BUSINESS WITH PERSONALITY
WHY BEING NICE LEADS
Issue 1,329 Thursday 24 February 2011
OIL SURGES ON
LIBYAN CRISIS
WORLD
▲
BY STEVE DINNEEN
THE PRICE of oil continued to surge
yesterday, after at least half of Libya’s
production ground to a halt amid
escalating violence.
Brent crude for delivery in April
soared six per cent to race to more
than $112.12 a barrel, its highest
level in two-and-a-half years. West
Texas Intermediate crude for March
delivery jumped 3.9 per cent to
$98.89 a barrel, smashing the 29-
month high it hit earlier.
Analysts warned of far worse to
come if the contagion spreads, with
Nomura saying oil could hit a stag-
gering $220 a barrel if both Libya
and Algeria both halted oil produc-
tion entirely.
Repsol, one of the largest foreign
operators in Libya, has suspended all
its production, as has German com-
pany Wintershall, while Italian oil
giant Eni said it has closed some
operations. Statoil, BP and Shell have
stripped down or closed their opera-
tions in the country.
Saudi Arabia said it could meet
any oil shortfall caused by a drop in
Libyan oil production, pointing to its
6m barrels a day surplus, with Libya
producing just 1.6m barrels.
However, analysts at Barclays
Capital say it is not that simple, with
Libyan and Saudi oil not directly
interchangeable. Libyan crude is a
higher grade that needs less refining
to its Saudi equivalent and a drop in
Libyan production will hit specific
types of oil.
The chaos follows another day of
violence, with Muammar Gaddafi
battling to retain control of Tripoli
and areas in western Libya as protest-
ers consolidated gains in the east.
The body-count from the turmoil is
now thought to be at least 1,000.
The British foreign office was
forced to defend its approach to the
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Boris aide
slams bank
levy policy
▲
POLITICS
BY JULIET SAMUEL
A SENIOR economic adviser to
London Mayor Boris Johnson has fired
a shot across the bows of the
Treasury, warning that too much
banker bashing could put £20bn of
tax revenue at risk.
Writing exclusively in today’s City
A.M., Anthony Browne says: “It is clear
that banker bashing is not a joyful
cost-free pastime. It has severe fiscal
consequences.”
In particular, he targets George
Osborne’s bank levy, which the chan-
cellor raised unexpectedly two weeks
ago to extract more cash from banks.
“The banking levy will affect the loca-
tion of balance-sheet heavy global
trading businesses,” says Browne.
He points to a study by Oliver
Wyman showing that £20bn of the
tax receipts delivered to the Treasury
by financial institutions last year
came from highly mobile activities
that could easily move abroad.
BROWNE’S COLUMN: P10
MPC’s Miles
Libya is still in revolt as a protestor captures military weapons (left), while King Abdullah of Saudi Arabia (right in white
attacks hawks
headdress) with the King of Bahrain revealed financial support measures worth £22bn in a bid to avoid popular unrest
ANALYSIS l Brent Crude Futures 112.12 ANALYSIS l Easyjet
in war on rates
112 $
23 Feb 389 p
108 384 355.5
▲
23 Feb UK ECONOMY
104 379
BY JULIAN HARRIS
101 374
97 369 TENSIONS in the Bank of England’s
93 364 rate setting committee heightened last
90 359 night, after David Miles launched a
86 354 thinly veiled attack on his ultra hawk-
ish colleague Andrew Sentance.
Dec Jan Feb 17 Feb 18 Feb 21 Feb 22 Feb 23 Feb Sentance recently said sterling’s
exchange rate should be a “key area of
focus” for the Bank’s monetary policy
Libyan crisis as the estimated 500 departing. As fears of a contagion to other oil committee (MPC). But last night Miles
Britons stranded there struggled to The FTSE 100 slipped 1.22 per cent producing countries spread, Saudi described any link between sterling’s
evacuate the violence-torn country. to 5,923.53 – a three-week low yester- Arabia’s King Abdullah bin Abdul depreciation in 2007-08 and the Bank’s
The first specially chartered plane to day. Airlines were among the hardest Aziz promised $36bn (£22bn) in bene- exceptionally loose monetary policy as
Tripoli sent to rescue them spent four hit, with EasyJet dropping 2.9 per fits to his people in a bid to avoid a “a strange interpretation of history.”
hours on the tarmac at Gatwick with cent and British Airways owner ICAG similar fate. And he warned against Sentance’s
a technical fault, before eventually falling 1.6 per cent. ALLISTER HEATH: P2 suggestion of a rate hike, saying he
remains “very sceptical” over such
arguments. MPC DIVISIONS WIDEN: P4
NASDAQ ▼ 2,722.99 -33.43 £/$ 1.62 unc £/¤ 1.18 unc ¤/$ ▲ 1.38 +0.01 Certified Distribution
29/11/10 till 02/01/11 is 98,444
 2 News
The paradox of plenty strikes again
EDITOR’S LETTER
ALLISTER HEATH
IT is the paradox of plenty: countries
that are amply endowed with natural
resources, such as oil or diamonds,
tend to suffer from extreme misgov-
ernment, poverty and misery. Iran
and Libya are cases in point. Countries
that start off with little or no natural
endowments – such as Hong Kong –
and are forced to exploit their human
capital to pay their way tend to enjoy
far better outcomes. The resource
curse is one of the most depressing
realities of the modern world, and one
which we have witnessed yet again in
North Africa and the Middle East in
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WHAT THE OTHER PAPERS SAY THIS MORNING
N IRELAND’S ECONOMIC WOES BOOST
TERROR GROUPS, WARN OFFICIALS
The parlous state of Northern
Ireland’s economy is acting as a
recruiting sergeant for dissident
republican groups, senior police and
security figures warned, raising ques-
tions about the pace of spending cuts
in the region. The province’s power-
sharing executive has been told to
find savings of £1.6bn during four
years, while David Cameron has said
that he wants to reduce its huge
reliance on public sector jobs.
INVESTORS WARN ON BRIBERY ACT
DILUTION
Any dilution of the Bribery Act would
be bad for Britain’s reputation as a
centre for investment, according to
some of the world’s largest institu-
tional shareholders. In a letter to
Jeremy Heywood, the Downing Street
permanent secretary, the
recent days. Tragically, there is no sim-
ple way of solving it. Those who blame
imperialism are kidding themselves.
The problem for the rest of the
world is that it continues to rely on
these undemocratic and despotic
regimes for much of its energy. In
part, this is because of a not-in-my-
backyard attitude to oil exploration
closer to home, unthinking environ-
mentalism and excessive risk-aversion:
the crackdown on oil exploration
after the Gulf of Mexico catastrophe
means that it will be even harder for
America to wean itself from imported
oil. The same is true of restrictions on
drilling in Antarctica. As prices rise,
shale oil will hopefully become more
viable. In the longer-term, the best
way forward would be to embrace
nuclear energy in a big way – there is
just no way that renewables will ever
provide enough cheap energy. But
even then we would first have to
invent proper electric cars with
decent batteries – and find reliable
suppliers of uranium and plutonium.
Pay on Wall
Street up 6pc
US ECONOMY
▲
BY MARION DAKERS
CASH bonus payments on Wall Street
were cut by an average of nine per cent
last year but overall pay rose, accord-
ing to figures published yesterday by
New York’s state comptroller.
Total compensation including stock
awards rose six per cent, however,
making up for a fall in the average
bonus to $128,530 (£79,259) in 2010, or
$20.8bn in total.
The average bonus fell faster than
the total bonus pool, comptroller
Thomas DiNapoli said, because the
sum was shared out between more
employees this year.
“Cash bonuses are down, but that’s
not an indicator of a weakness on Wall
Street,” said DiNapoli, adding: “Past
practices rewarded short-term gains at
the expense of long-term profitability.
International Corporate Governance
Network has asked for reassurance
that the act will be implemented.
WORKSPACE AND BLACKROCK IN
£100M PROPERTY JOINT VENTURE
Workspace Group, the London prop-
erty company, is to establish a £100m
joint venture with BlackRock, the
fund manager, to buy high-yielding
property in areas of the market
ignored by many real estate investors.
Workspace typically buys then turns
former industrial and office build-
ings into more modern premises.
COST-CUTS BEHIND REXAM GROWTH
The chief executive of Rexam said the
consumer packaging company
behind Carlsberg and Ref Bull cans
was set to become “boringly pre-
dictable” again following a difficult
period that forced it into a £350m
rights issue. Cost cutting helped
Europe’s biggest maker of beverage
cans lift annual underlying operating
profits by a fifth.
Meanwhile, oil prices keep on going
up. In a striking research note,
Nomura warned that the price could
hit $220 a barrel if the entirety of
Libya and Algeria’s supply were to be
knocked out. We are not there yet. But
it does seem as if around half of
Libya’s exports have now been halted,
possibly with worse to come as the
country succumbs to all-out civil war.
Some of the country’s fractious tribes
may decide to cut off the remaining
pipelines or seize energy facilities.
A rocketing oil price is obviously the
major threat facing the world econo-
my right now, as I wrote in this space
yesterday. The key is Saudi Arabia.
Unlike the psychopathic Muammar
Gaddafi, the Saudi regime is trying to
use carrots rather than sticks to pacify
its population. King Abdullah
returned to his country yesterday
after a three-month medical absence
and announced a massive programme
of handouts to bribe the population
into submission. It remains to be seen
whether this will work.
The industry’s greater emphasis on
deferred compensation will hold
down tax collections this year, but the
State and the City will benefit in
future years when taxes are paid on
this deferred compensation.”
Banks contributed around 13 per
cent of New York State’s tax revenues
in 2010, down from 20 per cent before
the start of the financial crisis.
DiNapoli said that 2010 was Wall
Street’s second most-profitable year on
record after 2009, which was buoyed
by federal bailouts, low interest rates
and proprietary trading.
Thomas DiNapoli, New
York State comptroller,
said cash bonuses fell
while salaries and
stock options rose
BBC CHIEFS STILL COLLECTING
BONUSES DESPITE BAN
The BBC is still secretly paying hun-
dreds of thousands of pounds in
bonuses to executives, despite a pub-
lic pledge that it would scrap them. A
number of top managers have
received payments totalling nearly
£500,000 in the past two years as part
of ongoing contracts.
ESPORTA IN PLAY AS RIVALS SHOW
INTEREST
The French bank that owns the
Esporta health club chain is under-
stood to be considering its options for
the business after receiving unsolicit-
ed approaches from rival operators.
Interest in the Société Générale-
owned chain is believed to have been
sparked by the bank’s decision last
autumn to test the water on a possi-
ble £200m sale and leaseback of 17 of
Esporta’s tennis-based clubs.
The good news is that the old eco-
nomic models which claimed that
every $10 rise in the price of oil would
cut global growth by 0.5 per cent have
been proved to be obsolete. They were
right in the 1970s but not today. The
Dutch Statistics Bureau’s December
World Trade Monitor, the best meas-
ure of worldwide production, exports
and imports, is strikingly upbeat. It
suggests that global economic
momentum re-accelerated in the
fourth quarter of 2010.
There is just one, major economy
that is slowing down right now, and
that is China. So for the time being at
least, the world can cope with dearer
oil. But if prices go on rising, and
Nomura’s doomsday scenario comes
true, growth will eventually start to be
chocked off.
The current times sometimes
resemble the stagflationary 1970s,
especially in the UK. The last thing we
need is another full-blown oil crisis.
allister.heath@cityam.com
Follow me on twitter: @allisterheath
KKR co-founders George R Roberts (left) and Henry R Kravis said the firm showed progress
KKR earnings leap 39pc
PRIVATE EQUITY
▲
BY MARION DAKERS
PRIVATE equity firm KKR posted a 39
per cent rise in quarterly earnings last
night to $714.6m (£440.7m), helping
the company to almost double its
three-month dividend to 29 cents.
US-based KKR, which owns stakes in
Alliance Boots, music rights firm BMG
and retailer Toys R Us, said its assets
under management rose 16.8 per cent
on twelve months ago to $61bn in the
last three months of 2010, beating ana-
FED MEMBER CALLS FOR WALL STREET
BANKS TO BE BROKEN UP
Kansas City Federal Reserve Bank
President Thomas Hoenig has called
for Wall Street’s financial giants to be
broken up to avoid another another
crisis. “I am convinced that the exis-
tence of too-big-to-fail financial insti-
tutions poses the greatest risk to the
US economy,” Hoenig said. “They
must be broken up.”
F1 TO LOSE $100M FROM BAHRAIN
GRAND PRIX CANCELLATION
Formula One is expected to lose
around $100m (£60m) in revenues
due to the cancellation of the season-
opening Bahrain Grand Prix, accord-
ing to new data. Information from
F1’s trade guide, Formula Money,
show that the teams are expected to
lose an estimated $40m from missing
Bahrain, with Ferrari set for the
biggest fall at $11m.
CITYA.M. 24 FEBRUARY 2011
NEWS | IN BRIEF
Credit Suisse bankers charged
Bankers at a Swiss firm, identified by
sources as Credit Suisse, were yesterday
charged with helping Americans dodge
taxes in a probe into offshore banks. The
US charged four former and current
bankers with encouraging Americans to
use offshore credit cards. Credit Suisse
said it was cooperating with US bodies.
ENRC to get $2bn Chinese loan
FTSE-listed Kazakh miner ENRC is to
get a loan of around $2bn (£1.23bn)
from the China Development Bank,
Kazakhstan’s President Nursultan
Nazarbayev said yesterday. The funds,
agreed between the two countries, are
set to help develop ENRC’s iron ore and
chrome units, though the firm has not
commented.
Abramovich set for legal fight
Russian billionaire Roman Abramovich
yesterday lost an appeal over a £2bn
claim brought by ex-business partner
Boris Berezovsky, meaning a legal battle
in the British courts will go ahead in
October. Berezovsky claims Abramovich
pressured him into selling a stake in oil
firm Sibneft at an unfair price.
lyst estimates.
“We continue to show great
progress in the two areas that drive
our business: investment performance
and capital raising,” said co-founders
Henry R Kravis and George R Roberts
“Our private equity funds returned
33 per cent for the year, significantly
outperforming the S&P 500 return of
15 per cent, while each of our credit
strategies also beat benchmark
indices.”
KKR’s New York-listed stock closed
down 1.5 per cent at $9.58.
GOLDEN SHARE AN OPTION FOR EADS
Germany’s government is weighing a
variety of ways to preserve its influ-
ence at Airbus parent EADS, includ-
ing a partial purchase of Daimler AG's
stake in the European aeronautics
company or creating a so-called gold-
en share, but faces numerous hurdles
in pursuing any of them. The German
cabinet met yesterday to discuss how
to remain a counterweight to French
power at EADS.
GOOGLE PENALISES OVERSTOCK FOR
SEARCH TACTICS
Google has penalized Overstock.com
in its search results after the retailer
ran afoul of Google policies that pro-
hibit companies from artificially
boosting their ranking in the Internet
giant’s search engine. Overstock’s
pages had recently ranked near the
top of results for dozens of common
searches.
CITYA.M. 24 FEBRUARY 2011
Qatar keen to
buy RBS and
Lloyds stakes
▲
WORLD ECONOMY
BY MARION DAKERS
QATAR plans to buy stakes in RBS and
Lloyds Banking Group, the nation’s
Prime Minister told David Cameron
yesterday.
Prime Minister Sheikh Hamad bin
Jassim bin Jabr al-Thani said when
asked about the state-owned banks:
“We are very open to any investment
in the UK and we have discussed
some.”
The Qatar Investment Authority
already has several billion pounds tied
up in the UK, including stakes in
Sainbury’s, Barclays and Harrods.
The UK’s holding of 83 per cent in
RBS and 40 per cent in Lloyds is not
expected to be sold until at least
September, once the Independent
Commission on Banking reports on
the possible break-up of UK banks.
Cameron, who is leading a trade del-
egation in the Middle East this week,
also praised Qatar’s deal with Centrica
yesterday, which will see state-run
Qatargas deliver 10 per cent of the UK’s
Apple boss Steve Jobs is currently on medical leave
CITY VIEWS: SHOULD LARGE COMPANIES BE LED BY ONE
PERSON OR A BOARD OF DIRECTORS? Interviews by Maria Tadeo
gas demand in an agreement worth
£2bn.
Qatargas is to deliver 2.4m tonnes of
liquefied natural gas (LNG) a year for
the next three years to Centrica, the
owner of British Gas.
Cameron said the deal was “good
for Britain, good for our energy secu-
rity, good for jobs, and good for eco-
nomic growth”.
Centrica chief executive Sam
Laidlaw, who is accompanying
Cameron on his tour, said he hoped
the deal represents the start of a long-
term relationship between the two
countries.
The agreement is the first time a UK
company has signed up for a long-term
LNG supply.
FAST FACTS | QATAR’S INVESTMENTS
● The Qatar Investment Authority was set up
in 2005 to diversify Qatar’s oil-driven economy.
● The sovereign wealth fund has a 24 per cent
stake in Canary Wharf owner Songbird, 15 per
cent of the LSE and swathes of London property.
News 3
Apple dodges
calls to reveal
Jobs’ successor
TECHNOLOGY
▲
Picture: REUTERS APPLE shareholders yesterday voted
down demands for a succession plan
for chief executive Steve Jobs.
Investors decided not to back a call
from the Labourers’ International
Union, which would have forced the
firm to reveal whether and how it
KEN SDEAN | LLOYDS will eventually replace Jobs, who is
currently on medical leave and did
not attend the meeting in San
“A face will represent a brand if the market per- Francisco.
But shareholders did pass a meas-
ceives strong leadership, but there are many ure requiring directors to win a
contributors behind every successful business.” majority vote before they join the
board, which was put forward by
Calpers, America’s biggest pension
fund, according to preliminary voting
PETER WILLIAMS | XCHANGING results produced last night.
Apple asked its shareholders to vote
down the request for details of its suc-
“The success of a company should not rely on cession plan, arguing that the infor-
a single person entirely. A directorial board mation would give an unfair
brings more in terms of ideas and options.” advantage to competitors
Chief financial officer Peter
Oppenheimer told shareholders that
the company was retaining its $60bn
TYRAN FALLAN | LONDON METAL EXCHANGE (£37bn) cash pile to pursue “future
opportunities”.
Tim Cook, Jobs’ top lieutenant, did
“It’s up to each company what their business not answer questions about Jobs’
model should be – one passionate leader can undisclosed medical condition that
has led to him taking charge of opera-
be as successful as a board of directors.” tions at Apple for the third time in
seven years.
 4 News CITYA.M. 24 FEBRUARY 2011

