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www.cityam.com FREE ISSUE 1,756 THURSDAY 8 NOVEMBER 2012
President Barack Obama and First Lady Michelle Obama are all smiles in front of a mass crowd of supporters yesterday
in tax hikes and spending cuts as
soon as January.
In the weeks ahead, I look
forward to sitting down with
governor Romney to talk about
where we can work together to move
this country forward, Obama said.
Referring to divided factions in
the Senate and House of
Representatives, Obama added: We
are not as divided as our politics
suggests. Were not as cynical as the
pundits believe.
In his concession speech, Romney
said the US was at a critical point
in its history. At a time like this, we
cant risk partisan bickering and
political posturing. Our leaders have
to reach across the aisle to do the
peoples work, he urged.
Obama was confirmed as a two-
term President yesterday, reaching
303 votes on the electoral college
comfortably more than the 270
required to win. The number will
rise to 332 if he is confirmed to have
won Florida. Late last night Romney
remained on only 206, with some
seats still to declare.
Yet America remains divided, with
VICTORIOUS President Barack
Obama addressed adoring crowds
in Chicago yesterday after
winning a second term at the
White House, yet was hit by an
immediate reality check as
markets crashed on the back of
renewed tensions in the Eurozone.
In New York the Dow Jones
crashed by 2.36 per cent to end
the day at 12,932.73 as violent
protests erupted in Greece and
investors also fretted about
Americas own levels of
government debt.
The Greek government last
night won a key vote on its latest
austerity measures. While 153
MPs supported it, the number is
significantly lower than the 179
MPs that formed the coalition. A
number of MPs were reported to
have been expelled from their
parties for failing to support the
measures, last night.
Greeces leaders still need to
pass the overall bill in another
vote on Sunday, and convince its
international lenders that it will
see through the austerity
measures and reforms needed to
pave the way for upcoming
tranches of its bailout cash.
With economic clouds
gathering overhead, Obama and
defeated Republican candidate
Mitt Romney both struck
conciliatory tones in their post-
election speeches, encouraging
colleagues to find a cure for
Americas so called fiscal cliff a
situation that could see the
economy knocked by over $600bn
SPOTLIGHT ON
US ELECTIONS
See pages 2, 3, 22, 23
nearly half of the popular vote
going to Romney.
Prime Minister David Cameron
congratulated Obama on his re-
election. I have really enjoyed
working with him over the last
few years and I look forward to
working with him again over the
next four years, Cameron said,
during his visit to Jordan.
There are so many things that
we need to do: we need to kick
start the world economy and I
want to see an EU-US trade deal.
Fellow Conservative Boris
Johnson, the Mayor of London,
also congratulated Obama but
was less comprehensive in his
praise. Looking forward to
renewing our claim to Americas
unpaid Congestion Charge bill!
the Mayor joked on Twitter a
reference to the hefty bill that
US diplomats cars have run up
while driving in central London.
OBAMA
50%
49%
ROMNEY
POPULAR VOTE
OBAMA
332
* Includes
projected Florida win
*
206
ROMNEY
ELECTORAL
COLLEGE VOTE
Dow Jones Industrial Average
4pm 10am 2pm 12pm
13,000
13,100
13,200
12,850
$
12,932.73
7Nov
But Barack Obamas triumphant re-election marred by stock market slump as global economic fears mount
BY JULIAN HARRIS
All eyes on the fiscal cliff as conflicts linger
INVESTOR worries over the so
called US fiscal cliff are growing
following the re-election of
Barack Obama to the White House
and continuing Republican
control of the House of
Representatives.
Republican House speaker John
Boehner last night told Obama
that his colleagues were ready to
be led towards a fiscal solution.
Democrat Obamas first term
was scarred by a failure to strike a
compromise in the House over a
plan to heal Americas potentially
crippling level of government
debt and annual deficit.
And if Congress cannot find an
BY JULIAN HARRIS
agreement on a new fiscal plan by
January, the US faces an
automatic $600bn hit from
scheduled tax rises and spending
cuts which some economists say
could severely jolt its economy.
Mr President, this is your
moment. Were ready to be led,
not as Democrats or Republicans,
but as Americans, Boehner said.
We want you to succeed. Lets
challenge ourselves to find the
common ground that has eluded
us. Lets rise above the
dysfunction and do the right
thing together for our country.
Yet ETX Capitals Andrew
Edwards warned: Failure by the
US government to tackle the fiscal
cliff is likely to see the worlds
biggest economy slip back into a
recession, while the anaemic
recovery in the jobs market will
continue to unnerve
markets in the short
term until we see a
meaningful
improvement.
Todd Schoenberger
of BlackBay Group in
New York added:
Traders on the
floor are thinking,
before the
election Obama
wasnt able to
resolve the
fiscal cliff
so what
makes you
think hes going to be able to do it
after the election? Thats the big
issue right now.
Yet stock markets could be
propped up by the Feds ongoing
quantitative easing programme.
Presidential candidate Mitt
Romney had been hostile towards
Bernankes asset-buying scheme,
with his defeat at the hands of
Obama likely to see Bernanke
continue to promote
monetary easing at least
until the end of his
current term in January
2014.
2
US ELECTION SPECIAL
To contact the newsdesk email news@cityam.com
THURSDAY 8 NOVEMBER 2012
EDITORS
LETTER
ALLISTER HEATH
Ten observations on a historic
election for the United States
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
The popular vote was very close:
50.4-48.1 per cent, and a gap of 2.8m
votes, against 52.9-45.7 per cent and
9.5m votes in 2008. Obamas lead was
cut from 7.2 points to 2.3 points.
However, Obama triumphed in all of
the swing states.
Many factors destroyed Romney:
he was a poor candidate with insuffi-
cient charisma and too many nega-
tives who should never have been
selected; most Ohioans backed car
bailouts, helping deliver the state to
Obama; the storm helped the
President; and the Democrats deliv-
ered a more competent campaign
which turned out even more young
people than in 2008, gaining the sup-
port of two-thirds of 18-29 year olds.
Incumbent governments can win
even in the current climate. But
Obama just had to defend most of his
votes. David Camerons 36.1 per cent
means that he needs to substantially
increase his share to win in 2015.
US employment has performed
poorly and real wages are under pres-
sure but the economy is growing.
The numbers feeling worse off were
small enough to save Obama.
Republicans kept their majority in
the House of Representatives and
increased their governorships to 30
out of 50. But Democrats strength-
ened their control of the Senate to 53
against 45 (and two independents).
Most referenda opposed tax hikes.
But voters in California voted to
increase taxes, including income tax,
in a move which is likely going to
accelerate that states sad economic
decline and push jobs to other parts
of the US. Californians also voted to
keep the death penalty. Some states
voted to decriminalise marijuana and
Americans increasingly back gay mar-
riage. One last intriguing fact: eight
out of ten US counties with the high-
est incomes voted for Obama.
The Republicans electoral strong-
holds were unskilled white men and
older voters. The Democrats were
backed by single women and the
young. US politics is also starkly divid-
ed along ethnic lines. The electorate
was 72 per cent white; this demo-
graphic backed Romney 58-40 per
cent. Around 13 per cent of the voters
were African-American, 93 per cent of
which voted for the President; 10 per
cent of the electorate were hispanics,
who backed Obama 71 percent to 27;
and 3 per cent were Asian (breaking
73-26 for Obama). America has been
changing for years whites made up
87 per cent of voters in 1992 and any
party that cannot capture the votes of
immigrants and their children is
doomed, and deservedly so. The
Republicans used to grab a much
higher share of hispanics under
George Bush. The partys current per-
formance is pathetic: it desperately
needs to reach out to ethnic minori-
ties and convince them that it is an
open party that opposes the evil that
is racism and supports a truly colour-
blind, upwardly mobile society.
But is it really demographics that
explains Obamas victory? As a bril-
liant analysis on p22 by Stephan
Shakespeare demonstrates, attitudes
were the best predictor of voting: 81
per cent of those who said they want
a bigger government voted Obama.
The Republican core vote strategy
failed but only just. Dont listen to
commentators who expound too
many meta-theories about the US or
any other country. Every time a party
loses an election, pundits write it off
and talk of grand, historic realign-
ments. They are always wrong. Losers
eventually fight back, as the
Democrats did after Reagan.
Dodd-Frank, the financial regula-
tory bill, will go ahead and so will
the UK and EU regulatory agenda.
Monetary policy will continue
unchanged. The big issue now is the
fiscal cliff. Good luck, Mr President.
IDAHO
UTAH
CALIFORNIA
ALASKA
NEVADA
WASHINGTON
12
OREGON
7
55
3
ARIZONA
11
332
BARACK OBAMA
JOE BIDEN
DEMOCRAT
270 ELECTORAL
6
4
6
WYOMING
3
MONTANA
3
NORTH DAKOTA
3
SOUTH DAKOTA
3
NEBRASKA
5
COLORADO
9
NEWMEXICO
5
TEXAS
38
HAWAII
4
KANSAS
6
OKLAHOMA
7
(incl. projected Florida win)
HOUSE OF REPRESENTATIVES
SENATE
DEMOCRATS 55
REPUBLICANS 45
50
DEMOCRATS 191
REPUBLICANS 232
218
REPUBLICANS retained their hold
on the House of Representatives
yesterday, while Democrats held
onto the Senate, maintaining the
partisan status quo of the past two
years.
Republicans guaranteed
themselves a majority in the 435-
member lower chamber, even
before the last results came in
through the night. But Democrats
increased their majority in the
upper chamber to 10, gaining in
Massachusetts and Indiana.
Republican chances of gaining
four seats and taking over the
Senate initially evens, according
to the party were dented by
controversial comments on rape
Republicans retain House but
Democrats tighten Senate grip
BY BEN SOUTHWOOD
and abortion by the extreme social
conservative wing of their party.
Both Todd Akin, who
notoriously said that women had a
means of shutting down
pregnancies in cases of legitimate
rape and Richard Mourdock, who
said pregnancies were a gift from
God even in cases of rape, lost
their races for Senate seats.
Democratic candidate Tammy
Baldwin won her Wisconsin race
to become not only the first
female senator from the state, but
also the first openly gay senator in
the US, as part of a race that saw a
record number of women elected
to Congress. Another of these
women was law professor
Elizabeth Warren, who unseated
Scott Brown in Massachussets.
The US market rally
appears to have beenone of
those act in haste andrepent
at leisure types of market
reactionwhichinvestors in
hindsight wishtheydthought
better of. Yesterday mornings news fromEurope has
seen US markets plunge on the open as investors
quickly realisedthat for all the noise, andrelief the
same oldproblems remain with the same
set of protagonists lookingfor a solution.
ANALYST VIEWS
WILL US MARKETS RECOVER?

Interviews by Ben Southwood
MICHAEL HEWSON CMC
The scal cliff may
turn out to be just a distrac-
tion. If just a short-term
solution is found to the
problem, markets should
recover fairly quickly. If
tough negotiations lead to a drop in equity mar-
kets that should be viewed as a buying opportu-
nity; US equities are still fundamentally attractive
but valuations are not as good as they
were a year ago.
DAN MORRIS JP MORGAN

We will see some
very intense negoti-
ations pre-Christmas around
the budget decit and the
negotiating stance of the two
parties will start off poles
apart... After a lot of wailing
and gnashing of teeth, we are hopeful of a budget
agreement along the lines of the Bowles-Simpson
proposal which is based on a ratio of 3-1 spending
cuts versus tax increases.
RICHARD LEWIS FIDELITY

Ben Bernanke has the
support of Barack Obama
1
2
3
4
5
6
7
8
9
10
HOW THE RESULT MIGHT AFFECT UK COMPANIES
As the dust settled on President
Obamas second-term victory, share
prices were quick to react yesterday to
the impact of another four years of his
reign.
Financial shares lost ground as any
hopes the Volcker rule, part of the
Dodd-Frank reforms, curbing
proprietary trading by Wall Street banks
in securities and derivatives, would be
repealed by Republican challenger Mitt
Romney, died. Barclays shares fell 2.8
per cent, Royal Bank of Scotland 2.7 per
cent and HSBC 2.2 per cent.
However, PwC financial services leader
Kevin Burrowes says the result at least
provided certainty for financial firms.
They can now get on with
implementing EU and US reforms on an
integrated basis, knowing they have a
clear direction from global regulators,
he said.
Aerospace and defence firms also
suffered, with BAE Systems down 1.3 per
cent, hurt by the expectation that
defense budgets would continue to drift
downwards.
Romney had pledged to increase the
funding for military budgets, but
analysts yesterday estimated Obamas
second four years in office could see as
much as $20bn slashed from defense
spending.
But there were also winners from
Obamas victory.
Mining shares rose in relief that Romney,
who had said he would remove Ben
Bernanke as Federal Reserve chief, lost;
gold investors also gained on fears of
more QE. Bernanke, made clear in
September that under his leadership the
Fed would maintain low interest rates,
and continue with quantitative easing
until the economy is back on track,
helping to ensure continuing high
demand for metals.
Education-orientated firms also
benefited, with UK-listed publisher
Pearson which closed flat yesterday,
beating the 1.6 per cent drop in the FTSE
100, as investors assumed its North
American education business would
benefit from continued federal funding
for school textbooks.
However, Liberum analyst Ian Whittaker
reiterated his sell rating yesterday,
warning that the Republicans continued
hold on the House of Representatives
meant significant extra funding was
unlikely to be signed off.
3
US ELECTION SPECIAL
cityam.com
MINNESOTA
VERMONT (3)
MASSACHUSETTS (11)
NEWHAMPSHIRE (4)
CONNECTICUT (7)
NEWJERSEY (14)
RHODE ISLAND (4)
MARYLAND (10)
DISTRICT OF COLUMBIA (3)
DELAWARE (3)
206
MITT ROMNEY
PAUL RYAN
REPUBLICAN
VOTES TO WIN
(10)
WISCONSIN
10
IOWA
6
MISSOURI
10
ARKANSAS
6
LOUISIANA
8
ILLINOIS
20
MISSISSIPPI
6
ALABAMA
9
TENNESSEE
11
GEORGIA
16
SOUTH CAROLINA
9
KENTUCKY
8
INDIANA
11
MICHIGAN
16
OHIO
18
NORTH CAROLINA
15
VIRGINIA
13
WVIRGINIA
5
PENNSYLVANIA
20
NEWYORK
29
FLORIDA
29
MAINE
4
FEARS a split Congress could hamper
action on the US economy saw initial
market euphoria that the elections
had delivered a decisive result rapid-
ly switch to fear on world markets.
The Dow plunged 312.95 points in
its worst one-day fall for the year,
with the FTSE 100 losing 1.6 per cent
and the benchmark Eurofirst drop-
ping 1.4 per cent.
The price of oil mirrored the fall in
equities, with US crude down 57
cents at $88.14 per barrel.
Meanwhile, gold surged to its high-
est level in two weeks, hitting $1,729
an ounce, its strongest level since 23
October, before slipping back to
$1,726.31 as investors rushed into
safe-haven investments.
The dramatic movements came as
analysts warned the result of the
Markets plunge
as re-election
jitters emerge
BY KATIE HOPE congressional elections with the
Republicans retaining the House of
Representatives and the Democrats
holding their majority in the Senate
meant little had actually changed.
The split Congress will not make it
easier to deal with the fiscal chal-
lenges of the next few years, said
Bernd Weidensteiner of
Commerzbank.
Unless the two sides of government
can agree a new plan to deal with
Americas debt, more than $600bn
(375bn) of tax increases and spend-
ing cuts will be automatically enact-
ed at the end of this year, a result
which ultimately could tip the US
back into recession, the IMF has
warned.
The persistent uncertainty will
remain a drag on confidence, includ-
ing in the equity market, said Julian
Jessop from Capital Economics.
Brent crude oil
110
109
111
112
108
107
$
Yesterdays trading
Spot Gold
20:00 4:00 7Nov 8:00 12:00 14:00
1,720
1,710
1,730
1,740
1,700
1,690
$
$1,731.40
twoweekhigh
EasternTime
The UK has made extremely
encouraging progress in securing
an order from the United Arab
Emirates for 60 Typhoon fighter
jets made by BAE Systems, a British
defence source said yesterday.
There is a political agreement.
Clearly there are a lot of details to
be worked through, but it is
extremely encouraging, the
source said, adding that a contract
was likely to be signed sooner
rather than later.
The official was speaking after
Prime Minister David Cameron
travelled to the UAE earlier this
week on a two-day diplomacy and
trade visit.
UK closes in on
Typhoon deal
BY CITY A.M. REPORTER
GREEK LAWMAKERS late last night
approved the austerity bill neces-
sary to secure the next tranche of
bailout funds from their creditors.
The two main governing parties
faced down a rebellion from junior
coalition partner Democratic Left,
and seven of their own MPs, to pass
the 500-odd page bill, containing
13.5bn (10.8bn) worth
of cuts 153 to 128.
But the success
was marred by
the rebellion of
seven repre-
sentatives
one from
Prime Minister
A n t o n i s
Samarass New
Democracy
Par t y
and
Greek cuts bill
makes it past
parliament test
BY BEN SOUTHWOOD
six from socialist coalition partner
Pasok. All seven deputies were
promptly expelled from their par-
ties.
Calling on the 300 representatives
to the house to pass the bill,
Samaras described the vote as a
make or break situation. Today we
vote on whether we will remain in
the Eurozone or return to interna-
tional isolation, meet completely
bankruptcy, and end up in the
Drachma, he warned the chamber.
