BUSINESS WITH PERSONALITY
SKYPE FOUNDERS TO
Issue 1,379 Wednesday 11 May 2011
HSBC TOO RISKY
FOR HONG KONG
▲
EXCLUSIVE
BY JULIET SAMUEL
HONG Kong gave a stern warning that
it might not welcome HSBC if it tries to
move its headquarters from the UK
after one of its leading regulators told
City A.M. that the city state would be
worried about the bank’s size.
Speaking in one of his first UK inter-
views since being appointed to lead a
body that will replace the FSA, Martin
Wheatley, who is currently chief exec-
utive of the Hong Kong Securities and
Futures Commission, told City A.M.:
“You’re right to ask if Hong Kong
would want it. The question is, do you
want to have something that big on
your doorstep? For a place with a rela-
tively small GDP compared to the size
of HSBC, you have to ask if you want to
have that risk in your system.”
HSBC is currently conducting a
review of its domicile, with specula-
tion that it could leave London after its
chairman Douglas Flint criticised the
UK’s bank levy as a “location tax”.
But it could find it difficult to move
back to its former home in Hong Kong
given Wheatley’s assessment.
The lead regulator of a bank is usual-
ly responsible for bailing out a failed
lender. With HSBC boasting a HK$19
trillion (£1.49 trillion) balance sheet,
the task could overwhelm Hong Kong.
Wheatley also poured cold water on
the idea that Hong Kong would ever
adopt lax regulations to tempt HSBC
FTSE 100 ▲6,018.89 +76.20 DOW ▲12,760.36 +75.68 NASDAQ ▲2,871.89 +28.64
SHARE £730m WINDFALL
MICROSOFT SPLASHES CASH P4-5
Martin Wheatley will be responsible for creating and leading the UK Financial Conduct Authority from September this year.
back: “There’s been a lot of talk about
certain UK banks re-domiciling. At the
moment, it’s all talk... It’s not in any-
one’s interests to create lower stan-
dards and regulatory arbitrage. The
spotlight would immediately be on
the regulator that does that. I don’t see
it.”
And even if HSBC did move,
Wheatley says that it wouldn’t gain
BARCLAYS
www.cityam.com
anything from looser capital require-
ments: “You’d want to make sure
you’re applying the same rules as a
bank would face anywhere else.”
Wheatley will return to the UK per-
manently in September to lead the
Financial Conduct Authority, one of
the two bodies to replace the FSA
when it is abolished next year.
HSBC’s review of its domicile will
£/$ 1.64 unc
not report until the end of 2011,
although CEO Stuart Gulliver will
today present the details of a highly
anticipated strategic overhaul.
In theory, HSBC could re-domicile
anywhere, but given its history in
Hong Kong and its Asian presence, a
move elsewhere is thought unlikely.
The bank declined to comment.
WHEATLEY INTERVIEW: P15
£/¤ 1.14 unc ¤/$ 1.44 unc
$1BN BONUS
DISPUTE SETTLED
OVER LEHMAN’S
ASSETS P9
FREE
Failed take
off for float
of heli firm
▲
CAPITAL MARKETS
BY RICHARD PARTINGTON
KREMLIN-BACKED defence firm
Russian Helicopters has pulled its joint
Moscow and London initial public
offering (IPO) after failing to find suffi-
cient demand for its shares, sources
close to the deal told City A.M. last
night.
Russia’s primary helicopter maker
had been looking to finalise a price for
its shares by today, in a sale that would
have netted the country’s government
more than $250m (£153m).
The total size of its share offer, includ-
ing new shares in the company, had
been set to exceed $500m, and the busi-
ness was set to be valued at up to $2.4bn.
But backers Oboronprom, the hold-
ing company through which the
Kremlin owns a string of defence
firms, did not want to let the IPO go
for a price below its expectations.
Management and bankers from BNP
Paribas, Bank of America Merrill Lynch
and VTB Capital had scrambled to woo
investors in a global roadshow that
ended in disappointment yesterday.
Investors are said to have been keen
on the firm, although felt cheaper
emerging market opportunities could
be found.
Russian Helicopters had set the
price range for its float at between $19
and $25 per share and global deposito-
ry receipt at the end of last month.
The firm is the latest in a string of
companies to put their London listing
plans on ice following a rocky period
for stock market floats.
MORE: DAVID HELLIER : P2
Certified Distribution
31/01/11 - 27/02/11 is 107,265
 2 News
New issues strive to win back trust
EDITOR’S LETTER
DAVID HELLIER
W
HAT should we make of the
London market for new
issues, where private compa-
nies appeal for funds from
equity investors such as BlackRock,
Gartmore and the sovereign wealth
houses?
Currently we have the spectre of
Glencore, the commodities trading
group, almost effortlessly getting
away an $11bn (£6.7bn) fund-raising,
while smaller, less well known compa-
nies fail to get their much-needed
flotations off the ground.
Yesterday yet another London flota-
7th Floor, Centurion House,
24 Monument Street, London, EC3R 8AJ
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Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Craig Gaymer
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
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If you have any comments about the distribution
of City A.M. Please ring 0207 015 1230, or email
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Beam Reach 5 Business Park,
Marsh Way, Rainham, Essex, RM13 8RS
WHAT THE OTHER PAPERS SAY THIS MORNING
PACE OF UK GROWTH UNDER THREAT
Britain’s economy is unlikely to grow
as fast as before the financial crisis
because its most productive sectors
have been hardest hit, jeopardising
government plans to cut the deficit. A
Financial Times analysis of the sector-
ial performance of the economy
before and after the crash highlights
how much banks and insurance com-
panies boosted economic growth
between 2000 and 2008.
SHELL RESURRECTS ARCTIC DRILLING
PLANS
Royal Dutch Shell has resurrected
plans to drill in the Arctic off the
coast of Alaska and is days from
applying for six new exploration
licences, according to the company’s
executive director for oil and gas pro-
duction in the Americas. Marvin
Odum said the company was prepar-
ing to apply for permits to drill up to
tion, that of the Kremlin-backed
Russian Helicopters company, was
pulled after bankers failed to get suffi-
cient demand for the shares on offer.
Talking to market participants,
who have seen flotations from the
likes of Edwards, Skrill and Topaz
Energy recently pulled, there is a dis-
tinct lack of trust amongst potential
investors in some of the companies
that have been put forward and a feel-
ing that many of the issues are being
over-priced.
Investors, it seems, are especially
wary of companies that are being
offloaded by private equity companies
and by groups whose management
take the opportunity to sell a majority
of their shares in the company they
are trying to persuade others to invest
in.
It was ever thus, I guess, but the cur-
rent issue of deep investor mistrust
dates back to March and July of last
year, according to those in the market,
when classroom supplier Promethean
World and then online grocer Ocado
AIG considers
shrinking IPO
INSURANCE
▲
BY RICHARD PARTINGTON
THE US Treasury is considering
whether to scale back plans for an ini-
tial public offering (IPO) of AIG due to
the insurer’s poor share price perform-
ance in recent weeks.
AIG’s board met late yesterday
evening to consider options, ahead of
the firm’s annual shareholder meet-
ing today.
The stakes are high for the US
Treasury as it gears up to sell about
$20bn (£12.2bn) of its stake in the firm.
The US government owns 92 per cent
of AIG after bailing it out multiple
times during and after the financial
crisis.
Selling shares at a loss would be a
blow for the Treasury, but the govern-
ment is under pressure to exit its cri-
sis-era investments in private
six wells in the Chukchi Sea following
the recent reapplication to drill four
wells in the adjacent Beaufort Sea.
CHINA’S HNA PAYS €431M FOR 20PC OF
SPANISH HOTELS GROUP
HNA, the acquisitive Chinese airline
and logistics group, is paying €431.6m
(£380m) to buy a 20 per cent stake in
NH Hoteles through a capital-raising
exercise by the Spanish group, the
companies announced yesterday.
TCHENGUIZ IN LEGAL CHALLENGE OVER
SFO RAIDS
Companies linked to Vincent
Tchenguiz, the property tycoon,
have filed for a judicial review into
the Serious Fraud Office raids that
were launched alongside his arrest
and release without charge along
with his brother Robert in March.
Tchenguiz Family Trust and its
adviser Vincos Limited, chaired by
Vincent, served the SFO with a
claim alleging the searches were
unlawful.
respectively went ahead with flota-
tions at price levels that could not be
sustained in the short-term (in the
case of Ocado), or the longer-term
(Promethean).
Promethean’s shares, issued at
200p, soon dropped to 52p and now
trade at a mind-boggingly low price of
30p. Ocado’s shares, issued at 180p,
fell back towards 120p (although, as
many point out these days, they now
stand at a healthy 285p).
“Experiences such as Ocado and
Promethean take such a long time to
live down,” says Owen Wild, deputy
editor of the excellent International
Financing Review.
The Glencore transaction seems to
have escaped much of the negativism
that has clouded the UK’s IPO market.
Partly this has been a function of
size. Says Wild: “It’s been very hard to
get anyone’s attention away from
Glencore.”
But there’s also been a concerted
attempt on behalf of the advisers and
the company itself to learn from the
companies and raise as much money
as it can before it runs up against bor-
rowing limits.
One option for AIG and the
Treasury could be to scale back the
size of the offering, close to the gov-
ernment’s break-even point, reports
have suggested. The move would give
AIG breathing space to perform in the
market, in order to build up appetite
for a large sale later this year.
Shares in the company have fallen
by more than 30 per cent between the
20 January and 9 May, putting doubt
on the government’s sale plans.
AIG chief Robert
Benmosche and the US
Treasury are said to be
considering scaling
back their IPO plans.
PORTAS TAKES AIM AT TESCO IN
BATTLE FOR SOUL OF TOWNS
The so-called “Queen of Shops” has
been called upon by the government
to advise it on saving the high street.
Mary Portas, who has mentored
retailers in a string of television
series, said that she had been called
upon by the government to come up
with suggestions for saving Britain’s
ailing town centres.
EMAP CHIEF’S PARTING SHOT AT
PRIVATE EQUITY AND RECESSION
The chief executive of Emap has
stepped down after three years in the
post. David Gilbertson said yesterday
that he had quit because the “reces-
sion has extended the likely period of
private equity ownership for the busi-
ness”. His decision to leave the strug-
gling business-to-business publisher
co-owned by Guardian Media Group
and Apax was said to be mutual.
mistakes of recent candidates for
flotation.
Firstly, advisers have let estimates of
valuations for Glencore drift ever
upwards in the knowledge that once
they settle on a mid-point valuation,
which in this case is $61bn, it will look
eminently reasonable.
Then there’s been the spirited decla-
ration by chief executive Ivan
Glasenberg that he won’t sell any of
his shares.
To cap it all, there’s the master-
stroke – apparently being claimed by
Morgan Stanley as its plan – of bring-
ing in cornerstone investors to take up
around 30 per cent of the new shares.
The ploy brought certainty of demand
to the issue, and it seems to be paying
off and will help London pitch itself as
the financial centre of the world, at
least for larger flotations.
david.hellier@cityam.com
• Allister Heath, who normally writes this
column, became a father for the first
time yesterday. We all send our congratu-
lations to him, his wife and his baby girl.
Transport for London chief Mike Brown has averted strike action Picture: Micha Theiner
Tube walkouts called off
POLITICS
▲
BY RICHARD PARTINGTON
A RUN of crippling Tube strikes due
to start next Monday have been
called off following secret talks
between Transport for London boss
Mike Brown and union officials.
He told RMT Union leader Bob
Crow that a driver at the centre of
the dispute would be re-instated in
order to avoid “significant disrup-
tion for London”.
The RMT has withdrawn the
BANK BOSSES RESIST INVESTOR
DEMANDS FOR BONUS REFORMS
Senior bankers are resisting demands
for bonus reforms from their own
shareholders and are “gaming” the
concessions they are making,
investors claim. Bank shareholders are
pushing for pay reforms that go
beyond the Financial Services
Authority’s (FSA) remuneration code.
Among their demands are the end of
annual performance measures and a
recognition of risk in performance
evaluations.
SAVILE ROW NOW TWICE THE PRICE OF
A GOOD SUIT
Office rents on London’s exclusive
Savile Row are poised to break
through the £100 per sq ft mark for
the first time since the financial crisis.
US hedge fund York Capital
Management has paid £97.50 per sq ft
for office space at 23 Savile Row.
CITYA.M. 11 MAY 2011
NEWS | IN BRIEF
Lord Marland new trade envoy
Lord Marland of Odstock is to be the
new face of British business trade dele-
gations abroad, leading British bosses to
meet foreign ministers and counter-
parts. The businessman and politician,
who was founding director of the insur-
er Jardine Lloyd Thomson, has been
hired as the chairman of the British
Business Ambassadors by UK Trade &
Investment (UKTI). He will keep his post
as a junior minister at Department of
Energy and Climate Change and lead
around six trips a year.
US mulls easing cash raising rules
US regulators are considering whether
to relax rules around capital raising
amid concerns that regulations could
stifle start-up firms. The chair of the
US Securities and Exchange
Commission, Mary Schapiro, has insti-
gated a review of the regulators rules.
She told a US house of representatives
committee yesterday: “I instructed our
staff to take a fresh look at some of
our offering rules to develop ideas for
the commission to consider that would
reduce the regulatory burdens on small
business.”
threat of two week of walkouts, in
what would have been the longest
ever series of strikes on the
Underground.
Eammon Lynch, a Bakerloo line
driver sacked for allegedly breaching
safety rules, will now be given a dif-
ferent job on the Underground.
London mayor Boris Johnson said:
“I welcome the RMT’s decision to call
off their industrial action and their
recognition that flexing union mus-
cle is completely unjustified and
unnecessary.”
DISNEY'S PROFIT SAPPED BY MARS
Walt Disney Co. said that factors
ranging from a shortage of box-office
hits to the earthquake in Japan cut
into its quarterly profit, though the
entertainment giant is hoping to ben-
efit from a strong line-up of new
films in the current quarter and
more spending at its theme parks.
Among other challenges, this year’s
fiscal second quarter included the
box-office dud “Mars Needs Moms”,
which cost Disney more than $70m
in marketing expenditures, as well as
an impairment charge.
IRELAND PINS HOPES ON NEW JOBS
The Irish government announced a
plan Tuesday that seeks to create new
jobs without deepening the country's
debt crisis, mainly by providing
incentives to boost private-sector
employment and retraining the
unemployed.
CITYA.M. 11 MAY 2011 News 3