HOW THE BANK OF ENGLAND’S INTEREST RATE SETTERS ARE DIVIDED

MARTIN CHARLES BEAN ADAM POSEN
WEALE The Bank’s deputy Defiantly
The newest governor might dovish, the US
member leapt be expected to member wants
off the fence last side with King, more monetary
HAWKS month to sup-
port a rate rise.
yet has been
sounding more
easing through
buying assets.
hawkish than
ANDREW usual of late. MERVYN KING
SENTANCE The Bank’s governor insisted they
Leader of the could be “many quarters” away
hawks, has PAUL FISHER from a slow normalisation of rates.
voted for a The Bank director
0.25 per cent recently proposed
rise since “looking through” DAVID MILES
June, and SPENCER DALE PAUL TUCKER the UK’s high Siding with doves,
now wants a The Bank’s head Still on the fence, inflation, yet may spoke of the dan-
0.5 per cent economist voted yet tipped to be be persuaded to gers of tightening
hike. for higher rates. the next to jump. budge in future. policy yesterday. DOVES

Bets on early
rate hike rise
s as Dale turns
“had grown in strength”; but said
▲

UK ECONOMY
BY KATIE HOPE
THE rift at the heart of the Bank of
England deepened yesterday after its
chief economist threw his weight
behind calls for interest rates to rise.
Spencer Dale joined independent
Monetary Policy Committee (MPC)
members Andrew Sentance and
Martin Weale in voting for higher
borrowing costs this month to bring
runaway inflation back under con-
trol, according to the minutes of the
Bank’s February meeting published
yesterday.
Dale is the first internal Bank mem-
ber to break the party line, that rates
should for the time being remain at
their current historic low of 0.5 per
cent, and it was the first effective 6-3
split on the MPC since July 2007.
Sentance who has been calling for
a rate rise since June, pressed harder
this month by voting for a 0.5 per-
centage point rise to one per cent,
while Weale repeated his January call
for a 0.25 percentage point rise, a
position now also backed by Dale.
Even those who opposed an imme-
diate increase, acknowledged in the
minutes that the hawks’ argument
“there was merit in waiting to see”
how the economy performed at the
start of the year before acting.
The emergence of a third hawk
caused some analysts to bring for-
ward their predictions of when a rate
rise, widely expected to be May, could
occur.
Simon Ward, Henderson’s chief
economist, said yesterday that it
could now come next month “if
revised fourth-quarter GDP figures
and surveys for February indicate
that economic recovery is continu-
ing.”
Alan Clarke at BNP Paribas said: “It
is looking more likely that we get
another rare meeting where the gov-
ernor is out-voted.”
The pound surged almost a cent
against the dollar to $1.6270, the
strongest this year, and yields on
short-term government debt edged
higher after the minutes were pub-
lished as markets priced in the likli-
hood of an interest rate rise. Money
markets are pricing in a quarter-point
increase in borrowing costs from
their record low of 0.5 per cent by
May, with rates seen rising to 1.25 per
cent by the end of this year.

F&C disputes contract with key

client BCP after Sherborne coup
▲

ASSET MANAGEMENT raised its stake in F&C to 17 per cent

F&C ASSET Management is in legal
wrangling with key client Millennium
BCP over compensation due should
the Portuguese bank end its contact.
BCP believes it can exit its exclusive
contract, which sees F&C manage
£15.6bn of its assets, at any time with-
out paying compensation or giving
any notice, thanks to a break clause
that took effect in 2009 when Friends
Provident divested its majority stake.
F&C, which this month saw rebel
shareholder Sherborne Investors take
control of its board, believes the break
clause kicked in when Sherborne
on 17 December, and BCP must still
serve 12 months notice.
F&C said BCP’s stance “put F&C on
notice that F&C’s continued provision
of services to it constitutes payment
in lieu of compensation” until 17
December 2011 when it could end the
contract without compensation or
notice. But it said BCP had not decid-
ed to end the contract, which was due
to expire in 2014.
The clause allows BCP to walk away
if any F&C shareholder gains a higher
stake than its two biggest investors
when the deal was signed: Friends
Provident and Dutch bank Eureko.
 6 News
Inflows up at
Henderson as
assets rocket
ASSET MANAGEMENT
▲
BY RICHARD PARTINGTON
ANGLO-AUSTRALIAN fund manager
Henderson said its profits leapt 37 per
cent last year, despite a £7.6m charge.
Underlying profit before tax
increased to £100.7m, up from
£73.7m a year earlier, at the firm led
by chief executive Andrew Formica.
Henderson was forced to pay a
£7.6m charge into the Financial
Services Compensation Scheme as a
result of the collapse of Keydata, tak-
ing the gloss off its results. The charge
incurred by the asset manager is the
biggest one to be revealed by a fund
manager so far.
Net inflows at the group jumped
from £700m to £2bn last year, with
assets under management rising
from £58.1bn to £61.6bn, helping to
boost the rise in profit. The firm’s
board said it would increase its final
year dividend as a result of the strong
figures to 4.65p, up from 4.25p.
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Meanwhile, Henderson’s acquisi-
tion target Gartmore leaked more
than £790m in assets over the first
seven weeks of this year.
Investors in the British asset man-
ager pulled the cash despite
Henderson having signed up Henderson chief executive Andrew Formica will tie up a deal for Gartmore. Picture: REX
Gartmore managers running 84 per
cent of funds. Assets under manage-
ment at the firm plummeted by £7bn
over the year after the departure of
two of its stars – Roger Guy and
Guillaume Rambourg.
Oriel Securities analyst Keith Baird
remained upbeat about the merger,
which is set to be tied up by April.
He said: “I was in the majority who
thought it [Gartmore] was possibly
undergoing a death spiral, which is
what you get in these situations
where there’s been an upheaval and
people leave. The whole Roger Guy
fiasco was a massive own goal, but it
did only affect one deck of the ship
and the rest of it seems to be func-
tioning well enough.”
Pack your toothbrush!
Fly from Heathrow
New York
Boston
Miami
Nairobi
Singapore
Seoul
CITYA.M. 24 FEBRUARY 2011
Gartmore closes
chapter on an
inglorious 2010
YESTERDAY, investors likely saw
Gartmore report as an independ-
ent fund manager for the last
time. It wasn’t a pretty sight.
Assets under management now
stand at £15.8bn, a £7.7bn drop on
the end-March figure.
Of course, the real loss is far
greater than that. Gartmore man-
aged to lose billions of pounds in
assets while its rivals were making
hay on the back of booming equi-
ty markets.
The firm has continued to lose
assets since the start of the year,
shedding some £790m assets in
ANALYSIS l Gartmore assets under management the first seven weeks of 2011, even
though soon-to-be-owner
£bn Henderson had said clients would
25
stick around.
Although the rate of outflows is
20
starting to slow (see graph, left),
we are still sceptical as to whether
15 Henderson can make this acquisi-
tion work. St James’s Place (results
below) is a better pick while
10
Jupiter and Hargreaves are also
good bets.
5
0
BOTTOMLINE
1 Jan 10
1 Dec 09
1 Feb 10
1 Mar 10
1 Apr 10
1 May 10
1 Jun 10
1 Jul 10
1 Aug 10
1 Sep 10
1 Oct 10
1 Nov 10
1 Dec 10
1 Jan 11
1 Feb 11
Analysis by David Crow
@
St James’s
Place profit
leaps 70pc
@
▲
WEALTH MANAGEMENT
BY RICHARD PARTINGTON
PROFITS at wealth manager St
James’s Place grew 70 per cent yester-
day, despite the group being hit by a
£6.2m charge.
The firm said it had to pay a £4.8m
from £
345 interim levy into the Financial
Services Compensation Scheme,
resulting from the collapse of
from £
379 Keydata, as well as a £2.4m annual
levy charge.
St James’s profits before sharehold-
@
from £
407 er tax for the year to 31 December still
managed to hit £84.2m, up 69 per
cent on a year earlier. Its funds under
from £
443 management hit a record £27bn, up
26 per cent on a year earlier.
The strong results will calm fears
from £
504 that major stakeholder Lloyds
Banking Group could sell its 60 per
cent holding imminently.
from £
532 Speculation over a possible disposal
arose after the bank said it would dis-
pose of over £200bn of its non core
Return fares, incl taxes assets within five years. Lloyds has
since said it is not looking to sell its
stake.
More offers on KLM.com Chief executive David Bellamy said:
“While the road to recovery for the
UK economy is likely to remain chal-
www.cityam.com
lenging, the need for trusted finan-
cial advice is greater than ever.”
Panmure Gordon analyst Barrie
Cornes was upbeat on the results.
He said: “Our view is that while
there is an overhang from Lloyds’
stake, if there was to be placement of
that stake, it wouldn’t be at a huge
discount, it would be very small, if a
discount at all.”
CITYA.M. 24 FEBRUARY 2011
Barclays deal
with Lehman
cleared in US
▲
BANKING
BY JULIET SAMUEL
BARCLAYS is in line for an estimated
£500m windfall after winning a legal
battle with the bankruptcy estate of
Lehman Brothers.
Lehman’s creditors were attempting
to extract $11bn (£6.8bn) from the
bank on the grounds that it had
improperly snapped up assets during a
fire sale following Lehman’s collapse.
But the bank’s lawyers fended off
the attack and made a semi-successful
counter-claim to three further groups
of assets, one of which was decided in
Barclays’ favour.
Subject to a possible appeal by
Lehman, the bank will now receive
assets valued at $1.9bn, which analysts
at Exane BNP Paribas say will equate to
extra cash of £500m.
New York bankruptcy Judge James
Peck said yesterday Lehman’s estate
had not demonstrated “sufficient spe-
cial circumstances” to invalidate sales
of pieces of Lehman at an “asset scram-
ble” follow its collapse.
News 7
Private equity
exits by IPO to
hit record high
PRIVATE EQUITY
▲
SHARE offerings by private equity-
backed firms are set to reach a record
high this year as funds take advan-
tage of the market upturn to exit
deals, research showed yesterday.
Funds have taken 11 companies
Lawyers for the Lehman estate public already this year, raising a total
argued that Barclays had “ended up The case’s conclusion is good news for Barclays chief Bob Diamond Picture: Reuters $10.2bn (£6.3bn), and there are many
with too favourable a deal during a more waiting, data from research
period of market turmoil, uncertainty firm Preqin found.
and confusion” and had acted with TIME LINE | BARCLAYS AND LEHMAN Recent exits include US pipeline
the “active and complicit assistance of company Kinder Morgan’s $2.9bn ini-
certain senior executives of Lehman”. 10 September 2008: Lehman’s market Peck allows Barclays to purchase Lehman's tial public offering this month – the
But Peak rejected this view, saying value plummets to $5.92 a share. Barclays US brokerage business. biggest private equity-backed IPO ever
that instead Barclays’ purchase of the and Bank of America both consider a – from Highstar Capital, Carlyle,
assets “benefitted all interested par- potential takeover of the firm. 17 November 2009: Lehman files lawsuit Riverstone and Goldman Sachs.
ties, mitigated systemic risk and against Barclays for $11bn in damages, “With numerous forthcoming pro-
helped to save every one of us from an posed deals in the pipeline, 2011
even greater economic calamity”.
13-14 September 2008: US Treasury claiming it was given favourable treatment
looks set to be a record-breaking year
Barclays’ shares closed up 1.32 per makes it clear it has no intention of bailing in a sale that was rushed and “unfair”. for these exits,” said Preqin’s deals
cent on the news at 319p. out Lehman. Both Barclays and Bank of data manager Manuel Carvalho.
America pull out of takeover talks. April 2010: Bankruptcy estate of Lehman Last year 145 IPOs and share sales
versus Barclays trial begins. Lehman attor- raised $38.7bn for private equity
ANALYSIS l Barclays 15 September 2008: Lehman files for neys claim the court that approved the sale
340 p funds – double the value seen in 2009
319.00 Chapter 11 bankruptcy. had been mislead. and 12 times the level raised in 2008.
330
320 23 Feb A greater proportion of private equity
310 16 September 2008: Barclays announces 22 February 2011: Judge Peck, who exits were through public markets
300 its intention to purchase Lehman's invest- approved the original deal, states that it last year too – 17 per cent of exits in
290 ment-banking and trading divisions, "may have been imperfect, but it was still 2010, up from five per cent in 2008.
280 amounting to nearly $200bn in assets. adequate under the exceptional circum- IPOs anticipated soon include a
270 stances of Lehman’s week”. Lehman $3.7bn flotation of US healthcare
260 17 September 2008: A $1.89bn deal Brothers estate may consider an appeal. provider HCA, whose owners include
250 approved by US bankruptcy judge James Maria Tadeo Bain Capital, KKR, Citigroup and
13 Dec 31 Dec 20 Jan 9 Feb Merrill Lynch.
 8 News
Nasdaq could
muscle in on
NYSE-DB deal
FINANCIAL MARKETS
▲
BY MARION DAKERS
US stock exchange Nasdaq is mulling a
bid for NYSE Euronext, sources said
yesterday, in a move that has the
potential to scupper NYSE’s $9.5bn
(£5.9bn) planned merger with
Deutsche Boerse.
Nasdaq, which is valued at $5.7bn, is
thought to be looking at muscling in
on the NYSE deal to avoid becoming a
takeover target itself in the ongoing
flurry of M&A among global
exchanges.
Bourses have blamed growing cost
pressures and competition from newer
platforms for the spate of consolida-
tion.
Nasdaq declined to comment.
London Stock Exchange chief execu-
tive Xavier Rolet, who is currently
steering his own exchange through a
£4.3bn merger with Canada’s TMX,
warned yesterday that the NYSE-
Deutsche Boerse deal could face com-
petition hurdles.
“There’s going to be big competition
issues, because between them, they
control 93 per cent of equity and index
derivatives in Europe,” Rolet said in an
interview.
“It cannot be said this is going to be
anything but a monopoly, because it
will be,” he added.
Rolet said M&A is inevitable in the
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6-Week Trading Psychology Course
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current market. “In five years there’ll
be three, four international exchange
groups with global distribution capa-
bilities,” he said.
The London Stock Exchange’s merg-
er with Canadian operator TMX,
which was revealed earlier this month,
also came in for criticism yesterday.
The head of Ontario’s securities reg-
ulator said yesterday it will look closely
at the value of the tie-in, echoing the
country’s resistance of miner BHP
Billiton’s $39bn takeover bid for Potash
Corp last year. Ontario Securities
Commission chairman Howard
Wetson said in a speech: “I can’t define
public interest but I sure know it when
I see it.”
Meanwhile, Chicago Board Options
Exchange’s parent said yesterday it
was now formally open to “strategic
transactions” such as a sale or merger
with another exchange operator.
ANALYSIS l NYSE Euronext
40
USD 36.84
23 Feb
36
32
28
29 Nov 17 Dec 7 Jan 28 Jan 17 Feb
ANALYSIS l Maersk 2010 results
Net profits of Revenue:
$5bn $56bn
($1bn loss in 2009) 15 per cent
OIL & GAS DIVISION:
Revenue: $10.3bn 14 per cent
Profit: $1.7bn 43 per cent
TANKERS AND OTHER SHIPPING:
Revenue: $5.6bn 2 per cent
Profit: $240m 13 per cent
OIL OIL OIL OIL
Kate Bleasdale leaves Healthcare
Locums board after chair quits
HEALTH
▲
BY RICHARD PARTINGTON
KATE BLEASDALE has quit her post
as director of Healthcare Locums,
the staffing firm she founded.
She had been suspended as
executive vice-chairman after “seri-
ous accounting irregularities” were
discovered at the company last
month.
Her attempt to oust the board
has also been dropped after the
chairman who suspended her
stood down late last week.
Bleasdale had used her 11 per
Average freight rate
per 40 foot container:
$3.064
28 per cent
CONTAINER DIVISION:
Revenue: $26bn 31 per cent
Profit: $2.6bn
($2.1bn loss in 2009)
TERMINAL DIVISION:
Revenue: $4.3bn 0.3 per cent
Profit: $793m 61 per cent
OIL OIL OIL OIL OIL
the first time earlier this week, as
the company tries to stabilise itself
following weeks of turmoil.
However, the internal investiga-
tion – which is said to be near
completion – could throw up new
issues for the firm following its
publication.
A separate external probe by
legal-firm Zolfo Cooper will also
report in the coming weeks.
Kate Bleasdale first founded
Healthcare Locums in 2004.
A serial entrepreneur, she gradu-
ated as a nurse in 1983 but left the
NHS in 1987 to found recruit-
CITYA.M. 24 FEBRUARY 2011
Maersk says
2011 profit
will be lower
▲
SHIPPING
BY HARRY BANKS
DENMARK’S AP Moller-Maersk said it
will not repeat last year’s record earn-
ings in 2011 due to expected lower oil
output combined with uncertainty
about freight rates and oil prices.
The shipping and oil group beat
2010 forecasts on the back of a con-
tainer shipping recovery and higher
oil prices, swinging from its worst
result in 2009, when the global eco-
nomic crisis hit trade and shipping,
to its best result ever.
Maersk, which owns the world’s
biggest container shipping company
Maersk Line and produces oil and gas
mainly in the North Sea and Qatar,
posted a net profit of $5.01bn
(£3.09bn) for 2010 against a loss of
$1bn a year earlier.
“Things look better going into 2011
than a year ago, but our share of oil
production will be lower and we still
see some uncertainty about the oil
price and where container rates will
end up,” said chief executive Nils
Smedegaard Andersen.
ANALYSIS l Maersk ‘B’ shares
55,00
DKK 51,750.00
23 Feb
52,00
49,00
46,00
13 Dec 31 Dec 20 Jan 9 Feb
  "      "$    " cent stake in the business to launch ment agency Match Healthcare.
a bid to remove chairman Alan The firm grew quickly and
 