If the government can also pass
the 2013 budget which is
expected to be brought to parlia-
ment on Sunday then they
stand to receive 31.5bn of aid
from the International Monetary
Fund and the European Union.
Without the bailout, Greece
may be unable to pay creditors.
JUSTIN WELBY NEW ARCHBISHOP OF CANTERBURY
JUSTIN Welby,
Bishop of Durham,
is expected to be
unveiled as the
next Archbishop of
Canterbury,
replacing current
Church of England
boss Rowan
Williams, and
pipping
Archbishop of York
John Sentamu to
the post. Welby is
a 56-year old Old
Etonian and
Cambridge
graduate, who
opposes same-sex
marriage and was
enthroned as a
bishop just under a
year ago.
Prime Minister
Antonis Samaras
fired one MP
5
NEWS
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EADS offices raided over Austria sale
Police have raided several offices
belonging to the European aerospace
and defence group EADS as part of an
inquiry into whether bribes were paid to
smooth the sale of Eurofighter Typhoon
jets to Austria.
Occidental Petroleum vying for Yates
Occidental Petroleum is among those
vying for Yates Petroleum, one of the
largest closely held oil companies in the
U.S., in a deal that could fetch as much
as $3 billion (1.88bn), according to
people familiar with the talks.
Europe fears US energy gap
Europes ability to compete against the
US as a manufacturing centre is being
damaged by rising energy costs as North
America benefits from cheap natural
shale gas, Germanys biggest companies
are warning. The energy cost advantge
for US firms is rising, BDI said.
ING blow to small firm investment
Hopes of small business driving the UKs
economic recovery have been dealt a blow
after a leading finance provider withdrew a
crucial source of finance for entrepreneurs.
ING is pulling out of the UK leasing industry,
which thousands of small companies rely on
to fund growth and investment.
The new jobs website for London professionals CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
A NEW industrial policy would help
the economy grow by boosting
exports, a leading business group
claims in a report out today.
The Confederation of British
Industry (CBI) said it does not want
the government to return to a policy
of picking winners but it does
think some support for selected
industries would help create
economic growth.
Support for sectors including
aerospace, car manufacturing, green
technologies, creative industries and
pharmaceuticals could give the
economy a 30bn boost through
exports and create a trade surplus.
It argues for a long-term drive to
make sure the government works
with big business to suit companies
needs better for example in
education and infrastructure.
The group complains that the
liberalisations of the 1980s mean the
government no longer helps big
firms. It stops short of asking the
state to invest directly in businesses
or set up firms, warning this could
repeat the failures of industrial
policies of the 1960s and 1970s.
But it calls for more indirect
action to increase growth in certain
sectors for example by using
regulation to force households and
firms to buy from green energy
suppliers, or giving grants to those
who adopt new technologies early.
CBI demands
more state aid
for businesses
BY TIM WALLACE
THE EUROZONES economy will bare-
ly grow at all next year, the European
Commission warned yesterday, slash-
ing its previously upbeat growth
projections.
Official forecasts now put 2013s
growth at just 0.1 per cent, well short
of the one per cent predicted in May.
That gloomy outlook means gov-
ernment debts will keep rising more
quickly than expected debt is now
expected to keep growing fast, to hit
94.5 per cent of GDP next year rather
than the 92.6 per cent previously
predicted.
And the currency areas army of
unemployed will keep growing to
11.8 per cent, rather than hold steady
at 11 per cent as forecasts six months
ago expected.
For the EU as a whole, the growth
outlook has been cut from 1.3 per
cent to 0.4 per cent, while govern-
ment debt is set to come in at 88.5
per cent of GDP, not 87.2 per cent,
and unemployment is forecast to rise
to 10.9 per cent, not 10.3 per cent.
The ongoing post-financial crisis
Unemployment
to rise again in
Europe in 2013
BY TIM WALLACE
correction continues to weigh heavily
on economic activity and employ-
ment in the EU, yet compared with
the situation before the summer,
financial tensions have somewhat
abated, the forecast said.
The full implementation of far-
reaching policy measures announced
over recent months and progress
with the correction of imbalances
should reduce financial stress in vul-
nerable member states further and
lead to a gradual restoration of confi-
dence across the EU, which is neces-
sary for investment and private
consumption to return.
Germany and France both saw their
GDP forecasts cut by 0.9 percentage
points to 0.8 per cent and 0.3 per cent
respectively, while Spain and Italys
were both cut 1.1 percentage points
to falls of 1.4 per cent and 0.5 per
cent.
Greece saw the biggest downgrade,
from an earlier forecast of flat GDP in
2013 to a fall of 4.2 per cent.
The UK also saw its forecast chopped
back, with growth now predicted to
come in at 0.9 per cent in 2013, not
the 1.7 per cent previously expected.
DUTCH financial group ING will
cut more than 2,000 jobs over the
next two years as it prepares to
separate its banking and insurance
operations.
The job losses are made up of
1,350 of its 12,000 staff in European
insurance operations, and 1,000 of
its 10,500 commercial banking
employees worldwide.
That is thought to include 300
roles in its UK leasing business.
The cuts should save the bank a
total of 460m (367.3m) per year
from the end of 2015.
Chairman Jan Hommen praised
ING announces 2,350 job losses
as it trims insurance operations
BY TIM WALLACE the dedication of the departing
staff: It is painful to announce
such steps because throughout
these challenging times employees
at all levels have worked tirelessly
to prepare businesses for
divestment and secure strong
stand-alone futures for the bank
and insurance [units].
The announcement comes after
Swiss bank UBS revealed it will cut
10,000 jobs as it scales back parts of
its investment bank, while German
Deutsche Bank is cutting 1,900
positions.
The group reported third-
quarter profits of 609m, down 64
per cent on the year.
6
NEWS
cityam.com
ING chairman Jan Hommen said the cuts were painful when staff had worked so hard
FRENCH banking giant BNP Paribas
defied the Eurozone crisis to double
earnings in the third quarter, according
to financial results published yesterday.
The bank reported net profits of
1.32bn (1.05bn) in the three-month
period up 144 per cent on the 541m
recorded in the third quarter of 2012.
That is in part a rebound from a multi-
billion euro hit from the falling value of
the banks Greek debt last year.
But the recovery is also due to boom-
ing investment bank revenues, largely
on the back of improved bond-trading
incomes. Corporate and investment
banking (CIB) revenues jumped from
1.79bn in the third quarter of 2011 to
2.38bn in the last three months.
The investment solutions arm also saw
revenues edge up 4.1 per cent from
Earnings double
as BNP recovers
from Greek woe
BY TIM WALLACE
1.46bn to 1.52bn, while the retail bank
recorded a 2.15 per cent rise to 6.18bn.
The group hit a fully-loaded Basel III
common equity tier one ratio of 9.5 per
cent in the quarter.
However the bank did take some hits,
with credit losses up 8.6 per cent on the
year to 944m.
Shares rose 0.42 per cent on the day.
Munich Re targets 3bn profit
as investment income surges
MUNICH RE yesterday raised its
target profit for 2012 to 3bn
(2.4bn), thanks to an absence of
large disasters and a strong
investment performance.
The worlds biggest reinsurer
also announced that third quarter
consolidated profit was 1.1bn
up from 290m for the same
period last year in part thanks to
a 65 per cent rise in investment
income.
Although the insurer does not
BY JAMES WATERSON
know the full cost of
Hurricane Sandy,
executives do not
expect disaster claims
to ruin the firms
final results.
The high number of
individual losses and
the vast extent of
the storm make
loss estimation
very difficult,
said chief
financial
officer Jrg
Schneider. Based on a provisional
estimate characterised by a high
degree of uncertainty, we
anticipate Munich Res share of
the losses to be in the mid three-
digit million euro range.
The announcement follows
strong results earlier this
week from rival German
insurer Hannover Re,
who also raised year-end
expectations.
BNP Paribas
7Nov 1 Nov 2Nov 5Nov 6Nov
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39.00
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7
NEWS
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Lord Mayor Ilecl Roger Giord said: The Shov is one of lhe
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Chief financial officer Jrg
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IN BRIEF
WANDisco leaps on patent win
nSheffield software firm WANDisco
saw shares rise more than 10 per cent
yesterday as it said US officials had
approved a request for its technology
to be patented. The approval boosts
WANDiscos position in the fast-
growing Big Data market. The
newly-patented active:active
replication technology underpins
much of WANDiscos business
collaboration software, which is used
by clients including HP and Barclays.
Warner Bros buys London studio
nSoho-based post-production film
studio De Lane Lea was yesterday
bought by US giant Warner Bros.
De Lane Lea, which edits films after
they have been shot, employs around
30 people in its studio. The price of
the deal was not disclosed, but is
likely to be minimal. De Lane Leas
revenues last year were around 3m.
The studio has worked on dozens of
recent hits, including the Harry Potter
films and Casino Royale.
IAG eyes Spanish budget airline
nIAG, the parent company of British
Airways and Iberia, is eyeing a bid for
Vueling Airlines, a budget carrier
based in Spain, the firm said in a
statement yesterday. IAGs board will
meet today to consider a bid and its
possible terms. A subsidiary of IAG
already owns 45.85 per cent of
Barcelona-based Vueling, which offers
low costs flights across Europe. IAG
chief executive Willie Walsh has been
on the acquisition trail since BA and
Iberia merged in 2010.
BURBERRY boss Angela Ahrendts yes-
terday spoke out against imposing
quotas for women on boards as the
luxury fashion brand reported bet-
ter-than-expected half year profits.
Ahrendts, who has been at the
helm of Burberry since 2006, is one
of only two women running FTSE
100 firms after Cynthia Carroll
announced last month she is to step
down as chief executive of Anglo
American.
Speaking at Burberrys new global
flagship Regent Store yesterday,
Ahrendts said it was about leader-
ship and experience over gender.
Asked why there were not more
women on boards she said:
Honestly, its just a matter of time.
But do you accelerate it? I dont
know.
The luxury brand, which spooked
the market in September when it
warned of a slowdown in China, said
sales had steadied in the last quarter,
with revenues up eight per cent to
883m in the six months to 30
September.
Burberry chief
against female
board quotas
BY KASMIRA JEFFORD
Underlying profit before tax rose six
per cent to 173m when stripping out
a one-off 73.8m payment Burberry
made to end a fragrance and beauty
licence with French company
Interparfums.
From April next year Burberry will
bring fragrance in house, which
Ahrendts said she hopes will create a
halo effect on sales of other prod-
ucts, tempting fragrance shoppers to
buy higher priced items.
Ahrendts shrugged off fears of a
slowdown in the luxury industry and
said forecasts of four to six per cent
growth was still healthier than
other sectors.
Apple shares hit a five-month
low as it loses Facetime battle
SHARES in Apple slumped to a five-
month low yesterday after it was
ordered to pay $368m (230m) over
a US patent dispute over its
Facetime video calling service.
Although the fine, paid to
Connecticut company VirnetX, is
small compared to Apples $120bn
cash pile, the ruling could affect
future use of the technology in
BY JAMES TITCOMB
Apples iPhone and iPad. After the
decision was made late on Tuesday,
Apple opened 1.6 per cent down in
New York yesterday and fell below
$557. This was 21 per cent down on
Septembers record $705 price, a
level that made Apple the most
valuable company of all time.
The company also went on the
offensive in the patent battles, it
was revealed yesterday. On Tuesday
night, Apple filed a lawsuit against
Samsung which brought Googles
Android operating system into the
fray for the first time.
The claims are against the
Samsung Galaxy Note 10.1 tablet
and, more significantly, Googles
latest version of its mobile and
tablet operating software, Android
Jelly Bean.
If Apple is successful, it could be
encouraged to go after other devices
using Android.
Burberry Group PLC
1,240
1,220
1,260
1,280
1,200
1,180
p 1,250.43
7Nov
COMETS administrator has today
begun slashing prices on selected
stock across the retailers 236
stores, as talks to sell all or parts
of the business continue.
A spokesperson from Deloitte
said it had launched a gentle
clearance sale today on certain
items but said it would not hold a
full blown fire sale at this stage.
Opcapita, the owner of the
embattled electricals retailer,
called in administrators last
Comet launches clearance sale
on stock as shop closures loom
BY KASMIRA JEFFORD
month after it struggled to secure
the credit insurance needed to buy
supplies over the crucial
Christmas period.
With no buyer in sight, the firm
which has more than 6,600 staff, is
likely to be broken up, with stores
sold off to other retailers and
liquidators. Sources have
suggested stores could start to
close as early as next week.
Rival Dixons said yesterday it
had delayed its Christmas
recruitment drive to allow Comet
staff to apply for its 3,000 posts.
8
NEWS
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REBEL shareholders yesterday won
a drawn-out battle to oust Quarto
chairman and chief executive
Laurence Orbach from the board
of the publishing house, with
industry veteran Tim Chadwick to
take his place.
At the special meeting forced by
activist investor Harwood Capital,
shareholders voted in favour of
removing Orbach, Quartos largest
shareholder, who founded the
publisher in 1976.
The company which publishes
everything from sex manuals to
knitting books has already set out
Shareholders win battle to oust
Quarto founder from the board
BY KASMIRA JEFFORD plans to split the chairman and
chief executive role, with chief
operating officer Marcus Leaver
set to succeed Orbach as chief
executive next year.
Chadwick, has been director to
the board but it is still unclear
whether he will take up the role of
chairman.
Harwood Capital, which owns
19 per cent of the company
together with the Wellcome trust,
wanted to parachute Chadwick,
the founder of Aurum Press, into
the role after accusing Orbach of
frittering away 44m on
acquisitions amounting to double
its market value since 2003.
Laurence Orbach co-founded the non-fiction book publisher in 1976
MAYOR of London Boris Johnson yester-
day unveiled increases to the cost of
public transport in the capital for
2013 amid accusations that the tim-
ing of the news was planned to coin-
cide with the US election result.
Fares on the Underground, DLR,
buses and suburban rail services
will rise by an average of 4.2 per
cent in the new year, above the
rate of inflation.
The cost of a weekly
Zones 1-2 travelcard will
rise by 1.20 to 30.40,
while the price of a sin-
gle tube ticket for the
same area will cost
2.80, up 10p.
A one-way peak
ticket for Zones 1-6
Johnson orders
above inflation
fare increases
BY JAMES WATERSON
will hit 5 for the first time.
Lib Dem Assembly Member Caroline
Pidgeon accused the Mayor of attempt-
ing to bury bad news by releasing
details of the hikes yesterday. But a
Transport for London spokesman insist-
ed that the announcement came imme-
diately after a board meeting that had
been arranged months in advance.
Meanwhile the cost of joining the
Barclays Cycle Hire scheme nick-
named Boris bikes will double
from 45 to 90 a year. TfL say
this will help support
future expansion of the
scheme and represents
the fact that cycle hire
pricing was set very low
at the beginning.
Johnson said the rises will
be used to fund investment
9
NEWS
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LONDON TURNS UP THE HEAT ON FARES IN 2013
Up Up Up
Tube Zone 1-2
Single Peak on Oyster
Annual cycle hire
membership
Bus
Single on Oyster
was 2.70 was 45 was 1.35
1.40 2.80 90
3.7% 3.7% 100%
e e
Zone 1-2
weekly travelcard
Zone 1-6
annual travelcard
30.40
2,224
was 29.20
was 2,136
AGEAS UK, the British arm of the
Belgian insurance giant, yesterday
announced its best ever results as
pre-tax profits jumped 36.4 per
cent to 106.7m for the first nine
months of this year.
Total income crept up by less
than one per cent but a strong
underwriting performance allowed
profits to surge.
Barry Smith, chief executive of
Ageas UK, told City A.M. that his
firm has benefited from the
decision to focus on profitable
areas such as motor cover.
Were growing where we see
attractive markets and not chasing
business where we dont see
growth, he said. In domestic
property weve deliberately
increased prices to take into
account assumptions on weather
events, which has culminated in a
reduction in [total] premiums.
While income from car
insurance jumped 15 per cent to
489.7m during the period,
household premiums dropped 9.7
per cent to 209.2m.
The fast-growing firm, which
already operates a joint venture
with Tesco Bank, is in the process
of buying French insurer
Groupamas UK business.
Once the deal completes Ageas
UK will becomes the fifth largest
general insurer in Britain.
Ageas UK
profits hit
record high
BY JAMES WATERSON
BDO and PKF are in advanced talks
to merge their UK operations, the
accountancy and advisory firms
revealed yesterday.
A tie-up, which is expected to take
place early next year, would give
the group extra firepower to com-
pete with Grant Thornton for mid-
market audit and business advisory
clients.
The firms said the enlarged com-
pany would have 3,500 people
working across the UK, with rev-
enues close to 400m a year. Their
global arms are expected to remain
separate.
Last month, Grant Thornton post-
ed revenues of 417m and repeated
its goal to reach 500m within
three years.
PKF, which lists mining, social
housing and the football industry
among its specialisms, said the tie-
up would help the companies grow
in their mid-market heartland.
The group gave a gloomy forecast
last month, posting a three per
cent fall in revenues to 103m and
BY MARION DAKERS
warning the economic downturn is
hampering activity in professional
services.
BDO managing partner Simon
Michaels was nevertheless keen to
highlight growth opportunities in a
statement yesterday: Our two
firms share a closely-aligned vision
to lead in the mid-market, as well as
similar cultures and a commitment
to deliver exceptional client serv-
ice.
