BUSINESS WITH PERSONALITY
HATE SHOPPING? YOU
Issue 1,351 Monday 28 March 2011
TOP LIB DEMS
CALL FOR NEW
PROPERTY TAX
POLITICS
▲
BY STEVE DINNEEN
THE two most powerful Lib Dems yes-
terday called for more tax to be levied
on high-value homeowners to offset
the scrapping of the 50p rate of tax.
Deputy prime minister Nick Clegg
and business secretary Vince Cable
both said those with expensive proper-
ties would be targeted when the 50p
rate is eventually dropped but ruled
out a revival of the controversial Lib
Dem “mansion tax” plan.
It is understood council tax bands
could be reevaluated so those with
high value properties will pay more.
Clegg also said the tax hikes could
come through changes to the struc-
ture of stamp duty, the top rate of
which is already going to five per cent
next month.
Cable said he and Chancellor
George Osborne are in agreement over
cutting the 50p rate. However, while
Osborne reasserted his long-term
opposition to the rate, he said in the
Budget “now wouldn’t be the right
time to remove it.” He also said he will
ask HMRC to investigate how much
revenue it raises.
Osborne said in his Budget speech
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that: “There’s one area that needs
extra work in the coming months, and
that’s on the taxation of very high
value property, where evasion and
avoidance are widespread and some of
the wealthiest are not paying their fair
share...we will also be redoubling our
efforts to find ways of ensuring that
owners of high value property cannot
avoid paying their fair share.”
A Treasury source told City A.M.
Osborne’s emphasis is on reducing tax
avoidance. The main scheme being tar-
geted is one which allows some people
to avoid stamp duty by purchasing
homes via companies.
Cable said: “You need to have a prop-
er base for taxing property. That’s one
of the things we’re going to have to
look at as we change away from these
very high marginal rates.
“[The tax rate] moved up to 50p in
an emergency because we had to have
a sense that everybody was bearing
Business secretary Vince
Cable says he and
George Osborne agree
over the scrapping of
the 50p rate of tax
ALL ABOARD
www.cityam.com
some of the pain. The Chancellor said
in the budget that we’re going to have
to move away from that. I agree with
him. The Liberal Democrats agree
with him.
“But it needs to be a change which is
fair overall and takes account of the
fact that the wealthy have got to pay
their share. The emphasis may well
have to shift from high marginal rates
of tax on income, which are undesir-
able, to taxation of wealth, including
property. The chancellor said that in
his Budget.”
But the Treasury appeared to dis-
tance itself from the comments,
releasing a terse statement saying:
“The Government’s tax policies were
set out in full in last week’s Budget.”
Cable argued for a so-called man-
sion tax while in opposition, propos-
ing a 0.5 per cent charge on properties
worth more than £1m. He was forced
into an embarrassing U-turn after
coming under fire from his own party,
after which the proposed threshold
was hiked to £2m.
Cable has enjoyed a higher profile
in recent weeks after months in the
wilderness following his unguarded
remarks about “declaring war” on
Rupert Murdoch.
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P24
London counts the cost
of protest against cuts
London bank branches in the aftermath of the violence Pictures: Micha Theiner/City A.M.
▲
UK ECONOMY
BY STEVE DINNEEN AND PHOEBE TORRANCE
HSBC has slammed the attacks on its
branches during Saturday’s protests as
“entirely unjustified,” pointing out
that it is one of the UK’s top taxpayers.
Branches of Santander and HSBC
were boarded up yesterday after black-
clad, masked youths smashed their
way into branches, where they
destroyed fittings and scrawled graffi-
ti. Lloyds TSB was also targeted.
An HSBC spokesman said: “We feel
that damage to our branches is entire-
ly unjustified. HSBC is a top ten UK tax
payer. In 2010 we paid £1.12bn tax in
the UK, equal to almost all profit made
from UK personal and business cus-
tomers. As for security, our priority is
the safety of our staff, branches can be
repaired.”
Many businesses across London
were privately angry yesterday, with
some worried that the riots would
PAUL MYNERS
PREDICTS NEW
WAVE OF WOMEN
DIRECTORS P7
FREE
damage the UK’s image as an invest-
ment centre. The overall cost of lost
business this weekend could come to
£5m. John Lewis said its takings were
down 20 per cent on Saturday. Others
– including Sir Philip Green’s Topshop
– face clean-up costs which could run
into tens of thousands.
Councils are also bracing them-
selves for a bumper clean-up opera-
tion. Westminster Council had 100
street cleaners working throughout
the night on Saturday and all day yes-
terday. Trafalgar Square was daubed
with paint and the lions at the foot of
Nelson’s Column were defaced.
The council’s cabinet member for
business, Brian Connell, said: “It’s
ironic and regrettable that a minor-
ity of people claiming to defend jobs
are content to damage the liveli-
hoods of the thousands employed in
the capital.”
At least 250,000 people joined the
protest, which ended with 201 arrests.
Certified Distribution
31/01/11 - 27/02/11 is 107,265
 2 News
Cutting spending through the ages
EDITOR’S LETTER
ALLISTER HEATH
BEWARE, dear reader: this is a trick
question. Which Chancellor of the
Exchequer cut spending the most in a
single year? Was it George Osborne in
his Budget last week, which if this
weekend’s protesters are to be
believed is pushing through the most
“reckless” reductions imaginable? Or
was it the great Tory chancellor Nigel
Lawson at the height of Margaret
Thatcher’s premiership in the 1980s,
the Tories’ Ken Clarke in the 1990s or
even the 1970s socialist stalwart
Dennis Healey?
Courtesy of the Office for Budget
7th Floor, Centurion House,
24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Craig Gaymer
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
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WHAT THE OTHER PAPERS SAY THIS MORNING
HOLLYWOOD MAKEOVER FOR YOUTUBE
Google is deepening its ties with
Hollywood by enlisting top stars to
supply original content for YouTube
in a bid to boost profits and user
engagement at the company’s online
video site. Google has been making
the rounds of Hollywood’s biggest tal-
ent agencies, outlining plans to cre-
ate a network of channels based
around specific themes or niches,
such as fashion, food and video
games.
L&G SET FOR REAL ESTATE LENDING
DRIVE
Legal & General, the UK’s fourth
largest insurer, is gearing up for a
push into lending money to the UK
commercial real estate market to
help fill the debt gap left by retreat-
ing banks. The insurer has appointed
Ashley Goldblatt, who has worked in
the company’s fixed income team, to
Responsibility, which has released all
of the data, adjusted for inflation, we
can finally calculate the answers.
Lawson cut by 2.6 per cent in 1988-89,
at the height of his very own inflation-
ary bubble; but the reductions were
painless as they were caused by a
slump in unemployment benefits. He
cut in more difficult circumstances by
1.4 per cent in 1985-86. Spending grew
slightly in the following two years –
but expenditure over the four-year
period fell by 3.1 per cent. Spending
only returned to the levels of 1984-85
in 1990-91 – and remained lower as a
share of GDP.
Remarkably, Labour’s Healey was
the joint second biggest one-year cut-
ter: he slashed total public spending
by 2.2 per cent in real terms in 1977-
78, after a bankrupt UK was forced to
take orders from the IMF. This was
almost exactly the same as the 2.2 per
cent chopped by Clarke in 1996-97
–though Gordon Brown stuck to his
Tory predecessor’s spending plans and
went on to cut another 0.5 per cent or
Merkel loses
in heartland
POLITICS
▲
BY HARRY BANKS
GERMAN chancellor Angela Merkel’s
conservative party lost power in a
regional stronghold yesterday, with
early poll results showing the Greens,
buoyed by Japan’s nuclear crisis, surg-
ing to their first state premiership.
In Baden-Wuerttemberg state,
where anti-nuclear sentiment has
been mobilised by Japan’s nuclear
breakdown, the Greens and Social
Democrats (SPD) were set to win 47.3
per cent, eclipsing the Christian
Democrats who held power there for
six decades.
Merkel’s CDU and its Free
Democrat coalition partners, big
backers of nuclear power, won a com-
bined 44.3 per cent, according to pro-
jections last night in the state of 11m
million people.
prepare a strategy to invest into debt
in the property market, which has
been hamstrung since the credit cri-
sis by the lack of available bank
finance.
ODDBINS SEEKS ADMINISTRATION
Oddbins, the wine retailer, has
applied to go into administration to
protect itself from creditors’ claims.
The move, which the company
described as “purely precautionary”,
was enacted at the end of last week
after one creditor issued a winding-
up order.
TULLOW LOOKS TO RAISE GHANA OIL
STAKE
Ireland’s Tullow Oil is seeking to
increase its stake in Ghana’s offshore
Jubilee field through the $300m
acquisition of shares controlled by
allies of John Kufuor, the former pres-
ident, industry officials in London
and Ghana said. Tullow’s bid is high-
er than offers made by other mostly
Ghanaian groups.
so in 1997-98, taking the total two-year
reduction to 2.7 per cent.
And what of Osborne? He will be
cutting by just 0.6 per cent in 2011-12
(barely any more than Brown man-
aged, and less in cash terms than
Healey), followed by 1.1 per cent in
2012-13, 1.3 per cent in 2013-14 and 0.8
per cent in 2014-15. Overall, spending
will be reduced by 3.7 per cent. The
reason these figures are lower than
the ones usually cited is that they take
all spending into account – not just a
few selected departments. So
Osborne’s one year-cuts are modest
compared with those of his predeces-
sors – but his reductions are spread
over four years and go slightly further
than any Chancellor has achieved in
the past 40 years. It might have been
better politically as well as economi-
cally for Osborne to spread the cuts
over just two years, and not to back-
load them in the way he has done.
The worrying reality is that
Osborne’s austerity package is the
minimum required to stabilise the
Analysts said the loss would cause
Merkel some headaches in her party,
with many disconcerted by recent
policy decisions; but an immediate
leadership challenge wasunlikely.
“The horrible pictures from Japan
and the horrible events in Japan was
the main issue over the last two
weeks,” said defeated CDU state pre-
mier Stefan Mappus.
The Greens’ 13 per cent advance
was mirrored in the state election in
Rhineland-Palatinate, where the SPD
held power and was likely to form a
coaltion with the Greens.
German chancellor
Angela Merkel has lost
power in the party
stronghold as Greens
win on nuclear issue
NEW INVESTOR SAVOURS TASTE OF
WESTBURY’S ROBUST RESULTS
Intermediate Capital Group has
acquired 20 per cent of Westbury
Street Holdings, Britain’s fourth-
biggest caterer. The purchase by the
FTSE 250 listed investment firm
comes soon after it took stakes in
Courtepaille, the French restaurant
chain, and Quorn, the meat-free food
group.
YOU’VE GONE TOO FAR, TOO FAST,
POWER CHIEFS TELL CHANCELLOR
The introduction of a carbon tax in
the Budget to penalise coal-fired
power stations that emit greenhouse
gases threatens to accelerate the clo-
sure of generating plant, potentially
creating a serious energy supply gap
in the middle of the decade. The elec-
tricity generating industry has
warned the Treasury that it has gone
