BUSINESS WITH PERSONALITY

CBI warns
Osborne off
pension raid
THE HEAD of the Confederation of
British Industry (CBI) has warned
George Osborne against another raid
on pensions, saying such a move
would be damaging to business.
The chancellor is understood to be
considering including a cut in tax
relief in the Autumn Statement on 5
December. But speaking to City A.M.
ahead of the business organisations
annual conference, director general
John Cridland said the chancellor
should not be tempted to reduce the
incentive for higher rate taxpayers.
Personal tax affects businesses
ability to deliver growth, he said.
The 50p personal tax rate was dam-
aging to British industry because it
was putting off the worlds best tal-
ent wanting to base themselves in
London. I am pretty clear that a hit
on pensions tax relief for higher earn-
ers would be seriously damaging.
Cridland also said the government
is weak at implementing policies
that could boost the economic recov-
ery. Despite this he backed David
Camerons demand for a real-terms
freeze in the EU budget and said he
was not overly concerned by job loss-
es in the City, providing London can
still maintain its status as the worlds
main financial hub.
However he warned that it was
inevitable that Britain would find
itself side-lined in a European Union
where key decisions are being taken
by the 17 Eurozone countries.
Weve got to fight, and fight hard,
for the single market of the 27, the
CBI boss said.
The Deepwater Horizon oil spill in April 2010 killed 11 workers
BP LAST night agreed to pay $4.5bn
(2.84bn) and plead guilty to charges of
misconduct to settle all claims relating
to the 2010 Deepwater Horizon disas-
ter, which caused the worst offshore
oil spill in US history.
The total settlement over the Gulf of
Mexico spill, which resolves all charges
with the Department of Justice (DoJ)
and with the Securities and Exchange
Commission (SEC), will be paid over
the next six years.
The April 2010 explosion at the
Deepwater Horizon rig offshore
Mexico killed 11 workers and spewed
around 4.9m barrels of oil into the sea
over three months.
As part of the resolution, BP will pay
$4bn over five years to settle all crimi-
nal claims. Within this settlement, the
oil major will also shoulder $1.256bn
in criminal fines, which is understood
to be the largest levy in US history.
It will also pay $525m over three
years to the SEC.
In addition to the penalties, BP has
agreed to operate under probation in
the US for the next five years.
BP said it would continue to defend
itself vigorously against the remain-
ing civil claims, and it would contest
allegations of gross negligence in the
civil cases.
These include claims under the
Clean Water Act for which BP could
pay damages to a maximum of
to rebuild confidence in the company,
Dudley said yesterday. We take seri-
ously not only our commitment to
safety and operational excellence but
also our communications with stake-
holders, including the public, the gov-
ernment and our investors.
BP has so far divested around $35bn
worth of assets, as part of a $38bn asset
sale programme planned to meet the
costs associated with the oil spill.
It has also spent more than $14bn on
clean-up costs and $9bn in further
claims, and has put aside $20bn in a
spill trust fund.
In a filing to the DoJ in September,
the US government accused BP and
Deepwater Horizon vessel owner
Transocean of gross negligence and
willful misconduct surrounding
their operations in the Gulf of
Mexico, which led to the explosion
of Deepwater Horizon.
BP shares closed down 0.08
per cent yesterday at
425.4p, with the
announcement
coming minutes
before UK mar-
kets closed.
www.cityam.com FREE
$21bn and other claims for Natural
Resources Damages.
On top of these claims, the oil giant
still faces miscellaneous private claims
pending in other federal and state
courts.
As part of yesterdays settlement, the
British oil major will plead guilty to 11
charges of misconduct or neglect of
ships officers relating to the loss of
workers lives at Macondo, two misde-
meanour counts and one felony relat-
ed to obstruction of Congress.
Chief executive Bob Dudley, who
replaced Tony Hayward as
chief executive in October
2010, maintained that
BP would only set-
tle on reason-
able terms and
said that it had
a c c e p t e d
responsibility
for its actions
over Macondo.
Since the
spill, we have
worked hard
FTSE 100 n5,677.75 -44.26 DOW n 12,542.38 -28.57 NASDAQn 2,836.94 -9.87 /$ 1.59unc / 1.25 unc /$ 1.27 unc
BY CATHY ADAMS
BP PAYS $4.5BN TO
SETTLE GULF SPILL
ISSUE 1,762 FRIDAY 16 NOVEMBER 2012
DONT KILL THE
LONDON MARKET
David Helliers Inside Track, Page 7
EXCLUSIVE
BY JAMES WATERSON
INTERVIEW: Page 20
L L
Certified Distribution
01/10/12 til 28/10/12 is 129,297
Tchenguiz win leaves fraud squad with 3m headache
THE UKS beleaguered fraud squad
yesterday paid the price for its
botched raid on the offices of
property magnates Robert and
Vincent Tchenguiz after a High
Court judge ordered it to cover
the costs of a judicial review.
The figure that the Serious
Fraud Office (SFO) is on the hook
BY MICHAEL BOW
for is understood to be between
2.75m and 3m, nearly a tenth of
the SFOs 36.8m budget.
Vincent Tchenguiz yesterday
said he would pursue more legal
action against the SFO after the
units highly publicised raid on his
business in March 2011.
This is only the first financial
manifestation of the folly of the
former director of the SFO, he
warned.
The SFO declined to comment.
The botched investigation,
which stemmed from the
brothers dealings with failed
Icelandic bank Kaupthing, was
the subject of a costly judicial
review earlier this year.
Tchenguiz has previously
warned the SFO that he is going
to sue them for upwards of
100m. Action is expected to
begin before the end of the year.
It will be a further blow to the
SFO, which had its budget
slashed 30 per cent last year and
is due to operate with a slim
budget of just 30m next year.
Sir John Thomas, who led the
judicial review, said the
underfunding may have played a
part in the muddled
investigation, led by former SFO
director Richard Alderman.
Tchenguiz personally attacked
the reckless actions of
Alderman yesterday and hit out
at his generous pension. His
brother, Robert, has already
indicated he will also sue the SFO
for damages.
In his judgment, Mr Justice
Silber said the conduct of the
former SFO director had taken
this case truly out of the norm.
Alderman could not be reached
last night.
TWILIGHT BITES
WE REVIEW THE FINAL FILM IN THE PHENOMENALLY SUCCESSFUL SERIES
See Page 25
BPs Bob Dudley
agreed to a $4.5bn
settlement
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
TWO former lovers of an ex-invest-
ment banker who made thousands
of pounds trading on insider tips he
provided to them were yesterday
found not guilty of insider dealing.
Jessica Mang, 30, and Christina
Weckwerth, 44, were being two-
timed by banker Thomas Ammann
when he told both to buy shares in a
company about to be taken over.
Ammann, who worked for
Japanese investment bank Mizuho
International, was advising on the
deal and had access to sensitive
inside price information.
When the deal went through,
Weckwerth made 1m (805,000)
and Mang, a chiropracter from
Surrey, made 29,000. Ammann
took half of the profits from each.
Yesterday, a jury accepted both
women did not know they were
trading on illegal information and
cleared them following a trial at
Southwark Crown Court.
The women will not have to pay
back the money.
Ammann had already pleaded
guilty to two counts of insider deal-
ing and two counts of encouraging
insider dealing and is facing jail.
Financial Services Authority
enforcement and financial crime
director Tracey McDermott said: As
an approved person Ammann knew
France Telecom open to EE listing
France Telecom has opened the door for a
flotation next year of EE, the UKs largest
mobile phone group by customer
numbers that it owns with Deutsche
Telekom. Gervais Pellissier, deputy chief
of France Telecom, said that there could
be some space at the end of next year
for a flotation, although he added the
parent companies would remain the
majority controlling shareholders. The
group has not appointed advisers for an
IPO, seen internally as more likely than a
private equity sale
Former Needham executive charged
A former executive of Needham & Co, the
Wall Street broker where convicted
insider trader Raj Rajaratnam built his
career, has been arrested by federal
agents for allegedly stealing $1m while at
the company.
Targa adds Bakken Shale Play deal
Targa Resources Partners, a midstream
energy company based in Houston, on
Thursday said it would acquire crude oil
and natural gas production and
distribution systems from Saddle Butte
Pipeline for $950m in cash.
Ponzi scheme seek damages
Trustees representing the victims of
Bernie Madoffs Ponzi scheme are seeking
to recoup millions of dollars from the
fraudsters family, including his sons
widow.
Pub groups bonus takes a hit
The chief executive of the debt-laden pub
group Punch Taverns is set to take a
157,000 bonus this year on top of a
salary increase of 6 per cent.
UK supplier rescues cab maker
A British car parts supplier has come the
rescue of Manganese Bronze, the black cab
maker that went bust after problems with
a Chinese steering box forced it to recall
400 taxis.
Triumph Motorcycles profits slow
Triumph Motorcycles Groups sales and
profits have hit the skids as the eurozone
crisis impacted its markets. The historic
motorcycle manufacturer had established
itself as an industrial success story.
Pain-Pill Probe Targets FedEx, UPS
The US is targeting America's two biggest
shipping companies, FedEx Inc. and
United Parcel Service Inc., as part of an
expanding crackdown against illegal sales
of prescription painkillers.
Gap Profit Rises 60 per cent
Gaps s fiscal third-quarter profit jumped
60 per cent as the retailer posted growing
same-store sales in North America and
stronger margins. Shares rose 3.9 per cent
after hours to $34.60.
ISRAEL last night called in reserve
troops after two rockets fired from
the Gaza Strip targeted Tel Aviv
amid escalating violence in the
region.
The attack by Palestinian
militants is the first on Israels
commercial capital in over two
decades, and defence minister
Ehud Barak insisted they would
pay a price for firing the missiles.
This escalation will exact a price
that the other side will have to
pay, he warned last night as he
approved the call-up of 30,000
reserve troops.
Tel Aviv had until recently been
thought to be out of missile range
for Gazas militant groups, and
yesterdays rockets marked the
first attempted attack on the
region since the 1991 Gulf War.
Eighteen Palestinians have been
killed in Israeli operations against
militants in Gaza since Wednesday
afternoon, when an Israeli air
strike killed the military leader of
Hamas, the militant group that
controls the territory, in his car in
Gaza City.
The Hamas Prime Minister in
Gaza, Ismail Haniyeh, condemned
what he called Israels ferocious
assault against the territory.
Egyptian Prime Minister Hisham
Qandil will travel to Gaza today in a
show of support for the people.
Israel drafts in
more troops as
violence builds
Thomas Ammann pleaded guilty to insider dealing and encouraging insider dealing
2
NEWS
BY KATIE HOPE
BY MICHAEL BOW
To contact the newsdesk email news@cityam.com
I
T is all too easy to despair about
everything that is wrong with
Britain. But one ray of light is our
slow-burning, yet increasingly
profound shift towards becoming a
more entrepreneurial society.
Britain counts 4.8m private firms,
99.9 per cent of which are small to
medium-sized businesses (SMEs). Most
are micro businesses. The rise of self-
employment is a very good thing: it is
gradually changing mindsets. The
people involved are far more likely to
believe and practice personal respon-
sibility; they understand, perhaps
more so than some employees in big
businesses, that work and reward
must be closely linked, that creating
economic value is difficult, that one
must always seek to please customers
and that endless rounds of red tape
and taxes are a nightmare.
So the rise of the small firm, of the
EDITORS
LETTER
ALLISTER HEATH
We need a new entrepreneurial revolution to rescue Britain
FRIDAY 16 NOVEMBER 2012
individual as an autonomous eco-
nomic agent, trading with the world
rather than being employed by it, is a
great cultural shift. But when it
comes to job-creation and economic
growth, there is one category of firm
that is even more heroic, and that is
the subset of entrepreneurs with the
desire, ability and good luck to make
it big. Nesta discovered in a seminal
study a few years back that there are
just 11,500 companies with more
than 10 staff which had grown at over
20 per cent per annum over three con-
secutive years. These gazelles made
up 6 per cent of SMEs with more than
10 employees and just 0.2 per cent of
private firms but created half the new
jobs created by existing companies in
2002-2008. Today, with giants such as
UBS and RBS shrinking and laying off
staff and a new generation of firms
beginning to emerge from the ruins
of the recession, gazelles are likely to
prove even more important, as an
excellent report from PwC, Duncan
Cheatles Prelude Group and the
Supper Club reminds us.
The paper merges anthropological-
style research with accounting rigour,
and highlights seven such gazelles as
case studies of a much larger van-
guard of successful high-growth start-
ups. None of these seven firms
including lifestyle management firm
Ten Group and occupational health
(national insurance, income tax, Vat)
amounts to 41 per cent of gross val-
ued added. The entrepreneurs fea-
tured generated a total tax
contribution of 104.2m over the last
five years. One of the firms featured
hands 30 per cent of its turnover to
HMRC; another collects 15,400 per
employee in PAYE tax. At a time when
debating tax avoidance has become a
national obsession, these figures
remind us that by creating jobs and
value added, entrepreneurial busi-
nesses always generate lots of tax
receipts, directly and indirectly.
There is only one way the UK will
ever get out of its debt crisis and stag-
nant growth: it needs more successful
entrepreneurs. Go for it, dear readers,
you know you want to do it.
consultancy Health Management
existed just a few years ago; today
they employ 1,219 people in total.
Most were started from home (where
60 per cent of small businesses are
created), one from a cow-shed and
another with little more than a
phone. Founders made big financial
sacrifices one sold everything he
had, another borrowed the money
from credit cards, increasingly a
source of start-up cash.
Everybody involved gains from suc-
cessful firms, including the taxman.
PwC calculates that 44 per cent of the
gross value added created over the
last five years across the seven
gazelles was distributed to employees.
The amount retained or distributed
to owners was just 15 per cent, while
the value distributed to government
in taxes borne (such as corporation
tax and business rates) and collected
he could not deal using the inside
information he had without arousing
suspicion but he thought that by get-
ting his girlfriends to trade instead
they could avoid being caught.
He was wrong, and he now faces
the consequences.
The FSA said it made no criticism of
Mizuho International.
A Mizuho spokesperson said: The
FSA has not expressed any concern
about Mizuho International or its sys-
tems and controls.
Ammann had been working on
Canons takeover of Dutch photocopi-
er firm Oce in late 2008 and early
2009 and dating both of the women
when he got them to snap up shares
in Oce.
Once the firm was bought both sold
their shares for profit.
The charges against Weckwerth
and Mang were serious and we con-
sidered that the evidence provided a
proper basis to put the case before a
jury for them to decide. Criminal
prosecutions are integral to the FSAs
long term strategy of delivering credi-
ble deterrence and combating city
wrongdoing, McDermott said.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
IN BRIEF
Starbucks in share buyback plan
nHigh street coffee chain Starbucks
yesterday said it could repurchase up
to 25m additional shares in a share
buyback to give value back to
shareholders. The Seattle based firm
said the plan was a reflection of its
strong current cash flow position. Its
board has approved the plan, which
takes its firepower for a buyback up to
37.1m shares after a recent approval
for 12.1m shares. The company had
760m shares outstanding as of July.
Amplats miners return to work
nThe South African strike that has
crippled Anglo American Platinum
since mid-September has come to an
end, as miners accepted a pay offer
and returned to work. Amplats has
offered miners a one-off payment of
ZAR4,500 (317) and a monthly salary
increase of ZAR400 on the condition
that the workers including the
12,000 dismissed from Rustenberg
are reinstated. The strike has lost
Amplats 191,359 ounces of platinum.
Dell sees profit plunge 47pc
nDell yesterday posted a 47 per cent
profit fall, hurt by lower PC sales and
weaker demand from large
corporations. However, it said it
expects revenue to grow as much as
five per cent in the current quarter.
Dell said revenue in its fiscal third
quarter fell 11 per cent to $13.7bn,
slightly lower than the average analyst
estimate of $13.9bn. The company
said the fourth quarter would remain
challenging".
Ex-lovers of insider trade
banker found not guilty
SOVEREIGN wealth fund Qatar
Holding has likely scuppered manage-
ment incentive arrangements for key
Xstrata staff, as it confirmed yesterday
that it would back the mega-merger
with Glencore but abstain from vot-
ing on controversial remuneration
plans.
Xstratas second-largest shareholder
after Glencore said yesterday it would
vote in favour of two key resolutions
at Tuesdays shareholder vote, which
will pave the way for the 56bn deal
to go ahead.
Under a complex voting structure
announced last month, Xstrata share-
holders will be able to vote in support
of the deal, but object to the retention
plan for key managers.
The Qatari sovereign wealth fund
said it would abstain from voting on
the management incentive arrange-
ments as it felt it inappropriate to
influence governance issues in the
UK. It means its voting share of
around 25 per cent will be removed
from the vote, which sources close to
Qatari investors
give blessing to
mega merger
BY CATHY ADAMS
the transaction say will make it diffi-
cult for the management incentive
plans to be green-lit. If the remunera-
tion plans are not voted through, it is
understood around 70 senior man-
agers at Xstrata could take flight.
Both Xstrata and Glencore have pre-
viously spoken out in support of the
management incentives. In the new
scheme document last month, direc-
tors of both commodity companies
said they believed that the retention of
key Xstrata senior management was
critical for the future success of the
combined group and to ensure the
transaction is completed as a merger
of equals.
Tuesdays shareholder vote which
comes 10 months after commodities
giant Glencore first approached
Xstrata will see Xstrata shareholders
vote on the deal, which was sweetened
in September to 3.05 new shares for
every Xstrata share. Investors Scottish
Widows Investment Partnership and
Standard Life Investments have so far
spoken out in favour of the deal,
although SLI has criticised the mage-
ment incentive arrangements.
Xstrata backs rights issue but
wants board changes at Lonmin
XSTRATA yesterday called for a
significant overhaul of Lonmins
board, management and strategy,
as it prepared to support its
forthcoming rights issue to shore
up its balance sheet in the wake of
industrial action in South Africa.
Xstrata chief executive Mick
Davis, in a letter to the chairman of
Lonmin, said that the Swiss miner
would support the proposed $817m
(515m) rights issue, but it
demanded that it must be backed
BY CATHY ADAMS by a suitable management team
and business plan.
Davis said Xstrata a 25 per cent
shareholder in Lonmin would not
passively support the rights issue
and demanded that the platinum
miner strengthen the
management team and overhaul
the current business plan so that a
realistic strategy to restore
shareholder value can be
developed.
Earlier this week, Lonmin said
the it recognised that governance
needed to be looked at, and was
committed to doing so after the
rights issue has been completed.
Xstrata boss Mick Davis wants Lonmin to overhaul its board and strategy
Lonmin PLC
15Nov 11 Nov 12Nov 13Nov 14Nov
440
460
480
500
p
490.40
15Nov
UK CONSUMER and healthcare
company Reckitt Benckiser made a
rival $1.4bn offer for Schiff
Nutrition International yesterday,
topping Bayer AGs agreed $1.2bn
deal to acquire the U.S. vitamin
maker.
Reckitt proposed to pay $42 for
each Schiff share, a 23.5 per cent
premium over the $34 per share
that Bayer, Germanys biggest
drugmaker, agreed to pay in late
Reckitt shoves aside Bayer as
bids $1.4bn for Schiff Nutrition
BY CITY A.M. REPORTER October.
Shares of Schiff Nutrition surged
nearly 30 per cent to $44 in after-
hours trading in the US, higher
than Reckitts rival offer and
indicating investors expect the
bidding to go higher.
Reckitt, which sells consumer
health, hygiene and home products,
said it will commence a tender offer
on Friday to buy the vitamin maker,
in an effort to enter the $30bn
global market for vitamins,
minerals and supplements.
FRIDAY 16 NOVEMBER 2012
3
NEWS
cityam.com
THE EUROZONE tumbled back into
an official recession in the third quar-
ter of the year, data from Brussels
confirmed yesterday, with bad
economic news weighing on markets.
The 17-country single currency area
saw GDP dip by 0.1 per cent in the
three months to September, its
Eurostat office said the second
straight quarter of contraction, fol-
lowing a 0.2 per cent fall in the three
months to June.
Compared to the third quarter of
2011, GDP was down 0.6 per cent in
the Eurozone, which continues to be
burdened by its debt crisis.
While the core economies of France
and Germany both managed 0.2 per
cent growth in third quarter, the
Netherlands surprised economists by
shrinking 1.1 per cent. Spain and Italy
were down by 0.3 per cent and 0.2 per
cent respectively, the data showed.
Separate figures from Eurostat
showed that inflation in the
Eurozone came in at 2.5 per cent last
Data confirms
Eurozone back
in a recession
BY JULIAN HARRIS
month, little changed from 2.6 per
cent in September.
We believe that the European
Central Bank (ECB) will take interest
rates down from 0.75 per cent to 0.5
per cent sooner rather than later,
commented Howard Archer of IHS
Global Insight. Indeed, an interest
rate cut in December is very possible.
The FTSEurofirst 300 index closed
down 0.9 per cent.
European Union officials are exam-
ining legal options to side-step a possi-
ble British veto on the blocs long-term
budget, in a bid to weaken David
Camerons trump card in the talks,
diplomats said.
The UK is one of several net contribu-
tors demanding deep reductions to EU
spending plans. Officials say Cameron
is the most likely to make good on a
threat to veto a deal at a summit of EU
leaders starting next Thursday.
The British are the only ones who
consider it potentially acceptable to
pull everything down around them at
the summit, said one EU diplomat.
Draghi admits low rates have
not helped weakest economies
LOW INTEREST rates have not been
able to help boost Europes battered
economies because the financial
system is broken, European Central
Bank (ECB) boss Mario Draghi
acknowledged yesterday.
The top policymaker said that the
ultra-loose monetary policy the
benchmark refinancing rate stands
at 0.75 per cent has not been
getting through to firms and
households.
Five years after the onset of the
BY TIM WALLACE financial crisis, he has now had to
resort to creative new measures to
try to get the benefit of low
rates through to the worst-
hit economies.
In some countries, the
rate cuts were fully passed
on. In others, the rates
charged on loans declined
only little. And in
others, some rates
have actually
risen, Draghi
told an Italian
university.
The outright monetary
transactions (OMTs) have been
designed to restore the transmission
of monetary policy.
Under the scheme the ECB will
buy Spanish government bonds,
as long as the government agrees
to tough conditions.
But he denied buying the debt
counted as financing the state a
key worry for more fiscally
prudent Germany.
Mario Draghi has offered to
buy up Spanish state debt
UK RETAIL sales fell in October as
shoppers bought less food and
clothing, puncturing a consumer
spending revival that policymakers
hoped would kick-start the
economy heading into 2013.
Sales volumes fell 0.8 per cent on
the month for an annual rise of
just 0.6 per cent, the Office for
National Statistics said yesterday.
Both numbers were the weakest
since April and much worse than
forecast, and sent sterling lower
Fears of fourth quarter slump in
UK sparked by retail sales dip
BY CITY A.M. REPORTER
against the dollar and the euro
during the days trading.
Food shops reported the biggest
monthly decline in sales since
November 2011.
I think a contraction in GDP is
on the cards for the fourth
quarter, warned Rob Wood of
Berenberg Bank.
Britons have suffered the biggest
drop in disposable incomes for
more than 30 years as soaring
prices and higher taxes have eaten
away at barely-rising pay packets.
THE FORUM: Page 22
L L
FRIDAY 16 NOVEMBER 2012
4
NEWS
cityam.com



