Cityam 2012-08-03

GEORGE Osborne will remain as
chancellor until the next general

election in 2015, David Cameron
insisted last night.
In a bid to quash speculation
that Osborne would be moved in
his September reshuffle, the Prime
Minister insisted that the
chancellor had his full support.
Pressed on whether Osborne
would be chancellor at the next
election, due in 2015, Cameron told
Sky News: Hes not going
anywhere yes.
Last weeks disastrous growth
figures which showed the UK
economy sliding deeper into
recession led to calls from within
the Conservative Party for Osborne
to be replaced as chancellor or
stripped of his job as head of
election strategy.
However, Cameron stopped short
of offering the same reassurances
for secretary of state for culture,
media and sport Jeremy Hunt
under pressure for his handling of
News Corps takeover bid for BSkyB.
BY KATIE HOPE
MARKETS plunged yesterday after the
European Central Bank (ECB) said it is
not yet ready to help relieve the finan-
cial pressure on the troubled Spanish
and Italian governments.
Last week ECB boss Mario Draghi
vowed to do whatever it takes to keep
the euro together, sending markets
soaring.
But yesterday he failed to deliver on
the pledge, telling governments that
they had to act first before he will even
consider buying their bonds.
He also poured cold water on the
idea that the European Stability
Mechanism (ESM) could be given a
banking licence which would boost
its firepower by allowing it access to
ECB funds arguing such a move
would be illegal with the ESMs cur-
ALLISTER HEATH: Page 2

Certified Distribution
28/05/2012 till 01/07/2012 is 132,857
rent structure.
Hopes were high that the ECB
would announce another round of
bond buying in the secondary mar-
kets, bringing down borrowing costs
for struggling Spain and Italy, giving
their governments more breathing
space to implement the economic
and budgetary reforms which Draghi
says are so vital to the economies
long-term success.
But instead he said the governments
have to act first and seek help from the
bailout funds.
Governments must stand ready to
activate the EFSF/ESM in the bond
market when exceptional financial
market circumstances and risks to
financial stability exist, said Draghi.
Only then may the governing coun-
cil choose to undertake outright open
market operations of a size adequate
to reach its objective.
And in any case Draghi revealed the
ECB has not yet decided on how any
bond purchases would work. He
expects reports to be published in the
coming weeks explaining exactly how
senior the ECBs credit will be, and so
how far down the pecking order pri-
vate creditors will be.
However, if countries do act and the
ECB joins in, economists said the two
actions could be a powerful short-term
aid to governments.
Draghi stated the ECB will not nec-
essarily sterilise future purchases by
taking offsetting deposits from the
regions commercial banks, said
Capital Economics Jennifer McKeown.
This would mean that the ECB was
conducting full-blown quantitative
easing.
Nonetheless, analysts were disap-
pointed that no real actions were
announced yesterday, despite the pos-
itive speech last week.
Draghi spectacularly under-deliv-
ered. The ECB may do something, but
the scheme he has in mind seems
even more limited than its failed
Securities Market Programme, said
Lombard Street Researchs Dario
Perkins. There is nothing here to sug-
gest investors should abandon their
fear of holding Mediterranean debt.
The Spanish governments 10-year
borrowing costs jumped 0.433 percent-
age points to 7.165 per cent, while the
Italian governments shot up 0.396
percentage points to 6.327 per cent.
Stocks plummeted, with the Euro
Stoxx 50 falling three per cent, the
French CAC 40 dropping 2.68 per cent
and the FTSE 100 falling 0.88 per cent.
FTSE 100 M5,662.3 -50.52 DOW M12,878.88 -92.18 NASDAQM2,909.77 -10.44 /$ 1.55 unc / 1.27 unc /$ 1.22 unc
BUSINESS WITH PERSONALITY
www.cityam.com ISSUE 1,688 FRIDAY 3 AUGUST 2012
See Page 16
SHORTLISTS REVEALED
FREE
MORE: Page 3, Page 5
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BY TIM WALLACE
GOLDS FLOOD IN
AS SIR CHRIS HOY
EQUALS RECORD
All the action from day six of
the Olympics: See Pages 10,
18, 19, 22, 23 and 24
MEDAL RUSH FOR TEAM GB
Cameron says
Osborne will
stay until 2015
ECB: BAZOOKA IS
STILL NOT READY
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
SOCIAL network LinkedIn posted an
89 per cent jump in revenues in its
quarterly profits last night, fuelled
by a year on year increase in its
Hiring Solutions products.
The network, which is used by
175m professionals globally,
announced it had increased
revenues for the quarter to $228.2m
(147m), up from $121m in the
second quarter of last year.
This was led by a 107 per cent
increase in revenues from its Hiring
Solutions product, which generated
53 per cent of total revenues.
LinkedIn chief executive Jeff
Weiner said: LinkedIn had a strong
second quarter with all of our key
operating and financial metrics
showing solid performance.
Our ongoing investment in
product innovation drove healthy
engagement as measured by unique
visiting members and member page
views, and our three revenue
streams all experienced significant
growth.
Net income was down to $2.8m
from last years figure of $4.5m,
largely due to an increase in the
provision of income taxes from
$5.4m last year to $10m this
quarter.
The jump in LinkedIns revenues
contrasts to its Silicon Valley peer
Facebook, which reported a smaller
32 per cent increase in revenues.
LinkedIn bucks
social network
revenue trend
BY MICHAEL BOW
US firm Knight Capital, the
company behind a software glitch
which led to trades being cancelled
in New York on Wednesday, was
scrambling to raise capital last
night after it revealed the error
had accidentally wiped $440m
(283m) off the companys balance
sheet.
The New Jersey based equity
broker, which placed the bad
trades in error after its automatic
systems malfunctioned, was
looking to secure liquidity from
creditors and investors to keep the
firm afloat, its chief executive
Thomas Joyce said.
Yesterday the firm said it had
made a pre-tax loss of $440m due
to the bad trades about four
times what it earned last year.
We have all hands on deck and
we understand what the issues
are, Joyce told Bloomberg TV. We
are talking to a lot of capable
people, people who are in touch
with situations like this.
Shares in the company have
fallen 75 per cent since the error
on Wednesday, when the NYSE
placed 148 listed stocks under
review after prices starting
fluctuating wildly.
Analysts said last night the
stricken company would be
Siemens sets out 3bn share
buyback
Siemens, the German industrial
conglomerate, plans to buy back up to
3bn in shares by the end of the year as it
tries to make best use of its capital
structure.
Siemens said in a statement late on
Thursday that the equity-for-debt swap
would be used to reduce capital stock, to
issue shares to employees and executives,
as well as for convertible bonds and
warrants.
Fast broadband timetable slips
A key target for the UK governments
rollout of superfast broadband will be
missed this year, raising doubts about
ambitions to build a national high-speed
network by 2015.
Goldman creates US social bond
Goldman Sachs has teamed up with New
York City to create the first significant
social impact bond in the US, providing
a test case for the experimental financing
method aimed at helping cash-strapped
local governments. The transactions
already have been used by cities in the UK.
Come back, Cameron urges visitors
David Cameron has urged tourists to
return to London after retailers
complained that constant warnings that
non-Olympic visitors should stay away
have turned the capital into a ghost
town.
Olympic Westfield to block shoppers
A huge new shopping mall next to the
Olympic Park in East London is to be
closed to shoppers this weekend to avoid
overcrowding.
David Cameron retreats on House of
Lords reform
David Cameron is to abandon plans to
reform the House of Lords after failing to
win over Conservative rebels.
Hop Farm Festival owner needs extra
funding after poor ticket sales
The company behind the Hop Farm
Festival, which this year featured Bob
Dylan, has warned it expects to make a
loss in 2012 and needs extra funding.
PBOC Calls Stability Of Growth Top
Priority
China's central bank said yesterday it will
make stabilizing economic growth a
bigger priority, signaling rising concern
over the slowdown in the world's second-
largest economy.
Spain Arrests Three Men Allegedly
Tied to al Qaeda
Spanish authorities yesterday said they
had arrested three alleged members of al
Qaeda in possession of explosives.
ROYAL Bank of Scotland is
expected to announce plans to set
aside millions of pounds today to
pay for costs related to its
computer blunder in June, which
left it unable to process customer
transactions.
The bank, which is 82 per cent
owned by the taxpayer, will reveal
its first interim results since the
meltdown today and provision is
expected for costs related to the IT
fiasco, the mis-selling of insurance
and interest rate swap products.
It follows similar provisions laid
out for PPI and swap costs by high
street rivals Barclays and HSBC in
their interim results.
The bank faced the wrath of its
customers and those at its
subsidiaries, NatWest and Ulster
Bank, in June when payments were
disrupted due to a failure in its
computer systems. The results,
announced this morning, are
expected to be mixed for RBS.
Cormac Leech, bank equity
research analyst at Liberum
Capital, said: Im expecting
investment banking revenues to be
down versus the first quarter and
also volumes on its retail bank.
Lending could also be lower than
expected, with a contraction in net
lending in the UK, in particular to
SMEs. RBS declined to comment.
RBS expected to
announce costs
for IT blunder
Knight Capital chief executive Thomas Joyce said it was all hands on deck to raise cash
2
NEWS
BY MICHAEL BOW
BY MICHAEL BOW
To contact the newsdesk email news@cityam.com
S
O thats it, then. George Osborne
will remain chancellor after the
September reshuffle, and will
keep his job until the election.
David Cameron was emphatic
yesterday. It means his fortunes are
now inextricably linked to his
chancellors; critics of Osbornes
policies will now also become critics
of Camerons; and anybody who
wants to replace the chancellor will
also have to replace the Prime
Minister. This is a key moment.
It is also Camerons last chance. He
and Osborne must come up with a
radical supply-side agenda for growth
over the next few months, while
retaining the planned public spend-
ing cuts. They need to show that they
get it. If they dont budge, and the
economy continues to shrink, and the
deficit to rise, the clamour for a
change of leadership at the top of the
EDITORS
LETTER
ALLISTER HEATH
Camerons decision to stick with Osborne is a major gamble
FRIDAY 3 AUGUST 2012
Conservative party still a minority
view among MPs will become
unstoppable.
SUB PRIME II
IT is astonishing that some in the cab-
inet are calling for the full nationali-
sation of RBS. They want to make it
lend more, regardless of risk; they
want it to shower credit on all and
sundry, including, presumably, to
every chancer with a great idea and
every wannabe property magnate
with insufficient cash for a deposit. I
exaggerate, of course, but some have
learnt absolutely nothing from what
happened over the past few years.
We are still nursing a bubble caused
by excessive liquidity, the practical
manifestation of which was that too
many banks lent too much money too
cheaply to too many economically
unviable projects and to too many
people who couldnt pay the money
back. Yet instead of insisting we all
behave more appropriately, some now
want to relive the errors of the past.
Its maddening.
Fully nationalising RBS is the kind
of policy that those who backed sub
prime lending in the US would have
been proud of. It demonstrates an
utter lack of ideas about what to do to
boost growth. Its advocates worry that
RBS, because it owes its remaining
private shareholders a legal duty to
been hiked too quickly at the wrong
time in the economic cycle, should be
relaxed. Others cannot. The UK even-
tually needs to move towards greater
equity and less debt financing for
small businesses.
It never works to nationalise any
kind of company. It is naive and
deluded to think that the govern-
ment can run a bank (or anything
else) in a hands-off way, nursing it
back to health prior to privatisation.
It cant. When a bank goes bust, it
should be dismantled and wound
down. Politicians always use the firms
they rescue to pursue political
objectives and buy votes, and wreck
them even further. That was true of
British Leyland cars in the 1970s
and it risks being true today of RBS.
maximise profits, rather than act as a
loss-making lender to doomed causes,
cannot be bullied any further into
compromising credit quality. Hence
the silly proposal.
There are many reasons why banks
are not lending more: capital require-
ments imposed by the authorities
have deliberately made it less prof-
itable to lend, especially to small busi-
nesses; the authorities have
discouraged mortgages with high
loan to value ratios and have forced
banks to use far more expensive
deposits to finance lending, rather
than cheaper wholesale funds, push-
ing up costs; banks are more aware of
default risks; the economy is in reces-
sion, which makes all projects riskier;
and the demand for credit is falling,
as sensible folk repay debts. Some of
the issues can be tackled capital and
liquidity requirements, which have
seeking an emergency short-term
loan from creditors or a capital
infusion deal before negotiating a
purchase with rival firms over the
weekend.
A New York based analyst, who
wished to remain anonymous, said:
Either they find a buyer or it ends
up in liquidation. Its extremely
difficult to earn their way out of
this.
Stifel Nicolaus analyst Matthew
Heinz said: This is going to be a
distressed sale and theres going to
be a haircut on what they sell.
Raymond James analyst Patrick
OShaughnessy added: They need
to have something lined up by the
end of the weekend. They need to
shore up liquidity to survive in the
near term. But their assets are quite
liquid if they need to convert them
into cash. This is not a Lehman
situation.
Knight Capital was also one of the
market makers involved in the
botched $10bn Facebook float
earlier this year, when a glitch
delayed the opening of trading in
the shares.
FORUM: Page 18