too far, too fast.
public finances. The most likely Plan B
would be more tax hikes and more
cuts. There is simply no way that glob-
al investors would accept huge
increases in spending, Keynesian-style,
in the current climate – and any boost
to demand from a slight reduction in
cuts (as advocated by the more realis-
tic Labour opponents of the
Chancellor) would probably be can-
celled out by higher rates. The OBR cal-
culates that every percentage point
rise in gilt rates would cost the taxpay-
er another £5bn in 2015-16. Debt inter-
est spending in the first ten months of
the year was up 48 per cent.
Revenues are also uncertain. The
OBR is predicting a 10 per cent fall in
the cash value of City bonuses in 2010-
11, compared with a previous assump-
tion of 5 per cent growth. This will cut
tax receipts by £1bn a year, as the war
on the City backfires. One thing is cer-
tain: smashing up a few bank branch-
es and shops will resolve nothing.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Former chief executive of the Co-op, David Anderson, will head up the Reclaim Fund
Big Society role for Co-op
EXCLUSIVE
▲
BY JULIET SAMUEL
DAVID Anderson, former chief exec-
utive of Co-operative Financial
Services, is to head up a non-profit
organisation that will provide a
major source of funding for David
Cameron’s Big Society Bank, City A.M.
can reveal.
The Reclaim Fund, which will
manage up to £400m in assets from
“dormant” bank accounts that have
not been accessed for 15 years, is to
JOHN LEWIS INTRODUCES THE “NEVER
ENDING REFUND” TO ENCOURAGE SHOP-
PERS IN AUSTERE TIMES
The days of buying a new dress that
you shove in the back of the wardrobe
and never wear are over after John
Lewis announced it is scrapping its 28
day return limit for a “never ending
refund”. The retailer is the first major
high street name to scrap the refund
limit.
BRITAIN SET FOR “BROLLY AND SUN-
BLOCK” SUMMER
Britain faces a “brolly and sunblock”
summer with June thunderstorms
threatening Wimbledon and
Glastonbury, followed by a mixed July
and scorching August in time for the
school holidays. As the clocks went
forward and British summer time
started, weathermen predicted this
summer will see worse weather than
the last two years.
CITYA.M. 28 MARCH 2011
NEWS | IN BRIEF
Rio Tinto still short of shares
Global miner Rio Tinto remains short of
its target of holding more than 50 per
cent of shares in Riversdale Mining ,
ahead of a deadline this evening on its
A$3.9bn (£2.5bn) takeover offer for the
Mozambique-focused coal miner. It had
reached just under 40 per cent as of this
morning, Rio Tinto said, with still no
word on whether Riversdale’s two
biggest shareholders, India's Tata Steel
and Brazil's CSN , would sell any of their
shares.
Apple sells out of iPad 2
Apple has already sold out second gener-
ation iPads in the UK after massive
demand in its first weekend on sale.
Those ordering online now face a wait of
up to four weeks, with the US taking pri-
ority. Analysts believe Apple shifted a
staggering 500,000 units in the US over
the weekend of the 11 March. It is
thought supply could also be hit by com-
ponent shortages following the Japanese
earthquake, which could push waiting
times back even further. Apple sold out
of first generation iPads within days as
demand exceeded all expectations, with
supply shortages lasting months.
be established this week as a sub-
sidiary of the Co-op, with Anderson
as chairman.
Paul Mills, a business leader at the
Co-op, will be executive director in
charge of administrating the fund,
which is expected to channel £100m
to the Big Lottery Fund in its first
year.
The Big Lottery will in turn fund
the Big Society Bank, with banks
signed up to the government’s
Merlin deal providing another
£200m in funds.
SANTANDER, CCB TO TARGET SMALLER
CHINA TOWNS
Spain’s Banco Santander SA will take
a 19.9 per cent stake in a joint venture
with China Construction Bank Corp.
to provide banking services outside of
China’s major cities, an area of
increasing interest to foreign finan-
cial institutions looking to make a
mark in China.
CHIP FIRM GAINS SIZABLE INFUSION
A Silicon Valley start-up has raised
one of the biggest funding rounds in
years in the semiconductor industry,
a sector that many venture-capital
firms have been avoiding. The $108m
infusion in Tabula is also notable
because Tabula is targeting a market
niche that has attracted a number of
other entrants that subsequently
went out of business. The company
spent nearly eight years perfecting a
technology for programmable chips.
CITYA.M. 28 MARCH 2011
EasyJet bets sales on
business travellers
▲
AVIATION
BY ROGER BAIRD IN AMMAN
EASYJET will target business cus-
tomers to boost sales, according to
chief executive Carolyn McCall.
The second largest budget airline
in Europe is testing a Flexifare sys-
tem, which offers business travellers
preferential boarding, free hold lug-
gage and the ability to change planes
just two hours before flight time.
“We have been testing this since
November and the signs are positive,”
said McCall.
The service will cost around £100
per journey compared to £250 a trip
offered for equivalent services by flag-
carriers British Airways, Air France-
KLM or Lufthansa.
The airline plans to make Flexifare
available on its website by the sum-
mer, to target its business customers
that work in small or medium sized
firms and book their own travel
arrangements.
Nineteen per cent of easyJet’s cur-
rent passengers are business trav-
ellers. They pay on average between
10 per cent and 20 per cent higher
fees because they book later than
leisure fliers.
McCall was speaking yesterday hav-
News 3
ing flown into Amman on easyJet’s
inaugural flight to the Jordanian
capital (right), just 48 hours after pro-
testers demanding reform clashed
with government supporters in the
city centre, killing one and injuring
100.
But the airline boss insisted the
route was safe to fly.
“Jordan is stable,” she said. “The
Foreign Office’s advice is that we can EasyJet boss Carolyn McCall said the airline may cut routes Picture:Micha Theiner/City A.M.
fly here and we will be guided by
that.”
The airline has cut 22 of its 550
routes in the last six months, with
McCall clear that it would not hesi-
Don’t judge growth plans yet
tate to axe further failing routes. DEPSITE stronger than anticipated 86 per cent for February – up 3.1 per
“You will see us being much more volume growth in February, shares cent to 3.83m from 3.39m in 2010 –
brutal about what routes work and in easyJet are yet to recover from the investors are concerned that
what routes don’t,” she said. 16 per cent tumble they took in mid- easyJet’s rapidly expanding fleet
January, when the airline warned means returns won’t match costs.
ANALYSIS l easyJet that first-half losses could double to But it’s not time to sell yet.
480 £160m due to fuel costs and lost rev- EasyJet’s winter 2011 schedule
p
enue from poor winter weather. should provide investors with an
440 Though total revenue for the opportunity to assess management’s
324.50 fourth quarter of 2010 was up by 7.5 longer-term prudence, and though
25 Mar
400 per cent at £654m, disruption costs target prices are falling, most bro-
were bigger than anticipated, run- kers remain neutral on the stock.
360 ning to £31m.
The continued downward trend
320 since January reflects the fact that
despite posting a high load factor of
BOTTOMLINE
10 Jan 28 Jan 17 Feb 9 Mar Analysis by Elizabeth Fournier
 4 News
Osorio seeks to fill £15bn
funding gap before auction
▲
BANKING
BY JULIET SAMUEL
LLOYDS needs to find funding to fill a
£15bn-£20bn black hole in the
accounts of the 600 branches it is try-
ing to sell off in the coming months,
according to a source familiar with
the situation.
New chief executive Antonio Horta-
Osorio wants to move quickly to
offload the branches, which the bank
is required to sell due to an EU compe-
tition ruling.
But the sale will mean weaning
them off the government’s Special
Liquidity Scheme, which the overall
Lloyds group still relies on for up to
£51.6bn of its funding (as of December
2010).
The funding for the branches is like-
ly to come in the form of a loan sup-
plied in part by investment banks
advising Lloyds on the deal, and in
part from potential buyers or private
equity backers.
Lloyds has not yet chosen an adviser,
but Credit Suisse, Rothschild,
Citigroup, UBS and JP Morgan are all
thought to be vying for the deal.
The ability to line up funding will
make a crucial difference to the attrac-
tiveness of the branches when Lloyds
sends out a prospectus for the sale.
Potential bidders include Lord
Leven’s investment vehicle NBNK,
Virgin Money, National Australia Bank
and private equity firm JC Flowers.
Lloyds declined to comment.
Cable to look
at Lloyds case
▲
POLITICS
BY JULIET SAMUEL
BUSINESS secretary Vince Cable will
take legal advice on publishing a
dossier that could be potentially
embarrassing for his predecessor
Peter Mandelson and shine a light on
Lloyds TSB’s merger with HBOS, he
told City A.M. yesterday.
It is the first sign that Cable could
push for the release of a document
that he called on Mandelson to pub-
lish before the General Election.
The document relates to a case
brought against Lloyds’ tie-up with
HBOS by a group of Scottish busi-
nessmen, who said it was un-compet-
itive.
A “secret dossier” was allegedly
compiled to support the govern-
ment’s argument, with all parties on
the case then sworn to silence.
Lloyds Action Now, a group of
ECB set to offer struggling Irish
banks a medium-term lifeline
▲
BANKING
THE European Central Bank is work-
ing on a plan to keep struggling Irish
banks afloat in the medium term.
The new facility, which would
replace the use of the Emergency
Liquidity Assistance programme,
would give Irish banks more time to
shrink their assets and reduce their
dependence on emergency funding.
Ireland’s banks have an estimated
€150bn (£132bn) in loans from the
ECB and Irish central bank.
And a weekend report in the
Sunday Business Post suggested that
upcoming stress tests on Ireland’s
four main lenders will reveal a capital
CITYA.M. 28 MARCH 2011
Lloyds chief
Antonio Horta-
Osorio wants to
sell 500 branches
Picture:
Micha Theiner
/City A.M.
Lloyds shareholders currently suing
the government and the bank’s for-
mer directors, say that the document
would reveal that Mandelson did not
adequately inform the courts that
HBOS had drawn on £25.4bn of
emerging funding.
They claim the revelation could
have had a crucial impact on the
courts’ decision to allow the merger
and recently filed a freedom of infor-
mation calling on Cable to publish it.
Cable told City A.M. that he is not
sure what the current legal position
is but said: “Now that you’ve pointed
it out to me, I will certainly make
inquiries as to what the position is.”
He added he intends to prioritise
“the broad principle that we must
have as much transparency as possi-
ble over a merger that was very dam-
aging for shareholders”.
Lloyds declined to comment.
hole of around €20bn.
Ireland’s central bank will on
Thursday publish the new stress test
results from Bank of Ireland, Allied
irish Banks, Irish Life& Permanent
and EBS Building Society.
The central bank has declined to
comment in advance of the results.
A Reuters survey of analysts showed
that around €25bn out of the €35bn
set aside for the banks under EU-IMF
deal would be required as a result of
the stress tests.
However the creation of a scheme,
said to be called a “Facility for Banks
Under Restructuring,” would reduce
the need for panic banking sales.
CITYA.M. 28 MARCH 2011 News 5