       % "  " !!"&  Walker. had revenues of £185m by the
The extraordinary general meet- time Bleasdale was dismissed
&# " 
 "  % %!"  $ ing to vote on the decision, as well in 2001.
as other board-level changes, has She filed a sex discrimina-
!" "! " " &# "  " % $! now been scrapped. tion claim against chair-
Former Standard Chartered man Sir Tim Chessells,
banker Peter Sullivan was installed hitting the headlines in
as the new chairman of the med- 2002 when she walked
ical recruitment firm without the away victorious with
backing of shareholders last Friday a £2.2m payout.
after Walker bowed to pressure and She used the
stepped down. money to start
%%%
"&! !
 David Henderson, a former Healthcare
 "      "!  " !" banker at Kleinwort Benson, was Locums, which
also appointed to the board as a floated on the
senior non-executive director. Aim exchange in
Sullivan addressed employees for 2005. DIARY: P8 KATE BLEASDALE
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 10 News CITYA.M. 24 FEBRUARY 2011

Memo to Osborne: don’t tax the City too much

times would be tied up in public with more than enough to pay for schools, on roads, rail and buses combined. other more friendly centres. The bank-
the offending produce. universities, police and prisons com- Only about 60 per cent of the tax total ing levy will affect the location of bal-
Like George Osborne, Colbert inher- bined. It is a number the government comes from UK financial services that ance-sheet heavy global trading
ited a fiscal catastrophe, and attempt- should pay close attention to – a little will almost inevitably stay here. businesses; the Financial Services
ed Herculean feats to overhaul the change could wipe out the entire pri- There was never any prospect of big Authority’s capital regime makes it
government’s finances. His guiding mary school system, fiscally speaking. banks moving overseas lock stock and less attractive to base global derivative
principle was that the “art of taxation Break down the headline figure, barrel, but tax revenues are still likely activities here.
consists of plucking the goose to get and it shows just how vulnerable the to be heavily affected by how interna- None of this would appear in any
the most feathers with the least hiss- tax collector is to banker bashing. A tionally competitive London is. The public data, but the tax base would
VIEW FROM CITY HALL ing”. detailed analysis by the consultants study suggests high personal taxes still be draining away. It is clear that
ANTHONY BROWNE It is a good principle to bear in
mind as the chancellor prepares his
Oliver Wyman for TheCityUK, which
represents financial services, shows
and anti-industry feeling mean that
the UK could lose around £14-16bn in
banker bashing is not a joyful cost-free
pastime, producing pleasing hisses. It
Budget. He shouldn’t just worry about that about 40 per cent of the total tax employment taxes from a small num- has severe fiscal consequences, which

J
EAN Baptiste Colbert, King Louis the amount of hissing, but the contribution comes from internation- ber of mobile high earners, including doesn’t just mean the chancellor will
IVth’s legendary finance minis- amount of feathers he is gathering. al financial services that happen to be traders, hedge fund managers, and be collecting few feathers. But we
ter, didn’t mess about. To uphold A recent report from PwC showed carried out in London, but are quite senior divisional heads. could all be paying the price for years
standards in the cloth industry, that financial services contributed mobile. That’s roughly £20bn of taxes With higher taxes in London, firms to come.
he issued an edict that any merchant £53bn in taxes last year – nearly £3,000 from activities that could move over- are increasingly looking to book their • Anthony Browne is an adviser to the
found peddling dodgy material three for every household in the UK, and seas – as much as the government pays trades (and so pay taxes) through Mayor of London

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City centre buildings in Christchurch will cost billions to rebuild

NZ loss could
ngmo
vies.c
om
reach $12bn
w from
samsu
ble no Commercial buildings are likely to
▲

tion availa INSURANCE

Incep be privately insured, which could
BY ALISON LOCK
push up the level of exposure for
LOSSES from the earthquake that hit many Lloyd’s insurers, Numis analyst
the New Zealand city of Christchurch Nick Johnson said. He estimated a
T may total $12bn (£7.2bn), JP Morgan total insured loss of $10bn “would
sa he T
m ow
su n
analysts said yesterday. not be inconceivable.”
ng av Repairs on shattered city centre Amlin, which lost $160m from the
m aila
ov ble buildings are likely to push insurance last quake, is most likely to have a
ies now
.c from claims to double the level paid for the similar loss this time, with Catlin and
om
quake that hit the city last September. Beazley among others potentially
The estimate also tops the $8bn top with some exposure, analysts said.
estimate by risk modelling firm AIR
Worldwide, which is assessing the ANALYSIS l Amlin
damage. It would make the disaster 420
p
the second-costliest earthquake ever
for insured loss after the 1994 388.00
California quake, which cost $20.3bn. 23 Feb
JP Morgan analyst Michael Huttner 400
said the number was a “very conser-
vative assumption on our part”.
“We assume that even buildings 380
which are still standing may have hid-
den structural damage and could
then need to be rebuilt,” he said. 29 Nov 17 Dec 11 Jan 31 Jan 18 Feb

Resolution rejects more buyouts

as focuses on efficiency savings
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INSURANCE
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further UK purchases while it inte-
grates its three previous acquisitions.
Brightest Smartphones for Everyone Resolution said in a strategy update
yesterday that consolidating Friends
Provident, AXA’s UK life business and
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ate £112m cost synergies per year by
2013, up from £75m.
of delivering mid-teens returns with
the current businesses.
“It will not contemplate acquisi-
tions that would dilute the returns
likely to emerge from the three acqui-
sitions already made,” the business
said.
Cowdery’s Resolution has aims to
build up a British life insurer valued
at £10bn before floating or selling this
by 2013.
CITYA.M. 24 FEBRUARY 2011
Rio Tinto CEO Tom Albanese has been pursuing strategic divestments
RSM Tenon
falls despite
profit leap
▲
PROFESSIONAL SERVICES
BY RICHARD PARTINGTON
SHARES in accountancy firm RSM
Tenon plummeted yesterday despite a
50 per cent profit leap after the group
warned that growth would slow.
Underlying profits for the listed
firm leapt by 53 per cent to £13.5m
for the six months to 31 December
2010. Turnover increased 65 per cent
to £121.1m.
The figures combine Tenons’ acqui-
sition of RSM Bentley Jennison, the
rival accountancy business it bought
for £76m in 2009.
But the two firms had produced
combined turnover of £240m
through 2009, far higher than yester-
day’s result.
RSM Tenon said the process of busi-
ness integration would “continue to
require substantial management
resource” and warned that growth
would progress at a slower pace than
originally thought.
Chief executive Andy Raynor said:
“Definitely the acquisitions have in
absolute terms come through. It’s
increased our prominence in the mar-
ket, although we’ve got a long way to
go with the brand.
“The overall scale of the business
has helped us to access organic
growth we wouldn’t have otherwise
had.”
RMS Tenon shares closed down
21.13 per cent at 42p per share.
ANALYSIS l RSM Tenon Group
68
66
64
62 42.00
60 23 Feb
58
56
54
52
50
29 Nov 17 Dec 11 Jan 31 Jan 18 Feb
Commerzbank will start state repayments Natixis returns to profit
▲
BANKING
BY HARRY BANKS
COMMERZBANK has said it will post
higher earnings in 2011 and start to
repay its bailout money as a rebound-
ing German economy lifted profits at
its core businesses, including invest-
ment banking.
In 2010, Germany’s second-biggest
lender posted net profit of €1.43bn
(£1.21bn), above expectations of €1.3bn.
▲
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Commerzbank’s core Mittelstand
business, which focuses on lending to
mid-sized German companies, posted
a record result for 2010, and the invest-
ment banking and portfolio restruc-
turing units benefited from a
favourable market environment,
write-backs and lower risk provisions.
Commerzbank also said it expects to
see a further decline of at least €200m
in loan loss provisions this year, giving
the bank leeway for the repayment of
Rio divests talc business
MINING
BY HARRY BANKS
RIO Tinto has received a binding
$340m (3210m) offer from industrial
materials group Imerys for its talc
business.
Selling the business is part of Rio’s
plan to focus on large-scale assets.
The miner has made divestments of
more than $11bn since 2008.
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the state’s non-voting capital contribu-
tion, called silent participation.
German state bailout fund SoFFin
injected €16.4bn of so-called silent par-
ticipations, and took a 25 per cent
stake in Commerzbank during the
financial crisis.
“We intend to reduce the silent par-
ticipations by a significant amount as
early as 2011,” chief executive Martin
Blessing said yesterday, without speci-
fying by how much.
Rio Tinto Minerals, which
includes the talc and borates busi-
ness, posted a net profit of $199m in
2010.
Last March, Rio said that it had
restarted the process of selling its
talc business and had received inter-
est from a range of parties, including
private equity groups.
Talc, the softest rock in the world,
is used in animal feed, ceramic tiles,
26 26 33
mins mins mins
Stratford Westminster Oxford
Circus
BANKING
FRENCH bank Natixis returned to a
net profit last year and plans to
resume paying a dividend.
Natixis, which focuses on invest-
ment banking, has boosted revenue
in a volatile year thanks to strength
in corporate finance, capital mar-
kets and asset management.
The bank’s net profit for 2010 was
€1.73bn, compared with an average
News 11
chewing gum and many everyday
products including body powder.
Rio had put its talc and borates
businesses up for sale in late 2008
but pulled it due to the global eco-
nomic crisis.
Buyer Imerys is a French group
that specialises in mining and dis-
tributing rare resources for use in
batteries, ceramics, paper and con-
struction materials.
NEWS | IN BRIEF
Accor pledges debt reduction
Europe’s largest hotel group Accor said it
was confident a recovery in demand for
rooms would continue this year and
pledged to accelerate asset sales to
reduce debt. Accor posted a 90 per cent
rise in 2010 operating profit, in line with
forecasts, as room rates gradually recov-
ered. Earnings before interest and tax
were €446m, in line with the company’s
guidance of around €440m.
AssetCo seeks covenant waivers
British support services provider
AssetCo said it was seeking waivers of
certain bank facilities to carry on with its
equity-placing plan, and that it was still
in talks with various parties on the injec-
tion of short-term funds. The troubled
company has said that it is considering a
share sale to raise £8m immediately, as a
delay in its balance sheet restructuring
had put a strain on its cash resources.
HCA downsizes public listing
Private equity-backed hospital operator
HCA Holdings has slashed the value of its
initial public offering (IPO) by 19 per
cent, as uncertainty over the future of
healthcare stocks remains high. HCA,
which set terms for its IPO on Tuesday,
now plans to raise up to $3.7bn in a deal
that would value it at $15.5bn. In May, it
had filed to raise up to $4.6bn.
Grain losses hit Wilmar earnings
Wilmar International, the world’s largest
palm oil plantation firm by market value,
reported a 28 per cent decline in quar-
terly earnings on losses from it oilseeds
and grains units, missing forecasts and
knocking its shares down five per cent.
Wilmar, which has a market value of
$27bn, booked an October-December net
profit of $318.6m, down from $442m a
year ago, and missing analysts’ forecasts
of $378m.
Ferrovial back in profit
Spanish infrastructure firm Ferrovial has
swung to a net profit in 2010 after a
drive to trim debt produced substantial
one-time gains from asset sales.
Ferrovial, which owns UK airports opera-
tor BAA, posted net profit of €2.16bn in
2010, compared with analysts’ forecast
for €2.67bn. Earnings before interest,
taxes, depreciation and amortisation fell
three per cent to €2.51bn in 2010, but
beat forecasts thanks to a return to
growth at its core construction division.
analyst estimate of €1.34bn. Natixis
posted a €1.39bn loss in 2009.
Natixis chairman Francois Perol
said that the bank, which is 72 per
cent owned by cooperative group
BPCE, is on track to comply with
stricter Basel III capital rules with-
out having to raise funds.
Shares of Natixis closed up 4.29
per cent at €4.30, to make the stock
the top gainer on the French blue-
chip CAC 40 index.
 The Capitalist
12
NO DIRTY
NAPPIES,
I’M OFF TO
THE MATCH
HIGH-profile dads have been dominating
the newsstands recently, with David
Cameron introducing baby Florence to
the press (right) and father-of-three Nick
Clegg proposing changes to the UK’s
paternity leave rules.
Hot on the heels of the trend, Prospect
magazine has today published an article
on the struggle to achieve a work-dad bal-
ance, with some fascinating insights into
the parenting styles of the UK’s working
fathers.
Most interesting is M&C Saatchi found-
ing director David Kershaw, a self-con-
fessed “creature of selfish habit” who
married late after spending the 1980s
leading the “somewhat debauched exis-
tence” of a classic ad man. Fast-forward
several years and he’s is ready to settle
down – but not without caveats.
Kershaw explains how a contract was
agreed with his wife for how the couple
would approach their “breeding pro-
gramme”, with three explicit conditions.
The clauses exempted Kershaw from
nappy changing, night duties, and having
to stop spending time playing golf or
watching his beloved Arsenal. Naturally, it
also required his wife to give up work.
To register for this event, visit:
www.rbs.co.uk/markets
The DAISY
A Device logo, RBS and THE ROYA
(‘RBS’) is authorised and regulated in the UK by the Financial Ser vices Authority
High-profile dads, such as David Cameron (above) are seeking the perfect work-life balance
Terms agreed, the couple happily pro-
created, with Kershaw continuing his
hands-off approach as their children grew
up, acting as “a sharer of treats rather
than a constant figure of responsibility”.
While The Capitalist is a firm believer in
an each-to-their-own philosophy, Clegg
should be careful to look elsewhere for his
paternity-leave poster boy.
RUGBY’S NEW MASCOTS
There’ll be something for everyone at One
New Change tonight, when Irish London
players Delon Armitage and David Paice
will share the shopping centre’s atrium
with an up-and-coming band – though
thankfully not at the same time.
AL BANK OF SCOTLAND are trade marks of The Royal Bank of Scotland Group plc. The Royal Bank of Scotland plc, Registered in Scotland No 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc
y. RBS is an authorised
auth
CITYA.M. 24 FEBRUARY 2011
EDITED BY
ELIZABETH FOURNIER
GOT A STORY? EMAIL
thecapitalist@cityam.com
M&C Saatchi
director David
Kershaw
established a
contract with
his wife that
exempted him
from parental
Back In Town – drifting out across the
chores dome of St Paul’s Cathedral, you’ll know
who they’re singing about.
STRICTLY BOARDROOM
Ousted Healthcare Locums vice-chair Kate
Bleasdale (left) has had a tumultuous
month, but The Capitalist is hoping that
Ahead of the Exile’s derby against being investigated for accountancy irregu-
Harlequins on Saturday, Armitage and larities at her own firm won’t stop the
Paice will be answering questions – which reportedly jovial ex-nurse from maintain-
fans can submit in advance on Facebook ing her party spirit.
or twitter – and there’ll also be giveaways Word has spread that an entertaining
of tickets for the popular clash. YouTube video of the former executive vice
For those not so into the rugby, alterna- chairman dancing to Abba has been taken
tive entertainment will be on offer in offline recently and The Capitalist is keen to
the form of “hotly-tipped” girl band view the forbidden footage: consider this a
FunFair (us neither). Taking cross call for submissions.
marketing to a whole new level We have to say that the report of the
London Irish have signed a deal for video does jog the memory: it was not too
the band to play at every one of their long ago that Bleasdale was accepting a
home games this season and will be business award at a dinner in Old
kicking off the event with a live per- Billingsgate Market. Shunning the usual
formance. speech, she decided instead on a peculiar
So when you hear the strains of little jig on-stage. Alas, the merry chair-
the club’s anthem – The Boys Are woman is “finally facing her Waterloo”.
agent of The Royal Bank of Scotland N.V
V. in cer tain jurisdictions.
CITYA.M. 24 FEBRUARY 2011 Economics 13