Eurozone -0.1%
EU27 +0.1%
THE EUROZONE PLUNGED BACK INTO
RECESSION IN THE THIRD QUARTER
* Q2 2012 data
** Average quarterly growth from Q3 2011 to Q3 2012
Bulgaria +0.1%
**Greece -1.8%
Cyprus -0.3%
Spain -0.3%
Italy -0.2%
*Slovenia -1%
Romania +0.5%
Slovakia +0.6%
Estonia +1.7%
Finland +0.3%
*Sweden +0.7%
UK +1%
*Denmark -0.4%
Austria -0.1%
Netherlands -1.1%
Portugal -0.8%
Lativa +1.7%
Lithuania +1.3%
Slovaki kia +0 6%
*Luxembourg +0.4%
%%
Czech Republic -0.3%
R
Hungary -0.2%
bourg +0 4% Czech
Germany +0.2%
% 3% % Republic 0 3
*Poland +0.4%
France +0.2%
*Malta +1.3%
Ireland 0%
Belgium 0%
FAILURES at the Treasury meant the
state lost billions of pounds in the
Northern Rock bailout while simul-
taneously failing to boost lending as
planned, despite running the insti-
tution, according to a damning
report published today by MPs.
The monumental failures by the
department also mean the govern-
ment is likely to lose money on the
far larger rescues of RBS and Lloyds,
the Public Accounts Committee
(PAC) found.
Northern Rock was nationalised in
2008 after a run on the retail bank
in late 2007.
But the PAC found the govern-
ment and its agents were both slow
to bail the bank out and poor at run-
ning the institution once they
owned it.
The decision to split the bank was
intended to generate lending, but in
public ownership the new bank lent
only 9.1bn against a target of
15bn, the report found.
UKFI took over management of
the shares in 2010 but Northern
Rock plc still lost money in 2011,
and its strategy should have been
Treasury failure
lost billions on
bank bailout
BY TIM WALLACE
challenged sooner, it said.
The lack of competition to buy the
bank is also a worry for MPs.
Virgin Money bought the institu-
tion for 931m, leaving the Treasury
sitting on a direct loss of 469m and
an economic loss of an estimated
2bn as the funds were put at risk
when they could have been used
elsewhere.
Virgin was one of only two bidders,
and the PAC believes the govern-
ment was lucky to have even that
level of interest indicating a much
bigger loss will be made on the
66bn bailouts of RBS and Lloyds.
To guard against such huge losses
in future, the PAC wants the
Treasury to keep on board the staff
with knowledge of the bank rescues
and sales in case they are needed
again.
It is vital that the final decisions
on the wholly owned banks are
made with value to the taxpayer tak-
ing precedence over speed of exit,
advised committee chairperson
Margaret Hodge.
But the Treasury was praised for
ensuring its interest as a shareholder
now comes before other policy objec-
tives for the bailed out banks.
FSA ends CPP misselling probe
with a record 10.5m penalty
CPP has been slapped with a joint-
record 10.5m fine for misselling
card protection insurance,
following an FSA probe that lasted
more than a year and wiped 90 per
cent off the firms market value.
The company has been left with a
bill for 33.4m, including redress
for customers and costs associated
with the investigation, but said the
settlement is an important
milestone that allows it to focus
on sorting out its debts and
rebuilding its reputation.
BY MARION DAKERS
As part of its settlement, CPP has
pledged to stop borrowing money
against its insurance or credit card
arms. This puts more pressure on
the firm to fix its finances by
March, when its debts mature.
US firm Affinion has made a
preliminary takeover approach for
CPP, but declined to comment
yesterday on whether the fine
would affect its decision to bid.
The FSA said that from 2005 to
2011, CPP sold or renewed 23.1m
insurance policies but was overly
persistent with customers and
overstated the benefits involved.
CPPs partners, which include
RBS, Santander and HSBC, are in
talks about how best to compensate
customers who were missold cover.
Several banks introduced
customers to CPP by adding stickers
to new credit and debit cards.
An RBS spokesperson said the
bank will likely end its contract to
provide mobile phone cover with
CPP, and pledged to co-operate
with anything [the FSA] asks of us.
Peel Hunt said the loss of RBS was
worrying as it is the business
partner Affinion would value most.
CHINAS Communist Party
installed Xi Jinping as its new
general secretary yesterday, putting
a politician known as a cautious
reformer in charge of the worlds
most populous country.
Xi, 59, and six other men were
added to the partys top committee
at a ceremony in Beijing, as the
party completed its once-a-decade
reshuffle.
Xi, who has replaced Hu Jintao in
Chinas top job, is the son of
reformist former vice premier and
parliament vice-chairman Xi
Zhongxun, making him a
princeling, one of the privileged
sons and daughters of Chinas
incumbent or former leaders.
Since the founding of the CPC,
we have united and led the people
Xi Jinping takes his place at the
top of Chinas Communist Party
BY MARION DAKERS to advance and struggle
tenaciously, transforming the
impoverished and backward Old
China into the New China that has
become prosperous and strong
gradually, he told reporters.
He also spoke out against
corruption within the party,
pledging to root out those who
abuse their position.
According to official news
agency Xinhua, the new leaders
motto is do it now. However,
some onlookers are sceptical of
seeing meaningful change under
Xis watch.
Were not going to see any
political reform because too many
people in the system see it as a
slippery slope to extinction, said
David Shambaugh, director of the
China policy programme at the
George Washington University.
BOTTOM LINE: Page 19
L L
FRIDAY 16 NOVEMBER 2012
5
NEWS
cityam.com
The new leader of the Communist Party has spoken out against corruption
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AMERICAN regulators have banned JP Morgan
from trading in the US electricity market for six
months, after finding that the bank made factual
misrepresentations and omissions during a probe
into market fixing.
JP Morgan Ventures Energy is not allowed to sell
power at market rates for six months from 1 April
2013, the Federal Energy Regulatory Commission
(FERC) said in a statement.
The punishment relates to a probe into the
Californian market in 2011 and JP Morgans
unsuccessful appeal against a $486,000 fine. FERC
said it imposed the suspension as a result of the
egregious nature of JP Morgans repeated
submission of false and misleading statements.
JP Morgan remains free to trade other energy-
related products. The bank apologised to FERC in
October, claiming it had inadvertently not
provided all the information. The bank said
yesterday the removal of its trading powers is
unsupported by FERCs own regulations.
JP Morgan unit is
suspended from the
US electricity market
BY MARION DAKERS
CHALLENGER airports hit back at Heathrows bid
to remain Britains major hub airport yesterday,
arguing any plan for extra air capacity needs to
look to the future and not to Heathrows
monopoly past.
Gatwick, owned by Global Infrastructure
Partners since 2009, said adding a second runway
to its airport would be better for the environment
and more practical for passengers than an
enlarged Heathrow.
And Birmingham Airport chief executive Paul
Kehoe said Heathrows report showed the need for
a network of airports across the country.
The comments follow a piece of research
commissioned by Heathrow that claimed the UK
economy is losing 14bn a year thanks to less than
optimal air capacity.
Interest groups are setting out their stalls as the
Davies Commission examines the options for
improving air links on behalf of the coalition.
Rivals hit back at
Heathrows bid to
remain top UK hub
BY MARION DAKERS
MOORE Group, the fund management and
administration firm, has been sold to a joint
venture between IFG Trust and Corporate Group.
Jersey based Moore, which has around $17bn
(10.7bn) under its wing including almost $5bn of
private equity fund clients, has been bought to
give the venture more scope in Asia.
The venture between IFG Trust and Corporate
Group, which is set to rebrand as a separate
entity shortly, was set up after a management
buyout backed by cash provided by AnaCap
Financial Partners
Ian Moore, who founded the firm in 1996, said:
This is a wonderful milestone in our history.
Culturally, its a perfect fit.
IFG Trust and Corporate Group is an
international player in the industry and I am very
excited at the prospect of working together and
becoming part of such an innovative multi-
jurisdictional business.
Moore was advised by Cavendish Corporate
Finance.
Tie up between IFG
and Corporate to bolt
on Moore Group
BY MICHAEL BOW
6
NEWS
BUSINESS secretary Vince Cable said
yesterday he expects George
Osborne to use his upcoming
Autumn Statement to address the
controversial issue of tax avoidance,
after a string of companies were
accused of diverting tax revenues
away from the UK.
Speaking to Sky News, Cable said
moves to prevent systematic abuse
could be announced as early as next
month, vowing that the government
would get to grips with the
problem. He also suggested firms
tax avoidance schemes involved
playing one government off against
another.
Earlier this week, executives from
Starbucks, Google and Amazon
faced MPs to answer questions over
their UK tax payments. Starbucks
finance chief Troy Alstead denied
the coffee chain was shifting profits
out of the UK and blamed high rents
for contributing to the company
reporting losses for the past 13
years.
Senior representatives from
Google and Amazon also defended
their companies actions.
Cable promises
tax crackdown
from chancellor
BY ELIZABETH FOURNIER
TELECOMS firm Megafon re-started
the flood of Russian firms looking to
list in the City yesterday, announcing
the price on its joint London-Moscow
listing as its delayed initial public
offering (IPO) comes to market.
The offering was held up by the
groups acquisition of handset maker
Euroset and by the third quarter
financial results.
Speculation over corporate gover-
nance standards arose last month
when Goldman Sachs dropped off the
list of advisers. But the group now
believes it has reassured banks and
investors.
Megafon, largely owned by Russias
richest man Alisher Usmanov, hopes
to raise a minimum of $1.7bn
(1.07bn) in the IPO, but strong
demand means the end figure will be
higher.
Megafon set to
list in London
by December
BY TIM WALLACE
Global roadshows started yesterday
with the bookrunners drumming up
support for the shares and, in London,
global depository receipts (GDR).
The indicative price range has been
set at $20 to $25 per share and GDR.
Trading is then expected to start on
28 November.
The total size of the London part of
the listing will depend on investor
demand but interest has been very
keen so far, said a banking source
familiar with the deal.
A swathe of Russian firms have
expressed interest in London in recent
months, with Sberbanks $5.2bn joint
listing raising hopes that the markets
could be coming to life at last.
Those expectations were dashed
when weak demand saw
Promsvyazbank pull its offering and
Megafons was delayed. But hopes are
once again high that this offering will
revitalise the market.
INVESTMENT banking giant Morgan Stanley
and expanding Russian force Sberbank are
joint global co-ordinators ontheMegafonini-
tial public offering (IPO). The deal, which
includes share listings in Moscow and global
depository receipts in London, is expected to
raise well above its minimum target of
$1.691bn(1.07bn).
Both have recent experience of similar suc-
cessful listings Sberbank itself has listed in
London and Moscow in recent months, and
Morgan Stanley was one of the bookrunners
on that deal. The pair will be joined by Citi,
Credit SuisseandVTBCapital as joint
bookrunners. Thevebanks arenot expected
to have a tough time drumming up support,
with investors thought to be very keen to take
a chunk of the Russian telecoms business.
But Goldman Sachs is not on the ticket
despite initially being on board its exit rais-
ing questions about the state of the listing
rm.
ADVISERS MEGAFONS LONDON LISTING
MORGAN STANLEY SBERBANK
INSIDE
TRACK
DAVID HELLIER
Megafon owner Alisher Usmanov also holds a 29.9 per cent stake in Arsenal FC
FRIDAY 16 NOVEMBER 2012
7
NEWS
cityam.com
A
fter several nerve-wracking
days delay, Alisher Usmanovs
telecoms group Megafon
finally launched its London IPO
yesterday, giving the moribund
market a timely boost ahead of the
naturally quiet festive season.
Megafons flotation, which is
expected to raise more than 1.5bn
for the selling shareholders, will run
just slightly ahead of the London and
Almaty float of another group from
central Asia, Kcell, Kazakhstans dom-
inant mobile telecoms company.
That two such large industrial
groups have chosen London as the
place to list their shares is seen by
some as a boost to a UK new issues
market that has struggled most of
the year to get off the ground.
Up until now there have been only
four main listings in London, the
most prominent of which was Direct
Line, the insurance group.
So, two such large groups, floating
almost simultaneously, is a big deal
and a welcome boost to the Citys
deal-starved practitioners.
However, there are those who are
concerned by the growing number of
companies coming to list in London
from Russia or the former Soviet
Union states, arguing that they bring
with them poor standards of corpo-
rate governance.
Britains door is too open to foreign
tycoons, screamed a headline in a UK
newspaper earlier this week, above an
article that argued that the door
should be selectively closed to many
foreign-based companies wanting to
list here.
Those who hold this view point to
the corporate governance failures at a
company such as ENRC, whose experi-
ence as a listed company in London
has been anything but incident free.
When it comes to the experiences of
UK investors in new issues, though,
foreign-owned companies arent the
only ones to have given fully rational
fund managers reasons to jump off
the proverbial cliff.
Those who bought shares at the
time of the flotations of Ocado, the
internet grocer, Promethean World,
the whiteboard maker, and Betfair,
the internet gaming group, for exam-
ple, all have reason to rue the new
issues market without having gone
anywhere near a company owned or
controlled by a foreign tycoon.
I spoke to one UK fund manager last
week who hasnt participated in an
IPO for more than two years. He said
he wouldnt return to the market
until it was clear that issues were
being priced more realistically.
In the case of Megafon and Kcell,
both companies are issuing Global
Depositary Receipts (GDRs), rather
than shares, which means that they
will not become part of the FTSE
indices that are routinely followed by
the UKs institutional tracker funds.
This means the investment will be
aimed at professional investors inter-
ested in emerging markets stocks.
Usmanov isnt for everybody, said a
banker yesterday. But if you think
hes worth backing you will go for
this issue.
Goldman Sachs raised the ante in
the corporate governance stakes at
Megafon by dropping out of the syn-
dicate, hinting it wasnt comfortable
with the structure of the umbrella
group that will own Usmanovs inter-
ests in it and other assets.
That structure, detailed for the first
time yesterday, shows that Usmanov
will hold 100 per cent of the voting
rights despite two partners having a
40 per cent economic interest
between them. This seems to have sat-
isfied Morgan Stanley and others.
Back Usmanov or keep your dis-
tance. But surely theres no sense in
stopping him listing here.
david.hellier@cityam.com
Dont scare away signs of life in City flotations market
SHARES in insurance buyout vehicle
Resolution slumped yesterday after
the firm said it will have to pay an
extra 35m as part of its purchase of
AXAs UK life insurance business.
Tim Tookey, chief financial officer,
told City A.M.: The AXA charge [relates
to] some of the costs in the final stage
of separation of IT systems. We have
bought part of something and the
cost of separating the very intricate IT
systems is proving more costly than
had first been envisaged.
Resolution was set up to combine
underperforming life insurers into a
more profitable whole. However it
now seems that the cost of integrat-
ing the companies will be higher than
originally expected and this summer
the company said it will no longer
seek to make new acquisitions.
Chief executive designate Andy
Briggs told City A.M. that his firm will
instead attempt to increase profits
from existing businesses: We will be
slimming down to focus on attractive
Resolution hit
by charges on
AXA takeover
BY JAMES WATERSON
growth markets. Were focussed on
building a robust low-risk capital busi-
ness, driving cash generation and driv-
ing profitable new business growth.
In addition to the costs relating to
AXAs IT system, the firm also said it
would have to spend an additional
30m to change the terms of its agree-
ment with outsourcer Diligenta.
New business profit for the nine
months to 30 September rose 45 per
cent to 138m, mainly thanks to
growth at its UK division. The headline
figure would have been even higher
without a 25 per cent slump in inter-
national sales.
Zurich misses profit target due
to troubled German business
ZURICH Insurance shares plunged
nearly four per cent to a three
month low yesterday after missing
third quarter profit targets.
The group, which does car and
home insurance, saw net profit
fall 62 per cent to $477m (300m)
compared to last year. For the nine
months up until 30 September
this year net profit was $2.7bn, a
16 per cent fall compared to last
years profit as a result of poor
performance from its German
insurance division.
BY MICHAEL BOW
Shares fell 3.88 per cent to close
at SFr223 yesterday as traders
scurried to sell the stock.
Chief executive Martin Senn
said: While the third quarter was
adversely affected by the previously
reported adjustment in the
German General Insurance
business, we continue to see the
benefit of our strong focus on
pricing discipline and portfolio
management.
Overall gross written premiums,
policy fees and insurance deposits
increased by nine per cent versus
the same period a year ago.
We are particularly pleased
with the robust performance in
some mature markets, notably the
US, Senn said.
The insurance groups
investment performance also took
a battering dropping 20 per cent
compared to a year ago.
The firm delivered net
investment increases on all the
groups investments of $6.1bn,
down from $7.6bn in 2011.
It said currency movements,
lower reinvestments and lower
capital gains on investments all
contributed to the fall.
Resolution Ltd
15Nov 11 Nov 12Nov 13Nov 14Nov
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228
232
238
236
234
240
242 p 229.89
15Nov
The recovery process is far from assured and shareholders may have
to endure further cost hikes. This, combined with no news on the corporate
restructuring, leads us to view the outlook as cloudy and we retain
our sell recommendation.
ANALYST VIEWS