APOLLO’S $509M SCREEN GRAB

Goldman faces fraud charge
over trade clearing activities
could bring charges against the bank. ings with Goldman.

▲
BANKING
BY RICHARD PARTINGTON
US REGULATORS are investigating
Goldman Sachs’s clearing and execu-
tion division over possible fraudulent
activity, the Wall Street bank revealed
last night.
The Commodity Futures Trading
Commission (CFTC) is investigating
the role Goldman played as a clearing
house for a broker-dealer client, and
THE OWNER of the So You Think You Can Dance TV format, which is hosted in the UK
by Cat Deeley (top left) alongside judges Nigel Lythgoe and Arlene Phillips, is to be
bought by US private equity firm Apollo Global Management. Entertainment rights
group CKx, which also owns the rights to the American Idol TV format and the rights to
the name and image of Elvis Presley, is being sold in a $5.50 per share all-cash deal.
The regulator is said to be planning
to bring “aiding and abetting, civil
fraud and supervision-related
charges” against Goldman.
The bank is alleged to have known,
or should have known, that the clear-
ing service it provided to its unnamed
client was being used improperly.
The broker-dealer is said to have
used the accounts of customers,
instead of those of its own, in its deal-
The Wall Street giant said it was
cooperating with the investigation. It
added that the worst-case estimate
for all of its legal costs would be
$2.7bn (£1.6bn) as of 31 March.
Meanwhile, Goldman said it had
lost money on only one day in the last
quarter. It added that it had 32 days
on which it saw trading gains of more
than $100m, compared to 68 over the
whole of last year.

Greece denies
fresh loan call
progress is key to determining
▲

EUROZONE ECONOMY
BY KATIE HOPE
GREECE last night denied that it was
seeking a new bailout before its cur-
rent rescue loans expire as unions pre-
pared to strike today in protest against
plans to sell stakes in utility companies.
The general strike has fanned fears
that Greece’s ambitious privatisation
programme, aimed at raising €50bn
(£44bn) by 2015 from selling assets
ranging from gaming companies to
real estate, is at risk of coming unstuck,
adding yet another hurdle to its falter-
ing deficit-reduction plans.
Senior EU and IMF officials make a
crucial inspection visit from today to
press Greece to do more to clean up its
finances, including speeding up its
asset sell-off, as thousands of workers
walk off the job to protest against aus-
terity. The visit will assess whether
Greece’s debt is sustainable and
whether it has made enough progress
on fiscal reforms to receive a fifth,
€12bn tranche of aid under the exist-
ing bailout.
Eurozone officials including
German chancellor Angela Merkel
have said the review of Greece’s
whether it can be given better terms
on the current €110bn bailout, or addi-
tional aid, to avoid a debt restructur-
ing.
Eurozone markets steadied yester-
day amid growing expectations that
Greece will receive additional aid to
avert an early debt restructuring. But
Greek and EU officials said reports
that Athens would get a second
bailout of €60bn next month were
wrong, insisting talks on further assis-
tance were only at an exploratory
stage.
European shares rose, while the cost
of insuring Greek debt against default
fell slightly. But Greece paid an
increased yield of 4.88 per cent to sell
six-month treasury bills yesterday to
refinance maturing debt, higher than
last month and well above the 4.2 per
cent average rate on its IMF and EU
loans.
Meanwhile, Finland yesterday post-
poned a decision on whether to back
the European Union bailout for
Portugal, casting fresh doubt over the
likelihood of unanimous approval for
the €78bn deal when EU finance min-
isters meet next week.

Energy firm hit Laxey Partners

by guilty verdict gain support
▲

ENERGY
SCOTTISH and Southern Energy has
been found guilty of misleading cus-
tomers on door-to-door sales calls.
The energy firm’s sales agents were
found to have used “misleading sell-
ing practices” when talking to people
on their doorsteps between
September 2008 and July 2009.
The agents used a fabricated print-
out that allegedly showed customers
they were paying too much to their
current suppliers.
The firm was found guilty at
Guildford Crown Court yesterday. It
will be sentenced on 27 May, and
could also face a criminal hearing.
INVESTMENT
ACTIVIST investor Laxey Partners has
received support from two sharehold-
er advisory groups in its bid to force
reform at Alliance Trust.
US advisory Shareholder Services
and pensions consultant Pirc have
come out in favour of Laxey’s plans
for a formal mechanism to help
increase Alliance Trust’s share price.
The investment firm’s shares cur-
rently trade at a discount of about 17
per cent to its net asset value.
Laxey has tabled a resolution for
the group’s 20 May annual meeting
calling for a control mechanism on
Alliance’s share price.
4 News CITYA.M. 11 MAY 2011

Tech Top Trumps.

How the other
SOCIAL NETWORK SOCIAL GAMING SOCIAL NETWORK DEAL-OF-THE-DAY WEBSITE privately held
firms measure
According to reports, Twitter Continues to climb. Last Recently knocked back a bid up (left).
recently turned down a bid of A recent fundraising valued it count saw secondary share of around $6bn. Reports sug-
around $10bn. at more than $10bn trades value it at $60bn gest a value of up to $20bn Skype founders
Niklas
Unlikely. Founder Biz Stone Says an IPO is planned for Very high. Founder Mark Very high. Has met with Zennström
recently said the firm has no 2012 but could secretly hope Zuckerberg has long said the bankers to discuss a second (right) and Janus
IPO plans. 2/10 for trade buyer. 7/10 firm will float. 8/10 half IPO. 8/10
Friis (middle
right) will make
Google held talks earlier this Denies it is for sale, but with a Only Apple with its $65bn Google tried to buy it but
year. Apple is a long-term valuation this high could prob- cash-pile could really afford would baulk at the $20bn millions from the
admirer. 8/10 ably be persuaded. 4/10 it. 2/10 price-tag. 5/10 sale to Steve
Ballmer’s
Launched in June 2006 Founded in January 2007, it is One of the oldest of the new Only started up in November Microsoft (far
Twitter is almost five-years- now four-years-old crop at 7-years-old. Founded 2008, making it just two- right)
old. by Zuckerberg in 2004. years-old

Credits itself with sparking The social gaming firm is used Has over 500m users. Even Attracts a vast, cultish crowd
the Middle East democracy, by millions but still most has its own movie. As big as of bargain hunters. 6/10
amongst other things. 9/10 famous for FarmVille. 5/10 it gets. 10/10

BUSINESS SOCIAL NETWORK

Hopes to achieve a market

capitalisation of $3.3bn in its
IPO later this month

ONLY ONE WATCH MANUFACTURE CAN SHOW YOU THIS. Slated for this month it is
almost certain to go ahead but
the price looks steep. 9/10

Unlikely at this stage, espe-

cially as trade buyers could
be put off by the price. 2/10

The daddy of the group at

eight-years-old.