Eurozone
CBI: Fortunes WEBER TALKS TOUGH ON EUROPE

new orders
split for UK in shock rise
service sector

▲
UK ECONOMY
BY JULIAN HARRIS
INDUSTRIAL orders in the Eurozone
defied expectations in the final
month of 2010, official data revealed
UK ECONOMY ume of business in the three months yesterday.
▲

BY JULIAN HARRIS
PROFESSIONAL services firms have
bounced back to record significant
growth for the first time in nearly
three years, the Confederation for
British Industry (CBI) is expected to
announce today.
Business volumes for the last three
months reached their highest index
score – a positive balance of eight per
cent – since May 2008.
Optimism in the business climate
shot up to a positive balance for pro-
fessional services firms, with 10 per
cent more respondents optimistic
than pessimistic, the CBI’s latest serv-
ice sector survey will reveal.
The CBI’s previous two surveys (last
November and August) reported nega-
tive balances (-4 per cent, and -17 per
cent), with more professional service
respondents pessimistic about their
business situation.
Professional service companies
include accountancy, legal and mar-
keting firms.
However, the survey reported a dip
in prospects for consumer services
companies, such as hotels, bars and
restaurants, travel and leisure.
In this sub-sector, the value and vol-
ume of business continued to fall,
marking a full year of decline. A bal-
ance of -11 reported a fall in their vol-
leading up to the survey, which was
conducted between 31 January and 16
February.
The period covers the severe winter
freeze, which saw some shops and
consumer services take a knock to
their revenue.
The inclement weather struck half
a per cent off the UK’s GDP, according
to the Office for National Statistics.
The service sector as a whole
accounts for around three quarters of
British GDP.
However, negative feeling in the
consumer services sector has lingered
beyond the freezing weather, with
optimism recording a negative score
of -11 per cent, and a small balance (-1
per cent) of respondents expected
business to fall over the coming three
months.
“On the one hand, consumer
spending is constrained, held back by
rising prices and squeezed real
incomes,” said the CBI’s chief econo-
mist Ian McCafferty.
“On the other, there are signs that
spending by businesses is picking up,
helping to re-balance the economy
away from consumer-driven growth.”
A positive balance of 24 per cent of
professional services firms expect to
expand over the next year, compared
to a negative balance (-17 per cent) in
the consumer services sub-sector.
The new orders index, compiled by
the European Union’s statistics office
Eurostat, jumped by 2.2 per cent in
December, compared to the previous
month.
Across the European Union as a
whole, industrial orders rose by 2.5
per cent from November to December.
Compared to December 2009, new
orders grew 18.5 per cent in both the
single currency area and across the
whole 27 country EU.
“This rather surprising outcome is
due to very strong monthly readings
coming out of Italy up [9.1 per cent],
France [up 7.5 per cent] and
Netherlands [up 9.7 per cent],” said
Fabio Fois of Barclays Capital.
These results more than offset
drops in new orders in Germany (-2.9
per cent) and Ireland (12.4 per cent),
Fois said.
Despite Germany’s monthly drop,
over the last quarter of the year the
Eurozone’s largest economy saw
industrial orders rise three per cent.
“Yet orders for durable consumer
goods fell a further 2.3 per cent in
December after dropping 1.5 per cent
in November,” warned Howard Archer
of IHS Global Insight.
BUNDESBANK President Axel Weber said euro nations with large deficits – such as “This fuels the view that Eurozone
Greece, Portugal and Ireland – must become more competitive to help prevent another consumers remain reluctant to spend
sovereign debt crisis. He said: “Countries with current account deficits will have to con- on big-ticket items and are a weak link
tribute the most – what is needed are reforms that will improve their competitiveness.” in economic activity.”

Appetite for borrowing stays low as

mortgage market remains in slump
UK ECONOMY Insight. Lending to non-financial compa-
▲

BY JULIAN HARRIS
BRITAIN’S slump in mortgage lend-
ing continued in January, the
British Bankers’ Association (BBA)
revealed yesterday.
Mortgage approvals for house
purchases stuck at 28,932 for the
month – virtually unchanged from
December’s figure of 28,907, which
was close to a two-year low.
Mortgage approvals tumbled 20.9
per cent year-on-year, to less than
half the average monthly level of
58,149 seen since 1997, according to
Howard Archer of IHS Global
“The average value [£135,200] was
2.7 per cent lower than a year earli-
er,” the BBA said.
“Housing market activity
remains stuck in the doldrums,
which seems highly likely to main-
tain downward pressure on prices,”
Archer added.
Net mortgage lending rose by
£1.6bn, almost double December’s
increase of £0.9bn, yet remains low
compared to historical levels.
Meanwhile, lending to non-finan-
cial companies slipped slightly by
£0.3bn, following the fall in
December of £3.4bn.
nies is down £1.7bn over the last six
months. “Business demand
remains subdued,” the BBA said, “so
contractions in lending in several
company sectors continue, but at
slower rates.”
And there was no increase in
appetite for borrowing in the BBA’s
consumer credit findings, with a
net repayment of £217m in January.
In December £310m of credit was
repaid by consumers, the BBA
reported.
“There remains limited availabil-
ity of unsecured credit from banks,”
Archer said.

NEWS | IN BRIEF
France and Italy see prices fall
French consumer prices dropped 0.2
per cent in January compared to
December, official data showed yester-
day. The fall reduced the annualised
rate of inflation to 1.8 per cent, from
two per cent in the last month of
2010. Services, transport and commu-
nication prices unexpectedly declined
0.6 per cent on the month, weighing
down the figures. Meanwhile, con-
sumer prices in Italy also came under
downward pressure. “We now expect
the euro area’s ‘flash’ harmonised index
of consumer prices to be revised down
to 2.3 per cent (from 2.4 per cent)
when it is published in its final form
next Monday,” said Fabio Fois of
Barclays Capital.
US home sales edge upwards
US existing home sales rose unexpect-
edly in January. The National
Association of Realtors said sales
climbed 2.7 per cent month-on-month
to an annual rate of 5.36m units, from
a downwardly revised 5.22m units
annual rate for the previous month.
“The upward trend in existing home
sales is set to remain slow and steady
rather than speedy and spectacular,”
said Paul Dales of Capital Economics.
Break up the banks, says Hoenig
Banks seen as “too big to fail” pose a
danger to the American economy, out-
spoken Federal Reserve official Thomas
Hoenig said last night. “We must break
up the largest banks, and could do so by
expanding the Volcker Rule,” he said,
endorsing “Glass Steagall-type” provi-
sions that aim to prevent risky activities.
 14 News
Virgin to issue £750m bond
▲
TELECOMS
BY STEVE DINNEEN
VIRGIN Media yesterday announced a
£750m senior secured notes issue.
The 10-year bonds will be made
available in a private placement.
The notes will rank on an equal
footing with Virgin Media’s senior
credit facility and its existing senior
secured notes due 2018.
Virgin intends to use the notes’ pro-
ceeds to refinance a portion of its
bank debt, thereby improving its debt
maturity profile.
The pricing of the notes, which will
be denominated in dollars and
Logica says it
will return to
profit growth
▲
TECHNOLOGY
BY HARRY BANKS
IT SERVICES firm Logica said it will
return to growth in 2011 as its main
UK and Dutch markets recover and
consulting picks up pace after
reporting a flat profit for the last
year.
Chief executive Andy Green said
the level of growth would depend on
the economic recovery in Europe,
but he expected to see an improve-
ment in the Anglo-Dutch company’s
home markets and a stronger per-
formance in consulting.
He said: “We are expecting between
one and three per cent economic
growth across most of our markets;
we expect to do a bit better than that.
A point or two more than that.”
He also said he expected “modest”
margin improvement after two years
of stable margins of 7.4 per cent,
when Logica cuts costs to tackle a
drop in demand for major IT proj-
ects. He said: “This is the year when
we believe we can start to move the
margins up.”
Brokerage Numis said the sting in
the tail was a £30m restructuring
charge that would drag first-half
margins below the level seen a year
Cable & Wireless Communications
sells Bermuda operations for £43m
▲
TELECOMS
CABLE & Wireless Communications
(CWC) yesterday announced the sale of
its business in Bermuda to Canada’s
Bragg Group for $70m (£43m).
The deal comes just three months
after CWC said it would buy a majority
stake in Bahamas
Telecommunications Company (BTC),
the state-owned mobile operator, for
$210m to boost its Caribbean opera-
tions.
Bragg Group, a Canadian cable and
pounds, will be confirmed today.
Moody’s yesterday assigned a Baa3
rating to the notes.
It said the rating “reflects the fact
that the transaction is neutral to net
debt and does not change Virgin’s Ba1
corporate family rating.”
Virgin is the UK’s second largest pay
TV provider. It last week announced
fourth quarter revenue up 6.6 per
cent to £1bn, ahead of a company sup-
plied poll forecasting £992m.
Operating cash flow was up 9.9 per
cent to £404m, also ahead of forecasts.
It sold 44,100 new broadband prod-
ucts to customers and 12,100 new TV
services, taking the average revenue
ago, meaning the group would have
to deliver a challenging second-half
margin of more than nine per cent.
Numis said: “The demand back-
drop is improving, costs appear well
controlled and Logica’s improve-
ment is gathering momentum, but
this first half outlook feels like it has
taken the wind out of Logica’s sails.”
The European environment for IT
services has started to improve after
a tough two years when companies
cut IT upgrade projects to save costs.
Logica’s rival Cap Gemini has
guided for nine to ten per cent rev-
enue growth this year and Atos
Origin is also looking for growth.
Logica has received a boost from
banks seeking guidance on how to
comply with tough new regulation.
ANALYSIS l Logica
150 p
145
137.50
23 Feb
140
135
130
125
120
115
29 Nov 17 Dec 11 Jan 31 Jan
telecommunications provider, will
fund the deal – expected to close by
the end of next month – with cash.
CWC, which also announced a share
buyback of up to $100m yesterday,
owns stakes in two international cable
systems which land in Bermuda that
are operated separately and not part of
the transaction.
Chief executive Tony Rice said:
“Bermuda does not fit our business
model as it is not a full-service opera-
tion while BTC provides excellent
opportunities and a strong strategic fit
FRED ZORZI
BNP PARIBAS
per user up 4.9 per cent to a new
record £47.51p. Cable customer net
additions for the full-year were
76,600. ADVISING Virgin Media on the bond
issue were BNP Paribas and Deutsche
ANALYSIS l Virgin Media Bank.
1,800
p Leading the BNP team was Fred
1,680.00 Zorzi. He was brought in by BNP in
23 Feb March last year as joint head of global
1,700
syndicate within the global debt syndi-
cate platform, which encompasses all
1,600 investment grade, emerging market,
high yield, retail and medium-term
note, or MTN, issuance.
1,500 He is based in London and in the
same way as New York, Tokyo, Hong
29 Nov 17 Dec 11 Jan 31 Jan 18 Feb
Net customer
113,000
with 300,000
more contracts
Everything Everywhere boss Tom Alexander says the firm is on track to improve its profitability
Everything Everywhere sees revenue
and profits slide but adds customers
▲
TECHNOLOGY through – from £5.4bn to £5.3bn.
BY STEVE DINNEEN Underlying profit was £1bn, down
from £1.1bn.
EVERYTHING Everywhere, the entity It saw its mobile service revenues
formed by the merging of France grow 1.3 per cent in the quarter.
Telecom’s Orange and Deutsche However, it lagged behind Vodafone,
Telekom’s T-Mobile, yesterday report- which saw mobile service revenues
ed weak results for the last quarter. jump seven per cent in the same peri-
Its revenue dropped two per cent in od. O2 is also expected to show it
the nine months from April last grew at a faster rate when it reports
18 Feb year – when the merger went its fourth quarter results on Friday.
AppSense raises $70m
investment from Goldman
▲
with our Caribbean business.” TECHNOLOGY
ANALYSIS l Cable & Wireless Worldwide UK TECHNOLOGY firm AppSense has
80 71.45 raised $70m (£43m) in investment
p
23 Feb from Goldman Sachs.
Pete Perrone, a managing director
at Goldman Sachs, will join the com-
pany’s board of directors as part of the
70 deal.
AppSense is the market leader in
“desktop virtualisation,” a technology
that allows users to easily multi-task
60 between devices, facilitating working
29 Nov 17 Dec 11 Jan 31 Jan 18 Feb from home or over multiple offices. It
CITYA.M. 24 FEBRUARY 2011
Kong, Zurich and Brussels, reports to
Martin Egan, global head of primary
markets.
Marc Falconer and Katherine Dior,
head of MTNs and head of interna-
tional retail bond syndicate respec-
tively, both report to Zorzi.
BNP is thought to have arranged
the surprise €1.2bn (£1.03bn) Michelin
share issue last September, while Citi
and Credit Agricole acted as bookrun-
ners.
BNP also advised PAI Partners
when it launched the sale of its 50 per
cent stake in French yoghurt maker
Yoplait.
The French bank was also a named
adviser on BHP Billiton’s $40bn
(£25.6bn) bid for Potash Corp.
It also advised on the €650m bond
issue from Italian yellow-pages pub-
lisher Seat Pagine Gialle.
Revenue
£5.3bn
down from
£5.4bn the year
before
Profit
£1bn
down from
£1.1bn the year
before
adds
Sources close to the firm said
Everything Everywhere has invested
heavily in bringing customers from
pay as you go packages to contracts.
It added 300,000 contract cus-
tomers in the fourth quarter but lost
out on 187,000 pay as you go users,
leaving net adds of 113,000 compared
to 195,000 at Vodafone. The group
said it was on track to deliver £3.5bn
of planned savings by 2014.
also allows cost reduction for enter-
prise use.
Perrone said: “With the increased
mobility of the workforce and the
need to be able to access information
from any device, Goldman Sachs sees
a clear demand for user virtualisation
solutions.
“AppSense’s strong customer trac-
tion, history of innovative solutions in
desktop computing, and the record
growth it has experienced over the
past two years further solidified our
decision to invest in the company.”
CITYA.M. 24 FEBRUARY 2011
Hill threat to Ladbrokes deal
▲
LEISURE
BY JOHN DUNNE
BOOKMAKER William Hill has
launched legal action to disrupt
merger talks between its joint-ven-
ture partner Playtech and close rival
Ladbrokes.
The company said it had secured
an interim injunction against
Playtech in an attempt to safeguard
its legal rights.
Ladbrokes and Playtech are explor-
ing a possible £2.2bn merger.
William Hill said that Playtech –
which provides the platform for
William Hill’s online gaming – had
Travis profit
lift fuelled by
DIY recovery
▲
BUILDING
BY JOHN DUNNE
BUILDERS’ merchant and do-it-your-
self retailer Travis Perkins said yester-
day it was currently trading well
because essential repair and mainte-
nance work suspended in the reces-
sion was now being done.
The firm posted a better than
expected 20.4 per cent rise in 2010
underlying profit to £216.7m.
It said it had gained market share
from rivals and said it had made a
strong start to 2011, although it does
expect conditions for the next 12
months to remain difficult.
The group, which has more than
600 branches, said it expected the
merchanting sector to continue its
gradual recovery this year.
Chief executive Geoff Cooper said:
“There is considerable gloom in the
wider economy, but we do not sub-
scribe to the double dip theory.
“We are seeing a lot of repair and
maintenance work being done that
was delayed and that is helping to off-
set some of the more difficult times
that we are seeing in other bits of con-
struction.
“In public sector (work) in 2011 and
2012 and indeed in 2013 we are going
Capital Shopping shuns acquisitions in
move to make more cash from malls Earls court joint venture
▲
PROPERTY
BY HARRY BANKS
CAPITAL Shopping Centres (CSC), the
UK’s largest mall owner, will squeeze
organic revenue and profit growth
from its portfolio of prime assets in
2011, ahead of chasing more blue-
chip mall acquisitions.
Chief executive David Fischel said
yesterday CSC’s main focus this year
was to drive growth in like-for-like
rental income, and enhance and
extend existing assets.
recently made contact “seeking possi-
ble significant amendments to the
current William Hill Online [WHO]
joint venture agreements”.
William Hill said the performance
of WHO was still strong and that it
remained committed to the venture
with Playtech.
William Hill owns 71 per cent of
the WHO venture, which was set up
in October 2008. Playtech holds 29
per cent. Under the deal, William Hill
has an option to buy out the software
company “after four and six years on
an independent fair value basis”.
Playtech has said it is still interested
in pursuing a joint venture agree-
to see further contraction and I think
it’s the private sector that’s gradually
going to come back and offset that
contraction.”
He forecast “very low single digit”
growth in the overall UK merchanti-
ng market in 2011 along with a “mid
single digit” contraction in the over-
all DIY market as worries over job
cuts and rising inflation impact. He
expects Travis Perkins to outperform
both markets.
Travis said all 11 businesses in its
portfolio outgrew their rivals and
increased profits in 2010.
It said its acquisition of BSS for
£558m had been a success. The move
last year was its biggest acquisition
since it bought Wickes for £950m in
2005.
ANALYSIS l Travis Perkins
1,150
p 1,004.00
23 Feb
1,050
950
850
29 Nov 17 Dec 11 Jan 31 Jan
CSC also needs to integrate its
newly-acquired Trafford Centre in
Manchester.
The £863m buy was opposed by US
mall owner and CSC shareholder
Simon Property , which dropped a bid
for CSC in January.
The company, which owns 14
prime UK malls, booked net asset
value (NAV) per share of 390p for the
year to the end of December, up from
339p a year earlier.
It has identified 1.4m square feet of
extension opportunities at its exist-
News 15
GAMING INDUSTRY IN MERGER MANIA
THE gaming industry is in the throes of
massive change with mergers and
merger speculation coming thick and
cent.
The listing of Betfair last October was
just another example of the fast pace of
fast. change in the industry with investors
ment with Ladbrokes, even though Ladbrokes’ talks with Playtech come eyeing the sector as a possible treasure
the injunction reportedly stops as the former is already courting 888 trove if regulations and tax rules allow it
Playtech sharing its software with the over a possible deal. Ladbrokes to prosper.
company at this point. approached 888 with a £240m Last year, online gambling was worth
takeover proposal pitched at around an estimated £3.5bn overall, a figure
ANALYSIS l Playtech 70p a share in December and negotia- that could rise up to five times if the US
440 tions are ongoing. market was opened up with a relaxation
p
361.88 Meanwhile, shareholders in Bwin and of gambling laws, according to analysts.
23 Feb PartyGaming voted last month to allow The fact that William Hill has fired a
the merger of the two online betting shot across the bows of Labrokes over
400 giants. its pursuit of Playtech shows how high
That merger is reportedly worth the stakes are in the rapidly changing
around €2.4bn (£2bn) and will be listed sector.
on the London Stock Exchange. Bwin The battle over Playtech is surely a
360
will retain a 51.7 per cent shareholding, key battle if Ladbrokes is to take up the
while PartyGaming will hold 48.3 per challenge.
29 Nov 17 Dec 11 Jan 31 Jan 18 Feb
Galliford in
boost from
new homes
▲
BUILDING
HOUSEBUILDER and construction
company Galliford Try’s first-half
adjusted pre-tax profit rose 29 per
Travis Perkins’ Geoff Cooper said all its businesses outperformed rivals Picture: GETTY cent on a pickup in housebuilding
demand, and the company raised its
interim dividend by 36 per cent.
ANALYST VIEWS: WHAT IS THE OUTLOOK FOR The company, which was founded
by W S Try in 1908 as a construction
TRAVIS PERKINS IN 2011? Interviews by John Dunne
business carrying out work in west
London, said that housebuilding sales
for the first half of the year were up
29 per cent at £152.9m.
JOHN MESSENGER | RBS “The spring selling season remains
“
crucial, and although it is too early to
judge whether it will be sustained,
With year to date trading positive and its starting valuation undemand-
the improvement in our sales rate
ing ahead of potential consensus upgrades if market share gains continue, we re-
”
during the first few weeks of 2011 is
iterate our ‘buy’ rating. The full-year dividend at 15p is in line, net debt at £774m is
encouraging,” chief executive Greg
below our estimates.
Fitzgerald said.
In December, the company had said
it was on track to hit its housebuild-
KEVIN LAPWOOD | SEYMOUR PIERCE ing growth targets, despite a slump in
“
autumn house sales, and was ready to
seize construction opportunities.
All in all the year turned out far better than we, or the company, had June to December pre-tax profit
dared to believe this time last year. The company appears to be more positive
”
before exceptional items was £17m
about the outlook than it was last year. On our current numbers, the shares are compared with £13.2m last year.
trading on a prospective price to earnings ratio of 12.4 times full-year.
The company’s revenue was mar-
ginally higher at £575.9m.
Galliford Try shares have gained
ANDY BROWN | PANMURE 14.5 per cent since the company post-
“
ed a 14 per cent rise in its five-month
house sales in November.
These are good full-year results from Travis Perkins. It has gained mar- Last week, rival homebuilder
ket share, maintained a healthy operating margin and remains well positioned to
”
Redrow said it was more upbeat on its
continue to deal with tough markets. The benefits of the BSS acquisition will be prospects, as buyers flocked back to
seen in the current year. We maintain our positive ‘buy’ stance. view homes.
18 Feb
Capital & Counties mulls
ing properties, offering better returns progressed beyond the early stage.
▲
PROPERTY
than a new development, it said yes- Capital & Counties was responding
terday. DEVELOPER Capital & Counties said to reports it was in talks with the
Including the Trafford Centre, CSC yesterday it is mulling a joint venture Hong Kong-based Kwok family, which
has about 15.5m square feet of retail for its proposed multi-billion pound controls Sun Hung Kai Properties, to
floor space. redevelopment of Earls Court in provide funding for the site.
Full-year net rental income from London, and has received interest The company also said it was mak-
continuing operations was £277m, from a number of parties. ing good progress in the planning
from £267m in 2009. The developer said in a statement application process for the Earls
Panmure analysts said in a note: that a joint venture (JV) for the 8,000- Court project.
“We remain happy with our 2011 esti- home development, one of the largest Sun Hung Kai Properties declined
mated NAV forecast of 400p and con- new residential projects in central to comment. Capital and Counties
tinue to believe this looks a fair level London, was one of the options being shares rose three per cent to 148.8p on
for the shares to trade at.” considered. None of the JV talks had the news of a potential partnership.
 16 News CITYA.M. 24 FEBRUARY 2011