In the latest Morningstar rank-
ings, Grant Thornton was the
biggest auditor of Aim-listed clients
with 165 mandates, followed by
BDO with 130. PKF came eighth
with 32.
The new group would still lag
behind the Big Four PwC, Ernst &
Young, KPMG and Deloitte who
dominate audit and advisory work
for Britains blue-chip companies.
The mid-market auditors have
been among the most vocal critics
of this market concentration, giv-
ing evidence to the Competition
Commissions probe into the indus-
try, which is due to report provi-
sional findings in the new year.
BDO is billing its tie-up talks with PKF as the
rst strategic merger in the accountancy
industry for 15 years.
Both rms have struggled to increase
turnover since the nancial crisis, while big-
ger and more diversied groups have weath-
ered the storm. This is a trend echoed across
the professional services, most dramatically
in the accounting problems at RSM Tenon that
have wiped 70 per cent off the rms market
cap in the last year.
Now accountants and auditors appear to be
following law rms in looking for strength in
mergers and acquisitions. There is also an
opportunity for the bean counters in the form
of a Competition Commission probe into the
statutory audit market.
With 99 of the FTSE 100 using the Big Four
rms for their audits (the remaining blue-
chip, Randgold Resources, uses BDO), there
is a growing clamour for more competition.
The CCs investigation could speed up
changes in the rules for auditors, forcing
large companies to put audit contracts out
for regular tender, or putting limits on the
amount of other work auditors can do for
their clients.
But the mid-cap specialists are not yet ready
to challenge the Big Four in this area.
The likes of BDO and Grant Thornton do not
have the expertise within their ranks to sign
off the accounts of a complex multinational
nancial group such as Barclays, for example,
which limits the work they could contest.
M&A would be a route to beeng up sector
specialist teams. While BDO and PKF pride
themselves on their mid-cap heartland, a tie-
up shows they have one eye on the horizon.
ACCOUNTANCY M&A WHY DO THE FIRMS WANT TO MERGE?
Martin Goodchild of PKF (left) and Simon Michaels of BDO (right) hope to grow together
10
NEWS
cityam.com
BDO and PKF in
talks for audit
merger deal
THE WEST Coast rail fiasco has
prompted transport company
FirstGroup to freeze its interim divi-
dend and consider scrapping a
planned rise next year.
First, whose winning bid for the
franchise was discarded by the gov-
ernment in September, said the
resulting uncertainty means it will
review its full year dividend in May.
By then, First hopes the
Department for Transport (DfT) will
have learned more about the seri-
ous flaws found in the franchising
process and set out a timetable to
resume the contests.
The FTSE 250-listed company had
previously committed to seven per
cent annual growth in its investor
payout.
I dont think the franchising
model is completely broken and it is
not something that needs months
BY MARION DAKERS and months of work to fix, said
chief executive Tim OToole.
He said the firm is in active discus-
sions with the DfT to extend Firsts
contract to run the Great Western
franchise, which is due to expire in
April.
Firsts bus division has also had a
tough six months, with a 2.3 per cent
fall in revenues to 572.9m and a 33
per cent fall in operating profits to
39.6m as margins slipped. The divi-
sion is selling off assets as it tries to
adjust to subsidy cuts.
For the group, revenues rose 2.6 per
cent to 3.25bn, while operating
profits slumped 21 per cent to
128.7m, broadly in line with fore-
casts.
And pre-tax profits plummeted 93.4
per cent to 8.4m, which the firm
blamed on poorly performing deriva-
tives, one-off disposal costs and a
favourable pensions charge last year.
Shares in the firm closed 5.1 per
cent lower at 194.9p.
As expected the company is cautious in its outlook statement but is
condent of achieving its goals to enhance performance and deliver improved
growth and returns. The repositioning of the UK division clearly has sig-
nicant execution risk. Rail is a big unknown.
ANALYST VIEWS
The second anniversary of Tim OTooles appointment occurs in doleful cir-

cumstances, with the share price having fallen substantially, prots running well
below the level he inherited, and net debt down only slightly. [But] trading in the
problematic UK bus division does not appear to have deteriorated further.
We sense the tone in the statement in terms of trading is more positive.

However, a lot of uncertainty still exists the economic background remains
tough, there is little clarity of the outcome of the rail franchising review
and the level of debt remains uncomfortably high.
HOW IS FIRSTGROUP
FARING IN A TOUGH TIME
FOR TRANSPORT FIRMS? By Marion Dakers
GERT ZONNEVELD PANMURE GORDON
DOUGLAS MCNEILL CHARLES STANLEY
JONATHAN JACKSON KILLIK & CO

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NEWS
cityam.com
First freezes its
dividend due to
rail uncertainty
SHOP DIRECT, the home-shopping
group owned by the billionaire
Barclay brothers, yesterday said sales
through mobile devices such as the
ipad and smart phones helped boost
annual sales.
The company behind Littlewoods,
isme and very.co.uk reported
that overall sales grew 0.4
per cent to 1.6bn in the
year to 30 June.
Online sales grew by six
per cent in the year
and the group said
75 per cent of total
sales were complet-
ed online.
A third of our
website traffic is
now generated
from mobile
Mobile traffic
drives up sales
at Shop Direct
BY KASMIRA JEFFORD
devices and that figure continues to
grow rapidly across all of our brands,
chief executive Alex Baldcock said.
Looking ahead, we will start to see
real incremental growth in sales from
mobile as we continue to draw on our
unparalleled knowledge of customer
needs and shopping habits.
The sales lift helped to narrow losses
in the period by 37 per cent to
57.7m compared with the
previous year while earn-
ings before interest, tax,
depreciation and amortisa-
tion jumped 66 per cent
to 108.9m. It has also
extended its click and
collect service with
free next day delivery
to over 5,000 stores.
The Barclay Brothers
own Shop Direct
12
NEWS
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CAPITAL & Counties (CapCo) said yesterday
it has snapped up a further 60m worth of
sites in Londons Covent Garden area as it
steps up its expansion in the area.
The group raised 149m in July to
accelerate growth plans and has since
bought properties on Wellington Street,
Floral Street and Henrietta Street with
offices, shops and restaurants including
Sophies Steakhouse.
In its interim statement the developer
said it had made 45 lettings for 6.4m in the
year to 7 November despite seeing a
slowdown during the Olympics. Talks over
its giant Earls Court scheme are still
ongoing and CapCo said it hopes to finalise
the plans in the first quarter of 2013.
As of 30 September gross debt fell to
380m from 450m and net debt reduced to
139m from 397m.
CapCo tightens
hold on West End
BY KASMIRA JEFFORD
Capco owns sites in Covent Garden
UK institutional pension funds
further cut their exposure to equity
markets while boosting holdings of
fixed income and hedge funds last
year, official data out yesterday
reveal.
Pension schemes, which invest
billions of pounds of workers
money in markets, cut average
equity holdings to 38.5 per cent in
2012, a drop from a figure of 61.1
per cent just six years ago.
The data, collected by pensions
watchdog The Pensions Regulator
based on 6,316 UK defined benefit
schemes, also reveals a surprise leap
in the use of hedge funds by
institutional investors.
Investors now give 4.5 per cent of
their cash to hedge funds,
compared to 2.4 per cent in 2011
and 2.2 per cent in 2010.
Historic low yields on UK
government gilts have also driven
schemes away from lending money
to the Treasury, with allocations to
gilts plummeting 40 per cent since
2008. This has been offset by more
allocations to corporate debt and
index-linked securities.
The data is collected from
schemes eligible to enter the
lifeboat fund The Pension
Protection Fund, which rescues
schemes which have collapsed.
Investors fall
out of love
with equities
BY MICHAEL BOW
RATHBONE Brothers, one of the oldest
wealth managers in the City, yesterday
snapped up boutique equity manager
Taylor Young Investment
Management (TYIM) and raised
24.7m from investors to give it addi-
tional firepower for more acquisitions.
FTSE 250 listed Rathbones, which
traces its trading roots back to 1742,
will pay up to 15m for the Cannon
Street-based firm in a deal which will
add 337m to Rathbones asset base, a
boost of two per cent.
TYIMs investment team, led by
Peter Thomson, will join Rathbones
which is headquartered in Curzon
Street, Mayfair as part of the deal.
In a sign of the sectors fluid M&A
activity, the firm yesterday also placed
24.7m of shares with new and exist-
ing investors to fund a warchest for
future buys.
Rathbone Brothers chief executive
Andy Pomfret said: We expect to see
more acquisition opportunities in the
private client industry in the next few
Rathbone raises
25m to power
more takeovers
BY MICHAEL BOW
years.
Raising capital now will give us the
flexibility to take advantage of these
opportunities as they arise and help us
provide more fully-secured loans to
our clients.
The firm bought the asset manage-
ment arm of AIB Jersey at the start of
October, adding 43m of funds.
The deal with TYIM will see the firm
pay 10m in cash, with 2.6m paid up
front and the rest in deferred pay-
ments based on the value of funds
transferring to Rathbones. The total is
capped at 15m.
Leading the placing of nearly 25m of
shares with investors was Martin Green and
Mike Cuthbert, from brokerage rm
Canaccord Genuity, who acted as sole
bookrunner on the deal.
Green is managing director of corporate
nance in the nancial sector at Canaccord
Genuity.
He joined the rm around a year ago from
Bank of America Merrill Lynch having previ-
ously worked at Cenkos and Smith New
Court. Green previously focused on nancial
services in sales before becoming an ana-
lyst, where he was top rated by Thomson
Reuters Extel reports.
He has spent most of his career in corporate
broking. He previously studied electrical
engineering at Royal Navy Engineering
College in Devon.
Working alongside Green was Mike
Cuthbert. Cuthbert is managing director
and head of UK products at Canaccord,
where he is head of the nancials team.
Cuthbert joined Canaccord after the transfer
of the nancials team from Bridgewell,
where Cuthbert previously worked.
Canaccord previously raised money for this
years biggest oat on the Alternative
Investment Market after Eland Oil and Gas
went public with an 118m issue.
ADVISERS CANACCORD GENUITY
MARTIN GREEN
CANACCORD GENUITY
Carlyle Group terminates plan
to snap up troubled Chemring
JUMBO US based alternative asset
manager Carlyle Group yesterday
pulled out of plans to buy British
defence firm Chemring following
months of talks between the two
firms.
Carlyle, which owns Dunkin
Donuts and Hertz car rental, had
already sought two extensions
from the Takeover Panel to try
and strike a deal with the FTSE
250 firm following its initial
BY MICHAEL BOW
expression of interest on 17 August.
Yesterday Carlyle said it had given
up on plans to make an offer.
It follows a profit warning issued
by Chemring at the start of this
month and the resignation of its
chief executive David Price and
appointment of new boss Mark
Papworth in October.
Chemrings shares plunged
almost 14 per cent on the
announcement, their lowest level
for over a year.
In a separate development, Carlyle
yesterday announced it had raised
$1.1bn from investors which it plans
to invest in mid market US firms.
Carlyle will use the cash raised
from investors for its Carlyle Equity
Opportunity Fund. The fund will
inject equity of between equity
capital of $25m to $150m into mid-
market firms.
We see incredible opportunities
in this large and under-served
market and have a great team to
pursue them, Carlyle managing
director Rodney Cohen said.
Rathbones chief executive Andy Pomfret is on the hunt for more bolt-on acquisitions
Rathbone Brothers PLC
1,280
1,320
1,300
1,260
1,240
p 1,240.32
7Nov
SAVINGS and investment group
Old Mutual yesterday revealed a
surge in its emerging markets
focus after growing sales of its
fund management products by
nearly a fifth in the sector in just
three months.
The Anglo-African company,
which merged its UK asset
management arm Old Mutual
Asset Managers with Skandia
Investment Group in April,
increased unit trust and mutual
fund sales by 19 per cent to $2.4bn
Old Mutual sharpens focus on
emerging market investments
BY MICHAEL BOW (1.5bn) for the three months
ending 30 September.
The surge was led by a 62 per
cent increase in sales of its funds
in South Africa, where the firm is
headquartered, and a 26 per cent
increase in the rest of Africa.
The company posted an overall
increase in assets under
management of four per cent,
taking its asset base up to
263.3bn.
Oriel Securities analyst Marcus
Barnard said the results showed
Old Mutual to be an emerging
market growth story.
13
NEWS
cityam.com
INDIA-focused Vedanta reported an
almost 50 per cent jump in first-half
profit yesterday, boosted by record
output from subsidiary Cairn India.
Earnings before interest, tax, depre-
ciation and amortisation for the six
months to September came in at
$2.6bn (1.62bn), driven by record
production at Cairn India, which was
acquired last year.
Vedanta said earlier this year it
planned to overhaul its network of
subsidiaries and create an umbrella
unit for its assets. The miner said yes-
terday that the streamlined group
structure is on track to complete by
the end of 2012.
Revenue over the six months came
in at $7.5bn for the FTSE 100 miner,
up 14 per cent year on year.
However, divisional profits from its
individual base metals sank. Zinc
profits fell 27 per cent over the peri-
od, while profits from copper fell 28
Vedanta profits
surge as firm
rejig nears end
BY CATHY ADAMS
per cent. Iron ore profits sank 63 per
cent over the six months to
September, largely due to a year-long
ban on iron ore mining in some
Indian states.
We are operating in challenging
market conditions with tapering
global growth, and emerging mar-
kets continue to be the major contrib-
utor to growth, said chairman Anil
Agarwal yesterday.
Shares closed down 2.31 per cent at
1,099p.
Vedanta Resources PLC
1,140
1,120
1,160
1,180
1,100
p
1,099
7Nov
GOLD miner Randgold Resources
said profit sank 15 per cent over
the third quarter, as it warned
output for the full year would
come in at the lower end of
expectations.
Profit for the FTSE 100 miner
came in at $121.3m, down 15 per
cent from the previous quarter.
Gold output fell three per cent
in the three months to September
to 210,534 ounces.
Its Tongon mine in the Ivory
Coast, which has underperformed
this year because of power
Randgold warns over output for
2012 as production issues weigh
BY CATHY ADAMS problems, will cause annual
output to be at the bottom end of
guidance around 825,000
ounces and costs to be higher
than anticipated, Randgold said
yesterday.
Chief executive Mark Bristow
said he expected production to
ramp up in the fourth quarter.
Production and costs for the final
quarter are forecast to again show
significant improvements, he
said.
Shares in Randgold Resources
fell 6.4 per cent yesterday to close
at 6,950p as investors were
disheartened by the results.
14
NEWS
cityam.com
Chief executive Mark Bristow described the third quarter results as a mixed bag
BOTTOM
LINE
MARC SIDWELL
V
EDANTA shares have been on
quite a ride this year. Over the
last three months, the shares
have outperformed the FTSE
100, up some 10 per cent, but within
that timeframe they also spent late
August and early September down
more than 10 per cent. Over the year
to date, a massive rise of 40 per cent
by March fell back in line with the
index by mid-May, and Vedanta then
spent June to September
underperforming, before starting its
current climb back into positive
territory.
Yesterdays results were in line
with expectations, and didnt move
the Indian mining and resources
groups shares much at all, but they
did reveal some of the strengths and
weaknesses behind its volatility.
First and foremost, thank
goodness for oil. Aluminium and
metals mining might be what comes
to mind first when thinking about
Vedanta, but its majority stake in
Cairn India, acquired at the end of
2011, gave the group a welcome
exposure to the upside of oil and gas
prices even as metals suffered. The
average price of aluminium in the
first half of the year was down 22
per cent. Lead was down 21 per cent,
zinc 15 per cent and copper 14 per
cent. Vedantas revenues for the first
six months of the year nevertheless
managed to be up 14 per cent to
$7.45bn (4.66bn), largely thanks to
the addition of $1.63bn in revenue
from Cairn India. Profit before tax
was up 16 per cent, to $1.06bn.
This goes to show the power of
diversification, but putting your
eggs in more than one basket also
brings expense and added
complexity. Vedanta has also had to
spend the year engaged in a process
of corporate simplification.
Announced in February, this process
is on track for completion by the
end of the year according to
yesterdays release, if Indias high
court approves. The merger of all
Vedantas Indian assets into Sesa
Sterlite should, it promises, offer
significant synergies, as well as
creating a company big enough to
compete at the highest level. It must
hope all that will help with debt
reduction, with net debt down only
about two per cent over the last six
months from $10.06bn to $9.84bn.
But trusting restructuring to
bring the sort of bounty to Vedanta
in 2013 that the addition of Cairn
gave to 2012 would be naive. And it
will take a sustained recovery in
metals prices to bring that share
price volatility into line.
STORM WARNING
Shipbrokers Clarksons is another
company finding its fortunes at the
mercy of the global economy. Its
shares fell yesterday on a profit
warning that admitted to even
choppier waters than those for
which the firm had prepared.
Clarksons shows the value in such
tough markets of being a global
player, pointing out that it has seen
increased transaction volumes in
most of its broking operations and
grown market share in most areas.
Yet it also reveals the perfect
storm that is the current global
economy. Slowing trade, a weakened
dollar, declining transactions for its
specialised financial services are all
playing a part in making life
difficult. Apparently Clarkson
Research Services is still growing
well, presumably as clients try to
find out exactly how much worse
things are going to get.