The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
Knight Capital looks for
cash after $440m error
BANK of America is in talks with
Fannie Mae to resolve a dispute over
bad mortgages that the government-
controlled entity wants the bank to
buy back.
In a filing yesterday, Bank of
America said it is in dialogue with
Fannie Mae to address our ongoing
differences.
At issue are billions of dollars of
mortgages that Bank of America
sold to Fannie Mae from 2004 to
2008, during the US housing boom.
As the loans go bad, Fannie wants
Bank of America to buy them back.
A HOST of technology firms have
announced new ventures in London
today, with companies including
Barclays and Vodafone investing in
the governments Tech City project.
The companies are plunging
money into accelerator
programmes, designed to provide
startups with funds and expertise,
in the East London hub.
Vodafone said yesterday it plans
to have its operation up and
running by the end of the year, and
hopes to replicate the success which
it has seen on its similar project in
Silicon Valley.
Barclays is providing backing to
Central Working, a programme that
provides office space to small
businesses. Several other firms
including those based in Italy and
Japan are also investing in projects.
The deals are due to be announced
at a summit later today.
Tech City has been a pet project
of the government, with David
Cameron and George Osborne keen
to rival the startup scene in
California. Google and Amazon
have recently unveiled new
developments in the area.
Osborne said: The government is
determined to make Britain the
technology centre of Europe, with
Londons Tech City at its heart.
Vodafone and
Barclays check
in to Tech City
BY JAMES TITCOMB
NEW DATA released yesterday shows
just how hard central London has
been hit by the Olympics focus on
the east of the City, with fewer visitor
numbers and a significant drop in
traffic in the area.
Figures from retail specialist
Springboard shows that shops and
restaurants were much quieter than
expected over the first weekend of
the games, with footfall down a stag-
gering 21 per cent on last year.
Overall, UK high streets recorded a
nine per cent drop in footfall.
Town centres & high streets had
predicted that the double whammy
of major televised sporting event and
good weather would not be good for
sales last weekend, but the Olympic
drop off is still more than expected,
Diane Wehrle, Springboards head of
retail insights said.
Despite warnings of traffic queues
and delays, public transport systems
have also been less congested. Q-Park,
which operates 16 parking facilities
Olympic slump
as ghost town
effect worsens
BY KASMIRA JEFFORD
in the West End, said it had seen a fall
in traffic of up to 40 per cent in some
facilities since the opening ceremony.
We have always thought that these
couple of weeks would be quite dis-
rupted and unusual, Brian Bickell,
chief executive of Shaftesbury, one
the West Ends biggest landlords said.
I am not surprised that people are
spending the day out at that [at the
Olympic park] rather than coming
into the West End. They want to soak
up the atmosphere.
Some hotels have also bemoaned a
marked fall in customers.
Millenium & Copthorne, the owner
of Chelseas Stamford Bridge hotel,
yesterday said it has seen revenues
from its London hotels fall 12.5 per
cent in the first 24 days of July, due in
part to a slowdown in visitors ahead
of the Olympics.
But other parts of London have
reported a welcome Olympic boost,
with Land Securities One New
Change shopping centre in St Pauls
reporting a 10 per cent rise in footfall
over the weekend.
BY MICHAEL BOW
BY BEN SOUTHWOOD
THE US will continue to recover
through this year and the next, at a
mild pace but well ahead of Europe
and the UK, according to a report
released yesterday by the IMF.
Growth will be two per cent this
year, and two and a quarter per cent
next year, says the international
body. But the organisation warned
that this relatively positive outlook
came up against several risks, such
as the fiscal cliff, the Euro crisis,
and the growing national debt.
The fiscal cliff is a jump in taxes,
combined with a number of
spending cuts, together worth about
four per cent of GDP, due to come
into action automatically next year
as discretionary plans lapse.
The IMF warns that this jump
could have significant negative
effects on recovery, but also stresses
that some measures must be taken
to rein in the deficit.
The report came as new jobs data
revealed that new claimants dipped
some 30,083 last week, on
unadjusted figures. This positive
figure was backed up by a 97,192 fall
in unadjusted claimant count
unemployment in the previous
week.
THE Bank of England held fire on
new policy yesterday, despite the
darkening outlook for the UK
economy.
Its Monetary Policy Committee
decided not to increase quantitative
easing (QE) and kept rates on hold
again, an approach analysts have
put down to a concern to see how
funding for lending (FLS) and the
most recent round of asset
purchases play out before taking
further action.
It comes as no surprise that the
Bank of England holds rates
despite darkening economy
BY BEN SOUTHWOOD
Monetary Policy Committee has
decided to sit on its hands, said
Tom Hooper at KPMG, After all, it
was only last month that they
decided to embark on another
round of QE.
Some analysts have suggested
that FLS has already hit the market.
Swap rates and three month Libor
have both fallen by around a
quarter of a per cent since [FLS was
announced], said Ray Boulger of
mortgage adviser John Charcol,
FLS has also produced record low 5
year fixed rates.
US warned over fiscal cliff as
IMF says recovery will be slow
DEBATE: Page 19

3
NEWS
cityam.com
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selfridges.com/londonbedcompany
Sale
LONDON BED COMPANY
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IN THE CITY
One New Change
shopping centre
footfall up
One New
Change Millennium
Mayfair
HOW LONDON HAS FARED DURING THE OLYMPICS
Hyde Park
Battersea Park
Barbican
Sources: STR Global and Springboard *Revenue per average room
10%
LONDON IN GENERAL
Hotel occupancy at
down fromJuly last year
85%
MILLENNIUM & COPTHORNE
12.5%
*
Fell in July in part
due to a slowdown
in visitor numbers
ahead of Olympics
Millennium
Kensington
Millennium
Fulham
WEST END
over the rst
Games weekend
21%
West
End
BoA in dispute
with Fannie Mae
West End visitors were down 21 per cent over the first weekend of the Games
G
E
T
T
Y
THE UK unit of Turkish Bank has
been slapped with a 294,000 fine
for breaching money laundering
regulations, the Financial Services
Authority (FSA) said yesterday.
Turkish Bank (UK), whose parent
firm is established in Northern
Cyprus, failed to put in place anti-
money laundering safeguards when
providing services for overseas
financial institutions, despite
warnings from the FSA.
The watchdog said the failings
were not deliberate or reckless but
that the firm nevertheless fell short
of the standards we expect.
The FSA paid a visit to Turkish
Banks offices in 2010 as part of a
broader review of how banks were
dealing with the risk of money
laundering.
Yesterdays penalty comes weeks
after HSBC was forced into an
apology and potentially enormous
fine in the US for its lax safeguards
in Mexico.
Turkish Banks correspondent
banking business made it
particularly vulnerable to money
laundering risks and its failings
exposed UK financial services to the
possibility that money could be
laundered through the UK, said the
FSAs acting director of enforcement,
Tracey McDermott.
The banks fine was cut in half due
to its early co-operation.
Lax laundering
controls cost
Turkish Bank
BY MARION DAKERS
SCHRODERS shares rose 0.8 per cent
yesterday as its four per cent rise in
assets under management in the half
year outshone a 17.7 per cent slide in
pre-tax profits compared to a year ago.
The asset manager said it had
194.6bn on its books at the end of
June, due to 2.7bn in net new busi-
ness and modest but positive invest-
ment returns.
While Schroders experienced
200m of net outflows from clients in
continental Europe as the sovereign
debt crisis scared off investors, the UK
business attracted a net 400m and
the US arm added 1.4bn.
Chief executive Michael Dobson said
the performance was resilient, and
underpinned a strong pattern of net
inflows going back to 2009.
However, fund performance has
slipped. Around half of Schroders
funds are outperforming either the
market or rivals over the last year,
compared to two-thirds since 2009,
Dobson told analysts.
Weve had some shorter term per-
formance issues; its the long-term
Schroders nets
fresh funds in
spite of turmoil
BY MARION DAKERS
thats key, he added.
In private banking, the firms net
revenues were down by 10 per cent to
52.6m, which Schroders pinned on a
year-on-year fall in assets under man-
agement and a client migration into
more defensive strategies.
The 200-year old asset manager is
investing in the business, increasing
headcount by 50 people in the first
half of the year, mostly linked to its IT
upgrades.
Schroders is also on the lookout for
bolt-on acquisitions, following its pur-
chase of a 25 per cent stake in Indias
Axis Asset Management in April but
only if the price is right, Dobson said.
TREVOR Moores career seemed cut out
for being chief executive of a camera
company long before joining Jessops in
2009. The 43 year-old recalls being given
his first SLR for his 11th birthday. I could
not afford a second lens for it until I was
22 and Id been at work for a year.
Unfortunately, I had to sell
all of the equipment I then
amassed over the next
three years to put the
deposit down on my
first flat, Moore
recently told City A.M.
Moore was parachuted
into Jessops at a
turbulent period, when its
main lender HSBC had just
seized control of the
specialist retailer in a debt-for-
equity swap. The
ailing
high street chain was struggling in the
face of fierce competition from online
retailers, the increasing use of mobile
phone cameras and mid-market point
and shoot cameras.
Under Moore, the group has reduced its
losses and regained some stability by
revamping its stores and boosting its
online presence.
HMV now hopes that the energetic
and charismatic Moore can
perform some similar magic on the
embattled music entertainment
chain.
His previous experience as
managing director of operations
at health club chain Esporta,
when it was being prepared for
auction, also stands him in good
stead. He has also done stints
at Coffee Republic,
Thresher Group,
Whitbread
and Phones
4U.
HMV chief executive Simon Fox
quits after six years in charge
SIMON FOX yesterday said he was
proud to be leaving HMV with a
profitable future as he resigned as
chief executive after six years at the
helm of the embattled retailer.
Fox, who is credited with keeping
HMV afloat during a tough period
for the group, will step down on 3
September.
He will be replaced by Trevor
Moore, who resigned as chief
executive of the camera chain
Jessops last month after less than
three years in the role.
David Adams, former chairman of
Jessops, joined HMVs board as a
non-executive director in May.
HMV, which runs 250 stores in the
BY KASMIRA JEFFORD UK & Ireland, has struggled to keep
up with the boom of digital music as
sales of CDs and DVDs waned.
In May, the group forecast a loss of
about 16m for the last financial
year but predicted that the company
will return a profit before tax of at
least 10m next year.
I am proud to be leaving HMV
with a profitable future secured,
said Fox, who in 2010 passed on an
opportunity to lead ITV.
The appointment of Trevor Moore
means that I will be leaving the
company in safe hands, he added.
Under his watch, HMV has cut its
store estate and shifted its focus to
selling more consumer technology
and improving its online offering.
In January, the retailer secured a
crucial lifeline from banks and
suppliers, which eased its covenants
and should help halve its 180m
debt pile over the next three years.
But analysts at Seymour Pierce
remained bearish saying HMV had
insurmountable structural issues.
Schroders PLC
1 Aug 2Aug 27Jul 30Jul 31 Jul
1,280
1,300
1,340
1,320
1,360 p 1,302.00
2Aug
HMV Group PLC
3.35
3.30
3.40
3.45
3.55
3.50
3.60 p 3.43
2Aug
ROBERT MORTON
INVESTEC
As expected, dif-
cult trading con-
ditions impacted
signicantly on the group
in the rst half and
although gross prots
were modestly ahead of
last year with all
regions showing some
growth operating prots more than halved. We
are not changing our forecasts or target
price on the back of todays results.
HENRY CARVER
PEEL HUNT
Adjusted prot
before tax was
3.4m on net fees of
92.4m, but trading is
tough and the outlook
has not improved since
the pre-close update.
We leave our numbers
unchanged, but we sus-
pect consensus will drift.
We maintain our cautious stance. Sell.
JULIAN CATER
CANACCORD GENUITY
Due to the fact
the rst quarter is
seasonally the weakest,
we continue to expect a
modest pick-up in net fee
income. Headcount is
likely to remain broadly
at in the second half,
reective of weak end
market conditions, meaning a reasonably high
proportion of increment net fee income
should drop-through to the bottom-line.
ANALYST VIEWS
CAN INVESTORS BANK ON A RECOVERY
AT ROBERT WALTERS? By Marion Dakers
PRIVATE equity group 3i yesterday
established a debt management
business in the United States,
taking its fast-growing debt arm
past 6.5bn in assets under
management.
The firm has teamed up with US
firm WCAS Fraser Sullivan to
establish the business, which will
manage or advise 25 funds with
exposure to the countrys credit
market.
London-listed 3i was set up after
World War Two to play a role in
financing reconstruction of
Britain, but in the last couple of
3i takes on debt management
business in the United States
BY MARION DAKERS
years has been shifting its focus to
debt and infrastructure investment
in light of disappointing private
equity returns.
3i will hold an 80 per cent equity
interest in the new subsidiary, with
the rest held by Fraser Sullivan
execs. The group expects to take
full control after three years.
Simon Borrows, 3is chief
executive, said: Our debt
management business now has
significant scale across both
Europe and the US, and we look
forward to further growing this
business, both organically and
though acquisition, as
opportunities arise.
RECRUITER Robert Walters said
pre-tax profits halved to 3.4m in
the six months to the end of June,
though its international presence
helped boost revenues 14 per cent
to 275m.
Net fee income rose 3.7 per cent
to 92.4m, helped by a five per cent
rise in UK incomes to 23.9m.
The firm has trimmed its own
staffing in banking recruitment,
which has been more than offset by
hiring in new markets such as
Robert Walters profits drop as
banking sector slowdown bites
BY MARION DAKERS
Brazil to take average headcount
up 15 per cent.
Eponymous chief executive
Robert Walters said the job culls
among large banks appear to be
levelling off. We are still placing
people in banks so its not come to
a stop, he told City A.M. I dont
think theres much more to come
in the areas we work in theyre
pretty lean and mean already.
[More job losses] would mean
moving out of whole sectors
altogether rather than cutting
back.
PROFILE: TREVOR MOORE
5
NEWS
cityam.com
Simon Borrows, boss of 3i, has diversified the firm away from private equity
G
E
T
T
Y
BNP PARIBAS announced surprisingly
strong profits yesterday as spending
cuts mitigated some of the damage
caused by the sovereign debt crisis.
The French bank also revealed plans
to cut down its sovereign debt expo-
sures as it has been burned by losses
on European government bonds.
Profits came in at 1.85bn (1.45bn),
down 13.2 per cent on the year, as rev-
enues fell eight per cent to 10.1bn.
Revenues in the retail bank rose 0.5
per cent and 2.2 per cent in its savings
arm investment solutions but the
investment banking arm took the
biggest hit, with revenues slumping
23.6 per cent on falling levels of mar-
ket activity and declining asset values.
Some of those falls were mitigated
by cuts in costs operating expenses
fell four per cent to 6.34bn, in part
thanks to the firm shedding 1,400
jobs over the past year.
Meanwhile the bank raised its Basel
III core tier one capital ratio to 8.9 per
cent just 0.1 percentage point short
BNP ramps up
capital ratio far
ahead of target
BY TIM WALLACE of the nine per cent target which it
wants to hit by the start of 2013.
However that capital level did take a
40 basis point hit from the falling
value of sovereign debt holdings.
Boss Jean-Laurent Bonnafe wants to
cap exposures to the debt of any one
government at roughly 10bn.
That would require some changes to
the current position BNP Paribass
banking book includes 12.2bn of
Belgian government debt exposures
and 11.2bn of Italian, while exposure
to French government debt stands at
9.5bn.
Eurozone must adapt or it will
fall apart, warns top think-tank
THE EUROZONE is likely to collapse
within two years if countries in the
bloc dont take significant measures
to increase fiscal, monetary and
political union, an influential think-
tank warned yesterday.
Dawn Holland, of the National
Institute of Economic and Social
Research (NIESR), said that the
current situation could not carry on
indefinitely, and that without
significant reform the European
Monetary Union (EMU) would be
likely to break apart soon.
BY BEN SOUTHWOOD
Her research, released today in the
newest issue of NIESRs quarterly
journal, argues that Eurozone
countries must create a banking
union, move toward centralised
fiscal control, and somehow effect
real wage cuts in weaker nations, or
risk catastrophic fallout.
Greece would face a 50 per cent
devaluation and gigantic rises in
prices, combined with emigration
and potential banking collapse if it
left the union, according to Holland.
She says that these factors mean
that it is unlikely that Greece will
leave voluntarily.
But she suggests a so-called Grexit
may become inevitable if the
Mediterranean nation continues to
breach Troika targets.
Hollands research was published
alongside gloomy economic forecasts
for the UK and the world as a whole.
NIESR predicted a 0.5 per cent
decline for the UK in 2012, followed
by a slight recovery in 2013, with 1.3
per cent growth, mainly driven by
building up inventories. The world
was expected to grow 3.3 per cent
this year, with the figure increasing
to 3.7 per cent in 2013 as some of the
aggressive headwinds die down.
FORMER UN secretary-general Kofi Annan is quitting as peace envoy for Syria at the end
of the month, frustrated by finger-pointing at the United Nations . As the rebellion
against President Bashar al-Assad becomes increasingly bloody, Annans troubled
attempts to broker a ceasefire or an international response have left him exasperated.
KOFI ANNAN QUITS AS SYRIAS PEACE ENVOY
Markit/CIPS UK Construction PMI
J-12 J-11 J-10 J-09 J-08 J-07 J-06 J-05 J-04 J-03 J-02 J-01 J-00
30
35
25
40
45
50
55
65
60
70 50=nochange
BNP Paribas SA
29.0
28.5
29.5
30.0
30.5
31.5
31.0
32.0 29.85
2Aug
NEW CONSTRUCTION work
collapsed in July, according to the
latest purchasing managers
index (PMI) survey from Markit.
The top line index showing
the overall state of the
construction sector crept up to
50.9, from 48.2 in June, above the
no-change level of 50, but well
below the long-run average of
54.2. And new orders shrank
markedly, having only fallen
faster once since January 2010.
Julys survey offered little sign
of an imminent rebound in the
UK construction sector, with total
New construction orders suffer
second biggest drop since 2010
BY BEN SOUTHWOOD
activity rising only marginally
after well documented temporary
factors had weighed on output
last month, said Tim Moore,
senior economist at Markit.
7
NEWS
cityam.com
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AMERICAN International Group
(AIG) reported a larger profit for the
second quarter yesterday, as tax
benefits boosted results and
operating income grew across the
companys varied insurance
businesses.
The company also reported more
than $11bn (7bn) in liquidity at the
parent company level, a cash pile
most people expect it will use to buy
down some of the governments
remaining stake.
Net profit rose to $2.33bn, or $1.33
per share, from $1.84bn or $1 a share
a year earlier. Operating income was
$1.06 per share. Net income was
boosted by a tax allowance release of
some $1.28bn, the latest in a series of
tax benefits the company has been
able to recognize as it returned to
profitability. It was partially offset
by a tax expense of $331m and an
increase to legal reserves of $450m.
The company, still 61 per cent-
owned by the US Treasury after its
$182bn bailout, ended the quarter
with roughly $11.5bn in parent
company liquidity. Analysts and
investors expect the company will
use a large chunk of this to buy back
some of the Treasurys stake.
In recent quarters the Treasury
has launched a share sale the day
after results.
Some of that capital came from
the sale of assets in Maiden Lane III,
the crisis-era bailout vehicle set up
by the Federal Reserve Bank of New
York. AIG has already received $6.1bn
in proceeds from MLIII asset sales
and expects to receive another
$1.9bn this month.
Tax benefits
help AIG to get
back on track
BY CITY A.M. REPORTER
RSA, Britains biggest commercial
insurer, said yesterday its first-half
profit fell by almost a quarter after
heavy flooding in the UK and
earthquakes in Italy triggered a
surge of claims.
RSA, best known for its More
Than home and motor insurance
business, made an operating profit
of 316m in the first six months of
2012, down 23 per cent compared
with a year earlier, it said yesterday.
The decline was driven by an esti-
mated 40m loss related to
Britains floods, and a further
35m hit from earthquakes that
struck Italys Emilia Romagna
region in May.
Economic conditions will
undoubtedly remain tough in some
of our markets, chief executive
Simon Lee said in a statement.
Despite this we remain confi-
dent of delivering a good perform-
ance for the full year.
RSAs combined operating ratio
costs and claims as a percentage of
revenues, a key profit indicator -
will be lower than 96 per cent over
the year as a whole, compared with
95.2 per cent in the first half.
The company is paying a dividend
of 3.4 pence, an increase of two per
cent.
Profits halve as
RSA takes flood
and quake hits
BY HARRY BANKS
RSA shares closed at 110p yester-
day, valuing the company at about
3.9bn.
The stock is up five per cent since
the start of the year, lagging a 14
per cent increase in the FTSE non-
life insurance index.
With investment income under
strain and the UK and Italy remain-
ing challenging it is critically
important that the international
operations continue to perform
well ... and that RSA keeps its under-
writing discipline very tight. said
Nic Clarke, analyst at Charles
Stanley. It appears in the first half
that RSA has done pretty well
achieving those goals.
However, Esprito Santo
Investment Bank maintained its
sell recommendation on the stock
after yesterdays announcement,
citing a lack of momentum on the
firms earnings.
Alliance Trust takes on 1.2bn of
Avivas assets along with staff
ALLIANCE Trust, one of Britains
largest investment trusts, has signed
a deal to acquire a portfolio of
socially responsible funds from
insurance group Aviva as it moves
ahead with an overhaul of its
businesses.
Alliance Trust said yesterday its
Alliance Trust Investments unit will
pay 1m to take on 1.2bn of assets
in Aviva Investors Sustainable and
Responsible Investment Funds that
will transfer early next year.
Five members of the Aviva
investment team will transfer to
Alliance Trust, the company said in
a statement.
Katherine Garrett-Cox, chief
executive of Alliance Trust, called
the deal transformational and at a
price that is fairly modest in the
grander scheme of things.
It injects 1.2bn of assets under
our umbrella... Its a significant
addition to funds under
management, she said.
Alliance Trust last month
kicked off a restructuring of its
portfolio management,
consolidating regionally
focused funds into a
global portfolio.
It is also seeking to
halve the number of
stocks in its portfolio to around 100,
moving towards a conviction
investment style in which fund
managers take bigger stakes in fewer
companies. Garrett-Cox said the
company is now a good way
through the process.
In its half year report
yesterday, Alliance Trust said
the increase in net asset value
for the six months to 30 June
was 5.5 per cent per share,
broadly in line with the sector
average.
RSA Insurance Group PLC
110.00
109.50
109.00
110.50
111.00
112.00
111.50
112.50 p 110.20
2Aug
Katherine Garrett-Cox called
the deal transformational
THOMAS Cooks new chief
executive yesterday said technology
would be the salvation of the
struggling British tour operator
and gave herself nine months to
deliver a turnaround plan to end
over a year of poor performance.
The company posted an
underlying operating loss of
26.5m in the three months ended
June, versus a profit of 20.1m in
the same period last year despite a
lift in foreign bookings from
Britons exasperated with rainy
weather at home.
Harriet Green, who joined from
electronic parts distributor
Premier Farrell said she would be
able to bring a fresh pair of eyes
Thomas Cooks new chief backs
technology as path to recovery
BY A CITY A.M. REPORTER
to existing industry problems.
In my view of business, all roads
ultimately lead to technology, she
added.
Thomas Cook, which has
struggled with tough trading
conditions, said foreign holiday
bookings had picked up in recent
weeks after subdued demand in
April and May, as the sodden
summer drove north Europeans to
seek the sun in the south.
UK bookings as of 29 July were
flat versus the same time last year,
while bookings in central Europe
were one per cent higher, boosted
by demand from Germany.
Net debt at 30 June was 1.01bn,
versus 902.5m last year. It expects
to complete the sale of its Indian
unit later this month.
PORTMEIRION said demand
for its Jubilee ranges of fine
china helped boost profits in
the first half of the year,
despite tough global
conditions.
The company behind the
Spode and Royal Worcester
crockery brands reported a six
per cent rise in profit before
Portmeirion sales boosted
by Jubilee china collection
BY KASMIRA JEFFORD
tax to 1.5m while sales rose
two per cent to 22.8m on a
comparative basis.
Chairman Dick Steele said
despite challenging economic
conditions, the group was con-
fident of its future prospects.
He said forward orders for
Christmas were strong,
which will benefit its trading
figures in the second half of
the year.
THE NEW boss of Europes third
biggest insurer Generali yesterday
announced a comprehensive
strategic review of the business, as
the firms net profit beat
expectations on the back of a strong
performance by its key life insurance
division.
Unveiling its first set of results
under new chief executive Mario
Greco, Generali said its net profit
had seen a strong progression in
the second quarter.
The company said it expected full-
year operating profit, stable at
2.34bn in the first six months of
the year, to improve on 2011.
The companys general insurance
business was hit by the deadly
earthquakes in northern Italy
during May this year, with non-life
operating profit falling six per cent
to 755m.
Generali put the negative impact
of the quake and other catastrophic
events at 222m.
Its solvency margin, a measure of
an insurers strength, stood at 130
per cent at the end of June, up from
117 per cent at the end of 2011.
I will start a thorough review of
the group financial and operational
performancea review of the
strategy of the group and of its
portfolio of activities, and I will
examine the current organisational
structure, the decision processes,
the internal governance systems
and the management skills and
commitments, said Greco.
Generali boss plans strategic
review to boost balance sheet
8
NEWS
cityam.com
CEO Harriet Green said Thomas Cook sold less corporate Olympic packages than expected
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BLACKBERRY maker Research
in Motion unveiled the latest
version of its PlayBook tablet
yesterday as the beleaguered
firm tries to gain a foothold in
the iPad-dominated market.
The new model will include
high-speed 4G technology,
making it the first version to
be able to connect to mobile
RIM gives PlayBook tablet
revamp after feeble sales
BY JAMES TITCOMB
networks, a significant feature
lacking from the earlier
PlayBook. The device will be
launched in Canada next week
before it is rolled out to the
rest of the world.
Initial PlayBook sales were
poor, with the tablet criticised
for lacking key features and
being overpriced. Just over 1m
have been sold since its launch
in April last year.
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IT seems there could be a pot of gold at
the end of the Olympic rainbow.
According to analysts at business advi-
sory firm Deloitte, there is an unex-
pected post-Games trend that could
bode well for the UK economy.
Deloittes number crunchers reckon
that a hosts stock market after the
Olympic Games consistently outper-
forms the average of other major
indices and not by an insignificant
amount.
Following Los Angeles 1984 Games
the USs S&P 500 rose five per cent
faster than the average index, while
the Beijing games saw a staggering 26
per cent boost to the SE180.
But it was the Seoul 1988 Games and
the KOSPI Index that gets the gold for
post-games growth by outperforming
its global peers by 34 per cent. The
anomaly in the survey, which covers
the last 28 years of the sporting event,
was the 2000 Olympics in Sydney,
which preceded an S&P ASX 200 that
lagged 12 per cent behind the average.
James Ferguson a partner at
Deloitte said: Whilst the current eco-
nomic woes blighting the Eurozone
cannot be overlooked, lets hope the
London markets get a boost to match
what happened after previous
Olympic games. Keval Dhokia
Deloitte raises
hopes for a
Games boost
Just Mini-mum
effort required
to clear fields
IF YOU liked the slice of quintessential
Britishness that was Danny Boyles
opening ceremony, the Capitalist
suspects youll take to London 2012s
latest trick.
To save time fetching javelins,
discuses, hammers and shots when
the track and field contest get
underway today staff will use a fleet
of remote-controlled mini Minis.
The electric vehicles are a quarter
of the size of regular Minis, weigh
25kg each and even have their own
headlights, windscreen wipers and
number plates.
Javelins and the like can be placed
into the iconic cars through the
sunroof, before being whizzed back
to Jessica Ennis and Co.
Mini minis will collect equipment
THE worlds eyes will be focused
on sprinters Usain Bolt and Yohan
Blake on Sunday as they will likely
face off in the 100m final, but in
their home country, Jamaicas rival
telecoms firms will be watching
more keenly than most.
Digicel, owned by Irish tycoon
Richard OBrien, and Cable &
Wireless Communications subsid
Lime dominate Jamaicas mobile
phone market, and the track stars
The other Jamaican stand-off
are the firms biggest ambassadors.
Favourite Bolt has a long-running
contract with Digicel who, like the
Olympic champion, has long been
the islands dominant force though
Lime, which sponsors underdog
Blake, hopes an upset can improve
their fortunes. With the winner of
the showdown claiming the
invaluable title of Jamaicas
premier sportsman, more than a
gold medal is at stake.
The new
jobs website
for London
professionals T
h
e