ITV may buy Libyan rebels

retake towns
to boost its from Gaddafi

studios arm

▲
WORLD
LIBYA’S ramshackle rebel army pushed
west yesterday to retake a series of
towns from the forces of Muammar
Gaddafi as they pulled back under
pressure from Western air strikes.
Chief executive of Emboldened by the capture of the
ITV Adam strategic town of Ajdabiyah with the
▲

MEDIA ed as possible targets, although Crozier is keen to help of foreign warplanes on

BY STEVE DINNEEN
ITV may grow its struggling studios
division through acquisitions, accord-
ing to its chief executive Adam
Crozier.
The broadcaster is desperate to
strengthen the division to provide a
revenue stream that is less volatile
than advertising income.
A bounce-back in the ad market tre-
bled ITV’s pre-tax profits to £321m
last year.
However, it saw a steep fall in prof-
its at its studio division, which slid 11
per cent to £81m, with revenues drop-
ping 12.5 per cent to £293m.
This has led analysts to question
how susceptible ITV may be to a sec-
ond economic downturn. Crozier sees
a bolstered studios division as a key
growth area, allowing ITV to export
programming abroad and cushion
against a drop in advertising.
A number of high profile independ-
ent production firms have been moot-
sources close to ITV have distanced
themselves from any imminent bids.
A glut of ITV executives have left
the firm to start production compa-
nies and these firms top the list of
likely acquisitions. These include:
• Mammoth Screen, the firm run
by former ITV executives Michele
Buck and Damien Timmer, which
produces shows including Wuthering
Heights.
• Left Bank Pictures, set up by ITV-
Companies ITV may acquire
man Andy Harries, which produces
Wallander.
• All3Media, the so-called “super-
indie” behind shows such as
Midsomer Murders, which is run by
former ITV bosses including Steve
Morrison, David Liddiment, Jules
Burns and Wayne Garvie.
boost its studios
division
• Gallowgate, the Ant and Dec
production vehicle with strong ties
to ITV.
• RTL-owned TalkbackThames,
the production arm of X-Factor
maker Freemantle, although it is
questionable whether ITV could
afford it.
Saturday, the rebels have within two
days dramatically reversed military
losses in their five-week insurgency
and regained control of all the main
oil terminals in eastern Libya, as far as
the town of Bin Jawad.
Rebels said they now had their
sights on the coastal town of Sirte,
Gaddafi’s home town and an impor-
tant military base about 150 km fur-
ther along the coastal road.
On the diplomatic front, NATO
agreed yesterday to take full com-
mand of military operations in Libya.
Meanwhile, the United States has
vowed to cut its military role in Libya
over the next week and join other
nations in ejecting Libya’s Muammar
Gaddafi from power.
US defence secretary Robert Gates
also raised the possibility that
Gaddafi’s regime could splinter and
said an international conference in
London tomorrow would discuss
political strategies to help bring an
end to Gaddafi’s 41-year rule.
 6 News
Japanese radiation
levels have soared
▲
WORLD
JAPAN is now resigned to a long fight
to contain the world’s worst atomic
crisis in 25 years after high radiation
levels complicated work at its crip-
pled nuclear plant.
Engineers have been battling to
control the six-reactor Fukushima
complex since it was damaged by a 11
March earthquake and tsunami that
also left more than 27,000 people
David Cameron will
urge the public to
become more
entrepreneurial.
Picture:
Micha Theiner
/City A.M.
dead or missing across Japan’s devas-
tated north east.
Radiation at the Tokyo Electric
Power plant has soared in recent days:
latest readings at the weekend
showed contamination 100,000 times
normal in water at reactor No. 2 and
1,850 times normal in the nearby sea.
Those were the most alarming levels
since the crisis began, experts said.
Tokyo Electric conceded it does not
know how long the crisis will last.
PM backs the
City’s start-up
business plans
▲
ENTREPRENEURS
BY DONATA HUGGINS
DAVID Cameron will today back a cam-
paign launched by over 60 City firms
to encourage people to become entre-
preneurs.
Firms including HSBC, Deloitte,
Google, KMPG, BlackBerry, AXA,
Coutts, Intel and Lloyds TSB are offer-
ing a package of £1,500 to every start-
up that participates.
Cameron will pledge his full sup-
port for the scheme and ask the public
to consider starting a business them-
selves.
The initiative founded by StartUp
Britain is an entirely private sector led
campaign to boost economic growth.
The government will not be contribut-
ing any funds towards the scheme.
Cameron is expected to say: “We
won’t build the future we want to see
in this country if we go back to the bad
old days of big government spending,
big borrowing and big debt. The recov-
ery we need is a private sector-led
recovery.” A spokesperson for the
Department of Business said that the
government is already supporting
entrepreneurs through measures
introduced in last week’s Budget.
Porsche revs up for €5bn share
issue and Volkswagen merger
▲
AUTOMOTIVE
DEBT-LADEN German carmaker
Porsche has approved an almost €5bn
(£4.4bn) capital increase, clearing the
way for a merger with Volkswagen.
Porsche said last night it had fixed
the subscription price for the new
ordinary and preferred shares --
which will have dividend rights start-
ing as of August 1, 2010 – at €38
apiece, and the subscription ratio at
1:0.75. The figure is a discount of
more than 30 per cent on last week’s
closing price of €56.
The carmaker added that it expects
the public offering to be approved by
German financial watchdog BaFin
CITYA.M. 28 MARCH 2011
The start-up package being offered
by City firms includes:
· AXA will offer 10 per cent off busi-
ness insurance.
· BlackBerry will offer 1,000 free
start-up guides.
· Microsoft will train 5,000 start-ups
in how to use technology to drive their
business and marketing activities,
including free technology resources
worth up to £400 per company.
· Google will provide a limited
amount of free advertising.
· O2 will offer one month’s free line
rental.
· PayPal will offer three months free
fees for new accounts when signing up
to a Powa.com website.
· Fujitsu is offering a 30-day free trial
and 10 per cent off the annual costs of
its cloud computing services.
· McKinsey & Co is launching a
scheme to encourage innovative grad-
uates to start up their own business.
Campaign supporter and entrepre-
neur Doug Richard told City A.M. the
scheme was important because:
“Banks and big businesses must work
with the government to inspire young
businesses and give them a fighting
chance to grow.”
MORE: P.21
today. The subscription period for the
new shares is then due to last from 30
March until 12 April.
Provided that the new shares are
fully subscribed, Porsche will raise
net proceeds of about €4.89bn. The
money will be used to meet €5bn in
loans which are due to mature by the
end of the year. The firm hopes to
reduce its net debt to €1.5bn from
€6.34bn.
Deutsche Bank, Morgan Stanley
and JPMorgan are the lead banks
underwriting the deal.
Porsche finance chief Hans Dieter
Poetsch said last week shareholders
subscribing to the capital increase
would get a payout in June.
CITYA.M. 28 MARCH 2011
Myners: more
women will
get on boards
▲
CORPORATE GOVERNANCE
BY ELIZABETH FOURNIER
EX-CITY Minister Lord Myners expects
women to make up the majority of
board members in at least five
FTSE100 companies by 2021, without
quotas necessary to bring about the
change.
Speaking at tonight’s Business
Woman of the Year awards, Lord
Myners will say that the failure by the
private sector to recognise and
mobilise female talent is the largest
missed opportunity of recent history,
with women’s “different, fruitful and,
at times, distinctly superior style to
decision making and leadership” offer-
ing the best opportunity for future
growth and economic prosperity.
But he will stop short of recom-
mending compulsory measures to
encourage gender diversity, insisting
that board appointments should be
based on merit, with companies
responsible for removing internal bar-
riers to appointing female leaders.
Myners’ views contradict those
expressed in last month’s government-
commissioned report from Lord
Davies, which said quotas to encour-
age female board members would
have to be introduced if voluntary
measures fail.
According to a 2010 study by
Cranfield University, women make up
only 12.5 per cent of FTSE100 board
members, just a 0.3 per cent rise from
the previous year.
Burberry is currently the FTSE100
company with the greatest number of
women on its board, but still falls
short of Myners’ predictions with just
three out of eight female directors.
Diageo is the only company with four
women on its board, including recent-
ly apponted finance chief Deirdre
Mahlan.
Almost a fifth of the current
FTSE100 – 18 companies – have no
female directors at all.
Lord Davies’ report called for the
UK’s largest public companies to make
sure female directors make up at least
25 per cent of their board members by
2015.
News 7
The next Boots
chief must like
foreign deals
CONSUMER
▲
ALLIANCE BOOTS is on the hunt for a
new chief executive to make interna-
tional deals after Andy Hornby sud-
denly stepped down on Friday, a
source close to the pharmaceutical
and beauty group said yesterday.
Executive chairman Stafano Pessina,
viewed as the driving force behind
Boots, is understood to be chasing new
contracts in China and wants a chief
that is happy to spend life on the road.
Hornby, who was in charge at HBOS
when the bank was bailed out in 2008,
resigned last week saying he needed a
break after less than two years in the
top job. “The job is relentless,” a friend
said.
The firm has not yet hired head-
hunters to look for an external candi-
date. Company policy requires Boots to
also look at internal candidates, with
the division heads seen as favourites.
Head of health and beauty Alex
Gourlay and pharmaceutical chief
Ornella Barra will look after day-to-day
operations while a permanent succes-
sor is found.
Shore Capital analyst Clive Black
said of the search for Hornby’s succes-
sor: “Boots is a relatively complex cor-
porate animal… [it] therefore needs a
chief executive that can pull all these
levers as well as working with some
Myners, pictured with wife Alison, says more women will join FTSE100 boards strong characters.”
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CITYA.M. 28 MARCH 2011
Tim Waterstone is keen to repurchase his eponymous brand
Southern
Cross aims
for rent deal
▲
PROPERTY
BY MARION DAKERS
STRUGGLING care home operator
Southern Cross is preparing for “hard-
ball negotiations” with landlords to
cut its massive rental bill, a person
close to the firm said yesterday.
Southern Cross last week wrote to
around a third of its landlords to
request a switch from quarterly to
monthly payments, after taking on
KPMG’s Richard Fleming and Tim
Bolot of turnaround specialist Bolt
Partners to thrash out a better deal.
Most of the firm’s biggest landlords
already accept monthly payment,
paving the way for tough negotiations
in the next few months, one person
familiar with the firm said.
Rental payments cost the firm
£250m a year, eating more than a
quarter of the firm’s revenues, after
the company sold a swathe of care
homes to rent back on long leases
before the recession.
The company said the 2.5 per cent
average annual rent hikes under the
leasing deals had become “unsustain-
able” earlier this month, sending its
shares plunging 60 per cent.
Southern Cross warned that it was
likely to breach debt covenants,
though its banks, Barclays and Lloyds,
remain “fully supportive”.
A company voluntary agreement,
similar to that won by Fleming for JJB
Sports last month, is thought to be off
the agenda due to the large number of
subsidiaries in the Southern Cross
structure.
Southern Cross landlords reportedly
include the Qatar Investment
Authority, NHP, Lloyds Properties and
property tycoon Nick Leslau’s
Prestbury.
Southern Cross and its advisers
KPMG and Bolt Partners all declined to
comment yesterday. The firm’s shares
closed at 15.5p on Friday, down from
130p a year ago.
Schaeffler sells down Continental stake Socrates is voted back
▲
INDUSTRY
BY HARRY BANKS
FAMILY-OWNED German ball-bear-
ings maker Schaeffler is working on a
major refinancing plan through
which it will sell some of its indirectly
held shares in German automotive
supplier Continental AG, it emerged
yesterday.
The proceeds from the sale of the
Continental shares will be used to
Picture: Graeme Robertson
partly repay some of its debt.
Interest rates and maturities of the
remaining loans are expected to be
improved through the deal, the peo-
ple familiar with the negotiations
said.
Up until now, Schaeffler has con-
trolled 75 per cent of Continental’s
shares with some shares held by
banks on its behalf. After the deal,
Schaeffler will control around two
thirds of the shares.
Waterstone keen on HMV
▲
M&A
BY JENNY FORSYTH
TIM Waterstone may be poised to buy
back the bookshop chain that bears
his name after he and his business
partners entered into exclusive talks
with its owner, HMV Group.
Waterstone, 71, has teamed up
with Russian millionaire Alexander
Mamut in a a bid to seize control of
Schaeffler took control of the
much larger German auto supplier
Continental about two years ago after
launching a hostile $18bn (£11.2bn)
bid in which it ended up collecting
more shares than it could afford,
lumbering itself with billions of euros
of debt. Schaeffler and Continental
had originally planned to merge their
businesses but Schaeffler boss
Juergen Geissinger last September
backed away from the deal.
the debt-laden chain.
HMV Group issued a profit warn-
ing earlier this month, advising that
profits would fall below market
expectations of £45m and it could
breach the terms of its bank loans.
HMV Group last week admitted it
was considering the sale of
Waterstone’s and HMV Canada, its
Canadian music chain. The sale of
Waterstone’s could net up to £75m.
BANKING
INTERIM Portuguese Prime Minister
Jose Socrates has been voted back in as
leader of his Socialist Party after quit-
ting last week.
He had walked out after parliament
voted down the Socialists’ austerity
budget, but his victory in the party
vote means he will lead them into an
election in two months’ time. He won
93 per cent of 32,000 members’ votes.
News 9
HMV also said that no discussions
are taking place with respect to an
offer for the whole group.
Waterstone, who has run a book
chain with Mamut in Russia, has fre-
quently been linked to possible bids
and also tried to buy the chain back
in 2006.
HMV shares closed 4.48 per cent
higher on Friday at 17.50p after the
company confirmed sales talks.
BA could
face Easter
walk-out
▲
AVIATION
BY STEVE DINNEEN
BRITISH Airways could face yet more
staff strikes, with the result of the lat-
est ballot due out later today.
Workers represented by Unite voted
again on whether to organise a staff
walk-out, with members expected to
overwhelmingly back the action.
The ballot raises the possibility of a
fresh wave of strikes over the Easter
break in a repeat of last year’s walk-
out that caused misery for millions of
travellers and cost BA tens of millions
of pounds.
A BA spokesman said: “We have
had positive talks with Unite and
expect talks to continue.”
The long-running dispute is being
fought on a number of fronts, with
union members complaining about
cost cutting and disciplinary action
against several of its members.
Incoming BA chief executive Keith
Williams has held talks with Unite
general secretary Len McCluskey.
Workers fought furiously against
outgoing BA boss Willie Walsh, who
they accused of attempting to break
the union.
In his first interview since taking
over the airline, Williams told City
A.M. last week it was time for a fresh
start at BA.
He said: “BA has not grown for
some considerable period of time. It’s
time to put some growth back into
this business.
“It is on the edge of some tremen-
dous opportunities due to our merger
with Iberia and partnership with
American Airlines.”
New BA boss Keith
Williams has held talks
with Unite over a pos-
sible walk-out over
cost cuts.
Markets continue to be unsettled by
the political crisis in Lisbon, however,
with yields on the country’s five year
debt sky-high shooting over 8.5 per
cent, compared to under eight per
cent a week ago.
EU leaders unveiled a “comprehen-
sive package” to solve the region’s debt
crisis after a two-day summit on Friday.
The agreement made progress on
establishing the Eurozone’s perma-
nent bailout fund.
 The Capitalist
10
CONVERSATIONS IN DARK CORNERS
FOR CITY’S BRIGHTEST TALENTS
THE guest list included some of the
most talented young people in bank-
ing and finance – but they were still
incapable of finding the party with-
out first getting lost in the neigh-
bouring Barbican housing complex.
However, once safely inside the
Square Mile World Spreads 30 Under
30 Awards at the elusive Museum of
London, small-talk between the bright
young things turned to more tradi-
tional topics, such as who had bought
the most tables at £3,000 a go?
Cheviot Asset Management and
the Canadian Imperial Bank of
Commerce came out on top here, but
the real focus of the evening was the
30 rising stars, with the banking and
finance winners including Jeremy
Cook, chief economist at World First;
Nicholas Toubkin, the youngest-ever
private banker at Coutts; and Marc
EDITED BY CITYA.M. 28 MARCH 2011
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
Davies, known for his “fast and accu-
rate judgement” at Frontier Capital
Management.
However, their achievements paled
into insignificance compared to
those of guest speaker Anton Kreil,
who set up his own hedge fund from
his bedroom in Liverpool at 18, was
poached by Goldman Sachs at 21, and
retired at 28 to teach lesser mortals
the secrets of trading in his BBC2
Anton Kreil addresses the Square Mile World Spreads 30 Under 30 Awards
show Million Dollar Traders. giving likenesses. But he had clearly
Kreil, in the company of awards been tipped off about who was paying
host Krishnan Guru-Murthy, kept the for the party, since Merchant’s chief
pace going at the 30 Under 30 after- executive Patrick Claridge (pictured
party at Chinawhite, where The bottom, right with the artist), “got off
Capitalist hears the networking was pretty lightly”.
intense, with “literally thousands” of .
business cards handed out.
The free-flowing champagne from
associate sponsor Louis Roederer did-
NOT MY GENERATION
THERE are perks to being John
n’t hurt the introductions either – Phizackerley, the EMEA chief execu-
and, as the evening drew on, some tive of Nomura.
guests exchanged “more than just No, not planning next month’s
business cards”. As one partygoer opening party for the bank’s new
reported: “When you have young, fortress at One Angel Lane – which
energetic people under 30 in a cham- will be marked by a traditional
pagne-filled room with dark corners, Kagami Biraki ceremony – but the
taking things further is inevitable.” chance to spend a large part of last
week listening to gigs at the Royal
Albert Hall, thanks to the bank’s two-
THE KING’S SPEECH year sponsorship of the Teenage
MEANWHILE, the crowd who turned Cancer Trust series.
up to pay their respects at the retire- Phizackerley was particularly
ment party for BGC Partners’ David impressed by The Who last Thursday,
Buik was “old-school City”, with Sky
News correspondent Jon Craig mixing
with Shroders fund manager Andy
Brough and the Bank of England’s
deputy governor Paul Tucker at The
Royal Exchange last Friday night.
As is customary for a retiring leg-
end, Buik hopped onto a step to make
a speech outlining some of the high-
lights of his illustrious career in
finance. But while his daily email
commentary dispatches to the City
regularly reach a wide audience, his
parting words fell largely on deaf ears. Reformed characters: Beady Eye
“No-one could hear a thing,” said a
mole, who blamed the acoustic issues but he was noticeably absent on
on an unfortunate combination of “a Friday, when the Manchester crowd
large room, a large number of guests turned out in force to hear former
and too many echoes coming from Oasis frontman Liam Gallagher take
the packed restaurant upstairs”. to the stage with new band Beady Eye.
With beers flying everywhere over
the crowdsurfing audience, The
ARTISTIC LICENSE Capitalist hears the Nomura executives
MEAN Fiddler founder Vince Power and their guests Lucy Ward and
took a break from the investor road- Anthony Harte from the Teenage
show as he prepares to float his latest Cancer Trust were pleased to be “safe-
venture Music Festivals on Aim next ly in their box”.
month to attend Merchant Securities’
spring party at the Paternoster Chop
House.
Merchant Securities is handling the
listing for Music Festivals and has val-
ued the live music company at
£20m, so Power had a strong
incentive to make an appear-
ance – but Lord St John of
Bletso, Gartmore fund manager
Rob Giles and Kate Tidbury of
Octopus showed up simply for
the “Best of British” food and
the entertainment by Magic
Circle member Robert Pound,
who conjured pound coins into
their closed hands.
Also on hand was a caricatur-
ist, who had been briefed to be
“savage and spare no blushes”,
making guests wince at his unfor-
12 News CITYA.M. 28 MARCH 2011