Global economic woe is testing even the biggest firms
SHIP broker Clarksons warned
yesterday that the gloomy economic
outlook and arid debt markets have
dried up business, sending its
shares down 8.7 per cent to 11.87.
The 150-year-old company said
freight rates and sales volumes have
continued to fall since July,
prompting it to lower expectations
for its full-year results.
Clarksons has consistently
highlighted the demand/supply
imbalance and this remains a
dominant feature, as does a lack of
available debt amidst general
weakness in capital markets, it said
in a statement.
While transaction volumes across
most of the firms broking business
have seen an uptick, this has been
offset by the weakness of the dollar
against sterling.
The firms boutique shipping
investment bank, Clarkson Capital
Markets, is also suffering very low
levels of activity.
Analysts at Panmure have cut
their operating profit for the year
from 27.5m to 24m, but remain
hopeful that Clarksons will be able
to capitalise on the economic
recovery as it picks up pace.
Clarksons sees
choppy waters
for ship broking
BY MARION DAKERS
15
NEWS
cityam.com
GERMAN Chancellor Angela Merkel
last night met with David Cameron in
the hope of brokering a deal on the
EU budget as the Prime Minister
promised to take a very tough
approach to the negotiations.
Cameron said yesterday that
attempts to push through a budget
increase at the meeting of EU leaders
on 22-23 November were completely
ludicrous amid domestic spending
cuts. The European Commission is
BY JAMES WATERSON
seeking a 5.8 per cent rise.
Berlin is concerned that Britain is
increasingly happy to play a bit-part
role in Europe. Ahead of the talks
Merkel said: I want a strong Great
Britain inside the EU. I cannot
imagine a Europe without Britain.
Cameron is in a difficult position
following last months defeat in the
House of Commons. Eurosceptic Tory
rebels collaborated with Labour to
pass an amendment demanding a
real-terms cut in EU spending
between 2014 and 2020.
Angela Merkel last night enjoyed a working dinner with David Cameron at Downing Street
Prime Minister gives backing
to Microsoft work programme
DAVID Cameron yesterday
welcomed an initiative from
Microsoft that aims to help
300,000 young people gain work
skills over the next three years.
The Prime Minister met with
the Microsoft chief executive Steve
Ballmer and said the Get On
scheme is the kind of support we
need from business to inspire,
provide skills, and create
meaningful opportunities in the
industries that will drive our
economy forward in the future.
A large proportion of the
schemes headline figure can be
ascribed to non-direct forms of
BY JAMES WATERSON
training, including the 30,000
people aged 16-24 year olds who
will receive work
inspiration sessions.
However it will also
include 4,000 paid
apprenticeships, 10,000
places on pre-
apprenticeship
training schemes,
as well as 1,000
positions for
graduates who
failed to get a job
at Microsoft but
can be placed with
other technology
firms.
The news comes as
official figures released yesterday
appear to show a decline in the
number of people being referred to
the governments flagship Work
Programme scheme.
Around 877,880 people were
involved in the programme
between July 2011 and June
2012, which offers financial
incentives to organisations
who place the long-term
unemployed in jobs.
But the number of
monthly referrals appears
to have declined on a regular
basis since the start of 2012.
Microsofts Steve Ballmer said
his firm has a company-wide
commitment to youth
Merkel attempts to make peace
with Cameron over EU spending
for the 2012 ceremony, Hodge
swooped the award for financial plan-
ner of the year for the fourth year in
succession.
This was the 17th incarnation of the
awards and once again planners from
a range of categories donned their
dinner jackets to receive gongs. They
included investment company plan-
ner of the year, won by Allan
Harragan of Grangewood Financial
Management; and investment plan-
ner of the year, which was won by
Robin Keyte from Keyte Limited
Chartered Financial Planners.
Left to right: James Rainbow,
marketing director at Schroders;
Matthew Hodge, senior manager
on the wealth advisory team at
PricewaterhouseCoopers and City
A.M. columnist John Inverdale
16
cityam.com
cityam.com/the-capitalist
THECAPITALIST
The rogue trader turned academic
Alexis Stenfors (pictured below)
made his first public speaking
appearance last night at the SOAS
campus in Russell Square. The former
proprietary trader at Merrill Lynch was
famously banned in 2010 by The
Financial Services Authority from
working in the City for five years.
Stenfors was at the London
university last night to
present a seminar on
Endogenous Deception
however The Capitalist
hears the traders planning
to attend were keen to hear
him explain away
some of the
actions he took
in his former
life as a
trader.
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
BEAR GRYLLS IN DOCKERS
ALPHA KHAKI
ANNABELS private members club in
Mayfair was where the most eligible
people in the land gathered yesterday
evening, in order to celebrate the
publication of Tatlers Little Black
Book.
The Capitalist was pleased to spot
some City names on the inaugural
most wanted list, and indeed just as
many business bachelorettes as bach-
elors gracing the pages.
In the solicitor corner was Lord
Elcho and Leeds graduate turned
Allen & Overy trainee Chelsy Davy;
whilst Net-a-Porter founder Natalie
Massenet and Burberry bigwig Sarah
Manley represented the retail sector.
Will Wells was the lucky young hedge
funder making the list, alongside
James Rothschild who is apparently
gruff in a rather sexy way and
quiet. Form an orderly queue ladies.
Net-a-Porter founder
Natalie Massenet
(left), James
Rothschild (above),
Sarah Manley the chief
marketing officer at
Burberry (above
right) and Allen &
Overy trainee lawyer
Chelsy Davy (right)
Hodge top dog
at the Financial
Planner Awards
Not one, but two City book
signings this week! Firstly
former world number one golfer Sir
Nick Faldo will be signing copies of his
new book,A Swing For Life, at
Waterstones in Leadenhall Market
today. This is Faldos only UK signing,
so to score a personalised present in
time for Christmas, head down there
promptly at 12.30pm. Secondly, one
for the girls and boys recent Olympic
gold medallist Jessica Ennis will be
signing copies of her new book,
Unbelievable, on Friday at 1pm at
Waterstones in Canary Wharfs Jubilee
Placeshopping centre.
The most eligible people in the
City: Tatlers Little Black Book
MATTHEW Hodge at PwC must be a
very fine planner indeed, or else he
has some excellent friends at Money
Management, which run the annual
Financial Planner of the Year awards.
Over at the Mandarin Oriental in
Knightsbridge, which was the venue
IN BRIEF
Serco buys out Oz maritime firm
nServices firm Serco has agreed to
buy the remaining 50 per cent stake in
Australian defence and marine
services firm DMS Maritime for
A$106m (68m) in cash. Serco said
the deal with one of Australias largest
maritime service operators would
strengthen its position as a defence
services provider in the country.
Sales rise at Spirax-Sarco
nValve maker Spirax-Sarco yesterday
said organic sales were up six per cent
in the four months to October,
boosted by double-digit sales growth
in the Asia Pacific region and
subsidiary Watson-Marlow. Operating
profit was eight per cent ahead. The
engineer also said it had bought a
Chilean distributor for 3.3m.
RPS on track to meet targets
nNatural resources, land and
property consultancy RPS Group is on
track to meet its full-year
expectations, it said yesterday. Results
in the nine months to September were
well ahead of the same period in
2011, the consultancy added, boosted
by strong performance in its energy
and energy infrastructure markets.
INCOMES soared across the whole
of British society over the past 25
years, according to a report pub-
lished yesterday by the Office for
National Statistics.
Even the financial crisis only
knocked wages by a fraction of the
huge leap experienced between
1986 and 2007, the study showed.
Average wages even after
accounting for inflation jumped
62 per cent for full-time employees
from 1986 to 2011.
But from 2007 to 2011 the average
wage fell by 3.2 per cent.
Top earners saw wages almost
double overall, with the top 10 per
cent earning 26.75 per hour in
2011, compared with 14.78 in
1986, after controlling for inflation
Meanwhile at the other end the
Long boom in
incomes from
1986 to 2007
BY TIM WALLACE
bottom 10 per cent earned 7.01 an
hour last year, up 47 per cent over
the 25-year period.
The introduction of the minimum
wage had a major impact from 1998
onwards, although pay had
increased considerably in the 12
years before that pay for the bot-
tom one per cent jumped 15 per
cent from 1986 to 1998, then anoth-
er 51 per cent from 1998 to 2011.
The City provided a particular
boost to wages in London 36 per
cent of those in the capital are in
the top 10 per cent nationally by
earnings with pay of over 26.75 per
hour.
But financial sector workers are
not the highest paid on average
that title falls to airline pilots and
flight engineers who earn an aver-
age of 44.49 per hour, excluding
overtime.
Quantitative easing decision
on a knife edge, say analysts
THE BANKS decision whether or
not to expand the quantitative
easing programme could go
either way, analysts said yesterday.
Weak business surveys and
gloomy industrial production
data could push the bank to add
25bn or more to its gilt portfolio,
analysts said, but better-than-
expected GDP growth would push
rate-setters in the opposite
BY BEN SOUTHWOOD
direction.
City A.M.s shadow MPC were
unanimous in voting to keep rates
on hold, but in an indication of
how tight the decision could be
three members voted to expand
quantitative easing (QE).
It will be a close decision at
todays monetary policy
committee (MPC) meeting, said
Vicky Redwood at Capital
Economics. We think that the
chances of more QE have slipped a
touch below 50/50, and if the MPC
does vote for more QE, it might be
25bn rather than 50bn.
Howard Archer at IHS Global
Insight, agreed with Redwood that
rising inflation and the positive
GDP figures were likely to sway
the balance against further QE.
He expects the Bank will
increase the stock of QE by 50bn
at some point in the first quarter
of next year but he said gloomy
data could prompt an early move.
17
NEWS
cityam.com
To celebrate INGs continuing association with arts charity The Discerning Eye,
ING Commercial Banking has teamed up with CityAM to offer you the chance
to win up to 1,000 of art. The ING Discerning Eye, with its slogan new artists,
new audiences, showcases the work of unknown artists alongside their more
established contemporaries.
This year a total of 485 pieces of art, representing the work of 184 artists, has
br clo|d by rorirr| gurc ror |l ur| world |o go or clow. Euol
selector will use their own dedicated gallery space to display their choices, pro-
viding a unique range of themes which has earned the exhibition an enviable
reputation among art lovers and collectors alike. All the art on show is for sale.
For a chance to win 1,000 to spend on the artwork of your choice from the ING
Discerning Eye exhibition, simply answer the question below:
What is the slogan of the ING Discerning Eye Exhibition?
Please send your answer to win@cityam.com
Terms and conditions
The winner will be entitled to choose a painting from the ING Discerning Eye exhibition up to the value of 1,000. The prize is
non transferable, non negotiable and no cash alternative is offered. Entry to the prize draw is free and is open to anyone aged
18 years and over resident in the UK, except employees of ING, their families, agents or anyone else professionally associated
with the draw. Only one entry per person. The closing date is midnight on Sunday 11 November 2012. The winning answer
will b druwr u| rurdor ror ull ligibl r|ric roivd urd |l wirrr will b ro|id by lor or Morduy 1. Novrbr.
The winner must be available on Tuesday 13 November at the Mall Galleries in London to choose their painting. ING assumes
no responsibility and is not liable for any costs, charges or expenses which the winner may be required to pay at any time in
connection with the prize. The winner, by accepting the prize, agrees to participate in non paid publicity accompanying or
rcul|irg ror |lic druw i rquird. Tl Edi|or'c doicior ic rul ir ull ru||rc oororrirg |lic roro|ior. No oorrcordro
will be entered into about a decision regarding eligibility. ING reserves the right to suspend, cancel, or amend this promotion
and/or review and revise these terms and conditions at any time without giving prior notice and by continuing to take part in the
promotion subsequent to any revision of these terms and conditions, entrants shall be deemed to have agreed to any such new
or amended terms. These terms and conditions are governed by and construed in accordance with the laws of England and
Wales and the English Courts will have exclusive jurisdiction to determine any proceedings in connection with this competition
ING Discerning Eye, Mall Galleries,
London SW1Y 5BD 15-25 November,
10am to 5pm, entrance free.
Follow us on Twitter : INGDiscEye
and join our Facebook group : ING Discerning Eye
Anita Klein
The Gift (detail)
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g
e
s
f
r
o
m
2
0
0
1
t
o
2
0
1
1
PAY HAS RISEN FOR EVERYONE
5
0
-5
0 10 20 30 40 50 60 70 80 90
PAYDISTRIBUTIONPERCENTILES
WAGES HAVE FALLEN SINCE THE CREDIT CRUNCH
PILOTS & FLIGHT ENGINEERS
EARN THE MOST
44.49
PER HOUR
BAR & WAITING STAFF
ARE THE WORST PAID
6.25
PER HOUR
KITCHEN & CATERING ASSISTANTS
ARE NEXT ON
6.30
PER HOUR
CEOs & SENIOR OFFICIALS
ARE NEXT ON
39.24
PER HOUR
THE TOP 1%
OF EARNERS ARE PAID
61.10
PER HOUR
117% MORE THAN IN 1986
THE TOP 1%
OF EARNERS ARE PAID
10.3 X
THE WAGES OF THE
BOTTOM1%
THE BOTTOM 1%
ARE PAID
5.93
PER HOUR
UP 70%ON 1986
MORE THAN 1/3
OF WORKERS IN THE
LIVE IN LONDON
TOP 10%
BY
EARNINGS
No new quantitative easing and no further cut to rates. The money supply has bounced back. But the main reason why QE needs to be
halted - despite worrying signs that the economy has ground to a halt again is that it has created a false markets in gilts and blurred
the distinction between monetary and fiscal policy.
CITY A.M. | OUR SHADOW MPC VOTES 6-3 AGAINST MORE QE
ALLISTER HEATH | CITY A.M.
At longlast broadmoney supply is showingsufcient
growth to negate the needfor further QE, so no change this
month andlets hope QE has nally come to an end. But we
needcurrent growthto be sustainedfor that. Holdrates.
GRAEME LEACH | INSTITUTE OF DIRECTORS
Holdrates andQE. Weaker business surveys suggest that
the improvement in thirdquarter GDP will not last. Still,
concerns about QE's effect in supportingination are suf-
cient to warrant a break in policy easingthis month.
GEORGE BUCKLEY | DEUTSCHE BANK
50bn more QE. The rise in GDP in the third quarter was
just due to temporary factors and the recent business sur-
veys suggest that the underlying recovery is still strug-
gling. Leave rates on hold, but with a bias to cut further.
VICKY REDWOOD | CAPITAL ECONOMICS
50bn more QE and no change to interest rates. More
stimulus is needed. The UK has seen no growth for a year
and a return to contraction in the fourth quarter seems
likely. The outlook for next year is weak.
ROBERT WOOD | BERENBERG BANK
Holdrates, suspendQE. Money growth has pickedupglob-
ally andat home, suggestingstronger economic activity in
early 2013 andrmer ination further ahead. Andthe
Fundingfor LendingScheme is still feedingthrough.
SIMON WARD | HENDERSON
Hold interest rates and further QE but keep under review.
UK indicators are mixed, and US economic prospects are
uncertain due to the scal cliff, while the Eurozone remains
in political paralysis.
VICKY PRYCE | FORMER GOVT ADVISER
Hold bank rate. Extend QE by another 50bn as uncer-
tainties about the durability of the uk recovery, US scal
cliff and challenges in Europe still persist and could
intensify.
TREVOR WILLIAMS | LLOYDS TSB
No change on either count. The decision aroundfurther QE
in November is a nely balancedone. The advent of
Fundingfor Lendingmakes it easier to holdoff, but the
underlyingeconomic data remain fragile.
ROSS WALKER | RBS
THE BASEL rules on bank capital lev-
els are built on the shakiest of foun-
dations, the Bank of Englands Andy
Haldane warned yesterday, arguing
that banks have too little certainty in
how to risk-weight their assets.
The official also told MPs and peers
that insurance rules are similarly
poorly designed, bank bondholders
should get votes like shareholders
do, and that banks should be threat-
ened with full separation if the
ringfence fails to improve behaviour
in retail units.
And the director of financial stabil-
ity warned the Bank of England itself
needs to become more accountable
to parliament, in a move that shows
disagreement with other senior
Bank figures, including outgoing
governor Sir Mervyn King.
That suggests senior staff are gain-
ing confidence to speak out against
Sir Mervyns management, and, com-
bined with three critical reports out
last week, points towards a shake-up
of Bank governance under the new
leader next year.
Basel III is a big
improvement on
Basel II, but both are
built on the shakiest
of foundations, he
told the Parliamentary
Commission on
Banking Standards
(PCBS).
Haldane attack
on inconsistent
Basel risk rules
BY TIM WALLACE
The denominator of the capital
ratio is a measure of a assets, weight-
ed by risks, which the banks have
done the weighting for.
The range of capital held for the
same asset can differ by a factor of
three or four or more between banks.
As long as those inconsistencies exist,
Basel III faces fundamental problems.
Haldane also said regulators should
force banks to clean up their opera-
tions arguing that the moves to put
retail and investment operations at
arms length from one another could
be made even more extreme, split-
ting banks in two if they do not
behave as he wants.
The ring fence will need to be
patrolled whatever height and wher-
ever it is put, to ensure full imple-
mentation of both the letter and
spirit of the rules, PCBS chairman
Andrew Tyrie told City A.M. That will
mean the Commission will want to
examine whether some further statu-
tory support is required.