[The results] are further evidence of the companys focus on value over
volume, with disappointing new business sales more than offset by continued
progress in increasing the value of new business. With a very attractive
valuation, we see a total return of 26 per cent over the next 12 months.

The UK business is performing well and is well placed to benet from

the combination of favourable regulation and asset movements. [The new inter-
national strategy means] we have greater condence that the dividend
targets will be met. The valuation looks attractive on embedded value.

WILL RESOLUTIONS
TURNAROUND PLAN BE
SUCCESSFUL? Interviews by James Waterson
KEVIN RYAN INVESTEC

ALAN DEVLIN BARCLAYS

GORDON AITKEN RBC CAPITAL MARKETS

FRIDAY 16 NOVEMBER 2012
10
NEWS
cityam.com
LLOYDS of London insurer Amlin
yesterday said it is well placed to
absorb claims from Hurricane
Sandy thanks to a strong
performance in the first nine
months of the year.
Total insured losses from
the storm, which devastated
the east coast of the US last
month, have been
estimated at around
$20bn. Amlin, the second-
biggest Lloyds insurer by
market value, said
its share of
the bill is
unclear but
it is
Amlin shrugs off Sandy and
unveils increase in premiums
BY JAMES WATERSON
confident that it can cope with
any payout.
The firm also announced that
revenues increased 11 per cent to
2.3bn for the first ten months of
2012, assisted by strong increases
in catastrophe premiums
following last years New Zealand
earthquake and Japanese
tsunami.
Income from the firms
nascent reinsurance business
also showed healthy growth,
with gross written premiums
increasing 69 per cent to
166.3m for the period in
question.
Charles Phillips has led
Amlin since 1999
IN BRIEF
Savills on track for higher profits
nProperty agent Savills said yesterday
it was on track to deliver annual profits
ahead of forecasts despite a slowdown
in transaction volumes in many of its
markets. In an interim statement for 1
July to date, Savills said prime London
residential and Asia Pacific continued to
trade well while its commercial business
increased market share. Its fund
management and US arms also
performed in line with expectations.
Derwent makes 23m acquisition
nDerwent London has snapped up 9
and 16 Prescot Street in Whitechapel
for 23m. The buildings, which total
111,000 square feet, are let until 2015
to the Cooperative Bank and an Indian
restaurant. Reporting its third quarter
figures, the developer said it expects a
four to five per cent growth in rental
values over 2012, following rising
rents and low vacancy levels. Since 1
July 2012 the group has let 77,500 sq
ft at an annual rent of 3.1m.
JLT signs largest letting of the year
nJardine Lloyd Thompson (JLT) is to
move its headquarters to The St
Botolph Building in the City, sealing
Londons largest letting deal this year.
The insurer said yesterday it has signed
a 25 year lease with Minerva - owned
by Delancey and AREA Property
Partners for 287,000 square feet, at a
rent of about 45 per sq ft. The deal
will unite JLTs 1,800 UK staff, located
in Crutched Friars, America Square and
Fenchurch Street, under one roof.
ASDA, the UKs second largest super-
market, reported a slowdown in third
quarter like-for-like sales growth yes-
terday and struck a sober note in its
outlook on the Christmas quarter.
Like-for-like sales rose 0.3 per cent in
the three months to 30 September,
down from 0.7 per cent in the previ-
ous quarter and 2.2 per cent in the
first quarter of the year.
But the rise means it has outper-
formed rival grocers Tesco and
Morrisons in the same period.
These are solid results in a tough
market, said chief executive Andy
Clarke, adding that Asda had
increased its market share by 0.1 per
cent to 17.5 per cent over the year.
Clarke said while he was surprised
at the UKs economic improvement in
the third quarter, it did not translate
in a big way into customers pockets.
He said that a recent survey of its
customers showed they were on aver-
age 13 per week worse off than two
years ago. He also warned that
Asda sales slow
as it forecasts a
bleak Christmas
BY KASMIRA JEFFORD
Christmas would be tough for con-
sumers and joined calls for chancellor
George Osborne to scrap a planned
hike in fuel duty.
Clarke refused to comment on criti-
cism this week of US multinationals
paying low corporate tax. He said Asda
paid a significant amount of tax
which amounted to 163m last year
and 886m over the last five years.
US parent company Wal-Mart Stores
posted disappointing quarterly sales as
lower prices for some food and elec-
tronics reduced revenues, with a like-
for-like rise in sales of 1.5 per cent
coming in below expectations.
Ted Baker goes up a size as its
quarterly revenues surge 22pc
TED BAKER yesterday reported that
sales have jumped by more than a
fifth since the same time last year,
as it manages to buck the high
street gloom and continues with its
overseas expansion.
The British fashion brand said
revenues rose 22.1 per cent in the
13 weeks to 10 November compared
with the same period last year.
Retail sales were up 24.6 per cent
BY KASMIRA JEFFORD
while wholesale sales rose 14.2 per
cent in the period, driven by a good
performance in both UK and US
wholesale operations.
The group opened 269,942 square
feet of space in the period, up by
13.7 per cent from last year, with
the launch of its first store in
Beijing in China and its first
concessions in Germany. It plans to
open its first store in Canada in the
coming months.
HENNES & Mauritz (H&M), the
Swedish fashion giant, yesterday
reported a surprise drop in
October sales as it suffered from
weak consumer demand in crisis-
hit Europe.
The worlds second largest
fashion retailer said like-for-like
sales fell by five per cent in
October, sending shares down
almost three per cent yesterday.
Total sales, which include new
store openings, rose four per cent,
less than the nine per cent forecast
Like-for-likes at H&M in October
hit by weak European demand
BY CITY A.M. REPORTER
by analysts. H&Ms total sales were
the weakest since April, when they
were down one per cent. In
September, they grew 15 per cent.
The group, which has 2,715
stores worldwide, has most of its
business in Europe, where a
sovereign debt crisis and austerity
measures have dampened demand.
Thousands of shoppers queued
outside of H&Ms Regent Street
store from the early hours of
yesterday morning to buy the
groups new designer collaboration
with French brand Maison Martin
Margiella.
FRIDAY 16 NOVEMBER 2012
11
NEWS
cityam.com
LACOSTE has been snapped up by Swiss family-owned group Maus Freres in a deal which
valued the French brand at 1bn (0.8bn), Maus Freres said yesterday. Founded in 1933 by
French tennis champion Rene Lacoste, his descendants have decided to sell their remaining
stake to the Swiss retailer, which already own 35 per cent, after a feud over management.
SWISS FIRM MAUS FRERES SNAPS UP LACOSTE
Wal-Mart Stores Inc
15Nov 11 Nov 12Nov 13Nov 14Nov
73
72
71
70
69
68
$ 68.59
15Nov
Ted Baker PLC
15Nov 11 Nov 12Nov 13Nov 14Nov
1,000
990
980
970
960
p
970.00
15Nov
making Christmas more comfortable
IN BRIEF
E&Y gets Farepak audit complaint
nErnst & Young (E&Y) faces
disciplinary action over its audit of the
parent company of Farepak, the
savings firm that collapsed shortly
before Christmas 2006. The Financial
Reporting Council said it has filed a
disciplinary formal complaint against
the big four auditor and one of its
former staff for signing off Farepaks
2005 accounts and declaring that the
firm was able to continue as a going
concern. The complaint will be heard
by a tribunal next year.
KPN sells German mobile towers
nDutch telecoms group KPN,
stepping up its battle to keep debt
under control, yesterday agreed to sell
some of its German mobile towers for
393m. The deal with US group
American Tower, which will lead to a
book gain of 100m, comes on top of
a decision in late October to sell its
Dutch mobile phone towers for a book
profit of 66m. UBS acted as sole
financial adviser on the deal, the
largest mobile tower transaction in the
EMEA region to date.
P&G outlines further job cuts
nProcter & Gamble (P&G) plans to
trim more non-manufacturing jobs
through 2016, on top of cutting 10 per
cent of that workforce by the end of
June, it said yesterday. P&G also said it
may increase stock repurchases to
$6bn from $4bn, but said such
additional buybacks should not have a
big impact on earnings per share. P&G
maintained its forecasts for sales and
earnings for the current quarter.
INVESTECS profits fell in the first
half of the year, with the poor state
of the world economy hitting trad-
ing, lending and investment
incomes, the bank and asset man-
agers results showed yesterday.
Profits dropped 5.8 per cent, com-
ing in at 168.5m in the six-month
period, down from 178.9m in the
same period of last year.
Interest income dropped 4.74 per
cent to 1.13bn, while investment
income plunged 10.88 per cent to
75.8m.
But the joint UK-South African
listed firm recorded a 19.3 per cent
drop in loan impairments from
143.3m to 115.6m and a 5.3 per
cent rise in fee and commission
income.
Given the poor economic environ-
ment the group is looking to focus
more on its profitable asset man-
agement business, as part of a
strategic shift into low-capital
intensive activities.
Analysts noted the bank has
excess liquidity, which could be a
Investecs asset
income eases
profit pressure
BY TIM WALLACE
drag in future.
The problem with liquidity is you
are damned if you do and damned if
you dont, managing director
Bernard Kantor told City A.M.
Now we probably have too much.
Our book is entirely funded by retail
deposits, not wholesale, and we will
cut back on some of the rates we pay
our 5bn surplus liquidity costs
60m to 80m a year to run.
Return on equity rose from 8.1 per
cent to 10.2 per cent, and Kantor
hopes that a stabilisation of market
conditions will allow Investec to
raise that to above 12 per cent in the
next year to 18 months.
Investec PLC
15Nov 11 Nov 12Nov 13Nov 14Nov
390
385
380
375
370
365
360
p
373.90
15Nov
LISTED alternative investor 3i,
which invests in businesses and
infrastructure, yesterday said it
remained on track to restructure
the firm after cutting 104 staff and
shifting its focus onto its debt
management business.
The company, which invests in
private equity infrastructure and
debt funds, said it wanted to
reduce staff numbers by a third by
March 2013.
Most of the job losses have come
from its offices in Europe and Asia.
An office in Birmingham is due to
be sold at the end of January.
3i restructure gathers pace as
firm trims overseas office staff
BY MICHAEL BOW The firm also said it would grow
its debt management business
organically, but did not rule out
future bolt-on acquisitions.
Were taking out hierarchies. In
the past the firm has had a bit of a
bureaucratic culture, chief
executive Simon Borrows said.
Were making very good progress.
Were reducing debt and the
quieter markets are helpful.
Pay packets at the firm, which
are around 60 per cent of total non-
operating costs, are also under
review. Plans will be put to
shareholders this month to make
sure pay reflects the firms success.
BOTTOM LINE: Page 19
L L
FRIDAY 16 NOVEMBER 2012
13
NEWS
cityam.com
Simon Borrows, the boss of 3i, announced plans to restructure the business in June
THE UKS fourth-largest mobile opera-
tor, Three, signed up a million extra
customers in the last year, putting a
dent in its rivals numbers.
Announcing the figures yesterday,
Three outlined a plan to bolster its
current network rather than focus on
the 4G technology that others are pur-
suing. This raises the possibility that a
January auction of
4G airwaves
may not
raise as
much as
anticipat-
ed for the
Treasury.
R i v a l
mobile oper-
ators EE,
Vodafone and
O2 are expect-
ed to aggres-
sively bid for
chunks of
the 4G-
enabled air-
w a v e s ,
w h i c h
Three says no
thanks to 4G as
customers rise
BY JAMES TITCOMB Ofcom says will offer mobile internet
speeds up to seven times as fast cur-
rent 3G networks.
O2 and Vodafone are keen to catch
up with EE which launched a 4G net-
work last month after winning special
approval to use its current network for
the service while EE needs extra spec-
trum to improve its current network.
However, Three chief executive David
Dyson said yesterday that rather than
focusing on 4G, it would upgrade its
3G network to the latest technology,
which Dyson claims will allow speeds
90 per cent as fast as 4G.
Although he would not comment on
Januarys auction of 4G airwaves,
expected to raise up to 4bn for the
Treasury, Dysons comments suggest
that Three will not bid aggressively for
spectrum. This could push down the
price Ofcom will be able to sell it for.
I dont think customers really care
how many Gs there are, Dyson said.
I dont think 4G is a mass market
proposition.
Three, owned by Chinese conglomer-
ate Hutchison Whampoa, has grown
its customer base. It now has 8.8m
users, and has seen service revenue up
12.6 per cent year-on-year.
Euromoney warns of tough trading
n Euromoney Institutional Investor, the
financial information and events group
owned mainly by Daily Mail & General
Trust, yesterday reported a 35 per cent
leap in profits in the year to October,
and a nine per cent rise in turnover, as it
weathered difficult market conditions.
However, the company also warned of
tougher trading in recent months, and
said those trends were likely to continue
into next year.
Citigate blames City for low sales
n Revenues at financial PR firm Citigate
have fallen 17 per cent year-on-year,
parent company Huntsworth announced
yesterday, blaming a downturn in the
City. Huntsworth, which also owns PR
firms Red and Grayling, said total
revenue fell 3.6 per cent. [Citigate]
was held back in London by the
continuing lack of activity in the UK
financial markets, the firm said.
Invensys misses forecasts but rises
n Shares in engineering technology
company Invensys rose yesterday even
as the company missed City forecasts.
The company, which saw shares
plummet in the summer as it turned
down a bid from US firm Emerson
Electric, said it was confident of an
upturn in orders. Invensys, which builds
the technology used in rail signalling
systems, said sales in the first half of the
financial year had been 1.2bn.
George Entwistle stepped down as director general on Saturday
Three chief executive David Dyson said the operator
would focus on improving its 3G service speeds
THE BBC Trust met yesterday to
put together a plan to appoint the
next director general following
George Entwistles weekend
departure, with the most likely
solution appearing to be a direct
approach for a former candidate.
They decided that there was a
pressing need to make an
appointment as soon as possible,
one source close to the Trust said.
Ofcom chief Ed Richards, who
was linked to the job before
Entwistle was appointed, is the
bookmakers favourite.
In other developments,
BBC Trust bashes together plan
for director general succession
BY JAMES TITCOMB communications regulator Ofcom
said it would investigate BBCs
Newsnight programme and ITVs
This Morning over the child abuse
allegations scandals that forced
Entwistle to step down.
Former Tory treasurer Lord
McAlpine, who was wrongly
implicated in Newsnight
allegations, said last night he had
reached a settlement with the BBC,
and would receive 185 000, plus
costs. We will now be continuing
to seek settlements from other
organisations that have published
defamatory remarks and
individuals who have used Twitter
to defame me, said Lord McAlpine.
FRIDAY 16 NOVEMBER 2012
14
NEWS
cityam.com
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IN BRIEF
THE CITY descended upon St Pauls on
Wednesday night to launch City A.M.s
Christmas appeal for Opportunity
International, including a fabulous auc-
tion in aid of the appeal that along
with private donations raised 211,818
on the night.
Stagecoach co-founder Ann
Gloag and Pi Capital boss
David Giampaolo were
among guests treated to a
private cathedral tour,
along with Truett
Tate, who resigned
from Lloyds earlier
this year. Tate kept
his speech short: I
left Lloyds, and
thats enough about
me... before going
on to reveal he had
taken a new role
on the board of
Virgin Money.
St Pauls full of
Opportunity at
appeal launch
L
A
U
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A