A useful service used by mil-

lions but lacks the impact of
rivals. 3/10

Microsoft in
shock Skype
acquisition
significant new business and revenue
▲

TECHNOLOGY
opportunities”.
BY STEVE DINNEEN He added: “Skype is a phenomenal
MICROSOFT stunned the market yes- service that is loved by millions of peo-
terday with the announcement it will ple around the world. Together we will
buy online video-calling service Skype create the future of real-time commu-
for an eye-watering $8.5bn (£5.2bn). nications so people can easily stay con-
Chief executive Steve Ballmer nected anywhere in the world.”
smashed the software giant’s acquisi- Microsoft snapped the firm up after
tion record, which had stood at $6.3bn speculation of a tie-up between Skype
for digital marketing firm aQuantive. and either Google or Facebook. The
Ballmer has been sitting on a vast Luxembourg-based firm, which
war chest, with investors calling for a clocked revenues of $860m in 2010
marquee acquisition. Yesterday they with a net loss of $7m, had planned an
got one. IPO for the second-half of this year. It
Skype boss Tony Bates will become had hoped to raise $1bn.
Our collection of mechanical calibres, all made in-house, is unique president of the newly-formed Ballmer said his company did not
in the world with unparalleled breadth in shape, design and level of Microsoft Skype Division. use Wall Street advisers on the deal,
complication: for every watch its own calibre. Since 1833, we have
produced 1,231 different mechanical calibres. Out of the 60 calibres The loss-making site has had a approaching the investor group that
in creation today, the most exceptional are shown here. Absolute rollercoaster few years. It was sold to owns Skype directly. Skype was
leadership in the history of fine watchmaking. eBay in 2005 for $3.1bn but the auc- advised by Goldman Sachs and
tion site struggled to integrate it into JPMorgan.
YOU DESERVE A REAL WATCH. its platform. The founders then
joined a consortium to buy back a 70 ANALYSIS l Microsoft Corporation
per cent stake. 27.5 $ 25.56
In partnership with
EBay has emerged from the saga 10 May
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with a tidy profit, booking $2.55bn
T

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from Microsoft and clawing back

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26.5
•

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$1.9bn in the sale to the consortium

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Jaeger-LeCoultre in partnership with UNESCO to raise awareness

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IT
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AG I
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and protect marine World Heritage. A real commitment to a in 2009.
•

precious cause. United Nations World Heritage

Educational, Scientific and
www.jaeger-lecoultre.com Cultural Organization
Centre Ballmer said the purchase will 25.5
“increase the accessibility of real-time
video and voice communications,
bringing benefits to both consumers 24.5
and enterprise users and generating ANALYSIS l Microsoft Corporation
27.5 $

26.5

25.5

24.5
1 Mar 21 Mar 8 Apr
25.56
10 May

Apr 28
Banco Santander

1 Mar 21 Mar 8 Apr Apr 28

CITYA.M. 11 MAY 2011 News 5

Spending this much on a telco is absurd

MICROSOFT is splashing the cash
again in its war with Google, a war of
attrition it is losing badly. No-one
denies that the software giant needs
to use the $50bn it has sitting in cash
and short-term investments to buy
new companies. Whether Skype is
the right buy at $8.5bn all comes
down to whether you think the com-
pany is a social network or not. If it is,
then it needs to be considered along-
side Facebook et al, which have
attracted stratospheric price tags.
But we think Skype is a telecoms
company – not a social network. Its
customers use it to make phone calls,
not to organise and catalogue their
social lives. Compared to other tele-
coms companies, an $8.5bn valua-
tion is simply absurd.
Consider this: Microsoft is spend-
ing $1,000 on each of Skype’s 6m pay-
ing customers, who each contributed
a measly $33 to last year’s operating
profit of $264m.
Now look at Vodafone: Each of its
341m customers contributed $55.29
to operating profit of $18.8m in 2010.
Based on its market cap of $146.8bn,
shareholders value each of
Vodafone’s customers at $430 – less
than half the amount Microsoft is
paying for Skype’s users.
Bulls will argue that Skype has bet-
ter growth prospects, but around a
third of Vodafone’s customers are in
India, where the average spend-per-
customer is very low and likely to rise
in the future.
There is some method in
Microsoft’s madness. It wants to use
Skype to create a so-called “unified
communications system”, a one-stop
shop for email, instant messaging,
voice and video. It is already very suc-
cesful in the first two, and hopes that
Skype can help it to break into the
others. But this is the wrong deal at
the wrong price.
david.crow@cityam.com
BOTTOMLINE
Analysis by David Crow

SKYPE SHAREHOLDERS | WHO WILL GET WHAT? TRADE ANY MARKET

Canadian Pension Plan Investment Board,
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eBay 30% $2.6bn Ev
Skype founders Niklas Zennström and
Janus Friis via their company Joltid 14% $1.2bn
Andreessen Horowitz 1.8% $153m

Founders’ stake gives

them $1.2bn windfall WORLD
AROUND THE
ADE
TECHNOLOGY The pair then joined a consor-
WITH EVERY TR
▲

BY STEVE DINNEEN tium that bought back a majority

SKYPE founders Niklas Zennström
and Janus Friis will probably still be
out celebrating this morning. Their
company, Joltid, owns a stake which
has been valued at $1.2bn (£730m)
in Microsoft’s eye-watering $8.5bn
swoop; to be paid in cold, hard cash.
The sale is the second windfall the
two have received from their online
video calling service, the first com-
ing after the sale of Skype to eBay for
around $3.1bn. Legal action fol-
lowed after a spat over who owned
intellectual property rights.
stake in Skype after eBay struggled
to integrate it into its online auc-
tion services.
The pair met while working for
European telecom operator Tele2.
In 2001 they co-founded peer-to-
peer file sharing application Kazaa.
After a legal confrontation with
rights holders Kazaa was sold to
Sharman Networks.
Zennström and Friis, aged just 45
and 35, founded several other tech-
nology firms, most notable Joltid
which they still operate, before
their greatest achievement – Skype.

What tech giant may have in WIN an amazing experience every week,
including a fabulous trip around the world for two*
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Microsoft’s struggling mobile phone
▲

TECHNOLOGY
THE ADJECTIVES “stunned” and
“shocked” have become commonplace
in a technology world where mam-
moth valuations are almost de rigueur;
Facebook worth more than $60bn,
Groupon rejecting a $6bn offer,
LinkedIn valued at up to $3.3bn.
But even in this context Microsoft’s
$8.5bn swoop for Skype has raised eye-
brows and dropped jaws. Analysts have
been falling over themselves to explain
the rationale of this bumper invest-
ment. Perhaps the most intriguing
prospects relate to synergies with
business. For more information visit
Ballmer has already made it clear
that knocking Google’s Android off its www.cityindex.co.uk/world
perch is a priority for the firm, which
handed over an estimated $1bn to
Nokia to develop handsets for its
Windows Phone 7 software.
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Skype technology into its Xbox gaming
hub, and its Office software to lure cor-
porate customers.
 6 News CITYA.M. 11 MAY 2011

Coalition makes
BG Group says 200 changes
North Sea tax to the tax code

to cost £162m
POLITICS

▲
THE coalition government has made
200 changes to the tax code since tak-
ing power last year – despite promising
to simplify the tax system.
The Association of Chartered
Certified Accountants (ACCA) said the
▲

ENERGY stoppages and civil unrest disrupting huge number of changes had created a
BY MARION DAKERS plants in Tunisia and Egypt, while pre- “compliance headache for account-
tax profit fell 28 per cent to $1.45bn ants, businesses and individuals”.
BG GROUP yesterday disappointed on higher costs. Oil companies are disappointed by George Osborne’s tax raid on oil Picture: REUTERS Chancellor George Osborne set up a
investors with a 25 per cent year-on- BG Group’s shares closed down 1.6 new Office of Tax Simplification amid
year drop in quarterly earnings, after per cent yesterday. MUTINY IN THE NORTH SEA: ENERGY FIRMS’ IRE much fanfare last July, and tasked it
taking a $265m (£162m) hit from the BG’s warning came as law firm with cutting down a tax code he said
North Sea tax hike and reporting a McGrigors said George Osborne’s tax had become overly complex after “a
five per cent production drop. raid on oil companies had wiped out “Oil firms make long-term investment operations and projects that we have decade of meddling and intervening”
Chief executive Frank Chapman confidence within the UK oil and gas decisions on a stable and predictable in our plan and that [a] £700m invest- by Labour.
was scathing about the government’s sector. tax regime. This is not helpful.” Steve ment.” Centrica, 4 April But Osborne has made more
surprise levy on energy, which taxes A survey sponsored by McGrigors Jenkins, Nautical CEO and Oil and Gas changes to the tax code in a single year
gas firms on the same tariff as oil said it had found “the first empirical Independents’ Association, 23 March “It was very disappointing. It was than his predecessor Gordon Brown.
explorers: “I have no reason to be con- data... to demonstrate the very tangi- done without consultation with the Brown made 130 changes in his
fident today that a compromise will ble damage” done by the levy. "We believed that we were able to industry. It’s the third tax hike in 10 Budgets of 1997 and 1998 and around
reached. We will continue to make develop [oil fields with £6.2bn invest- years, making the UK one of the more 120 in the post-election Budgets of
our point… but I don’t think the gov- ANALYSIS l BG ment] but with these proposed tax unstable investment climates for our 2002 and 2006.
ernment will change their approach 1,600
1,412.50 increases we need to reconsider the business” Chevron chairman and chief Chas Roy-Chowdhury, head of taxa-
p 10 May
in this matter.” project.” Statoil, 30 March executive John Watson, 18 April tion at ACCA, said: “The number of
Chapman said that current work in changes made means the government
the North Sea would go ahead as “[The tax] will reduce investment, put “The coalition government has provid- is taking two steps back for every one
1,500
planned, but new projects “are placed further pressure on oil and gas supply ed yet another unfortunate example of step forward in its battle to get to grips
on a rank list of global opportunities… in the UK and ultimately could drive oil UK political instability to the interna- with the UK’s complicated tax system.”
That the UK tax burden has increased prices up further”. Valiant, 31 March tional investor community. The Last week, John Whiting, the “tax
unsurprisingly moves these projects 1,400 prospects for all long term energy tsar” appointed to head up the OTS,
further down our list.” “We are assessing the impact of the investment in this country are harmed embarrassed the chancellor by hitting
Production levels fell by 4.5m bar- proposed tax increase on all of our by this.” Oil & Gas UK, 10 May out at his tax raid on North Sea oil and
rels in the last quarter due to planned
ANALYSIS l BG
1,600

1,500

1,400
p

14 Feb 4 Mar 24 Mar

1,412.50
10 May

13 Apr 9 May
14 Feb 4 Mar 24 Mar 13 Apr 9 May gas firms.
CITYA.M. 11 MAY 2011 Focus on Pace 7

Pace tumbles Firm’s founder takes a hit

after warning DAVID Hood stands to lose the most from yesterday’s
profit warning at Pace, with his 16.5 per cent stake
taking a heavy hit in yesterday’s 39 per cent share
price collapse.
Hood stepped down from the firm in 1997, having
a plane hire company based
at Leeds-Bradford airport,
where he acts as chairman
and sole shareholder.
He also holds non-exec

on its profits
nursed it from a niche modem sales outfit in Shipley posts at commercial prop-
in 1982 to a FTSE 250 international TV tech firm. erty investor Talisman
And while Hood has sold shares worth some £200m Capital and online directo-
since he took a backseat, he still controls a sizeable ry City Visitor, and co-
chunk of the business through his family trust, part- founded London-based
ner Joanne Haigh and his own personal holding. chiropractor Freedom Back
Yorkshireman Hood was named the UK’s 287th Clinics in 2009.
richest person in last week’s Sunday Times rich list, He received an OBE in
operating profit of between £97m and with a person wealth of £252m. He reportedly owns a 1996 for
▲