Haldane also argued that the tech-
nological capability now exists for a
radical shift to a utilities model of
banking. He wants all deposits held
in one location, with banks servicing
customers who are free to shift
from one to another, in the same
way as energy electricity and gas
firms operate.
University gap between rich
and poor narrows, report says
THE GAP between the
university attendance of the
richest and the poorest
narrowed between 2004-5 and
2009-10, a think tank said
today, just as the tuition fee
cap was raised.
The gap in higher education
participation between the
best-off and worst-off state
school students narrowed
BY BEN SOUTHWOOD
from 40 per cent in 2004-5 to
37 per cent in 2009-10, the
Institute of Fiscal Studies (IFS)
revealed today, with much of
the decline after the tuition
fee cap was raised to 3,000 in
2006-7.
This could be down to the
fact that the reform was more
generous to students from
more deprived backgrounds
and hit more privileged
students relatively hard
contrary to popular belief
the IFS tentatively suggested.
The fact that the previous
tuition fee cap rise led to a
short-term dip, followed by a
long-term return to growth,
suggests the current dip could
also be temporary, the report
authors speculate cautiously.
Another report from the IFS
showed how top universities
were providing more extensive
support for poorer students.
Ex-policymaker wants Bank
to plan for interest rate hike
THE BANK of England should
abandon quantitative easing
(QE) for the time being, and
plan on bringing the base
interest rate back up towards
sustainable levels by mid-
2015, ex-ratesetter Andrew
Sentance said today.
The risks of the banks very
loose monetary policy are
BY BEN SOUTHWOOD
beginning to outweigh the
benefits, Sentance argued,
especially when the economy is
on its way to recovery. Keeping
interest rates so low is distorting
economic decision-making, and
keeping inflation above target,
Sentance says in the PwC report.
These claims came in tandem
with optimistic forecasts for
economic growth in 2013
growth of 1.8 per cent. This
projection is a 0.1 percentage
point improvement on PwCs last
forecast in July, and comes well
above consensus forecasts,
running at 1.1 per cent.
We believe that our views are
justified in the light of the latest
figures that showed a healthy
rebound to GDP growth of one
per cent in the third quarter,
said chief PwC economist John
Hawksworth.
TOP banking official Andrew
Bailey yesterday denied claims
that judgement-based regulation
will lead to uncertainty and
arbitrary controls in the banking
sector, instead arguing it
represents the best way to reduce
complexity in regulations.
Regulators have faced criticism
for promoting a shoot first, ask
questions later model, as it could
give excessive powers to the
authorities and undermine banks
efforts to innovate.
But Bailey a director at the
Financial Services Authority, who
will sit on the Bank of Englands
new Financial Policy Committee
said exercising judgement will
Bailey says his judgement is
best chance for banking sector
BY TIM WALLACE
end both the box-ticking culture
among officials, and the efforts of
banks to sidestep onerous rules
by gaming the exact letter of
regulations.
The art of supervision is to
look at a situation from several
angles and seek thereby to
identify weaknesses. Good
supervision is about judgment,
he told an audience at a Bank of
America Merrill Lynch conference.
And the top regulator also said
that banks should hold more
capital against unlikely but
damaging events, such as a
Eurozone breakup, despite
worries that forcing banks to hold
large amounts of capital can
damage lending and so economic
growth.
18
NEWS
cityam.com
Official Andrew Bailey said banks should hold more capital against the risk of a euro collapse
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Andy Haldane said the Bank
needs to be more accountable
IRISH airline Aer Lingus said
yesterday its operating profits
slipped in the third quarter, but
that year to date earnings remain
almost 30 per cent ahead of last
year.
Operating profits fell 2.9 per
cent to 90.9m (72.6m), the carrier
said, while revenues rose 5.7 per
cent to 460.8m.
Aer Lingus also posted strong
yield growth, in spite of an eight
per cent rise in operating expenses
thanks to fuel and tax hikes.
We remain focused on
achieving continued cost savings
and greater efficiency within the
business against a challenging
macro-economic backdrop, said
chief executive Christoph Mueller.
Revenues rise
at Aer Lingus
BY MARION DAKERS
STOBART, the transport and
infrastructure group, is
considering the launch of a retail
bond to raise around 25m.
The terms of the issue have yet to
be finalised and, according to
informed market sources, the issue
might yet be pulled over a disagree-
ment over the rate of interest
Canaccord is suggesting the group
pays for its money. Canaccord is
advising on the deal.
The bond issue, which would
carry with it a coupon of five per
cent or more, would allow Stobart
to retire some of its existing bank
loans from and keep its average
interest rate around five per cent.
Stobart eyes
25m bond
BY DAVID HELLIER
The new
jobs website
for London
professionals
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IN BRIEF
Ericsson cuts 1,550 Swedish jobs
nEricsson yesterday announced a
plan to cut 1,550 jobs at its head office
in Sweden around nine per cent of
the 17,700 people employed there
following a third quarter profit fall of
43 per cent to 2.18bn kronor (203m).
Tomas Qvist, head of human resources
at the Swedish telecoms giant, called
the redundancies inevitable and
said he needed to focus on reducing
costs as sales dry up.
Cognizant profits up a fifth
nIT outsourcing firm Cognizant
yesterday reported a 22 per cent rise
in profits in the third quarter of the
year. The US-based company, which
provides technology consultancy
services to many blue chip companies,
said growth was driven by more
business from financial services firms.
Cognizant, which employs most of its
staff in India, saw revenue at $1.89bn
(1.18bn) up from $1.6bn last year.
Veolia profits drop 25 per cent
nFrench utility firm Veolia
Environnement yesterday reported a
25 per cent drop in nine-month profit,
as it sought to reassure investors that
plans to reduce debt remained on
track. The waste, water and energy
firm said it could cut debt by up to
3bn (2.4bn) in the fourth quarter by
divesting several small assets, and the
closure of its US waste business in the
coming weeks.
BRITAINS second-largest mobile net-
work O2 saw revenue fall more than
five per cent in the third quarter as
customers held off on renewing con-
tracts ahead of the launch of the
iPhone 5, it said yesterday.
Regulation on roaming charges and
mobile termination rates the
amount networks can charge for calls
to other operators have affected all
of the UKs mobile operators this
year.
However, O2 took a much bigger
hit than its major rival EE in the
third quarter.
O2s turnover was down
5.4 per cent year-on-year
in pound sterling terms
to 1.8bn (1.4bn), com-
pared to EEs 1.5 per
cent fall. O2 was
much more suscepti-
ble to lower industry
charges on phone
calls.
The firm a division
Upgrade delay
and regulation
hit O2 revenue
BY JAMES TITCOMB
of European telecoms giant
Telefonica gained 110,000 mobile
customers on the period last year, as a
rise in new contracts offset people
leaving pay-as-you-go plans. O2 now
has 22.5m mobile customers.
The figures suggest that a short net-
work blackout that hit O2 in the sum-
mer did not damage the company.
The gains came despite a nine per
cent year-on-year fall in contract
renewals as people held off on
upgrades ahead of the launch
of the iPhone 5.
Meanwhile, Telefonica
which also has operations in
Germany, Spain, Ireland,
the Czech Republic,
Slovakia and Latin
America swung to a
profit after losing
money in the quarter
last year. The debt-laden
group has been hit hard
by the recession.
Playtech Ltd
425
420
430
435
415
410
p
425.90
7Nov
Betfair Group PLC
750
740
760
770
730
720
p
764.60
7Nov
THE WORLDS fourth-largest
brewer Carlsberg reported a slight
drop in profits yesterday, but said
it stood by its full-year outlook
after gaining in Russia.
The company said it was
particularly pleased that efforts to
drive its international brands were
improving its market share in key
growth regions.
Our performance was in line
with our expectation and it is
particularly positive to report that
we are back on a growth trend in
Russia, chief executive Jorgen
Carlsbergs bottom line hit by
weather but Russia improves
BY ALEX CROELL
Buhl Rasmussen said.
Eastern Europe and Asian sales
cushioned sluggish trading in
western Europe, which counted
for 55 per cent of group revenue.
Carlsberg said the western
European beer market was
especially challenging due to poor
weather conditions during the
summer.
The group reported a 7.8 per
cent year-on-year increase in sales
to 18.8bn Danish kroner (2bn) in
the third quarter versus an 18.6bn
DKr forecast. Pre-tax profit,
however, fell 20 per cent to 3.15bn
DKr due to restructuring costs.
19
NEWS
cityam.com
Chief executive Jorgen Buhl Rasmussen said he was seeing positive signs in Russia
Betfair pulls out of Germany as
tax on sports bets is introduced
ONLINE betting exchange operator
Betfair yesterday announced it had
pulled the plug on the majority of
its German business after a tax hike
made the operation unworkable.
Due to the way Betfairs model
works, with users staking money
against each other rather than
against the bookie, Germanys
recently-introduced five per cent
tax on sports betting has forced the
company out.
A tax at this rate, if applicable,
would make Betfairs current
exchange model unviable, the
company said.
BY JAMES TITCOMB
Betfair said it had been working
with tax officials to see if it could
continue to operate its exchange
model.
But yesterday it said: The
company is disappointed, however,
that to date the tax authorities have
not been able to agree to an
interpretation of the law that would
allow Betfair to continue to offer
the exchange product.
It will continue to offer its casino,
poker, and fixed odds operations,
although these account for a much
smaller part of the business than
the exchange system.
Approximately four per cent of
Betfairs revenue came from
Germany last year.
The companys share price was
relatively unaffected yesterday, with
Betfair having already highlighted
the issue at its recent earnings.
Playtech hits the jackpot in third
quarter due to casino gambling
PLAYTECH, the company that
provides gambling software to the
likes of bet365 and PaddyPower,
yesterday said gross income was up
32 per cent on last year in the third
quarter, thanks to a strong showing
in its casino gaming products and its
stake in William Hill.
Shares in the London-listed
company, which bases itself in
Estonia, rose as much as 5.7 per
cent on the news yesterday as its
results exceeded forecasts.
Playtechs revenue in the period
was 79.9m (63.8m), thirty per
cent up, while it took in 12.8m
BY JAMES TITCOMB from its 29 per cent stake in
William Hills online business a
rise of 50 per cent.
William Hill is considering
buying back Playtechs share, and
has started the process of valuing it
ahead of a possible offer next year.
Playtechs stake is believed to be
worth around 400m.
Regardless of William Hills as
yet undetermined final decision on
the call option we remain
committed to our important
relationship with William Hill and
the continued success of WHO
going forward, chief executive Mor
Weizer said.
He pointed to mobile gaming as
an important and lucrative growth
area for Playtech, as more people
shift to placing bets on their
smartphones rather than on
personal computers.
FUEL logistics supplier Hargreaves
Services is to mothball the Maltby
mine in Yorkshire, it said
yesterday.
In August Hargreaves warned
that Maltby, which supplies Drax
Groups power station in North
Yorkshire Europes largest coal-
fired plant was at risk of being
mothballed because of worsening
geological problems.
A report subsequently
commissioned by Hargreaves said
that one of the mines coal panels,
which was leaking gas, oil and
water, was not viable on health
and safety, geological and financial
grounds, causing the AIM-listed
firm to close the mine.
Hargreaves Services mothballs
Maltby coal mine in Yorkshire
BY CATHY ADAMS
The closure of the Maltby
Colliery will mean around 500
staff will be at risk of redundancy.
Hargreaves earlier this year
issued a profit warning triggered
by problems at Maltby, which
produces more than 1m tonnes of
coal each year. The company said
that delays in mining a new coal
seam would reduce profit by 12m
to 16m for the year ending May
2013.
Hargreaves said alternative
proposals for Maltby should be
tabled before the end of month, to
be considered by the board.
In September, Hargreaves posted
record profit of 43.1m for the
year to 31 May, up 16.8 per cent
year on year. Revenue over the year
rose 24.6 per cent to 688.3m.
INDUSTRIAL conveyor belt maker
Fenner yesterday posted a spike in
full-year profit, as it bucked the
trend of a spate of bad news from
the engineering sector.
Underlying pre-tax profit rose
30 per cent to 103.9m over the
year to August, boosted by
demand in its core engineered
conveyor solutions division.
The industrial division which
accounts for about three quarters
of Fenners revenue posted
operating profits of 84.4m, up 38
per cent.
Revenue for the FTSE 250
company increased by 16 per cent
to 830.6m over the period.
Strong demand from the oil and
Profits up 30 per cent at Fenner
as it raises dividend by a third
BY CATHY ADAMS gas sector, and higher demand for
its conveyor belts used in coal and
iron ore extraction drove positive
trading conditions for the firm
over the period.
However, Fenner said it had seen
slowing orders from the US coal
sector in the second half of the
year.
Scott Cagehin at Numis
Securities said that he remained
positive for its 2013 prospects due
to Fenners exposure to strong
markets.
Looking forward, we expect
further investment to capitalise on
both organic and acquisitive
growth opportunities, he added.
On the back of strong results,
Fenner raised its dividend by 31
per cent to 10.5p a share.
O2 boss Ronan Dunne saw
110,000 extra customers
20
Wall st plunges
on fears over
US economy
T
HE Dow industrials lost more
than 300 points in a sell-off
yesterday that drove all major
US stock indexes down over two
per cent in the wake of the
presidential election as the looming
fiscal cliff debate and Europes
economic troubles returned to the
forefront.
The Standard & Poors 500 Index
posted its biggest daily percentage
drop since June, with all 10 S&P sectors
solidly lower and about 80 percent of
stocks on both the New York Stock
Exchange and the Nasdaq ending in
negative territory. Both the Dow and
the S&P 500 closed at their lowest lev-
els since early August.
Financial stocks and energy shares,
two sectors that could face increased
regulation after President Barack
Obamas re-election, were the weakest
on the day. The S&P financial index
lost 3.5 per cent, while the S&P energy
index fell 3.1 per cent. An S&P index of
technology shares slid 2.8 per cent as
the stock of Apple entered bear mar-
ket territory.
The Dow Jones industrial average slid
312.95 points, or 2.36 per cent, to
12,932.73 at the close. The Standard &
Poors 500 Index fell 33.86 points, or
2.37 per cent, to 1,394.53. The Nasdaq
Composite Index lost 74.64 points, or
2.48 per cent, to close at 2,937.29.
The S&P 500 closed below the key
1,400 level for the first time since 30
Augu, while the Dow ended under
13,000 for the first time since 2 August.
About 7.81bn shares traded in total.
Contributing to the Nasdaqs decline,
Apple shares fell 3.8 per cent to $558,
off more than 20 per cent from an all-
time high reached earlier this year.
That slump puts the stock of the
worlds most valuable publicly traded
company in bear market territory.
U
K stocks fell sharply yesterday after
bleak forecasts for the Eurozone
economy and fiscal problems in the
United States eclipsed initial relief
over US President Barack Obamas re-
election.
In morning trade the FTSE 100 had hit a
level not seen for nearly two months as the
Obama win fuelled hopes the US Federal
Reserve would maintain its loose monetary
policy.
But the European Commissions forecast
that the Eurozone economy would barely
grow next year kick-started a long slide into
the close for indexes across Europe.
And while investors were relieved over
Obamas victory, they remained concerned
about the US fiscal cliff of about $600bn
in spending cuts and tax hikes set to begin
early 2013, which could jeopardise growth.
The fact that the election had gone
swimmingly, there were no glitches, it was
a clear winner, had helped markets open
higher, Angus Campbell, head of market
analysis at Capital Spreads, said.
Then you get the downgrades to GDP
(gross domestic product) for the euro zone
and then you get the US markets opening
... that turned the focus onto the fiscal cliff
and suddenly you get this huge sell-off.
The FTSE 100 eventually closed down 1.58
per cent, or 93.97 points, at 5,791.63.
No sector was spared the sell-off.
European stocks geared to the economic
cycle gave most ground, with miners, ener-
gy stocks and banks all off 2 per cent.
French bank BNP Paribas managed to
buck the weak trend adding 1.1 per cent,
buoyed by strong quarterly earnings.
Todays movements show us just how
fickle investors are, said IGs David
Madden.
Re-election joy eclipsed by worries
over Eurozone and US economies
BESTof theBROKERS
Aberdeen Asset Management PLC
p 350
345
340
335
330
7Nov 1Nov 2Nov 5Nov 6Nov
333.50
7 Nov
ABERDEEN ASSET
MANAGEMENT
UBS has maintained its
buy rating on the firm
and upped its target price
to 370p from340p, after
raising multiples to reflect
good relative flow
prospects for 2013.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
5,925
5,900
5,875
5,850
5,800
5,825
5,791.63
7 Nov
Blinkx PLC
p 74
72
70
68
66
68.10
7 Nov
BLINKX
Numis has initiated cover
of the video search engine
with a buy rating and a
target price of 104p. The
broker sees scope for it to
produce very strong
revenue growth as its
platforms expand.
Marks and Spencer Group PLC
p 400
398
396
394
392
390
388
386
397.42
7 Nov
MARKS &
SPENCER
Panmure Gordon has
lowered its target price on
the retailer from 389p to
397p after lower than
expected revenue growth
but maintained its buy
rating on the stock.
Deloitte
Michael Lee has been appointed
director of Deloittes analytics
practice. He joins from Detica
NetReveal, and is a specialist in
using analytics to detect and
prevent fraud and financial
crime.
HSBC
Andy Clark has been appointed chief executive at HSBCs
UK asset management branch. He has worked for the bank
since 2005, most recently as regional head of wholesale
for Europe, Middle East and Africa.
