates next month.
faster rate,” Dales added. due to higher than expected inflation “With CPI coming in higher than The ECB failed to use the terms
Imports grew 4.9 per cent to FAST FACTS | AMERICAN ECONOMY in China, the world’s second-largest expected again today, I think that “strong vigilance” and “heightened
$220.8bn as the average price for oil user. inflation concerns will continue to alertness” in its statement last week –
imported oil hit $93.76 per barrel, the ● US imports totalled $220.8bn in March. Chinese consumer price inflation plague risk appetite,” said a head trad- code-words usually deployed to signal
highest level since September 2008. ● Exports rose, but remained more than £48bn slipped in April, yet came in above er at Hong Kong-based broker. an impending rate rise.
Oil prices continued to rise in April, lower at $172.7bn for the month. expectations at 5.3 per cent – rekin- Meanwhile, China’s industrial pro- “Using code words does not mean a
but have receded in recent weeks back ● The US government’s deficit was more than dling concern that Beijing’s efforts to duction climbed 13.4 per cent year-on- commitment,” he added. “To main-
to early March levels. $40bn last month. cool the economy would erode energy year in April, a slight slowdown from tain price stability in the medium
US exports grew 4.6 per cent in demand. March’s 14.8 per cent growth. term is our overriding principle.”

| PROMOTION

Win
A PAIR OF VIP GRAND CRU
PASSES TO VINOPOLIS ON
THE 26TH MAY
May is National Wine Month and to celebrate, City AM and Riedel are
offering one lucky reader VIP Grand Cru Pass for Two to the Riedel
Masterclass at Vinopolis on Thursday 26 May. In a great night out, the win-
ner will enjoy a unique and fascinating tutored wine and glass tasting con-
ducted by Maximilian Riedel, 11th generation of the glassmaking family and
designer of some of the company’s most iconic wine glasses and decanters.
Maximilian will demonstrate the relationship between the shape of a glass and the
perception and enjoyment of wines. This tasting will also see the launch of the limited
edition Maximilian Riedel Signature Mamba decanter. Designed personally for 2011,
each decanter is individually hand-made by Riedel's most senior master-craftsmen and
carries the personal signature of Maximilian Riedel engraved on the base. This item
cannot be bought in retail stores and is exclusively available to those attending tast-
ings with Maximilian Riedel.
A LIMITED NUMBER OF VIP GRAND CRU PASSES ARE AVAILABLE The tastings take place at Vinopolis, London’s premier wine venue, on Thursday 26
WHICH INCLUDE: and Friday 27 May. Entry is from 6.00pm (when a bar will be available) and the tast-
● Entry for 2 plus £200 worth of Vinum XL glasses ings will commence promptly at 7.00pm.
● A signed Mamba decanter worth £375
● Complimentary glass of Champagne on arrival
For chance to win this wonderful evening simply
● Reserved seating in the front part of the auditorium for the tasting
answer the following question.
VIP Grand Cru Passes can still be bought for the 26 and 27 May for £395 if you aren’t How many generations have Riedel been making glassware?
lucky enough to win. Standard Tickets are priced at £65 per person, to include £100
worth of Riedel glasses to take home, and a specially discounted ticket for 6 is A) 10 B) 11 C) 12
available at £325. For further details and to book tickets, please visit www.riedel.co.uk send your answer and contact number to win@cityam.com

Terms & Conditions: The promoter is Riedel and the promoter reserves the right to change the prize to one of equivalent or greater value without notice. Travel expenses and accommodation are not included, prize is not transferable Entry in to the promotion is free and no
purchase is necessary, entrants must be aged 18 and over. The closing date is 15th May 2011 at 11:59am. The winner will be drawn at random from all the correct entries and will be notified on 16th May 2011. By entering the promotion you agree to receive further informa-
tion and similar promotions from City A.M. and Riedel. If you wish not to receive any further information please add ‘No’ after your answer. The winners, by accepting the prize, agree to publicity if required. The Editor’s decision is final and one entry per reader.
Business Features
22

| Careers

Climb the career


ladder faster in a
growing business
Sometimes taking a step down can
actually be a step up, says Donata Huggins

I
T SEEMS like people are becoming Martin says he accepted that he need-
successful faster these days. The ed to take a pay cut to get to where he
Forbes list of young CEO wanted to be. He joined Moonpig as a
billionaires is enough to make most commercial director, but for lower pay
of us feel we should be getting richer, than his previous job at Hallmark cards.
quicker. But how do these young whip- He became chief executive last year after
per-snappers get there so fast? the founder moved on to become chair-
Iain Martin, the 43 year-old chief exec- man.
utive of the fast growing Moonpig.com
(see rankings right), thinks the route to CAREER PLANNING
the top can be found in expanding com- “A lot of careers happen by accident,
panies. “We have a culture we like to fos- things just sort of pop up, but my move
ter at Moonpig, so we prefer to recruit by to Moonpig was entirely planned.”
promotion from within,” he explains. Martin wanted to work for an entrepre- LONDON’S FASTEST GROWING LONDON’S FASTEST GROWING
“The company employed someone to neurial, digital business and progress Speed past the old PRIVATE COMPANIES BY SALES PRIVATE COMPANIES BY PROFITS
answer the phones when Moonpig first faster. “I wrote to Nick [the then chief institutions for rapid
1. Your Golf Travel, a golf travel agency. 1. Power Perfector, energy-saving device dis-
started, now she’s the marketing executive] and expressed my interest promotion and career
Annual sales growth 158.06 per cent. tributor. Annual profit growth 157.45 per cent.
director – that’s phenomenal career pro- when I was working at Hallmark. progression
2. Pathology Group, recruitment consultancy. 2. Moonpig.com, online greeting card retail-
gression.” And that isn’t Martin’s only Amazingly, he met with me despite not
Annual sales growth 151.89 per cent. er. Annual profit growth 149.79 per cent.
example. His previous marketing man- having a job to offer. We stayed in touch
3. Power Perfector, energy device distributor. 3. Liquid Capital, financial services provider.
ager left to head up Moonpig’s and a year later, he brought me in.”
Annual sales growth 140.01 per cent. Annual profit growth 142.24 per cent.
Australian office. Picture: GETTY
4. Moonpig.com, online greeting card retailer. 4. UPP, university accomodation provider.
LOOKING FOR INSPIRATION Annual sales growth 115.51 per cent.
GAPS IN THE RECRUITMENT MARKET Moving to Moonpig was the logical Annual profit growth 125.01 per cent.
5. Green Park, recruitment consultancy. 5. Charles Tyrwhitt Shirts, shirtmaker.
Andy Bristow, a manager at the recruit- choice for Martin since he had worked in
Annual sales growth 112.62 per cent. Annual profit growth 105.54 per cent.
ment consultant Hays, says the candi- the card business. But where can the rest
6. BullionVault.com, gold dealer. Annual sales 6. Cath Kidston, lifestyle retailer. Annual
dates he speaks to are certainly of us look? We’ve listed London’s fast-
growth 105.87 per cent. profit growth 91.16 per cent.
interested in being in a fast-growing growing companies on the right to give
7. Miroma, media barter company. Annual 7. Skrill, online payment provider. Annual
company, but few are willing to move if you some inspiration.
sales growth 95.55 per cent. profit growth 88.53 per cent.
the pay offered wasn’t competitive:
CONTACT US | CAREERS 8. Fjoed, digital design consultancy. Annual 8. Cheapflights Media, price comparison
“Small companies are up against corpo-
sales growth 89.50 per cent. website. Annual profit growth 82.97 per cent.
rates for talent.” Do you have a career conundrum? Or just need a little 9. Ship Shape Resources, construction servic- 9. Sun Mark, consumer products distributor.
Nick Stevens, a recruitment
more direction? We would love to hear from you and help es. Annual sales growth 89.21 per cent. Annual profit growth 77.42 per cent.
consultant at the fast-growing firm
you solve it – and are happy to preserve your anonymity. 10. Natural Products, giftware designer. 10. Regent Gas, gas supplier. Annual profit
Eximius Group, adds that candidates are
Annual sales growth 83.51 per cent. growth 62.24 per cent.
often reluctant to consider lower posi- Email donata.huggins@cityam.com Source: The Sunday Times Fast Track 100
tion and pay. Source: The Sunday Times Profit Track 100