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/
C
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YET more awards on Wednesday night, this
time dished out at the Grange hotel by St
Pauls as part of the Forex Summit.
Jannick Malling, founder of online trading
platform Tradable, brought home the
bacon with the Most Innovative Financial
Company. When asked about a comparison
made between him and Steve Jobs, Malling
bashfully replied: I think by the time Steve
Jobs was my age he had already invented
Apple but this is great recognition for the
effort we have put in over the last year.
Forex names
foxy winner
15
cityam.com
FRIDAY 16 NOVEMBER 2012
cityam.com/the-capitalist EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
THECAPITALIST
Jannick Malling, founder of Tradable
(left) with Michael Greenberg, chief
executive of Forex Magantes (right)
Truett Tate, former
Lloyds board member
(above left) with Robin
Saunders, managing
partner at Clearbrook
Capital (above right);
Left: Isabel and Carlos
Dos Santos, the
Mozambique High
Commissioner
Stagecoach co-founder Ann Gloag (left) and Pi Capital
chief executie David Giampaolo (below left) with
guest Yvonne Wilhelmsen (below right)
www.cityam/appeal
#cityamappeal
Donate online at www.cityam.com/appeal or
by text to CITY13 and amount (5 or 10 only)
to 70070 or by phone to: 01865 725 304
in store mobile carphonewarehouse.com
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price applies to new subscriptions and upgrades on pay monthly connections. 1 UKs lowest price tariff is only available on O2, subject to credit check and a minimum term of 24 months. Trade in value as of 12/10/2012. 250 Trade in value quoted is for iPhone 4S 64GB. Prices may change on a weekly basis. Avoid tech misery with Geek Squads insurance cover that comes with
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ENGINEERING giant WS Atkins
said yesterday it had won a
contract to help the US Federal
Emergency Management Agency
clean-up after Hurricane Sandy, as
it announced a rise in pre-tax
profits.
Profits before tax for the first
half of the year rose 14 per cent
to 50.4m, from 44.2m 12
months earlier, as revenues
dropped 3.2 per cent from
842.9m to 815.7m.
Atkins, which helped to design
Olympic contractor WS Atkins
to help New York as profits rise
BY CITY A.M. REPORTER
and deliver parts of the Olympic
Park, also said it had increased
headcount by 300 over the year.
The company said that a
challenging first half in North
America and the Middle East was
offset by strong growth in Asia
Pacific and Europe.
The UK performance was
described as solid, with an
emphasis on growing headcount.
Shares in the firm soared by
more than 11 per cent yesterday,
closing up at 710p.
Atkins also announced a 2.6 per
cent increase in its interim
dividend.
FRIDAY 16 NOVEMBER 2012
17
NEWS
cityam.com
WS Atkins helped build the stadium for the 2012 Olympic Games held in London
SLI MMI NG
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by Experienced Doctor
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MORNING UPDATE
Sign up to
our 10:30am
newsletter at
cityam.com
NATIONAL Grid posted a jump in half-
year profits yesterday, as it warned
that damage from Hurricane Sandy
will cost it up to 100m to fix.
FTSE 100-listed National Grid posted
a 37 per cent rise in statutory pre-tax
profits to 1.29bn for the six months to
the end of September, or a rise of 21
per cent to 1.15bn based on business
performance.
Revenues fell 3.6 per cent to 6.08bn,
due mostly to a fall in US-regulated
activities.
National Grid said it had reviewed its
storm response plans since 2011s
Hurricane Irene and that in most
regions, power was restored within
three days of Hurricane Sandy batter-
ing the eastern seaboard.
The group is working with US
authorities to restore services for the
1.1m customers in Long Island who
lost power in the superstorm at the
start of November.
Operating profits for its UK transmis-
sion business rose 18 per cent to
National Grids
Sandy clean-up
to reach 100m
BY MARION DAKERS
712m in the half, while gas distribu-
tion profits rose seven per cent to
408m.
Part of this rise was due to above-
inflation price rises in the regulated
transmission business.
Capital investment rose 23 per cent
to 1.83bn, mostly due to 34 per cent
higher spending on UK transmission.
Net debt increased from 19.6bn to
20.4bn as the firm ploughs money
into its upgrade work.
Chief executive Steve Holliday said
he was pleased with the progress we
made in the first half of the year.
Esperanza ramp-up boosts
Antofagasta as output soars
THE RAMP-UP of production at
Chilean mine Esperanza boosted
Antofagasta earnings by 13 per cent
over the nine months to September,
it said yesterday.
Esperanza, which began
operations in 2011, was the main
driver behind a 13.7 per cent jump
in copper output over the period to
515,800 tonnes. Copper output
from Esperanza jumped to 113,700
BY CITY A.M. REPORTER tonnes over the nine months.
Meanwhile, gold production
came in at 213,500 ounces over the
period, again flattered by the young
mines rising output.
Earnings over the nine months
stood at $2.8bn (1.8bn), up from
$2.5bn last year, while revenue
jumped 16.3 per cent to $4.9bn.
In August, Antofagasta reported a
7.6 per cent drop in first half profits,
as falling copper prices and higher
production costs weighed on results.
BEVERAGE can maker Rexam said
yesterday that its healthcare
business has performed below
expectations as its pharma division
lost some business in animal health.
The healthcare business, which
contributes about 10 per cent of the
companys total sales, makes
precision medical devices such as
bronchial inhalers, injection
syringes and tubes.
Rexam, whose cans are used by
companies such as PepsiCo, Red Bull
and Carlsberg, however, reported a
Worries over healthcare unit
weigh on can maker Rexam
BY CITY A.M. REPORTER
six per cent rise in global sales
volumes at its beverage can
business.
The company also said the
divestment of its personal care
business was in its final stages.
We are on track to return 370m
of the proceeds to shareholders,
chief executive Graham Chipchase
said.
Rexam said in July that it would
sell its underperforming personal
care business in two parts for
$709m in cash.
Shares in Rexam fell 1.2 per cent
to 435.9p.
IN BRIEF
Heritage ups resource estimate
nExplorer Heritage Oil hailed its
acquisition of a Nigerian oil block
yesterday, increasing its net proven
and probable reserves to 412m barrels
of oil. The acquisition also boosted its
full-year net production to an
estimated 11,350 barrels of oil a day.
Heritage is ramping up production at
the Nigerian oil fields, and yesterday
said that it expected the block to be
cash generative immediately.
Increasing cash flows at Premier
nOil and gas explorer Premier Oil
yesterday said it anticipated sharply
increasing cash flows for both this
year and next, driven by rising
production and stronger oil prices.
Average output at the firm for the year
to October was 57,300 barrels of oil
equivalent a day, up from 40,400 over
the same period last year. Premier
yesterday reaffirmed its medium-term
target of 100,000 barrels of oil per
day.
BBA Aviation hits headwinds
nBBA Aviations shares fell three per
cent yesterday after the plane support
services firm said trading since July
has been tough. BBA said group
revenues have fallen three per cent on
a year ago, knocked by flight
disruption from Hurricane Sandy as
well as broader weakness in the
market. However, the group thinks the
rate of decline has slowed recently,
and that its long-term prospects
remain on track.
National Grid PLC
15Nov 11 Nov 12Nov 13Nov 14Nov
705
700
695
690
685
680
p
692.32
15Nov
Antofagasta PLC
15Nov 11 Nov 12Nov 13Nov 14Nov
1,270
1,260
1,250
1,240
1,230
1,220
p
1,222.72
15Nov
Rise in household gas use offsets
fall in business demand at Centrica
BRITISH gas owner Centrica said
yesterday the weak UK economy was
impacting demand among business
customers, though cost cuts were
enabling it to stay on track for growth
in its residential division.
It expected to deliver overall earnings
growth in 2012 in line with market
expectations, the company said in a
trading statement yesterday.
This includes double-digit profit
growth in the residential arm, helping
to offset the 43,000 business accounts
that British Gas has lost since the end
of June.
Unusually cool weather conditions
over the summer meant that average
household gas consumption had risen
nine per cent in the year to October
compared to the previous year, it said.
But the group said the cold snap
masked an underlying drop in demand
for gas, as households take steps to be
more energy efficient.
British Gas, the countrys largest
natural gas supplier, is putting up
prices six per cent from today, an
unpopular move among Brits
struggling with rising bills and
stagnant wages.
The other big six energy suppliers
are also increasing prices, citing higher
wholesale costs as well as the need to
upgrade networks.
Public anger over rising utility prices
alongside bumper profits at the
companies has deepened in recent days
over a scandal about alleged irregular
trades in the gas market.
Centrica has distanced itself from
the allegations, saying on Wednesday
that an internal review showed there
was nothing unusual about its gas
trading on 28 September, the day
under investigation.
BY HARRY BANKS
Centrica PLC
15Nov 11 Nov 12Nov 13Nov 14Nov
322.50
320.00
317.50
315.00
312.50
310.00
p
316.33
15Nov
Prices from 369,995-579,995
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A development by:
Selling Agents:
LONDON rents hit another record
high in October as landlords celebrate
solid returns on investment, accord-
ing to the LSL buy-to-let index pub-
lished today.
Average monthly rents in the capital
jumped 0.9 per cent to 1,102, break-
ing the 1,100 mark for the first time.
That represents a seven per cent
hike on the year, and holds landlords
yields steady at 5.1 per cent.
The rest of the country saw slower
rises in rents, with the average
monthly bill climbing 0.4 per cent for
England and Wales to 744.
Despite taking rents to 3.4 per cent
higher than at the same point last
year, and yields for landlords to 5.4
per cent, that October climb repre-
sents the smallest national increase
since May.
The East of England was the only
area to see prices rise more quickly
than London, with rents up 1.4 per
cent on the month to 760.
But not every region recorded
growth rents dropped 1.8 per cent in
the East Midlands to 564 per month,
and 1.6 per cent in Wales to 547.
The lowest yield for landlords was
recorded in the South West at 3.9 per
cent on the year.
Despite the deceleration, the fact
Record London
rents keep up
investor profits
BY TIM WALLACE that monthly rents rose by twice the
rate seen a year ago points to the
underlying strength of tenant
demand, said LSL Property Services
director Davide Newnes.
Looking ahead, its difficult to see
rents remaining stationary once the
winter lull has passed.
Banks still need to set aside large
sums of money for high loan-to-value
lending, so in the longer term the
number of first time buyers wont
return to the level necessary to signifi-
cantly undercut the strong demand
for rental property.
However, initiatives like the New Buy
scheme and the Funding for Lending
initiative may take some of the heat
out of the rental market in the near
future by boosting mortgage lending
and house buying.
SHOULD QUOTAS BE IMPOSED TO
APPOINT WOMEN TO BOARDS?
Interviews by Alex Croell
No, I dont believe they should be. As a
matter of principle I think board mem-
bers should be decided based on their merit and
skill.
These views are those of the individuals above andnot necessarily those of their company
JULIAN TAVORA
CGD

Its a tricky question. You want to see

women all the way at the top but ideally
they need to earn the right to be there through
merit.
SIMONE SKEATES
FIDELITY WORLDWIDE
INVESTMENTS
Its a good thing to a certain degree.
Historically boards have been dominated
by men, so it would be good to see some female
faces in power. Its positive to highlight that.
TERRI JONES
OCBC BANK