KPMG
Emma Wild has been appointed to the newly-created role
of head of upstream oil advisory in the UK. She joins from
Lloyds Bank, where she managed the technical aspects of
its upstream investment portfolio. She has over 15 years
experience in the industry.
Mirabaud
Andrew Lake has been appointed global high yield
manager in the banks asset management division. He
joins from Aviva Investors, where he was head of high
yield portfolio management. Lake has also held roles at
F&C Asset Management and Merrill Lynch, and is also a
qualified barrister.
Reed Smith
Nick Stainthorpe has been appointed partner in the law
firms global structured finance practice. He previously
held the position of senior associate at Freshfields.
Stainthorpe specialises in derivatives and structured
finance.
Boost ETP
The exchange-traded product platform has made two
senior appointments. Saima Parviez joins as head of
marketing from Peel Hunt, where she held the same role.
Marlene Rodriguez joins as a sales executive from BNP
Paribas, where she was an exchange-traded fund trader
assistant.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
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A
S AMERICANS congregated
around their television sets
on election night, all eyes
were on Florida. With its 29
electoral college votes, losing
the state would put an early end to
Mitt Romneys hopes of winning the
White House. But, with quick and
decisive victories elsewhere, it was
clear that President Barack Obama
would win re-election handsomely.
As the Sunshine State continued to
count up the votes into the wee
hours, this thing was already over.
Republicans, who had hoped that
a late surge in enthusiasm for
Romney would be enough, failed to
see the much-hyped talk of
expanding the map into
Democratic states materialise. Big
T
HERE are three things that
matter about the US election
result, seen from my pollsters
point of view. What do we learn
about the role of demographics
against attitudes in determining
outcome? What might the result mean
for the next UK general election? And
why did we get that Mitt Romney
phantom swing?
A lot has been written about how
divided a country the US has become,
with support for the two parties split
down race, age and gender lines. But
looking more closely, are demograph-
ics really the most important angle?
True, YouGovs final survey (of 36,000
Americans, which predicted the result
exactly right) showed a 20 per cent gap
between the genders, with men prefer-
ring Romney by 8 per cent and women
opting for Barack Obama by 12 per
cent. Or look at age: 40 is the crossing
point when one moves from being a
likely Obama voter to a likely Romney
one. And the other big divide is race.
Important, yes, but you could also
argue that demographics are an imper-
fect proxy for the likelihood of holding
cityam.com/forum
Obama won 81 per
cent of those who want
a bigger government
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
22
STEPHAN SHAKESPEARE
It was attitudes not demographics
that determined the US campaign
certain attitudes. Those attitudes are
more important predictors. The exit
poll shows Obama won 81 per cent of
those who believe in a bigger role for
government: he took 87 per cent of
those wanting to preserve or expand
the 2010 health care law and he won 67
per cent of those who think abortion
should be legal. So if I could have just
one piece of information about a ran-
dom voter to predict who they would
choose, it would not be demographic,
it would be their preference for a big-
ger or smaller role for government.
The exit poll also shed light on what
the outcome might be at the next
British election. How has a western
leader survived in the current econom-
ic circumstances? That the economy
was the number one issue in America
is clear: Obama secured 4 per cent of
those who thought Romney would
best handle the economy, and Romney
took 1 per cent of those who thought
Obama would. Not surprisingly, those
who felt better off than they did four
years ago opted for the incumbent (84
per cent) and those who felt worse off
backed the challenger (80 per cent). But
perhaps it was how the largest group
split that was ultimately decisive: those
who felt their financial situation was
about the same voted 58 per cent to 40
per cent in Obamas favour.
This goes against the conventional
model of voting behaviour, which sees
economic conditions as a strong pre-
dictor of outcome. But an answer
makes sense of this: the exact timing of
the economic crash. The exit poll
showed that most blamed the Bush
administration for the mess. David
Cameron could possibly find himself
the beneficiary of a similar effect, as
our polling shows more people blame
Labour than Conservatives for the cuts.
From a simple horse-race point of
view, Obamas victory shouldnt have
come as a surprise. He was consistently
ahead, except for the period after the
first presidential debate. This was the
one time we saw some sheer bad
polling: Gallup, for example, showed a
7 percent Romney lead and even in
their final poll had Romney a squeak
ahead. Most of the others also enter-
tained a big Romney swing, though
they tended to finally converge to
somewhere near the result.
The truth and this is important is
that there never was a swing. We inter-
viewed 33,000 people before the first
debate and re-interviewed 25,000 of
them afterwards. The change was less
than 1 per cent. You cant do better
than large-scale high-response re-inter-
views to measure change. But we found
one interesting detail: those who had
previously said they preferred Obama
were significantly less likely to respond
to the post-debate survey. Perhaps they
felt weakened by the negative buzz
around a bad debating performance.
They hadnt changed their mind, they
just didnt want to talk about it.
So Romneys phantom swing was
entirely an illusion of traditional
polling methodology. That methodolo-
gy is no more random selection than
any other, as people can self-deselect
depending on their attitudes (just as
they can with all other methodologies).
But with panel-based re-interviews you
get more data, and can create better
models.
This may seem an obscure point, but
it matters: phantom swings are excit-
ing but distorting. They plague cam-
paigns. And the overreaction of
commentators could negatively influ-
ence tight races. Perhaps youll permit
YouGov a little smugness: we not only
got the overall result exactly right, we
called all states correctly except for
Florida, where we gave Romney a 1 per
cent lead but which, after all, turned
out to be statistically a dead-heat.
Stephan Shakespeare is chief executive and
co-founder of YouGov.
prizes like Pennsylvania were called
for the President early. Wisconsin,
the home state of Romneys running
mate Paul Ryan, wasnt even close.
Michigan, the state Romney was
born and raised in, quickly turned
Democratic blue. Republicans were
only able overturn Obamas 2008
majorities in Indiana, North
Carolina and Nebraskas second
congressional district. With passions
running high, such little progress
will be hard to stomach.
A second term for Obama brings a
fresh mandate but its never that
easy. There is often talk of a second
term curse, when re-elected
Presidents struggle to enact their
agenda due to scandal or robust
legislative opposition from Congress.
Obama will certainly experience the
latter. Republicans did hold onto
their majority in the House of
Representatives so, when it comes to
resolving challenges like the
countrys looming fiscal crisis,
Obama wont be able to ram
legislation through a friendly
Congress. As the President pointed
out during his victory speech,
elections matter. So do
constitutional checks and balances.
There is now an eerie sense of dj
vu for Republicans. Like the post-
mortem after John McCains defeat
in 2008, talk about reform and the
overall direction of the party have
already started. Its not too difficult
to see why. Senator Lindsey Graham
conceded Republicans arent losing
95 percent of African-Americans and
two-thirds of Hispanics and voters
under 30 because were not being
hard-ass enough. The partys line on
immigration has clearly taken its toll
and alienated Hispanic voters, the
fastest growing demographic in the
country. This does not mean the
Republicans need to surrender their
core principles of small government
and low taxes. But their platform
needs to be reformed and their tone,
perhaps most importantly,
overhauled. Needing to win Ohio
every four years isnt just an accident
of history. Its a stinging indictment
of the Republicans diminishing
appeal.
And yet its not just the
Republicans who need to learn
lessons after Tuesday. Obamas first
term promised much but quickly
became insular, confrontational and
partisan. This breeds hostility and
gridlock, not a legacy. Americans
expect their President to be above
that. In trying times like these, the
office requires it.
Ewan Watt is a Washington, D.C.-based
consultant. You can follow him on Twitter
@ewancwatt
THE WHITE
HOUSE RACE
EWAN WATT
The President has a mandate but must now battle the second term curse
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23
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one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Divided State
[Re: So much for the election. Now America
must regain its mojo, yesterday]
This article is correct. The closeness of this
election (a clear reminder that America is
still a highly divided country) does nothing
to resolve which direction the US should
take. With 48 per cent of the electorate
behind Romney, theres no decisive appetite
among voters for the US to move away from
free market capitalism. But fierce
partisanship also has an unhappy side.
Theres also no appetite for compromise
vital if US leaders are to resolve the
impending fiscal cliff. Democrats and
Republicans must recognise that neither has
a clear mandate to impose their views on
the rest of the country.
Matthew Brawl
Regional growth
[Re: Monetary union is clipping the wings of
regions outside the dynamic South,
yesterday]
Britains regions dont just need new
infrastructure connections to drag them out
of economic stagnation. They need to be
able to set their own tax rates, to liberalise
their own business regulations, and to make
themselves more attractive to investors. This
would be better for all of us. London and the
South East may currently be dynamic
enough to support other regions through
internal transfers. But if we persist with the
burdensome levels of taxation that these
transfers involve, that dynamism could
easily disappear to other more attractive
locations.
Richard Sedgwick
T
HE fortunes of UK financial
services hang in the balance,
as the future of a European
banking union is resolved. If
we make the right choices
now, this could be an opportunity to
secure advantages for Britain.
By some measures, financial servic-
es account for 10 per cent of our GDP
and over 10 per cent of our tax take.
Our financial services also contribute
significantly to the EU; they make up
36 per cent of the EU wholesale mar-
ket and 61 per cent of the EUs net
exports in financial services.
But since the financial crisis, some
EU politicians have publicly blamed
Anglo-Saxon capitalism for the con-
sequences of their own profligate
government spending. There are
now 49 EU regulations and measures
coming down the pipeline, many
aimed at restricting financial servic-
es activity.
With impending banking union,
there is a real risk that Eurozone
countries will begin to act as a bloc;
outvoting the UK on financial issues,
particularly in the European
Banking Authority, which already
gives the Eurozone a majority
through qualified majority voting.
We need a robust response. This
months negotiations over banking
union offer a once-in-a lifetime
opportunity for the UK to secure pro-
tections and advantages for UK finan-
cial services. We should be looking
for three commitments in return for
consenting to European banking
union.
First, legal safeguards for the Single
Market must be introduced to ensure
Eurozone members cannot put up
protectionist barriers against British
financial products and services.
Second, we must secure an emer-
gency brake for the UK in recogni-
tion of the strategic importance of
the sector. This should allow Britain
TOP TWEETS
Im sceptical of grand theories about
Obamas victory. The vote was close. Both
campaigns had strengths and weaknesses.
@SamuelCoates
The first thing on Obamas to-do list is the
fiscal cliff. A series of postponed decisions
are coming due in January.
@j_w_wilson
Whatever you think about Obama, hes
certainly inspirational. If only there was a
similar politician in Britain.
@littlebig_voice
Hopefully the Republican House of
Representatives can hold the United States
together for four more years.
@realDonaldTrump
Will a second presidential term for Obama
improve prospects for the global economy?
YES
Markets like certainty, and the fact that President Obama won a
definitive victory must be taken positively. With little change in
the make-up of Congress, there is a good chance for a resolution
to the issue of the fiscal cliff before the end of the year. However,
the fiscal cliff may turn out to be just a distraction: even if
politicians manage to find a short-term solution, investors are
likely to turn their attention back to the fundamental outlook,
which is far from resolved. Tough negotiations could lead to a
drop in equity prices, and although valuations are not as
attractive as they were a year ago, that could represent a good
buying opportunity. We may have to wait until next year for
longer-term fiscal challenges to be addressed. With Obama in his
last term, and the Republicans failing to seize the Senate, there is
scope for compromise and substantive agreements.
Dan Morris is global strategist at JP Morgan Asset Management.
Dan Morris
NO
Ishaq Siddiqi
Although Obamas victory in the election has removed political
uncertainty, the political and economic challenges facing the US
are still concerning. US stock markets have not welcomed
Obamas victory as cheerfully as their European peers, which
seem content with the fact that no change in US leadership means
no change in the current Federal Reserve policy. However, the
unchanged balance of power is likely to mean gridlock in
Washington, and confidence over Obamas ability to negotiate a
solution to the looming fiscal cliff is still low. Action towards
resolving the issue is unlikely to be decisive, and the upshot is
that 5 per cent could be wiped off US GDP in 2013 dragging its
economy back into a recession. Investors are likely to react with
caution going into the year-end, and this could negatively impact
the US dollar.
Ishaq Siddiqi is market strategist at ETX Capital.
RAPIDresponses
EU banking union
is a vital moment
to defend finance
to halt damaging financial services
directives, referring them to the
European Council where there is the
possibility of veto. Such an arrange-
ment would, for example, allow us to
resist the European Central Banks
proposal for all clearing houses deal-
ing in sizeable amounts of euro-
denominated business to be located
in the Eurozone.
The third is to secure agreement to
expand opportunities for the finan-
cial services within the EU and out-
side. The UK should continue to push
for the completion of the single mar-
ket, especially in services. We should
also seek a binding commitment
from the European Commission to
secure free trade agreements for
financial services in developing mar-
kets. Far from being shackled in a
global market place by EU financial
services legislation, we should use
the EU to open up markets for
European financial services business-
es.
There is no doubt about the Prime
Ministers support for the financial
services industry. He nailed his
colours firmly to the mast in Brussels
last December, when he exercised
the UK veto. And the governments
resolve is just as strong today. This is
great news for the industry and the
wider economy and for the country
as a whole. And I, one of many, stand
ready to back the Prime Minister as
he resumes battle in Brussels later
this month.
Andrea Leadsom is Conservative MP for
South Northamptonshire.
ANDREA LEADSOM
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Further your career in nance
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T
HE investment management
certificate (IMC) is both a
foundation for those with
future plans for the chartered
financial analyst (CFA) programme,
and a qualification that
demonstrates regulatory
competence. Run by the CFA Society
of the UK, roughly 6,000 students sit
the exam each year, and its
appropriate for anyone entering an
investment-related role, be it
investment management or a
support function.
It doesnt have a market monopoly,
however. There are other qualifica-
tions available, such as the papers on
investment management from the
Chartered Institute for Securities and
Investment. But for those at the
more junior end of the asset manage-
ment job market or for graduates, the
IMC acts as a differentiator and will
increase a candidates chances of
securing a role, advises Colin
Webster, co-founder of Bruin
Going back to the exam
room can boost a career
Financial recruitment.
The IMC tests candidates knowledge
and understanding of markets,
accounting, economics and statistics.
Its a good all-rounder for anyone in
financial services who would benefit
from better understanding the mar-
ket context, or as a warm up to the
CFA, says Carolyn Valahu of
Morningstar.
But it can be hard work. Unit one
costs 220 and delegates will typically
need to spend 30 hours studying to
complete; unit two costs 215 and will
require 40 hours of study. So it is
worth it?
Statistical analysis carried out inter-
nally by Bruin found that it has signed
up 3,060 candidates with an IMC qual-
ification over the past two years. The
recruitment agencys success rate in
getting these candidates interviews
with its clients was 29 per cent higher
than for investment management
candidates without this qualification.
Additionally, in the UK many job
No time for last minute cramming
Annabel Palmer on taking the investment management certificate
24
cityam.com
BUSINESSEDUCATION
peer support. But, says Valahu, feed-
back from Morningstar staff who have
studied for the IMC suggests that most
get along just using the online
resources and the IMC self-study mate-
rials.
But, if you already have a good track
record in operations roles and dont
have the IMC qualification, there is lit-
tle benefit adding it to your CV.
Experience outweighs the qualifica-
tion, Webster believes. And for those
looking to move into the front office,
the CFA programme is a more rele-
vant qualification.
Indeed, where the IMC would be con-
sidered a basic foundation course,
which can be completed in a short
space of time, someone fully CFA qual-
ified is very well regarded, says Aoife
Crawford, director at CuttingHedge
recruitment. There has recently been
a huge growth in candidates across
the board who are either part or fully
CFA qualified, from sales people
through to the analysts.
So if you are contemplating complet-
ing the more intensive CFA pro-
gramme, the investment of time and
hours spent studying may be worth it.
functions in financial services require
a formal qualification endorsed by the
FSA. This is exactly what the IMC
offers. According to Jeremy Smith,
head of benchmark examinations at
Kaplan Financial, the IMC is a recog-
nised qualification which is common-
ly undertaken as a regulatory
benchmark. And after the credit
crunch, the unit on investment envi-
ronment is of particular importance
to employers. Clients want credibility,
and employers want to hire people
who have a good understanding of the
risks, the regulations, and who under-
stand how important professionalism
and ethics are, advises Nicole
Haroutunian of the CFA Institute.
The workload is challenging but
realistic, says Craig Hurring, director
at the CFA Society of the UK. How you
prepare for the exam depends entirely
on your circumstances and personal
study preferences. Studying through
the training companies is definitely a
benefit for the guided instruction and
LIFE&STYLE
25
cityam.com
FASHION
BY NAOMI MDUDU
L
EATHER IS having quite a
moment. You might be
thinking: when did it ever
disappear? But if you cast your
mind back a couple of seasons,
youll remember all the lightweight,
colour-blocked fabrics that captured
everyones imagination jackets
that looked like they should have
come with a bike were nowhere to
be seen.
But with the weather changing,
you might be thinking about
investing in the trusted wardrobe
staple again to tide you over in the
colder months. If so, Belstaff could
be the way to go but be warned, I
say investment for good reason.
The brands latest collection of
made-to-order crocodile skin leather
jackets for men and women are
priced from 45,000 the price of
your childs university degree and
then some. Nonetheless, they are
pretty spectacular.
The jackets are the perfect nod to
the labels history, while also feeling
incredibly modern, as you would
expect with a price point like that.