TECHNOLOGY £110m – below consensus estimates of Boeing 737 jet. services to

BY MARION DAKERS £114m. His interest in private planes extends to Multiflight, business. DAVID HOOD
SHARES in TV tech firm Pace crashed The company previously lost 20 per
39 per cent yesterday after an unsched- cent of its market value in March after
uled trading statement warned that it announced that a customer had
profits for the year would be worse delayed a major US contract.
than forecast. Pace said it now expects operating
The profit warning wiped nearly margins of 5.5 per cent, but is confi-
£300m from Pace’s market value and dent of a return to its target of eight
led to speculation that the firm is vul- per cent by the end of the year. Chief
nerable to a takeover approach or executive Neil Gaydon said the warn-
management shake-up (see Analyst ing was “disappointing”, but added
Views, below). that the firm has already taken action.
Pace, which makes digital set-top
boxes, said supply chain costs have
ANALYSIS l Pace
risen during the year, exacerbated by
240
the Japanese earthquake and tsunami p
220
in March.
Its European business has been prof- 200 92.60
10 May
iting less than expected despite hitting 180
its revenue targets. 160
Pace said it will close its network 140
business, which provides digital TV for 120
those outside the normal broadcast 100
range, due to “insufficient demand”.
80
The Pace board has guided on an 14 Feb 4 Mar 24 Mar 13 Apr 9 May

ANALYST VIEWS: WHAT’S NEXT FOR PACE?

Interviews by Marion Dakers

JONATHAN IMLAH | COLLINS STEWART

“ The company needs to focus on execution, and turning around the

European business, which has underperformed. I don’t think it will be looking to

”
do anything revolutionary. Aside from this, there’s not much it can do about pres-
sures from outside, for example a board change or takeover approach.

ARUN GEORGE | ALTIUM

“ The statement derails what’s left of the investment thesis. It offers a

list of reasons that contributed to the lowered margin expansion, none of which

”
seems to be credible in our view. Pace now faces an uphill task in rebuilding confi-
dence and we believe needs a refresh of the leadership team.

ERIC BURNS |

“ Today’s statement raises as many questions as it provides answers, not

least why what appears to have been in part a first-quarter issue was not announced

”
until May and why management are so confident second-half margins will bounce
back. Although sales to date have held up well our cynical disposition makes
us speculate that this might be the next metric to go into reverse.

CSR says new chips will

help in smartphone race
CSR said its newest combination
▲

TECHNOLOGY chips in products like Samsung’s

CHIPMAKER CSR, whose planned
takeover of Zoran was thrown into
doubt yesterday, has said support for
its new wifi-bluetooth chip and con-
tracts for its GPS products from
Samsung and Huawei will help it
recover in the smartphone market.
The positive news on its product
pipeline yesterday outweighed a
weaker-than-expected forecast for
the current quarter and a five per
cent decline in first-quarter sales.
Galaxy II smartphone and the com-
mitment from a manufacturer for
its wifi-bluetooth chip would deliver
growth.
The outlook came a day after
CSR’s takeover of imaging chipmak-
er Zoran was cast into doubt by poor
results from the US firm.
CSR said it would look again at the
agreed all-share deal after Zoran was
hit by Cisco’s decision to close its
Flip video camera unit and supply
chain problems in Japan.
 8 News CITYA.M. 11 MAY 2011

Oil prices take a knock from margin hike

WORLD ECONOMY

▲
BY JULIAN HARRIS
OIL prices took a hit yesterday from
the news of another hike in mar-
gins from the world’s largest com-
modities exchange.
The CME Group announced the
fourth rise since February, which
will take effect from today.
Margins will climb by 25 per cent,
boosting the cost of holding posi-
tions.
The CME’s move to make it more
expensive for speculators to trade
oil futures on margin, while not
completely unexpected, added to a
sense that a year-long steep climb in
commodity prices is on hold for
now.
Brent crude fell 1.9 per cent to
$113.79 a barrel before moving back
above $114.
However, in later trading, losses
were pared by concerns that flood-
ing in the US could hit refinery
operations.
While no refineries have been
forced to cut operations yet, rising
waters along the Mississippi threat-
en to disrupt plants in Louisiana in
the next two weeks.
US crude traded up 12 cents to
$102.67 a barrel, while US gasoline
futures gained 2.7 per cent.
Brent rose $1.06 to $116.96 follow-
ing the news, in late morning trad-
ing in the US, before later reaching
almost $118.
Following on from Monday’s
gains in oil, yesterday’s prices added
to the recent volatility in commodi-
ty markets. Last week saw US crude
prices fall from over $114 a barrel --
the highest level since 2008 -- to $94
a barrel. That drop was part of a
wider commodities sell-off, spurred
in part by recent margin increases
of 84 per cent in silver.
Some analysts also cited China’s
huge trade surplus as having a possi-
ble knock on effect on prices. The
booming economy’s lower than
expected growth in imports for last
month were partly attributed to
commodity prices that spiked in
April. Chinese crude oil imports in
April were the third highest on
record, on a daily basis, at 5.24m
barrels of crude oil per day (bpd), up
1.7 per cent on the year, official data
showed yesterday.
CHINA’S EXPORTS SOAR: P16

Resolution life sales

jump by 52 per cent
INSURANCE
▲

BY ALISON LOCK However, the sales narrowly damaging its value.

RESOLUTION, the buyer and con-
solidator of UK life insurance
assets, sold £270m of fresh life poli-
cies in the first three months of the
year, it said yesterday.
New sales through its newly-
renamed Friends Life business rose
52 per cent or £92m on the same
period in 2010, with £66m of the
increase attributed to its acquisi-
tions last year of Axa UK Life and
Bupa Health Assurance.
Sales in the UK were £172m in
the quarter, it said in its interim
management statement.
missed the consensus analyst esti-
mate of £275m.
Resolution confirmed it was on
track to deliver the mid-teen
returns it has targeted from its
strategy to buy and merge under-
performing UK life insurers.
The integration of its three
acquisitions to date was “progress-
ing well” towards achieving the
expected £112m annual pre-tax
synergies by 2013, it said.
And it “remains confident” of
meeting its target of returning
£400m cash per year to sharehold-
ers from the end of 2011 without
Investec analyst Kevin Ryan said
Resolution remained an attractive
stock as it “remains a cash cow run
entirely for the benefit of share-
holders with the management
interests completely aligned.”
But he questioned why share-
holders cash had remained flat at
just over £1bn in the quarter, and
said he was eager for more infor-
mation on when Resolution would
return the promised capital to its
investors.
Resolution’s shares fell 0.4 per
cent to 296.3p yesterday valuing
the firm at about £4.3bn.

SHAREHOLDER VIEWS: WHAT DID YOU MAKE OF THE

ANNUAL GENERAL MEETING? Interviews by Alison Lock No fireworks
JOHN LANE | SHAREHOLDER
at National
“National Express stopped Elliott
from putting its nominees on the
board, and it has made the board
Express AGM
push forward with the search
process for non-executives. So I think
▲