Turn that frown upside.... it could make you money


And even if it doesn’t, this book affirms that the nice guy doesn’t always finish last, says Donata Huggins
should view the book as Just to say thank you who had been sued twice or more. The con- cess. They touch on this, retelling the anec-
THE POWER OF NICE Chicken Soup for the Business Picture: GETTY clusion: it pays to be nice. dote about Bill Clinton sailing to the UK for
BY LINDA KAPLAN THALER Soul, it does offer some inter- The authors reveal a hand- his Rhodes scholarship, shaking everyone
AND ROBIN KOVAL esting research findings on cor- ful of “nice” financial celebs. on board’s hand only to explain that he
Random House, £7.99 porate behaviour. The authors Warren Buffett apparently wanted to be president one day and would
cite evidence such as never fires anyone, but tries to need a lot of friends.
hhhii correlations between move struggling Sadly, much of the book points out the
employee morale and employees into obvious: people respond well to kindness

W
HILE it is laughable company bottom lines to more suitable and often later repay the favour. Whereas
to read a Donald support their view that the roles. other parts touch on topics that are better
Trump quote on the nice guy doesn’t always fin- The book explained elsewhere. For those interested
front cover of a book ish last. For every 2 per cent would benefit in the topic, but keen to read more in-
called The Power of Nice, one increase in “service climate” – from being re- depth analysis, Working with Emotional
should not write it off straight- that is general cheerfulness branded as Intelligence by Professor Daniel Goleman
away. and helpfulness as measured something is a more worthwhile read.
This charming book is just badly market- in your staff (god knows how closer to While most who would be interested in
ed – ironic considering that was written by they do that) – the book claims the Clinton this book will probably find it a pleasant
the chief executive and president of an that companies experience a 1 Effect, tap- affirmation of their existing views, the
advertising agency. The book consists of per cent increase in revenue. ping into the poor marketing probably means that the
119 pages of delightful anecdotes and psy- Another study found that well-known office tyrants that need it will have no
chological research, hoping to physicians who had never been notion that interest. Perhaps this is one to buy and
demonstrate that being nice is a viable sued spoke to their patients you can leave on the desk. Maybe the Donald
strategy for career success. for an average of three min- charm your Trump quote on the front will tempt such
While to avoid disappointment you utes longer than physicians way to suc- grisly characters into its pages.
Wealth Management | Social Lending
23

Forget investing in
an Isa, try lending
to a total stranger
Banking without the bank can be safe if you do
your homework first, writes Donata Huggins

H
AVE low interest rates finally using this kind of service is exposing out losing out. Our first nugget of You won’t get that
driven us mad? Thousands of themselves to more risk and has far advice is: do your research. There are at effect from an Isa
TOP THREE SOCIAL LENDING SITES
people are lending money to less protection than someone deposit- least five major sites available –
complete strangers over the ing their money in a bank or building Funding Circle, Quakle, Ratesetter, Yes- Zopa (www.zopa.com)
internet through social lending sites. society.” None of the money lent secure and Zopa – all with slightly dif- Picture: GETTY Screens all potential borrowers, looking not only at their
The concept is quite frankly cool. through the schemes is protected by ferent offerings. Secondly, spread your credit history but at affordability factors too.
Lenders and borrowers deal directly the Financial Services Compensation bets. No matter how creditworthy your
with each other, borrowers get lower Scheme, so the depositor could lose investment choices, there is always a RateSetter (www.ratesetter.com)
rates and lenders get higher returns. some or all of their investment if the chance they might default. If you RateSetter has a “provision fund” to cover bad debts.
It’s becoming a big business. Zopa – the borrowers default or the firm goes spread your cash as thinly as possible, This is paid for by the borrowers, through an additional
oldest fish in the social lending pond – bust. But it is so far so good on this across 20 or 50 people potentially, you rate charge.
has arranged more than £125m worth front. No firms have gone bust and are less likely to lose your initial capi- Funding Circle (www.fundingcircle.com)
of loans in its six-year existence. But only 0.7 per cent of Zopa’s investments tal. Finally, don’t be tempted to just go The money here is lent to low-risk small businesses,
the question nagging is: can it be safe? haven’t been repaid, and RateSetter for the highest rate. Playing the rate rather than individuals.
Kevin Mountford, head of banking hasn’t had any yet – and their “provi- tart in this game means you expose
at moneysupermarket.com says: “It’s sion fund” covers bad debts. yourself to much higher risk. Happy
important to remember that anyone There are ways to play it safe with- banking without the bank.

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24 Wealth Management | Funds CITYA.M. 12 MAY 2011

Don’t worry,
IN FOCUS | TOP 10 BROAD BASKET COMMODITY FUNDS SOURCE:MORNINGSTAR
UK REGISTERED 09/05/08 LATEST LATEST DOMICILE PORTFOLIO MANAGEMENT
INVESTMENT FUNDS – 10/05/11 SHARE PORTFOLIO MANAGER(S) GROUP
PERFORM. PRICE SIZE
CHANGE (%) (£) (£M)

the party in
TOP 10

Lyxor ETF Commodities CRB Non-Energy A 39.54 18.90 N/A France N/A  Lyxor International Asset Management
ETFS Ex-Energy DJ-UBSCI ETC 27.68 8.80 18.44 Jersey N/A ETF Securities
Barclays Corals Index B EUR 17.15 N/A 44.91 Luxembourg N/A Barclays Capital Fund Solutions
EasyETF S&P GSNE A EUR
Marlborough ETF Commodity A
PIMCO GIS Commodities Plus Strat E Acc
Lyxor ETF Commodities CRB GBP
10.18
2.45
-0.85
-3.44
165.74
N/A
N/A
20.47
45.34
38.85
205.79
N/A
Luxembourg
UK
Ireland
France
N/A
Nigel Baynes & Stacey Ash
Saumil Parikh
N/A
BNP Paribas
Marlborough Fund Managers
PIMCO Global Advisors
Lyxor International Asset Management
commodities
Vontobel Belvista Commodity B USD
DB Platinum Commodity USD R1C
db x-trackers DLBCI - OY Balanced 1C
-4.34
-6.74
-7.95
N/A
N/A
30.40
548.21
515.55
1,108.14
Luxembourg
Luxembourg
Luxembourg
Jacques Blatter
N/A
N/A
Vontobel Management
DB Platinum Advisors
db x-trackers Team isn’t over yet
The right commodity fund will hedge
you against inflation and expose you
to global growth, says Philip Salter