n
e
w

j
o
b
s

w
e
b
s
i
t
e

f
o
r

L
o
n
d
o
n

p
r
o
f
e
s
s
i
o
n
a
l
s
C
I
T
Y
A
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C
A
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E
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S
.
c
o
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SPORTING immortality, lucrative
endorsement deals, invites to
swanky parties where the drinks
are free some things go with the
territory of becoming an Olympic
champion.
But Britains first gold
medallists of London 2012,
cycling messiah Bradley
Wiggins and rowing wun-
derkinds Helen Glover
and Heather Stanning,
have also been hon-
oured in less conven-
tional fashion.
In tribute to their
historic achieve-
ments, Battersea
Dogs and Cats
Home have named
three of their resi-
dents after the tri-
umphant trio, and
urged animal loving
sport fans to throw
them a bone.
Wiggins the one-
year- old
Staffordshire bull
terrier doesnt just
share a name with
Britains most successful
Olympian; his red fur is also a sim-
ilar tint to Bradleys famous mod
cut and sideburns.
Seven-week-old Chihuahuas Helen
and Heather, meanwhile, pos-
sess the same steely determina-
tion as their rowing
inspirations, according to
(frankly imaginative) staff at
the south London institu-
tion.
Helen, Heather and
Wiggins are all champi-
ons in the making, and
we want them all to
win the ultimate gold
medal, by triumphing
with a new home, said
Ali Taylor, head of
canine welfare train-
ing.
Here at Battersea
everyone is right
behind Team GB
and we hope that
naming some of our
animals after the team
will help spur them
on to win even
more medals.
Got A Story? Email
thecapitalist@cityam.com
10
cityam.com
cityam.com/the-capitalist
THECAPITALIST
AT LONDON2012
LONDON 2012 IMAGE OF THE DAY
The curse of Cameron rumours were finally
quashed yesterday after the Prime Ministers
presence at the cycling did nothing to deter
Chris Hoy and team from racing to gold. He
was joined by numerous other VIPS.
YESTERDAY we told you about the
golden stamps rushed out to honour
Team GBs first Gold medallists, and the post
boxes hastily gilded in each of the winners
hometown. Today we bring you the proof a
solid gold (sort of) mailbox slap bang in the
centre of Penzance to celebrate local girl Helen
Glovers victory in the Womens Rowing Pairs.
Throughout the Olympics, City A.M. will be
publishing its Olympic Image of the Day. If
you have a shot you think our readers will
like, please email pictures@cityam.com
Give the mod a
home: Wiggos
canine honour
These views are those of the individuals belowand
not necessarily those of their company
I'm excited to be there for the
Womens 10,000m nal and to see
Jessica Ennis perform in front of the world. Im
also eager to adorn my Union Jack dress for the
rst time and to make use of all the GB ags I
bought in support of our athletes that are
competing at the Games.
EMILY HOWELLS
KPMG
I wont be going and I did not apply.