TRANSPORT
it has been good for the company.” BY ALISON LOCK

JON BARNES | SHAREHOLDER NATIONAL Express averted a share-

holder showdown at its annual meet-
ing after sealing an 11th-hour truce
“It went quite well – people thought with its activist investor yesterday.
Elliott Advisors, the group’s
there might be fireworks, but it turned largest shareholder, accepted a one-
out to be a mix of a few fireworks and a year restraint on activism while for-
mer DHL UK chief executive Chris
damp squib in the end. There were some Muntwyler will join the board.
pertinent questions and the chairman did National Express chief executive
a good job of moving the meeting along.” Dean Finch looked relieved as he
spoke to shareholders after the meet-
ing, describing Elliott’s campaign as
PETER COLLIER | SHAREHOLDER a “distraction”, City A.M. was told.
Discussion of Elliott’s activism was
muted at the meeting, while Elliott
“One or two professionals had an axe representative Dominic Dolinetz
voted and left before it began.
to grind but I thought the chairman But Elliott’s actions have impeded
gave very good answers. I think National Express’ search for new non-
executives, City A.M. understands, as
National Express has turned a corner leading candidates including a US
financially and remain supportive of nominee expressed unwillingness to
commit to a company in conflict with
the board.” its shareholders.
CITYA.M. 11 MAY 2011
Healthcare Locums, which ousted chief Kate Bleasdale (above) has replaced its entire board
HCL gets new directors
CORPORATE GOVERNANCE
▲
BY MARION DAKERS
SCANDAL-HIT recruitment firm
Healthcare Locums (HCL)
announced three new board mem-
bers yesterday after five months
without a management team –
though some familiar faces
remain.
Chairman Peter Sullivan, who
was brought in to oversee the firm
in February shortly before founder
Kate Bleasdale was sacked, has
named Andy McRae as a non-execu-
tive director.
McRae was chief operating offi-
Barclays wins $1bn
on Lehman payout
BANKING
▲
BY ALISON LOCK
BARCLAYS yesterday won a $1.1bn
(£682m) payout from the trustee of
Lehman Brothers’ estate after agree-
ing a value for disputed assets
linked to its purchase of Lehman’s
US arm.
The payment settles a dispute
over how much “clearance box”
assets that were held to facilitate
the clearance of securities trading
should be worth.
A US bankruptcy court ruled in
February that Barclays was entitled
to the funds, but the two sides dis-
agreed over whether it should be
paid their original value of $869m
NEW START FOR THE LONDON STOCK EXCHANGE
cer for HCL in 2009 before moving
to run the company’s recent acqui-
sition, Healthcare Australia.
Sullivan has also brought in
Colin Whipp as interim chief finan-
cial officer, after hiring him as an
adviser on the firm’s accounting
irregularities several months ago.
New chief executive Stephen
Burke, 51, has come out of semi-
retirement, having spent the last
six years in non-executive roles.
Before this he was an executive
director at recruitment firm
Michael Page. Sullivan said the
appointments were “an important
milestone”.
or a larger amount based on the
addition of interest or appreciation.
Barclays, led by chief executive
Bob Diamond (pictured) said the
$1.1bn accord represented
the appreciated value of the
underlying assets.
However, an attorney for
Lehman trustee James
Giddens said the figure
represented the $869m
plus interest. The
accord settles part
of a total $3.5bn
dispute over for-
mer Lehman
assets in a US
bankruptcy court
but debate over
News 9
NEWS | IN BRIEF
Google joins online music drive
Google has launched an online music
locker service to allow users to store and
access their songs wherever they are,
similar to one launched by Amazon.com
in March. Like the Amazon Cloud Drive
player, the Google music service is being
introduced without any prior licensing
deals with major music labels, following
months of fruitless negotiations. The new
service will allow a user to upload up to
20,000 songs on to the service. Music
Beta will be available for free for a limit-
ed time to users who request an invita-
tion in the US. The Google music service
comes alongside a licensed movie service
which allows YouTube and Android
device users to rent movies from $1.99.
Ad revenues down at Johnston
Johnston Press has said that its advertis-
ing revenues in the 18 weeks to May
were down by 10.6 per cent from the
same period a year ago, though the
downward trend moderated to a decline
of 7.8 per cent in the last five weeks of
that period. The company also said that
increased newsprint prices were impact-
ing business, and that it would imple-
ment savings of £5m this year to offset
the hike in costs. Johnston said public
sector cutbacks were an important fac-
tor behind a 30.7 per cent fall in employ-
ment advertising. Johnston Press
publishes the Scotsman and the
Yorkshire Post.
the remaining billions is still ongo-
ing.
Giddens’ attorney argued that
Barclays should return the $2.1bn it
received when it bought Lehman’s
US brokerage business, and pay
interest.
Barclays said it inherited about
$6bn in liabilities when it agreed to
take on Lehman’s proprietary cash
margin held at clearing houses.
Even if that were offset by
other assets related to the
deal, a $1bn offset is still in
order, it argued. Judge
James Peck, delayed his
ruling yesterday to take
longer to review the
arguments.
THE London Stock
Exchange unveiled
its new market
opening ceremony
yesterday, reinstat-
ing a tradition lost
when the bourse
closed its trading
floors. Chancellor
George Osborne
(centre) formally
opened the new
LCD display at the
exchange’s head-
quarters in
Paternoster Square,
which will be subse-
quently switched on
by new companies
joining the London
market and “non-
listing VIPs”.
Picture: Micha
Theiner/City A.M.
 The Capitalist
10
MORRISONS’ FINANCE CONTROLLER
COOKS UP WINNING WEB STRATEGY
WITH a name like Richard Pennycook,
there was only ever one possible voca-
tion for Morrisons’ group finance
director (FD), who proved he is worthy
of the title by restoring the grocer’s
profits after the slump when it bought
Safeway in 2005.
So keep those “cooking the books”
jokes to yourself, because Pennycook
last night received his sector’s highest
honour at the FDs’ Excellence Awards
React instantly with our new free iPhone app.
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ì 9LHZOLYHSULFHVDQG5HXWHUVQHZVSHUVRQDOLVH\RXU:DWFKOLVWV
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in Grosvenor Square, beating rival
FDs Paul Brooks from Experian,
Michael McKeown of Severn Trent,
John Bason of Associated British
Foods and Douglas Hurt of IMI to be
named FTSE 100 FD of the Year 2011.
Pennycook, 47, was rewarded for
his “strategic move towards a multi-
channel approach” for the value
supermarket chain, overseeing the
£70m acquisition of Peterborough
Cell,
cell,
cell.
EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
retailer Kiddicare.com in February
and its £32m stake in US online gro-
cer FreshDirect on 9 March.
So is the future of supermarket
shopping online? Pennycook was
unable to attend the ceremony, so it
was left to Morrisons chief account-
ant Robin Brown to fill in the gaps of
Morrisons’ strategy. “We don’t sense
that our competitors are making
money from online sales,” he told The
Capitalist. “So we bought a 10 per cent
stake in Fresh Direct, which has been
making good money in the US for
years, to make that model work.
He added: “We are playing
catch-up in the online retail
race with the competition –
but without the hassle of hav-
ing to work out how to make
that business profitable.”
Meanwhile, the evening’s
other winners collected their
awards from former ITN
and BBC journal-
ist Peter
Sissons, who
said of his
time at the
BBC: “One
thing I look forward
learned was
the value of
teamwork,
CITYA.M. 11 MAY 2011
Top: Host Peter Sissons
Middle: Neeraj Kapur and Andrew
Tarbutt from RBS; Sue Best from the
Institute of Chartered Accountants and
Margaret Bowler of Grant Thornton
Left: Andrew Lewis, FD of Avon Rubber
Below: Morrisons’ chief accountant Robin
Brown
which means never taking all the
blame for yourself.”
“Of course, we do exclude the FD of
the BBC, Zarin Patel,” he continued,
before presenting the award for
Young FD of the Year to Avon Rubber’s
Andrew Lewis, and the FTSE 250 FD of
the Year jointly to Mike Butterworth
from Cookson Group and Richard
Perry from Fenner.
Richard Hutton of Greggs the baker
picked up the Sustainable Business
Award. Fellow guest, building con-
tractor Steve Hayman, joked “to
run a sustainable business you
have to have a few fingers in a
few pies.” Meanwhile Glenn
Hayward of Nominet was
nominated as the FD of the
Future.
No doubt headhunter Kelvin
Trott of Alexander Charles,
voted Recruitment Firm of
the Year, will be
keeping a close
eye on the ris-
ing stars of the
FD world. “I
very much
to meeting
them,” he
said.
CITYA.M. 11 MAY 2011 News 11

Strong branding needed to survive PR pitfalls

brand.
Apple’s branding has been excep-
tional over the last few years but it has
not stopped things going wrong.
However that strength of branding has
meant that once it has responded to
issues in a satisfactory manner the
problem has quickly gone away.
BRANDINDEX The antennae design flaw on the
STEPHAN SHAKESPEARE iPhone4 last summer saw large drops
in BrandIndex buzz score which were
exacerbated by Apple’s initially clumsy
by the start of September. factorily, as a few days after that the The lesson – withstanding the
The poor initial reaction meant the comeback began. Although it is yet to shocks caused by PR disasters needs a
issue dragged on for longer than it get all the way back to where it was strong brand and a believable and
should have done but Apple got there in the US and Germany, history and timely response.
in the end the trend suggest that it will do so Stephan Shakespeare is chief executive of
So when researchers caused privacy soon. YouGov
concerns by revealing that location
information is stored on the iPhone we ANALYSIS l Apple buzz after location ANALYSIS l Apple buzz after antennae news
knew that Apple’s response would be 30.0 track news 30.0
crucial.
Buzz scores immediately dropped in
DE 20.0
US
20.0
US UK
the US (by 19 points) and Germany (by UK 10.0

U
NDERSTANDABLY brands put in response (it dropped over 40 points in 12 points), although interestingly the
a lot of work to control PR but both the US and the UK in July 2010) UK remained largely immune on this 0.0
10.0
sometimes disasters happen and but by understanding what was hap- occasion, with only a small decline (of -10.0
the impact that then has on the pening it was able to develop that five points).
brand is dependent on the response response and the free distribution of This time Apple responded quickly 0.0 -20.0
and the underlying strength of the covers saw it regain all the lost ground (on 25 April) and, it would seem, satis- 18 04 2011 25 04 2011 01 05 2011 09 05 2011 01 07 2010 25 07 2010 16 08 2010 15 09 2010

NEWS | IN BRIEF
Xcite falls as reserves disappoint GM invests $2bn in its plants
Shares in AIM-listed oil explorer Xcite
lost 25.7 per cent yesterday after an
independent report on its Bentley field in
the North Sea revealed less oil than
hoped. The report’s best estimate valued
the reserves at $961m (£588.4m), which
chief executive Richard Smith said was
“an excellent outcome” which represents
“a key milestone in our programme to
determine full field reserves”.
General Motors (GM) said yesterday it will
invest about $2bn (£1.2m) in 17 US plants,
including a facility here that makes trans-
missions for small cars, as the automaker
shifts from recovery mode to investing in
future products. GM said the plans will
create or preserve more than 4,000 jobs
as it retools the plants in eight states. The
company employs 202,000 people global-
ly, including 77,000 in the US.