C
OMMODITIES took a big knock nine years, while the previous bear
in the recent correction, but market ran for around twenty-one
the fundamentals still point years. In spite of the risks of popping
towards continued rises over bubbles down the line, Brazilian,
the medium term. Assuming you Indian, Chinese and Russian growth
aren’t planning to fill your home is a trend that still has some way to
with sheep, soybeans and platinum, go.
with certain provisos, commodity
funds can offer you a route in. PICKING WINNERS
As the table shows, not all broad bas-
THE PARTY ISN’T OVER ket commodity funds turned a profit
Investors who joined the commodity in the last three years. A better, if
party just prior to the correction potentially riskier tactic, would have
might feel as though they pitched up been to choose a specific sector. In
too late – some will have cut their precious metals over the last three
losses and gone straight back home years, investors have seen 162.7 per
to perceived safer assets. For those cent growth from the ETFS Physical
that didn’t attend, reports of its Silver exchange-traded commodity
slump could have confirmed their (ETC), while in soft commodities they
suspicions that the asset class is in a could have profited by 89.99 per cent
bubble. But the party isn’t over: com- from the ETFS Cotton ETC. Picking
modities will bounce back. winners is a risky strategy though.
Investors would have lost around 80
A BET ON INFLATION AND GROWTH per cent on natural gas energy ETCs.
Because food and energy represents But as Stephen Barber, who advises
about a quarter of CPI inflation and Selftrade on markets and economics
over three quarters of its volatility, says: “A diversified fund could mean
exposure to commodities is a way of diluting exposure to the best per-
hedging against inflation, some- forming assets.”
thing investors can’t get from most
other assets. Inflation is continu- TOP OF THE TREE
ing to bite, so investors are Research from Deutsche Bank
continuing to like them. from 4 May shows that
Added to this, the central despite the dip, commodities
banks of the US and Japan are are still the top-performing
still priming the pump, asset class so far this year.
which is getting soaked up in Commodities total returns are
oil and other commodities. Also, 7.1 per cent, followed by equity
demand from emerging markets at 6.2 per cent, then emerging
will continue to put upward pres- markets at 3.8 per cent, with
sure on commodity prices. Peter bonds at 0.3 per cent and
Toogood, Director of forex losing 1.1 per
Investment Services at cent. Investing in
OBSR, says that in rela- commodities is not
tion to oil, China is for the faintheart-
expected to be turning ed. Commodities
out 25m cars by 2015, and the funds
double that of the US. that track them
Combined with sup- suffer hugely
ply problems from from volatility
lack of investment and in the long
and with access to run it is a bet
oil getting increas- against techno-
ingly difficult, oil looks to logical innova-
be on the up. However, get- tion. It is also vital
ting access to oil through a to avoid commodi-
fund is difficult. Toogood ties funds like oil that
says that as it is a futures cannot profit from the
game the rollover of con- trend. In these cases
tracts kills you. As such, equities are a much bet-
the trade “doesn’t work.” ter bet.
Nevertheless, invest-
SUPER-CYCLES ment cycles suggest that
Investment cycles in the we are still in a bull market
capacity building of busi- and as inflation persists
nesses working across most and the world’s have-nots
commodities means that chase the lifestyle of the
the bull and bear takes a world’s haves, for the foresee-
long time to turn. The able future demand for
current bull market has commodities will
been going for only increase.
CITYA.M. 12 MAY 2011 Wealth Management | Markets 25

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Lifestyle
26 CITYA.M. XX
CITYA.M. 12 XXXXXXX
MAY 2011
ATTACK THE
BLOCK
| Books READ REVIEW IN
TOMORROW’S PAPER

Victorian railway
murder inspires
gripping first novel
Kate Colquhoun has created a compelling
whodunit based on real historical events
coverage and trial of Muller, who was The accused: Franz
MR. BRIGGS’ HAT eventually hanged despite doubts over evi- Muller, the German
BY KATE COLQUHOUN dence. (As far back as Victorian times, it tailor
Little Brown, £16.99 becomes clear, we Brits were keen on a
good yarn, even if it did blind our judge- Picture: Getty
hhhhi ment from the truth.)
by Lucie Greene The book has inevitably been compared
with Kate Summerscale’s 2008 bestseller,
MR Briggs’ Hat, the debut novel by award- The Suspicions of Mr. Whicher, and it’s
winning historian Kate Colquhoun, is a true there are many overlaps. But don’t let
current hot pick of the literary press. And that distract you. This is a gripping, beau-
it’s easy to see why. This is a rip-roaring tale tifully written read.
of murder and intrigue set in 1864.
The story – based on real life events – A position that won’t surprise listeners 3,000 interviews since the age of 18,
centres on a mysterious murder which MADE IN BRITAIN: HOW of The Bottom Line, his absorbing Radio 4 including Lady Gaga, Tom Cruise,
takes place in the first cl ass carriage of a THE NATION EARNS discussion programme with business lead- Chuck Berry and David Bowie. Of
North London train. Two bank clerks dis- ITS LIVING ers and entrepreneurs. these, meetings with Hugh Hefner;
cover a hat in first-class on top of a pool of BY EVAN DAVIS Books accompanying television series travelling with Madonna by heli-
blood from murder victim Thomas Briggs, Little Brown, £18.99 often fall short against standalone books. copter; Gaga crying over ex-
a senior bank clerk, who is later found Made in Britain is an exception. Davis boyfriends; and being locked in
dying on the railway tracks. What ensues hhhhi resists coming down on either side of the an apartment with Courtney
is a nationwide manhunt for the killer by Philip Salter left-right wing debates he presents (which Love are featured. Each
and news sensation, culminating in the may frustrate some) but it’s an engaging encounter is posited as a
trial of suspect German tailor Franz MADE in Britain is the second book by the book written by an author whose passion moment that is most illustrative
Muller. prolific economist and journalist Evan and command of his subject shine about the celebrity.
Colquhoun deftly explores the impact Davis, which will accompany a BBC series through. Strauss is somewhat of a
of the murder on the Victorian psyche at a of the same name. For fans that listen to celebrity himself these days and
time when society was relishing the won- him dissect the countless erroneous eco- has been tapped by many celebri-
ders of the industrial age and railway nomic arguments presented by guests on EVERYONE LOVES YOU ties to ghost write autobiogra-
expansion, but equally becoming more the Today Programme, this work will hit WHEN YOU’RE DEAD (AND phies in the past. (Not least
paranoid about the evils of urban society. the spot. His upbeat, balanced and effort- OTHER THINGS I LEARNED Jenna Jamesons’ How to Make
It also highlights the growth of newspa- less interviewing style translates well into FROM FAMOUS PEOPLE) Money like a Porn Star.) He’s
pers of the era – 1864 was considered a prose and it is filled with interesting facts BY NEIL STRAUSS also well known for penning
golden age for British press – and how this that can slip through the noise of informa- Portfolio, £20 the bestseller The Game:
impacted the drama of the investigation’s tion – such as the fact that German auto- Penetrating the Secret Society of
motive production only accounts for 3 to hhhii Pickup Artists. This new book is an
4 per cent of its economy. by Lucie Greene¶ entertaining read and gives excellent
A central aim of the book is a noble one insight in to the strange world of
especially given the bias of the UK press: to AS a senior writer for Rolling Stone, jour- celebrities. The only problem with its
stop people trying to assess the value of nalist Neil Strauss has witnessed some snippet-style format is that it can
what they do by looking at physical pro- incredible moments in pop culture histo- sometimes feels disjointed.
duction alone. His contention is: “It’s not ry. Here, in Everyone Loves you When
the weight or size of an object that makes You’re dead (And other Things I learned Madonna, right, as featured in one
it valuable and, more than most other from Famous People) he revisits key inter- of Strauss’ weird and wacky
advanced economies, Britain has found views with icons, presenting them in new celebrity moments.
ways of earning a living that are beyond form as mini episodes.
manufacturing.” Strauss says he has conducted over Picture: Reuters