Budget sends the right signals to UK business

finances, it was always clear that any
growth could not be funded through
Government largesse. It will be up to
the private sector to generate wealth
and offset public sector job losses.
Unless we see a further substantial
devaluation of sterling we are not
going to get a German style surge in
CITY COMMENT manufacturing any time soon.
So all parts of the private sector will
STUART FRASER have to grow, including our financial
services industry – internationally
their staff are happy to be in the UK. If
the talent moves so will the firms.
There is no doubt that recent events
have caused international investors to
question if Britain is as welcoming a
business environment as it once was.
This week however the Chancellor
promised us something different; a
Budget to attract investment to the UK
and to demonstrate that we are once
again open for business.
And there was much to commend
mention an explicit acknowledge-
ment of the importance of a world-
class financial services industry, will
all produce economic benefits and
provide reassurance for firms and
their staff that want to be based here.
Perhaps even more importantly, the
chancellor acknowledged that the 50p
tax is a seen as a temporary measure
and, following calls from Labour for it
to be revisited, we heard no further ref-
erence to the bonus tax.
aging to our reputation in the interna-
tional business community.
It will be a long haul to repair that
damage but I believe this government
is heading in the right direction. Even
with spending cuts, balancing the
books will be difficult and patience
and understanding is needed.
This of course should not be extend-
ed to those who continue to vilify the
industry and appear intent on either
shrinking its size or who refuse to take

P
RIOR to last Wednesday’s
announcement, George Osborne
said he wanted to produce a
Budget for growth.
With a gaping hole in public
owned and with a big base in London.
London has huge strengths as an
international city but we must never
take this for granted. If global firms
are to stay here then we must ensure
it, both in terms of tone and content.
A cut in corporation tax; relief for
non-doms investing in the UK; the
establishment of 21 enterprise zones
and increased support for SMEs, not to
These measures represented policy-
making at its lowest ebb – they went
against the most basic tenets that
ought to underpin a fair and pre-
dictable tax regime and proved dam-
into account that we live in a very com-
petitive world, hungry for the talent
we are lucky to have on our doorstep.
Stuart Fraser is policy adviser to the City
of London.

Services look
for a rebound
while, hit a 20-year high in January

▲
UK ECONOMY
BY JULIAN HARRIS
PROSPECTS for economic recovery in
2011 will be clearer this week, when
official data is released on the UK’s
largest sector.
The index of services fell 0.6 per
cent in the final month of last year,
yet is expected to rebound in 2011.
January’s data is released on
Wednesday, by the Office for National
Statistics.
Severe winter conditions were part-
ly responsible for the knock to
Demember’s figures, although servic-
es are failing to bounce back as
strongly as many hoped.
“We are seeing manufacturing
grow very strongly, at some record
rates, whereas services are strug-
gling,” said Chris Williamson of
Markit.
Markit’s purchasing managers’
index hit an eight-month high of 54.5
for the services industry in January,
as it sprung back from the December
decline. However, growth (represent-
ed by all figures over 50 in the index)
slipped to 52.6 in February, reflecting
ongoing weakness in services.
Growth in manufacturing, mean-
and continued to thrive into
February, according to the PMIs.
“Domestic consumer spending still
accounts for 65 per cent of GDP, so
weak domestic demand hits a lot of
areas,” Williamson said.
While much of the services indus-
try can turn to expanding demand
for exports, the rebalancing of the UK
won’t be strong enough to push the
whole sector forward, Williamson
said.
In December, hotels and restau-
rants saw output plummet by an
annualised rate of 5.4 per cent.
Business and finance, less affected
by the weather and domestic
demand, slipped just 0.8 per cent.
ANALYSIS l Index of Services, % Change
8
%
4
0
-4
-8
Source: Timetric
2008 2009 2010

ECONOMISTS’ VIEWS: IS THE UK SERVICE

SECTOR IN GOOD HEALTH? Interviews by Phoebe Torrance

DAVID KERN | BRITISH CHAMBERS OF COMMERCE

“ I think there will be some bounce back in this week’s figures on the
service sector, since what happened in December was distorted because of the

”
severe winter weather. And financial, creative and business services are areas
which can benefit from growing exports.

ANDREW GOODWIN | ERNST AND YOUNG ITEM CLUB

“ Survey evidence shows that the service sector rebounded in January,

so we are definitely expecting positive numbers next week. I expect business and

”
financial sectors to grow, yet more domestic sectors like hotels and retail distribu-
tors could struggle over the next couple years.

CHRIS WILLIAMSON | MARKIT

“ Large chunks of the sector were affected in December because of the

snow, such as travel and leisure activities -- yet our purchasing managers’ index

”
showed a bounce back in January. The UK still has an advantage in financial serv-
ices, which we should not be dismissing.
CITYA.M. 28 MARCH 2011 News 13

ANALYSIS l North Sea oil fields

Oil fields and production (barrels per day)
Share of well (%) North Sea oil groups
WEST DON
234,000
Sea
BRENT
reconsider strategies
EnQuest 25.7 % 351,000 ENERGY shelved plans for a North Sea asset prices edging closer to the all-time

▲
Valiant 19.3% Esso 50% BY MARION DAKERS sale following the tax hike. The two highs seen in 2008.
Shell 50% firms put assets worth an estimated The government said it expects to
Shetland OIL FIRMS in the North Sea remain £800m on the market last year. make around £2bn a year from the
BROOM lucrative, a report out today claims, BP also put all of its operated gas tax hike, though the Treasury will
249,000 NORWAY despite a number of firms hastily fields in the southern North Sea on this week meet with industry groups
HEATHER rewriting their strategies in the wake the market in February, with a report- to try and lessen the impact on com-
EnQuest 55 %
Orkney 81,000 Wintershall 29%
of the shock North Sea oil profit tax
announced in last week’s Budget.
ed asking price of £600m.
The Chancellor raised the supple-
panies with the biggest exposure to
the North Sea, in an attempt to stop
BG Group 31% Independent firms such as mentary charge for profits in the investors from leaving the region.
Chevron 31% Premier, Nautical and Encore have a North Sea from 20 to 32 per cent in The North Sea has around 21bn
EnQuest 37.5% BALMORAL strong enough financial base and last week’s Budget to fund a 1p per barrels of oil left to extract, after pro-
approach to risk to give “spectacular litre fuel tax cut and a fuel stabiliser, ducing 39bn barrels since the
100,000 returns”, according to Edison which absorbs some of the cost of reserves were first drilled in the
Premier Oil 78% Investment Research. higher oil prices. 1960s.
TEAL Smaller companies can develop Firms with older fields face a mar- Last week’s Budget introduced
135,000 ERSKINE blocks that have been left by the oil ginal tax rate of 81 per cent, experts plans to restrict tax relief for the costs
Esso 50%
Shell 50%
439,000 majors as the North Sea reserves
dwindle, Edison said.
forecast, as fields drilled before 1993
must pay a 50 per cent petroleum rev-
of decommissioning from 2012,
which Edison said could encourage
BG Group 30% But the majors might find it prob- enue tax. Other companies will have a firms to simply abandon rigs once the
BP 18% lematic to exit the region since the corporation tax rate of 62 per cent. oil dries up. However, around 65 per
KYLE
Chevron 50% DENMARK tax hike made mature fields less The UK government made £6bn in cent of businesses think raising taxes
UK 197,000 lucrative, analysts warned. revenues from oil and gas production for the oil industry is a positive step,
Premier Oil 40% ConocoPhillips and ExxonMobil in 2009 / 10, according to figures from according to a survey of 620 company
Dana Pet. 15% yesterday declined to comment on HM Revenue & Customs This was the directors by the Institute of Directors
reports at the weekend that they had lowest sum for five years, despite oil released at the weekend.

Lehman investors
in HK to be repaid
BANKING 
▲

BY HARRY BANKS Hong Kong Association of Banks, said

SIXTEEN Hong Kong banks have
agreed on a deal to enable investors in
structured products of the now bank-
rupt Lehman Brothers recover a
majority of their investments.
Investors in Hong Kong lost nearly
HK$2.5bn (£199m) on structured
products, called “minibonds” offered
by US investment bank Lehman
Brothers, which collapsed in 2008.
A statement from receivers
PricewaterhouseCoopers yesterday
said the agreement was to result in
most of Lehman’s minibond investors
recovering over 80 per cent of their
original investment from the under-
lying collateral.
He Guangbei, BOC Hong Kong chief
executive and the chairman of the
that, under the new compensation
package, minibond investors will
receive up to 96.5 per cent of the prin-
ciple amount they invested.
Distribution to minibond investors
²
&DQWUDYHOHYHU\KRXURQRXU
     
by the 16 banks, including Bank of
China Hong Kong and Bank of
ORQJHU6WUDWIRUGWR/HZLVKDP
   
Communications Hong Kong, is set WUDLQVLQWKHPRUQLQJSHDN
   
for June this year. The resolution is
likely to put an end to the long-run-
ning negotiation for compensation to      
the minibond investors, who had   
complained they were misled that
the products were safe.
Asian-focused lender Standard       
Chartered agreed to buy back
HK$1.48bn worth of equity-linked    
products guaranteed by Lehman,
Hong Kong regulators said earlier this
   
month.