Im more interested in spending my
money on music festivals having attended
Glastonbury on many occasions. But I think the
track and eld events will denitely be the
highlight of the London Games.
MIKE FREEMAN
MITSUI SUMITOMO
I'm not going but being a rower

myself, I went ecstatic when I went
to see Britain's rst gold medal victory in the
rowing a couple of days ago, and having served
in the Royal Navy I found the presence of the
Armed Forces added to the patriotic fervour.
DANNY MILLS
LLOYDS OF LONDON
ARE YOU PLANNING TO GO TO

THE OLYMPICS?
Interviews by Keval Dhokia and Alex Woodall
CITYVIEWS
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A
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IN BRIEF
Pre-tax profits rise at Spirent
nCommunications technology group
Spirent said yesterday that pre-tax
profits rose three per cent compared to
the first half of 2011 from $55.2m
(35.3m) to $56.6m this year. The group
saw growth in the US and Asia Pacific as
European demand faltered and said that
it expected the macroeconomic climate
in the second-half to cause volatility.
RPS on track for full year
n Energy resources and environmental
consultancy RPS said yesterday it is on
track for the full year. Pre-tax profits
rose from 19.1m in the first half of 2011
to 19.9m this year as RPS focused on
markets less affected by economic
instability. The group said it remains on
track to meet its full year forecasts.
Deutsche Post tops estimates
n Deutsche Post yesterday reported
quarterly underlying earnings that
exceeded estimates as adjusted
earnings before interest and tax
reached 581m (459m). Deutsche
Post said it now expects to post 2012
earnings of 2.5-2.6bn. Its results
contrast with more downbeat reports
from its US rivals, UPS and FedEx.
Segro sells industrial estates
n Industrial property developer Segro
said yesterday it had sold 10 UK
regional estates for 111m. Chief
investment officer Phil Redding said
the sale was an important step and
meant Segro has now sold a large part
of its UK non-core assets.
G
E
T
T
Y
BAE SYSTEMS said yesterday delays
in completing a substantial deal
with Saudi Arabia and lower spend-
ing by European and American mil-
itary customers dented profit, in a
sector facing further government
defence cuts.
Europes largest defence contrac-
tor, which will build Britains next
generation of nuclear-armed sub-
marines, yesterday said earnings
before interest, taxes and amortisa-
tion (Ebita) fell three per cent in
the first six months of the year.
US rivals, such as Northrop
Grumman and General Dynamics,
also reported lower earnings last
month, and flagged uncertainty
about an additional $500bn in US
defence spending cuts that could
come in January, on top of $487bn
in cuts already made.
BAE were similar to other large
US defence companies, said RBC
analyst Rob Stallard. I see more of
the same in big defence with sales
Saudi deal and
military spend
hit BAE Systems
BY HARRY BANKS
below expectations as the US budg-
et declines.
BAE, which makes around half of
its revenues in the US, said sales at
its US platforms and services unit
fell 16 per cent in the first half.
Earnings before the deduction of
interest, tax and amortisation fell
to 939m in the six months to the
end of June, as sales fell 10 per cent
to 8.33bn, while the order book
edged up two per cent to 40bn.
BAE increased its half-year divi-
dend by four per cent to 7.8 pence
per share.
Aggreko boosts earnings after
Olympic contract helps growth
AGGREKO, the temporary power
provider for the London 2012
Olympics, yesterday posted a 23 per
cent rise in trading profit for the
first half, beating its expectations,
and said it would deliver good
growth for the full year.
The worlds number one
temporary power provider reported
underlying trading profit of 159m
on revenue of 734m, up 16 per cent
on the same basis.
The company said yesterday it had
made a successful start to the
London Olympics, with over 550
generators and 1,500 kilometres of
cable deployed on 44 sites in a
contract worth around 55m.
Its been a very successful six
months, chief executive Rupert
Soames said in a statement.
We have delivered what will be
the worlds largest contract for
temporary power for a major
sporting event, in the form of our
work as the exclusive supplier of
temporary power for the London
Olympics.
Aggreko said in June that it
expected first-half sales to grow 15
per cent, indicating a slowdown in
the second quarter, and underlying
trading profit to rise about 20 per
cent. The company, which provides
generators to cover electricity
shortfalls and power major events,
said it would spend about 415m on
its fleet, in line with its previous
guidance.
Churchills grandson is leading a
shining example in hard times
A
RECORD order book, 16 per cent
rise in profits, and the biggest
temporary contract ever to
provide power to the biggest
event of the year.
Add a refreshingly honest chief exec-
utive who shareholders trust and like,
and a share price thats gained more
than 30 per cent in the past three
years, and youve got something that
looks very much like a British business
success story.
For once, lets not dwell on the nega-
tives. Chief executive Rupert Soames,
grandson of Sir Winston Churchill,
may have signalled a slowdown in the
second half, but youd struggle to find
a firm in the recent results round that
hasnt done the same and being on
target to deliver a 15 per cent rise in
profits is hardly a disaster.
Like the rest of the world Aggrekos
eyes may be trained on London for
now, but its the companys interna-
tional projects that it relies on for
growth. From power stations in South
Africa to back-up for Japan after the
Fukushima disaster, Aggrekos expo-
sure is well spread and new invest-
ments focus on growth markets such
as Brazil. We expect the firm to
remain a leading light.
BOTTOM
LINE
ELIZABETH FOURNIER
Aggreko PLC
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THE MERGER between Glencore
and Xstrata is increasingly likely to
fall apart, according to analysts.
Liberum Capital has lowered its
view and given the deal a 56 per
cent chance of succeeding, adding
in a note that the markets have
already broadly priced in fear of
the merger failing.
The deal was announced in
February, but has since been
dogged by protests over pay deals
and a late intervention by Qatar to
call for better terms for investors.
Analysts mulling the prospect
of Glencore-Xstrata deal failing
BY MARION DAKERS
Qatar, an 11 per cent shareholder
in Xstrata, has asked the firms to
bump the offer to 3.25 shares in the
enlarged firm per Xstrata stock, up
from the current offer of 2.8.
Liberum analysts, however, think
this demand will almost certainly
not be met, with a more likely
improvement coming in at around
three new shares.
Experts at Jefferies, meanwhile,
have said a full concession to the
Qataris would be more
appropriate.
Investors will vote on the deal on
7 September.
GENERAL Motors (GM) posted a
stronger-than-expected quarterly
profit yesterday as its loss in
Europe was not as bad as feared,
and its results were boosted by
delayed spending in North
America.
Analysts said GMs North
American outperformance added
14 cents to the second-quarter
results, helping the company top
Wall Streets expectations by 16
cents.
However, GM, which delayed
the spending to the third quarter,
said its average profit outlook for
the second and third quarters
combined in North America
General Motors profit helped
by delayed spending in the US
would still be the same as
previously forecast, suggesting
analysts will need to cut their
estimates for the third quarter.
GM had previously said its
second and third quarter
operating profit in North
America would be similar to the
$1.7bn it reported in the first
quarter. It earned $1.97bn in the
second quarter, implying it will
earn about $1.4bn in the third
quarter, analysts said.
Net income attributable to
common shareholders in the
second quarter fell 41 per cent to
$1.49bn, or 90 cents a share,
compared with $2.52bn, or $1.54
a share, in the year-earlier
quarter.
DEUTSCHE Lufthansa pulled back
further from plans to lift capacity
and expand its passenger fleet to
safeguard profits threatened by
soaring fuel prices.
The German carrier said
yesterday it would offer only 0.5
per cent more seats this year
instead of one per cent, having
already shrunk its growth plans
several times in recent months.
Lufthansa said it still expected
its 2012 operating profit to decline
to the mid-hundreds of millions
from 820m last year. In the
second quarter, its operating profit
rose more than a quarter to
361m.
Lufthansa slims
capacity plans
13
NEWS
cityam.com
Ivan Glasenberg is under investor pressure to improve the terms of the merger
Smith & Nephew ups
divi as margins rise
SMITH & Nephew, Europes
leading maker of artificial hips
and knees, hiked its half-year
dividend 50 per cent yesterday as
profit margins grew and its
confidence in the future
improved, despite challenging
markets.
The group, which also makes
wound therapy products, said it
generated broadly flat revenue of
$1.03bn (663m) from $1.08bn a
year ago, generating trading
profit of $234m versus $236m.
Analysts, on average, had
expected revenue of $1.04bn,
while the company-collated
consensus for trading profit was
$229m.
BAE Systems PLC
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2Aug
Smith & Nephew PLC
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2Aug
TIME OUT has become the latest title
to reinvent itself as a free
publication, with its London edition
set to launch across transport
networks in the capital in the
coming weeks.
The weekly magazine has seen
fewer casual buyers in recent years,
and says the move is part of a new
strategy following increased traffic
to its website.
We will leap from 50,000
circulation, to over 300,000, taking
Time Outs unique editorial
expertise to a huge new audience,
Time Outs editor in chief Tim
Arthur said. The move follows
successful launches of free
magazines Stylist and Shortlist in
the capital.
Time Outs project director Greg
Miall told City A.M. that the
publisher wanted to expand its
reach. We wanted to do something
thats a little bit more ambitious,
Miall said. There are so many high
quality and free titles in London,
and we were looking at what the
business was going to be like in five
years when making this decision.
The magazine, which publishes
event listings and local
information, said it will still charge
for its national title.
Time Out goes
free in London
as buyers fall
BY JAMES TITCOMB
SKYS exclusive movie rights do not
create a monopoly in the pay-TV mar-
ket, the governments media watch-
dog ruled yesterday, in a major
victory for the broadcaster.
Despite Sky enjoying special deals
with major Hollywood studios, the
arrival of online streaming services
Netflix and Lovefilm into the market
has loosened Skys grip, the competi-
tion commission declared.
Skys position in relation to the
acquisition and distribution of
movies in the first pay window does
not adversely affect competition in
the pay-TV retail market, the com-
mission said, in a reversal of a deci-
sion taken last year.
The case was re-opened to take into
account the arrival of Netflix and
Lovefilm as well as Skys Now TV
offering, which offers an alternative
to its satellite service.
The firms rivals hit out at the rul-
ing. Virgin Media called it extreme-
ly disappointing, and BT said it
Sky dominance
not a problem
says watchdog
BY JAMES TITCOMB
flies in the face of BTs experience as
a retailer and that consumers who
wish to watch premium Hollywood
movies are left with no alternative.
Sky Movies enjoys exclusive rights
on the first broadcasts from major
film studios, but the competition
commission judged that this was not
enough of a factor to make Sky a
dominant player in the market.
The watchdog said Sky Movies is
not a sufficient driver of subscribers
choice of pay-TV provider to give Sky
such an advantage over its rivals
when competing for subscribers.
Ladbrokes profits leap as online
woes are offset by high street
BETTING machines in Ladbrokes
high street outlets helped the
bookie to improve profits in the first
half of the year despite its online
revenues plummeting.
Ladbrokes said pre-tax profit rose
49 per cent on the same period last
year to 106.9m, with revenue up
eight per cent to 529m. This was
almost entirely driven by increased
use of gaming machines at the
companys 2,150 betting shops,
with Ladbrokes estimating it will
have opened 100 new high street
stores by the end of the year.
BY JAMES TITCOMB
However, there was bad news on
the digital front, with online profits
halved at 15m. Chief executive
Richard Glynn said Ladbrokes
websites performance was
disappointing but promised
improved performance with the
launch of the new online operation
later in the year. The real focus is
driving digital profitability but we
must put that in the context of a
particularly strong UK retail
performance, he said.
Ladbrokes sacked its head of
online strategy Richard Ames
earlier this week following repeated
delays to the launch of the
revamped website and mobile
service, which has seen more than
50m of investment in the last two
years, and a profit warning in June.
The bookmaker has struggled to
make a breakthrough in online
gambling as rivals William Hill and
Bet365 have made gains.
Despite Ladbrokes online woes,
its high street performance was
strong enough for the firm to raise
its interim share dividend from 3.9p
to 4.3p per share.
Looking forward we expect to
see further growth in UK retail and
plan to accelerate our programme
of shop openings, Glynn said.
Trinity Mirror PLC
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30
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34
38
36
40 p 37.00
2Aug
ADVERTISING giant WPP has
bought a majority stake in British
online marketing firm Fortune
Cookie, the latest acquisition for
Sir Martin Sorrells firm as it aims
to expand its digital reach.
The deal, estimated at up to
30m, will net Fortune Cookies
founder and chief executive Justin
Cooke a hefty sum as he becomes
head of the British arm of WPP
subsidiary Possible Worldwide.
Cooke, who launched Fortune
WPPs latest acquisition makes
digital agency chief his fortune
BY JAMES TITCOMB Cookie in 1997, told City A.M. the
deal was needed to compete in the
international market as more
small agencies are bought out by
major firms.
You need to be thinking
globally, and thats hard to do
when youre a small agency,
Cooke said. There are clients that
we want to service globally, so it
was a good deal for us.
Fortune Cookies 190 staff will
become part of Possible
Worldwide as it bolsters its
presence in the UK.
SHARP yesterday announced a 94bn
yen operating loss for the June quarter
and revealed plans for its first job cuts
in more than 60 years as Japans elec-
tronics industry scrambles to keep up
with foreign competitors.
Sharp said it would cut 5,000
jobs around 10 per cent of its
workforce as it attempts to reduce
costs as it struggles with weakening
global demand for TVs and
competition from rivals led by
Samsung.
They are the firms first job cuts
since the economic confusion that
followed Japans defeat in World War
Two. We are in a really tough
situation. We will restructure and
Sharp to slash 5,000 jobs for first
time since end of World War II
speed up our decision making, said
Sharp president Takashi Okuda.
Sharp, which posted its worst net
loss in a century in the last financial
year, reported a first-quarter loss as
waning TV demand and an
overcapacity at its main liquid
crystal display plant continued to
weigh on earnings.
In the three months to 30 June,
Sharp swung to an operating loss of
94.1bn yen from a 3.5bn yen profit a
year earlier. That was deeper than
the average 44.4bn yen average loss
expected by analysts.
The manufacturer of Aquos TVs
also slashed its forecast to a full-year
operating loss of 100bn yen, from its
earlier estimate for an operating
profit of 20bn yen.
14
NEWS
cityam.com
Justin Cooke, Fortune Cookies chief executive, will become head of Possibles UK arm
Cuts pay off for Trinity Mirror as
shares leap after difficult year
NEWSPAPER publisher Trinity
Mirror saw shares rise 20 per cent
yesterday as the company posted
better than expected profits thanks
to a cost-cutting operation, although
it did warn of drops in advertising
revenue at its national papers.
Advertising sales fell 10.5 per
cent in the first half of the year and
circulation revenue fell slightly on
the same period last year, as the
launch of the Sunday edition of the
Sun hit the companys Sunday
Mirror and People newspapers in
the second quarter of the year.
BY JAMES TITCOMB
You will see, particularly in our
national titles, double-digit
percentage declines in circulation
revenues during the second half,
interim chief executive Vijay
Vaghela said.
Total revenue was down four per
cent to 356m but Trinity Mirrors
pre-tax profit was 35.1m, up from
28.9m the year before.
The results are a welcome boost
for Trinity Mirror after a turbulent
year that has seen its chief
executive Sly Bailey step down after
investor anger over her pay packet,
as well as the editors of its Mirror
newspapers removed. The publisher
has undergone extensive spending
cuts including turning its Mirror
newsroom into a seven-day
operation.
SONY yesterday slashed its
forecast for 2012/13 operating
profit and lowered its sales
expectations for key products
including its handheld PSP and PS
Vita devices as new boss Kazuo
Hirai battles to revive the
fortunes of the electronics giant.
Sony reported yesterday that
operating profit for April to June
fell a much steeper-than-expected
77 per cent to 6.28bn yen
compared with a year earlier.
Analysts had expected a 36 per
cent fall in profit.
In a further sign of its struggle
to appeal to consumers in the
face of competition from the likes
Sony forced to trim forecasts as
demand for its devices plunges
BY CITY A.M. REPORTER of Apple, Samsung Electronics
and Microsoft, Sony cut some
projections for product sales for
the year to March 2013.
It expects to shift 15.5m TVs,
down from a May projection of
17.5m, reflecting the waning
demand for televisions.
Sony expects handheld device
sales of 12m, instead of 16m,
although it maintained a forecast
for 16m sales of the PlayStation
games console.
Citing exchange rate moves and
a weak global economy, Sony cut
its forecast for operating profit in
2012/13 to 130bn yen from a
previous forecast of 180bn yen.
Sonys European sales account
for a fifth of all revenue.
British Sky Broadcasting Group PLC
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723.50
2Aug
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cityam.com
LONDONREPORT
Carmignac Gestion
The asset management firm has
appointed Cora Pfab as sales
manager for southern Germany
and Austria. She joins from F&C
Thames River and relocates from
London to Carmignac Gestions
German office. Pfab has
extensive experience in financial
services, and has also worked at
ABN Amro Asset Management.
Duff & Phelps
The financial advisory and investment banking firm has
appointed Matthew Quade as a director in its global
restructuring advisory practice. He joins from Barcalys
Banking Group, where he led its European debt advisory
team. Quade started his career in business advisory roles
at Deloitte.
Lewis Silkin
Judith Damerell has been appointed as partner to head
up the planning team in the law firms real estate and
development group. She joins from Eversheds, where she
was a partner and head of planning for its London and
Cambridge offices. Damerell was involved as a planning
lawyer on the London 2012 Olympic Games.
OpCapita
Josh Sperri has been promoted to managing director at
the private investment partnership. He has been at
OpCapita since its launch in 2006, and has led the
execution of operational turnaround programmes at its
European investments. Sperri was also previously a
founding member of Bank of Americas European private
equity partnership.
Aberdeen Asset Management
Debora Confortini has been appointed to the asset
management firms emerging market debt team. She
joins as a credit analyst from Standard & Poor, where she
was a ratings specialist focused on Latin American
companies.
Sackers & Partners
The pensions law firm has promoted Fuat Sami from
associate to partner. He joined Sackers in 2008, and has
particular expertise in changes to pension scheme
benefits, scheme mergers and employer debt issues. He
will act as a leading member in the firms public sector
team.
Aureus Mining
Thinus Strydom has been appointed general manager,
construction and mine operation at the gold mining firm.
He has over 15 years experience in the industry, and has
held operations roles at Randgold Resources and the
Bisha mine in Eritrea.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Shares drop for
fourth straight
day on Wall St
U
S stocks fell for a fourth day
yesterday after European
Central Bank President Mario
Draghi disappointed investors
hoping for immediate action to
contain the Eurozone debt crisis.
One of Wall Streets top market
makers, Knight Capital Group, was
fighting for its survival after a
trading glitch that roiled markets on
Wednesday wiped out $440m the
firms capital.
However, the market focused
mostly on the ECB, though traders
were also looking ahead to todays
closely watched US jobs report which
could bring a volatile end to an
eventful week.
Markets rallied late last week in
part on hopes for stimulus from the
Federal Reserve but mostly as
expectations grew the ECB would
take action to protect the euro.
Friday's jobs report could give a
stronger indication whether the Fed,
which has a freer hand than the ECB,
will act shortly.
Data showed the number of
Americans filing new claims for
jobless benefits rose last week and
manufacturers suffered an
unexpected drop in orders in June,
suggesting the economy is struggling
to break out of a soft patch.
The Dow Jones industrial average
fell 92.18 points, or 0.71 per cent, to
12,878.88. The S&P 500 Index
dropped 10.14 points, or 0.74 per
cent, to 1,365.00. The Nasdaq
Composite lost 10.44 points, or 0.36
per cent, to 2,909.77.
Major indexes fell for a fourth day
running, totaling weekly losses so far
of more than 1.5 per cent.
Knight Capital shares fell after
Wednesdays trading error forced the
company to seek new funding. The
stock closed down 62.8 per cent at
$2.58, their lowest since early
October 1998.
According to Thomson Reuters
data, 67 per cent of the 385 S&P
500 components that have reported
results so far this quarter have beat
earnings estimates. In the past four
quarters, the average beat rate has
been 68 per cent.
General Motors posted a smaller-
than-expected loss in Europe that
helped the No. 1 U.S. automaker post
a better-than-expected second-
quarter profit. Shares slipped 2.6
per cent to $19.14.
Gap jumped 12.8 per cent to $33.17
after the clothing retailer posted its
July and second-quarter sales, but
rival Aeropostale plummeted 32.8
per cent to $13.08 after cutting its
second-quarter forecast.
US retailers reported stronger-than-
expected sales for July but the gains
were largely due to discounting and
do not necessarily signal vigorous
consumer spending for the rest of
the year.
About 7.1bn shares exchanged
hands on the New York Stock
Exchange, NYSE MKT and Nasdaq,
above the year-to-date daily average
of 6.75bn.
B
RITAINS leading FTSE share index
fell yesterday, retreating from a
three-month high after the
European Central Bank (ECB) failed
to deliver widely expected stimulus
measures to help tackle the Eurozone
debt crisis.
ECB president Mario Draghi said the
bank would draw up a mechanism in
coming weeks to make outright debt
purchases to stabilise peripheral euro
zone states' borrowing costs but this
disappointed hopes for more immediate
action.
The disappointment we all feared
arrived. There were no revelations in the
press conference. They have taken away
the support we thought was coming for
higher bond yields, said IG Index market
analyst Chris Beauchamp.
Markets will remain under pressure