Jazz, cigars and pop stars come to Docklands


founder membership could mean landing on its upper floor, Boisdale seems to be hit- Cocktail Emporium for an instructional, sen-
your very own “meet and greet”. With the ting the right note in its effort to bring a sory experience or the Dram Shop for seri-
Gresham Club due this summer they still world class jazz venue to Canary Wharf as ous gin consumption and an honesty bar.
have a few more tricks up their sleeves. well as world class whisky and food. Last but not least the appealing Riding
Another recent Docklands launch is Pollen Street Social, the brainchild of ex- House Cafe opened last week on Great
GOING Boisdale of Canary Wharf on Cabot
Square, which opened over two huge floors,
Gordon Ramsey chef Jason Atherton, has
opened just off Hanover Square with its own
Titchfield Street with an NYC sociable vibe.
Just avoid eye contact with the lampshade
OUT complete with signature colour scheme,
mahogany paneling and a generous helping
separate bar. The Social Room lives up to its
name as a laid back, unstuffy affair with big
squirrels if you can.
www.alphabetgroup.co.uk
TIM BADHAM of McDonald tartan. Whereas the original in windows and simple, low-key luxury to put www.boisdale-cw.co.uk
Belgravia conveys an old school eccentricity, patrons at ease. The “deconstructed” cock- www.pollenstreetsocial.com
here the bold reds lend a more contempo- tails include intriguing options like the www.whistlingshop.com

W
ITH finishing touches being made rary backdrop to a light and airy space and Breakfast Martini – vodka, Grand Marnier, www.ridinghousecafe.co.uk
to Battery Club in Canary stunning sunset views. The 1,000 sq ft marmalade and toast.
Wharf, the owners are not Cigar Terrace and Cuban Cigar Library Over in Shoreditch, The Worship Street Tim Badham is the founder of Innerplace,
resting on their laurels. They’re in (complete with members’ lockers and Whistling Shop has just been unleashed by London’s leading providers of VIP enter-
the midst of launching Alphabet City, a hip indoor smoking room) complements the the team behind molecular speakeasy Purl tainment, including film premieres, fashion
NOËL COWARD THEATRE new members only dining room, bar and stock of 1,000 rare whiskeys to ensure a in Marylebone. Taking the Victorian gin shows, launch parties and members club
0844 482 5141 lounge at the O2. With all manner of pop treat for connoisseurs. With Jools Holland palace theme to new levels, the folk here access.
star after-parties in the mix, locking down a as Patron of Music and a large music stage concoct scientific-style potions. Try the ww.innerplace.co.uk.
CITYA.M. 12 MAY 2011 Lifestyle | Food & Drink 27

The glamorous
way to drink
Hotel bars, once seen as dull and stuffy, are
now recognised as the places to enjoy the
classiest cocktails, writes Timothy Barber

I
F you want the finest cocktails all purple velvet seating, gleaming
served by the most talented bar Lalique glass panels, sculpted mirrors
staff in the most spectacular set- and vintage photographs, plus a fabu-
ting – and let’s face it, who does- lous horseshoe marble bar.
n’t – London’s swish hotels are right www.claridges.co.uk
now the place to find them. Thanks to
a slew of upgrades and openings, the HOTEL: Flemings, Mayfair
ever-burgeoning popularity of sophis- BAR: Flemings cocktail bar (below)
ticated cocktails and the continuing Another hotel that underwent a
cultural cool of all things old-fash- recent refurbishment, Flemings has
ioned, the capital’s hotel bars have emerged from relative obscurity, hid-
been having a notable resurgence. den away on a Mayfair side street, as a
From new openings to old classics, place of serious cool. Its basement bar The new Gilbert
here is City A.M.’s pick of the best. is like no other, all bold colours, funky Scott bar at the
furnishings and loud patterned car- St Pancras
HOTEL: St Pancras Renaissance pets, yet intimate enough and chic Renaissance hotel
BAR: The Booking Office and the enough not to feel garish. It’s a sophis-
Gilbert Scott (right) ticated place for a late-night tipple,
The gothic splendour of the newly- and the drinks, from tremendous
revived hotel at St Pancras station is Pink Pigeon rum to its signature mar-
on show in its primary bar, whose tinis, are worth the trip alone.
name – the Booking Office – hardly www.flemings-mayfair.co.uk
offers an idea of its cathedral-esque
proportions and architecture. The sta-
tion’s old wooden ticket booth still
curves along one wall behind the bar,
where cocktails include Victorian TS
punch served in copper punch bowls.
IP TICKE
Smaller but, in our opinion, even V LY
more splendid, is the bar of chef NEAR T!
Marcus Wareing’s new restaurant OU
there, the Gilbert Scott. Its ineffably SOLD
glamorous, romantic look is the work
of uber-designer David Collins – we
love the huge bells that hang from
the ceiling acting as light shades.
www.marriott.co.uk

HOTEL: Corinthia, Whitehall Place HOTEL: Dukes Hotel, St James


BAR: The Bassoon Bart BAR: Dukes Bar
Built at the end of the 19th century, Talking of signature martinis, they
this old hotel building has been don’t come better than at the leg-
turned into something very grand endary bar of Dukes hotel in St
indeed: a stupendously extravagant James’s. Famously frequented by Ian
hotel full of gleaming white marble, Fleming, the place is a hushed,
colossal modernist chandeliers, vast unfussy place dedicated to good con-
restaurants and a four-floor spa; but versation and phenomenal drinks.
not without controversy – its develop- www.dukes.com
ment has been partially funded by
Libyan sovereign wealth money. The HOTEL: The Connaught, Mayfair
marvellously-named bar is in the old BAR: The Coburg Bar and the
hotel’s music room, now a sleek, Connaught Bar
debonair environment of 1920s cool You could pick the marble-and-mir-
mixed with contemporary ultra-luxu- rors glitz and innovative cocktails of
ry. The Manhattan cocktails are the Connaught Bar, but we’d say the
superb, and the “food cocktails” – connoisseur’s choice is the understat-
including the ingenious creation of ed lounge-bar chic of the Coburg bar,
an oyster in a mini Bloody Mary – are
sheer class, as are the staff.
which opened in 2008. Not least
because of the remarkable “baccha-
— A feast for the senses —
www.corinthia.com nology” drinks menu, which is full of
historic cocktails and rare vintage
champagnes and wines. The atmos- 16 - 19 JUNE 20113&(&/541"3,
phere is low-key but ineffably smart,
as dapper and suave as a Savile Row Create your own gourmet menu at the world’s greatest pop-up restaurant
suit, and a marvellous place to while festival. Savour outstanding dishes from 40 of London’s best restaurants and
away the hours as you work your way explore fine food and wine from top producers. Celebrate summer in the city
through 300 years of cocktails. with Taste of London, the culinary event of the season.
www.the-connaught.co.uk
Restaurant line up: "TJBEF$VCBt#BSSBöOBt#FOBSFTt#FOUMFZTt#PDDBEJ-VQP(FMVQPt$IFG$PMMJO
HOTEL: The Savoy, the Strand #SPXOt$MVC(BTDPOt$PSSJHBOT.BZGBJSt'JOPtGPVSPOJOFt(BVDIPt(BVUIJFS4PIPt,BJ.BZGBJSt-"OJNB
BAR: The American Bar and the t-&USBOHFSt-BVODFTUPO1MBDFt-F$BQSJDFt-F(BWSPDIFt.B[Ft0QFSB5BWFSOt03"t1BSBNPVOUt1FUSVT
t2VP7BEJTt3FGFUUPSJPt3IPEFTt3PVYBU5IF-BOEBVt4DPUUTt4LZMPOt5BNBSJOEt5IF$JOOBNPO$MVC
Beaufort bar t5IF.PEFSO1BOUSZt5IF3JU[3FTUBVSBOUt:BVBUDIBt:PSL"MCBOZtQMVTQPQVQSFTUBVSBOUTGSPN
The Savoy’s famous institution, the "DUJPO"HBJOTU)VOHFSBOE.BMBZTJB,JUDIFO
American Bar, is all about the spirit
of the Roaring Twenties, with classic Standard Ticket Offer: 2 for £38 (Save £14) visit tastefestivals.com/london
American cocktails, live jazz piano
HOTEL: Claridges, Mayfair and smart deco stylings. Joining it
or call 0871 230 7132 2VPUF$*5:

BAR: The Fumoir (above) since the hotel’s refurbishment is


There may be those who have patron- the altogether more ritzy Beaufort
ised the bar at Claridges for ages with- Bar, in the space of the hotel’s old
out knowing about its inner sanctum, cabaret stage and with a black-and- #PPLJOHBOEUSBOTBDUJPOGFFTBQQMZ0òFSJTMJNJUFEBOEBQQMJFTUPTUBOEBSEUJDLFUTQVSDIBTFEJOBEWBODFGPS5IVSTEBZBOE'SJEBZTFTTJPOT0òFSDBMDVMBUFE
the Fumoir. Step through a mirrored gold interior that’s as theatrical as POEPPSQSJDF0UIFSUJDLFUUZQFTBWBJMBCMFBUUBTUFGFTUJWBMTDPNMPOEPO
door into a world of svelte art deco – they come. www.fairmont.com/savoy
28 Lifestyle | TV& Games CITYA.M. 12 MAY 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK


TERRESTRIAL
6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm BBC London News 6.30pm Great British Menu 6.30pm ITV News 6.30pm Hollyoaks 6.25pm OK! TV
7pm The One Show 7pm Coast: The team explores 7pm CHOICE Emmerdale 7pm Channel 4 News 7pm 5 News at 7
7.30pm EastEnders: BBC News Ireland’s Atlantic coast. 7.30pm Human Rights and 7.55pm 4thought.tv 7.30pm Rough Guide To
8pm CHOICE Watchdog 8pm The Animal’s Guide to Wrongs: Tonight 8pm Three in a Bed 8pm Emergency Bikers
9pm Inside the Human Body Britain: Chris Packham focuses 8pm Emmerdale 9pm A Very Dangerous Doctor 9pm Extreme Fishing with
10pm BBC News on coastal creatures. 8.30pm Coronation Street 10.40pm The Secret Millionaire Robson Green – At the
10.25pm Regional News Last in the series. 9pm Long Lost Family 11.45pm The Big Bang Theory Ends of the Earth
10.35pm Question Time 9pm CHOICE 10pm ITV News at Ten 12.15am Music on 4: The JD Set: 10pm Impossible?
11.35pm This Week: The Shadow Line 10.30pm London News Manchester 12.30am Album Chart 11.05pm Banged Up Abroad WATCHDOG
10pm Psychoville 2 10.35pm Piers Morgan’s Life Show Introduces – Jamie Woon 12.05am SuperCasino BBC1, 8PM
Holiday Weatherview Stories: David Hasselhoff 11.35pm 12.45am 4Play: Oh Land 1am The 4.05am Meals in Moments With Anne Robinson and Chris Hollins
12.25am Sign Zone: The Death 10.30pm Newsnight: Weather The Late Debate 12.05am Model Agency 1.55am Supersize vs 2008 Celebrity MasterChef winner investigate cases of over-charging and
of Bin Laden – Panorama 11.20pm Business Nightmares Grimefighters 12.30am The Zone; Superskinny Kids 2.50am A Year Liz McClarnon. 4.15am How Not to poor service, while Matt Allwright
12.55am Countryfile with Evan Davis News Headlines 2.35am Human Inside Number 10 3.45am Hill Decorate 4.55am County Secrets exposes another rogue trader.
1.55am Antiques Roadshow 12.20am Children’s Rights and Wrongs: Tonight 3am Street Blues 4.35am Great British 5.10am Wildlife The work of an
2.55am Neighbourhood Watched Craniofacial Surgery ITV Nightscreen 4.35am-5.30am Brands 4.50am Wogan’s Perfect animal sanctuary. SOS
3.40am-6am BBC News 1.20am-6am BBC News Jeremy Kyle: Morning Surgery Recall 5.15am-6am Countdown 5.35am-6am House Doctor

SKY SPORTS 1 BRITISH EUROSPORT Charmed 4.20am Nothing to 2.55am Ugly Betty 3.35am DISCOVERY HOME &
SATELLITE & CABLE