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 12 Consumer News
TUI narrows losses
with overseas boost
LEISURE
▲
BY JOHN DUNNE
TUI Travel, Europe’s biggest tour
operator, yesterday said it was on
track to meet full-year expectations
as increased demand for alternative
destinations offset the impact of
unrest in Egypt and Tunisia.
The FTSE 100 company, majority
owned by German group TUI AG, said
disruption from troubles in Egypt
and Tunisia had knocked £29m off
first-half profit, compared with the
£30m it anticipated. Overall TUI
Travel lost £307m in the six months
Tesco appeals
to aspirational
customer base
▲
RETAIL
TESCO plans to create new brands to
spruce up its product ranges and
appeal to increasingly aspirational
shoppers across the world, its new
chief executive said yesterday.
Phil Clarke, outlining his strategy,
said Tesco would be online in all 15 of
its markets this decade and, while it
would continue to expand rapidly in
its main British market, it would like-
ly allocate a growing proportion of
resources to its overseas businesses.
“It is a change of gear, not a change
of direction,” said Clarke, who will
present the strategy to 5,000
managers in 21 meetings across the
world over the next 12 weeks. New,
however, is a goal to create “highly
valued brands”. He said the brands
would not have Tesco emblazoned
on them.
to 31 March compared with £322m in
the same period last year. For the sec-
ond-half, TUI Travel said it expected
to be able to fully mitigate the impact
by increasing the amount of holidays
on sale to alternative destinations.
“The flexibility of our business
model has allowed us to react quickly
to mitigate the impact of the events
in North Africa” chief executive Peter
Long said.
“We have reshaped our pro-
grammes across all source markets to
satisfy the shift in demand to alterna-
tive destinations including Spain,
Greece and Turkey,” he added.
N Brown dividend
up as profit jumps
RETAIL
HOME shopping business N Brown
yesterday posted another year of
growth, despite difficult trading con-
ditions.
The retailer, which has brands
including High and Mighty, Figleaves,
Jacamo and Simply Be, reported rev-
enues of £718m for the year to 28
February, up 4.2 per cent.
Pre-tax profits were boosted by 5.5
per cent to £98.2m. The company
hiked its dividend by 15 per cent and
signalled future increases. N Brown’s
brands targeting younger customers
had performed particularly well,
with sales up 11 per cent, while its
brands targeting older customers
declined by nine per cent.
Chief executive Alan White said:
“We have high inflation, affecting
things like food and energy, and
In contrast, arch-rival Thomas
Cook said on Monday the impact of
unrest in the Arab world had been
worse than previously thought.
ANALYSIS l TUI Travel
250
248.00
p 10 May
240
230
220
14 Feb 4 Mar 24 Mar 13 Apr
interest rates are very low, which is a
bad combination for our older cus-
tomers.
“They are the victims of the
economic circumstances. However
our ranges for younger people are
doing well.”
He said the company’s interna-
tional businesses – including opera-
tions in the US – were holding
up well.
“There is more pressure in the UK
because the cuts are being mad now.
In the US everyone is asking when it
will happen. Hopefully the way our
government is doing it will work.”
White said that the company was off
the acquisition trail for the moment
as it develops its existing businesses.
N Brown said that it expected to
deliver another good result in
2011/12. It is paying a dividend of
12.41p a share.
9 May TUI boss Peter Long is upbeat about the company’s performance
IHG enjoys sales rise due
to US business travellers
▲
LEISURE
INTERCONTINENTAL Hotels Group
(IHG) has lifted first-quarter profit by
more than a third, welcoming back
the US business traveller and point-
ing to stronger bookings and higher
room rates for the rest of the year.
The world’s biggest hotelier, which
operates Holiday Inn, Crowne Plaza as
well as InterContinental brands, said
the United States posted its highest
growth in five years while China
was its strongest market with big
rises in occupancy and rates.
Hoteliers are reporting more guests
as the economic recovery boosts
business travel and offsets the
impact of earthquakes in Asia and
unrest in North Africa and the
Middle East.
As occupancy levels rise, room
rates are being pushed higher.
Outgoing chief executive Andrew
Cosslett, who will be replaced by
CITYA.M. 11 MAY 2011
finance chief Richard Solomons, was
confident about the outlook for
the rest of the year and said the
group was seeing rising room
rates around the world, including
the United States which accounts for
two thirds of company profit.
The hotelier, which runs
around 4,500 hotels, posted operat-
ing profits up 35 per cent at $112m
(£68.5m) for the first three months
of 2011, beating a company
consensus of $106m. Quarterly sales
rose nine per cent to $396m.
InterContinental shares rose 3.9 per
cent to 1,298p driven by a good per-
formance across the group and in
particular by its largely franchised
US business.
“It looks like outgoing chief execu-
tive Andy Cosslett has timed his exit
to perfection with a top-of-the
range quarter one to mark his swan-
song,” said Nigel Parson at Evolution
Securities.
CITYA.M. 11 MAY 2011
Easyjet blames earnings hit
on an increase in fuel prices
AVIATION
▲
BY JOHN DUNNE
EASYJET yesterday said it had seen
its first-half losses almost double as
it struggled to put a lid on the
impact of higher fuel prices.
Europe’s second largest low-cost
airline by passenger numbers said
pre-tax losses rose 94 per cent to
£153m in the six months to the end
of March, compared with £79m in
the same period a year earlier.
But revenues rose eight per cent
to £1.27bn as the UK-based airline
carried 23.9m passengers, an
increase of 12 per cent.
Earnings were hit by the jump in
Getting into the Spirit: New chief finance officer Roddy Murray
Punch picks top execs
LEISURE
▲
BY HARRY BANKS
PUNCH Taverns has appointed
Roddy Murray as finance director
for its managed Spirit division,
which is due to be demerged
later this year.
Murray will join the group on 23
May and sit on the Spirit
board. He joins from the
BSS Group — a plumbing equip-
ment supplier — where he was
group finance director from 2006.
Consumer News
the price of fuel, which rose by 40
per cent in the first-half of the year,
and a rise in departure taxes.
A sharp increase in capacity,
up 11 per cent in the period,
was reflected by the airline
having to cut fares to fill
the seats, leading to a 2.1
per cent drop in revenue
per seat. The losses were
in line with expectations
following a profit warn-
ing by the company in late
January as fuel
costs surged.
The big freeze
also took its
toll.
His previous roles include stints at
Moss Bross and Mackay Stores as
well as Guinness plc, United
Distillers and Diageo. Punch
also confirmed that Steve Dando
has been appointed finance
director of Punch Taverns
after performing the role on an
“acting” basis.
“Roddy has a strong track
record of achievement which
will further strengthen the
team,” said chief executive Ian
Dyson.
13
EasyJet’s chief executive Carolyn
McCall (pictured) said: “The past six
months has been tough with
sharply rising fuel costs com-
bined with cautious behaviour
by consumers and an
adverse impact from taxes
on passengers.”
The company tried to
shrug off the widening
losses. EasyJet said the
airline was “highly cash
generative” and
plans to restart
dividend pay-
ments, with
the first next
year.
NEWS | IN BRIEF
Pendragon drives forward
Car dealership group Pendragon said
yesterday its first-quarter key indica-
tors were ahead of forecasts. In an
interim management statement for
the period to 31 March, the group
said aftersales turnover declined mar-
ginally but gross profit margin
improved by 280 basis points. Used
car volumes were up 15.6 per cent on
a like-for-like basis, outperforming a
flat market. Excluding scrappage, like-
for-like UK new retail car sales for the
key brands represented were up 9.1
per cent, compared with a market
increase of 7.5 per cent.
Foster’s wine spin-off thrives
Australia's Foster’s Group and its unit
Treasury Wine Estates just
grew more expensive for potential
suitors, following a strong debut for
the wine group on the Australian
bourse yesterday. Foster’s spun off
Treasury Wine Estates to its
shareholders to boost value. The
world’s second-largest wine company
ended its first day on the board
with a market value of A$2.18bn
(£1.9bn), near the top end of broker
valuations.
 14 News
NEWS | IN BRIEF
Asia boost for Deutsche Post
Deutsche Post DHL yesterday posted con-
sensus-beating quarterly earnings and
affirmed its 2011 outlook as demand from
Asia boosted profits at its express delivery
business. Deutsche Post’s first-quarter earn-
ings before interest and tax rose 11 per
cent to €629m (£553m), beating expecta-
tions. It expects its 2011 earnings to grow
to between €2.2bn and €2.4bn this year.
Confident start at Morgan Crucible shoulder the burden of compensating resi-
British industrial materials firm Morgan
Crucible said it is confident of delivering Fukushima Daiichi nuclear plant, a bill that
half-year results ahead of expectations as is expected to run into tens of billions of dol-
it sees a strong recovery across all its
geographies. The firm, which provides car- on Monday to finalise a scheme to allow
bon technology to the aerospace and space Tokyo Electric to cope with the payouts, but
exploration industries, also said it per-
formed better than its previous expecta-
tions in the first four months of 2011, driv-
en by a strong performance at its ceramics
division. The company, which initiated
streamlining of its business in July, said it
would incur restructuring costs of about
£5m in 2011, the majority of in the first-
half of the year.
Tepco needs compensation help
The head of Tokyo Electric Power Co
(Tepco) has asked the government to help
dents displaced by the crisis at its
lars. Ministers met over the weekend and
have been unable to agree on a final plan
which could mean a rise in electricity bills.
Capita Group confident
as sales pipeline improves
▲
SUPPORT SERVICES
BRITISH outsourcing group Capita yes-
terday reported solid trading in the
first four months of 2011 and said it
expected a strong second-half as its
outsourcing markets continued to
improve.
Capita, which manages TV licensing
for the BBC and criminal records serv-
ice for the Home Office, said yesterday
it was seeing a busy sales period, par-
ticularly across life, pensions and local
government markets. In the first four
months to 30 April it said it had signed
seven contracts, including extensions,
with an aggregate value of £313m.
Capita, which in February said its
bid pipeline stood at £4.7bn, said
opportunities in British central gov-
ernment were emerging as it looks to
deliver its public service reform.
Chief executive Paul Pindar has said
the company is interested in acquisi-
tions in financial services and health
divisions and establishing itself in pro-
viding administration services in the
defence industry.
Profit surge
lifts Imperial
Tobacco stock
▲
CONSUMER
BY HARRY BANKS
SHARES in Imperial Tobacco rose 3.1
per cent yesterday, after the world’s
fourth-biggest cigarette maker beat
forecasts with first-half earnings
growth, and announced a £500m
share buyback.
The Bristol-based company posted
adjusted earnings for the half-year
to the end of March of 88.4p a share,
beating consensus expectations of
87.8p. The half-year dividend is up 16
per cent to 28.1p a share.
The British group, with cigarette
brands including Lambert & Butler,
Fortuna and Gauloises, said the buy-
back was effective immediately,
while after this year the company
said it would look to grow dividends
ahead of earnings.
The group said Spain remains dif-
ficult but it had made gains else-
where in the EU and in the rest of
the world and is focused on produc-
ing a strong result for the second-
half.
Imperial, which makes over 300bn
cigarettes a year, said its volumes
fell 0.7 per cent in the half year to
the end of March but price rises
Balfour Beatty Rise in G4S first
orders on track quarter revenue
▲
INFRASTRUCTURE
BALFOUR Beatty, Britain’s largest infra-
structure contractor, said its order
book had grown since the end of 2010
and trading so far this year was in line
with its expectations.
The company said yesterday its busi-
nesses had adapted well to the uncer-
tainty in government capital
expenditure in the UK and the US in
the first four months of the year and
that it was “encouraged” by the
progress made so far.
Balfour Beatty said its order book
was ahead of the £15.2bn it reported at
the end of 2010, despite a hit from for-
eign exchange translation.
CITYA.M. 11 MAY 2011
Capita boss Paul Pindar has said the com-
pany will make acquisitions
pushed revenues up one per cent.
“Spain remains difficult but we
made gains elsewhere in the EU and
our growth in emerging markets
outside the EU was excellent,” said
chief executive Alison Cooper.
Imperial shares, after a period of
underperformance, have picked up
since late March rising from £18.61
to current levels, but they still trade
on a discount of 11.1 times earnings
for the current year compared to
rival British American Tobacco
which trades on 14 times earnings.
“Investors will want to see evi-
dence of less bad trading in the EU
before being willing to pay a sub-
stantially higher multiple,” said ana-
lyst Adam Spielman from Citi.
ANALYSIS l Imperial Tobacco Group
2200
p 2,224.00
2150 10 May
2100
2050
2000
1950
1900
1850
14 Feb 4 Mar 24 Mar 13 Apr 9 May
SECURITY
SECURITY services firm G4S yesterday
posted a rise in overall revenues for
the first-quarter and said it expected
its organic growth to improve after
recent contract wins.
G4S, which provides cash trans-
portation services, facilities manage-
ment and security and protection
around the world, said overall rev-
enues grew at 4.7 per cent at constant
exchange rates, with organic growth
up four per cent.
The company said profit for the
first three months to 31 March was
above 2010 levels but overall margins
were slightly lower.
CITYA.M. 11 MAY 2011 WORDS BY JULIET SAMUEL News 15