Bank dove predicts fall in

inflation by mid-2012
do.” Posen challenged the view of the
▲

ECONOMICS
THE Bank of England's leading dove
Adam Posen has predicted that infla-
tion will tumble to 1.5 per cent by the
middle of next year as George
Osborne’s austerity drive and the
underlying weakness of the economy
stifle consumer spending.
In an interview with the Guardian,
Posen said: “If I have made the wrong
call, not only will I switch my vote, I
would not pursue a second term.
They should have somebody who gets
it right and not me. I am accountable
for my performance. I'm holding my
nerve because it is the right thing to
three hawks on the committee on
four separate counts.
He said so-called “core inflation”,
did not suggest that the economy was
overheating; the recent strength in
manufacturing only affected 13 per
cent of the UK’s total output; it was
too simplistic to say that the economy '/5$EULJKWHUFRPPXWH
' /5 $EULJKWHUFRPP
PXXWH Z
ZZZGOUFRXN
ZZGOUFRXN
was overheating if inflation was high;
and it would only be costly to take a
wait-and-see approach to raising
interest rates if there was a risk of an
inflationary spiral. “We could get
inflation back to target really fast if
we put the economy through the
wringer,” he said.
 14 News
What crisis? Optimism reigns despite turmoil
CNBC COMMENT
ROSS WESTGATE
C
risis, what crisis ? The FTSE 100
starts trading this week at 5,900
after rising over three per cent
last week. It was up six of the
past seven trading days. We’re now
above the levels before the Japanese
earthquake, we still have rising
Middle East tensions, an unresolved
European debt crisis, and an inflation
problem that could strangle Britain’s
economic recovery before it’s really
started. Two weeks ago, pessimism
reigned and now we’re facing a cho-
rus of optimism, so what’s going on?
First of all, I’m inclined to follow
the advice of CNBC contributor Doug
Kass and avoid all this noise. Things
were never as bad as the pessimists
believed – but nor are they as good as
the optimists would have us believe.
Lena Komileva at Brown Brothers
Harriman described last week as the
un-pricing of Japan’s triple shock
across global asset prices. This has
also prompted a return to the global
correlation of markets. Dollar down,
risk assets up – backed up by central
bank liquidity and strong corporate
balance sheets.
Helping this “risk trade” has been
the reaction of the global authorities
to events. After the stupor of a decade
of G7 inaction, the concerted move to
stem the yen’s rapid ascent was a real
surprise. This came in the same 24
hours that the UN once again became
relevant with its action in Libya.
Suddenly, investors got the sense that
authorities can indeed rise to the
challenge. Even the ECB’s policies can
be seen in this light. You might dis-
agree with its looming rate rise – but
it could be argued that at least the
bank is being strong on its mandate
and showing a resolve to act, an
action which says “we’re in control”.
But this sense of control may prove
costly. As Komileva says, “at this junc-
ture, with so much confidence invest-
ed in beliefs that global policy will
prevail over local risks, the risk from
a potential policy mistake is huge.”
That’s why the debate about what
the Bank of England should do is key.
I’ve written before in these pages
about the risks of a rate rise but I
SUSHI
SAMBA
Restaurant
opening
in autumn
Heron Tower rent hunt hots
up as McDermott moves in
▲
PROPERTY
BY MARION DAKERS
US LAW firm McDermott Will &
Emery becomes the first tenant to
move into the Heron Tower on
Bishopsgate today, kicking off a
new round of marketing to fill the
remaining 37 floors.
McDermott is moving into the
eighth and ninth floors of the 46-
storey skyscraper, taking 25,000
square feet of space for a
rumoured £55 a square foot, just a
week after building work ended.
Gerald Ronson’s Heron
International is expected to
announce more tenants in the
LANDMARK
PLC
Serviced
offices
to rent
MCDERMOTT
WILL &
EMERY
moves
in today
THE DRIFT
Restaurant
and bars open
in May
CITYA.M. 28 MARCH 2011
absolutely agree with the damage
that higher inflation can and already
is doing to the economy. It’s also why
if the OBR’s projections for UK
growth, especially in 2013 and 2014
turn out to be too optimistic, the gov-
ernment will need a Plan B.
Until now stock investors have been
buoyed by corporate profit growth
and supportive global policy. I’d sug-
gest the former is peaking and the lat-
ter is uncertain. That makes us, in the
words of Doug Kass, “still hostage to
more adverse developments.”
Ross Westgate hosts Strictly Money and
co-hosts Worldwide Exchange daily on
CNBC.
next few weeks once contracts
have been exchanged.
Agents CB Richard Ellis and
Cushman & Wakefield have held
talks with several international
firms keen to take space, includ-
ing US and Chinese companies
looking for a base in London, a per-
son close to the firm said yester-
day.
For comparison, the Gherkin
was 50 per cent pre-let when it was
finished in 2004. However, this
was taken up by a sole tenant – the
building’s owner, insurer Swiss Re.
The Shard, due to complete in
May 2012, has one pre-let taking
22 per cent of the tower’s space.
CITYA.M. 28 MARCH 2011
Strong dividends
entice investors
back into equities
FINANCIAL MARKETS
▲
BY ALISON LOCK
RETAIL investors are buying into the
stock market at pre-financial crisis
levels, new research from a share reg-
istration consultancy today showed.
Private shareholders ploughed a
net £473m into equities in the quar-
ter ending in February to take their
holdings to £233bn, the highest level
since November 2007, the Capita
Registrars Private Investor Watch
report said.
Market turmoil following the dual
catastrophes in Japan wiped £16bn
off private portfolios by 16 March,
when the FTSE 100 closed at a three-
month low of 5,598 – though £8bn
had been recovered by 23 March
when it returned to 5,796.
A recovery in stock prices com-
bined with ultra-low interest rates
Bonuses are on the
rise as top pay stalls
REMUNERATION
▲
BY ALISON LOCK
WARY shareholders are keeping
pressure on companies to rein in
executive salaries ahead of annual
meetings this year, a new survey
today found.
Executives at FTSE 350 compa-
nies are expected to see minimal
pay increases with more than a
fifth of boards planning a pay
freeze on top staff despite firms’
performance bouncing back
strongly since the financial crisis.
But bonus payments are rising,
with FTSE 100 chief executives’
bonuses rising by nearly a third last
year to 111 per cent of base salary,
the PwC FTSE 350 Executive
Remuneration Survey found.
Rajat Gupta steps down from Gates
Foundation as Galleon case proceeds
▲
REGULATION
RAJAT Gupta, the former head of
McKinsey, has stepped down from
his role as a senior adviser to the
Bill & Melinda Gates Foundation
while he defends himself against
insider trading charges related to
Galleon Group head Raj
Rajaratnam.
Gupta has already resigned from
the Indian Business School and
other directorships including
Procter & Gamble and American
Airlines.
The US Securities and Exchange
and poor house prices has enticed
retail investors back to the market.
“Private investors have been attract-
ed by strong dividend yields and the
recovery in corporate profits,” said
Capita Registrars chief executive
Charles Cryer.
Retail investors bought and sold
£980m of stock in the three months
to February and traded £6.1bn in the
year to February, though turnover
remains low as investors have added
rather than sell shares.
The buying has reflected the cur-
rent huge market volatility, with
investors targeting defensive stocks
and those expected to benefit from
economic recovery in what Cryer
called “cautious optimism”.
Retail investors’ holdings now
make up 12 per cent of the UK stock
market, up from a low of 10.9 per cent
in May 2010.
Where awarded, salary rises are
expected to be low at about three
per cent, a slight increase on the
average 2.8 per cent raise in 2010
and a sign that boards are aware
restive shareholders may oppose
large pay deals.
Institutional investors voiced
concern at HSBC’s proposed £13.3m
award to new chief executive Stuart
Gulliver last week. In 2007 and 2008
salaries rose by six per cent.
“Shareholder activism on pay
has stepped up substantially over
the last few years and seems to be
having an effect. It looks like 2011
will be the third consecutive year
of pay rise restraint,” said PwC
reward partner Sean O’Hare.
Firms keen to keep top staff are
pushing bonus ceilings up to com-
Commission laid charges against
him this month over links with
Rajaratnam, and Gupta has denied
any wrongdoing.
US prosecutors say Rajaratnam,
the founder of Galleon Group, ille-
gally made $45m (£28m) from 2003
to 2009 in stock trades based on
tips from insiders, including high-
ly placed executives in the corpo-
rate US.
Rajaratnam maintains his trades
were based on his own research
and publicly available information.
The Gates Foundation said
Gupta had taken the decision to
TESCO CAPS ITS PRICE CHECK OFFER
TESCO has been forced to cap its offer to refund double the difference on products that can
be bought for less at Asda. The supermarket giant has introduced a £20 maximum refund
on its Price Check offer after canny shoppers researched Asda deals and made sizeable
claims. Tesco claims they profited by finding Asda promotions.
pensate, with 30 per cent planning
to increase executives’ maximum
potential bonuses this year. In 2010
the median bonus ceiling jumped
25 percentage points to 175 per
cent of base salary.
Deferrals are becoming more
common as boards bow to regulato-
ry pressure. About three quarters of
FTSE 100 companies and 58 per cent
of FTSE 250 companies now defer
about half of all bonus awards.
A fifth of companies also operate
clawbacks, where bonuses can be
reclaimed in the event of material
change at a company. Another fifth
are planning to add clawbacks.
Remuneration plans will be pre-
sented by boards to shareholders at
the many annual general meetings
scheduled for April and May.
step down last week.
It stated: “Rajat has stepped
down from his role on the
Foundation’s Global Development
advisory panel until these matters
are resolved.”
Gupta had chaired the panel,
which is one of several at the foun-
dation. It meets twice a year and
was last convened in February.
It was designed to draw in more
senior outsiders, partly over criti-
cism that the foundation was unac-
countable beyond Mr Gates, his
wife Melinda, and Warren Buffett,
their co-trustee.
News 15
NEWS | IN BRIEF
BlackBerry maker buys new app
BlackBerry maker Research In Motion
says it has bought Ontario-based start-
up tinyHippos Inc, creator of Ripple, a
cross-platform mobile application devel-
opment and testing tool. The company
was acquired for its “extensive experi-
ence in web and mobile widget/web
development,” Tyler Lessard, RIM’s vice
president of global alliances and devel-
oper relations, said on the developer’s
blog. Terms of the deal were not dis-
closed. The acquisition comes as RIM
prepares to launch its Playbook tablet
computer next month, entering an
increasingly crowded market dominated
by Apple’s iPad and various devices run-
ning on Google’s Android platform.
Warning from Canada watchdog
Canada’s banking watchdog warned
yesterday that the next global financial
crisis may not be far off and that now is
the time for regulators to get tough on
the financial industry. “I think we have
seen this movie before, but the amazing
thing is we continue to expect a differ-
ent ending,” said Ted Price, assistant
superintendent of the Office of the
Superintendent of Financial Institutions
(OSFI), according to the prepared text
of a speech in Calgary, Alberta. The
world’s banks are now entering a “dan-
gerous” where profits are strong and
they are increasingly willing to invest in
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CITYA.M. 28 MARCH 2011 News 17

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

HDG Mansur
The real estate fund and asset management
firm has appointed Jeremy Thorman as sales
liaison manager for its mixed-use develop-
ment in Finzels Reach, Bristol. Thorman will
manage the link between sales and construc-
tion for the £255m development, working
with senior managing director Michael Baker.
Thorman joins from European Land and has
also held roles at Westcity and Northacre.
Norton Rose office of the international law firm
Fei Kwok has joined the Shanghai as a counsel in its Shanghai office.
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Kwok joins from Shearman &
Sterling LLP’s Shanghai office, where
she was a senior associate in the
banking and projects team. She spe-
cialises in shipping finance and ener-
gy-related transactions in China,
including LNG procurement, mid-
stream facilities, downstream facili-
ties and petrochemical projects.
UBS
The investment bank has strength-
ened its Global Capital Markets
(GCM) division by appointing David
Soanes as global head of GCM, and a
member of the IB EC, and Rob
Jolliffe as deputy global head of
GCM.
IAWS Foods
The specialist baker has appointed
Jon Smythe as UK marketing direc-
tor to oversee all UK marketing
activity across brands including
Delice de France, Cuisine de France,
La Brea and Otis Spunkmeyer.
Smythe joins from Hain Celestial UK,
the manufacturers of the Linda
McCartney brand, where he was UK
commercial director. He has also held
marketing and commercial roles at
Asda Walmart, McCain and ConAgra.
Panmure Gordon
The stockbroker and investment
bank has appointed a senior banker
and two equity analysts. Fred Walsh
joins from Arden Partners as a direc-
tor in the investment banking team,
and Chris Smith joins from Merchant
Securities as a specialist financials
analyst. The firm has also re-hired
Philip Dorgan to its retail team from
Altium, to work alongside retail ana-
lyst Jean Roche. The three new hires
+44 (0)20 7557 7245
morganmckinley.com

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

ANALYSIS l Compass Group 550.50 ANALYSIS l BP 483.55 ANALYSIS l Essar Energy 486.60
25 Mar 510
25 Mar 25 Mar
600 p p 600
p

560

520
560 475

480

440
520 440
3 Jan 19 Jan 8 Feb 28 Feb 18 Mar 3 Jan 19 Jan 8 Feb 28 Feb 18 Mar 10 Jan 28 Jan 17 Feb 9 Mar

COMPASS GROUP BP ESSAR ENERGY

Deutsche Bank rates the caterer “buy” with a target price of 685p ahead
of its half year pre-close trading update on Thursday. The broker thinks
that success in North America and in new markets should offset any
impact from recent natural disasters in Japan, and is expecting 4.9 per
cent organic growth in the first half of 2011. However, the broker sees a
continued risk of public sector spending cuts hitting growth.
Citigroup rates the oil major “medium risk” with a 12-month target price
of 525p. The broker sees last week’s arbitration ruling against BP as a set-
back but not the end of the dispute. Citi believes BP AAR’s respective
stakes in TNK-BP have a book value of around $10bn, and could fetch
more in the current market, though the broker thinks BP needs to main-
tain relations with AAR to protect the value of the firm.
Morgan Stanley has cut its target price on the India-focused power firm
by two per cent to 415p but maintains its “underweight” rating. The bro-
ker has reduced its forecasts following news of delays to new projects
announced last week, but remains impressed by the firm’s ambitious
growth plans. There is still scope for further delays and forecast reduc-
tions, Morgan Stanley adds.

Strong data should keep stocks heading higher

ANALYSIS l FTSE
MARTIN ON 5,900.76
up 12 points from Friday’s close at 5,912. notice of the US employment numbers.
The German DAX is quoted to open up A big number is the call – consensus 6,100 25 Mar
14 points at 6,960 and the French CAC is for a rise of over 200,000 jobs in March

THEMARKETS
6,000
up 10 points at 3,982. – and that is how traders are positioning
The Dow finished the week up 50 their books, so the risk is to the down 5,900
points on Friday, up over 360 points for side. Ahead of those on Friday, get ready
5,800
the week, and that is set to support the for US consumer confidence out tomor-
current momentum for European mar- row and ADP private payrolls data on 5,700
kets today. Wednesday.
The fact that the rally has come In Europe, the other headline market 5,600
despite no clear-cut resolution to the mover will be Portugal; although the 5,500
unrest in Libya nor the Japanese nuclear markets have all but fully priced-in an 6 Jan 26 Jan 15 Feb 7 Mar 25 Mar
crises tells a cold but clear story: the sell- eventual bailout by the EU the debt-rid-
off which took stocks to their lowest lev- den country still faces much political ANALYSIS l Dax Index
els since July 2010 was an over-reaction, uncertainty before that looks like 7,600 6,946.36
a classic panic sell. becoming a reality. 25 Mar
MARTIN SLANEY Instead, at least for now, focus is now Martin Slaney is director of GFT's global
7,400

firmly back on economics and global dealing operations 7,200

growth.
7,000

A
FTER their biggest weekly gain for With that backdrop, the coming few
six months, European stocks days could see some sharp moves in 6,800
could well press even further stock markets given the heavyweight
6,600
ahead on this morning’s open. economic data due to be released.
In out-of-hours trading, GFT is fore- Yes, it’s non-farm payrolls week again, 6,400
casting the UK’s FTSE 100 index to open where markets globally sit up and take 6 Jan 26 Jan 15 Feb 7 Mar 25 Mar

WALL STREET WEEK AHEAD

and keep uncertainty high, analysts Economic data lately has taken a to spruce up their portfolio’s quarter- The strategy contributed to a

U
S stock investors could scram-
ble to pick up some of the mar-
ket’s recent best performers
this week as the quarter comes
to an end, putting the spotlight on
energy and industrial companies.
But worries about Japan, the
Middle East and oil prices will persist
said, even as the VIX, the CBOE
Volatility Index, slid 27 per cent over
the past week.
Another driver could come from
economic data, with the US govern-
ment’s March payrolls report – the
most widely watched economic indi-
cator of the month – due on Friday.
backseat to geopolitical events, with
Japan’s massive earthquake and
tsunami sparking fears of a nuclear
disaster in the country and driving
the most recent pullback in stocks.
But many expect window dressing,
where fund managers sell stocks with
big losses and buy ones with big gains
ly performance, to dominate trading.
“I think a number of people viewed
the harshness of the sell-off as an
opportunity to pick up some inappro-
priately punished stocks,” said
Michael Strauss, chief economist of
Commonfund, based in Wilton,
Connecticut.
bounceback late last week, with the
Dow Jones industrial average and
Nasdaq posting their best weeks since
July. The benchmark Standard &
Poor’s 500 had its best week since
early February.
The earnings reporting period is set
to start in the second week of April.
18 CITYA.M. 28 MARCH 2011

Wealth Management Spread Betting |

THE TIPSTER
BET THE
HOUSE ON
Fitzdares to
BELLWAY
spread into
L
AST week's budget certainly gave a
fillip to the construction industry. The
sector has hardly had an easy ride
since the free-flow of credit dried up
in 2008, but with some of the froth
knocked out of the market, progress seems
to have been emerging in recent months.
Housebuilder Bellway will be releasing its
interims on Wednesday, so expect outlooks
financial bets
here to have the ability to sway this stock
and the peer group as a whole. IG Index Entrepreneur Balthazar Fabricus
offers Bellway 694.8p-699.2p.
With DBK coming out with their figures talks with Philip Salter about his
today, trading either the Dax or DBK
directly could offer some volatility.
WorldSpreads offer a spread of €41.55-
move into financial spread betting
€41.65 on DBK and a spread of 6,955-