7pm Sky Sports News at Seven 6pm MotoGP 8pm British Declare 5.10am-6am Maury Heartland 4.20am The Class
7.30pm Live Football League: Superbikes 9.30pm Cycling: Giro 4.40am-6am Switched HEALTH
Nottingham Forest v Swansea d’Italia: Stage six from Orvieto to
BBC THREE 7pm Bringing Home Baby 8pm
City (Kick-off 7.45pm). 10pm Fiuggi Terme. 10.35pm MotoGP
7pm The Apprentice 8pm HISTORY 10 Years Younger: The Challenge
Eurovision Song Contest 2011 7pm Heir Hunters 8pm Ice Road 9pm I Didn’t Know I Was
Ringside 11pm SPL Round-Up 11.05pm GP2 Series
10pm EastEnders 10.30pm Truckers 9pm Pawn Stars 10pm Pregnant 10pm Born on a Bad THE SHADOW LINE
11.30pm Time of Our Lives 12.05am-12.40am Day 11pm A&E 12am I Didn’t BBC2, 9PM
Russell Howard’s Good News Storage Wars 11pm Swamp
12.30am Football League Intercontinental Rally Challenge Know I Was Pregnant 1am Born Gabriel and Joseph are both desperate
11pm Family Guy 11.20pm Family People 12am Pawn Stars 1am
2am Premier League World Guy Presents: Seth and Alex’s Storage Wars 2am True Story on a Bad Day 2am A&E 3am 10 to track down the driver of Wratten’s
2.30am Ringside 3.30am ESPN Almost Live Comedy Show 3am Heir Hunters 4am Universe Years Younger: The Challenge car first, but a mysterious figure is one
SPL Round-Up 4am Football 7pm ESPN Kicks: Scottish 11.45pm So What If My Baby Is 5am-6am Ice Road Truckers 4am Labour and Delivery step ahead. With Christopher Eccleston.
League 5.30am-6am Premier Premier League 7.15pm Live Born Like Me? 12.45am Russell 5am-6am Bringing Home Baby
League World Women’s Super League Football Howard’s Good News 1.15am DISCOVERY
10pm The Ultimate Fighter 11pm Eurovision Song Contest 2011 8pm Through the Wormhole SKY1
SKY SPORTS 2 FIA GT1 World Championship 3.20am So What If My Baby Is with Morgan Freeman 9pm 8pm Hawaii Five-0 9pm The
6pm Live PGA Tour Golf 12am 12am NBA Action 12.30am Live Born Like Me? 4.20am-5.20am Flying Wild Alaska 10pm Chicago Code: New series. Police
European Tour Golf 2am-5.30am NBA Basketball 3.30am ESPN The Apprentice Deadliest Catch 11pm Surviving drama, starring Jennifer Beals
Premier League Darts Press Pass 4am Skateboarding the Cut 12am Bear Grylls: Born and Jason Clarke. 10pm House
E4 Survivor 1am Deadliest Catch 11pm NCIS: Los Angeles 12am
SKY SPORTS 3 SKY LIVING 7pm Hollyoaks 7.30pm Friends 2am Frontline Battle Machines Ross Kemp on Gangs 1.50am UK
7pm Live Premier League Darts 7pm CSI: Crime Scene 9pm The Big Bang Theory with Mike Brewer 3am Hitler’s Border Force 2.40am Cold Case EMMERDALE
10.30pm NRL Fulltime 11pm Investigation 8pm Chuck 9pm 9.30pm How I Met Your Mother Henchmen 3.50am World War 3.25am A Town Called Eureka ITV1, 7PM
WWE: Late Night – Raw 1am 16 & Pregnant 10pm Katie 11pm 10pm The Inbetweeners Two: The Complete History 4.10am Secret Life of Suburbia Ella offers to help a concerned Adam
WWE: NXT 2am The Rugby Club Criminal Minds 12am CSI: Crime 11.05pm Shameless 12.10am My 4.40am How the Universe Works 5am Bite Size Brainiac when he reveals his fears about John
3am NFL: Total Access Scene Investigation 1.50am Name Is Earl 1.05am The 5.30am-6am Destroyed in 5.15am-6am Don’t Forget the and Moira losing their home. Aaron
4am-5am Time of Our Lives Ghost Whisperer 2.40am Inbetweeners 2am Shameless Seconds Lyrics US accuses Hazel of giving up on Jackson.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
9 17 23 30 10 16 17 
11 15 11
7 8  
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 12 3
12 16 12
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 7 20 9
 
above or to the left of it. 22 12
You can only use the digits 1-9 24 35  
  and you must not use the
10
16 3   
same digit twice in a block. 7 18 34 33 4
   The same digit may occur 15 6   
18
     more than once in a row or
column, but it must be in a
10
14
14
8
11

6 29
 separate block.
13 5 6 
45
    17 8 9


 ACROSS DOWN
1 Resembling 1 Involuntary muscular
    
   WORDWHEEL A R
an ape (6)
6 Add on,
supplement (6)
contraction (5)
2 Relating to a person
or thing regarded as a
Using only the letters in the Wordwheel, you have 7 Bullets, etc representative symbol (6)
  ten minutes to find as many words as possible,
O F (abbr) (4) 3 Follower of Hitler (4)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters T 9 Regions on
diametrically
4 Expired (4)
5 Probabilities (4)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
S T opposite sides of
the Earth (9)
8 Adult male person (3)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E E 13 Mood disorder (5)
10 Greyish-brown colour (5)
11 Monetary value (5)
15 Ancient unit of
QUICK CROSSWORD 3 9 3 8
12 Garden of Adam and Eve (4)

S T R O P S S N I P
4 1 7 3 2 1 7 9 SUDOKU         
length (5)
17 Be valid (5)
14 Edge tool used to cut
9 8 8 9 7 5 1
        
and shape wood (4)
T A I A I 20 Not marked by the
E V E L O D R O M E 2 1 4 5 3 7 6 8
         16 Thrown carelessly (6)
A C E L C O 2 1 1 4 3 2 use of reason (9)
         18 Large nation (inits) (3)
M A N I A C A S H Y 3 4 6 9 23 Identical (4)
19 Provide a remedy (5)
WORDWHEEL
V C R O S S A         
9 7 5 8 1 8
F I R E G A M B I T          24 Shelters from
A C M O R E
5 2 3 7 1 6 9 8
light (6) 20 Neither good nor bad (2-2)
        
B R E A K D O W N N
6 4 9 4 8 6 4 The nine-letter word was 21 Close by (4)
U P S U T 3 1 2 6 3 1 5 2          25 Most senior (6)
Y O B S C A S S I S 5 9 6 9
TRANSPIRE          22 Misplace (4)
Sport
29
BLATTER DEMANDS
SWIFT ANSWERS
FA PREPARE DOSSIER OF
FIFA WRONGDOING: P30

SPORT | IN BRIEF

Take on the London Triathlon Ireland handed World Cup boost


CRICKET: The ICC Cricket Committee
has unanimously recommended that
there should be a qualifying process for

with a little help from Daley the 2015 World Cup, enhancing the
prospect of Ireland competing at the
event. Last month, the ICC announced a
move to restrict the 2015 competition
to the sport’s 10 full members. “It’s
excellent news that another group of
Money-can’t buy people have put their support behind the
new for a qualifying process,” said
Warren Deutrom, Cricket Ireland’s CEO.
experience up for
Weylandt death sparks probe
grabs for 25 fit and CYCLING: UCI president Pat McQuaid
says cycling’s governing body will inves-
fearless City A.M. tigate bike safety after the death of
Belgian rider Wouter Weylandt. The
readers Belgian rider died as a result of head
injuries after a high-speed crash during

S
UPER-FIT City A.M. readers can the third stage of the Giro d’Italia. “We
win the sporting chance of a will investigate and discuss with the
lifetime by becoming a member industry the rigidity and safety aspects
of the Laureus team in this of bikes,” said McQuaid.
year’s London Triathlon – and receive
special training from double Olympic Paralympic ticket prices revealed
gold medallist Daley Thompson. OLYMPICS: Around two million tickets
Triathlon is one of the fastest grow- for the London 2012 Paralympics will go
ing sports and one of the most excit- on sale from 9 September. Prices will
ing. And on 6 and 7 August the start at £10 for adults and £5 for under-
London leg of the Dextro Energy 16s and over-60s. More than 95 per
Triathlon ITU World Championship cent of the tickets will be priced at £50
will take place over next year’s spec- or under.
tacular Olympic course.
Individual amateur places are Foster quits international scene
already filled, but sports charity FOOTBALL: Birmingham and England
Laureus, as the global charity partner goalkeeper Ben Foster has announced
of the International Triathlon Union, his shock decision to take an indefinite
is teaming up with City A.M. to pro- break from international football. “I’ve
vide the chance for 25 readers to com- enjoyed my time with England and am
pete alongside the greatest triathletes certainly not closing a door on the inter-
in the world – and at the same time national side of things forever but this is
raise funds for the Laureus Sport for the right thing for me to do right now in
Good Foundation. Competitors get to terms of club football,” he said.
Double decathlon Olympic champi- run the London
on Thompson will provide two train- 2012 course a year Chabal axed from France squad
ing days for the Laureus / City A.M. before the Games RUGBY UNION: France have left
team and also be on hand to support Sebastien Chabal out of their provisional
the racers on the day. He said: “This squad for the World Cup. The 33-year-
allows sports enthusiasts to race at an places available. old was dropped from the team after
iconic London 2012 venue alongside
elite athletes, while raising funds for
the Laureus Sport for Good
Foundation. Last year I had great fun
While Olympic is for those more
confident with their fitness – a 1,500
metre swim, a 40 kilometre cycle ride
and a ten kilometre run. There are 20
SIGN UP NOW their Six Nations defeat by Italy.