Hong Kong’s
lack of “a level playing field”.
“We’ll start with a patchwork but
the situation is evolving,” he says. The
reason for the mismatch, he says, is
that different financial centres have
different business flowing through

top regulator
them: “For example, Korea is more
worried about currency swaps, where-
as Singapore and Hong Kong are inter-
ested in interest rate swaps – you
respond to what is changing.”
But he recognises the City’s concern

comes home
London is overly worried about its own
decline, says Martin Wheatley.
THE City might be in the doldrums
about its declining global status, but
there is at least one well-respected
financial expert that London has
tempted back from an Asian hot spot –
he just happens to be a regulator.
Martin Wheatley, current chief
executive of Hong Kong’s Securities
and Futures Commission, will return
in September to create and head up
the UK’s brand new Financial Conduct
Authority, a watchdog being formed
to take over a chunk of the FSA’s func-
tions when it is abolished next year.
At the Economist Bellwether
Conference in London yesterday,
Wheatley found the great and good of
the Square Mile pressing their busi-
ness cards into his hand. “We’re happy
you’re back,” he was told. “It’s like he’s
David Bowie!” joked one observer.
Surely only in London could
Wheatley, peering neatly over his half-
moon spectacles, spark comparisons
with Bowie.
But the sense of anticipation at least
shows that London remains a leading
global master in one area: regulation.
“Having been in Hong Kong for six
years, the one market we look to most
in terms of global leadership is
London,” he told City A.M.. “The UK has
always been one of the dominant
thought leaders in regulation. It is less
captured by the industry it is regulat-
ing than anywhere else.”
As for the doom and gloom narra-
tives of the City’s diminishing status,
he is dismissive: “I don’t think in
terms of London being in decline. In
fact, with the current economy, the
financial industry will become more
important in the UK.”
He is also sanguine about the
prospect of competing regulatory
regimes, despite banks decrying the
Speaking at a conference yesterday, Wheatley was in high demand.
about its voice being swallowed by
Europe, with mutterings that over-
hauling the FSA during a pivotal year
for regulation has not helped London’s
lobbying power. “I’m well aware of the
concern and we have to work hard at
it. It is a concern now because before
the directives always had a get-out
clause. Now... they are rules rather
than directives,” he says.
“But London is a large percentage of
Europe’s finance. There’s clearly a mis-
match, but we’ve accepted that com-
promise on the basis that a single
market will be able to compete better,”
he adds.
As for his new role in the UK, he is
tight-lipped. Does he think the Vickers
Commission is right to recommend
ring-fencing banks’ retail operations?
“It’s early days,” he says diplomatically.
It’s not quite David Bowie.
CV | MARTIN WHEATLEY
Age: 51
Job: Chief executive of the Hong
Kong Securities and Futures
Commission, member of Financial
Stability Board. Will head FSA busi-
ness unit in September and lead the
Financial Conduct Authority in 2012.
Past roles: Deputy CEO of the LSE,
chairman of FTSE International, sat
on the FSA’s Listing Authority
Picture: GETTY Advisory Committee.

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 16 Economics
Private sector drives greater
demand for permanent jobs
▲
EMPLOYMENT
DEMAND for permanent staff is accel-
erating faster than the growth in tem-
porary jobs, research showed today.
The number of permanent roles in
the UK expanded at the second fastest
rate in the last six months in April,
the KPMG report on jobs found.
“In many areas of the private sector
employers feel confident to hire again
on a full time basis, though the pic-
“The awards are a good experience,
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Sir Roger Carr, Chairman, Centrica (Dealmaker of the Year)
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headline sponsor
ture is very different in the public sec-
tor,” said KPMG’s Bernard Brown.
The four-month low in temporary
jobs growth was partly attributed to
“tighter public sector budgets,” as
well as caution over the impending
Agency Workers Regulations.
“Private sector businesses with a
dependency on the public sector are
clearly on a knife edge, as they wait to
understand how the unfolding gov-
ernment policy will impact them,”
champagne reception sponsor
official venue partner sponsors
ANALYSIS l Temporary work replaced some permanent jobs during the recession
26m
No. of
employees
Proportion of employees
who are temporary
25m
24m
Brown added.
Despite the government’s austerity
plan, pay pressures jumped to a nine- 23m
month high last month, the report
found – a movement that could con-
cern the Bank of England’s monetary Employment in UK
policy committee if it feeds through 22m
to official data.
The report’s index of permanent
salaries jumped to a reading of 56.1,
from 55.3 in March and 53.7 in 21m
February. 1994 1996 1998 2000
Huge Chinese
trade surplus
provokes US
▲
ASIAN ECONOMY
BY JULIAN HARRIS
CHINESE exports hit a record high in
April, it was revealed yesterday, push-
ing its trade surplus to nearly four
times the expected level.
The news coincided with the third
round of official talks between
Chinese and US authorities in
Washington DC, with the spotlight
yet again on Beijing’s management
of the yuan.
US Treasury secretary Timothy
Geithner pressed Chinese minster
Chen Deming to allow faster appreci-
ation of the yuan, yesterday, yet was
told that appreciation is being con-
ducted in a “very healthy manner.”
After registering a rare deficit in
the first-quarter of the year, China’s
trade balance soared to an $11.4bn
(£6.97bn) surplus in April, on the
back of a 29.9 per cent spike in
exports.
Imports were up 21.8 per cent,
NEWS | IN BRIEF
Sticky unemployment in the OECD Swiss price pressures remain low
Stubborn unemployment across nation
members of the Organisation for
Economic Co-operation and Development
(OECD) stuck at 8.2 per cent in March,
the group announced yesterday.
Unemployment has been falling in many
OECD countries in recent months, yet
rose in March in Italy and Spain. Spain
has the highest unemployment rate in
the OECD, at 20.7 per cent.
French output takes a knock
French industrial output unexpectedly
declined by 0.9 per cent in March, includ-
ing a percentage point drop in manufac-
turing, it was revealed yesterday.
Manufacturing remains up 6.3 per cent
from the same time last year, while
February’s growth was revised up to 0.9
per cent by statistics office INSEE.
Inflation on the up in Norway
The Norwegian consumer price index
inflation ticked higher in April, from an
annualised one per cent to 1.3 per cent,
increasing chances of further rate hikes.
CITYA.M. 11 MAY 2011
8.0
% of
employees
7.5
7.0
6.5
6.0
5.5
Source: Timetric
5.0
2002 2004 2006 2008 2010
below most predictions.
“We expected this trend to become
more visible in the second half of the
year on a pick-up in global growth
and more significant slowing in
domestic demand,” said Jian Chang
of Barclays Capital. “But swings in
commodity prices likely drove this to
occur sooner than we expected.”
The data was welcomed by some
analysts as a sign of robust global
demand.
But Xu Biao, an economist with
China Merchants Bank in Shenzhen,
said the lower-than-expected imports
may contain a more serious warning.
“Concerns about a slowdown have
certainly intensified, and the risks of
a worst-case scenario for the Chinese
economy, namely a relatively low
growth rate and a high inflation, are
on the rise,” he said.
The data may pave the way for
authorities to allow greater apprecia-
tion of the yuan, with stronger mon-
etary tightening expected to come.
Swiss inflation was softer than expected
in April as the strong Swiss franc helped
to keep a lid on prices, dousing expecta-
tions that the Swiss National Bank will
raise interest rates in the near term.
Consumer prices rose 0.3 per cent from a
year ago and were 0.1 per cent higher
compared with the previous month, the
Federal Statistics Office said yesterday.
Italian industry slows in March
In Italy, industrial expansion slowed to a
0.4 per cent rise in March, down from
February’s monthly growth of 1.5 per cent.
Mixed news for US firms’ morale
Economic optimism advanced in the US
this month, although a separate survey
showed a decline in confidence among
small businesses. The National Federation
of Independent Business’s index slipped
0.7 points, despite a two point rise in the
IBD/TIPP Economic Optimism Index.
Meanwhile import cost growth slowed to
2.2 per cent in April, and wholesales rose
by 2.9 per cent in March, data showed.
CITYA.M. 11 MAY 2011 News 17

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

STM Group
The financial services provider has appointed
Julian Telling to the board as non-executive
chairman, replacing Bernard Gallagher, who
stepped down on 9 May. Telling established
independent financial adviser Sumus in 1983,
overseeing the firm’s AIM listing in 2005 and its
merger with Lighthouse in 2008. He is a direc-
tor of six companies, including Capitecs and
Brightside Group, and a former director of
Falcon International Investment Management.
Meyer Bergman manager to support Mark Gamble,
The real estate investment manager head of asset management, to manage
has appointed Renee Moran as asset the firm’s UK assets, initially focusing
on The Exchange Shopping Centre in
Ilford. Renee joins from Hammerson,
where she held the role of asset manag-
er for the past five years.
Norton Rose Group
Michael Wilton has joined as a corpo-
rate finance partner in the Beijing
office. Wilton joins from Norton Rose’s
Melbourne office, where he was head of
the M&A and Equity Capital Markets
Group for Norton Rose Australia.
Shore Capital
The AIM-listed investment banking
group has appointed Shay Ramalingam,
formerly of Nomura Private Equity, as
an investment director for the Puma
VCTs. Shore Capital has also appointed
Yuen Low, formerly of RBC Capital
Markets, as a mining analyst.
MAM Funds
The fund management group has
appointed Martin Turner to work along-
side Gervais Williams to manage the
Diverse Income Trust, a new invest-
ment trust. Turner joins MAM Funds
following his recent resignation from
his role as head of small mid-cap equi-
ties at adviser Collins Stewart.
Russell Investments
Norbert Fullerton, formerly of Towers
Watson, has been appointed as direc-
tor, consulting and advisory services,
EMEA at the investment consultant.
Russell Investments
The real-estate bridging financier has
appointed former Goldman Sachs man-
aging director Richard O’Toole to its
board of directors. O’Toole is currently a
non-executive director of Goldman
Sachs Bank Europe.
Jones Lang LaSalle
George Nicholas has been appointed as
executive vice president in Jones Lang
LaSalle’s Hotels Capital Markets team
for the UK and Northern Europe.

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ANALYSIS l Vodafone Group ANALYSIS l Rightmove ANALYSIS l Centrica

185 p
1,100 p 1,085.00 350 p 306.99
169.60 10 May 10 May
10 May
180
1,000
330
175
900
170 310

165 800
14 Feb 4 Mar 24 Mar 13 Apr 9 May 14 Feb 4 Mar 24 Mar 13 Apr 9 May 14 Feb 4 Mar 24 Mar 13 Apr 9 May

VODAFONE RIGHTMOVE CENTRICA

Credit Suisse rates the telecoms group “outperform” with a target price of
185p. The broker has cut its medium-term earnings per share forecast by
three per cent in light of recent results in the sector, and expects European
operations to miss consensus estimates – this is particularly disappointing
given the expected boost from iPhone sales. However, Credit Suisse thinks
US and Indian sales will beat forecasts to push Vodafone ahead of its rivals.
JP Morgan Cazenove rates the property website “overweight” and has lift-
ed its target price from £11.10 to £12.71. The broker thinks it is too early to
take profits from Rightmove’s recent share price rise and continues to see
growth in revenues per advertiser. JP Morgan forecasts a five per cent rise
in house prices and values in 2012, after a flat 2011, and thinks if market
conditions improve enough, Rightmove shares could reach up to £14.50.
Goldman Sachs rates the energy group “buy” with a target price of 460p, a
drop of 11p following Monday’s trading update. The broker thinks that
despite a hike in gas taxes, Centrica’s earnings will rise thanks to higher
wholesale gas and power prices. Goldman expects the firm to return some
cash to investors if it decides not to spend money investing further in the
North Sea or in new nuclear projects.