CITY MOVES | WHO’S SWITCHING JOBS Edited by Maria Tadeo in association with

Smith & Williamson
The law firm has appointed a new head of its
City-based restructuring and recovery team.
Anthony Spicer will take up the role in the
firm’s Moorgate office. He is a chartered
accountant and licensed insolvency practition-
er. He has specialised in turnaround and restu-
ructuring since 1989, on both the lending and
company side, with his recent work including a
deal on Kaupthing Capital Partners’ stake in
Phase Eight. He has also dealt with numerous
solvent liquidations.
of co-managing partner at the private
AnaCap equity adviser he co-founded, working
Peter Cartwright has taken on the role alongside Joe Giannamore. He will lead
the firm’s interaction with its portfolio
companies. Before joining AnaCap in
2006, Cartwright was a director at
Direct Group, a private equity insurance
provider, and has also worked at GMAC
and GE Capital.
Barclays Corporate
Kosar Mumtaz-Zahid has joined the
bank as a relationship director in the
charities team. She will work alongside
Jon Mosscrop, head of charities, to
expand the firm’s civil society services.
She has eight years’ experience in the
non-profit sector and joins Barclays
from RBS, where she was in a similar
role. She also has over 20 years’ experi-
ence in banking and began her career at
Natwest before moving to RBS eight
years ago.
ICMA
The International Capital Market
Association (ICMA) has appointed Yury
Dubin as chairman of its committee for
Russia and the Commonwealth of
Independent States (CIS) region. With
more than 40 years’ experience in cross-
market operations, Dubin will primarily
focus on strengthening ICMA's links
within the Russia market. Dubin is also
director of custody of Sberbank,
Russia's largest bank.
Aviva Investors
The investment wing of the insurance
group has announced the appointment
of Dan James as head of global aggre-
gate portfolio management. He will be
responsible for implementing strategies
and asset allocations across all global
aggregate portfolios. Based in Aviva
Investors London's office, James will
also promote Aviva's Investors products
and develop high-margin absolute
return solutions. He previously served as
head of short duration and absolute
return at Fischer Francis Trees Watts.

To appear in CITYMOVES please email your career

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

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

ANALYSIS l Bodycote 289.70 ANALYSIS l Electrocomponents ANALYSIS l Dechra Pharmaceuticals

310 p 23 Feb 280
p
270.10 540
p 504.00
300
23 Feb 23 Feb
290 270 520

280
500
270 260
260 480
250 250
240 460
29 Nov 8 Dec 17 Dec 30 Dec 11 Jan 20 Jan 31 Jan 9 Feb 18 Feb 29 Nov 17 Dec 11 Jan 31 Jan 18 Feb 29 Nov 17 Dec 11 Jan 31 Jan 18 Feb

BODYCOTE ELECTROCOMPONENTS DECHRA

S&P Equity Research revised its target price from 255p to 320p before
the company’s results today. Analysts Andrew Douglas and Pzremslaw
Nowak will be looking at volumes growth and operational improvements
in today’s update. “We expect management to be reasonably upbeat in
respect of the outlook, but also highlight the usual lack of visibility across
the group,” they write.
Following an analysts’ meeting this week, Seymour Pierce Research
regards the stock as an “add” but stops short of giving it a “buy” rating.
Caroline de La Soujeole and Kevin Lapwood give the stock a 300p target
price, versus its current price around 270p. The company has flagged up
opportunities for growth in Europe, particularly Eastern Europe but “we
believe it is too early to get too excited about it,” say Seymour Pierce.
The firm’s interim results met expectations, according to Brewin Research,
with the exception of net debt being £15m higher than thought at
£49.6m. “While underlying progress is admirable,” write Chris Glasper and
Sahill Shan, “there are some signs that competitive pressures are having
an impact.” They recommend a “hold” with a target price of 520p versus a
current price of 515p.

FTSE 100 sinks again over US stocks drop on

fears of Middle East unrest volatile oil prices
“Geopolitical fears continue to Barclays at the height of the finan- cent at $133.37.

THELONDON grow rather than subside and as long

as that occurs then the price of oil
cial crisis was fair.
“This is a good decision for THENEW YORK The S&P 500 has climbed nearly 25
per cent since the start of September

REPORT
will continue to defy normal
demand cycles,” Howard Wheeldon,
strategist at BGC Partners, said.
“Once the imported inflation of
REPORT
Barclays,” said Seymour Pierce in a and many analysts have said a short-
research note. term correction is likely. However,
Stocks seen as defensive were the the benchmark index recovered from
other main FTSE 100 gainers, with hitting an intraday low of 1,299.55

P
OLITICAL turmoil in Libya and the higher price of oil takes hold utility Severn Trent up 0.1 per cent during the session. Analysts eyed sup-

the threat of contagion across
the Middle East and North
Africa sent Britain’s leading
shares lower yesterday, testing seven-
month technical support levels.
The FTSE 100 index was 73.23
points, or 1.2 per cent, lower at
5,923.53, extending its declines to
more than 2.5 per cent on the week.
London’s blue chips closed at their
lowest level in over three weeks but
just above the technical support level
of 5,920 from July 2010, although it
was breached earlier in the session at
5,915.52.
Energy and mining stocks were the
sharpest fallers as governments
around the world scrambled to evac-
uate their citizens from Libya, where
leader Muammar Gaddafi has vowed
to crush a revolt against his 41-year
rule.
Gold miner Antofagasta lost 5.1
per cent, while copper-focused group
Xstrata tumbled 4.4 per cent.
Investors speculated that the trou-
bles could derail the global recovery,
with crude oil prices hovering near
multi-year highs, and gold over
$1,400 (£864.23) an ounce as
investors turned to the metal as a
haven from risk.
through virtually the whole of manu-
facturing and services then it acts as
an unfortunate tax on the con-
sumer.”
Beverage can maker Rexam was
the heaviest FTSE 100 faller, down 5.8
per cent after posting full-year
results.
“Company news has taken a back
seat to a certain extent with one of
the biggest fallers being can compa-
ny Rexam, despite posting better
than expected profits for 2010,” a
trader said.
Technology stocks were also
among the biggest decliners after
Hewlett-Packard lowered its 2011 rev-
enue outlook, citing weak consumer
demand for its PCs.
Chip designer ARM fell 1.5 per
cent, while the STOXX Europe 600
Technology index was down 1.8 per
cent.
Banks retreated as investors took
flight from risky equities, with Royal
Bank of Scotland down 0.8 per cent
ahead of results and Barclays also
down 0.8 per cent as the stock traded
ex-dividend.
The fall came despite an earlier US
court ruling that Lehman Brothers’
hurried sale of US operations to
and Imperial Tobacco 0.5 per cent
higher.
Oil services firm Amec was the top
FTSE 100 riser, up 0.9 per cent, with
traders citing a read-across from a
bullish outlook statement by
Australian peer Worley Parsons.
Property companies were also
among the top performers, with
Land Securities gaining 0.8 per cent
and British Land outperforming the
market to close 0.2 per cent off.
Outside the FTSE 100, music retail-
er HMV rose 5.95 per cent after a
report that the firm was preparing
for talks with its lenders.
Cable & Wireless Worldwide
gained 6.7 per cent after it sold off its
Bermuda business.
ANALYSIS l FTSE 5,923.53
6100 23 Feb
5900
5700
5500
29 Nov 17 Dec 11 Jan 31 Jan
U
S stocks dropped for a second
straight session yesterday as
Libya’s violence sent oil prices
up briefly to $100 (£61.69) a bar-
rel and tech shares sank, adding cre-
dence to calls for a market
correction.
The Dow Jones industrial average
fell 107.01 points, or 0.88 per cent, at
12,105.78. The Standard & Poor’s 500
Index lost 8.04 points, or 0.61 per
cent, to 1,307.40. The Nasdaq
Composite Index declined 33.43
points, or 1.21 per cent, to 2,722.99.
Oil futures jumped to their highest
since October 2008 amid worries
about supply disruptions in Libya, a
top oil producer. Late in the day, oil
eased off the day’s highs, helping
stocks trim losses.
“We’ve had a solid run-up here in
the equity markets for an extended
period, really without a correction,
so long-term, this will be a good
thing for the market to have a little
bit of a pullback,” said Wayne
Schmidt, chief investment officer at
Gradient Investments.
The Nasdaq led losses as recent top
gainers also lost ground, including
Netflix, down 4.7 per cent at $211.20,
18 Feb and Salesforce.com, down 2.5 per
port at 1,296, the mid-January highs
on the S&P 500, and also 1,286, the
50-day moving average.
“You saw a lot of shorts this morn-
ing, going into this market with
anticipation of problems spreading
in the Middle East, and now that peo-
ple have made some money, you
might see some short covering in the
afternoon,” said Doreen Mogavero,
chief executive of Mogavero, Lee &
Co.
While higher oil prices often boost
energy-sector shares, they usually
drag on the overall stock market.
Higher energy costs tend to reverber-
ate through the economy, pushing
up the costs of utilities, manufac-
tured goods and transportation.
The S&P energy index gained two
per cent, while the Dow Jones
Transportation Average shed 2.1 per
cent.
Volume was active with about
10.25bn shares traded on the New
York Stock Exchange, the American
Stock Exchange and Nasdaq, above
the daily average of 7.99bn.
Declining stocks outnumbered
advancing ones on the NYSE by 1,959
to 1,062, while on the Nasdaq, declin-
ers beat advancers by 1,996 to 629.
 Wealth Management
Choppier
waters sailed
in quest for
high returns
With rates low, the tide may turn in the
choice between UK fixed income and
equity income funds, writes Craig Drake
W
ITH the UK equity income
sector underperforming over
recent times, equity funds
have struggled to attract the
same interest as fixed income funds.
However, with the base rate so low,
investors are increasingly leaving the
safe waters of bond based fixed income
funds in favour of the choppier waters
of equity income funds, lured by the
sirens of higher returns.
According to Gemma Godfrey of
Credo personal wealth management,
“We are seeing very limited upside
potential in the bond markets, with
bond spreads 70 per cent below the
peaks that we saw in 2008, investors are
having to look farther afield in the bond
market in order to see the same returns
as those available in equities, to emerg-
ing market debt for example. However,
the risk involved does not offer any real
draw over equities.”
Andreas Utermann, global CIO at
RCM, a company of Allianz Global
Investors, underlined this sentiment:
“The risk-return tradeoff for equities
appears much more positive than that
for government bonds. We have main-
tained our underweight position in gov-
ernment bonds of any duration longer
than two or three years as we feel that
the risk of a secular setback is very sig-
nificant.”
“With interest rates in the OECD con-
tinuing to provide no protection for
future inflation, and property either
depressed or, as are commodities, in
potential bubble territory, equities
would appear the only game in town.”
From a pension fund perspective, Lee
Robertson, CEO of Investment Quorum,
a boutique wealth management firm,
says that things are not so cut and dry:
“While in their client portfolio there
has certainly been a move away from
fixed income funds, that is not to say
that they have been abandoned alto-
ANALYSIS l UK dividends
70
£bn
60
50
40
2007 2008
| Funds
17
Investors sail
between the Scylla of
risk and the Charybdis
of low returns
gether. It is more that there has been a
move away from government bonds
and gilts in favour of higher-yielding
bonds such as Tesco, for example.”
The flow into UK equities had been
slowed recently by a depression of divi-
dend payment figures on the back of
the BP disaster. The fallout of the events
in the gulf dented dividends by £5.4bn
with BP accounting for almost one
tenth of all UK dividends. However
Capita Registrars, which publishes the
UK Dividend Monitor, says it expects
total dividends paid in 2011 to rise by 9
per cent from £56.5bn to £59.6bn.
Charles Cryer, chief executive of
Capita Registrars said: “2010 finally saw
a very broad based recovery in
dividends – the vast majority of compa-
nies and sectors returned more to
shareholders, as the need to hoard cash
in the face of tight credit and a weak
economy receded. Even though share
prices have rebounded, the income on
equities is still looking very attractive,
far ahead of bonds and cash. After a
really tough two years, income
investors can look forward to a much
better year for dividends in 2011.”
A potential third route for those seek-
ing an income from their investments
comes in the form of a number of new
overseas equity income funds. However,
in the short term, Andreas Utermann at
Allianz Global Investors favours devel-
oped economies over casting the net
wider, expecting that some of the capi-
tal that has flowed into emerging mar-
kets over the past 12 months as a result
of quantitative easing will start flowing
back into western economies.
As with all things current in the
financial sector, dividends from compa-
nies in your portfolio with exposure to
the Middle East may take a hit, but with
this whirlpool of risk navigated, 2011
may well see investors sailing into the
safety of healthy income on their funds.
Source: Capita Registrars UK Dividend Monitor
2009 2010 2011e
 18 Wealth Management | Life Insurance CITYA.M. 24 FEBRUARY 2011