UK car manufacturers bounce

back after slump in September
CARMAKERS bounced back in
October, with the number of
vehicles rolling off production
lines rising by 6.4 per cent during
the month.
Britain produced 148,927 cars
and commercial vehicles last
month, a strong rise to help reverse
a blip in September when output
fell seven per cent, according to
BY MARION DAKERS
figures from the Society of Motor
Manufacturers and Traders (SMMT).
The rise came in the same month
that Ford said it plans to close its
factories in Southampton and
Dagenham.
In the year to date, production is
up 8.4 per cent on a year ago, with a
9.7 per cent rise in car output
offsetting a 6.1 per cent fall in
commercial vehicles.
The number of cars being
exported rose 4.7 per cent to
116,899, with exports of
commercial vehicles up one per
cent to 6,556 in the month.
Cars made for domestic sale are
also on the rise, though from a
lower base, increasing 18.1 per cent
in the month to 20,129.
Overall production remains
below 2008 levels, with barely half
the pre-recession number of
commercial vehicles being made.
CITYVIEWS
London rents show no sign of slowing
Oct 12 Jul 11 Oct 12 Jan12 Jul 12 Apr 12
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1000
1040
1060
1100
1080
1120 permonth
960
FRIDAY 16 NOVEMBER 2012
19
NEWS
cityam.com
AN EU tax on imports of Chinese
crockery has been condemned by
retailers as pointless and harmful
to the poor.
The European Commission
yesterday announced the tax in
response to claims by an
anonymous EU manufacturer that
Chinese producers are pushing
their products onto the European
market at artificially low prices.
The taxes will add between 17.6
per cent and 58.8 per cent to the
price of items like plates, cups and
oven dishes arriving from China
which produces half of the
ceramics on sale in the EU.
This extra cost will add 287m
(231.3m) to importers costs,
according to the British Retail
Consortium (BRC), pushing up
prices for the consumer.
The Commission has imposed
the taxes with just 24 hours
notice, making matters tougher
for importers and retailers.
Because China mainly supplies
the value end of the market, this
will deny less well-off customers
access to affordable crockery, said
the BRCs head Stephen Robertson.
The irony is: making hard-
pressed customers pay more will
do nothing to support European
producers who dont have the
capacity to produce enough at low
enough prices.
Our members tell us that the
only alternative for them, if
theyre forced to look elsewhere,
will be to source from other low-
cost Asian countries.
Retailers slam
tax on crockery
from China
BY TIM WALLACE
BOTTOM
LINE
MARC SIDWELL
A tough-minded strategy gives 3i fresh hope of growth
S
IMON Borrows took a
distinguished City pedigree to
private equity house 3i in May,
and his stewardship has bought
the group some time to put its
turnaround plans, announced in
June, into place. Even activist
shareholder Laxey Partners seems to
have made peace with the
arrangements.
Yesterdays half-year results gave
further grounds for holding fire.
Assets under management were
down year on year, from 12.281bn
to 11.347bn, but operating
expenses were nonetheless down
too, at first sight only slightly as a
percentage of those assets, 1.6 per
cent to 1.5 per cent, but in fact
equivalent to a 6.3 per cent cut in
costs, an indication that Borrows
plans to drive efficiency are moving
in the right direction.
So, indeed, they should be. A
quarter of 3is workforce has been
laid off since April, and Borrows
plan calls for about a sixth of those
who are still left to lose their jobs by
the end of next March.
Borrows also indicated that 3i is
actively repositioning itself for
growth. A new $500m (315m) fund
in Brazil is planned for the second
half of next year, together with a
strategic retreat from Barcelona,
Copenhagen and Birmingham.
It is also closing offices in Hong
Kong and Shanghai. That contrasts
with its Brazilian expansion: an
encouraging sign that the strategic
focus on Brazil is altogether more
considered than a crude emerging
markets push.
The City may wonder if all the
cutting and refocusing is preface to
a transformative deal of the kind it
expects from such an experienced
investment banker, but making
hard calls on 3is turnaround is
unquestionably a good start.
TRIAL AS RETRIBUTION
CPP saw its shares halve in value
with the announcement of the
FSAs investigation in March 2011,
and the price has trended lower
since then. More than a year and a
half later, the regulator has
imposed a 10.5m fine but
acknowledged that the credit card
insurers current financial position
means the FSA will now have to
allow payment of the fine to be
made in instalments over the next
two years.
There is no excuse for CPPs
lapses and it is essential that firms
are held to account when they fail
to communicate fairly and clearly
with their customers. Yet there
must be a less counterproductive
way to achieve that end without
such a long-drawn-out process.
CPP, after all, agreed to settle at
an early stage. It was rewarded
today with a fine that was 4.5m
lower, but it might have preferred
an earlier decision to cut short the
damaging period of uncertainty it
has endured. As recently as August
the groups half year report
accepted that there were some
grounds for doubt as to whether it
would be able to continue as a
going concern.
Since the FSA has concluded that
it does not want to drive CPP out of
business, and so will now wait for
its money, speedier justice would
surely have been in everyones
interests.
SUPERSTORM Sandy drove a surge
in new claims for US jobless
benefits last week and hit factory
activity in November, providing
early signs of how heavily the
storm could hit the worlds largest
economy in the fourth quarter.
Initial claims for state
unemployment benefits rose
78,000 to a seasonally adjusted
439,000, the highest level since
April 2011, figures from the Labor
Sandy hurts both employment
and manufacturing in the US
BY CITY A.M. REPORTER
Department showed.
It was the biggest one-week
jump since the spike caused by
Hurricane Katrina in September
2005.
Separately, the Philadelphia
Federal Reserve Bank said its
business activity index slumped to
-10.7 from 5.7 the month before
indicating a fall in output.
Analysts hope the impact on the
economy will be short-lived, but
the storm still represents a blow
to growth.
The hurricane hit New York and killed more than 100 people on the US east coast
THE OWNER of MTV and Paramount,
Viacom, yesterday said that it had
defied slipping box office revenues
and lower ratings at its TV networks
to reach a $643m (405m) profit in
the third quarter of the year.
This 12 per cent year-on-year rise
came despite revenues falling 17 per
cent to $3.4bn. The firms cost-
cutting operation has saved it 26
per cent in expenses.
The company put the drop in
turnover down to Paramounts
movie release calendar. Sales at the
division fell 39 per cent, with no
blockbuster picture released in the
quarter to compare to last years
Transformers film.
However, audiences on the US
MTV network, which includes
music channels as well as
Nickelodeon and Comedy Central,
have also fallen, resulting in lower
advertising revenues.
Despite this hit Viacom chief
executive Philippe Dauman
defended the network yesterday.
MTV is very healthy indeed, he
told analysts who questioned if it
was in trouble.
Viacom profits
up despite lack
of blockbuster
BY JAMES TITCOMB
J
OHN Cridland is one of the few
people who could get excited by
the prospect of working next to a
building site for six years. The
view from his office window in
Londons Centrepoint building is
currently a mess of cement mixers,
trucks and cranes as the Crossrail
construction crews set about
transforming Tottenham Court Road
station into a major transport
interchange by 2018.
But despite all the dust and noise
the director general of the
Confederation of British Industry
(CBI) says it is an inspirational sight.
All the economic research says
spending on infrastructure is the best
way to get economic growth moving,
he says, before launching into a pas-
sionate defence of his plan to kick-
start the economy with investment in
public works.
The biggest part of the cuts so far
have been in capital, not current,
spending. Over the next few years
that will rebalance because most of
the capital cuts are in and most of the
current cuts are still to come.
But businesses are frustrated with
cuts in capital spending that direct-
ly impacts on the growth rate because
of what its done to the construction
industry, as well as weakening the
economic capability of the nation.
Right now he says the government
has the right policies on infrastruc-
ture but is severely lacking when it
comes to implementing them on the
ground: I think the delivery is weak,
things are taking too long and the
impact is lost. Last Autumn Statement
the chancellor said there would be
20bn of pension fund investment in
Britains infrastructure. A year on,
how much progress has been made?
The government gets that
appointing [former Olympics chief]
Paul Deighton as infrastructure min-
ister shows they know they need to do
more.
Cridland will be the first to admit
that calls for investment in major
public works is different from what
youve heard from the CBI before but
this befits the fact that the current
director general is cut from different
cloth to predecessors such as Digby
Jones and Adair Turner. Unlike them,
Cridland has never been active in
business and instead has spent his
entire 30-year career with the CBI.
But despite the lack of hands-on
experience he has always been willing
to fight for a pro-business environ-
ment, even when this runs against the
prevailing national mood.
Im continuing to argue for busi-
ness tax cuts at a time when people
are questioning whether business is
paying enough tax. Im continuing to
say that the government needs to
reduce the deficit at a time when peo-
ple question austerity.
One of those unpopular tax cuts
that Cridland backed was the reduc-
tion in the top rate of tax for those
earning more than 150,000:
Personal tax affects businesses ability
to deliver growth. The 50p personal
tax rate was damaging to British
industry, he says.
He is also willing to take a stand
against any attempt to reduce tax
relief on pensions: I am pretty clear
that a hit on pensions tax relief for
higher earners would be seriously
damaging. He says a reduction in pen-
sion tax relief is not just about world
class talent but also middle managers
on moderate salaries who suddenly
find their pensions being messed
around.
That matters to business, he says.
His demands from the chancellors
Autumn Statement are priced at
1.5bn but he claims they will have a
major effect on the economy. Some
are classic CBI measures a two per
cent cap on business rate increases to
help retailers while others, such as a
removal of stamp duty for shares trad-
World gold demand
slides on slowdown
in Chinese economy
GLOBAL gold demand dropped 11
per cent in the three months to
September from record levels seen
in the same period last year,
dampened mainly by fading Chinese
fervour as its economy slowed, with
stronger Indian demand stemming
a larger fall, the World Gold Council
said yesterday.
Chinese gold consumption fell
eight per cent in the July to
September period to 176.8 tonnes,
the WGCs quarterly demand trends
report showed, with both jewellery
and investment demand hurt by a
slowing economic growth.
Data last month showed Chinas
economy slowed for a seventh
straight quarter in the July to
September period. Chinese bar and
coin investment dropped 12 per
cent to 53 tonnes, while jewellery
buying fell five per cent to 123.8
tonnes.
BY HARRY BANKS The fall in Chinese demand
coincides with weaker economic
numbers in China in the third
quarter, the WGCs managing
director of investment research
Marcus Grubb said. There is some
evidence that the economic
situation is stabilising in China and
recovery is starting... its possible
that the stimulus measures have
worked and the economy has
bottomed out.
If thats true, we wont see a
repeat of this Chinese weakness in
the fourth quarter, he said.
China is second to India as the
worlds biggest gold consumer.
Indian demand rose in the last
quarter by nine per cent to 223.1
tonnes, reversing the trend of the
previous three quarters, with pent-
up consumer demand lifting the
market. Global jewellery
consumption dipped two per cent to
448.8 tonnes, while coins and bar
demand fell 30 per cent.
EXECUTIVE Offices Group, the upmarket office space provider, has signed a deal to take
up four floors of Atlas House in the City, which it plans to revamp and run as offices. The
group, which was acquired by Morgan Stanleys real estate fund in 2005 for 220m, has
signed a 15-year lease on the 19th century building now known as 1 King Street with
its owner UBS Central London Office Value Added Fund.
EXECUTIVE OFFICES SIGN LEASE ON ATLAS HOUSE
FRIDAY 16 NOVEMBER 2012
20
NEWS
cityam.com
ed on AIM and an increase in the
annual investment allowance for
small firms are more targeted.
Despite saying his small business
members want a return to Captain
Mainwaring banking based on strong
personal relationships, he is strongly
opposed to suggestions that the gov-
ernment may force banks to split their
investment banking arms from their
high street operation.
That isnt what [the Vickers commis-
sion on banking] called for and its not
what George Osborne has asked for,
but weve heard some noises that we
may end up there.
As a small business, if I choose a
high-street bank and get my first
export order then I dont want to be
told that Ive suddenly got to go and
build up a relationship with an invest-
ment bank to get a simple hedging
product.
One of his predecessors, Adair
Turner, is second-favourite for the top
job at the Bank of England. Cridland
will not be drawn on his favoured can-
didate but says the new governor must
be able to look the chief executive of a
bank in the eye and raise an eyebrow
when he or she needs to. Its got to be
someone who anyone in the City or
Canary Wharf would say hes a heavy
hitter.
Cridland supports a return to what
he terms the real economy that
replaces debt-driven consumption
with manufacturing and overseas
trade, including in services. As to
finance, he insists that hed like [the
City] to employ as many people as pos-
sible but if the rebalancing of the econ-
omy means we are less dependent on
growth from financial services... that
probably means a shift in the labour
market.
He backs a real-terms freeze to the
EU budget a classic area where busi-
ness and government stand together
but says there is a real fight coming
up to ensure Britain retains all the ben-
efits of the single market and is not
sidelined by the 17 Eurozone member
states deciding policy on their own.
Ultimately Cridlands message is that
we must get trading abroad if we want
to secure Britains economic future:
We could easily slip away or we can
get out there and sell. Im up for the
fight Im a glass half full sort of guy.
John Cridland wants to
get UK building again
The CBI director general tells James Waterson why infrastructure
matters, how tax hikes hurt firms and why we must trade abroad
FRIDAY 16 NOVEMBER 2012
21
Weak Wal-Mart
sales weigh on
jittery Wall St
U
S stocks were little changed
yesterday as the prospect of a
drawn-out battle over
impending tax and spending
changes made investors wary of
getting into the water, while retailer
Wal-Mart tumbled after
disappointing sales.
The S&P 500 is down nearly two per
cent for the week, adding to last weeks
selloff and eroding more of the mar-
ket's gains for the year.
The Eurozone relapsed into its sec-
ond recession since 2009 in the third
quarter as the region was hurt by its
debt problems.
Wal-Mart fell 3.6 per cent to $68.72
and was the biggest drag on the Dow
as frugal consumers hurt the compa-
nys quarterly sales.
Investors will be watching todays
meeting at the White House between
President Barack Obama and
Republican and Democratic leaders of
Congress over deficit reduction for any
sign the two sides are moving closer.
The memory of last years political
impasse over raising the debt ceiling
has also made analysts nervous.
The Dow Jones industrial average
slipped 28.49 points, or 0.23 per cent,
to 12,542.46. The Standard & Poors
500 Index lost 2.16 points, or 0.16 per
cent, to 1,353.33. The Nasdaq
Composite Index was off 9.87 points,
or 0.35 per cent, to 2,836.94.
The S&P 500 sunk to a 3 1/2-month
closing low and was well below its 200-
day moving average, which it pierced
last week.
Apple shares dragged the Nasdaq
lower, falling 2.1 per cent to $525.62
and down about 25 perc ent since
Septembers high.
Target bucked the trend, rising 1.7
percent to $62.44 after it reported a
profit that beat expectations.
B
RITAINS top share index fell to a
fresh two-month low yesterday, as
news that the Eurozone had fallen
back into recession provided an
impetus to break out of recent ranges.
The UK blue-chip index was down 44.26
points, or 0.8 per cent, at 5,677.75 at the
close, finishing below 5,700 for the first
time in two months and marking an end
to range-bound trading that had persisted
since early September.
The Eurozone slipped back into recession
between July and September, contracting
0.1 per cent on top of a 0.2 per cent drop in
the second quarter, despite French and
German growth proving resilient.
Thomson Reuters data showed a broad-
based sell-off, with every sector falling.
Energy took 8.5 points off the index, with
sentiment hit by growth concerns in
Europe and worries over the US ability to
avoid a fiscal cliff of spending cuts and
tax hikes, which could jeopardise growth.
However, sectors resilient to the econom-
ic cycle also fell, with consumer non-cycli-
cals taking nine points off the index,
despite generally being regarded as a
defensive play when the growth outlook
falls.
Pennon was the biggest faller on the
index, losing 6.2 per cent after it said first-
half profit before tax and joint ventures at
Viridor would fall 30.5 per cent to 27.8m.
Pennon traded over six times its average
90-day volume. Wood Group also fell in
heavy volume, losing 5.9 per cent in trad-
ing of over five times the average 90-day
volume. Traders said the failure of the
energy services company to get onto the
list of companies added to the MSCI UK
index this month was crimping demand
for the stock.
BESTof theBROKERS
ICAP PLC
9Nov 12Nov 13Nov 14Nov 15Nov
p 320
310
300
290
280
284.21
15 Nov
ICAP
Canaccord maintains its
hold rating for the
voice and electronics
dealer, decreasing its
target 10 per cent to
300p. The broker expects
growth to remain
stagnant for the rest of
the financial year.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
15Nov 9Nov 12Nov 13Nov 14Nov
5,800
5,780
5,760
5,740
5,700
5,680
5,720
5,677.75
15 Nov
Moneysupermarket Com Group PLC
9Nov 12Nov 13Nov 14Nov 15Nov
p 156
155
154
153
152
151
154.00
15 Nov
MONEY
SUPERMARKET
UBS has a buy rating
on the price comparison
site and has raised its
target from 160p to
170p, pointing out strong
growth that is helped by
rising energy bills.
Darty PLC
9Nov 12Nov 13Nov 14Nov 15Nov
p 49
48
47
46
45
44
43
42
47.00
15 Nov
DARTY
Seymour Pierce rates the
retailer hold but cuts
its target from 55p to
45p after a first-half
update, citing ongoing
Eurozone jitters that are
weighing on the
companys sales.
Maurice Turnor Gardner
The law firm has announced the
appointment Sarah Conway as
partner in its residential property
practice, effective January 2013.
She joins from Allen & Overy,
where she has worked since 1998.
Conway has also held the
partnership at Carruthers & Co,
and focuses on residential
property transactions for high net
worth clients.
Shawbrook Bank
Ian Henderson has been appointed chief executive at the
specialist savings and lending bank. He joins from Barclays
Wealth, where he was chief operating officer. Henderson
was also previously chief executive of RBS International.
De Candole Residential
Charles Fry has been appointed chairman of the central
London property developer. He founded Johnson Fry in
1969, and subsequently also founded Pinder Fry and
Benjamin in 1998. Fry has been in the industry for 40 years.
Deloitte
Jon Pumfleet has been appointed to the business advisory
firms investment management executive. He joins from
Threadneedle Asset Management, where he was head of
technology risk. In his new role, Pumfleet will lead
investment management in Deloittes UK enterprise risk
services practice.
Investec Capital Markets
Investec Banks asset management subsidiary has
appointed Claudio Chiste to its shipping and marine finance
team. He joins from Banca IMI, where he has worked for the
past five years. Chiste is current chair of the Shipping
Professional Network in London.
Assicurazioni Generali
Spencer Horgan has been appointed head of investor
relations at the Italian insurance group. He joins after 10
years at Deutsche Bank, where he was head of equity
research for European insurance companies.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
in association with
LONDONREPORT
NEW YORK
REPORT
in association with
in association with
FTSE hits two-month low as fears
over Eurozone drive sharp sell-off
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
I
N 75 BC, when the great Roman
politician and champion of
liberal learning Cicero was
quaestor in Sicily, he led an
expedition to a neglected,
overgrown jumble of funerary
monuments just outside the city of
Syracuse. Directing men with
scythes to cut away the briars, he
uncovered the tomb of Archimedes,
lost for more than a century, just as
he had found it described in an old
manuscript.
Education secretary Michael Gove
took on Ciceros mantle this week,
in a remarkable speech that sought
to cut away modish assumptions
and reveal Britains forgotten debt
to liberal education the tradition
of learning for its own sake.
F
ORGET Grexit, Spexit or any
other possible departures from
the euro. Despite yesterdays
news that the Eurozone is now
back in recession, the markets
should focus on another potential exit.
The Brixit a British departure from
the European Union.
For the first time in a generation its
realistic. But would it hurt the UK econ-
omy? This question is usually framed in
terms of exports and market access.
But the relative decline of the EU as a
percentage of the global economy
makes those two issues less relevant.
In fact, if the UK did pull out of the
EU, it would be better off. There would
be costs, but sterling would benefit
from becoming a quasi reserve curren-
cy. And UK businesses would get a one-
off competitiveness boost.
For the UK, the European question is
changing very rapidly. First, if the euro
is to survive, there will need to be full
fiscal union. Tax and spending deci-
sions will be made by a treasury minis-
ter in Brussels. Members will have to
relinquish control over their national
economies, and Britain wont want to
cityam.com/forum
Trade is exaggerated
only 13 per cent of the
UK economy relies on
selling to EU markets
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.