for a few weeks to come. It is almost
panning out to be a repeat of last
August.
The FTSE 100 fell 19 per cent to 4,791.01
points in early August 2011, its lowest for
three years, after a sell-off on fears that
Europe's debt crisis would derail the
global economy.
The FTSE 100 closed at 5,662.30, down
50.52 points, or 0.9 per cent, having hit a
three-month high of 5,746.68 before the
ECB meeting. Volume was weak, at 87
per cent of its 90-day average.
While investors anticipate volatile
trade for the coming weeks, the
expectation that the ECB will soon be
able to buy Spanish and Italian bonds on
the open market may prevent a similar
sell-off to last summer, they said.
It is going to be very nervous downside
trading for the coming weeks, said BGC
Partners market analyst Louise Cooper.
But if he doesnt say anything (in
coming weeks), or if he says something
unimpressive then markets could
collapse.
David Jones, chief market strategist at
IG Index, said it was almost inevitable
that Draghi would disappoint markets.
It was always going to be rather
difficult for him to match the high
expectations set last week. Todays ECB
rate decision and press conference duly
failed to live up to the hype, as Mr Draghi
said there would be no immediate
intervention in bond markets. Almost on
cue, stock markets fell and bond yields
for Italy and Spain spiked higher as
investors took fright. It does seem
however that the ECB might be laying
the groundwork for bond buying in due
course, but it will require governments
to apply for a bailout first. No prizes for
guessing which countries he might have
in mind here. Mr Draghi added that the
ECB might consider more non-standard
measures, but he declined to elaborate
further.
Jones believes most investors focus will
now be on todays closely watched non-
farm payroll data. Weary investors have
now managed to get past both of the key
central bank meetings this week, but
now attention turns to non-farm payrolls
tomorrow, with the US economy forecast
to have added 100,000 jobs in July.
Embattled bulls will be hoping that this
datapoint can help rescue what has been
a rather disappointing week, said Jones.
Miners were the biggest drag on the
index, weighed by lower copper prices
and negative market sentiment after the
ECB meeting. The heavyweight sector
dropped 2.4 per cent and shaved around
13 points off the blue-chip index.
Banks, big holders of Eurozone bonds,
were also among the sessions biggest
losers, dropping 1.3 per cent.
Earlier, UK stocks showed little reaction
after the Bank of England held interest
rates steady, as expected.
FTSE retreats from 3-month high
as ECBs failure to act disappoints
BESTof theBROKERS
Antofagasta PLC
27Jul 30Jul 31 Jul 1 Aug 2Aug
1,110
1,100
1,090
1,080
1,070
1,060
1,050
p
1,041.00
2Aug
ANTOFAGASTA
UBS has edged up its target price on the miner to 870p from 850p
formerly a quality premium is justified by the strength of its balance
sheet, low cost operations and transparency, the banks said yesterday.
However, it leaves its sell recommendation on the stock unchanged.
FTSE
27Jul 30Jul 31Jul 1Aug 2Aug
5,800
5,750
5,700
5,650
5,600
5,662.30
2 Aug
DASHBOARD CITY
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
NEW YORK
REPORT
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
in association with
Rightmove PLC
1,650
1,600
1,550
1,500
p
1,645.00
2Aug
RIGHTMOVE
N+1 Brewin has ramped up the target price on the property websites
stock from 1670p to 1835p, citing impressive first half results and, more
specifically, better than expected average revenue per advertiser. The
group has a positive view of Rightmove and an add recommendation.
Syngenta AG
1,110
1,100
1,090
1,080
1,070
1,060
1,050
CHF
333.00
2Aug
SYNGENTA
Liberum Capital has lifted its target price on the Swiss chemicals giant to
SFr400, reiterating its buy rating on the shares. Liberum has also
raised its estimates of the companys earnings per share for 2012 and
2013 by 10 per cent and six per cent respectively.
SPONSORED BY
INVESTMENT BANK OF THE YEAR
TRADER OF THE YEAR
16
CITYA.M. AWARDS2012 SHORTLISTS
cityam.com
T
ODAYS City A.M. awards shortlist,
summarises the nominations for the
trader of the year award, sponsored by
spread betting specialists GFT.
The award is designed to seek out this years
front runners traders who have performed
exceptionally against a backdrop of complex reg-
ulation and great volatility.
Experience, discipline, performance under
pressure all these qualities will be evident in
the star performer. But the heaviest component
will come from the numbers. The successful
applicant will be the trader or team that has
shown itself to have successfully read its sector
and outperformed peers and competitors.
This year we have selected traders from a cou-
ple of traditional fund manager type organisa-
tions such as Old Mutual and First State
Investments and mixed this in with a propri-
etary trader from GLG, now owned by Man
Group, Wintons David Harding and Ewan Kirk
from Cantab.
None of the traders seek publicity or fame.
They almost all operate away from the public
gaze but each of them has a big reputation in
their sector.
HEADLINE SPONSOR
Driss Ben-Brahim
Proprietary trader, GLG
Driss Ben-Brahim, GLGs colourful star performer, has established a
reputation for success trading in currencies, sovereign bonds and interest
rates. This high achiever joined GLG, now part of Man Group, in 2008 and
currently oversees GLG Atlas Macro, which is bucking the trend at Man
Group with returns in excess of 6.81 per cent. A multi-lingual INSEAD
graduate, Ben-Brahim began his career in 1994 at Goldman Sachs and was
made a partner there in 2004.
Old Mutuals star head of equities and leader of the banks Specialist
Equities fund has carved out a reputation for excelling when it comes to
shorting the equities market. A specialist himself, Bradburys focus for
most of his trading career has been the small and mid-cap sectors.
Bradbury was appointed to his current role in 2008. He has significantly
outperformed his peers over decades, earning a triple-A rating along the
way.
Ewan Kirk
CIO at Cantab
Ewan Kirk, mathematician and leading light in the computer-driven hedge
fund world, has steered Cantab Capital Partners from outsider status to
become a 30bn giant.
A Goldman Sachs alumnus, the Cantab chief investment officer and the
firms co-founder, oversees the research-focused Cambridge firm, which
has grown rapidly since its launch in 2007. The fund has achieved
annualised returns of 13.5 per cent since its 2007 launch.
David Harding
CEO, Winton Capital Management
Founder of another computer-driven trading operator, Winton Capital
Management, David Harding has also had a good year.
The firms leading fund, Winton Futures, gained 6.3 per cent over 2011,
while its cumulative performance over three years has reached 23.54 per
cent, according to Trustnet. Harding, one of the original scientists behind
Man Groups flagship fund, AHL, set up Winton Capital Management in
1997. Harding is reputed to be a punk rock aficionado.
Angus Tulloch
First State Investments
With nearly 40 years experience, Angus Tulloch has a long track record of
consistently outperforming his peers. The high-achiever manages the
firms First State Asia Pacific and First State Asia Pacific Leaders funds and
is to take over the management of its 192m Scottish Oriental Companies
trust next year. His ratings have been consistently high. Tulloch has
outstripped his peer group by 7.5 per cent over the past year and 34.7 per
cent over the last five years, according to Trustnet.
2
012 will go down as an immensely
difficult year for investment banks.
Profitability came down as most banks in
most markets saw a fall-off in activity.
Mergers & acquisition activity fell 16 per cent
globally; equity capital markets business was
down 31 per cent and many IPO markets were
effectively closed. Facebooks controversial IPO
in New York accounted for 38 per cent of the
global volume of IPOs and may have put off oth-
ers going down that route in the process.
Goldman Sachs has had another splendid year,
advising on many of the years largest deals
including Walgreens two-part takeover of
Alliance Boots.
Elsewhere Bank of America Merrill Lynch and
UBS have been included because they have made
comebacks of sorts after difficult periods. RBC,
the Canadian-owned bank, is short-listed by
virtue of the fact that it has for the first time got
into the top ten of one of the most sought after
league tables, the fees table.
Rothschilds inclusion comes at a time when
some of the boutique investment banks have
been winning market share at the expense of
their bulge bracket rivals.
RBC
RBC, which began a major push into investment banking five years ago,
has become a top 10 firm by fees over the first half for the first time in its
history. The investment banking arm of Royal Bank of Canada has
overtaken Wells Fargo Securities to become the tenth largest bank by fee
revenues, according to Dealogic data. In London the group advised Melrose
on its bid for Elster and became an adviser to several new companies
including Ophir, African Barrick and Centamin Egypt.
Despite a number of high-profile staff departures, Bank of America Merrill
Lynch has had an impressive 12 months. The bank came top in total EMEA
fees for equity deals, according to Dealogic figures for the first half of 2012.
It led the 6bn plus rights issue for Unicredit in the early part of the year,
which achieved a 99.7 per cent take-up despite difficult market conditions.
It also played a key role on one of the most successful floats of the year,
that of Brunello Cucinelli, the Italian menswear group.
Goldman Sachs
Goldman Sachs had another superb year, advising on many of the largest
acquisitions in the world, including Xstrata on its merger with Glencore,
Fosters on its acquisition by SAB Miller and Kraft Foods on its planned
separation into two units. it also advised Nat Rothschilds Vallares on its
acquisition of Genel Enerji. The bank was a major player in the subdued
IPO market, pulling off a number of deals including Global Ports.
UBS
With the hiring of Andrea Orcel, one of the Citys most flamboyant bankers,
UBS signalled that it was determined to retain and build on its investment
banking franchise which had seemed in jeopardy after the rogue trader
scandal. The bank has generally been more involved in deals both in the UK
and in Europe and has acted for Vodafone on its bid for Cable & Wireless
Worldwide, PTT on its bid for Cove Energy and GKN on its bid for Volvos
aero-engine arm.
Rothschild
As fears have mounted over conflicts of interest and size at some of the
bulge bracket firms, many of the small boutique groups have been gaining
market share in the advisory business. Rothschild has been one of the
winners, advising, for example, the Hong Kong Exchange on the $2.1bn bid
for the London Metal Exchange and Elster in the $2.3bn bid from Melrose.
In London, the firm has also moved into striking new premises in St
Swithins Lane.
Bank of America Merrill Lynch
Ashton Bradbury
Head of equities at Old Mutual Asset Managers
SPONSORED BY
O
NE hundred years ago, the
first Olympic medals were
awarded for cultural
achievement. In the summer
of 1912 in Stockholm,
exponents of architecture, literature,
music, painting and sculpture were
celebrated alongside the runners
and the jumpers. The tradition
continued for decades, with a final
hurrah at the London Games of
1948, when the medallists work was
exhibited at the Victoria and Albert
museum. Since then, the awarding
of medals to artists has been given
up, replaced by cultural exhibitions
held alongside the Games, like this
years Cultural Olympiad.
The Olympic medals for art are a
little-known chapter of the events
history. Cast out because of a
H
OW many investors would
lose 26,000 on a 45,000
investment and then come
back for more? That is the
kind of investment strategy
which only makes sense when you are
gambling with someone elses money.
And apparently the government is
considering playing the same game
on a million times this scale.
Senior government figures are said
to be discussing the possibility of buy-
ing out the rest of RBS. Most estimates
suggest it would cost another 5bn.
To put this in context, over 45bn of
your money has been invested bailing
RBS out so far. All that money bought
over 90bn shares. Today, that is an 82
per cent share of the bank, and worth
less than 19bn, a 26bn loss.
If taxpayers want to invest in RBS,
they can. They dont need anyone to
step in and invest on their behalf.
Given the record of the nationalised
banks since the bailouts though, few
people are queuing up to buy bank
shares. And major shareholders that
are invested in RBS are not keen on
being bought out. They have com-
Spread betting and CFD Trade today at www.cityindex.co.uk/dailyfact
No US president since the 1940s has been
re-elected with unemployment over 7.2%.
Unemployment is now at 8.2%.
FACT OF
THE DAY
cityam.com/forum
Over 45bn of your
money has already
been invested bailing
RBS out so far
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
18
MATTHEW SINCLAIR
Fantasy economics: Nationalising
RBS would be an epic nightmare
plained to the Treasury about being
forced out.
The public finances are in enough
trouble already with the government
continuing to spend much more than
it can squeeze out in taxes. This gov-
ernment should be preparing proper-
ly for the long-term fiscal challenges
that will come with more pensioners
claiming state pensions and NHS
treatment. Public finances are in a
mess. Wasting another 5bn would
not help.
It gets worse. The plan is to buy RBS
so that we can force it to make loans
that dont make commercial sense.
That means either lower returns, and
less profit, or more risk. Either way,
the bank is more likely to lose more
money. So it isnt just that ministers
want to play double-or-quits on the
bailout game. They want to stack the
deck against themselves.
The supposed justification for stak-
ing another pile of taxpayers money
on RBS is that we will be able to get
the economy going by forcing them to
make lots of loans to British industry
that the bank itself now thinks are too
risky. But if RBS becomes a nation-
alised lender of first resort, what hap-
pens to the other banks?
It will be a huge challenge to com-
bine a massive state-owned bank with
private sector institutions that have to
justify their lending decisions to their
own investors in a freer market. It is
easy to imagine under such circum-
stances that the sector would become
more and more dominated by a big
bank with all the advantages of a
direct state guarantee. This could well
lead to less lending, as the other banks
retreat from competing.
However imperfect the financial sec-
tor today might be, do we really think
the politicians are up to the job of allo-
cating capital by state diktat? More
and more distorted decisions at a
politicised and too big to fail RBS
would end in tears a financial crisis
to make even the last one look modest.
Politicians need to be realistic and
accept that recovering from a finan-
cial crisis is difficult, particularly with
another crisis still bubbling away on
our doorstep. They cant wish that
away. What they can do is look at the
financial regulations that went so
wrong in the first place, so we dont
have another collapse to contend
with.
However some politicians try to spin
it, the public clearly want their money
back from the banks, not billions
more wasted on bailouts. The govern-
ment should clearly and publicly
reject this reckless plan for yet more
intervention in a banking sector that
has already been ruined by so many
clumsy regulations and so much inept
policy.
More than that, this government
needs to bring on a supply-side revolu-
tion, which will do far more for eco-
nomic growth than yet another
attempt to artificially manipulate the
flow of credit.
All is not lost. George Osborne isnt
convinced by the arguments for
nationalisation, while the plan may be
impractical because of EU state aid
rules. But this ludicrous idea should
be nipped in bud and quickly. The
Treasury cant duck the issue like they
have, to a certain extent, with the
Tobin Tax, trusting leaders in other
countries to block it while publicly
feigning support or indifference.
Politicians need to do their job of get-
ting policy right, before putting even
more of our money at risk buying a
bank to play fantasy economics with.
Matthew Sinclair is the chief executive of
the Taxpayers Alliance.
conviction that no artist could
compete and remain an amateur,
they did not return even after
professional athletes were accepted
as competitors. Struck from the
official record, Britains 1948 silver
for sculpture and gold for painting
no longer count towards our all-time
Olympic medal total. As a result,
these awards can seem a minor
curiosity, but they were in fact an
integral part of the Olympic ideal
and it is a true loss to the movement
that the art competition never
caught fire like its sporting sibling.
A dual competition for art and
sport was always part of Baron
Pierre de Coubertins vision of the
Olympics. Although he didnt
manage to establish it as part of the
first modern Olympics in 1896, he
was passionate about its inclusion,
saying there is only one difference
between our Olympiads and plain
sporting championships, and it is
precisely the contests of art as they
existed in the Olympiads of Ancient
Greece, where sport exhibitions
walked in equality with artistic
exhibitions. The mix was central at
the British birthplace of the modern
Games at Much Wenlock in
Shropshire, where William Penny
Brookes founded the Olympian
Class, later the Wenlock Olympian
Games, in 1850, to award annual
prizes not just for skill in athletic
exercise but also for proficiency in
intellectual and industrial
attainment.
De Coubertin and Brookes wanted
to celebrate the human mind and
body at full stretch, and their power
when integrated together. Inspired
by ancient Greece, the Renaissance
ideal of the Universal Man and the
liberal education tradition, this
Olympics of brain as well as brawn
was just one part of a larger
physical culture movement of the
nineteenth and early twentieth
century. Like the artists medals, the
very idea of physical culture has
slipped from our collective memory.
Our amnesia is a sign of a deeper
forgetfulness. Human excellence, at
work or at play, is a product of
intellect and physical skill. At the
high points of our civilisation, we
have celebrated not just one side of
our nature but both, together.
Today, only the quirky sport of
chessboxing appears to keep the
combination alive. As we watch the
athletes strive this summer, we
should recall the lines that William
Shakespeare gave Prince Hamlet:
What a piece of work is a man... in
action how like an angel; in
apprehension how like a god. Lets
enjoy the angelic action, but we
shouldnt neglect our other faculties
in the process.
Marc Sidwell is managing editor of
City A.M.
THE LONG
VIEW
MARC SIDWELL
We no longer have the vision to celebrate artists Olympic achievements
In association with
trading can result in losses greater than your initial deposit.
TRADE NON FARM PAYROLLS
TODAY AT 1.30PM
19
Many hues of Boris
[Re: After calls for Boris Johnson to stand
for the Tory leadership, could it happen
before 2015?, yesterday]
The Olympics has provided Boris with an
opportunity to allow his exuberant
personality to be let rip. There are even
more stages to be centre of than normal,
which suits the mayors longer-term
ambitions to advance in British politics. As
mayor of the city in which the Olympics are
being held, he has every right to be seen
extolling Londons virtues. But he knows
that people all over Britain will see him,
extending his political reach. Conservatives
of every hue respond to him: rural,
suburban and city which is a rare attribute.
TonyTravers, director of theGreater London
Groupat LSE.
Taxing transactions
[Re: Frances Tobin Tax will make a little but
damage a lot, yesterday]
France has obviously decided that it no
longer wants a financial services industry of
any sort. Thats fine for London, as its
professionals will likely migrate here. But as
Sam Bowman says, theres little pleasure in
crowing at the strange death of our
neighbours capitalist economy.
Heidi Faulkner
Why no mention of perhaps the oldest
financial transaction tax in the world the
UKs stamp duty. Its been running since
1694, is levied at 0.5 per cent, and raises
3bn a year. Why do opponents only ever
mention the failed Swedish example?
JonSlater
TOP TWEETS
Despite ghost town worries, Canary Wharf
hotels and shops are buzzing. Is the East End
taking a well-earned place in the spotlight?
@HamishMcD
Gold medals are like London buses. You wait
for ages, and then several arrive in just over
24 hours.
@sixthformpoet
This is coordinated inertia by the worlds
leading central banks: no move by the Fed,
Bank of England or the ECB.
@JustinWolfers
Kofi Annan has gone as UN Syria envoy. He
never had a chance. So many countries have
been arming one side or the other.
@Doylech
Was the Bank of England correct to leave
monetary policy unchanged yesterday?
YES
We believe that the decision of the Bank of Englands Monetary
Policy Committee to keep interest rates on hold at 0.5 per cent
was the right one. Having announced a range of measures to
stimulate growth last month including an increase in
quantitative easing and the Funding for Lending Scheme it
should wait to assess how the economy is responding to these
measures before considering further action. Our own internal
surveys at Lloyds Bank suggest that the British economy may
not be as weak as recent negative data releases suggest.
Moreover, with interest rates already at a 300 year low, a cut in
the bank rate from its current position is unlikely to have much
impact. Instead, if economic conditions warrant it, the Bank of
England should seek to extend quantitative easing again later in
the year.
Adam Chester is head of UK macro economics at Lloyds Bank.
Adam Chester
NO
David Kern
We dont support a further increase in quantitative easing, but there
is more that the Bank of Englands Monetary Policy Committee
(MPC) can do to stimulate lending to businesses. More quantitative
easing offers marginal benefits to the real economy, and could limit
the fall in inflation which is vital at a time of dampened domestic
and Eurozone demand. To support growth, and help overcome the
obstacles to a revival in business lending, the MPC and the
government should look to other measures. If the MPC agrees to
purchase assets other than gilts, banks would be less risk-averse in
lending to businesses. In addition, the MPC should also consider
introducing a reduction in the interest rates paid by the Bank of
England on deposits held by commercial banks. This could
discourage cash hoarding and may provide a useful incentive to
increase lending.
David Kern is chief economist at the British Chambers of Commerce.
RAPIDresponses
Forget G4S: The
UK is hosting the
safest Games ever
W
ITH Great Britain
basking in the golden
hue of success in the
Velodrome and beyond,
you might be forgiven
for forgetting that just a few weeks
ago the Olympics was mired in
serious safety concerns. But we have
been able to rest easy, safe in the
knowledge that the British armed
forces have risen to the challenge.
The contractual collapse of G4S to
provide enough personnel to secure
the Games created unwelcome
doubt that security was not as good
as it should be. Politicians were
rightly worried that some never-do-
wells, hitherto deterred by assur-
ances of tight security (with images
of armed police, aircraft carriers,
fighter jets and air defence batter-
ies), may have wondered whether
there was still an opportunity to
make their impact.
So far, however, the only security
mishaps of note have been a lost set
of keys at Wembley Stadium, and a
small demonstration at the sports
complex that needed to be diverted.
A loose dog nearly ran into the
mens road race peloton, and thats
about it.
This is because the security lender