While the prices might seem out of
this world, the introduction of the
exclusive, made to order service
makes sense. Even the most
commercially solid brands are
facing the conundrum of how to
increase profits and expand
without becoming too mainstream,
so creating such premium pieces
deals with the threat of some D-list
celebrity wearing one and ruining
the image.
Its long overdue. Ever since the
label launched in 1924, reinventing
the biker jacket by introducing a
waterproof breathable wax cotton
style, it hasnt done anything
particularly ground breaking or
memorable. In fact, youre probably
more familiar with seeing the
brand on the big screen (on the
back of Tom Cruise, Will Smith or,
most recently, Daniel Craig in
Skyfall), than spotting people
wearing it on the streets.
The strength of its latest offering
is a result of a number of things.
Two years ago the label was bought
by Swiss conglomerate Labelux and,
shortly afterwards, successful
American businessmen Harry
Stakin was confirmed as its new
chief executive, bringing along good
friend Tommy Hilfiger to serve as an
adviser on the board. Its biggest
weapon, though, is Martin Cooper.
Having worked at Burberry for 16
years, leaving his role as its vice
president and director of outerwear,
it should come as no surprise that
many have dubbed him the king of
outerwear.
With him on side, be prepared to
see a lot more Belstaff both on and
off screen.
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There is more
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movie fodder
After a revamp, the brand is back with a new
look and it is stunning. Just dont expect to get
any change from 45,000 for one of their jackets
The womens made to order styles come in crocodile skins The menswear jackets range from bikers to more traditional styles
How the 4th
gen iPad
measures up
THE SURPRISE package in the Apple
announcements last month was the
news there would be an update to
the 3rd generation iPad.
Apple says it will continue to sell
the iPad 2 (starting price 329) but
will replace the new iPad (which is
now the old iPad this naming
business is getting rather
complicated...) with the 4th gen
model.
The new, new iPad comes with an
updated processor capable of
running up to twice as fast as its
predecessor, 4G capability in the UK
(on selected models) and uses
Apples new Lightning connector.
We lined the two models up head-
to-head for a speed test and the new
version does come out a clear
winner. Its not that the old version
isnt already pretty speedy, but the
4th generation is
certainly a step
up, albeit an
incremental
one.
If you already
own a 3rd
generation
iPad, there
isnt enough
extra here to
make you
upgrade.
But if youre
an iPad 2
owner (or, dare I say it, another
brand of tablet altogether), this is
yet another reason to take the leap.
By Steve Dinneen
Halo 4 sees you resume the role of the Master Chief super-soldier
nWHO IS IT FOR? People who want a
cheaper jumping off point into the tablet
world than the 399 iPad but still want
Apples seal of quality; people with very big
pockets or very small bags; anyone who
needs a lightweight tool for presenting.
n WHATS IT GOT GOING FOR IT? It is
incredibly light, has a surprising amount of
screen space and is 130 cheaper than the
entry-level iPad.
n WHAT ARE ITS DRAWBACKS? Its too
big to fit in your pocket; has no retina display.
IN SUMMARY
cityam.com
26 LIFE&STYLE TECHNOLOGY
Halo 4: as much fun as
you can have on an Xbox
Small but perfectly
formed: we put
the iPad Mini
through its paces
Apples latest tablet is a thing of beauty.
But is that enough, asks Steve Dinneen
H
ALO ISNT just a video game
its a gigantic, multimedia
behemoth, crushing all in its
path under its metal-plated
boots. Since the original Halo
launched on Microsofts first Xbox,
the franchise has grown to fill an
entire universe, with spin-offs
including an animated web series, a
graphic novel and an encyclopedia
full of Halo lore.
The insatiable appetite for the sci-
fi epic has made it one of the most
successful series ever created, in any
format (if the latest title doesnt
gross $1bn, Ill eat my Xbox).
And, like any successful franchise,
Microsoft knows how to keep its
fanbase lusting after more. Halo 3
was released in 2008 and fans have
been forced to settle for spin-off
titles, including Halo Wars, a real-
time strategy game set in the Halo
universe, and Halo 3: ODST, which
sees players take the role of a new
protagonist, further fleshing out the
operatic back-story.
Halo 4, then, has a lot to live up to.
And, if youre a fan of the series, you
A
PPLES GREAT skill lies in
creating products you didnt
know you needed. Nobody
thought they wanted a little
metal box with all their music on it,
but when it arrived, the world went
all doe-eyed and declared its
undying love. Tablets had been
around for years and made no
impact on the public consciousness.
Fingerprints, we complained.
What about all the fingerprints?
And then came the iPad. Enough
said.
Now, in the face of the first
serious encroachment into Apples
near-monopoly of the tablet market
by a new generation of seven inch
devices, comes the iPad Mini: a form
factor Steve Jobs infamously
rejected as being too small.
Apple really needed to work its
magic this time, too, because, as an
iPad owner, Im inclined to agree
with Steve Jobs. Sure, the iPad Mini
is cool that goes without saying
but where does it fit into my life?
Id assumed it would be
marginally bigger than my Kindle
Touch but there is actually a huge
amount of extra screen space. At 7.9
inches, it feels more closely related
to the iPad than, say, the 5.3 inch
Galaxy Note. The extra space
helped along by the tiny bevel
around the screen means
watching movies or playing games
that require a lot of screen space
(such as the wonderfully addictive
Solipskier) never feels cramped.
This also has its drawbacks: in my
mac test (and by mac I mean the
type of jacket favoured by FBI agents
and flashers, rather than Apples
range of computers), my Kindle fits
snugly into the over-sized breast
pocket, but the Mini is far too big.
This may seem like an arbitrary
criticism, but the ability to carry
the Kindle in your pocket is part of
its appeal to commuters if you
need to carry it in your bag, why not
just go for the standard iPad?
It is, though, incredibly
wont be disappointed. It goes down
as one of the most stunning games
Ive ever seen: from the incredibly
animated cinematic opening
sequence to the wonderfully
rendered alien landscapes, it is
relentlessly pretty.
The single-player game relies far
more on tactics than previous
iterations. Gone are the days when
you could jump headlong into the
action and hope to survive. Even on
normal difficulty, this is a sure-fire
way of ending up skewered on an
Energy Sword. The plot which, lets
face it, isnt the primary reason for
playing is engaging
enough and the voice
acting is at least as
adept as your
standard Hollywood
popcorn blockbuster.
It suffers from
the same
problem that
has niggled at
me
throughout
the lifespan
of the
franchise, in
that the regularity
of checkpoints drain
some of the tension if
you die (and you will
die, rather a lot), you
know youll be able to restart from a
couple of minutes back. The flip-side
is you dont spend hours wading
through the same parts of the game,
which gives it a refreshing pick-up-
and-play feel.
Multi-player, though, is the reason
most fans tune in the mode that
drives grown men to sit in the dark
wearing wi-fi headsets so they can
discuss tactics with remote team-
mates. And it is about as much fun
as you can have on a console. The
levels are brilliantly designed and
the combat system, honed over more
than a decade, makes encounters
feel satisfyingly controlled.
But best of all, you really
feel involved in the action.
Every well directed gun-
shot, every kamikaze attack,
every time someone crept
up behind me and
punched me in the back
of the head had me
giggling with
delight. And,
really, what more
could you ask for
in an action
game?
light. The lack of a retina
display (meaning the resolution
is the same as the iPad 2 but less
crisp than the latest iPhones or the
new iPad) means Apple has been
able to throw out a lot of the bigger
versions weight (for the lowdown on
the updated iPad see our review, right). If
youre working on a presentation,
for example, and need a
combination of screen size and
portability, this would be ideal.
All things considered, the iPad
Mini is yet another wonderfully
crafted device but one that feels like
it exists to plug a gap in the market
rather than a gap in your life.
iPad Mini, from 269, apple.com/uk
GAME
HALO 4
Xbox 360 | By Steve Dinneen
hhhhh
28
TV & GAMES
cityam.com
T
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BBC1
SKY SPORTS 1
6pmLive ATP World Tour Finals
Tennis 10pmThe Footballers
Football Show11.30pmPremier
League World 11.55pm-6amLive
Test Cricket
SKY SPORTS 2
7pmAmericas Cup Discovered
7.30pmPremier League World
8pmThe Rugby Club 9pmRingside
10pmWWE: Late Night Raw
12amWWE: NXT 1amLive NFL
4.30amSky Sports Classics
5am-6amLive European Tour Golf
SKY SPORTS 3
6pmLive PGA Tour Golf 9pm
European Tour Golf 11pm
Ringside 12amAmericas Cup
Discovered 12.30amThe
Footballers Football Show2am
Ringside 3am-4amThe Rugby
Club
BRITISH EUROSPORT
7pmInside WTCC 7.30pm
MotoGP 11.30pm-12.35am
Poker
ESPN
5.30pmLive UEFA Europa
League Football 8pmLive UEFA
Europa League Football 10.15pm
French Ligue 1 Preview10.45pm
ESPN Kicks: Extra 11pmESPN
FC Press Pass 11.30pmGoal!
Bundesliga Preview12amUEFA
Europa League Highlights 2am
French Ligue 1 Preview2.30am
Global Rallycross Championship
4amDTM Motor Racing 5am
Goal! Bundesliga Preview
5.30am-6amFIBA Basketball
SKY LIVING
7pmCriminal Minds 8pm
Americas Next Top Model 9pm
FILMLegends of the Fall 1994.
11.40pmBones 12.40amGreys
Anatomy 1.40amSupernatural
2.40amMedium3.30amBones
4.20amCriminal Minds
5.10am-6amPassport Patrol
BBC THREE
7pmTop Gear 8pmDont Tell the
Bride Goes Global 9pmRussell
Howards Good News 9.30pm
Some Girls 10pmWilfred
10.20pmGreat Movie Mistakes
10.30pmEastEnders 11pm
Family Guy 11.45pmAmerican
Dad! 12.30amRussell Howards
Good News 1amSome Girls
1.30amWilfred 1.50amDont
Tell the Bride Goes Global
2.50am Unzipped
3.35am-4.05amSome Girls
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8.30pmThe
Big Bang Theory 9pm2 Broke
Girls 9.30pmNew Girl 10pmBig
Fat Quiz of the 00s 11.40pmThe
Big Bang Theory 12.35amThe IT
Crowd 1.10amThe Work
Experience 1.40amHow I Met
Your Mother 2.05amScrubs
2.30amBig Fat Quiz of the 00s
4am90210 4.40am-6am
Switched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmSwamp People 9pm
Ice Road Truckers 10pmStorage
Wars 10.30pmStorage Wars:
Texas 11pmStorage Wars
11.30pmPawn Stars 12amIce
Road Truckers 1amStorage Wars
1.30amStorage Wars: Texas
2amAmerican Pickers 3amAx
Men 4amSwamp People 5am
Pawn Stars 5.30am-6am
American Restoration
DISCOVERY
7pmOne Car Too Far 8pm
Wheeler Dealers 9pmBattle
Castle with Dan Snow10pm
How We Invented The World
11pmWheeler Dealers 12am
Battle Castle with Dan Snow
1amHow We Invented The
World 2amAmerican Guns 3am
Battle Castle with Dan Snow
3.50amHow We Invented The
World 4.40amDiscovery Atlas:
Mexico Revealed 5.30am-6am
Meerkat Manor
DISCOVERY HOME &
HEALTH
7pmDr Oz 8pmSecretly
Pregnant 9pmMy Deadly
Appetite 10pmEmbarrassing
Bodies 11pmHoarding: Buried
Alive 12amMy Deadly Appetite
1amWanted Down Under 2am
Embarrassing Bodies 3am
Hoarding: Buried Alive 4amA
Baby Story 5am-6amBirth Days
SKY1
8pmThe Middle 8.30pm
Modern Family 9pmSpy 9.30pm
Trollied 10pmA League of Their
Own 11pmRoad Wars 1am
NCIS: Los Angeles 1.55amBrit
Cops: Frontline Crime UK 2.50am
Road Wars 4.10am-6am
Brainiac: Science Abuse
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
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9pmCHOICE Hunted
10pmBBC News
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10.35pmQuestion Time
11.35pmThis Week
12.20amHoliday Weatherview
12.25amSign Zone: Gambling
Nation Panorama 12.55amSign
Zone: Countryfile 1.55amSign
Zone: Antiques to the Rescue
2.55amSign Zone: Planet Earth
Live: A Tale of Three Bears
3.55am-6amBBC News
6pmEggheads
6.30pmStrictly Come Dancing
It Takes Two
7pmThe Dark: Natures
Nighttime World
8pmMasterChef: The
Professionals: Six chefs battle
it out in the quarter-final.
9pmCHOICE Great
Continental Railway Journeys
10pmHebburn
10.30pmNewsnight: Weather
11.20pmDara O Briains
Science Club
12.20amThe Culture Show
12.50am BBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmThe Best Start in Life?:
Tonight
8pmEmmerdale
8.30pmEmmerdale at 40
9pmDCI Banks
10pmITV News at Ten
10.30pmLondon News
10.35pmCorfu: A Tale of Two
Islands
11.05pmThe Jonathan Ross Show
12.05amJackpot247 3amThe
Best Start in Life?: Tonight 3.25am
ITV Nightscreen 4.35am-5.30am
The Jeremy Kyle Show
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv
8pmCHOICE Kirsties Vintage
Home
9pmFILMThe Inbetweeners
Movie: 2011.
11.05pmThe Inbetweeners Top 10
Moments 12.05amRandom Acts
12.10am999: Whats Your
Emergency? 1.10amEmbarrassing
Bodies Special 2.05amThe Great
British Property Scandal: Every
Empty Counts 3amUnreported
World 3.25amNuclear War Games:
Channel 4 Dispatches 3.55amDeal
or No Deal 4.50amCountdown
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6.30pm5 News at 6.30
7pmRolfs Animal Clinic: Two
pythons are given MRI scans; 5
News Update
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9pmHatfields & McCoys
10pmFILMThe Contractor:
Thriller, with Wesley Snipes,
Charles Dance, Lena Headey
and Iain Robertson. 2007.
12.05amSuperCasino
3.55amHouseBusters 4.20am
House Doctor 4.45amMichaelas
Wild Challenge 5.10amNicks
Quest 5.35am-6amWildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7 8
9 10 11
12 13 14 15
16 17 18
19 20
13 17
27 12
17 29
4 6 14
22
45
21
12 3 13
16 14
28 21
10 14
10
15
10
37
10
23
5
30
5
15
13
28
20
11
16
29
4
21
11
24
11
7
3
ACROSS
1 Pointed
projection on
a fork (5)
4 Diversion
requiring physical
exertion (5)
7 Participant in
some activity (7)
8 Metal container
(3)
9 Arctic marten (5)
11 Fragment (5)
12 Popular board
game (5)
14 Cut-price
events (5)
16 Encountered (3)
17 Lodger (7)
19 Discontinue (5)
20 Rub out (5)
DOWN
1 Machine used for
printing (5)
2 Select as an
alternative (3)
3 Wine-making fruit (5)
4 Assemble (3,2)
5 Porridge ingredient (7)
6 Unit of weight
equivalent to 1000
kilograms (5)
10 Drink given to people
who are ill (4,3)
12 Childs magazine (5)
13 Cavalry sword (5)
14 Ordered series (5)
15 Bout, period of
indulgence (5)
18 Chemical which
carries genetic
information (inits) (3)
S
V
G
L
R I
N
E
O
4
4

4
4
B A I T S A C H E T
O A N T I V
S C A B Y O N D E R
N L L N
I M P E R V I O U S
A I I R C
P E R C E P T I V E
L R A N
C A L V E S P A S S
Z P A R E U
H A T R E D R A Y S
6 3 9 4 7 9 3
9 8 1 5 2 4 8 1
6 5 1 3 6 4 2
7 5 8 9 7 5
6 9 7 3 1 5
4 1 6 8 9 2 7 5 3
8 9 7 8 6 9
8 6 9 7 2 1
2 1 4 5 3 5 3
4 2 6 4 3 2 1 7
1 3 3 1 2 4 9
4
4
4
4
4
4
4
4
4
The nine-letter word was
MORALISED
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
HUNTED
BBC1, 9PM
Sam suspects Jack Turner intends to
assassinate Fatima Zahir, a Pakistani
presidential candidate opposed to the
sale of the dam.
GREAT CONTINENTAL RAILWAY
JOURNEYS BBC2, 9PM
Michael Portillo retraces journeys
featured in Bradshaws Continental
Railway Guide of 1913, beginning by
travelling from London to Monte Carlo.
KIRSTIES VINTAGE HOME
CHANNEL 4, 8PM
In this first of a new series, Kirstie
Allsopp looks to the past for inspiration
as she helps families transform their
neglected and cluttered homes.
TVPICK
LONDON 2012 chairman Lord Coe
has vowed to build on the runaway
success of this years Games after
being confirmed as head of the
British Olympic Association (BOA).
Coe, who succeeds Lord Moynihan
as chairman, was elected unopposed
for a four-year term after his only
rival, British Hockey chief Richard
Leman, withdrew last month.
Following the tremendous
impact of the London 2012 Games,
the BOA has an important role to
play in ensuring the growth of the
Olympic movement throughout the
UK and the continued success and
support of Team GB at future
Olympic Games, said Coe.
Former gold medal-winning
athlete Coe led Londons bid to host
the Olympics and then ran the
organising committee for the event
itself, which was widely hailed as
one of the greatest of all time.