Six things to check before setting

up the family’s financial safety net
If you are buying life
insurance, remember
it’s not all about cost,
writes Jennifer Hill
PERSONAL insurance premiums are set to
rise this year, as the market vies to boost
profitability.
That was the prediction last week from
Axa, after it unveiled a drop in 2010
underlying earnings to £131m from
£235m in 2009.
So what better time to make sure
you’re covered? While hunting down a
competitive deal is a must, it shouldn’t be
your sole consideration.
Peter Chadborn, a director at Plan
Money, the independent financial advis-
er, says: “Don’t be fooled into thinking
that it’s all about cost. There are other
valuable features to consider.”
Here, we look at everything you need to
know when buying a financial safety net
for your family:

CHECK YOUR EMPLOYMENT CONTRACT

Many employers provide their workers
with life cover as part of their total remu-
neration package, so check your contract.
This is often between two times and four
times your annual salary, says Patrick
Connolly, at financial adviser AWD Chase
de Vere.
KNOW WHAT YOU NEED
Life cover is often taken out by those with
dependent children, but there are differ-
ent types depending on what the policy
proceeds are designed to do. Would your
beneficiaries need cash to repay a lump
sum debt or replace lost income?
Connolly says the “most appropriate”
life insurance for most families is “family
income benefit”. If you were to die, this
would pay a regular tax-free income up
until a specified date, usually when
dependent children reach age 18 or 21.
“This is the cheapest form of life cover,
so can be afforded by families even if
they’re on a fairly tight budget,” says
Connolly.
“As it pays a regular income, the person
setting up the policy doesn’t have to cal-
culate a lump sum amount to provide the
required level of income for dependents
and the beneficiaries don’t have to worry
about where best to invest the proceeds to
generate income.”
This is a form of “decreasing term
assurance”, because the total amount
paid out decreases the longer the assured
person survives for.
In contrast, “level term assurance”
might be appropriate if the payout
required doesn’t reduce over time, for
example if you’ve taken out an interest-
only mortgage.
ACT SOONER NOT LATER
The cost of insurance rises the older you
get, given the greater likelihood of your
death (see tables below).
A man aged 30 on his next birthday
could buy £250,000-worth of level life
Catch them if you fall cover over 20 years for £11.54 a month
with PruProtect, says Chadborn. A man
Picture: GETTY aged 40 on his next birthday would have
to fork out £21.55 for the cheapest deal,
from Legal & General, and if he waited a
further ten years he’d have to pay £54.55
per month, also to L&G.
BE FLEXIBLE
The cheapest isn’t necessarily the best.
Some policies offer the flexibility to
amend the term or cover part-way
through the policy. For example, if you
were a smoker and became a non-smoker,
you could shave pounds off your policy.
Some 13 per cent of insured smokers
have not smoked or used nicotine patches
for at least a year, yet 51 per cent of them
still haven’t informed their life insurer of
their new “non-smoker” status, according
to Sainsbury’s Bank.
They could save 46 per cent. Smokers
pay on average £210 a year for life cover,
almost double the £114 of non-smokers.
LOOK FOR ADDED EXTRAS
Some policies come with extras, such as
access to the best doctors and counselling
support services for your beneficiaries in
the event of your death. Consider what
added extras it might be worth paying a
small premium for.
TRUST IN TRUSTS
Should you put your policy in trust?
There are a variety of reasons for doing so.
“This could ensure that the proceeds
are distributed exactly in accordance
with your wishes and facilitate a speedy
payment, without having to wait for pro-
bate to be granted,” says Chadborn. “In
certain circumstances, trust can also
serve as an effective inheritance tax plan-
ning tool.”

COST OF £250,000 LIFE INSURANCE FOR A MAN AGED 30 NEXT BIRTHDAY COST OF £250,000 LIFE INSURANCE FOR A MAN AGED 40 NEXT BIRTHDAY COST OF £250,000 LIFE INSURANCE FOR A MAN AGED 50 NEXT BIRTHDAY
Provider Product Cost per month Provider Product Cost per month Provider Product Cost per month
PruProtect Essentials Plan £11.54 Legal & General Level Term Assurance £21.55 Legal & General Level Term Assurance £54.55
LV= Online Term £11.68 Aviva Term Assurance £21.75 Aviva Simplified Life Level Term £54.60
Scottish Provident Self Assurance Term £11.73 Scottish Provident Self Assurance Term £21.82 Aviva Term Assurance £54.75
Aviva Simplified Life Level Term £11.76 LV= Online Term £21.84 LV= Online Term £54.88
Axa Protection Account £11.82 Aviva Simplified Life Level Term £21.96 Aegon Scottish Equitable Personal Protection £55.03
Source: Plan Money Source: Plan Money Source: Plan Money

PERSONAL FINANCE NEWS

BY DONATA HUGGINS
YOUNG FEMALE DRIVERS WILL PAY MORE
The EU gender directive ruling, which is
expected on 1 March this year, will decide
whether or not it is legal for insurers to
charge different premiums based on gender.
Under the current rules, young female driv-
ers pay less for their insurance than young
men, based on the fact they are less likely to
make expensive claims. If pushed through,
the ruling is likely to result in further price
rises for young female drivers as they
absorb the difference between their current
rates and those of their male counterparts.
ISA INVESTORS LOOKING TO AFRICA
New research from online stockbroker and
fund supermarket Interactive Investor
shows that ISA investors are looking further
afield for income growth. Figures reveal that
nearly a quarter (24 per cent) of investors
plan to invest in new emerging markets such
as Africa and Vietnam this year, a 52 per
cent increase on 2010. The research also
reveals that four in ten investors (41 per
cent) expect to invest in established emerg-
ing markets in 2011 and 38 per cent plan to
invest in natural resources and commodities.
BRITS ARE SAVING FOR A RAINY DAY
New research from Confused.com has
revealed that as a nation we're saving for a
rainy day rather than towards any particu-
lar goal. The comparison site found that of
the 80 per cent of Brits who save each
month, nearly a quarter (24 per cent) don't
have a specific focus, whilst one fifth (22
per cent) are saving for the long term and
retirement and another 20 per cent are sav-
ing for a deposit on a home. And somewhat
shockingly, one percent admitted they are
saving to leave their partner.
FALLING RATES STILL NOT AT 2008 LEVELS
Although rates for personal loans above
£7,500 have been falling steadily since the
start of the year, anyone looking to borrow
less than this amount was still paying much
more. The average rate for the top 10 per-
sonal loans at £3,000 is now 14.39 per cent,
the lowest average since November 2009,
and the average rate for loans at £5,000 is
now 10.02 per cent, the lowest rate since
June 2009. Despite these positive moves,
the rates are still some way off pre-credit
crunch levels.
 CREDIT
RISK



     
      

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 20 Wealth Management CITYA.M. 24 FEBRUARY 2011