of last resort, the Ministry of
Defence, was invited to still the trou-
bled waters, and it has done so with
speed and proficiency. The extra mil-
itary people have fitted quickly and
seamlessly into a world class, if not
world-leading, security regime.
It could be said that the arrival on
the scene of a large cohort of mili-
tary personnel, with instincts finely
honed in the villages and townships
of Helmand, provides greater reas-
surance and greater deterrence than
a private security contractor.
They have worked in support of
civilian-led security before, whether
in Northern Ireland, Iraq or
DAVID LIVINGSTONE
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one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Afghanistan. They know their job.
In places like these, the threat to
safety comes not from uniformed
armies, equipped with missiles and
bomber aircraft, but from within
the civilian population. What the
current day serviceman on patrol is
looking for isnt the glint of sunlight
off steel, betraying an approaching
enemy tank division, but a wayward
glance, a head movement, an avert-
ed stare, or any almost invisible clue
that something is not quite right.
And with regard to deterrence,
how better to show the world that
we have these expert people on the
ground than by filling empty seats
with off-duty soldiers, sailors and
airmen.
It is important that some sort of
inquiry into G4Ss failings should
happen, if only to inform the organ-
isers of the Rio games about poten-
tial pitfalls. And from a UK
perspective, given the amount of
public money involved (alongside
the time of our sailors, soldiers and
airmen), it might be useful to find
out who dropped the ball, and bring
the right people to account.
But the security system has coped
well with the challenges placed
before it. And, for now, with increas-
ing confidence, we can sit back and
enjoy the biggest sporting festival on
earth.
David Livingstone is managing director
of Napier Meridian, a security strategy
company, and an associate fellow at
Chatham House.
T
he last time I saw Daniel Kitson
was 12 years ago, at Glasgows
The Stand comedy club, at
which point he was an up-and-
coming young comedian. With milk
bottle bottom glasses, lank, greasy
hair and a fusty-looking army jacket,
his opening line was: I know what it
looks like, but Im actually not a
paedophile. Instead of descending
into a Jimmy Carr-esque parade of
insults, though, the show turned out
to be a self-deprecating, surprisingly
sentimental story about a lonely,
misunderstood bloke.
Since then, hes become the come-
dians comedian, a master of his
trade who has never quite strayed
into household name territory,
largely down to his dislike of televi-
sion work (he fell out with Peter Kay
after playing minor role in his sit-com
Phoenix Nights).
Now, a shorter haired, thicker-set
Kitson is preparing for a new show at
the Edinburgh Fringe. His goal: to
stop writing tender-hearted stories
about lonely guys.
The show, Where Once Was
Wonder, is a stage-play about a fic-
tional Daniel Kitson writing a play
about an old man who discards every-
thing he picks up after 24 hours. It
doesnt lack ambition, with complex
ideas involving projectors, indoor
Daniel Kitson reminds Steve Dinneen why he is still the comedians comedian
THE British crime drama hasnt fared
very well since the glory days of The
Long Good Friday; all Danny Dyer
romps and hackneyed mockney
geezers. I Against I does little to
redress the balance.
Co-directors Mark Cripps, David
Ellison and James Marquand set out
to create a genre movie that
emulated the visuals of films like
Blade Runner and Heat. Stylistically,
though, it is closer to the kind of cat-
and-mouse crime drama thats a
staple of Chinese and Korean cinema.
LIFE&STYLE
20
cityam.com
GOING OUT
The going starts to get tough half way through
Kitsons show. People left. Then more people left.
Youve done well to get this far, he said.
FILM
I AGAINST I
Cert 15 | By Steve Dinneen
hhiii
The very finest of the Fringe
rain and extravagant props.
Unfortunately, he says, he didnt
have time to actually build any of
that. Neither did he get around to
auditioning any actors. What were
left with is Daniel Kitson sitting at a
desk, reading the entire play aloud,
stage directions and all.
It starts promisingly, with his deft-
ly delivered asides adding enough
colour to the prose to get you by. All
the while, youre wondering when
hes going to blink and stop reading
the script. After the half hour mark,
it starts to sink in that hes probably
not going to blink.
This is where the going starts to
get a bit tough. People left. Then
more people left. Youve done well
to get this far, he conceded.
As he perseveres, though, the very
fact hes still going starts to make
you laugh. Like Stewart Lee (a big fan
of Kitsons), he is a man who appreci-
ates the comedy potential of stretch-
ing a routine to breaking point;
alienating his audience, only to reel
then back in.
Its all very clever the play within
a play within a stand-up routine pro-
viding a commentary on comedy
itself. You also find yourself drawn
into the story, which, despite his best
efforts is a tender-hearted tale about a
lonely bloke.
You have to work for your supper,
but stick with Kitson and youll be
rewarded with a brilliant comedian
pushing the boundaries of his craft.
Where Once Was Wonder runs from 5-
26 August at the Stand 1 venue at the
Edinburgh Fringe Festival.
Ian Drake is a swaggering young
nightclub manager: kind of a
thinking mans Danny Dyer.
Unfortunately he stumbles across the
body of his rather shady boss, who
has come off second best in a knife
fight. Ian is told in no uncertain
terms to kill the only other person
who was at the scene of the crime.
What he doesnt know is that
the other guy an army vet
of Russian or East European
descent has been given the
same orders.
It
starts
off
promisingly
enough, with the
grainy digital stock
well suited to the noir-
ish atmosphere; all lingering shots of
Canary Wharf and chases around the
M25. It certainly delivers on the
standard tropes of the genre. Single
bullet spun round a revolver: check.
Ambiguous femme fatale: check. In-
over-his-head young protagonist:
check. In fact, it ticks the boxes so
hard it tears through the page if it
were a voting slip it would be classed
as spoiled.
While this isnt necessarily a
problem, the flimsy story definitely
is. Any suspense is blown away
by the humourless, formulaic
writing: youre never in any
serious doubt about who is
pulling the strings and why.
There are countless movies
doing what I Against I does.
Most do it far better.
I Against I is a formulaic, humourless crime flop
ALSO ON THIS WEEKEND
TED
The first big-screen outing for Family
Guy creator Seth McFarlane sees Mark
Whalberg play John Bennett, a child
that got a wish for his teddy bear to
come to life. Unfortunately, John grew
up, and now hes stuck with a beer-
drinking, pot-smoking sidekick who his
girlfriend doesnt approve of. Not likely
to be a contender for Best Picture, but
youll be laughing despite yourself.
In cinemas now
GRAYSON PERRY'S WALTHAMSTOW
TAPESTRY
at contemporary life through a
medium usually associated with
medieval battle scenes. The first
transvestite potter to win the Turner
Prize is certainly never dull.
Until 23 September, William Morris
Gallery, E17 4PP
Best of the Fest
Stewart Lee's Carpet
Remnant World
The Assembly Rooms, George St,
Edinburgh, 2-26 August
The UKs finest comedian prepares
for another self-referential skit about
the state of the modern world and
the perils of being middle class.
Jimmy Carr: Gagging Order
Venue 150, 16-26 August
Fresh from his brush with the tax
man, the baby-faced comedian will
deliver another set filled with
snappy one liners that is sure to fill
half the country with a seething rage
and have the rest rolling in the aisles.
Richard Herring: Talking Cock 2
Underbelly, Bristo Sq, 2-26 August
The other half of Lee and Herring
returns to the Fringe in his Silver
Jubilee year (he first performed here
in 1987), with this reworking of his
smash-hit 2002 show, Talking Cock.
Expect lots of self deprecating jokes
about Herrings diminishing
manhood.
Humphrey Ker is...Dymock
Watson! Nazi Smasher!
Pleasance Dome, 7-14 August
The winner of last years best new-
comer returns for another
history-oriented show based on the
true story of his grandfathers
mission to blow up a refinery in
Romania during World War II.
Roisin Conaty: Lifehunter
Pleasance Courtyard, 1-26 August
Another former Best Newcomer
winner, Roisin Conaty will return with
her musings on 21st century life and
love. You may recognise her as the
sometimes-star of Russell Howard's
Good News. Dont let that put you off,
though.
COMEDY
DANIEL KITSON
Battersea Arts Centre
hhhhi
An astonishing 15-metre tapestry by East
End artist Grayson Perry. This work looks
A brand new Pinocchio is carved on
stage every night as part of this heart-
warming production, starring former
Little Angel artistic director Steve
Tiplady as Gepetto. For a family night
out that will engage adults as much as
children, this will hit the spot.
Until 5 August, Rose Theatre Kingston,
KT1 1HL
PINOCCHIO
GET READY FOR THE INTERNATIONAL COMEDY EXTRAVAGANZA AT THE EDINBURGH FRINGE FROM 1-26 AUGUST
21
TV & GAMES
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BBC1
SKY SPORTS 1
7pmLive World Golf Championship
11pmLadies Irish Open 12am
Sporting Greats 1amWorld Golf
Championship 5amSpirit of
Yachting 5.30am-6am
Powerboating
SKY SPORTS 2
7pmSpirit of Yachting 7.30pm
Live Super League 10pmWWE:
Late Night Smackdown 12am
WWE: Late Night Bottom Line
1amSuper League 3amTest
Cricket 5amIAAF Athletix
5.30am-6amATP Tour Uncovered
SKY SPORTS 3
3.55pmLive Test Cricket 11pm
Test Cricket 1amSoccer AM: The
Best Bits 2amPowerboating
2.30amSpirit of Yachting 3am
Trans World Sport 4am-6am
Super League
BRITISH EUROSPORT
6.45pmLive Olympic Athletics
7.30pmLive Olympic Swimming
8.30pmLive Olympic Athletics
10pmOlympic Games: Together to
London 10.30pmLive Olympic
Volleyball 11.30pmOlympic
Weightlifting 12.30amOlympic
Athletics 2amOlympic Swimming
3amOlympic Cycling 4amOlympic
Weightlifting 5amOlympic Games:
Together to London 5.30am-6am
Olympics: English Breakfast
ESPN
6.45pmLive Premiership Rugby
Sevens Series 10.30pmESPN
Kicks: Extra 10.45pmMMA Live
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11.30pmPress Pass 2012 12am
PTI London Interrupted 12.30am
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1.30amLive American Football
4.30amPTI London Interrupted
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5.30am-6amPress Pass 2012
SKY LIVING
7pmCriminal Minds 8pmBritain
&Irelands Next Top Model
9pmNikita 10pmCriminal Minds
11pmBones 12amCriminal Minds
2.40amCSI: Miami 3.30amMedium
4.20amBones 5.10am-6am
Americas Next Top Model
BBC THREE
7pmOlympics 2012 11pmBritain
Unzipped 12amFamily Guy
12.45amAmerican Dad! 1.25am
Sun, Sex and Suspicious Parents
5.20amGreat Movie Mistakes
2011: Not in 3D 5.30amBritish
Olympic Dreams 5.55am-6.25am
Hole in the Wall
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmThe Big Bang
Theory 8.30pm2 Broke Girls 9pm
FILMBlade: Trinity 2004. Thriller,
with Wesley Snipes. 11.10pm
Revenge 12.05amThe Big Bang
Theory 1.05amScrubs 1.35am
How I Met Your Mother 2amRules
of Engagement 2.30amDesperate
Housewives 3.20am90210 4am
Greek 4.40am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmStorage Wars 9pm
American Pickers 11pmStorage
Wars 11.30pmPawn Stars 12am
American Pickers 3amSwamp
People 4amThe Last Days of
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5.30am-6amAmerican
Restoration
DISCOVERY
7pmAmerican Guns 8pmAuction
Hunters 9pmMan, Woman,
Wild. Mykel Hawk and Ruth
England are stranded at sea. 10pm
American Chopper: Senior Versus
Junior. Paul Jr finally calls his
father to offer his condolences.
11pmAircrash Confidential 12am
Man, Woman, Wild 1amAmerican
Chopper: Senior Versus Junior 2am
Auction Kings 3amAmerican
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3.50amWheeler Dealers: On the
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in Seconds
DISCOVERY HOME &
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Love 9pmI Didnt Know I Was
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Supernanny US 11pm
Embarrassing Bodies 12amI Didnt
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1amSupernanny US 2am
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Medical Examiner 4amBirth
Stories 5am-6amPortland Babies
SKY1
7pmThe Simpsons 7.30pmRaising
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Parents 9pmStella. The single
mum goes on a fitness drive before
her date with Sean. 10pmAn Idiot
Abroad 11pmDog the Bounty
Hunter 12amBrit Cops: War on
Crime 1amRoad Wars 1.55amThe
Good Guys 2.45amThe Chicago
Code 3.35amIts Me or the Dog
4.35amAirline 5.05am-6amSell
Me the Answer
BBC2 ITV1 CHANNEL4 CHANNEL5
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6.30pmBBC London News
7pmCHOICE Olympics 2012:
The first evening of athletics
and the latest swimming finals.
10pmBBC News
10.30pmRegional News
10.40pmOlympics Tonight:
Gabby Logan and guests look
back at the seventh days
events.
12amBBC News
12.10amOlympic Sportsday:
Dan Walker looks back at the
seventh days events.
12.55amWeatherview
1am-6amBBC News
6pmOlympics 2012
7pmNew Forest
A Year in the Wild
8pmCoast
8.30pmGardeners World
9pmCHOICE The Great British
Story: A Peoples History
10pmOlympics 2012
10.40pmNewsnight: Weather
11.10pmThe National Lottery
Friday Night Draws 11.20pmThe
Sarah Millican Television
Programme 11.50pm EastEnders
1.15amFILMSomeone Else. 2006.
2.25amSign Zone: Tom Daley:
Diving for Britain 3.20amSign
Zone: Hairy Bikers Best of British
4.05am-6amClose
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmCoronation Street
8pmGrimefighters
8.30pmCoronation Street
9pmCHOICE Soham:
A Parents Tale
10pmITV News at Ten
10.30pmLondon News
10.35pmFILM
The Bourne Identity. 2002.
12.45amThe Store;
ITV News Headlines
2.45amFILM A Home at the End
of the World. 2004.
4.25am-5.30amITV Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv 8pmPhil
Spencer: Secret Agent. Homes in
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The Million Pound Drop 10.35pm
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11.10pmFriday Night Dinner
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12.10amRandom Acts 12.15am
FILMExit Through the Gift Shop.
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4.05amChannel 4 Presents:
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Part III 4.10amBrain Damage
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Deadliest Roads: Transporting
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12.15amSuperCasino 3.55am
Motorsport Mundial 4.20amHouse
Doctor 4.45amMichaelas Wild
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Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6 7 8
9
10 11 12
13 14
15
16 17 18 19
20 21
21 35
9 16
6 15
37 14
45
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33 19
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7
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37
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34
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ACROSS
1 Bird that resembles
a swallow (5)
3 Committee having
supervisory
powers (5)
6 Muslim name
for the one and
only God (5)
7 Greek letter (5)
10 State or society
governed by the
wealthy (10)
13 2011 lm produced,
directed and starring
Ralph Fiennes (10)
16 Deect, fend of (5)
19 Happen (5)
20 Gentle poke (5)
21 Race run at
Epsom (5)
DOWN
1 Token indicating
that postal fees
have been paid (5)
2 Person who uses
insincere praise (9)
3 Implore (3)
4 Aspire (3)
5 Hollywood actress,
Cameron ___ (4)
8 Slide of snow from
a mountainside (9)
9 Rle player (5)
11 Resin-like substance
secreted by certain
insects (3)
12 Second person
pronoun (3)
14 Atomiser (5)
15 Farm outbuilding (4)
17 Conclude (3)
18 Golf peg (3)
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C R I S P S P R E E
O H W E A
A I D E B A K I N G
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C H I D E N E R V E
A L L G S V
R E A D E R P E R E
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T R A P S B A I L S
3 1 2 1 4
9 4 5 9 8 7
7 2 1 3 9 6 4 8
8 5 7 6 9 3 1 6
6 3 4 1 8 7 5 2 9
3 2 5 1
7 2 5 4 1 6 8 3 9
8 3 9 2 8 9 4 7
3 1 2 5 3 2 1 4
8 7 6 9 2 6
6 9 1 6 8
4
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The nine-letter word was
MAGNETISM
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
OLYMPICS 2012
BBC1, 7PM
Gary Lineker presents a packed
evening of coverage on day seven,
featuring the first evening of athletics
and the latest swimming finals.
THE GREAT BRITISH STORY: A
PEOPLES HISTORY BBC2, 9PM
Michael Wood explores the many
ways in which the Industrial
Revolution transformed Britain during
the 19th century.
SOHAM: A PARENTS TALE
ITV1, 9PM
Ten years after the Soham murders,
the parents of Holly Wells talk about
the positive steps they have taken to
honour their daughters memory.
TVPICK
THIS afternoons card is
typically tough, but
GATEWOODlooks to hold a
great chance of winning his
first Group race in the opening
Coutts Glorious Stakes (2.00pm).
The George Strawbridge-
owned four-year-old has been a
revelation this season, winning
all three starts, and the step up
to a mile and a half is exactly
what he needs. John Gosden is
reportedly using this race as a
stepping stone to a potentially
audacious crack at the
Melbourne Cup and a win
would virtually guarantee him
a spot in that prestigious race.
What I like about Gatewood
is that he has looked in trouble
on a couple of occasions this
season, but has shown great
courage and determination to
knuckle down and get the job
done. He came from an
impossible position to land a
handicap on Oaks day at Epsom
and was then a gutsy winner of
the Wolferton Handicap at
Royal Ascot last time. He has
plenty to find on ratings with a
few of his rivals, but he is surely
the most progressive animal in
the line-up and wont mind if
the ground softens. The 9/4
available with Coral looks a
fair price.
TRUMPET MAJOR was a
massive disappointment in the
Irish Guineas back in May
following his fourth behind
Camelot in the QIPCO 2,000
Guineas. He was found to be
sick after the Curragh, though,
and has been given plenty of
time to get over those exertions.
He carries top weight in the
Group Three RSA Thoroughbred
Stakes (2.35pm) but, from a
good draw in stall three, I
fancy him to see off the likes
of Gregorian, Aljamaaheer
and Archbishop.
The Betfred Mile (3.10pm) is
one of the biggest betting races
of the entire week, so it was a
huge shame to see the
potentially top class Trade
Commissioner pulled out. The
race is now wide open and
looks to be one of the weaker
renewals in recent years.
If there is one race where the
draw is important, it is this one.
Only two horses from double-
figure stalls have finished in
the first two in the past decade
and nine of the last 10 winners
came from trap seven or lower.
That immediately rules out half
the runners from a win
perspective and Im going to be
backing ALBAQAA (stall five) at
14/1 and SWIFTLY DONE (stall
one) at 16/1 each-way against
the field.
Albaqaa won an apprentice
handicap at this meeting last
year and bounced back to form
at Sandown last time to finish
fifth to Trade Commissioner
having endured a rough
passage. He goes well at the
course, has sneaked in at the
bottom of the weights and has a
decent draw.
Swiftly Done has won his last
two on ground with plenty of
cut in it, but he has also won on
good before and his draw in
stall one could be crucial with
four of the past nine winners
coming from that berth.
The Gordons King George
Stakes (3.45pm) is another
tricky puzzle to solve, but the
in-form HAMISH
MCGONAGALL is fancied to go
close from stall 14. A saver is
advised on course and distance
winner SECRET ASSET who
won well at this meeting 12
months ago.
You can follow me on Twitter
@BillEsdaile for all my views.
Gatewood can get us off to a flyer at Goodwood this afternoon
T
HE QIPCO British
Champions Series
continues tomorrow
afternoon with the focus
on the females in the 10
furlong Nassau Stakes. Sir
Henry Cecil is already enjoying
a fantastic Goodwood and its a
shame his star mare, Midday,
has been retired as she wont
get the chance to add a fourth
Nassau to the record third she
won last year.
IZZI TOP (3.15pm) heads the
market and John Gosdens four
year-old is hard to oppose.
Unbeaten in her last four starts,
the daughter of Pivotal has taken
successive rises in class in her
stride and looked impressive in
the Group One Pretty Polly last
time out. She goes well on any
ground and, with the
Gosden/Buick team continuing
in ominous form, Izzi Top is my
bet of the day at a general 2/1.
Nahrain was highly progres-
sive last season but ran a stinker
at Royal Ascot on her reappear-
ance while Was, the Oaks win-
ner, was arguably lucky to win a
rough renewal of that Classic.
Although she will like the better
ground, having been well beaten
on heavy in the Irish Oaks, Aidan
OBriens representative has a bit
to find on the ratings.
Goodwood is without question
one of the most beautiful cours-
es in the world but, with the
unique contours often causing
problems for both jockey and
horse, proven ability to negotiate
the sharp downhill track is a
massive plus. Therefore, I cannot
resist a small each-way bet on
PISCEAN in the opening sprint
(2.05pm). Sneaking in at the foot
of the weights, Tom Keddys
horse boasts three wins, a second
and two other close efforts from
eight runs here. He is well drawn
and is seven pounds below his
highest winning mark.
In the stayers handicap, ROXY
FLYER (2.40pm) has to be worth
an interest. Both of her wins
have been at the Sussex track
and Amanda Perretts charge
also has several credible efforts
to her name in much better com-
pany here. Having been narrowly
denied on her last two starts, and
with Ryan Moore on board, she
is well worth another try over
this trip.
Form figures rarely tell the
true story and DUNGANNON
(3.55pm) deserves another
chance in the Stewards Cup at
14/1 with Coral. Andrew
Baldings inmate has run storm-
ers on his last two starts, taking a
bump in the Wokingham Stakes
at Ascot but still finishing close-
up, and then winning the race
on the stands side back at the
Berkshire venue. Low drawn
horses had an advantage that
day and he had to settle for a
length-and-a-quarter fifth.
Likely jolly Macs Power has
gone off favourite five times in
his last 12 races without reward-
ing punters so he looks worth
swerving. Dandy Nicholls VIC-
TOIRE DE LYPHAR was a head
second in the consolation race
for sprinters who didnt get into
the Stewards Cup two years ago
and is worth a saver at 12/1
having returned to form last
time out.
Richard Hannon has been
amongst the winners once more
at his beloved Goodwood and his
Coolmore-owned colt, WENT-
WORTH (4.30pm), can make a
winning debut in the seven fur-
long maiden. The son of
Acclamation has been showing
up well at home and has
Group entries.
In the closing apprentice handi-
cap, LANDAMAN (5.40pm) still
looks well treated for his win here
earlier in the week. Mark
Johnstons gelding won in great
style on Tuesday and, with
Michael Murphys claim negating
the penalty, he has leading claims.
John Gosdens four-year-old Izzi Top can continue this seasons impressive form at 3.15pm in this afternoons third race in Goodwoods Nassau Stakes
22
THEPUNTER
RACING TRADER
BILL ESDAILE, OUR RACING EXPERT, PREVIEWS THE FINAL TWO DAYS OF GLORIOUS GOODWOOD
n Pointers
PISCEAN e/w 2.05pm Goodwood
(tomorrow)
ROXY FLYER e/w 2.40pm Goodwood
(tomorrow)
IZZI TOP 3.15pm Goodwood
(tomorrow)
DUNGANNON e/w 3.55pm Goodwood
(tomorrow)
VICTOIRE DE LYPHAR e/w 3.55pm Goodwood
(tomorrow)
WENTWORTH 4.30pm Goodwood
(tomorrow)
LANDAMAN 5.40pm Goodwood
(tomorrow)
n Pointers
GATEWOOD 2.00pm Goodwood
(today)
TRUMPET MAJOR e/w 2.35pm Goodwood
(today)
ALBAQAA e/w 3.10pm Goodwood
(today)
SWIFTLY DONE e/w 3.10pm Goodwood
(today)
HAMISH MCGONAGALL e/w 3.45pm Goodwood
(today)
SECRET ASSET e/w 3.45pm Goodwood
(today)