Results
training the Laureus team and I know places available for these elite com-
it will be the same this year with the petitors. WHAT YOU GET WHERE TO GO
Laureus / City A.M. team.” The Laureus Sport for Good The 25 members of the Laureus / City City A.M. readers interested in taking =FFK98CC
The race takes place over a dramat- Foundation is dedicated to improving A.M. team will receive: part should email: :CP;<J;8C<98EBGI<D@<IC<8>L<
ic course involving The Serpentine, the lives of young people through the ?\Xikj%%%%%%%%%%%%%%%%%%%%'  ' :\ck`Z%%%%%%%%%%%%%%%%%%%%%%%%%%%(  *
Hyde Park, Constitution Hill and use of sport and members of the
campbell.gray@laureus.com  ?ffg\i()#+0
Buckingham Palace. England’s
Brownlee brothers, Alistair and
Laureus / City A.M. team will each be
asked to raise £2,000 for the charity.
• Two training days with Daley
Thompson
8kk1(-#-/( :fddfej./
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Jonathan, will be looking to win the
men’s race to enhance their Olympic
The funds raised by the Laureus /
City A.M. runners will go to help the • Training schedule put together by
Daley Thompson
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Laureus / City A.M. team places, for Foundation, whose mission is to use • Laureus branded T-shirt   G N ; C = 8 >; Gkj
men’s or women’s races, are available sport as the means to tackle social
• Opportunity
Laureus branded triathlon suit IXe^\ij%%%%%%%%%%%%%%%%%%%%%%%%%%*. )0 * , /* )/ ,, 0'
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in two categories – Sprint and
Olympic distance.
Sprint is the category for the aver-
problems around the world. Laureus
currently supports 84 community
sports projects and since its inception
• legends at thetoevent
meet Laureus sporting READ ON
For more information on the Laureus
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20 kilometre cycle ride and a five kilo-
metre run. There are a total of five
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Bopara, Morgan and Hildreth set for Lions shootout 9CL<JHL8I<9<KGI<D@<IGC8P$F==J

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None of that trio have made the Indian Premier League. absence through injury.

CRICKET 8^^1/$(%
BY JAMES GOLDMAN an irresistible case for Test Leicestershire’s Samit Patel has Fast bowlers Ajmal Shahzad and
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selection going on been offered the chance to re-launch Steven Finn will have the chance to
ENGLAND have named Test hopefuls early season form. his international career having fallen force their way back into the Test :?8DG@FEJ?@G=@E8C(JKC<>
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Ravi Bopara, James Hildreth and Eoin Bopara (right) at least out of favour with the selectors fol- picture, while Jade Dernbach will
Morgan in the Lions squad ahead of has one century to lowing a number of fitness related look to take advantage of the
next week’s tour match against Sri his name, but issues, while his highly-rated enforced absence of Warwickshire’s KF;8PËJ;@8IP
=ffkYXcc.%+,gdlec\jjjkXk\[
Lanka at Derby. Hildreth averages county colleague James Taylor Chris Woakes. egfn\i:_Xdg`fej_`gGcXp$F]]j
Paul Collingwood’s post Ashes just over 20, while is another intriguing call-up. Meanwhile, Kevin Pietersen man- J\d`$=`eXc=`ijkC\^
retirement has created a vacancy in Morgan has played In the bowing depart- aged only 30 for Surrey against Efkk`e^_Xd=fi\jkmJnXej\X%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
England’s batting line-up and Bopara only once for ment Graham Onions, Cambridge University on his come- L\=8Le[\i$(.:_Xdg`fej_`gJ\d`$=`eXc
and Morgan are the favourites to Middlesex as a who has taken 12 wick- back in what was his first innings ?fccXe[m<e^cXe[('%*' %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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replace the Durham stalwart, with result of his stint ets in his two county since a hernia injury cut short his
Somerset’s Hildreth also thought to with Kolkata matches this season, returns to an involvement in England’s World
be in contention. Knightriders in England squad after a 15-month Cup campaign back in March. email sport@cityam.com
30 Sport CITYA.M. 12 MAY 2011

FA prepare to
submit full
dossier on Fifa
Celtic boss Lennon Pic: GETTY

Fan arrested
after fracas corruption
with Lennon

FOOTBALL
BY JAMES GOLDMAN minds of Fifa.
“We have to do it now, immediately,
THE FOOTBALL ASSOCIATION will sub- and we have three weeks. We must
mit a full dossier to Fifa after the world accelerate the movement, whether it is
governing body requested urgent evi- for the good or for the bad.”
FOOTBALL dence of the corruption allegations One of the men at the centre of

aimed at four members of its Executive Triesman’s allegations, Fifa vice presi-
A MAN has been arrested in connec- Committee by former England 2018 dent Jack Warner, who is alleged to
tion with an attack on Celtic manager bid chairman Lord Triesman. have asked for £2.5m in order to build
Neil Lennon during his side’s 3-0 win Fifa general secretary Jerome Valcke an education centre in his native
at Tynecastle last night. wrote to the FA, addressing chairman Trinidad & Tobago, was dismissive of
The fan leapt from the Hearts sec- David Bernstein, demanding a copy of the accusation.
tion of the main stand after Celtic’s Triesman’s evidence – submitted at “First of all, I laugh like hell
second goal and headed for Lennon, Tuesday’s Culture Media and because it took those guys
who was standing on the touchline. Sport Committee – as well as from December to now
He connected with the former any documents supporting [to say] that I have
Northern Ireland international accusations that four mem- £2.5m I believe. I never
before being bundled to the ground bers made requests for asked anybody for
and arrested. financial assistance or anything,” said
Scottish Football Association chief favours during the bid- Warner (inset).
executive Stewart Regan issued a ding campaign. “When these guys
statement, saying: “Clearly this kind “For us to be in a posi- came here, we prom-
of behaviour from supporters is whol- tion to examine the situa- ised to help. I showed
ly unacceptable. tion thoroughly, and with them a place to put a
“The safety of players, club officials clear sightedness, we kindly playground. They prom-
and match officials is paramount on solicit you to remit us a complete ised to come back but never
or around the field of play, and this report [from] Lord Triesman [together did.
clear breach of security is a matter I with] any or all documentary evidence “What is painful is that the FA spent
will be discussing with SPL chief exec- at his disposal,” wrote Valcke. “We wish £19m in a bid, 24 persons in Fifa, one is
utive Neil Doncaster tomorrow.” to underline the utmost urgency and from England, seven of whom from
It is not the first time Lennon has extreme sensitivity of the matter.” Europe. If the other 16 persons were
been targeted by opposition support- FA general secretary Alex Horne has bad, how come the only vote they got
ers this season. responded by writing immediately to is the Englishman’s vote? How come
In January a package addressed to Fifa including some evidence provided not even one person from Europe
him containing bullets was intercept- by the committee and has promised to voted for them?”
ed at a sorting office in Country submit the rest as soon as possible. Sports minister Hugh Robertson,
Antrim and two months later Celtic Fifa president Sepp Blatter said the meanwhile, reneged on a suggestion Blatter wants the
confirmed Lennon was under 24- allegations had to be dealt with before that the FA would pull out of Fifa if allegations dealt
hour security surveillance after a sus- the body’s Congress in Zurich next they did not addressed corruption. with before next
picious package was intercepted at a month. After initially saying “all options are month’s Fifa
Royal Mail sorting office in Ayrshire. “We have to do it very fast,” he said. open”, Robertson later said: “Leaving Congress
In April it emerged that Royal Mail “We have a Congress to come and have Fifa is not on the agenda but all the
intercepted a total of two “viable” par- to deal with this matter before the effort at Government level is on trying Picture: GETTY
cel bombs addressed to Lennon. Congress and not just kick it out of the to get reform at Fifa.”