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 Business Features
Making decisions
in the real world
JOHN KAY
I
N a letter to the English chemist Joseph
Priestley, the 18th-century American
polymath Benjamin Franklin set out a
rule for making decisions: “Divide half
a sheet of paper by a line into two columns,
writing over the one Pro and over the other
Con. I put down under the different head-
ings short lists of the different motives,
that at different times occur to me for and
against the measure. When I have got
them all together in one view, I endeavour
to estimate the respective weights.”
Charles Darwin attempted to follow
Franklin’s Rule. He set out the pros and
cons of marriage in two opposing columns.
A wife would provide “children, compan-
ionship, the charms of music and female
chit-chat”; “an object to be beloved and
played with”, in this respect “better than a
dog anyhow”. But Darwin also recognised
disadvantages; “being forced to visit rela-
tions, and to bend in every trifle”, “the loss
of freedom to go where one liked”. If we
look at Darwin’s list today, the cons seem
to outweigh the pros.
But neither Franklin nor Darwin really
made decisions that way, and both under-
stood that reality perfectly well. Franklin
elsewhere wrote “so convenient a thing it
is to be a reasonable person, since it
enables one to find or make a reason for
everything one had a mind to do.” And
Darwin scrawled across the bottom of his
list: “It is intolerable to think of spending
one’s whole life, like a neuter bee” followed
by “marry – marry – marry”.
The next year he wedded Emma
Wedgwood and the couple had 10 chil-
dren. In the business world, we are encour-
aged to follow Franklin’s Rule. We should
define our objectives, enumerate alterna-
tives, and measure the contribution of
each potential course of action to these
objectives. We pretend to do this in many
formal processes, from career appraisals to
risk assessment. But mostly, we are follow-
ing Franklin’s later advice – finding a rea-
son for what we have in mind to do, and
rationalising decisions which have already
been made on other grounds.
These grounds are obscured by the spu-
rious formality of structures based on
Franklin’s Rule. In any complex environ-
ment our objectives are high-level and
loosely defined. What we want is some-
thing like a fulfilling life, a complex mix-
ture of personal and professional
achievements not containable by check-
lists. To do that, we need to translate
these high-level objectives into specific
goals – get a better job, find more time for
personal life, and then into specific
actions – call a head-hunter, block out
time in the diary.
Our objectives are multi-faceted, the
environment is complex, constantly
changing – and is changed by our interac-
tion with it. Our understanding is imper-
fect, and there is always uncertainty – the
things we don’t know we don’t know.
The connections between action and
outcome are often opaque and unexpect-
ed. That is why the attainment of complex
goals is necessarily oblique. It requires
adaptation and iteration, in which we
mostly learn by doing, and achieve what
we want not by a directed plan but
through an oblique process in which we
learn what it is we want through the busi-
ness of achieving it.
John Kay’s latest book, Obliquity, is out now
21
| Careers
Be liked to be more successful
Some simple steps can
boost your career, says
Jeremy Hazlehurst
P
EOPLE are more likely to want to
do business with you if they like
you. But are there things that you
can do to foster that chemistry?
Yes, says American business writer, entre-
preneur and investor Guy Kawasaki, in
his new book Enchantment.
Enchantment, he says, is “the process of
delighting people with a product, serv-
ice, organisation or idea”, and its out-
come is “voluntary and long-lasting
support that is mutually beneficial”. The
bedrock of enchanting people is having a
good relationship. Here are his four tips
for making people like you more.
1. Smile. “What does it cost to smile?
Nothing. What does it cost not to smile?
Everything, if it prevents you from con-
necting with people. While smiling
sends a very clear message about your
state of mind, not smiling creates an
opening for many interpretations,
including grumpiness, aloofness and
anger – none of which helps you enchant
people,” writes Kawasaki. Nobody likes to
do business with grumpy people, and a
miseryguts doesn’t get what he wants.
“The key to a great George Clooney-esque
smile is to think pleasant thoughts. If
you’re grumpy inside, it’s hard to have a
smile that lights up a room. The most
you’ll achieve is a fake smile, and a fake
smile won’t make people like you.” A real
smile is one that involves the eyes as well
as the mouth – so “make crow’s feet”.
2. Dress correctly. Overdressing means
3. Use the right words. Express yourself
simply. Use the active, not the passive
Smile if you want
people to like you
4. Perfect your handshake. Scientists
have studied this and the upshot is that
“I’m richer, more powerful and more voice – the passive is “wimpy and ineffi- you should:
important than you”, while underdress- cient”. And keep it short. “If people are Picture: REUTERS l “Make eye contact throughout”
ing means “I don’t respect you, I’ll dress interested, they’ll ask for more informa- l Smile genuinely, grip and squeeze the
any way I please.” What you want is tion,” reckons Kawasaki. Finally, do not other person’s hand
“equal dressing”, which says “we’re use war or sport analogies. “Many people l Stand a moderate distance from the
peers.” The way you dress for business is have not fought in a war and those who other person, neither too close nor too dis-
not about showing that you have money, have will tell you that war is confusion, tant
style or great taste, but making people death and pain more than glory, victory l Make sure your hand is “cool, dry and
like you. Also make sure your dress and leadership.” Also, wars have winners smooth”
matches what you stand for. If you are and losers. The aim of enchantment is l Use a “medium amount of vigour” when
the out-of-the box thinker, then jeans “mutually assured satisfaction”. Be equal- shaking
and a T-shirt might work, whereas if you ly careful with sports analogies – cricket l Hold the handshake for “no more than
are the “adult supervision”, then a suit means nothing to Americans, or baseball two to three seconds”.
can work even if others don’t wear one. to Brits. Guy Kawasaki’s Enchantment is out next week
THESE THINGS I KNOW | TIPS FOR SUCCESS IN THE CITY
THOMAS DREWRY with your intuition and then make sure it
is backed by a strong business case.
Take time to
stop and think
whether that be country, company or cul-
ture. If you are not totally happy with the
FOUNDER OF EXECUTIVE SEARCH way things are, make changes.
FIRM VENI PARTNERS Understand the power of “no”. Many of us
find this one of the most difficult things to Do not let your job define you. Too many peo-
Keep control over your career rather than say, but it is actually one of the most power- ple allow themselves to become trapped
allowing yourself to be railroaded by events ful words in business and often much more in careers they no longer enjoy. If you do
or other people’s opinions and perceptions. effective than “yes”, particularly when not like what you do, have the courage
Too often, we simply react to opportunities backed by a sound argument. to be true to yourself and walk away;
that happen to come our way. Being clear allowing a job to define your life risks
about what you want is the first step to Understand and be true to yourself. At the risk years of compromise and missed oppor-
making sure you achieve it. Once you know of sounding like a personal development tunity. There are always other options.
what you are trying to achieve, stay coach, far too few people in the financial
focused. Developing a set of criteria by services sector embrace self-awareness Acting in isolation is not always productive. It
which to make your own decisions will despite the benefits it brings. Everything can be incredibly helpful to have a men-
help keep you on track and avoid potential you do must be congruent with who you tor or career buddy to test ideas or run
stumbling blocks. are; incongruity increases stress, hampers through different scenarios with. This is
performance and simply cannot last. not always about goal setting, but rather
Develop and trust your intuition. This can be about having someone you trust, who wish-
challenging for high-level financial services Make time to stop and think. Evaluate where es you well, who will wave the red flag
professionals, who naturally tend towards you are, what you like and what you do when things are amiss and will give you an
facts, figures and other hard factors, but not. Ask yourself whether you are doing honest, but not brutal, sanity check from
soft factors are equally important. Start the right job in the right environment; time to time.
 Lifestyle
22
Wareing’s next
stop: St Pancras
The super-chef tells
Zoe Strimpel why his
new restaurant is a
thing of beauty
M
ARCUS Wareing appears, sleek in
dark clothes, at the building site
that is soon to be the Gilbert
Scott, his first restaurant since his
flagship at the Berkeley.
With his silky-looking clothes, graceful
step and searing blue eyes, he looks like
what he is: the sort of man who under-
stands and presides over Michelin stars
(Marcus Wareing at the Berkeley has two).
So it is funny to see him treading through a
construction site in St Pancras, the noise of
the Euston Road drowning out his first
words, the British Library looming unsexily,
weary tourists and students trudging by.
Yet entering the site, it’s easy to see why
he is here. It’s a space of shocking beauty, a
slice of pure Victorian luck. The Gilbert
Scott is named after the architect who built
St Pancras station in 1865. Set within the
newly renovated St Pancras Renaissance
hotel, it is all richly-hued mosaics, sky-high
ceilings, massive windows and ornate gild-
ing. David Collins, the designer-du-jour and
the man behind the gorgeous insides of the
Connaught Bar, the Wolseley and Bob Bob
Ricard, is overseeing it. On my visit, crafts-
men were restoring bronzework and sculpt-
ing creamy-coloured skirting. It was part
construction site, part artisan workshop.
I could see why Wareing – very much a
Knightsbridge man now – had plumped for
a site between a massive train station and
the grot of the Euston Road. “It was always
about the building,” he tells me over a bad
coffee in the geek-tastic British Library.
“The history of it. I’ve always valued history
BOOKS
REVIEWS
House swapping and geopolitcal disaster
A story of two couples looking for escape but
finding something more than they bargained
for, and a vision of future economic disaster
BEFORE I KNEW YOU
BY AMANDA BROOKFIELD
Penguin, £6.99
hhhii
MID-Atlantic at 35,000 feet, two couples
pass in opposite directions. They are on
the seemingly perfect credit crunch vaca-
tion, an international house swap with
suitably affluent, never-to-be-seen hosts.
Sophie and Andrew Chapman leave
their Victorian family home in south-west
London, their teenage daughters and
Sophie’s recent debilitating depression for
| Interview and Books
– and hotel restaurants are a bastion of the
past. Take the Savoy,” he says, where he
used to preside with Gordon Ramsay before
their epic bust-up.
Maybe it’s the enormous glass case of
ancient tomes behind us, but Wareing does
seem to want to talk about history. “How
would I have lived in the 1800s? What
would it have been like? How would I have
fit in?” He has made some attempt to
answer with the polished heritage menu at
the Gilbert Scott. Think Liverpool tart
(lemon tart made with rind and cooked
lemon) Manchester tart (short-crust with
raspberry jam and custard) and big pies for
two. Pastry is a big deal here: there will be a
dedicated patisserie bar.
Wareing considered the location of the
building and the sorts of food that arrived
on the track at King’s Cross. He looked at
old cookery books and at how our tastes
have evolved. “The old recipes were
incredibly simple,” he says. “Of course we
have to modernise them into tastes that
people like now. But even with a pie, a
simple pie, it’s about how we make it.
The pastry, the type of leek, the way we
cut it into a cake wedge.”
For a Michelin-starred master
of gourmet finery, isn’t a bit
odd for him to be trading
in pie slices and tarts?
“We all love fine din-
ing but it’s hard to do
well and you would-
n’t want it every day.
This is about com-
fort. But yes, I have
to reign myself
back with simple
food. I always want
to add to it. The
focus here though
is design, location,
the quality of the
raw ingredients.”
Wareing does not
the splendours of a colonial residence in
rural Connecticut. Meanwhile, newly-
weds William and Beth Stapleton swap
their idyllic love nest in Connecticut and
worries about Wall Street bonuses for the
grittier environs of inner-city London and
proximity to William’s three sons from his
first marriage.
But with relationships, careers and
finances under pressure, there is far more
at stake than four weeks of rest and recu-
peration at the heart of Amanda
Brookfield’s 14th novel, Before I Knew You.
Lost cats and cultural misunderstand-
ings soon give way to niggling jealousies
as Sophie and Beth fantasise about one
CITYA.M. 24 FEBRUARY 2011
GILBERT SCOTT: A MASTER OF VICTORIAN ARCHITECTURE
GILBERT Scott (1811-1878),
the son of a Buckinghamshire
clergyman, was one of the
Pancras – the construction of
the station’s former Midland
Grand Hotel in 1865 – would
the railways”, not least for
possessing two of the most
celebrated structures built in
most prolific architects
Britain has ever produced,
altering or building over 800
buildings. Many of these
were workhouses, but he also
built the main building of
Glasgow University, the
one day become a super-chic
bar, restaurant and hotel is a
pleasing twist of fate given
the long period of neglect in
which the once-glamorous
hotel languished.
St Pancras has never been
Britain in the Victorian era.
There is the hotel (now the
Renaissance, a Marriott
Hotel, in which Wareing’s
restaurant sits), with its phe-
nomenal spiral staircase, and
the main train shed, complet-
Great Hall of Bombay a desirable area, but it has ed in 1868 by the engineer
Below: Marcus
Wareing, and right,
University and the extension
of Lincoln’s Inn library.
always enthralled architec-
turally. The station was
William Henry Barlow: the
largest single-span structure
the Gilbert Scott’s
Victorian splendour.
That his work at St known as the “cathedral of built at the time.
Pictures: ALEX RID-
LEY AND MICHA
THEINER
intend to spend much time here. His name
is over the door at the Berkeley and that’s
the kitchen you’ll find him in. “It’s not
“I’m sick of talking about
about me – it’s not a Marcus Wareing
restaurant,” he says with trademark frank-
how great I am. It’s just
ness. Suddenly he warms to his theme,
apparently fed up of self-adulation, drain-
passé to talk about it, do you
ing the last of his watery latte. “I’m sick of
talking about how great I am. It’s just passé
know what I mean?”
to talk about it, do you know what I mean?”
He gestures at the books behind us as a swooped on the location’s breathtaking
contrast to the vanity fair of celebrity chef- potential. And we have him to thank for
dom: “Wow, I mean, that is real history. that, passé a sentiment as that may be.
That’s real.” The Gilbert Scott opens on 4 April. St Pancras
Wareing may have a backseat in the run- Renassiance Hotel, Euston Road NW1 2AR.
ning of the Gilbert Scott, but it was he that www.thegilbertscott.co.uk
another’s blissful lifestyles. But only when
the couples return home do they find that
charity workers have been killed in
Uganda by an African Christian sect.
their lives have become perilously
entwined. Old alliances are tested. New
Knowles is looking to boost his mid-
term ratings and a little military initiative
alliances are forged. Painful secrets are
revealed and lives are transformed as this
in Africa is just the thing. First he checks
with the Chinese in neighbouring Sudan
acute and seductive novel twists and to get the go ahead.
turns, delighting as it surprises. But Knowles is unaware of certain
Jonathan Hourigan machinations in Beijing and crucially of
the fact that a Wall Street hedge fund is
END GAME about to destroy the value of a US bank in
which the Chinese have a substantial
BY MATTHEW GLASS
Corvus, £16.99
stake. The novel takes a riveting turn
through the options tendered by the polit-
ical advisers, financial watchdogs and mil-
hhhii itary establishments on both sides; the
actions of Special Forces and the rising
clamour of the world’s media as the crisis
A THRILLER set in 2018, End Game imag- escalates towards catastrophe.
ines the next economic and political crisis This impressive novel hurtles to a close
that sees the US pitted against China. A with a climax that takes its cue from the
post-Obama Republican, President finale of the Cuban missile crisis 50 years
Knowles is at the helm of the US when earlier. A solidly entertaining read.
news breaks that a group of American Zoe Strimpel
CITYA.M. 24 FEBRUARY 2011
Technology
WHAT’S NEW IN
GADGETS AND
TECHNOLOGY
BY TIMOTHY BARBER
SONY LAUNCHES NEW VAIO RANGE
Sony unveiled its new range of Vaio laptops
this week, including the strikingly-coloured C
Series. Available in luminous orange, green and
pink, it features light emitting technology that
makes your laptop look like it’s glowing. For the
more demure consumer, you can also grab it in
black or white, and it packs a punch for a mid-
range product. The other attention grabber
was an updated version of its L Series touch-
screen all in one desktop, clearly placed as an
alternative to Apple’s revolutionary iMac.
While it still features a full keyboard for typing,
most basic functions can be carried out by
touching the screen. Sony is also showing off
its first 3D laptop, the F Series, which debuted
at the Consumer Electronics Show in Las
Vegas earlier this year. It provides a high defi-
nition viewing experience with battery pow-
ered glasses. Finally, the S Series is its new
ultra-thin, ultra-powerful laptop, which looks
slick and features the new hybrid graphics chip
from Intel.
WHAT TO DO ABOUT HACKERS?
The biggest players in the gaming industry
appear to be taking different approaches to
dealing with the bedroom boffins dedicated to
cracking their software. PlayStation 3 manu-
facturer Sony is taking the hard line, threaten-
ing to sue hackers of the PS3 and promising
that anyone using circumvention devices or
pirated software will be banned from using the
system for life. Meanwhile Xbox creator
Microsoft is embracing both the nerds and the
spirit of crowdsourcing. It’s planning to release
a “starter kit for application developers” for its
highly successful Xbox Kinect, which will
enable enthusiasts to create their own uses
and experiences via Microsoft’s technology.
That’s coming in the spring,
with a commercial version
to follow.
R2D2 VACUUM
There are two prob-
lems with vacuum
cleaning: one, it’s an
utter bore, and two, it’s
an utter bore that makes
an awful lot of noise. Robotic
vacuum cleaners that you leave to
mosey round the room on their own may have
been around for a bit, but Samsung’s aiming to
solve problem two as well with its newly-
launched NaviBot Silencio (pictured). Apparently
faster and a lot quieter than most of its peers,
creating just 62dB of noise while it goes about
its business at the touch of a button. To work its
way around the room it has a small integrated
camera providing a “visionary mapping system”.
OUT OF OFFICE
TIMOTHY BARBER
COMEDY RUSH LIVE
If you like your comedy of the quick-fire
variety, then tonight’s Comedy Rush show
should be right up your street. it features
60 comic acts in 60 minutes flat, with a
line-up that includes Brendon Burns, Lucy
Porter, Robin Ince, Howard Read, Simon
Munnery and Andrew Maxwell. If you can’t
make it tonight, there’s another show in a
Gadget watches
40 years after the first digital watch, hi-tech timekeeping
continues to push the boundaries, says Timothy Barber
I
T’S four decades since the launch of
the first digital watch, and the tech-
nology is about to take its next big
leap forward. Thanks to the prolifera-
tion of e-readers and touchscreen devices,
those old liquid crystal digital displays
now look about as up-to-date as tartan bell-
bottoms. It was only a matter of time
before watch producers started incorpo-
rating the new tech, and fast out of the
blocks is Seiko with its Active Matrix
EPD, launching next month.
The letters EPD stand for
Electrophoretic Display – more sim-
ply known as electronic ink, and
the same technology by which e-
readers get their crystal clear
graphics. It’s all to do with nega-
tively and positively-charged white
and black microcapsules suspended
in fluid, as it happens. From that you
get a display of 300 dpi clarity, on a four-
shade grey scale.
Seiko hasn’t just left it at that though.
The watch is also connected via radio wave
to the world’s atomic clock stations. When
in signal, it can be accurate to, well, one
second in every 30 million years. And the
self-recharging solar battery doesn’t ever
have to be changed.
It may be pointing the way to the future
for digital watches, but the Active Matrix
EPD also references the past in its retro-
tinged design and old-school bracelet. It’s
one classy piece of kit, no question.
CASIO G-SHOCK
MTG-1500
Casio’s G-Shock watches are tough,
muscular, and stylish. This new model
has rose gold elements for a bit of
glam. £500 www.g-shock.co.uk
D&G HIGH CONTACT
TOUCHSCREEN
No mere quirky fashion watch, this
incorporates touchscreen technolo-
gy. Comes in bright colours too.
£165, tel: 01628 770988
month’s time boasting an equally impres-
sive line-up of comics squeezing multiple
punchlines into a minute. Rufus Hound,
Scott Capurro, Adam Bloom, Phil Nichol
and Rhys Thomas will all be on the bill.
7.30pm tonight (doors 6.30) and 24 March,
Shaftesbury Theatre, 210 Shaftesbury Avenue,
WC2H 8DP. For tickets (£25) and more informa-
tion visit www.comedy-rush.com
FRANKENSTEIN AT
THE NATIONAL
IN TOMORROW’S
REVIEWS SECTION
SEIKO
ACTIVE
MATRIX EPD
The EPD will come in stainless steel,
stainless steel with gold-tone coating
and stainless steel with black coating.
£1,350 www.jurawatches.com
LINDE WERDELIN
SPIDOSPEED
Linde Werdelin makes attachable
instruments for diving or skiing to
clip onto its stunning watches. This
chronograph launches next month.
€11,760 www.lindewerdelin.com
RED SHOES AT BATTERSEA ARTS CENTRE
This spring BAC reaches the grand old age
of 30. To celebrate, groundbreaking theatre
company kneehigh will be staging its last
ever performances of its award-winning
Hans Christian Andersen adaptation, the
Red Shoes, first staged at BAC in 2000. 2 Mar-
9 Apr, Battersea Arts Centre, SW11 5TN. Tickets
from £22.50 from www.bac.og.uk
23
NICK
BOOTH
TECH TALK
Build up your
online profile
if you want to
get poached
T
HERE was a time when all you needed
to advance your career – other than a
good work ethic – was a connection or
two with a well-placed headhunter.
Now the key is to develop a strong online pres-
ence too. The top City talent scouts have been
tending to turn to social networking sites to
help with their recruitment searches, and if
they don’t find you there – or find you and
don’t like what they see – then don’t expect to
get poached.
One could point out to them that the inter-
net is hardly the most reliable place for solid
information, but there’s no point swimming
against the tide. Get online and flatter to
deceive with the best of them, via the new
generation of mobile social networks.
On professional networking sites like
LinkedIn and Ecademy, nobody was ever a
mustard spreader in a train station burger
bar. No, they delivered, er, steakholder solu-
tions on a diverse range of platforms.
Reinvention, it seems, is the name of the
game, so why not start your own social net-
work. SocialGo is a new site giving out free
accounts (initially) so that you can create
your own groups. Why not create your own
recruitment agency with you as the strongest
candidate? It’s an easy enough system to use.
But once you’ve set up your own social net-
work, with you at the head, you mustn’t rest
on your laurels. It’s not enough to reinvent
the past and over-promise the future on one
site. You must relentlessly promote yourself.
Don’t worry if this interferes with your work
– nobody seems to judge you on that.
You’ll need to broaden your range of social
sites. Obviously, Facebook is a must, but there
are hundreds more. Viadeo is great for pro-
moting yourself in developing markets like
China, India and Brazil, and it’s also handy if
you want to get headhunted for a European
post. Meanwhile, 1and1.com gives you anoth-
er domain, email address and professional
looking online business card, all for £3.
You can coordinate all your online boasting
sites at flavours.me, the easiest website for
creating your own, easily manageable web-
site.
Finally, you’ll need to monitor the hype you
have created about yourself. Some tools are
better than others for this, but Chatterscope
and SocialMention are a couple of good
places to start.
Nick Booth edits www.mobileb2b.co.uk
 24 Lifestyle | TV& Games CITYA.M. 24 FEBRUARY 2011