22
FRIDAY 16 NOVEMBER 2012
MATTHEW LYNN
Forget Grexit and Spexit: Brixit is
looming over the European Union
be part of that. So the UK may soon
have left anyway, in that it is no longer
involved in the EUs most important
decisions.
Second, the world has moved on. The
global economy is now dominated by
rising emerging economies. In con-
trast, the slow-growth EU doesnt look
like a partner anyone would want to
stay married to anymore.
And its highly likely Britain will have
a referendum on EU membership in
the next five years. Labour is commit-
ted to one, and the Conservatives wont
want to be trumped by Ed Miliband.
When the referendum happens,
Britain might vote to leave. By this
stage, the core Eurozone may well be
stuck in a deep recession. That can only
tip the popular mood further towards
leaving the EU.
If a British exit becomes possible, the
markets will take fright. Sterling will
tank. The FTSE would dive. Most main-
stream business opinion for 30 years
has held that Britain needs to be in the
EU. It needs access to that market. Lose
it, and trade would collapse. But on a
medium-term view, it will boost the UK
economy. Heres why.
True, there would be losers. The City
would suffer. It has been the key finan-
cial market for the EU, but it is unlikely
France and Germany would tolerate
this situation if the UK was outside the
club. Some global banks could move
their operations to Frankfurt or Paris,
and the wealth they generate would
flow elsewhere. As the mass redundan-
cies at the London office of the Swiss
bank UBS demonstrate, however, this is
now less of a worry than it would have
been a decade ago.
Also, while the UK could negotiate
the same kind of free access to EU mar-
kets enjoyed by the Swiss, hidden barri-
ers to our exports may be put in place.
And while the importance of exports to
the EU is often exaggerated only
about 13 per cent of the economy relies
on selling to EU markets some busi-
nesses would suffer.
But there would also be two big
advantages. First, sterling would
emerge as an island of stability. The
pound is already emerging as a partial
reserve currency a status it hasnt
held for fifty years. The Swiss National
Bank, for example, revealed this month
that it had doubled its holdings of ster-
ling, while cutting back on euros. The
Russian central bank recently said that
9 per cent of its reserves are held in ster-
ling. Despite the UKs problems, it is
still a stable nation, and is not caught
up in the Eurozone mess. If Britain was
further detached from the euro crisis,
its attractiveness would increase.
Second, Britain could expect a one-off
competitiveness boost. While it may
have started as a free trade zone, the EU
has turned into a spending and regu-
lating machine. Its agricultural policies
keep food prices high. Its employment
regulations make it hard to fire people
and companies reluctant to hire.
Health and safety laws put barriers in
the way of innovation. Discard them,
and businesses would be freed of a
massive burden of red-tape. There are
few better ways of stimulating growth
than tearing up regulations. Though it
would only happen once, it would help
the UK grow again and that would
help the equity markets.
There are few reasons to be optimistic
about the UK economy. State spending
is too high, taxes keep going up, and
growth has been flat-lining for four
years. But an exit from the EU might be
the growth shock the UK needs and
could be the one thing to get the econ-
omy moving again.
Matthew Lynn is chief executive of Strategy
Economics.
Britain once played a central role
in defending and continuing this
tradition. The Romans inherited it
from the Greeks and it was in turn
carried forward, after Romes fall,
through the Christian church.
Today it lies almost forgotten, lost
in the brambles of vocationalism
and personalised learning.
That is a tragedy. From Alcuin of
York, summoned by Charlemagne
to be Europes schoolmaster, and
Alfred the Great, who spread
learning to unify his kingdom, to
more recent champions of liberal
education, like John Ruskin and RH
Tawney, the ideal of a broad
education to liberate the intellect,
rather than training in a narrow
specialism, has been a torch
holding back the darkness of
ignorance, as it passes from
generation to generation.
As Gove pointed out, business
leaders can be as guilty as anyone of
calling for education to be
narrowed. In the absence of enough
graduates with the necessary skills
for the workplace, it is all too
tempting for practical men and
women to call for schools to become
a boot camp to prepare their future
employees for office life. But as so
often, the short cut is not the best
route. A true liberal education not
only enriches the lives of those it
touches, but helps them to succeed.
As scholar and statesman Richard
Pace wrote in 1517 in The Fruits of
Liberal Education, consider and
ponder how many individuals in
the past and present, and how
many born in obscure positions,
learning has rendered most noble
and illustrious.
Liberal education focuses on
logical analysis, hard numerical
skills, essential facts and knowledge
of classic texts. It also develops
more intangible qualities,
including the skill of persuasion
and qualities of character and
personal integrity.
Surrounded by technological
marvels, we have become used to
looking to new inventions to open
up fresh vistas of achievement.
Goves courageous speech reminds
us that sometimes only recovering
our past can unlock the future.
Restoring the ancient tradition of
liberal learning has a unique power
to open minds and unleash human
potential.
Marc Sidwell is managing editor of
City A.M.
The School of Freedom: A liberal
education reader from Plato to the
present day edited by Marc Sidwell and
Anthony OHear is published by Imprint
Academic.
THE LONG
VIEW
MARC SIDWELL
Michael Gove is courageously recovering our ancient tradition of learning
MORNING UPDATE
A.M.
23
FRIDAY 16 NOVEMBER 2012
The Forum is open for you to take part. Got a sharp comment on
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
Stale bank lending
[Re: The real reason businesses arent
borrowing from their banks, yesterday]
Anthony Brownes argument about small
business lending is stale. In his early days in
post, we hoped that the chief executive of
the British Bankers Association (BBA),
would have shifted the debate onto more
fertile ground. The enormous rise in lending
during the boom years was down to
increased lending in the financial and
property sectors. The total stock of lending
to businesses did not increase much prior to
the financial crisis. It is also misleading for
Browne to say that only 1.5 per cent of small
firms have been rejected loans by his
member banks. According to the survey he
is citing, a third of all loans applications and
a fifth of all overdraft applications were
declined. We are also disappointed that the
BBA is bringing back old, divisive
arguments, rather than stating a clear
positive vision to improve lending. By
returning to this debate now, it will not help
support start-up firms. Furthermore, it will
not help small firms looking to export for the
first time. We need to restore confidence in
the sector a factor clearly missing from
Brownes article. We want to see a more
positive approach to lending like trying to
sort out the interest rate swaps mis-selling
saga. and introducing more competition
through bank and non-bank channels. The
government is engaged with these
arguments, but Browne is silent.
GraemeFisher, headof policyat theFederation
of Small Businesses
B
RITAIN faces many
challenges, but none more
daunting than our ageing
society and the financial
challenges it will create for
future generations.
There were 807,766 live births in
the UK in the past year, and the
Office of National Statistics (ONS)
predicts that one in three will live to
be 100 years old. Today there are
13,420 living centenarians, vastly
exceeding the 300 in 1950. By 2112,
the balance of the population will
have shifted even further.
The consequences of this shift are
far-reaching. According to Scottish
Widows research, on current trends
the implications could be bleak. This
new generation of centenarians will
face a hat-trick of financial pres-
sures by the time they hit their mid
20s.
While those born in 1983 are
already forced to prioritise major
life decisions the average wedding
costs 21,000, the average student
loan is 8,700, and the average
salary at 21 is just 22,000 the pres-
sure to prioritise will likely intensify.
Taking only finances into account,
our projections suggest 2012 births
wont get married until theyre 33,
wont be able to have their first child
until theyre 31, and the average
wedding will reach a massive
39,000 (adjusted for inflation).
Without major policy changes, the
next generation of centenarians will
also face student debt levels of
73,000, which they will only clear
when they are 52 years old.
And to respond to these major
adjustment, financial products will
also be forced to change. Mortgages
will adapt to a nation of centenari-
ans by allowing borrowers to pay
loans back over a longer period of
time. The idea of merging pensions
with other savings products, such as
TOP TWEETS
China gets a new leader: Xi Jinping takes the
reins of the worlds second largest economy.
And no $6bn (3.78bn) elections.
@humnju
Amazon needs to sort its tax out, but John
Lewis is too expensive (ergo uncompetitive)
Its prices will put it out of business.
@LoneDragoon90
John Lewis could start saving itself by not
buying Kindles from Amazon, and then
selling them on their behalf.
@MayorWatch
Its GroundhogDay: Eurozone crisis, now with
added double-dip recession. The Eurozones
governance is without a compass.
@JonLuckhurst
Will the new Chinese leadership implement
necessary economic and political reforms?
YES
After months of policy paralysis, certainty over leadership will be
good for markets in the short term. The new leadership can focus on
pushing through policies once its power base is consolidated. Xi
Jinping will head a Politburo standing committee that is pro-
reform, which has to be positive for investments. For the past
decade, political and economic reforms in China have gone
backwards. The new leadership realises the importance of structural
changes to maintain longer term economic growth. The role of the
state needs to be pulled back to avoid crowding out of private
entrepreneurship. There has certainly been more talk of reform to
deregulate industries and introduce more market-driven policies.
These reforms may not be positive for large companies, like banks,
but will be positive for the economy longer term, as well as for the
private sector. The main risk here is one of execution.
Gigi Chan is manager of Threadneedles China Opportunities Fund.
Gigi Chan
NO
Tom Stevenson
Three challenges face China. Firstly, maintaining economic growth,
which has slowed from 12 per cent to 7.4 per cent over the last two
years. This isnt a problem, so long as its recent stabilisation efforts
continue. Second, rebalancing its economy from export and
investment towards domestic consumption currently, only a third
of Chinas GDP is made up of domestic consumption. Third, to
begin the process of political and economic reform particularly
reducing the dominance of state-run enterprises, and curbing
corruption. It isnt clear whether the new leadership can retain
Chinas place at the worlds top table. The main challenge is to
introduce sweeping reform, but evidence of the last ten years is
not encouraging. With a new, possibly more conservative
leadership now in place, more questions have been raised than
answers given.
Tom Stevenson is investment director at Fidelity.
RAPIDresponses
Babies born today
can expect a long
expensive future
Isas, could also help this future gen-
eration face up to the twin chal-
lenge of saving for short-term
financial hurdles, while putting
aside enough for retirement.
But centenarians will still have to
work for longer. Our forecasting pre-
dicts that the state retirement age
will be at least 70 by 2100 (and prob-
ably more), and an increasing pro-
portion will work well beyond their
70th birthday.
Its not grim news, however. The
nature of work is also likely to
change to suit an older workforce.
Flexible and part-time roles will
become standard. Average life
expectancy will also increase signif-
icantly and, according to the ONS,
2012 births will likely live until
theyre 92 years,
But for a comfortable retirement
projected to cost an average of
2.391m, up from the 1.032m for
1983 births long-term saving will
need to start by at least the age of 25.
A longer life, without a damaging
collapse in living standards, is
inevitably extremely costly.
More flexible financial products
will help to alleviate the financial
pressures placed on the next genera-
tion of centenarians. But a shift in
long-term saving needs to start now.
With early understanding of the
complex realities of their long lives,
hopefully our children will take this
lesson all the way up to their 100th
birthday.
Iain McGowan is head of investment
propositions at Scottish Widows.
IAIN MCGOWAN
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25
I LIKE Twilight. A lot. Probably too much for
someone who left her teenage years a good
while ago. So, I had high hopes for the final
instalment hopes that werent entirely
realised.
The story picks up where we left off, shortly
after Bella (Kristen Stewart) almost died
giving birth and Edward (Robert Pattinson)
was forced to turn her into a vampire in order
to save her. The resulting baby is born half
human half vampire, leading the Volturi (the
Vampire law enforcers) to conclude that Bella
and Edward have, in some way, broken an
ancient vampire law.
The Volturis attempts to bring them to
justice results in a major showdown, which
sees author Stephanie Meyer and screenwriter
Melissa Rosenberg deviate from the plot of
the book (resulting in the best bit of the
whole movie, which probably doesnt say
much for Meyers writing).
The first part of the movie focuses on Bella.
We follow her as she gets to grips with
hunting, which involves crawling around on
all fours wearing a cocktail dress and
controlling her urge to feed on humans,
followed by a sex scene, vampire style (the bit
most of the Twi-hards have been waiting for).
Sadly, a little too much of the first half
consists of a lot of scenes showing the Cullen
clan (thats Edwards lot) doing a lot of
standing around, with the odd one-liner
thrown in to stop you falling asleep.
It picks up in the second half, although the
big battle scene the climactic highlight of
the whole franchise lacks the drama of the
final Harry Potter or Lord of the Rings. Its
more like a watered-down version of the X-
Men, complete with vampires armed with
powers like control over the elements or
electric hands. On a positive note, Bella comes
into her own as a strong female lead in this
film, despite being hampered by the limited
dialogue shes given, which denies Stewart
the opportunity to really flex her acting
muscles. And thats generally true of the
other characters too, not least the rather
brilliant Michael Sheen, back as Aro, leader of
the Volturi.
Will any of this stop the fans lining up in
their droves to go and see it? Certainly not.
Whether its worth all the hype, though, is an
entirely different question.
LIFE&STYLE
FRIDAY 16 NOVEMBER 2012
cityam.com
GOING OUT
Twi not to fall asleep to Breaking Dawn
THE CAST of Twilight stepped out in style in
Leicester Square at the premiere of the films
final instalment, Breaking Dawn part 2.
Kristen Stewart, who has famously swapped
her heels for trainers on the red carpet,
completely stole the show. Despite being spotted
earlier on in the day wearing her usual jeans-t-
shirt-trainers combination, she dazzled in a
statement Zuhair Murad sheer black backless
jumpsuit. The couture outfit came with
embellishments in all of the right places to
preserve her modesty along with intricate lace
details along the legs. This came just two days
after she donned another sheer outfit by the
Lebanese designer at the films world premiere in
Los Angeles.
The boys held their own too with Taylor
Lautner opting for a modern suit from Z Zegna
teamed with a simple t-shirt, while Robert
Pattinson chose a wool check Burberry suit for
the occasion.
The presence of the stellar cast made Leicester
Square come to a standstill as 6,000 fans filled
the square with some coming from as far as
America and Dubai to be amongst the crowds
waving them goodbye. The three main
characters spent over two hours signing
autographs, posing for photographs and
greeting fans, some of which had camped for 72
hours in the hope of catching a glimpse of their
favourite stars. Other guests at the premiere
included The Saturdays, the contestants on the X
Factor and Olympians Victoria Pendleton and
Gemma Gibbons.
HOW THE STARS FINALLY SAID GOODBYE TO THEIR HORDES OF FANS IN LEICESTER SQUARE THIS WEEK
hhhii
By Naomi Mdudu
Review 1: The Twi-Hard
IF YOUVE not been following the Twilight
franchise, Breaking Dawn part 2, the final
instalment, is a bad place to start.
Thankfully, the plot is threadbare enough
for newbies to pick up pretty quickly: there
are a load of vampires with trendy haircuts