Prime Minister David Cameron,
who in August appointed Coe legacy
ambassador, welcomed the former
Conservative MPs latest role.
He said: Seb Coe demonstrated
inspirational leadership in
delivering the best ever Olympic and
Paralympic Games this summer and
as a double Olympic gold medallist
himself there can be no better choice
for BOA chairman.
PM welcomes
Coes latest
Olympic role
Mancini needs to win title again to keep job
IN BRIEF
Hodgson out for six weeks
n RUGBY UNION: Saracens have
suffered a blow after in-form fly-half
Charlie Hodgson was ruled out for six
weeks with a fractured cheekbone. The
sure-kicking former England No10, who
has amassed 90 points this season,
suffered the injury in Sundays 29-24
Aviva Premiership win over Wasps.
Olympic Stadium move delayed
n GENERAL: Londons Olympic
Stadium will not reopen until at least
late 2015, a year later than originally
planned, the man in charge of deciding
its future confirmed yesterday. London
Legacy Development Corporation chief
Denis Hone also revealed there had
been no bid for tenancy from any
American Football franchises, despite
Mayor Boris Johnson holding talks with
NFL chiefs. West Ham remain clear
favourites to move into the stadium.
Ice baths bad for you, say experts
n GENERAL: Taking an ice bath after
exercise may do more harm than good,
according to new research. Scientists
from the University of Portsmouth
found immersion in cold water was no
more effective in stimulating recovery
than light warm-down exercise, while
plunging into ice could be dangerous.
Our results show they dont work,
said lead author Jo Corbett. They also
pose a number of potentially serious
health risks.
FOOTBALL
COMMENT
TREVOR STEVEN
SWANN FLIES HOME FROM INDIA TOUR FOR ILL DAUGHTER
HARLEQUINS prop Joe Marler
believes England are ready to
hammer their opponents in this
months internationals, having
emerged stronger from a hiding of
their own in the summer.
Marler, who is set to win his
fourth cap on Saturday against Fiji,
cites going 22-3 down to South Africa
in the second Test in Johannesburg
as the crucible in which their spirit
was forged.
That 20-minute period was a
turning point in the tightness of the
South Africa drubbing made us
stronger, says Englands Marler
group and the guys coming together
as a team and wanting to dig deep
for each other in the darkest places,
he said.
Physically it is a massive step up
and you know that if you are not on
your game they will just keep
coming and keep coming. That is the
sort of attitude we have in our
group. We just want to keep
hammering the opposition, keep
going, keep going because if they
ease off we will take the chance.
Englands clash with Fiji precedes
fixtures against Australia, South
Africa and New Zealand.
BY FRANK DALLERES
BY FRANK DALLERES
SPORT
29
cityam.com
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O
NCE again Roberto Mancini
was quick to divert attention
from his own failings and
blame the referee after
Tuesdays draw with Ajax pushed
Manchester City closer to another
embarrassing Champions League
elimination.
He was similarly blinkered when
City were well beaten by the same
opponents in Amsterdam last
month, emphasising the uphill
struggle they would face to qualify
rather than his teams glaring
deficiencies.
Mancinis evasiveness when
queries are raised about his sides
failures begs the question: does he
see them and refuse to acknowledge
them, or is he blind to their lack of
focus, concentration and desire?
Moaning about decisions in their
latest European disappointment is
like crying over spilt milk. It was
nigh-on impossible for City to reach
the last 16 even if they beat Ajax.
He has talked about being found
out in the Champions League
because theyre not used to that
level. Thats tosh City are man-for-
man better than most squads and
should walk the group stage.
The fact is that Mancini, while
enjoying great success in the Italian
and English top flight, has a poor
record in European competition, and
it is creating huge pressure for him.
He more or less has to retain the
Premier League now if he wants to
save his job. Even then it would be
touch and go and he would only
have succeeded in treading water.
You could argue hes a victim of
his own success. Nobody at City
really believed they would win the
title last season, but they did, and
now even doing it again wont feel
like progress.
To make matters worse for
Mancini, a huge shadow has been
cast over his future by the arrival of
Txiki Begiristain, the former
Barcelona director of football now
occupying the same role at
Eastlands.
CONSPIRACY THEORIES
With Pep Guardiola, the coach
credited with moulding the
universally adored Barca team,
rumoured to be ready to return to
management next year in England,
the conspiracy theories will go into
overdrive. Begiristain has seen
Guardiolas work and its fruits
first hand, while Mancini might
have won the league but has only got
City playing anything like as
attractive football early last season.
If Mancini runs away with the
title, Begiristain cant say too much.
But any other outcome and you cant
tell me that Citys ultra-ambitious
owners wont be asking him what
Pep would do.
Im fascinated to see whether
Mancinis players rally for him now.
If they are 100 per cent behind him
they will go on a strong run and
start playing, but at the moment,
like his post-match remarks, they
remain unconvincing.
Trevor Steven is former England
footballer who played in two World Cups
and two European Championships. He
now acts as a scout and media
commentator.
ENGLAND will be without at least three
of their favoured four-man bowling
attack in todays final warm-up match
before the Test series in India after
spinner Graeme Swann flew home last
night. The 33-year-old left the squad
to be at the bedside of his ill daughter
but is expected to return for the first
Test in seven days time. Pacemen
Stuart Broad and Steven Finn will miss
the tour match against Haryana due to
injury and are doubtful for the Test.
MANCHESTER United came from a
goal down to score three times in the
last 10 minutes and clinch a place in
the Champions League knockout
stage after a floodlight failure
caused chaos in Portugal.
The Premier League leaders were
trailing to Alans 49th-minute
penalty when a power cut forced
both teams off the pitch for 10
minutes.
But substitute Robin van Persies
opportunistic strike, a Wayne
Rooney spot-kick and Javier
Hernandezs poachers effort
completed a dramatic turnaround
and secured top spot in Group H
with two games still to play.
Uniteds early qualification is a
welcome contrast to last years
campaign, when they suffered a
shock elimination at the group
stage. Yet their prospects of reaching
the last 16 so quickly did not look
healthy when Jonny Evans body-
checked Custodio and Alan gave
goalkeeper David de Gea little
chance with a powerful rising
penalty.
The floodlight failure soon after
gave Sir Alex Ferguson the ideal
chance to reorganise and he sent on
Rio Ferdinand for Evans at centre-
back, before soon replacing Danny
Welbeck with Van Persie.
Uniteds top scorer notched his
third European goal of the season
when Braga goalkeeper Beto came
rushing out to intercept a long ball,
only to change his mind and watch
Van Persie bend an early shot past
him. Rooney picked himself up after
being felled by Nuno Coelho to
convert the second, and Hernandez
continued his recent hot streak by
stabbing in at the second attempt in
stoppage time.
United hit back
to win group
after blackout
CHELSEA manager Roberto di Matteo
admitted his side had needed a slice
of luck after substitute Victor Moses
struck in the fourth minute of stop-
page time to give their Champions
League defence a huge boost.
Twice the Blues had led, through
Fernando Torres and then Oscars vir-
tuoso strike, but twice they were
pegged back by Willian, a player they
have trailed, and a dazzling Shakhtar
Donetsk team.
But with all three allotted minutes
of added time played, Moses was left
unmarked for Juan Matas corner and
the 21-year-old headed the winner
past error-prone visiting goalkeeper
Andriy Pyatov.
While they still face a nervy final
two rounds of Group E fixtures, not
least their next match against
Juventus in Turin, the win keeps
them in second place and hopeful of
reaching the last 16.
In terms of the timing of the win-
ning goal I would agree there was an
element of luck, said Di Matteo,
whose men suffered a damaging 2-1
defeat to the same opponents in
Ukraine two weeks ago.
But, playing against a good team, I
thought we deserved to win because
we did a lot of good things and we put
them under pressure, especially in
the first half.
That is how we scored the first two
goals, we applied pressure, so I think
we deserved to win ultimately.
Moses propels
Chelsea closer
to promised
land of last 16
Torres gave Chelsea the ideal start
in the sixth minute when Pyatov
hastily rolled out to his full-back, col-
lected the return pass and attempted
a hurried clearance, only for it to rico-
chet past him and in off the charging
Spain strikers feet.
Shakhtar equalised just three min-
utes later, however, when two of their
Brazilians combined, Fernandinho
surging past two defenders into the
penalty area and pulling back for
Willian to side-foot home.
Pyatov gifted Chelsea a second just
before half-time when he careered
out of his area and headed straight to
Oscar, who controlled with his chest
and despatched a languid volley over
the stranded keeper from 40 yards.
Di Matteo opted against starting
captain John Terry following his
domestic four-match ban due to fit-
ness concerns, while the home
defence also missed the injured
Ashley Cole, who might have prevent-
ed Darijo Srna escaping down the
right to tee up Willians second four
minutes after the restart. Shakhtars
Razvan Rat struck a post before, with
hopes of three points seemingly lost,
Moses grabbed the latest of winners.
Celtic stun European aristocrats Barcelona after
teenager Watt provides anniversary present
CELTIC manager Neil Lennon
hailed the perfect 125th
anniversary present after his men
produced a huge upset to defeat
Barcelona in Glasgow.
Kenyan midfielder Victor
Wanyama headed the Bhoys in
front in the first half and teenage
substitute Tony Watt wrapped up
the monumental victory late on.
Lionel Messi scored an injury-
time consolation for the Catalans,
but it could not spoil Celtics night
as the club celebrated its birthday.
It is right up there as one of the
proudest nights of my career, said
Lennon. It was a monumental
effort on the [125th] anniversary of
the club. I wanted them to do
justice tonight and they have
surpassed that and beaten the best
team in the world.
The victory gives Celtic a huge
chance of qualifying for the last 16,
with Lennons men three points
ahead of third-placed Benfica with
just two matches remaining.
Barca broke Celtic hearts with a
last-minute winner at Camp Nou
two weeks ago but there was to be
no repeat last night, with
goalkeeper Fraser Forster in
inspired form again.
Wanyama climbed highest to
meet Charlie Mulgrews corner and
plant a powerful header past Victor
Valdes. Eight minutes from time 18-
year-old Watt pounced on Xavis
slip and drilled home low.
Moses (centre) headed the decisive goal
in the fourth minute of added time after
Shakhtar twice pegged Chelsea back
Van Persie scored his third in Europe
30
SPORT
cityam.com/sport @cityam_sport
Man Utd 4 4 0 0 9 4 12
Galatasaray 4 1 1 2 4 5 4
CFR Cluj 4 1 1 2 5 6 4
Braga 4 1 0 3 5 8 3
GROUP H
TEAM PLD W D L F A PTS
Shakhtar 4 2 1 1 7 5 7
Chelsea 4 2 1 1 10 6 7
Juventus 4 1 3 0 8 4 6
Nordsjaelland 4 0 1 3 1 11 1
GROUP E
TEAM PLD W D L F A PTS
BRAGA........................................1
MANCHESTER UNITED................3
BY SPORTS DESK STAFF
CHAMPIONS LEAGUE
CHELSEA.....................................3
SHAKHTAR DONETSK ................2
BY FRANK DALLERES
CHAMPIONS LEAGUE
Teenager Watt (left) hit Celtics second
CELTIC ........................................2
BARCELONA................................1
BY SPORTS DESK STAFF
CHAMPIONS LEAGUE
31
TOTTENHAM manager Andre Villas-
Boas insists the loss to injury of sum-
mer signing Mousa Dembele is not to
blame for their recent slump in form.
Former Fulham star Dembele
helped Spurs string together four suc-
cess Premier League wins before
aggravating a hip problem while on
duty with Belgium.
Since then they have lost three and
drawn one from five games, but
Villas-Boas played down the midfield-
ers absence ahead of tonights
Europa League visit of Maribor.
We had good games without
Mousa, said the Portuguese.
Against Chelsea we lost Gareth
Bale and Mousa and we gave them a
run for their money even though
they were on an amazing run.
Good players are missed but this
squad is full of good players. I dont
think it has affected the tempo and
dynamic its more important to
have players fully concentrated.
Villas-Boas has decided against
sending Dembele for an operation, in
the hope that physiotherapy will heal
the 25-year-old in time for next
weeks derby at Arsenal.
Mancini must win the Premier League this
season if he wants to save his job. Even then it
would be touch and go
cityam.com
BY FRANK DALLERES
Millwall ban 13-year-old boy for racist abuse as
Spurs condemn calls to criminalise fan chants
MILLWALL have banned a 13-year-
old fan who racially abused
Boltons Marvin Sordell during a
match last month but issued a
strong denial that it was anything
other than an isolated incident.
The Championship club said the
boy had written to the 23-year-old
forward, who represented Team
GB at the London 2012 Olympics,
to apologise for the incident at the
New Den on 6 October.
Sordell used Twitter to complain
of abuse towards him and team-
mates Lee Chung-Yong, Benik
Afobe and Darren Pratley, but
Millwall condemned coverage
suggesting a wider problem.
These reports were made with
no knowledge of the facts and
created the impression that Bolton
players were subjected to racial
chanting or systematic abuse by
more than one individual, the club
said in a statement.
It is the latest racism controversy
to hit English football, following
allegations toward Chelseas John
Terry, Liverpools Luis Suarez and
referee Mark Clattenburg.
The Society of Black Lawyers
yesterday called for players guilty
of racism to be sacked and banned
for nine months. But Tottenham
hit back at another of its proposals,
that Spurs fans who proudly use
the term Yid should be reported
to police and treated no differently
to those who use it pejoratively.
The club does not tolerate any
form of racist or abusive chanting,
the club said. Our guiding
principle in respect of the Y-word
is based on the point of law itself
the distinguishing factor is the
intent with which it is used.
BY FRANK DALLERES
Tottenham dont depend on
Dembele, says Villas-Boas
BRITISH Tour de France champion
Bradley Wiggins suffered suspected
broken ribs in a collision with a van
while training last night.
Wiggins was thrown from his
saddle in the crash in
Wrightington, near the north
London-raised stars Lancashire
home, at around 6pm and taken by
ambulance to hospital, where he
stayed overnight. He is said to have
complained that he felt his ribs had
been broken, and hurt his hands
and wrists.
Team Sky confirmed the
accident, adding that his injuries
were not thought to be serious
and that he is expected to make a
full and speedy recovery.
The accident comes at the end of
a historic year for the popular 32-
year-old, who became the first
Briton to win the Tour de France.
He then became the first rider
ever to follow that with gold in the
Olympic road racing time trial,
which he won at Hampton Court in
south London.
The double achievement elevated
him to national hero status and he
remains the favourite to win the
BBCs Sports Personality of the Year
award next month, despite a host of
strong contenders.
Wiggins was being followed on
his training ride by his support
team, who rushed to his aid. The
collision is believed to have
occurred when the van pulled out
of a service station.
The Belgian-born Team Sky rider
is expected to play second fiddle in
next years Tour, where the
mountainous route is likely to
favour colleague and fellow Briton
Chris Froome.
BY FRANK DALLERES
BRITAINS Andy Murray rued
missed chances after his titanic
tussle with world No1 Novak
Djokovic left him one defeat away
from a premature exit from the
Barclays ATP World Tour Finals in
London yesterday.
Murray, who beat Djokovic in an
epic US Open final to win his
maiden grand slam earlier this
year, took the first set against the
Serb but was eventually out-fought
4-6, 6-3, 7-5 at the O2 Arena.
It leaves the Scot needing to beat
Frenchman Jo-Wilfried Tsonga in
his final group match tomorrow in
order to guarantee a place in the
last four, while Djokovic may also
need to beat Czech Tomas Berdych,
who defeated Tsonga last night, to
be certain of progressing.
An absorbing duel watched by
17,000 spectators was on a knife-
edge for much of its two and half
hours, until Djokovic broke Murray
and then saved two break points
while serving for the match.
The last two minutes of the
match is probably what decided it,
said Murray. He broke from 15-40
and then I had 15-40 next game and
didnt break, so that was the
moment that decided the match.
Victory for Djokovic gave him the
edge over his former juniors rival
Murray in their seven meetings this
year, which have become
increasingly captivating and titanic
contests.
I think both of us probably see
each others games pretty well
especially this year, because weve
played so much, Murray added.
You kind of know a little bit
what to expect. I think thats why
all the matches, especially the last
few, have been so close and decided
by a few points. The intensity of my
matches with him has been
extremely high this year.
But the one thing I would say is
this year I think both of us probably
have seen things in each others
games improve and thats why there
are a lot of long rallies and the
matches are incredibly tight.
Murray took the initiative with
an almost flawless first set and
earned an early chance to break in
the second at 1-1, but Djokovic rose
to the challenge and forced a
decider. Momentum swung
between the old foes in the final set
and Murray came within two points
of victory at 5-4, but Djokovic held
and then broke at the critical
moment in a gritty finale.
I dont think I played bad in the
first set, said Djokovic. It was him
playing really well, serving
extremely well. He lost only a
couple of points on his first serve
throughout the whole set, so that
says enough about his quality. Then
he made some unforced errors.
Wiggins hospitalised in crash with van
Murray hopes of home triumph smothered
at O2 as Djokovic digs deep in epic contest
Murray needs to beat Jo-Wilfried Tsonga tomorrow in his final group match to be sure of qualifying
No1 fights back from
set down to defeat
Brit in three sets
BY FRANK DALLERES
Trevor Steven: Page 29
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