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7pm Hollyoaks 7.30pm Friends
9pm The Big Bang Theory
9.30pm How I Met Your
Mother 10pm Skins 11.05pm
Rude Tube: Total Stunts
12.10am Scrubs 1.05am Skins
4.10am Running in Heels HEALTH
4.30am-6am Switched 7pm A Baby Story 8pm How
Clean Is Your House? 9pm
HISTORY Paralysed and Pregnant: Four
7pm Heir Hunters 8pm IRT Years Later 10pm The Real ER ROME WASN’T BUILT IN A DAY
Deadliest Roads 10pm Swamp 11pm Critical Condition CHANNEL 4, 9PM
11.30pm A&E 12am Paralysed
People 11pm IRT Deadliest The team discovers the materials used
Roads 1am Oil Riggers 2am and Pregnant: Four Years Later by the Romans for their windows, and
Swamp People 3am The 1am The Real ER 2am Critical Dai Morgan Evans lays on a banquet as
Nostradamus Effect 4am Condition 2.30am A&E 3am the build nears completion.
Decoding the Past 5am-6am How Clean Is Your House?
Ancient Discoveries 4am Bringing Home Baby
5am-6am A Baby Story
DISCOVERY
8pm How Do They Do It? SKY1
8.30pm How It’s Made 9pm 8pm Hawaii Five-0 9pm Mad
Weird or What? 10pm HMS Dogs 10pm House. The medic
Ark Royal 11pm Frontline uncovers secrets about Cuddy’s
Battle Machines with Mike mother. 11pm NCIS: Los
Brewer 12am Bear Grylls: Born Angeles 12am Road Wars 1am
Survivor 1am Deadliest Catch Body Language Secrets 1.50am LIVE UEFA EUROPA LEAGUE
2am Future Weapons 3am Inside: Alaska’s Toughest Prison FOOTBALL CHANNEL 5, 5.45PM
Greatest Tank Battles 3.50am 2.40am Glenn Martin, DDS Liverpool v Sparta Prague (Kick-off
The First World War 4.40am 3.30am Threshold 4.20am 6.00pm). Jim Rosenthal presents
Treasure Quest 5.30am-6am Don’t Forget the Lyrics 5.10am- coverage of the second leg of the
How Does That Work? 6am Sell Me the Answer last-32 fixture at Anfield.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
16 34 10 17 11 10
28 13
45  
28
Place the numbers from 1 to 9 in each empty cell so that each 20 9
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 15 11
6 24
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 14 17     
above or to the left of it. 6
You can only use the digits 1-9 12 3 23  
    and you must not use the
6 4
23    
same digit twice in a block. 10 21 35 9
     The same digit may occur 7 7 17
23 12
 more than once in a row or
column, but it must be in a
33
15
10

12 16
   separate block.
11 8
29
  14 30
 

   ACROSS DOWN
1 Swimmer (6) 1 Slang term for

     WORDWHEEL O C
4 Second letter
of the Greek
alphabet (4)
ostentatious jewellery (5)
2 Strings (5)
3 Soft yellow substance
Using only the letters in the Wordwheel, you have
    ten minutes to find as many words as possible,
A K 6 Loss of the secreted by aural
ability to move glands (6)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters S a body part (9)
8 ___ Mahler,
4 Refuse to do
business with (7)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
R E composer, 5 Pompous fool (3)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
T H
1860-1911 (6)
12 Leer (4)
7 Inuit dwelling (5)
9 Mammary gland
QUICK CROSSWORD 3 2 8 9 7 3 9
13 Live (5) of bovids (5)
T H U G I N F E R
7 3 9 2 4 5 6 1 8 SUDOKU         
15 Norse deity (4) 10 Flimsy (7)
H O V E N O U
5 8 9 8 9 6
         16 Writer (6) 11 Through (3)
2 1 3 6 9 7 5 8
U L N A V R S
9 4 9 2 4 2 1
         19 Obsess (9) 14 Surgical stitch (6)
M A T O N E M E N T
        
B A R E N C Y 3 5 1 2 8 20 Artificial 17 Sir Fred ___, English
        
T
R E
A
C I T
A
A L
S O O N
9 6 8
7 2 5
4 5
1 3 6
2
9
1
3
WORDWHEEL         
hairpieces (4)
21 Act against an
astrophysicist
(1915-2001) (5)
H I T O R M I S S O         
7 9 5 8 1 7 The nine-letter word was
I I E E E L S attack (6)
N V S E E S E 1 4 6 3 7 9 2 8 5          18 Ball-shaped (5)
PERFORATE
G U E S S S L I D 3 1 2 1 5 6 9          19 Animal’s foot (3)
 Sport
25
ARSENAL MOVE ONE POINT BEHIND
MAN UNITED BUT AT WHAT COST?
INJURIES TO WALCOTT AND FABREGAS
AHEAD OF CARLING CUP FINAL: PAGE 26

Results
Wilko’s happy COURT APPEAL: MANCHESTER TO HOST NBA
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to guide Flood
RBS
6 NATIONS
BY FRANK DALLERES
ENGLAND stalwart Jonny Wilkinson
may not play a single minute of
Saturday’s RBS 6 Nations showdown
with France but the record-breaking
fly-half still believes he can help
Martin Johnson’s men triumph.
The stellar form of
Wilkinson’s old protege
Toby Flood is likely to
mean the 2003 World
Cup winner (right) starts
on the bench for a
match that is already
being billed as a cham-
pionship decider.
But the Toulon No10,
now 31, insists he can still
make a positive contribu-
tion in his new role as under-
study, whether as a late replacement
or even just offering guidance to
Flood on the training pitch.
“The last time I was in this position
[of second choice] was at the start of
my career and it’s a real challenge to
begin again and to build myself and to
grow to try and get my place back in
the team,” said Wilkinson. “I’ve taken
great inspiration from the likes of
Mike Catt and Paul Grayson. I remem-
ber being in the team when these
guys weren’t and they helped me. I’m
trying to do that now.”
Whether it is by dint of his input or
not, Flood’s kicking has been flawless
so far this year, with all 11
attempts converted.
Wilkinson (inset)
added: “It’s every player’s
job to understand that
what they do on the
field as a replacement
or how they train and
the mentality they
bring has an affect on
those around them.
the build up.”
England boss Martin Johnson
will name his team today, with erst-
while captain Lewis Moody set to be
omitted from the 22 after failing to
prove his fitness after injury.
SUPERSTARS from the NBA, such as British hero Luol Deng (above), are set to continue
their incursion into Britain by playing a game in Manchester later this year. Details of
the match, which could involve the Great Britain team, will be confirmed on Monday.
The NBA will hold its first regular season game in Europe when New Jersey Nets meet
Toronto Raptors at London’s O2 next week. Picture: REUTERS
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email sport@cityam.com

HERE COMES THE SUMMER

WITNESS THIS FAST AND FURIOUS
ADAPTATION OF THE SPORT OF KINGS
AS IT RETURNS TO ITS ANCESTRAL HOME
IN THE HEART OF LONDON

BOOK Start the weekend early on City Friday, enjoy the charms
NOW of Ladies Day and see it through to the thrilling conclusion
VIP PACKAGES of Finals Day and the Veuve Clicquot Polo Party.
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 26 Sport
Cech will face United next week Pic: GETTY
Cech: Blues still
on for a double
▲
FOOTBALL
BY FRANK DALLERES
CHELSEA goalkeeper Petr Cech is
refusing to give up on an unlikely
Champions League and Premier
League double this season, despite
the Blues’ four-month malaise.
Europe’s biggest prize has consis-
tently eluded the west Londoners
even during their trophy-laden recent
years, while Carlo Ancelotti’s men are
as close to mid-table as they are top-
flight leaders Manchester United.
Tuesday’s victory at FC
Copenhagen has put them within
touching distance of the Champions
League last 16, however, while
Chelsea could cut the gap at the top
when United visit Stamford Bridge
early next week.
And Cech said: “The Champions
League is a competition Chelsea has
never won before. We want to go and
win it. We are behind in the league,
but we have to play Manchester
United twice. We will need luck for
everybody else to drop points, but we
will fight until the very last moment.”
Saturday 5 March* Saturday 2 April*
* Subject to availability, terms and conditions apply.
On sale dates vary by match.
† Available to Season Ticket Holders and Members only.
WIN AND A PRAYER
l Fabregas vows to overcome hamstring strain
l But Walcott is ruled out of Wembley final
ARSENAL 1 Spain midfielder wrote on Twitter.
STOKE 0 till the last second.”
▲
FOOTBALL
BY FRANK DALLERES, EMIRATES STADIUM
ARSENAL captain Cesc Fabregas last
night vowed to win his race to be fit
for Sunday’s Carling Cup final after
injuries to him and Theo Walcott
soured a victory over Stoke that lift-
ed the Gunners to within one point
of Premier League leaders
Manchester United.
Fabregas (right) was taken off
with a hamstring problem
moments after Sebastian
Squillaci’s eighth minute
winner, and Walcott was car-
ried off on a stretcher after
spraining his ankle in the sec-
ond half. The England
winger is out of the
Wembley showdown with
Birmingham but Fabregas is
refusing to give up on the chance
to lead Arsenal to a first trophy in
six years.
“I don’t know if I’ll make Sunday
or not, but all I know is that from
this moment to Sunday 4pm I
Saturday 16 April* Saturday 7 May * † Sunday 22 May * †
won’t sleep if it’s necessary,” the
“I’ve waited too long to captain a
final for Arsenal and I won’t give up
Manager Arsene Wenger, who is
also sweating on the fitness of strik-
er Robin van Persie and defender
Laurent Koscielny, said it was
“impossible” to gauge the severity
of Fabregas’ injury last night but
hoped to know more today, and
praised his players for overcoming
the injuries to record a valuable,
hard-fought win.
“Tonight was a night when
nobody else played; if you can take
three points and just glide a little
bit closer to the top it means your
team is really hungry for success,”
he said. “We were less sharp cre-
atively but you could feel the team
did not want to make a mistake,
and that is a very positive
sign.”
Stoke pushed hard for
an equaliser as the
evening grew later and
increasingly physical,
with the catapulted
long throws of Rory
Delap a threat,
prompting Wenger
to suggest, tongue
perhaps only
Tired Swann has plans for Sehwag
▲
CRICKET
BY JAMES GOLDMAN
ENGLAND spinner Graeme Swann
admits he’s been slow to adjust to
the challenges touring India pres-
ents following a hectic few weeks.
The 31-year-old celebrated the
birth of his first child last week, but
48 hours after his new arrival he
was jetting off to the subcontinent
to spearhead England’s World Cup
challenge. “The change of climate
and temperature really does hit you
Sport ‘needs unified
anti-corruption body’
GENERAL
▲
WORLD sports chiefs have been
urged to establish a global anti-
corruption agency with a man-
date to target everything from
doping to match-fixing.
David Howman, director gener-
al of anti-drugs body WADA,
believes the same criminals are
often behind doping and fixing,
meaning an integrated, interna-
tional detective agency would be
the most effective solution.
“The key issue is that the crimi-
slightly in cheek, that “I wonder if
we should not change rules a bit”.
The Arsenal chief refused to elab-
orate fully or criticise Stoke, whose
captain Ryan Shawcross was persist-
ently barracked for breaking Aaron
Ramsey’s leg last year, but conceded
their direct style would prove good
practice for a Wembley date with
Birmingham.
“It was good practice for Sunday
because it was a bit of a cup game,”
Wenger added. “Tactically we'll face
certainly the same kind of problem
as well.” Arsenal started with pur-
hard,” he said. “After 20 overs
[against Holland] I looked up at the
board desperate for it to be 45 overs
gone because I was cooked.”
Tuesday’s jittery six-wicket win
over Holland was not the best way
to prepare for the co-hosts and their
in-form opener Virender Sehwag
on Sunday.
Swann said: “We’ve got our
gameplans and we know how we’re
going to bowl at him. We’ll just
have to get him out in the first few
overs, and there’s no problem.”
nal underworld is engaged in
clear and serious efforts to cor-
rupt the sporting world,” said
Howman. “It needs governments,
sports organisations and the legit-
imate gambling industry to unite
together to save sport. If we do
not, we face a very rocky future.”
The call comes just weeks after
three Pakistan cricketers, includ-
ing former Test captain Salman
Butt, were handed bans of up to
20 years after being found guilty
of spot-fixing during last year’s
tour of England.
CITYA.M. 24 FEBRUARY 2011
pose and Walcott rattled the inside
of the post before the inevitable
breakthrough came, a deep corner
reaching Nicklas Bendtner, who
volleyed gently across the face of
goal where Squillaci pounced and
headed past Asmir Begovic.
TOP THREE
TEAM PLD W D L F A PTS
Man United 26 16 9 1 57 25 57
Arsenal 27 17 5 5 57 27 56
Man City 27 14 7 6 43 24 49
Ponting warned
AUSTRALIA captain Ricky Ponting
has been warned after damaging a
television in the dressing room.
Ponting was run out against
Zimbabwe on Monday and subse-
quently accepted the Level 1 charge,
which may see him lose 50 per cent
of his match fee. ICC ref Roshan
Mahanama said: “Ricky knows his
action was in breach of the code.”
SPORT | IN BRIEF
No trials at Olympic Stadium
ATHLETICS: UK Athletics insists the
2012 British trials are “very unlikely”
to be held inside the Olympic Stadium.
The governing body says it would
“absolutely love” to hold the trials –
which will decide GB's Olympic team –
at the arena ahead of the Olympics.
We’re pushing them as hard as we can
but there are logistical constraints,"
UKA chairman Ed Warner said.
Afridi shows Kenya’s wide boys
CRICKET: Pakistan captain Shahid
Afridi took 5-16 as his side crushed
Kenya by 205 runs in Hambantota.
Pakistan reached 317-7 from their 50
overs, aided by the Kenyan bowling
attacking who sent down a world
record 37 wides.
CITYA.M. 24 FEBRUARY 2011 Sport 27

CROCKOMETER
With just three days until the
Carling Cup final and a chance to
end his six-year wait for a trophy,
Fergie seeks home comfort
Arsene Wenger must contend with
injuries to three of his key men. MARSEILLE 0 Super Mario sinks
RULED OUT
Theo Walcott, fleet- MANCHESTER UTD 0 holders in Milan
footed and in-form,
will definitely miss GERMANY
▲

FOOTBALL
the Wembley final BY JAMES GOLDMAN international
after spraining his striker Mario
ankle trying to MANCHESTER UNITED manager Sir Gomez exacted
escape the attentions Alex Ferguson hopes home advantage revenge on Inter
of Stoke midfielder will have a decisive say in the out- Milan with an
Dean Whitehead come of his side’s delicately poised injury time goal
last 16 Champions League tie against which handed
Marseille. Bayern Munich
MAJOR DOUBT The French champions managed to a crucial 1-0 first leg Champions
Captain and driving avoid the concession of an away goal League win at the San Siro.
force Cesc Fabregas but failed to force United goalkeeper Bayern were beaten in the final by
was withdrawn as a Edwin van der Sar into serious action. Inter last May, but the Bundesliga
precaution after just By the same token, however, side are now strong favourites to
15 minutes, but the Marseille stopper Steve Mandanda progress to the last eight of this
Spaniard has barely enjoyed a relatively comfortable year’s competition after Gomez struck
any time to recover evening as United’s much vaunted in injury time.
from another ham- front three of Wayne Rooney, Dimitar Rooney was shunted out to the left of a three-man United attack Pic: ACTION IMAGES The usually reliable Julio Cesar
string strain Berbatov and Nani failed to fire. Darren Fletcher had United’s best do,” said Ferguson. “The way we nor- failed to hold Arjen Robben’s shot
“Marseille made sure they did not opportunity, a first-half snap shot mally set up, with Nani or Ryan Giggs from distance and Gomez (above) was
lose,” Ferguson reflected. “It was a from the edge of the area that on the left, gives us more natural on hand to apply the finishing touch.
DOUBT poor game for the spectators. Mandanda managed to keep out after width. Esteban Cambiasso missed the
Robin van Persie has Nothing happened. originally being wrong-footed. “But Wayne worked hard, as he best chances for Inter, who also saw
missed the last two “On our ground we will be much Ferguson reserved the majority of always does. He has great spirit but he striker Samuel Eto’o draw a blank in
games with a ham- better. Scoring away from home is his praise for central defensive part- was better when we played him front of goal as Bayern goalkeeper
string tweak that always important and we didn’t do ners Nemanja Vidic and Chris through the middle in a 4-4-2 at the Thomas Kraft pulled off several
only Wenger knows that tonight. Smalling, who once more produced a end.” impressive saves.
the severity of – and “You always worry at this stage of sure-footed performance in Rio Marseille coach Didier Deschamps Muller wasted a fine chance early
the Frenchman isn't the season because there are no bad Ferdinand’s absence. added: “We know the away game at in the second half, while Robben also
giving much away teams left in the competition. But we Wayne Rooney also earned plaudits Old Trafford is going to be complicat- clipped the outside of the post with a
on that front will have two or three players back from his manager after an industri- ed for us but hope is still alive. I think rising shot, but the visitors got their
and whilst we won't be taking any- ous shift on the left wing. for the first game it is very important, reward through Gomez’s late strike.
thing for granted, this result is fine.” “He did what we wanted him to not to concede a goal.”
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