Euro greats call for logo SPORT


change as tribute to Seve DALEY
GOLF
THOMPSON

logo is a silhouette of Harry Vardon –


Open champion a record six times Win the chance to
FORMER European Ryder Cup cap- between 1896 and 1914 – but both
tains Nick Faldo and Colin
Montgomerie have urged the
Faldo and Montgomerie believe it
would be a fitting tribute to amend it
train with Olympic
European Tour to redesign their logo
to include an image of the late Seve
and incorporate the five-times major
winner.
legend: Page 29
Ballesteros. “I think you will find it does
The funeral of the Spanish golfer,
who passed away last week aged 54
change and let’s hope it is sooner
rather than later,” said Montgomerie.
Bopara, Morgan and
following a long battle with cancer,
took place yesterday in Pedrena and
“I would vote for that immediately.
“When you talk about the European
Hildreth primed for
was attended by hundreds of mourn-
ers including his former European
Tour you talk about Seve and I think
it’s only right he should appear.”
England Test
Ryder Cup team-mates Sam Torrance
and Jose Maria Olazabal, former
Faldo added: “I think they (the
Tour) would have a very difficult time
shootout
cyclist Miguel Indurain and ex- Real
Mardi and Spain striker
not changing the logo. There will
never be another Seve. He had
Cricket: Page 29
Ballesteros’ funeral took place in his home town of Pedrena Picture: GETTY Emilio Butragueno. The current tour absolutely everything.”
CITYA.M. 12 MAY 2011 Sport 31

Spurs fans disgruntled How royal wedding fired


with Redknapp are in
need of a reality check Thorpe’s hopes of fairytale
from their last 10 Premier League
Frank Dalleres hears
games.
They were also hit hard by
swimming icon on
Gareth Bale’s fitness problems. He
has won matches on his own for
why his comeback
them and other players feed off
that. But he’s such an athlete and for London 2012 is
relies on his explosive pace that
when not in absolutely peak condi- a huge gamble
FOOTBALL COMMENT tion he is not as effective.
TREVOR STEVEN
I
Manchester City, who pipped T MAY not be his primary motiva-
them to the last qualifying place, tion, but Ian Thorpe admits
had their own distraction in the attending the royal wedding last

I
GATHER some Tottenham sup- Europa League, but Roberto month has only increased his
porters have been criticising Mancini has been able to assemble hunger to complete a fairytale of his
manager Harry Redknapp for a a squad of huge depth to cope with own when he returns to London next
loss of form that has seen them challenging on all fronts. year for the Olympics.
fail to qualify for next season’s Thorpe is back in training five years
Champions League. They must be NEW SIGNINGS after hanging up his swimcap and
completely barmy. Spurs have never The problem for Spurs is that com- aiming to add to his five gold medals
had it so good, or at least not in petition for the top four is only at the Games, where it is hoped he
recent memory. going to get tougher next season. will face the man who has replaced
Of course it’s disappointing not As well as the current incumbents, him as the world’s greatest, Michael
to be in with Europe’s big boys Liverpool are a force again and I Phelps. The Australian, 29, believes he
again next year, if you look at in iso- have a funny feeling that Everton can still beat the best, insists he is
lation. But clearly some fans have could just be back in the mix. back in the pool because he loves it
become slightly spoiled by their That means Tottenham need to rather than for any reward, and can-
Continental adventure this season. arm themselves with new signings, not wait to compete in London’s new
You always get that to some chief among them a striker of the aquatic centre. On top of that,
extent. When we won the league highest calibre. They’re not that Thorpe, who was invited to the royal
at Everton it became harder to hard to find, just look at the wedding by his friend Prince William,
keep the faithful happy. You top of the goalscorers’ charts says the extravagance of that occa-
reach a high level and then in Europe, pick your favourite sion has whetted his appetite for
they expect it. It’s human and check his availability. London 2012.
nature. They could also use an alter- “It was unbelievable, a surreal
Tottenham can’t say native to the 4-4-2 that experience. I’ve never seen London
they’ve had a poor Harry seems to love. like it. Now I’ve seen how you do a Thorpe is looking to add to his five Olympic golds next summer Picture: GETTY
season, however. Being able to play 4-3- wedding I’m interested in how you do
They reached the 3 with wide for- an Olympics,” joked Thorpe, who was to prove to himself he could get back he enjoys what he’s doing and
quarter-finals of wards who can drop in Hackney yesterday to open an out- to his best; after two he knew he although the result hasn’t been what
the Champions back into midfield door gym for his sponsors Adidas. could. He is improving but still short, people expected, I have tremendous
League on their would make them London is a recurring theme in his admitting he wouldn’t be ready if he admiration that he continues.”
debut in the less predictable, return. It was on a flight here last were competing in July’s world cham- He plans to swim on beyond
competition; to and prevent their autumn that he realised, albeit reluc- pionships. He doesn’t like adding to London 2012 regardless of his success
have managed a central midfielders tantly, that he yearned to swim again. the hype surrounding a contest with but admits he is putting a legacy as
top four place from being out- “I’d thought about it before but usu- Phelps in the 200m freestyle, the one of sport’s all-time greats at stake.
would have been numbered. If I ally shut myself down in 10 seconds,” event they share, and gushes about “If I look at it from a career point of
monumental. have one criti- he says. “I had every answer why I did- Michael Schumacher for returning to view, it’s probably a terrible thing to
In the end the cism of Redknapp n’t want to do it. Then I was flying Formula One on his own terms. do,” he says. “But it’s a decision that
burden of playing (left) it’s that they from Chicago to London and thought “I’m glad I’m swimming again and comes from the heart, not the head.”
the best in Europe could use more about it; the answers I had weren’t enjoying it,” he says. “When we have Ian Thorpe was speaking at the Hackney
and having to con- variety to their that good this time. So I made a deci- heroes in sport we want them to adiZone, one of 50 outdoor multi-sport
sistently raise their play, and therefore sion to start swimming. I actually retain that glimmer and want to take giant gyms that have been installed across
game to very, very a few more players went and saw someone to try and ownership of their performances, the UK by London 2012 sponsor adidas. The
high levels took its familiar with anoth- convince me not to do it – that didn’t and we forget that person enjoys adiZone project aims to get more people
toll and they ran out of er system – but work – so I started training.” what they do. People talk about active and is a true sporting legacy of the
steam, with just one win that’s all. Thorpe gave himself three months Schumacher. I look at him and clearly London 2012 Olympic & Paralympic Games.

THE FULHAM SEASON TICKET 2011/2012


Prices start from £329 Adults and £95 Juniors.
Buy your season ticket before 23rd May for early bird discounts.
Monday 16th May – your best chance to grab a great seat. Non-renewed 2010/11
seats are being released to the general public from 16th May including some of
the best seats on offer at Craven Cottage.
Visit fulhamfc.com/seasontickets or call 0843 208 1234
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