living in an IKEA showroom in the woods.
Two of them have a baby, Renesmee, who has,
for no obvious reason, a terrifying computer
generated face. Maybe its a vampire thing.
There are also some werewolves knocking
around and one of them has a crush on the
new-born baby. Yep, on the baby. The babys
mother is understandably flipped out by this
but everyone else seems to be fine with it and
its pretty much forgotten about after five
minutes, which, all things considered, is
probably for the best. Then some bad
vampires, led by the brilliantly camp Michael
Sheen, arrive, spoiling for a fight.
Its difficult to tell which bits of arbitrarily
applied vampire-lore were introduced in
previous iterations and which are just so
clumsily inserted you assume they must have
been explained at some point (Bella, for
instance, is a shield, who can project magic
that looks a bit like the worm-holes in Donnie
Darko. She just can, alright?).
The problem, though, isnt how barking the
premise is (its no odder than your average
Terry Gilliam movie). The problem is, its
interminably dull, with everyone bar Michael
Sheen remaining steadfastly po-faced as they
reel off their toe-curlingly clunky lines. Every
so often director Bill Condon offers a hint that
hes in on the joke but for the most part this is
pure, condensed teen angst.
Robert Pattinson has surprisingly little to
do except glower moodily from under a
permanently furrowed brow and try to keep a
straight face as he says things like: Now its
your turn not to break me. Both he and
Stewart have the ability to work at a far higher
level (think Cosmopolis and On the Road,
respectively).
The rest of the movie is made up of a series
of disjointed set pieces crowned by a big fight
that, while derivative of every superhero
movie from the last decade, is at least sweet
relief from the lead-heavy dialogue.
Breaking Dawn part 2 is both bloated and
dull, gaudy and flat. Its a vampire movie
without bite, and that is unforgivable.
hiiii
By Steve Dinneen
Review 2: The Twi-what?
We sent two reviewers to see the new Twilight movie, one fan and one sceptic. Heres what they thought.
FRIDAY 16 NOVEMBER 2012
26
cityam.com
LIFE&STYLE GOING OUT
M
ichael Hanekes Palme dOr
winning latest is beautiful,
humane, and terrifyingly
truthful. Amour reaffirms
Hanekes status as a master of mod-
ern cinema.
We are first introduced to George
(Jean-Louis Trintignant) and Anne
(Emmanuelle Riva) at a well-attended
classical performance by one of
Annes ex pupils. They are a pair of
married octogenarians, who have
lived full and satisfying lives as music
teachers. The paintings, books and
records that line the walls of their
grand Parisian apartment tell of a
sensuous engagement with the
world. They are cultured, intellectual,
alert to the richness of their sur-
roundings. Their deep connection is
movingly conveyed through a dis-
creet tactility.
One day, however, Anne begins to
act strangely. She zones out and
becomes disorientated. Georges
awakes in the middle of the night to
find his wife sitting upright in the
bed that they still share, staring into
the darkness, seemingly unaware of
what she is doing.
A series of strokes have triggered
the onset of dementia and paralysis.
After over 50 years of marriage,
George and Anne suddenly find
themselves facing uncharted fron-
tiers of intimacy. George must pull
up Annas underwear after she goes
to the toilet, change her diaper before
bed and feed her like a baby, wiping
away spillages with the scrape of a
Amour is both
beautiful and
frightening
teaspoon along her lip.
In the wake of Annes decline, the
long-established dynamic of their
marriage must be renegotiated. This
leads to a kind of re-courtship; the
couple experience shyness and
embarrassment as they make the
uncomfortable transition from hus-
band and wife to carer and cared for.
The central performances are
incredible. Jean-Louis Trintignant
masterfully conveys inner sorrow
through outward denial. In her most
diminished state Emmanuelle Riva is
heartrendingly expressive. All her
mental and physical powers have
departed her, but she is somehow
totally aware of all that she has lost.
Her expression is totally vacant, yet
grief flickers in her eyes.
Amour is filmed with a series of
long, still shots that make no apology
for the bare reality of things.
Hanekes camera lingers on lined
faces, body-parts contorted by paraly-
sis and rooms that echo with bleak
unspoken truths.
The title of the film ironically
invokes the sentimentalities of love.
Hollywood-style love is only a prob-
lem when it is unrequited; its powers
of healing and resolution are other-
wise unlimited. In Hollywood, love is
a gooey centre around which happy
endings assemble themselves.
Here, Haneke unflinchingly shows
loves brutality its irrationality. In
Amour, love is everywhere. Its at the
heart of every motivation: its the
basis for anger, exasperation, hatred,
care, the desire to mercifully end life
and the irrational impulse to preserve
it at all costs.
This is a frighteningly astute render-
ing of the final stages of life. It is true,
compassionate filmmaking of the
utmost seriousness and quality.
WHERE
TO DRINK
TIM BADHAM
T
hey say you should never see
how sausages are made if you
want to carry on enjoying
them. The same doesnt
always go for art. The last
exhibition of the year at the Tate
Modern, A Bigger Splash (named
after the David Hockney painting,
pictured above), focuses on the
relationship between performance
and art, observation and creation.
It suggests that art is a bit like
quantum physics, changing when
you observe it and changing even
more when you see it being made.
It opens with a signature
Pollock, encased in a glass cabinet
on the ground, as it would have
laid as he painted it. It is
accompanied by a video of the
artist dancing around the
canvas very much a work of
performance (albeit one he
renounced, saying being filmed
made him act differently, making
the experience phony).
The Central European actionist
movement of the 60s is well
represented, with videos of
(mainly female) models writhing
in paint like giant living brushes
and buckets of red oil-paint being
poured over animal carcasses and
left to drip on to naked women
lying below. It is safe to say not
many of these works will adorn
the walls of even the most
pedestrian of feminists.
The feminist answer came the
following decade; one of the
highlights of the show is the
hypnotic video of Croatian artist
Sanja Ivekovic smearing her face
with make-up.
The second half of the
exhibition is made up of
installation works a sleigh under
neon lights, a surreal front room
which, while more visually
arresting than the photography
and video, lacks the ability to take
the performance into the real
world, which, in the context of the
exhibition, castrates it somewhat.
The final room, though, created by
trompe loeil artist (painting
photo-realistic renditions of things
like wood and marble panelling)
Lucy McKenzie, is like walking into
the final scene of 2001: A Space
Odyssey, making you part of the
creation: a personal performance.
While the exhibitions central
tenet that performance and art
are inextricably entwined is
something of a truism, there is
enough fascinating work here to
more than carry it.
ART
A BIGGER SPLASH
Tate Modern | By Steve Dinneen
hhhhi
FILM
AMOUR
Cert 12A | By Alex Dymoke
hhhhh
FILM
HIT SO HARD
Cert 15 | By Alex Dymoke
hhiii
The Tates exploration of performance and art
Hit So Hard is one for die-hard music fans only
H
it So Hard: The Life and Near
Death of Patty Schemel is a
documentary about the life
of Patty Schemel, the gay
red-headed drummer from 90s
Courtney Love-fronted grunge
band, Hole.
The towering personalities of
Kurt Cobain and Courtney Love
cast long, dominating shadows
over the legacy of grunge, but this
film shows that a there was a
whole cast of equally screwed-up,
equally talented characters
knocking around Seattle in the
early to mid 90s.
This film would not have been
made if were not for the survival
of some home videos, recorded by
Schemel herself. These videos
capture Holes hedonistic tour-bus
antics, as well as footage of Cobain
and Love at home with their baby
daughter, Frances, in the months
before Cobains suicide. These
recordings undoubtedly have a
certain voyeuristic appeal but the
footage runs out pretty quickly,
leaving us only with Schemels
story to hold our attention. Her life
has certainly been colourful but
one cant help but wonder whether
it is quite remarkable enough to
warrant a full feature length
documentary. It is unclear what
distinguishes her from the
hundreds of other rock stars who
have enjoyed meteoric success, only
to spontaneously combust upon re-
entry to the atmosphere.
The documentary ends up
The best places to wet your
moustache this Movember
LONDON CONTINUES to flourish for
Movember, with plenty of drinking dens
to moisten your moustache.
Take Coya, for instance. Nestled
alongside Green Park on Piccadilly, this
peerless Peruvian venue comprises of a
bar, a restaurant and private members
area, complete with terraced garden.
Opened by Zuma and Arts Club founder
Arjun Waney, the design in the upstairs
members bar juxtaposes distressed
decor in an Incan palette with ornate
chandeliers and a leather embossed bar.
For drinks sans membership, repair
downstairs to their massive Pisco bar with
a library of homemade pisco infusions
and rare tequilas.
Hawksmoor Air Street launched recently,
with a glamorous Art Deco cocktail bar
paying homage to the Fumoir Bar at
Claridges, with views through floor-to-
ceiling etched and stained glass windows
onto Regent Street. Theyve beefed up their
menu with a few new cocktails including the
excellent full-fat old fashioned, made with
butter-infused bourbon; heart surgeon
provided at your own expense.
The South American trend continues in
all corners of London, with the Barrio
Group opening up their newest venture
Barrio East on Shoreditch High Street. The
quirky new hotspot features interiors
taking cues from Latin party destinations
as well as a 1960s Sprite 4-berth
caravan converted into a perch where one
can watch the action unfold both onstage
and on the dancefloor. They will be
relaunching their cocktail menu across all
the Barrio Bars, so drop into one for rum
and tequila heavy mixology.
Craft beer fanatics should investigate
the brand-new Brewdogbar in Shoreditch,
which features a stripped-back design
and one of the most formidable ranges of
draught beer in The Smoke; the opening
was commemorated with projections of
the Brewdog logo across the capital and
the founders naked image on the Houses
of Parliament.
feeling like an extra on a concert
DVD. It also assumes significant
prior knowledge regarding Hole
and Nirvana, Kurt and Courtney.
The documentary doesnt, for
example, tell us whether or not
Kurt Cobain was already famous at
the time the video recordings were
made. Nor does it tell us how any of
them met, or what the relations
between the surviving members of
Hole are like now.
All things considered, this is one
for serious grunge fans only.
Patty Schemels life is interest-
ing but interesting enough
for a whole documentary?
T
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BBC1
SKY SPORTS 1
7pmPremier League Preview
7.30pmLive Football League
10pmThe Fantasy Football Club
11pmPremier League Preview
11.30pmGreat Matches of
European Football 12amFight
Night Countdown 12.30am
Football League 1.55amThe
Fantasy Football Club 2.55am
Premier League Preview3.25am
Fight Night Countdown
3.55am-6amLive Test Cricket
SKY SPORTS 2
7pmLive Darts 11pmTest Cricket
1amDarts 5am-6amLive
European Tour Golf
SKY SPORTS 3
7pmTight Lines 8pmTest Cricket
10pmFight Night Countdown
10.30pmWWE: Late Night
Smackdown 12.30amWWE: Late
Night Bottom Line 1.30am
WWE Special 2.30amTight Lines
3.30amFootball League
5am-6amThe Fantasy Football
Club
BRITISH EUROSPORT
11.30amLive Snooker 7.30pm
Strongest Man 8pmLive Boxing
10pmSnooker 11.30pm
Strongest Man 12am-12.15am
Football: Brazilmania
ESPN
6.45pmPremier League Preview
7.15pmESPN Exclusive
Interviews 7.45pmLive French
Football 9.45pmPremier League
Preview10.15pmGoal!
Bundesliga Preview10.45pm
ESPN Kicks: FA Cup 11pmESPN
FC Press Pass 11.30pmBoxing
12.30amPremier League Preview
1amLive Tennis 3amTotal Italian
Football 3.30amUFC: The
Ultimate Fighter 4.30amFIBA
Basketball 5am-6amCycling
SKY LIVING
7pmCriminal Minds 8pmShow
Me Your Wardrobe 8.30pm
Nothing to Declare 9pmNikita
10pmCriminal Minds 11pmBones
12amCriminal Minds 1.50am
Supernatural 2.40amMedium
3.30amBones 4.20amNothing
to Declare 5.10am-6amPassport
Patrol
BBC THREE
7pmMerlin 7.45pmDoctor Who
8.30pmImpractical Jokers 9pm
Unzipped 9.45pmRussell
Howards Good News Extra
10.30pmSome Girls 11pmFamily
Guy 12.30amAmerican Dad!
1.55amImpractical Jokers
2.25amRussell Howards Good
News Extra 3.10am-3.55am
Unzipped
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmNew Girl
8.30pmFILMMy Super
Ex-Girlfriend 2006. 10.20pm
FILMUnder Siege 2: Dark
Territory 1995. 12.25amThe Big
Bang Theory 1.25amMisfits
2.30amTool Academy: Boyfriends
Behaving Badly 3.25amBalls of
Steel Australia 4.15amHow I Met
Your Mother 4.40amScrubs
5.05am90210 5.20am-6am
Switched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmIce Road Truckers
9pmAncient Aliens 10pm
American Restoration 11pm
Storage Wars 11.30pmPawn
Stars 12amAncient Aliens 1am
American Restoration 2am
American Pickers 3amAx Men
4amSwamp People 5amPawn
Stars 5.30am-6amAmerican
Restoration
DISCOVERY
7pmFifth Gear 8pmFast n Loud
9pmAuction Hunters 10pm
Wheeler Dealers 11pmThe Devils
Ride 12amFast n Loud 1am
Wheeler Dealers 2amAmerican
Guns 3amAuction Hunters
3.50amWheeler Dealers 4.40am
Discovery Atlas 5.30am-6am
Meerkat Manor
DISCOVERY HOME &
HEALTH
7pmDr Oz 8pmParalysed and
Pregnant: Four Years Later 9pmI
Didnt Know I Was Pregnant
10pmSupernanny US 11pm
Emergency 12amI Didnt Know I
Was Pregnant 1amWanted Down
Under 2amSupernanny US 3am
Emergency 4amA Baby Story
5am-6amBabys Room
SKY1
8pmModern Family 8.30pmSpy
9pmTrollied 9.30pmTrollied 2:
Behind the Scenes 10pmA
League of Their Own 11pmDont
Sit in the Front Row11.30pm
Road Wars 12amRoss Kemp: The
Invisible Wounded 1amRoad
Wars 4.10am-6amStargate SG-1
BBC2 ITV1 CHANNEL4 CHANNEL5
S
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6pmBBC News
6.30pmBBC London News
7pmThe One Show: Children in
Need Special: Matt Baker and
Alex Jones look ahead to
tonights charity telethon.
7.30pmCHOICE Children in
Need 2012: Terry Wogan, Tess
Daly and Fearne Cotton
present a bumper evening of
fund-raising fun.
10pmBBC News
10.25pmRegional News
10.35pmChildren in Need
2012:
1.30amWeatherview1.35am-6am
BBC News
6pmEggheads 6.30pm Strictly
Come Dancing It Takes Two 7pm
Celebrity Antiques Road Trip:
8pmMastermind:
8.30pmAn Island Parish:
9pmCHOICE Attenborough:
60 Years in the Wild
10pmChildren in Need 2012:
10.40pmNewsnight:
11.10pmThe Review Show:
Weather 11.45pmNational Lottery
Friday Night Draws 11.55pmLater
with Jools Holland: 1amFILM
Backstage: Documentary following
hip-hop stars. 2000. 2.25amFILM
Battle Beyond the Stars: Sci-fi
adventure, with Richard Thomas.
1980. 4am-6amClose
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale:
7.30pmCoronation Street:
8pmIsland Hospital:
8.30pmCoronation Street:
9pmIm a Celebrity Get Me
Out of Here!
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMWanted:
Action adventure. 2008.
12.35amJackpot247; ITV
News Headlines
3amFILMEnter the Dragon:
Martial arts thriller. 1973.
4.45am-5.30amITV Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.30pmUnreported World 7.55pm
4thought.tv
8pmCome Dine with Me:
9pmDerren Brown: Fear and
Faith:
10pmCHOICE Alan Carr:
Chatty Man
11.05pmFriday Night Dinner
11.35pm8 Out of 10 Cats:
12.25amRandom Acts 12.30am
Full English 1amRicky Gervais
1.25amMy Name Is Earl 2.10am
Bobs Burgers 2.55amCharlies
Angels 3.40am90210 4.20am
Deal or No Deal 5.15amCountdown
5.55am-6amClose
6pmHome and Away:
6.30pm5 News at 6.30
7pmCowboy Builders:
8pmWild Things with Dominic
Monaghan: 5 News at 9
9pmThe Mentalist
10pmCastle
10.55pmLaw & Order:
Criminal Intent
11.55pmInside Hollywood:
Magazine show.
12.05amSuperCasino
3.55amMotorsport Mundial
4.25amHouse Doctor 4.45am
Michaelas Wild Challenge
5.10amWildlife SOS
5.35am-6amWildlife SOS
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 22
12 3 10
23 35
6 7
45
39 6
16 5
9 38
45
20 9
15 15
13 15 19
8
13
5
7
17
15
34
30
6
45
11
16
17
14
45
21
23
16
15
4
12
8
6
17
ACROSS
1 Combined stakes
of the betters (5)
3 Scallywag (5)
6 Lay slabs (4)
8 Gentle teasing (6)
9 Former French gold
or silver coin (3)
11 Holy book of Islam (5)
12 Teatime sweet
bread roll (5)
14 Exceptional (7)
15 Capital of Tibet (5)
16 Twist into a state
of deformity (5)
18 Seize suddenly (3)
19 Underweight (6)
20 Consciousness of ones
own identity (4)
21 Rate of travel (5)
22 Occurring at regular
intervals, seven
times per week (5)
DOWN
1 Material used
for stufng and
insulation (5)
2 Protective shoe-
coverings (7)
3 Planetary
house, one of
twelve (4,4)
4 Early form of
sextant (9)
5 Rid of
impurities (5)
7 Adaptable (9)
10 Not deserved
(8)
13 Card game, a
form of rummy
using two decks
of cards and
four jokers (7)
15 Inventories (5)
17 Exalted (5)
L
N
K
B
C D
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4