6,956 on the rolling Dax future.
This week is a big one for the travel
industry, with trading updates due from
Thomas Cook tomorrow and TUI Travel
on Thursday. Thomas Cook’s share price
fell in early trading on Friday following an
announcement that the Olympic Games
Committee suspected pricing of hotel
packages for the 2012 Games might not
be fair. With the summer coming up, and
the Olympics around the corner, this could
be a bargain price for one of Europe’s
largest travel firms. Cantor Index offers a
spread of 167.76p-168.55p.
After a torrid week where its share
price fell 70p to 570p in the space of a few
days, Ted Baker has bounced back in a big
way. It released annual figures showing
revenues up 15 per cent to £187m and
pre-tax profit up 24 per cent to £24m. This
encouraged the share price to recover to
its current 666p level. Their latest state-
ment shows an intention to break into the
Chinese market. Capital Spreads quotes
674.1p-677.4p.
Heating and plumbing products compa-
ny Wolseley is due to announce its first
half results on Tuesday and given the con-
tinued fragile nature of the US housing
market and the number of UK public sec-
tor contracts it has, it could well be as
good as it gets for the company as it seeks
to rebuild its business and return to profit
after two years of losses. CMC Markets
offers a spread of 2,074.40p-2,079.54p.
Philip Salter
S
TARTED in 2005 with an injec-
tion of cash from venture cap-
italist Ben Goldsmith,
Fitzdares markets itself as
“the bespoke bookmaker for the dis-
cerning gambler.” In six years it has
developed into a successful niche
bookmakers catering to some of
London’s wealthiest gamblers. With
a solid track record in sports, it has
now moved into the business of
financial spread betting.
Balthazar Fabricus is the entrepre-
neur behind Fitzdares. Having
joined Ladbrokes from university, he
had “a burning desire to start a busi-
ness that would offer a best of breed
customer service to discerning gam-
blers.” Initially, Fitzdares specialised
in offering a fixed odds service on
sporting events, but after a couple of
years moved into sports spread bet-
ting. Motivated by demand from
existing clients to access more mar-
kets, Fabricus has now launched a
joint venture with WorldSpreads to
offer financial spread betting.
Customer service is the USP of
Fitzdares and it relies principally on
word-of-mouth to get new business.
Fabricus believes that even though
financial spread betting is a highly
competitive market, it can find a
comparable niche as they found in
sports betting. Traditionally a
phone-based company with the feel
of a private members’ club,
Fitzdares’ spread betting members
will trade mostly online, so the firm
is launching mobile phone apps
alongside a new trading platform.
Fabricus believes spread betting is
a growing sector, but recognises
that he operates at a different level
to most of the competition. He has
no ambitions to be the next IG in
financial spread betting, any more
than he wishes to see a Fitzdares on
every high street instead of
Ladbrokes. But Fabricus would love
Fitzdares to be the Coutts of betting.
Ironically, many of the big name
players in sports betting started out
offering a similar service to
Fitzdares. Ladbrokes was on Old
Burlington Street and William Hill
on Carnaby Street, and their success
was built upon old school turf
account philosophy. Fabricus’ aim is
to “herald a return to those princi-
ples of yesteryear.”
A challenge for Fitzdares might be
in differentiating itself in spread
betting where digital interactions
dominate. Fabricus counters this by
saying that unrivalled customer
service – even through emails –
combined with the look and feel of
his website will distinguish
Fitzdares from the competition.
Given his success to date, it would
take a brave man to bet against him.

THE WEEK AHEAD in association with

Ladder Trading COMPANY NEWS ECONOMICS NEWS POLITICAL NEWS

l Travel company
Thomas Cook group is
going to announce its sec-
ond quarter interim man-
agement statement on
Tuesday. This will be fol-
lowed by figures being
released by TUI Travel on
Thursday, where we may
see indication of how the
Middle East turmoil
affected the performance
of travel companies.
l Housebuilder Bellway
will be announcing its
interim profits on
Wednesday.
Professional Trading
Professional Spread Betting l Apple will be hoping
that it will be celebrating
www.ProSpreads.com its 35th birthday on
Friday with news of a suc-
Spread betting can result in losses that exceed your initial deposit.
Authorised and regulated by the Financial Services Commission, Gibraltar. cessful first week of sales
of the latest incarnation
of the iPad.
l On Monday, the US will
announce personal income
and spending figures for
February.
l Tuesday will see the
release of Japanese overall
household spending figures
for February.
l Tuesday will also see the
release of Japanese unem-
ployment figures. It is
expected that the decline
in industrial production will
have yet to hit employment
figures.
l Figures will be
announced on Tuesday of
the number of UK mort-
gage approvals in February.
l The US non-farm pay-
roll figures will be released
on Friday.
l On Monday, drinkers
will be hit by a 7.2 per
cent hike in tax on a pint
of beer. This comes ahead
of proposals to be tabled
by Sarah Woolaston on
Wednesday which would
give the state further con-
trol over alcohol advertis-
ing.
l On Monday, John
Woodcock will be propos-
ing legislation on a matter
that weighs heavily on
many peoples’ minds: pro-
tection of Bowling Greens
(Development Control).
l On Tuesday, the UK is
to host a summit to dis-
cuss the military action in
Libya and implementation
of UN Security Council
Resolutions 1970 and
1973.
CITYA.M. 28 MARCH 2011
ANALYSIS l Bollinger bands
-5,295
-5,290
-5,285
-5,280
-5,275
-5,270
-5,265
11:48 12:00 12:12
Add fizz to your trades M
by using Bollinger bands
Using this indicator can help you to identify and
capitalise on intraday trends, writes Craig Drake
T
HOUGH long term trends are
relatively easy to identify, track-
ing intraday trends is often
more tricky to do, as short term
developments often disappear before
you’ve even identified them or before
they can be used to your advantage.
This is where Bollinger bands can
serve as a useful tool for day traders.
Whereas most indicators work better
and smoother on longer timeframes
because the irrationality of the mar-
ket has time to work itself out over a
multitude of bars, Bollinger bands are
designed for the express purpose of
profiting on trends and their reversals
and for tracking market volatility.
Balthazar Fabricus, Developed by John Bollinger,
boss of Fitzdares, is Bollinger bands consist of a centre line
going beyond sports of an exponential moving average and
betting two price bands either side of it based
on standard deviations of the stock
being studied. The bands will expand
as the stock becomes more volatile or
12:24 12:36 12:48 13:00 13:12 13:24
contract if it becomes bound into a
tight trading pattern.
When the stock price hovers around
the upper band, the shares are
thought to be overbought and when
they stay near to the bottom band
they are thought to be oversold, trig-
gering a buy signal.
Tom Hougaard outlines the use of
stochastics in his column on the right
of this page. By using these techniques
in combination with Bollinger bands,
you have the ideal set up of technical
indicators to find overbought and
oversold territory. For example, when
both the Bollinger bands and stochas-
tic indicator curve up near a low, it is
often a buy indication, and when the
opposite occurs it is a strong sell sig-
nal.
By using these techniques you
should be able to better identify intra-
day trends and profit from them once
you have done so.
19
HOW TRADERS
CAN PROFIT ON
EVA MENDES
TOM HOUGAARD
CONSULTING ANALYST, INTERTRADER
13:36 13:48
Y FELLOW trader, Dr David Paul, came to
me with a new setup he wanted to trade.
We tested it extensively, and it fulfilled the
criteria we were looking for: good risk to
reward, good hit ratio, good Sharpe ratio and all
the other boring stuff that makes most people’s
eyes glaze over.
In fact it proved to be a sizzling hot setup
(which will be fully disclosed below), which we
have traded and taught on our course over the
last couple of years. So we decided to name it
after an equally hot Hollywood Goddess – Eva
Mendes.
Now to the setup, which is a divergence setup
between price and stochastics, which measures
the relationship between closing prices and price
range over a given time period (the stochastics
settings are the generic ones for any charting
package: 14-3-3). We use it on the hourly and
four-hour chart, so it lends itself perfectly to
swing trading.
The rules are simple: you trade in the direction
of the trend, as defined by some trend measure. It
can be a three-day high or low, or simply a 50-
period moving average. The Eva Mendes set-up
happens when the stochastics indicator has made
a lower low, but price is making a higher low, in
the direction of the trend.
In other words, the previous low on the price
chart will correspond to a low on the stochastics
indicator. The next low will have to be higher low
on the price chart, while at the same time sto-
chastics will have to take out the previous low.
Our entry comes by using a four-bar fractal
reversal. I will have to discuss that setup in the
next instalment. Now you get the setup, and next
time I will teach you the entry method.
The views and comments in this article are not
the views of InterTrader.com. The provision of this
information should not be construed in any cir-
cumstances as a recommendation or solicitation
to buy or sell any security or financial instrument.
 20 Wealth Management | Markets CITYA.M. 28 MARCH 2011

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 Business Features
SME Budget bonanza:
“
entrepreneurs react
Do the new measures go far
enough? Donata Huggins asks
business owners what they think
W
ITH David Cameron
urging the British
public to be more
entrepreneurial in a
speech today, many are asking
whether the government is
doing enough to support start-
ups and small businesses. Last
week’s Budget was dubbed the
“Budget for growth” and
offered a number of measured
aimed at entrepreneurs and
small businesses, but not every-
one is convinced they will have
an impact. Mark Littlewood, the
director general of the Institute
of Economic Affairs (IEA), for
example, is not convinced: “As a
budget that was intended to be
about encouraging growth, this
is a disappointment. Even on
the areas where the Chancellor
is doing the right things, his
reforms are tiny. He committed
himself to simplifying tax rules,
but has only eliminated 100
pages from our 10,000 page tax
rulebook and has added many
more.”
Others were more positive.
Miles Templeman, the director
general of the Institute of
Directors said: “This was a
Budget aimed at changing per-
ceptions and boosting business
confidence about long-term eco-
nomic prospects in the UK. The
Chancellor didn’t have much
money to play with but he
played his hand well”. City A.M.
asked some entrepreneurs what
they thought.
FACTS | BUDGET
l Osborne announced the lifetime limit for
entrepreneur’s relief will double from £5m to
£10m.
l The Enterprise Investment Scheme (EIS) and
Venture Capital Trusts (VCT) will be reformed, if
the EU grants approval.
l 21 enterprise zones will be rolled out across
the UK.
l Start-ups to be exempt from new domestic
regulation for three years.
l The small business rate relief holiday will run
for another year from 1 October.
l A consultation on merging national insurance
and income tax.
l If approved by the EU, research and develop-
ment tax will increase to 200 per cent for small
and medium-sized business.
l Further deregulation promised.
21
| Entrepreneurs
JULIAN HICKMAN |
PARTNER AT LONGBOW CAPITAL
The Budget has put venture capital trusts (VCT) and
the enterprise investment scheme (EIS) back where
they belong and that’s at the heart of enabling private
investors to get behind British innovation and allow more
companies – not just start-ups – to benefit from tax-efficient
investment. Pre-Budget fears that the Chancellor would turn
”
his back on VCTs and EIS have proved unfounded.
EIS investments will become really attractive to
investors as a result of the Chancellor’s changes.
JASON STOCKWOOD |
ENTREPRENEUR, SIMPLY BUSINESS
“
The introduction of 21 Enterprise Zones provides an opportu-
nity for encouraging start ups. The financial discounts on
business rates, extra capital allowances for manufacturing
and super-fast broadband will generate hubs of excellence where
small businesses can work together and contribute to developing
successful businesses. But this kind of support is important for
”
all new and small businesses, and it is important that
they are not neglected. We need to encourage and sup-
port businesses across the country, whatever their loca-
tion.
MARK NEEDHAM |
ENTREPRENEUR, WIDGET UK
“
It is about time that income tax and national insurance
(NI) were merged. I hope the consultation is short. It
wasn’t so long ago that I used to do the payroll myself.
The different thresholds at which NI and income tax kick in
made it hard to tell people what a pay increase would mean
”
in their pocket. The consultation is not really needed: the cur-
rent categories are a mess and we all know the
money goes to the same place in the end.
 Lifestyle
22 In association with CITYA.M. 28 MARCH 2011

| Travel

Refresh, revive and get fit at

a Swiss mountain retreat
With breathtaking architecture, scenery and spa, it’s no wonder Susan Sherwin
found a stunningly nourishing antidote to City life at the Tschuggen Grand

W
HETHER it’s the ski season
or the summer holidays, the
Swiss Alps are crawling with
tourists. If people aren’t
whizzing down a snow-covered hill-
side in the winter, come summer
they’re resolutely trudging up a well-
marked, well-trodden path.
But head to these same Alpine vil-
lages only a week or two out of season
and you’ll have the place almost to
yourself, offering the perfect retreat
from the stress of City life. And after a
sticky London summer battling with
overheated public transport, a stuffy
office and a distinct lack of sun, it was
with much relief that I hopped on a
plane for a long weekend in Arosa, a
small Swiss resort about 1,800m above
sea-level.
Arosa is not as well known as its big-
ger and more famous neighbours of
Davos and Klosters. It’s a compact
Alpine village by comparison, but it
has more than enough in terms of
walking, cycling and horse riding
trails to keep you occupied.
It’s about three hours from Zurich
airport but don’t bother hiring a car.
For a start, the train is just as quick as
driving, it works like clockwork – three
changes, not one missed connection – is faultless thanks to Swiss designer
and the final leg is not to be missed. Carlo Rampazzi, who spruced it up
It’s a narrow-gauge railway that wends substantially in 2006.
its way steadily higher up the valley All the rooms have a smart, mod-
towards Arosa from the valley town of ern feel with bright quilted head-
Chur and you’ll get some stunning boards – mine was a patchwork of
views if the weather’s favourable. vibrant orange and zebra stripes. Eye-
The five-star Tschuggen Grand is cer- catching, certainly, but I was glad I
tainly the place to stay in Arosa and we didn’t have to wake up facing it. The
were met at the tiny station by an large bathroom, with its clean lines,
immaculately-dressed member of staff glass and local Grisons granite was
who drove us the short distance to the just as up-to-date and as well appoint-
hotel, which is perched just above the ed.
village, and used to be a sanatorium. While the hotel is certainly mod-
But those hoping to stay in a choco- ern, the adjacent Bergoase spa, which
late-box Swiss chalet will be disap- opened in December 2006, is verging
pointed. Rebuilt in the late Sixties after on the futuristic. It is carved into the
a fire destroyed the original hotel, the hillside and is topped by nine glass
Tschuggen Grand did not escape the sails, which blend into the trees dur-
architectural penchant of the time for ing the day but glow different colours
concrete and glass. at night.
But while the exterior of the hotel The spa is joined to the hotel by a
might be somewhat drab, the interior suspended glass walkway so I was able