20 FREE BET!
FOR NEW CUSTOMERS
MONEY BACK OFFER: Win stakes and win part of each-way bets refunded if your selection nishes second to
FULBRIGHT. Max refund of 200 per customer. Singles only. In the event of a dead-heat for 1st place, normal dead-heat
rules apply and no additional stake refund will be given. GUARANTEED PRICES: We reserve the right to change prices
before or during the guarantee period should there be any non-runners from the published list or a going change from the
time of publication of the prices. Stake restrictions may apply. LAY ANY HORSE TO WIN 10K: Coral guarantee to lay
the win part of any bet to win 10,000. There is no guarantee to lay any corresponding place bet. Offer applies to singles
only. Offer only applies to the win part of any bet selection at Goodwood from Tuesday 31st July - Saturday 4th August
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OFFER: Available on mobile, coral.co.uk and by phone. New customers 18+ & UK residents only. Deposit and stake up
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MONEY
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IF YOUR HORSE IS 2ND TO
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WE LAY ANY HORSE
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*
Applies to Goodwood win bets placed from 9AM
BETFRED MILE
1 Mile, Heritage Handicap, Goodwood 3.10pm, Live on CH4
15/2 Fulbright
9/1 Captain Bertie
10/1 Albaqaa
10/1 Excellent Guest
12/1 Field Of Dream
12/1 Prince Of Johanne
14/1 Decent Fella
14/1 Swiftly Done
16/1 Boom And Bust
16/1 Johnny Castle
16/1 Mister Music
16/1 Smarty Socks
16/1 Vainglory
18/1 Belgian Bill
18/1 Sir Reginald
20/1 Memory Cloth
22/1 Bannock
22/1 Xilerator
25/1 Madam Macie
28/1 Mabait
NR Trade Commissioner
Each-way 1/4 the odds a place 1-2-3-4.
Non-runner money back. Rule 4 may apply. Prices subject to uctuation.
Izzi set to rise to the Top again
in Goodwoods Nassau Stakes
Shakes-Drayton and Grabarz
are my Brit track and field tips
GREAT Britain yesterday became
canoeing, shooting and judo powers
when an array of minority sports
produced unpredictable successes
to take Team GB up to fifth in the
medal table.
Though the rowing silver from the
mens lightweight fours was ulti-
mately less surprising, the two golds
and silvers that followed in shooting,
canoeing and judo was considerably
less expected and inspired the
momentum to produce Britains
most triumphant day yet.
The quartet of Chris Bartley, Peter
Chambers, Richard Chambers and
Rob Williams produced what was
yesterday Britains first medal, their
third from rowing overall, and fur-
ther success on the water was still
yet to come.
Etienne Stott and Tim Baillie fin-
ished first for Britains first ever gold
in the mens doubles canoe
slalom while the silver of training
partners David Florence and
Richard Hounslow would
immediately follow.
Within a matter of minutes but
miles away, Peter Wilson fired his
final shot of a 188 out of 200 for a
gold of his own in the mens double
trap and justifiably collapsed in a
heap of emotion before Britains
judo medallist thereafter emerged.
In reaching the under-78kg final
against USAs Kayla Harrison,
Gemma Gibbons had secured
Britains first judo medal since
Sydney 2000 and lost only 2-0 to take
silver in the close contest for gold.
Gemma Gibbonss silver medal was the first medal Britain have won in judo for 12 years
USAS swimming sensation
Michael Phelps last night beat
Ryan Lochte to win his first
individual gold of London 2012
and the 20th Olympics medal
of an illustrious career.
Phelps on Tuesday became
the most decorated medallist
in the history of the Games but
is now also the first man to
successfully twice defend an
Olympic swimming crown
after securing a title previously
won in 2004 and 2008.
In tennis, British No1 Andy
Murray won in both singles
and, with Laura Robson, in
mixed doubles matches and
will today face Novak Djokovic.
For Team GBs boxers, there
was a win for Anthony Ogogo
but a loss for Josh Taylor.
BY DECLAN WARRINGTON
SPORT
23
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IN BRIEF
Cazorla set for Arsenal switch
nFOOTBALL: Arsenal are set to sign
Spain international Santi Cazorla from
Malaga before the week is up. The
midfielder is due to complete a
medical in north London today.
Liverpool win in Europa League
nFOOTBALL: Stewart Downing scored
the only goal of the game as Liverpool
last night beat Belarusian side FC
Gomel 1-0 in their Europa League third
qualifying first leg tie.
Cut delays Groves v Anderson
nBOXING: British super middleweight
champion George Groves has
withdrawn from his 14th September
title defence against Kenny Anderson
because of a cut eye.
Brilliant Britons succeed
with golds and silvers
OLYMPICS
COMMENT
SALLY GUNNELL
T
ODAY marks the start of the
athletics and I cant wait.
This week has highlighted
that Team GB are under real
pressure to perform and achieve.
Before these Olympics there was a
lot of hype about winning medals
here and there, but maybe the
bar was set a bit too high. Its
going to take quite a character to
be able to deliver in front of a
home crowd when it matters.
Because of that I think we
might see some track and field
athletes come through when they
werent expected to. Ive said all
along that if a Team GB athlete
can get into a final then anything
can happen. Id love to see the
likes of Mo Farah, Jess Ennis and
Dai Green win but I think that
the last week has proven its not
going to be easy.
Leading into Barcelona in 1992,
the expectancy on me was to
medal but I dont think anyone
predicted that I would get gold. It
was a nice situation because I
always knew that I could win but
only had to deal with pressure I
put on myself rather than from a
whole nation.
Twenty years on and I really
think that the likes of 400m
hurdler Perri Shakes-Drayton,
who hasnt had to deal with that
extra pressure until recently, has
a real chance. The Russian Irina
Davydova is the only of Perris
rivals who takes some relatively
good form into this weekend but
the rest of the field dont look at
the same level. If she gets a medal
thats great, but I think she has to
believe she can achieve bigger.
I also think that someone like
Robbie Grabarz in the high jump
could be one to watch. Robbies a
confident guy and if he gets into
his rhythm and feeds off of the
crowd then I think he could be
one of those athletes who has
escaped all the pre-Olympic hype
to win a medal.
Sally Gunnells exclusive column
comes courtesy of Japanese sportswear
brand Mizuno. Sally will be meeting the
public on Tuesday 7 August, 2pm-5pm,
at the Mizuno Performance Centre,
Centre Point, New Oxford Street. Visit
www.mizunoseiei.com for more details.
ENGLAND fast bowler James
Anderson criticised umpire Steve
Davis for yesterday calling a dead-
ball against Steven Finn after a
bowl in which South Africa
captain Graeme Smith was
caught at slip.
South Africa remain in control
of the series to decide the worlds
premier Test team after Alviro
Petersen secured an unbeaten
124, and his side closed the
second Tests first day on 262-5
after an apparent breakthrough
was ultimately lost through the
umpires intervention.
Its a frustrating one for us,
because he [Davis] didnt actually
warn us he was going to do it,
said Anderson. We were slightly
perplexed by that.
But the batsmen said it was
distracting, and they had been in
the umpires ear and he finally
decided he was going to call
dead-ball.
Unfortunately, it was the ball
we managed to get Smith out.
There is nothing in the rules that
says the umpire cant do that.
Its strange that no batsmen
have complained about it before
and he has done it hundreds of
times, from what I can remember.
If they thought it was
distracting and they told the
umpire, then fair enough.
Finny was told to be careful,
because it was distracting the
batsmen...at no stage was he told
it would be called dead-ball.
Finns recall was justified when
he bowled out Dale Steyn, but
though Stuart Broad also
dismissed AB de Villiers late on,
South Africa remain favourites.
Anderson rues Smith reprieve
Phelps helps himself to medal No20
Results
BY DECLAN WARRINGTON
TRACK cycling king Sir Chris Hoy
toasted the most memorable gold
medal of his long and illustrious
career after leading the mens pur-
suit team to an exhilarating triumph
on Britains best day yet at the
London 2012 Olympics.
Hoy, Jason Kenny and Philip
Hindes obliterated the world record
for the second time in a matter of
hours as Team GB defeated France in
the final and retained their title
in front of a rapturous
Velodrome crowd.
It came after Britain had reaped
gold in shooting, gold and silver in
canoeing, and silvers in rowing and
judo, as an unexpected flurry of suc-
cesses, some unexpected, swept the
host nation up to fifth place in the
medal table.
Yet amid the jubilation was agony
for womens track cycling sprint pair
Victoria Pendleton and Jess Varnish,
who rode the quickest time of the
afternoon but finished empty-
handed after being relegated for
an infringement.
Hoy, savouring a fifth
Olympic medal and
a fourth gold,
said: I
always
felt my
f i r s t
win in
Athens was the
most memorable. That was
my lifetimes ambition, I never
thought Id top that feeling
until tonight.
When I crossed the line and
heard the roar from the crowd
I didnt have to look at the
scoreboard; I knew wed won
the race. This is the most
memorable gold medal of my
whole career.
The 36-year-old Scot,
who could add a sixth
gold in the keirin, said he had
been inspired by the
success of Bradley Wiggins, whom he
superseded as Britains most success-
ful Olympian, in Wednesdays time
trial and last months Tour de France.
Hoy added: We watched the road
guys do such a fantastic job here and
all summer and you cant help but be
inspired by what they and Bradley
have achieved for the whole nation
and for the sport, so when you get
your chance to step up you want to do
the business.
The mens trio signalled their
intent by setting an Olympic record in
their first race and a world record
in their second, but blitzed it again
in the final, finishing in 42.600
seconds, with Princes William
and Harry among the 6,000-
strong crowd.
Their female counterparts looked
destined for gold too, but were
expelled from the final after a review
of their second race showed that
Pendleton had in fact overtaken
Varnish before permitted. Germany
won gold after China were similarly
relegated in the final, but Pendleton
can win a medal tomorrow if she
reaches the keirin final.
Sir Chris Hoy (left) has now won four Olympic gold medals; Jason Kenny (inset, centre) has two and Philip Hindes (inset, left) has one
24
SPORT
cityam.com/sport
BY FRANK DALLERES
Supporting
British athletes
since 1999
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British athletes for over 12 years.
Join us and Back the Team by searching Aviva Athletics on Facebook.
S
e
a
r
c
h