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G U L A G P L U S
R U A I O L I A
E M S Z I D O L
Y A H W E H E L
I T E R R I F Y
Z A T L A S O
S E A W E E D R
I H N I M B U S
L O K I A I M P
O E L I O T E A
S K Y E E R R O R
3 9 7 1 3 9 6
2 4 8 9 5 6 3 7 1
6 8 9 1 4 2
1 2 3 4 9 5 8
8 7 6 2 5 1
1 8 2 9 3 7 4 6 5
3 6 4 7 9 8
3 1 6 5 1 3 2
8 9 7 4 9 7
9 7 3 4 5 1 2 8 6
1 5 8 9 4 2 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
CAPTURING
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S
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
CHILDREN IN NEED 2012
BBC1, 7.30PM
Fund-raising fun, featuring music by
One Direction and Girls Aloud, and
Strictly Come Dancing and Doctor
Who specials.
ATTENBOROUGH: 60 YEARS IN
THE WILD BBC2, 9PM
David Attenborough examining the
changes in the natural world as well as
the developments in wildlife film-
making since he began in 1952.
ALAN CARR: CHATTY MAN
CHANNEL4, 10PM
The host is joined by actress Julia
Davis, stand-up comedian John Bishop,
and Spice Girls Melanie C, Emma
Bunton and Geri Halliwell.
TVPICK
27
TV & GAMES
cityam.com
FRIDAY 16 NOVEMBER 2012
THEPUNTER
RACING TRADER
BILL ESDAILE PREVIEWS CHELTENHAMS OPEN MEETING
T
HE Paddy Power Gold Cup
(2.35pm) is the first big
handicap of the jumps
season and there is no other
place to start than with last years
winning trainer, David Pipe.
Great Endeavour won the
prize for a record ninth time for
Pond House 12 months ago,
following father Martins eight
successes between 1987 and
2005.
According to many, a 10th
victory is already in the bag as
Grands Crus is one of the most
promising chasers around and is
no bigger than 5/1 for next
months King George at
Kempton.
I have no doubt that the
dashing grey is well-
handicapped off a mark of 157,
but he still has to carry 11st 6lb
tomorrow and only five horses
have successfully lumbered such
a burden in the past 25 years.
Grands Crus is the most likely
winner but, at 9/4 with Paddy
Power, Im happy to look
elsewhere. Dont forget that
Long Run came to this race off a
very similar mark two years ago,
but couldnt beat Little Josh or
Dancing Tornado, before going
on to win the King George and
Gold Cup.
Hunt Ball is a remarkable
animal to have progressed the
way he has, but he was
hammered by the handicapper
for winning a bad race at the
Festival and I struggle to see him
taking this.
Al Ferof also has a welter
burden and although I think
Walkon and Divers are
interesting at the foot of the
weights, Im relying on
FORPADYDEPLASTERER at a
massive 33/1 with Coral.
Thomas Coopers 10-year-old
has been called all the names
under the sun, mainly due to
him not winning since his Arkle
success in 2009, and finishing
second in 13 of his 26 career
starts. However, this is his first
ever run in a handicap and, off a
mark of 150, he has the potential
to go very well indeed.
He was second to Sizing
Europe on his seasonal
reappearance at Gowran Park
and should get the strong pace
and decent ground that he needs
tomorrow.
The opening JCB Triumph
Hurdle Trial (12.45pm) looks a
shootout between the three
powerhouse stables of Paul
Nicholls, Nicky Henderson and
Alan King.
Its difficult to know at this
stage of the season whose
juveniles are more forward, but
Nicholls has won this race for the
last two years and I fancy him to
land the hat-trick with FAR
WEST.
My selection beat Handazan,
who has since gone in at Aintree,
and that form looks much
stronger than the race Vasco Du
Ronceray won at Hereford, while
Mcvicar has a 4lb penalty to
carry. Galaxy Rock will be trying
to win his second Henrietta
Knight Handicap Chase (1.55pm)
and if the rain stays away, he will
surely go close after a decent
second at this course last month.
However, BRADLEY, who
finished two places behind him
in that race, has always looked a
real stayer and he was making
up ground at the death.
The step up in trip will suit
and he should be good each-way
value for the in-form Fergal
OBrien yard.
There is some excellent racing
this afternoon and I cant see
past Nicholls DODGING
BULLETS in the novice hurdle at
2.25pm.
He finished fourth in the
Triumph last year and broke his
maiden in impressive style over
course and distance last month.
The opening novice chase
features some very promising
animals, but I cant split Fingal
Bay and Dynaste, so am happy to
keep a watching brief.
This is a meeting where
Henderson normally does very
well and KID CASSIDY has to be
of interest in the
Paddypower.com Handicap
Chase (1.50pm).
He was a disappointing
favourite in the Grand Annual at
the Festival, but he is very
talented and with the yard
winning this for the last three
years, it surely has to be
significant that he is their only
runner.
THERE is an equally exciting card
on Sunday and the highlight is
undoubtedly the Racing Post
Hurdle, formerly known as the
Greatwood, at 2.50pm.
This has been a very different
race to the Paddy Power Gold
Cup, with four top weights
winning in the past decade, and
it is the first genuine Champion
Hurdle trial of the season.
Nicky Hendersons Darlan is
sure to go off favourite and this
years Supreme Novices runner-
up must have a big chance,
despite having to carry top
weight.
AP McCoy and Henderson
both love him and reckon he
could turn out to be a serious
Champion Hurdle contender.
That may well be the case, but
hell have to be to win this race
and I actually prefer his
stablemate, CASH AND GO.
This will be the five-year-olds
first start for Seven Barrows after
a promising novice campaign for
Edward OGrady last term. He
disappointed in the Deloitte
Novice Hurdle in February, but
scoped badly afterwards, and he
is reportedly working very well
at home.
Barry Geraghty takes the ride
and he looks a cracking each-way
bet at 7/1 with Coral getting 10lb
from Darlan.
It could be a huge day for
Henderson, as the Shloer Chase
looks a penalty kick for Sprinter
Sacre, and he starts the day off
with CAPTAIN CONAN in the
Racing Post Arkle Trial (1.10pm).
The five-year-old has always
looked a chaser in the making
and he is strongly fancied to land
this, breaking a run of four
straight wins for Paul Nicholls.
For those sticking around
after the Racing Post Hurdle, it
will be worth having a few quid
on Philip Hobbss VILLAGE VIC
in the Neptune Investment
Novices Hurdle (3.25pm). He was
an excellent second to The New
One at Cheltenham last month
and should have come on for the
run.
You can follow me on Twitter
@BillEsdaile for all my views live
from Cheltenham.
FRIDAY 16 NOVEMBER 2012
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28
n Pointers
KID CASSIDY 1.50pm Cheltenham
(today)
DODGING BULLETS 2.25pm Cheltenham
(today)
FAR WEST 12.45pm Cheltenham
(tomorrow)
BRADLEY e/w 1.55pm Cheltenham
(tomorrow)
FORPADYDEPLASTERER e/w
2.35pm Cheltenham (tomorrow)
n Pointers
CAPTAIN CONAN 1.10pm Cheltenham
(Sunday)
CASH AND GO e/w 2.50pm Cheltenham
(Sunday)
VILLAGE VIC 3.25pm Cheltenham
(Sunday)
Punters can take their Cash And Go after Racing Post Hurdle
ITS great to be back at
Cheltenham for the Open meet-
ing and Im pretty sure Ive
never had a better chance in
the Paddy Power Gold Cup than
with Walkon.
Hes never won at
Cheltenham, but hes put in
some excellent performances
there, including finishing run-
ner-up in the 2009 Triumph
Hurdle.
His best runs in recent years
have been when hes been mad
fresh and hes in absolutely
cracking order at home. I
couldnt have asked for a nicer
racing weight and Im hopeful
of a very big run.
The Triumph Hurdle Trial
looks a hot race but I wouldnt
swap my fellow, Mcvicar, for
anything. Yes, he has to
improve, but I think he can do
that, and this will give us a bet-
ter idea of where we go next.
Lovcen is a favourite of mine
and I was really pleased with
his first run at Aintree. It will
be tough for him tomorrow off
150 in the 3.05pm, but he is
classy and, although he is built
like a chaser, well know after
the race whether we stick with
hurdles or go over fences.
Im on Vendor in Sundays
Racing Post Hurdle and he has
an outside chance. I was disap-
pointed with him at Aintree,
where he was too free, but if he
can learn to settle, he is
undoubtedly fairly handi-
capped.
Choc Thornton is sponsored by
Lycetts, specialist insurers to the
Bloodstock Industry.
Hot Choc
Take Forpady to land
Paddy Power at 33/1
5-2 in last seasons home game and go
on to pip their neighbours to third
place.
The visitors will be haunted by
memories of that game on their
return to Ashburton Grove tomorrow
lunchtime and, given their erratic
form, now is not the time to be back-
ing them to claim just a third Premier
League victory at Arsenal.
Even accounting for the hosts mak-
ing their worst start to a league cam-
paign in a generation, and the fact
they go into this contest a point and a
place in arrears to the Lilywhites, they
look a tempting price, at 19/20 with
Coral. Results have just about been bet-
ter in front of their own fans than on
the road for the Gunners. While the
opposite is true for Andre Villas-Boas
men, they let a 1-0 half-time lead slip
when losing 2-1 at Manchester City last
time out, and have now lost three of
their last four Premier League games.
Although Spurs have failed to score
just once in the top flight this term, at
home to Wigan, they have routinely
undone their good work by letting
them in at the other end. Theyve kept
just one clean sheet
in the league, when
Hugo Lloris enjoyed
a shut out against
Aston Villa in his
only league appear-
ance to date.
Arsenal have had
their own defensive
lapses but, having
scored the same
number as Spurs,
their goal differ-
ence is better by
five.
There has been just one goalless
draw in this fixture, in February 2009,
since 1998 and the only other occasion
when either side failed to register in
the last 16 fixtures was Arsenals 3-0
win in October 2009, seven games ago.
All the evidence points to both
teams scoring, available at 8/15 with
Coral, and Arsenal to win 2-1 is a
decent bet in the correct score market,
at 7/1 with the same firm. With that in
mind, consider selling goals at 3.2
with Sporting Index.
England can compound Wallabies misery
Arsenal can consign
Tottenham to more
derby misery at the
Emirates tomorrow
FRIDAY 16 NOVEMBER 2012
29
SPORT TRADER
ENGLAND.......................................
AUSTRALIA....................................
Tomorrow 2.30pm
n Pointers
Arsenal at 19/20 with Coral
Arsenal to win 2-1 at 7/1 with Coral
Sell total goals at 3.2 with Sporting Index
cityam.com
Arsenal destined
for derby delight
T
HERE has rarely been a dull
moment in the history of the
north London derby, but it is a
clash which has outdone even
itself in recent years.
It is impossible to name all the high-
lights, for there have been plenty of
them, from Tottenhams 5-1 win en
route to lifting the 2008 League Cup,
to the 4-4 draw at the Emirates the fol-
lowing season, when David Bentley
scored from almost the centre-circle
and Spurs earned a point thanks to
two goals at the death.
Then there was Younes Kabouls late
winner, the odd goal in five, for Spurs
first victory at the Emirates in
November 2010, not to mention the six
goals the teams shared at White Hart
Lane later that campaign nor, most
recently, Arsenals comeback from two
goals and 10 points down to prevail
n Pointers
England with -8 handicap at 10/11 with Coral
Buy total points at 45 with Sporting Index
IN BRIEF
Ireland bring in new Ulster trio
nRUGBY UNION: Ireland have handed
three uncapped players their debuts
for the match against Fiji in Limerick
tomorrow. The three players; Luke
Marshall, Craig Gilroy and Paddy
Jackson, all play for Ulster as only
Conor Murray, Jamie Heaslip and Mike
Ross have been retained from the side
that lost 16-12 to South Africa on
Saturday.
Webber warns Vettel over title
nFORMULA ONE: Red Bull driver
Mark Webber believes team-mate
Sebastian Vettel must win the title in
Austin this weekend. Brazil can be
incredibly inconsistent with the
weather, so that's a bit more of a
nervous venue, said Webber. There
are numerous permutations but Vettel
can be crowned champion on Sunday
if he wins the race and rival Fernando
Alonso finishes fifth.
Results
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TOTTENHAM..................................
Tomorrow 12.45pm
BEN CLEMINSON AND WILLIAM CHRIMES PREVIEW THE WEEKENDS BEST SPORTS BETS
ENGLAND are under no illusions
that hammering Fiji was anything
other than a warm-up for their
showdown with Australia. Putting
54 points on Fiji vindicated Stuart
Lancasters selection choices,
especially Alex Goodes man-of-the-
match performance.
Lancaster admitted England
started sluggishly last Saturday and
hell know that they cannot make
the same mistakes, even though this
isnt the strongest Australian side.
The Wallabies were beaten 35-18 on
their last visit to HQ in a contest
that will be remembered for Chris
Ashtons phenomenal try. The
winger is likely to return to the
starting XV having served his ban as
England shuffle the pack.
Englands win in November 2010
over Australia was the second on
the bounce against their old rivals
and the Red Rose are 1/3 with Coral
to make it a hat-trick.
Robbie Deanss troops were
embarrassed in Paris last Saturday
when losing 33-6. France outplayed
the Wallabies in all facets of the
game as they failed to score a try
for the second straight
international. Australia will
welcome back Berrick Barnes and
Digby Ioane to the fold, but I dont
think that will be enough.
England won by 17 points last
time they met the Aussies and
coupled with their efforts in
France, Im more than happy to
back Lancasters side with the -8
handicap at 10/11 with Coral.
There were 53 points scored
when these two last met and
Australias susceptible defence
shipped 33 on their last outing, so
spread bettors are advised to buy
total points at 45 with Sporting
Index.
TOTTENHAM manager Andre Villas-
Boas has warned his team against
underestimating sleeping giants
Arsenal ahead of tomorrows north
London derby at the Emirates
Stadium.
The Gunners are mired in their
worst start for 30 years, currently
eighth in the Premier League, having
picked up a meagre 16 points from
11 matches. Spurs, who have not
finished above their neighbours
since 1995, before Arsene Wenger
took over, sit one place above.
But Villas-Boas wants his team to
learn from the heartache of last
season, when they gave up a 10-point
lead over their rivals, and with it a
Champions League spot.
Arsenals current position is
irrelevant because last season they
had a poor start and clinched third
spot by picking up points at the
decisive moment of the season, so
its wrong to condemn teams on a
weekly basis, said Villas-Boas.
The league is so tight for these
spots. Were nearer to Arsenal than
we were in the past but it is still a
step up and is where we want to be
in the future. Recently, they have
obtained more Champions League
qualifications, so our objectives for
the season have been within their
reach for the last couple of years.
The former Chelsea manager is
looking forward to his first derby
since taking over at White Hart Lane.
Ive been getting used to this
derby for the last two weeks, he
said. The staff speak about it and
the chairman keeps on mentioning
it. Its normal and you have to
embrace it. Its part of the greater
culture of the game and it means a
lot for both teams.
Tottenham, who will be keen to
bounce back from a cruel last-
minute defeat at the hands of
Manchester City on Sunday, are
without injured central midfielder
Mousa Dembele. Returns for Kyle
Walker, Jermain Defoe and Aaron
Lennon will be decided following
assessment.
Arsenal could welcome goalkeeper
Wojciech Szczesny back into the fray,
following tests later today, after being
sidelined for two months with an
ankle injury. Aaron Ramsey and Alex
Oxlade-Chamberlain are likely to
feature, having appeared in the 3-3
draw against Fulham last weekend.
AVBs warning
to Tottenham
over derby day
PREMIER League clubs are close to
finalising historic cost-control meas-
ures in line with European financial
fair play rules following a meeting of
chairmen yesterday in London.
A number of details, such as
whether to include a cap on year-on-
year wage bill increases, remain unre-
solved but it is understood there is
broad agreement to proceed with
rules that would ultimately require
teams to break even.
A final decision on the regulations
the first of their kind to be imposed
on the English top flight is not
expected until the next meeting in
early 2013, with the restrictions set to
take effect next season.
The move is an attempt by clubs to
arrest spiralling wage costs, a major
factor in most sides making a loss
despite record league revenues, with
a 5bn television windfall set to kick
in next term.
It was a constructive meeting,
good ideas were put forward, one
Premier League chairman who did
not want to be named told City A.M.
The majority of clubs are in favour
of financial fair play or break even
the odd ones dont want any change
whatsoever, but its looking fairly pos-
itive. I dont think there will be a deci-
sion until after Christmas.
Arsenal and Manchester United are
thought to be in favour of adopting
rules in line with European govern-
ing body Uefa, which will gradually
reduce allowable losses with a view to
making clubs break even or face
expulsion from competitions such as
the Champions League.
Since a number of top-flight sides
with European ambitions are
required to abide by them, as well as
clubs eyeing promotion from the
Championship, it is seen as the most
logical course of action.
Sunderland have proposed an alter-
native, that teams be restricted to
increasing their annual wage bill by a
maximum of 10 per cent. While the
break even rules have the broadest
support, it is understood a combina-
tion of both measures remains a pos-
sibility. Fulham, Tottenham and
Newcastle are among those opposed
to any form of regulation. Passing the
rule changes would require 14 of the
20 clubs to vote in favour.
FRIDAY 16 NOVEMBER 2012
30
SPORT
cityam.com/sport
BY TOM SHEPHERD
@cityam_sport
NORTH LONDON DERBY
nOf their last 10 league meetings,
Arsenal have won four, Tottenham
three, and three have been drawn
nFour times in the last four seasons a
team has overturned a two-goal
deficit to win or draw the fixture
nTottenhams 3-2 win in 2010/11
season is the only time Spurs have
won away to Arsenal in 19 years
nThe fixture has seen an average of
4.2 goals over the last five years
nEmmanuel Adebayor has scored
nine goals in the North London derby,
eight for Arsenal and once for current
club Tottenham
FOOTBALL
COMMENT
TREVOR STEVEN
P
ICKING over Englands defeat
in Sweden on Wednesday there
is only one place to start, with
the majestic, swaggering
performance of Zlatan Ibrahimovic
and that jaw-dropping goal.
The ball must have been six feet in
the air when he made contact with
it, taking out the goalkeeper and
defender from 35 yards. Im sure it
will now be a permanent fixture in
all best goal shortlists. I had first-
hand experience of Maradonas
incredible solo effort against
England at the 1986 World Cup but
Ibrahimovics overhead kick is
definitely in the top five strikes I
have ever seen.
His other goals were also brilliant.
His first was just a flick of the boot
but it rocketed past Joe Hart, while
he started and finished the second
before losing Ryan Shawcross and
volleying home. He was head and
shoulders above every other player
on the pitch, literally and
figuratively, although there were
some encouraging England
performances from debutants and
fringe players.
Evertons Leon Osman looked very
comfortable winning his first cap
and showed he is at the top of his
game. Unfortunately it has come at
the age of 31, but he looks a better
midfield option than James Milner
to me. Teenager Raheem Sterling is
obviously going to be exceptional
and looks set to keep his place in the
squad, and although he didnt get
much time Wilfried Zaha looks
outstanding and it made sense to
blood him.
I like the look of Tottenhams
Steven Caulker, who was very strong
and seemed to fit in very well, but
Im less sure about his fellow
defender Shawcross. I didnt think
he should have been in the squad
and he was found out by the clever
movement of Ibrahimovic.
Of the fringe players, left-back
Leighton Baines translated his
excellent club form to the
international stage, while striker
Danny Welbeck is establishing
himself very well.
KNUCKLE DOWN
My concerns are that many of the
players involved, such as Osman,
may not make it into the next squad
and that this game has not really
helped Roy Hodgson get a better idea
of his best XI. Also, while we are
producing promising youngsters,
they are mostly wide players, such as
Sterling, Zaha and Alex Oxlade-
Chamberlain. Aside from Jack
Wilshere there is a lack of emerging
talent in central midfield. Tom
Huddlestone? I dont think so.
Lastly, Hodgson must be alarmed
by the deterioration of Hart. He
looked rock solid in the last two
seasons but mistakes have dented his
confidence and he is now over-
thinking and making irrational
decisions. He needs to knuckle down
and get his game back before other
teams start to target him as a weak
link in this England team.
Trevor Steven is a former England
footballer who played at two World Cups
and two European Championships. He
now works as a media commentator.
Majestic Zlatan outshone Hodgson starlets
Top English
clubs set to
agree break
even rules
SIGN UP 45M FALCAO, LUIZ TELLS CHELSEA
BY FRANK DALLERES
SPOTLIGHT ON
financial fair play in
FOOTBALL
CHELSEA defender David Luiz has urged the Blues to sign Radamel Falcao (above). The
45m-rated striker terrorized Chelsea with a hat-trick when Atletico Madrid beat them
4-1 in Augusts Uefa Super Cup. He would fit perfectly into the squad, said Luiz. We
would all be happy because he is very difficult to stop. He is an excellent striker."
31
Choc Thornton previews the Paddy
Power Gold Cup at Cheltenham
cityam.com
FRIDAY 16 NOVEMBER 2012
RUGBY
COMMENT
HUGH VYVYAN
W
HAT have we learned from
the autumn internationals
so far? New Zealand are still
the best by far, South Africa
win tight games with brutal defence
and Argentina again punched above
their weight against a surprisingly
poor Welsh team.
What has happened to Australia?
Hammered by a good French display,
theyve never been so inconsistent. I
spoke to their forwards coach
Andrew Blades this week; they are
hurting badly and we should expect
a backlash tomorrow. They have
injuries to key players but one of the
most exciting backs anywhere, Digby
Ioane, returns and has expressed his
relish about getting stuck into
pretty boy England wingers. Im
sure Chris Ashton will be delighted
someone has called him pretty.
England seem settled, unflashy yet
with glimpses of attacking intent.
Against Fiji they looked a team
growing in confidence. A hard-
working forward pack spearheaded
by the excellent Chris Robshaw
should provide the platform for a
backline that, with Alex Goode, has a
balance of skill, pace and power. An
England win will see Twickenham
start to feel like a fortress again.
Our own fortress in the making is
Saracens Allianz Park. The state of
the art stadium in north London,
which opens for our first game on 16
February, is a welcome home to a
wandering team who have played 11
games at 11 different venues this
term. The fact weve only lost once
shows the club is in good shape on
the field, and with a new stadium
and new City office at Allianz HQ on
Gracechurch Street, it is showing
ambition and intent off the field.
Hugh Vyvyan is an ex England and
Saracens rugby player who is currently
developing the Saracens Tulip Club
offering in the City.
Beware the backlash,
Aussies are wounded
ENGLAND spinner Graeme Swann
enjoyed a personal milestone after
he took all four wickets but failed to
prevent Indian taking the upper
hand on day one of the first Test in
Ahmedabad yesterday.
Swanns haul, which included
centurion Virender Sehwag and
Sachin Tendulkar, took his career
total to 194 wickets, eclipsing the
great Jim Laker as Englands most
successful off-spinner.
It is a proud moment, he said.
Im always saying Im not one for
stats, but when people told me I was
near to Jim Laker I was genuinely
excited. Im very honoured to go
past him.
India finished on 323-4, thanks
largely to a rampaging start in
which Sehwag (117) claimed his first
ton for almost two years off just 90
balls and shared an opening
partnership of 134 with Gautam
Gambhir as the hosts were allowed
to hit through the offside too often.
Swann overtakes Laker tally
as India make tourists toil
BY FRANK DALLERES Poor fielding let England down as
the tourists dropped four crucial
catches. The most costly drop
occurred when the impressive
Cheteshwar Pujarea hit a leading
edge off Tim Bresnan whilst on
eight. James Anderson darted in
from mid-on but the ball just about
looped over his head.
Pujara accumulated 98 not out,
although the tourists curtailed the
run rate as the day wore on, Swann
also taking the wickets of Tendulkar
(13) and Virat Kohli (19).
Swann had to bowl 32 overs as
Nottinghamshire all-rounder Samit
Patel was largely ineffective with
the ball and perhaps failed to justify
his selection ahead of left-arm
spinner Monty Panesar.
Having lost the toss on that
pitch, wed obviously have liked five
or six wickets but well take four,
Swann added. At lunchtime, we sat
down and came up with a new
gameplan, because I dont think we
bowled quite straight enough in the
first session.
Ashton, who is back from a ban, has scored three tries in three Tests against Australia
ENGLAND head coach Stuart
Lancaster is hoping the returning
Chris Ashton can rediscover his
devastating international form
when his side take on Australia at
Twickenham tomorrow.
Ashton, who returns from a one-
match suspension, has not scored
an international try in 2012,
having last gone over against
Scotland at the Rugby World Cup
in October 2011. However the
Saracens winger, who is the only
change from Saturdays emphatic
victory over Fiji, has managed to
damage Australia in the past,
scoring three tries in three Tests
against the Wallabies.
Were looking for a bit of what
Chris Ashton delivers in matches,
said Lancaster. He chases the ball,
creates line breaks, makes
opportunities for others and takes
them himself.
Australia suffered a thumping
33-6 defeat to France on Saturday
but Lancaster expects a backlash.
The Aussies will have done a lot
of work on their own performance
this week after losing against the
French, he added. But the game
before that they pushed the All
Blacks to 18-18 and they are a very
experienced side who have played
some very good rugby over the last
six months.
England are targeting a third
consecutive victory over Australia
for the first time since winning
the World Cup in 2003.
BY ALEX SHARP
Ashton can give us the X-factor, says Lancaster
Betting tips in The Punter: Pages 28-29