Spa and waffles at

a Cork golf retreat
This spacious resort is a no-nonsense
Irish winner, writes Zoe Strimpel
FRIEND of mine from Cork, have it at a proper resort, with golf

A who has lived in London,

Cambridge and Stockholm,
decided to reconnect with her
roots for her wedding.
Very considerately, she chose to
course, ballroom and, of course, a
fully-fledged hotel.
So deciding to take a room there
was a no-brainer; if you can avoid that
tired, drunk journey back with your
CITYA.M. 28 MARCH 2011 In association with 23
5 POLLEN ST
NEW ITALIAN BEHIND
REGENT STREET
REVIEWED TOMORROW

Those hoping to stay in a chocolate-box chalet will TRAVEL NOTES | by Zoe Strimpel
be disappointed; the Tschuggen Grand did not
escape the 1960s penchant for concrete and glass

EQUESTRIAN CLINICS AT Clinics cost £60 per person.

to walk to and from my room wrapped
in an over-sized dressing gown and
slippers. Although the spa is built into
the rock, its sheer size (an astounding
5,000 sq m over four floors) and light
make the whole place feel open and
relaxing. Whether you’re there to exer-
cise, get pummelled or relax complete-
ly, there’s plenty of choice, though
fitness fiends wanting a work-out
before breakfast may wish the spa
opened earlier than 8am.
I decided to start in the gym – a tad
later than 8am, I’ll admit – before
heading to unwind in the outside
relaxation pool and then enjoying a
detoxifying lunch in the spa’s own
restaurant, which rounded off the
morning nicely.
A full body sports massage was just
the trick for my troubled back though
I could have chosen to go for any num-
ber of other treatments, including
reflexology and ayurvedic massages. If
you’re really pushing the boat out or
looking to impress, then you can also
hire one of the two private spas, which
include treatments for two.
It would be very easy to laze in the
spa for days on end without feeling
the need to ever venture outside the
hotel. This will certainly more than fill
those common days in the mountains
when low cloud, rain and even snow
put paid to the best-laid plans.
But if you’re lucky to have excellent
weather, then there’s really no excuse
not to make the most of the stagger-
ing surroundings. The hotel can
arrange all manner of activities – from
yoga up the mountain at 2,000m to
cycling, walking and horse riding. And
if you feel you need a bit of a helping
hand to get you started like we did,
then the hotel’s private mountain rail-
way – the Tschuggen Express – will
stilettos in your hands, then you
absolutely should, right?
Fota Island is not necessarily my
kind of place – it’s neither boutique
nor particularly unusual in its design,
spa or restaurants.
But sometimes that’s a good thing.
It’s not pretentious, it gets the job
done and it has everything you need
for a good stay. It’s also nestled in a
vast spread of nature – woods as well
as fields and the golf course, a space
used creatively with a variety of
“lodges” away from the main build-
ing that families or friends can rent.
My room was spacious and mod-
ern, with a massive window door
opening out into the sunset. It was
cold, but I stuck my nose out long
enough to hear birds cheeping, before
running a bath in my capacious bath-
room.
take you up the first 150m of altitude
in just over two minutes.
If you’re heading off into the hills –
or even if you’re not – there’s plenty of
opportunity to fill up at breakfast.
Faced with the biggest continental
spread I have ever seen, it was tempt-
ing to try a little bit of everything, safe
in the knowledge I would work it off
later. Fresh trout, local cheeses and
meats, bircher muesli and boiled eggs
all made it onto my plate while if you
feel the need for something hot,
they’ll cook almost anything.
It’s not just breakfast that’s taken
seriously at the Tschuggen Grand.
There are no fewer than five restau-
rants, which all put plenty of empha-
sis on local ingredients and the crisp
and delicious Grisons white wine,
whether you’re dining at the gourmet
La Vetta or the less up-market but
extremely fun Bunderstube, which
offers local specialties such as cheese
fondue and raclette as well as a skittles
alley to try your luck after dinner – if
you can still move, that is.
I left the Tschuggen Grand feeling
energetic and healthy with all my City
lethargy and worries gone. More than
a hundred years ago, people started
arriving in Arosa in search of better
health. While the Tschuggen is any-
thing but a sanatorium now, this is
still true today. For 7 nights at Tschuggen
Grand Hotel on B&B Basis including flights,
Kuoni (01306747008 www.kuoni.co.uk) offer
prices from £1290pp based on two sharing.
To help limber up for the wedding,
I went down to the spa, which is a big
and bustling space. The large, curving
swimming pool was my first port of
call, and – though full of couples – it
was jolly nice to have a paddle.
I slept well in my comfortable,
mega-sized bed and rose for one of the
best hotel breakfasts I’ve ever encoun-
tered. Irish delights abounded: soda
bread, wonderful butter, pastries and
cakes (banana bread was my favourite)
and – the show stopper – honeyed
waffles with chocolate syrup.
Fota Island is, first and foremost, a
golf retreat. The course is huge and
there is a golf school. In true Irish
style, this is also a family-oriented
place, and I saw many kids frolicking
about happily. The adults looked just
as pleased to be there. Rooms from €104
per night. www.fotaisland.ie
LUCKNAM PARK To book, call 01225 742
Country house hotels 777 or visit www.luck-
and horses go beauti- nampark.co.uk
fully together. Now
you have a chance HOTEL DU CAP
to hone your eques- EDEN ROC
trian skills at the REOPENS
supremely lovely The Ritz of the
Lucknam Park, the Cap d’Antibes,
sort of place that Hotel du Cap
Mr Darcy would Eden Roc is now
have considered a bigger and better
reasonable abode. than ever, after a
With an all-weather four year, €45m
arena, shiny new show refurb, its first since the
jumps and a cross country 1950s. All one-bedroom
course designed by Badminton and two-bedroom suites now
course builders. Legends Stephen have sea views and there’s a new grill
Hadley and Richard Waygood MBE restaurant with sushi bar; a new swim-
will be in charge of your equestrian ming pool and beach area; a new
treatment in the 500 acres of park- restaurant and terrace; and a new
land at Lucknam Park. Show Jumping kitchen area to service the famous
with Stephen Hadley, 20-21 April and Cabanas, where time has stood still.
27-28 July; Combined training with Reopens 15 April, www.hotel-du-cap-
Richard Waygood MBE, 1-2 June. eden-roc.com
THINK ROOMS... with
WALDHOTEL NATIONAL 4*
Tomelistrasse | Arosa | 7050
Surrounded by mountains and majestic firs,
Waldhotel National is an impressive hotel to match
its impressive location. The lovely pine rooms manage
to create a stylish and modern feel without ever
losing that welcome touch of traditional cosiness.
And the spa here, complete with outdoor sauna, is
the ideal place to return to after a winter’s day skiing
or summer’s day hiking.
GOLF & SPORTHOTEL
HOF MARAN 4*
Maranerstrasse |Arosa | 7050
Hof Maran is right at the heart of the activity in
Arosa. You can ski right up to the front door, cross
country trails pass right by, the golf course is
opposite and it even has its own ice rink. And when
you’re done with being active you’ll appreciate
relaxing in the sauna and steam bath, or outside on
the sun-soaked terrace. The rooms are fresh and
modern here, and all enjoy striking panoramic views.
HOTEL METROPOL & SPA 4*
Matterstrasse 9 | Zermatt | 3920
With beautiful views of the Matterhorn mountain
(the most photographed mountain in the world no
less!), Hotel Metropol provides a charming Swiss stay.
This modern and tranquil hotel is right in the heart of
Zammatt and is a great base for all your summer or
winter activities. There’s a swimming pool and spa,
and we love how the big windows surrounding the
pool let you look out whilst you swim.
To book your stay at any of these fabulous hotels, or to discover a whole world of other
accommodation possibilities, visit LateRooms.com or call 0161 831 3894.
 Lifestyle
24
CITY DAD
THE STORY
CONTINUES
TOMORROW

Men ditch Q&A

high street Clare Rous & Kara Iland
FOUNDERS OF ROUS ILAND MEMBERS’ BOUTIQUE,

for fashion
WWW.ROUSILAND.COM

HOW TO GET
DRESSED: ADDING

on the web
Chaps hate shops, which is why
COLOUR
Q.
I am stuck in a rut of buying
blacks and greys. I want to
wear colour but don’t have any
confidence in what suits me. Should I
get my colours done?
more of them are buying clothes
A.
DON’T be fooled into thinking
online, writes Lucie Greene that there are clear rules about
colours that you haven’t been
taught. There are too many factors to

M
ENSWEAR online has always been
seen as second fiddle to women’s
wear,” says Jeremy Langmead,
newly anointed editor-in-chief at
Mr. Porter, Net-a-Porter’s new online men’s
fashion mecca. “You always had to find
menswear by scrabbling around for the
button hidden away at the top left or
right hand corner of a women’s wear
website. There hasn’t ever been a
dedicated global men’s style destina-
tion for men.”
That is, until now. Mr. Porter
launched last month and already is
setting the hearts of stylish men
aflutter. Langmead (former editor of
Esquire and Wallpaper*) said he
wanted the site to be as much a place
to read and pick up style tips as to
shop. It will, he says, “make shopping
easy and enjoyable, but also make men
feel comfortable being on a shopping
site mixing editorial, style advic, and inspi-
ration.”
Men have traditionally been averse to
shopping on-line, but that is changing.
“We’ve seen huge growth in the online
designer retail market, which is continu-
ing to grow,” says Sarah Curran, CEO at
My-wardrobe, where Burberry, Polo
Ralph Lauren, Vivienne Westwood and
Paul Smith are all best sellers. “We
launched menswear in January 2009,
achieved over £1m in sales in the first
year and have consistently recorded
over 100 per cent year-on-year sales
growth since. The market is one of the
biggest opportunities as more time
poor men realise the efficiency of shop-
ping this way.”
It helps that menswear itself is boom-
ing. “It’s the biggest area of expansion in
the fashion industry, partly because until
now it’s been under-developed,” says
Robert Johnston, associate editor at GQ.
“Menswear is on fire,” agrees Ed Burstell,
buying director at Liberty. “We are current-
influence what we individually feel
John Smedley shirts. good wearing to be simplified into gen-
eral terms. We all have our own partic-
ular associations with certain shades –
influenced by school uniform pet hates
to aspirational style icons. We also all
have a unique set of colouring and our
own way of wearing make-up/styling
our hair which itself changes depend-
ing on our mood and the season. You
just need to be brave and try different
colours on and trust your own reac-
tion. In every colour family there will
be a shade that suits you.
To start with try different colour
accessories. A skinny belt in gold,
cobalt blue or even coral pink will add
a little pop of colour to black and grey
ensembles: try Black & Brown’s rain-
bow selection of styles. Oversized
cashmere scarves in modern digital
prints, as perfected by British designer
Lilly and Lionel, are an easy way to
introduce colour near your face in a
ly experiencing a dou- Men – unlike women – simple item you can take on and off
ble digit increase over also like direction: depending on how brave you are feel-
last year. We have also “Male shoppers are sur- ing. For your clothes chose new mod-
just increased the prisingly receptive to ern neutrals: olive and khaki greens,
size of the depart- outfit-building sugges- French navy blues, and mushroom tau-
ment by over a tions,” says Gordon pes are all flattering options and easily
third.” Richardson, fashion paired with your existing blacks and
Do men shop director at Topman. A greys. Finally don’t forget about the
differently to key feature of texture of the fabric. Silks worn on
women? “They Topman’s site is a selec- the upper body reflect light up to the
are more brand tion of helpful com- face to enhance the natural colour of
driven and plete outfit looks. your eyes, skin and hair.
direct. They go Mulberry men’s bag. Reyner says there is
specifically for an opportunity for
the items they want. They also buy in online men’s fashion companies to attract
multiples. For example, I’ll go to new consumers, previously wary of shop-
Green and Jack’s and buy 10 shirts at ping. “Lots of men still tend to be intimidat-
once,” says Johnston. “Men are less ed by some store environments. Shops have
interested in trends and more inter- tried to overcome this with bars and pool
ested in the stories behind clothing and tables, but it has varying success,” he says.
how they’re made and the craftsman- “Online men’s wear sites are a great way to
ship,” adds Max Reyner from LSN research and find the products without Python double buckle waisted belt, Black
Global, a trends prediction company. having to deal with any of that.” and Brown, £149.99

FASHION NEWS | BY LUCIE GREENE

GQ FASHION MAG LAUNCHES
GQ Magazine has launched a new
swanky fashion-focussed partner, a hip
bi-annual accompaniment to its monthly
edition – coffee table candy for boys, basi-
cally. The magazine is being headed by
ex-I-D Magazine editor Ben Reardon and
features Oscar nominee James Franco on
the cover, along with shoots styled by
Louis Vuitton’s men’s wear designer Kim
Jones. Simon Mills also writes about why
British menswear is back on the map.
LOEWE LOVE
Fans of Loewe’s chic understated designs
can rejoice – the Spanish brand is open-
ing its first flagship on Mayfair’s prime
luxury spot Mount Street any minute,
selling its complete range of accessories
and a capsule range of clothing. (Look
out for the brand’s iconic logo print
pieces.) The store itself promises to be a
bit special. Peter Marino – the design-
er behind Christian Dior and
Ermenegildo Zegna and Louis
Vuitton’s temples of luxury –
styled it.
SHOE STORY
Oliver Spencer’s Lambs Conduit
Street store already has a cult following.
(If you’ve not discovered it yet, think
A bag from Loewe. cool workwear basics, cable knits and
naval winter coats a-plenty.) Now he is
launching a footwear boutique in collab-
oration with Simon Spiteri, ex-head of
menswear at Liberty. The store launches
next month and will sell a range of
Oliver Spencer boots, including
the Northampton lace-up, a
selection of independent shoe
brands and accessories by Il
Bussetto and Sean Marshall. Not
to be missed. Prices will start at
£50.
 CITYA.M. 28 MARCH 2011 Lifestyle | TV& Games 25