A
v
iv
a
A
thletics o
n

F
a
c
e
b
o
o
k
Sally Gunnell
gives her predictions
for Great Britains
Athletics team
TODAY AT THE
GAMES
Athletics
n Jessica Ennis begins her pursuit
of gold in the womens heptathlon
with 100m hurdles at 10:29, high
jump at 11:15, shot put at 19:00, and
200m at 20:45.
Rowing
n Anna Watkins and Katherine
Grainger are in the womens double
sculls final at 12:10. Other British
finalists include the mens
quadruple sculls at 11:30, George
Nash and William Satch in the mens
pair at 11:50, and Alan Campbell in
the mens single sculls at 12:30.
Cycling
n Victoria Pendleton will hope to
make amends for yesterdays
disappointment in the womens
keirin final at 18:38, while the mens
team pursuit should challenge in
the final at 17:59.
Swimming
n Rebecca Adlington is looking to
defend her 800m freestyle title at
19:45 but will face fierce
competition from Denmarks Lotte
Friis.
TEAM GB MEDAL TOTAL
TOP 3 MEDAL TABLE
5 6 4
China
United States
South Korea
18
18
7
11
9
2
5
10
5
Cyclists win one
of six more
British medals
Victoria Pendleton
had a cruel afternoon
G
E
T
T
Y
/
L
A
U
R
A

L
E
A
N
/
C
I
T
Y
A
M
AT THE VELODROME
Page 23
Gold medals A-Hoy

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