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

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

QUICK CROSSWORD
   

SUDOKU KAKURO
10 27 14 4 24 22 11 
6 9 12
35 8   
45
Place the numbers from 1 to 9 in each empty cell so that each 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 28 10
3 21
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 12 10 14   
above or to the left of it. 7
You can only use the digits 1-9 12 6  
  and you must not use the
17 37 16 15
11 30   
same digit twice in a block. 16
  The same digit may occur 17 14 
13 29
      more than once in a row or
column, but it must be in a
13
6 19
13 10
11
  
7 12
     separate block.
8 5 
45
 
9 10 23

     ACROSS DOWN
1 Make parallel (5) 1 One who studies
     
  WORDWHEEL B K
3
6
7
Stated (4)
Notify of danger (4)
Derek ___, British actor
and settles
conflicts and
disputes (11)
Using only the letters in the Wordwheel, you have knighted in 1994 (6) 2 Item worn on
  ten minutes to find as many words as possible,
I D 9 Egyptian goddess the hand (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E 10
of fertility (4)
Large open vessel
3 ___ Lanka,
country (3)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
N A 11
for liquids (3)
Arid region (6)
4 Replies (7)
5 Unruly (11)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
R W 13 Word that denotes
an action (4)
6 Clever joke (9)
8 Establishments
QUICK CROSSWORD 1 5 6 9 8 9 4
14 Take an exam (3) where alcoholic

P I A N O T H U M P
3 6 2 5 6 6 2 SUDOKU         
16
17
Birthday missive (4)
Discontinued (6)
drinks are
served (4)
8 9 4 3 2 4 1
A M R A A          19 Mischievous little fairy (3) 12 Do something to a
R I R A P T U R E 2 3 1 9 7 8 5
        
I T A L I C R T 6 7 2 5 1 20 Shade of green tinged greater degree (7)
        
S B S A F E L Y 2 9 1 4 5 7 6 3 8 with blue (4) 15 Short-term worker
WORDWHEEL
        
H E L M D D A R K 9 7 8 4 2 22 Globe (6) (abbr) (4)
T E A S E L Y I         
C P M O D E L S
4 6 2 5 7 1 2 23 Appear (4) 18 Greenfly, for
        
W H I P P E T T M
1 5 3 2 9 2 8 The nine-letter word was 24 Dry biscuit, a teething aid (4) instance (5)
2 8 1 2 6 5 9         
E E U T E
BIOGRAPHY         
25 Authoritative 21 Basic unit of money
A S I D E S C E N T 7 9 3 9 8 1 6
proclamation (5) in Albania (3)
 Sport
26
Neymar in
racism row
at Emirates
FOOTBALL
▲
CHELSEA target Neymar complained
of racist abuse after starring in
Brazil’s 2-0 win over Scotland at
Emirates Stadium yesterday.
The teenage Santos forward scored
both goals, one a penalty, and then
alleged a banana had been thrown
onto the pitch during the friendly.
“This atmosphere of racism is total-
ly sad,” Neymar said. “They were jeer-
ing me a lot – even when I was about
to kick the penalty the entire stadium
was jeering.”
Brazil coach Mano Menezes said he
had not seen the banana incident,
while Scotland manager Craig Levein
said he was not aware of it either.
Test heroes
help Saints
rout Wasps
RUGBY UNION
▲
NORTHAMPTON boss Jim Mallinder
tipped Dylan Hartley as a future
England captain after helping to
inspire a 39-3 win over Wasps.
Red Rose stars Ben Foden and Chris
Ashton were among the five tries as
Saints climbed back into the
Premiership’s top four.
Mallinder said: “Dylan is maturing
all the time and has the right creden-
tials to be an England captain. He had
a great game.”
Saracens moved to within three
points of leaders Leicester with a 24-9
victory over Newcastle, James Short
and Jared Saunders scoring the tries.
%$
#3*5"*/µ4
#*((&45
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065
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Featuring the world’s greatest flat race
Investec Derby Festival – 3rd & 4th June 2011
Capello faces
new headache
over captaincy
▲
FOOTBALL
BY JAMES GOLDMAN
ENGLAND manager Fabio Capello is
faced with a fresh captaincy conun-
drum ahead of tomorrow’s friendly
against Ghana after he agreed to
release five senior players from his
squad, including reinstated perma-
nent skipper John Terry.
The Chelsea defender, along with
his club colleagues, Frank Lampard
and Ashley Cole, have been granted a
break, as have Wayne Rooney and
Michael Dawson, with their hectic
domestic and European schedule in
mind.
Capello may have thought he’d put
the captaincy issue to bed last week
with Terry’s reappointment, but after
admitting to not enjoying “seeing the
armband passed about” the Italian
must select his next captain, from a
largely inexperienced group of play-
ers, carefully.
Gareth Barry is the favourite to
wear the armband, but the
Manchester City midfielder’s recent
loss of form, coupled with Scott
Parker’s emergence, means he is no
longer guaranteed to start.
Jack Wilshere, impressive in a new
TOP OF THE CLASS: WHO SHONE FOR ENGLAND IN CARDIFF?
Darren Bent: Three
important goals in
three games for the
striker suggests his
happy knack of being
in the right place at
the right time for his
club will extend to the
international scene.
CITYA.M. 28 MARCH 2011
midfield formation during Saturday’s
straightforward 2-0 win in Wales, has
been mentioned as a potential
England captain by Capello himself,
but at only 19 years of age the manag-
er may wish not to burden the
Arsenal midfielder with even more
responsibility.
Steven Gerrard, also overlooked for
the captaincy in favour of Terry and
currently injured, has revealed
Capello spoke to him regarding his
change of captain, despite not
informing Rio Ferdinand.
“I did actually get a call,” he said.
“The manager spoke to me. He spoke
to me and just explained what he’d
been doing; he didn’t have to.”
Meanwhile, Club England manag-
ing director Adrian Bevington,
expects that Capello will attempt to
calm the waters between himself and
Rio Ferdinand, who is understood to
have been aggrieved at losing the cap-
taincy.
Bevington said: “I believe, that
maybe the communication could
have been better and he expressed
some regrets. I look forward to seeing
Rio again in an England shirt – and
I’m sure Fabio will pick up with Rio
soon after these internationals.”
Ashley Young: The Scott Parker: Playing the Jack Wilshere: Was
Villa winger supplied best football of his career fractionally off with his
the assists for both by his own admission. final ball on a couple of
goals and his intelli- Adding extra energy to occasions, but that’s nit
gent movement off the the engine room in place picking. Provides indus-
flanks hinted at the of Gareth Barry and try and genuine flair in
extra touch of versatili- looks set to make up for equal measure. For
ty he has added to his lost time in an England once, the hype is fully
game this season. shirt at long last. justified.
The Investec Derby Festival is one of the most iconic events of the sporting
and social calendars. With an anticipated 125,000 on Investec Derby Day
alone, the Festival is one of the most popular sporting events in Britain. And
for good reason. The Festival attracts a diverse range of people, creating
CITYA.M. 28 MARCH 2011
Hamilton glee as Vettel lays marker
Champion kicks off
season in style but
McLaren star revels
in second place
FORMULA ONE
▲
BY FRANK DALLERES
ENGLAND’S Lewis Hamilton vowed to
rein in champion Sebastian Vettel
after the German got his title defence
off to the ideal start with a pole-to-
flag victory at the Australian grand
prix.
Vettel underlined his status as hot
favourite to win the drivers’ title
again with an exemplary perform-
ance in Melbourne, the Red Bull driv-
er comfortably claiming the first race
of the 2011 season by 22 seconds.
But Hamilton was delighted to fin-
ish runner-up, having feared his
McLaren would again be off the pace
this term, and predicted he and his
team would continue to chip away at
the recent dominance of Vettel and
Red Bull.
“I feel really privileged to be up
here [on the podium] because we
thought it was going to be quite a bad
weekend,” said the Stevenage driver.
“Now, I’m back up here, back in the
Vaughan tips Strauss to quit as skipper
▲
CRICKET
BY JAMES GOLDMAN
FORMER England skipper Michael
Vaughan believes Andrew Strauss will
relinquish the captaincy of the one-day
side following Saturday’s savage World
Cup beating at the hands of Sri Lanka.
England’s head coach Andy Flower
revealed he would consult with Strauss
over his future plans, but only once the
dust has settled on the side’s ignomin-
ious 10-wicket quarter-final defeat in
Colombo. And Vaughan who, like
an exhilarating carnival atmosphere. This year’s Investec Derby Festival will be no exception. The two–day Festival
starts with Investec Ladies Day on Friday 3rd June, followed by Investec Derby Day on Saturday 4th June.
Hospitality packages are available. Book ahead and you can be there for the whole show.
Book now: 0844 848 3256 | epsomdowns.co.uk
Vettel (left) swept to victory ahead of Hamilton (right) in the season’s first race
fight, only a few points behind the
guy in front who has a much, much
faster car. But we’ll close that gap, I
have no doubts about that.”
Renault’s Vitali Petrov earned a
podium debut after the Russian took
third place, while Ferrari’s Fernando
Alonso pipped home favourite Mark
Webber to fourth, and Hamilton’s
team-mate and compatriot Jenson
Button was sixth.
Scot Paul di Resta came in 10th on
his Formula One debut, the Force
India driver being promoted two
places when the Saubers of Sergio
Strauss, combined the roles of Test and
one-day captain during his playing
career, believes the pressures of com-
bining professional duties and main-
taining a stable life at home will see
the Middlesex man step down.
“He is a mature bloke and a
mature captain and his heart is in
the captaincy,” said Vaughan. “But
he’ll also understand that when he
gets home he needs to decide what
is best for the England set-up.
“You are away for so long. He has
a lovely young family and it comes
Perez and Kamui Kobayashi were dis-
qualified for a technical infringe-
ment.
Vettel was last night slashed to
odds-on to retain his title by book-
makers William Hill, despite there
being 18 more races left this season,
but the 23-year-old attempted to play
down his success.
“I don’t really like the word domi-
nant at this stage, because there is a
long, long way to go,” he said. “Yes,
the car was perfect, and all in all, I’m
very happy. We’ve learned a lot and
we now need to move forwards.”
to a stage when he needs to ask
himself if he needs to be
doing that consistently.
“Will he be at the next
World Cup in four year’s
time. You have to say he
probably won’t be.
“He may carry on
into the summer for
continuity into the
India series. But I have a
sneaky suspicion that
[the Sri Lanka quarter-
final] was his last game.”
Picture: ACTION IMAGES
AUSTRALIAN GRAND PRIX RESULTS
1. Sebastian Vettel, Red Bull 1h 29m 30s
2. Lewis Hamilton, McLaren 1:29:52
3. Vitaly Petrov, Renault 1:30:00
4. Fernando Alonso, Ferrari 1:30:02
5. Mark Webber, Red Bull 1:30:08
6. Jenson Button, McLaren 1:30:24
7. Felipe Massa, Ferrari 1:30:55
8. Sebastien Buemi, Toro Rosso Lapped
9. Adrian Sutl, Force India
10. Paul Di Resta, Force India
Lapped
Lapped
ENGLAND ODI CAPTAIN | WHO NEXT?
Alastair Cook: Not a part of the one-day set-up
but would be a like-for-like replacement and is
favourite to inherit the Test captaincy too.
Stuart Broad: Spate of on-field controversies
raise doubts over his temperament, but winter
stint as a pundit revealed a tactical understand-
ing not previously given credit for.
Jonathan Trott: Unflappable and sure of his
place in the side. Only been on international
scene for two years though.
27
SPORT | IN BRIEF
Balotelli in trouble again
FOOTBALL: Man City striker Mario
Balotelli faces more disciplinary action
after he was said to have thrown darts
in the direction of youth team players.
Walsh to ride National favourite
RACING: Ruby Walsh will ride ante-post
Grand National favourite The Midnight
Club in the iconic race on 9 April.
Pendleton out in semis
CYCLING: Victoria Pendleton missed out
on a third medal at the World Track
Championships after she was knocked
out in the semi-finals of the keirin event.
Coach tips rower for 2012
ROWING: Teenage Boat Race winner
Constantine Louloudis has been tipped
to star at the London 2012 Olympics by
his Oxford coach Sean Bowden.
Hunt call for end to cash row
OLYMPICS: Culture Secretary Jeremy
Hunt has called for an end to the cash
row between the British Olympic
Association and 2012 organisers Locog.
Crusaders win Super XV game
RUGBY UNION: Dan Carter and Sonny
Bill Williams helped the Canterbury
Crusaders to a 44-28 win over the Natal
Sharks at Twickenham.
Results
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 How did oil prices
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Will the rise Costs hit
UK UK drivers at
protect sterling’s
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value?
rises. pump.
Take a position at
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MPC considers
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Take a position at
igindex.co.uk
BP’s 2010
financial
report shows
Where next April 2010,
for BP’s share price?
first annual
loss since
Take a position at BP oil spill
igindex.co.uk
1992.
BP’s dividend
But dividend Combined
clean-up and
creates worst
payments
payouts
suspended,
restored in well-capping costs environmental
exceed $40bn.
June 2010.
March 2011.
disaster in
US history.
Spread betting can result in losses that exceed your initial deposit.