Strong miners propel FTSE Utility firms push

to a one-week closing high US stocks higher
American and BHP Billiton, up 1.3 firmed 1.8 per cent. $8.5bn in cash, a price some believe is

THELONDON and 1.8 per cent respectively, with a

“buy” recommendation.
BG Group was among a handful
of blue-chip fallers, down 1.6 per THENEW YORK too expensive.
Shares of eBay, which has a stake in

REPORT
The broker named Rio Tinto its
top pick among the miners, ahead of
Anglo American and then BHP
Billiton, anticipating record earn-
REPORT
cent in heavy trading after the gas Skype, rose 2.5 per cent to $33.93.
and oil producer’s first-quarter The Dow Jones industrial average
results missed forecasts, with was up 75.68 points, or 0.60 per cent,
Investec Securities cutting its 2011 at 12,760.36. The Standard & Poor’s

T
HE FTSE 100 share index hit a ings from the sector again this year. EPS estimate for BG by 10 per cent. 500 Index was up 10.87 points, or 0.81

one-week closing high yester-
day after bumper Chinese
trade data boosted miners,
although analysts said sentiment
could be soured if Beijing opts to
tighten its monetary policy.
China’s April consumer price
inflation index, due today, is expect-
ed to have dipped from March’s 32-
month high of 5.4 per cent to 5.2
percent.
“Given the comments by the
People’s Bank of China about mak-
ing inflation the number one priori-
ty, if it continues to remain above 5
per cent, I think we’re going to have
to think about further tightening
this weekend,” Michael Hewson,
market analyst at CMC Markets, said.
“That could weigh on risk appetite
going forward,” he said.
The FTSE 100 ended up 76.20
points, or 1.3 per cent, at 6,018.89, its
highest close since May 3, having
dropped 0.6 per cent on Monday.
Mining stocks added the most
points the FTSE 100 after China post-
ed its largest trade surplus in four
months in April.
Rio Tinto was the best off, up 2.4
per cent, as RBS initiated coverage
on the stock, alongside Anglo
Banks also bounced back on
expectations of a deal to solve
Greece’s debt crisis, recovering from
a decline in the previous session
when they gave up a legal fight over
compensating consumers for mis-
selling loan insurance policies.
Fund management group
Schroders climbed 5.6 per cent,
buoyed by a Numis Securities
upgrade to “buy,” with the broker
saying a sharp fall in shares after
first-quarter results this month was
an overreaction.
Elsewhere, InterContinental
Hotels added 3.9 per cent in heavy
trading after the world’s biggest
hotelier unveiled consensus beating
first quarter profits.
Imperial Tobacco rose 3.1 per cent
after the cigarette maker, whose
brands include Lambert & Butler,
Fortuna and Gauloises, announced a
£500m share buyback, as it topped
forecasts with first-half earnings
growth.
“While a return to buybacks was
widely expected, we think the early
timing will be positive for the
shares,” said analyst Martin Deboo at
brokers Investec Securities.
Peer British American Tobacco
U
Some money managers saw little S stocks rose for a third day yes- per cent, at 1,357.16. The Nasdaq
on the horizon to rouse the FTSE 100 terday, led by utilities and other Composite Index was up 28.64 points,
from its relative torpor, with the defensive sectors that may drive or 1.01 per cent, at 2,871.89.
index having been stuck in a 250- further gains as investors bet After the closing bell, shares of
point range since early April, from a on profit growth and set aside con- Walt Disney were down 2.8 per cent
low of around 5,858 to a high of just cerns about weakening demand. at $42.70 after it reported revenue
over 6,100. For now the equity market is filter- that missed expectations. [
“We’re coming towards the end of ing out potential problems involving The S&P 500 is off 0.5 per cent
the results season now, which has Eurozone debt and speculation that since the start of the month but
been broadly positive, and I think the recent selloff in commodities is a remains just below recent highs for
attention will turn once again to harbinger of weak economic growth. the up trend. Its May 2 intraday level
macro factors... obviously fears of “The market has absorbed most of was the highest since early June 2008.
inflation in faster growing the negative news to date and should “In the very short term, if we close
economies coupled with the uncer- push higher based on the fact above 1,354, which is the highs from
tainty over the peripheral Europe sit- investors are focused on earnings three days ago, that might lead us
uation,” said James Buckley, recovery and growth,” said Jay Leupp, higher in a constant pattern up to
manager of Baring Asset partner at San Mateo, California- 1,370 soon,” said Stephen Massocca,
Management’s £1.5bn pound pan- based Grubb & Ellis, which oversees managing director at Wedbush
European equities fund. more than $2bn in assets. Morgan in San Francisco.
The leading S&P 500 sector was util- Boston Scientific was the most
ANALYSIS l FTSE 6,018.89 ities, which rose 1.3 per cent yester- heavily traded stock on the Big Board
6,100 10 May day. Though considered a low-growth after chief executive Ray Elliot said he
6,000 sector, utilities have risen 5.4 per cent will step down at the end of 2011. The
since 8 April when the recent slide in surprise announcement sent shares
5,900 US bond yields began. of the medical device maker down 8.9
5,800
News of a trade surplus in China per cent to $7.02.
supported the market, easing fears Among advancers, Dean Foods
5,700 about slow global growth. jumped 11.5 per cent to $12.24 after
5,600
Microsoft was an outlier among posting higher-than-expected profit.
index leaders, losing 0.6 per cent to About 6.6bn shares traded on the
5,500 $25.67 after announcing it plans to New York Stock Exchange, NYSE
7 Feb 25 Feb 17 Mar 6 Apr 28 Apr buy Internet phone service Skype for Amex and Nasdaq.
 18
Wealth Management Foreign Exchange
GREEK DRAMA
COULD LEAVE
EURO IN LIMBO
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
W
HAT a difference a week makes. Last
Wednesday, euro-dollar at $1.5000 looked
inevitable, as rate hikes were the only focus
of the market. This week, all eyes are on the
debt problems in Greece, as fears about its exit from
the euro have the pair trading much closer to the
$1.4000 figure.
Greece, which appears to be on the verge of insol-
vency with a debt to GDP ratio approaching 200 per
cent, is the Achilles heel of the European monetary
union. Saddled with enormous debts, a shrinking
economy and porous tax system, Greece is unable to
service its credit and cannot meet the IMF fiscal
budget targets. Furthermore, a significant portion of
Greek debt lies on the books of French and German
banks. If they were forced to mark those assets to
the market, the losses would create enormous finan-
cial problems for core European economies as well.
That’s why an observer of the Greek financial scene
remarked last week that Greece could trigger a
“Lehman” like event in European credit markets if it
were to exit the union.
The volatility in euro-dollar underscores the seri-
ousness with which the market is treating the Greek
situation and suggests that policymakers will have
no choice but to work out some sort of financing
arrangement at the Ecofin meeting next week in
order to pacify the capital markets. However, any
arrangement must be comprehensive in nature,
encompassing Portugal and Ireland as well. If EU
officials decide to provide preferential terms only to
Greece, the political difficulties of such a move will
be far greater than the economic costs. Until then,
euro-dollar is likely to trade in limbo, with little possi-
bility of a rally back to $1.5000 as sovereign debt
concerns outweigh risk appetite flows.
Next Thursday, 19 May, I will be giving a free
seminar in conjunction with City A.M. titled
Actionable FX Strategies for the Retail Trader in
which I will discuss the euro-dollar situation in much
greater detail. Be sure to register – at
www.gftuk.com/cityam – and join me at the Grange
St Pauls Hotel. The presentation starts at 8.00am.
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initial deposit.
Sterling looks
weak but not
as frail as the
euro and dollar
Authorities across the channel and pond will
keep the poorly pound afloat, says Philip Salter
S
TERLING has had a tough year. An
underwhelming recovery and loose
monetary policy from the Monetary
Policy Committee (MPC) have had
their impact, neither of which looks to be
imminently reversed. But bad as things are,
the monetary authorities in the US appear
to be wedded to keeping interest rates
lower for longer than the UK, while an
implosion in the Eurozone would bolster
the pound.
According to Angus Campbell of London
Capital, sterling “has suffered this year as
the Bank of England (BoE) continues to
keep interest rates at all time lows. With lit-
tle or no yield from holding sterling cash,
investors have on the whole shunned the
currency throughout the year.” However,
other currencies have fared worse. Ian
O’Sullivan of Spread Co says: “One of the
clearest things about sterling this year so
far has been its strength versus the weak-
ness of the US dollar and the Japanese yen,
but relative weakness versus the euro and
the Swissie.” However, with debt crises
blighting the Eurozone’s periphery, a flight
from euro to sterling could be on the cards.
Recently, sterling has suffered. The servic-
es PMI report, which showed a fall from
57.1 to 54.3 for March, gave it a big hit
against the dollar, as expectations were set
for a smaller decrease. Contributing to this
fall were the reduced manufacturing PMI,
which fell from 56.7 to 54.6 and construc-
CITYA.M. 11 MAY 2011
|
tion PMI, which fell from 56.4 to 53.3. On
Monday, reports on the state of the UK
housing market were disappointing. The
Halifax House Price Index showed prices
dropping 3.7 per cent in the three months
to April, while the Royal Institute of
Chartered Surveyors (Rics) showed the
majority of surveyors and estate agents see
house prices as falling – not as many as
some feared, but certainly not good news.
WHAT TO WATCH
There are a number of upcoming
announcements that could move sterling.
Later today, the BoE Quarterly Inflation
Report will be released, setting out infla-
tion projections. Sterling could climb if the
BoE projects inflation to climb this year.
Although in the long run inflation dimin-
ishes a currency’s value, in the short-term
sterling would strengthen in anticipation case it knocks us back into a recession.”
that the MPC will raise interest rates. Adding that “only three months ago their
Mervyn King’s comments will be key for expectations were for the first quarter GDP
those looking for a change of sentiment, as to come in at 1 per cent, but it’s only man-
he delivers his press conference later today. aged half that. As a result, we can expect
On Thursday, the UK’s industrial and man- downward revisions to their growth fore-
ufacturing production figures will be casts and this could impact sterling nega-
released. Expectations are for a rise, but tively.” Michael Hewson of CMC Markets
given the inaccuracy of these predictions in thinks “the pound has remained remark-
the past traders shouldn’t count their ably resilient given that the CBI announced
chickens. it was lowering its growth forecasts.”
Campbell says “growth prospects contin- Adding to complications, volatility in oil
ue to influence the voting behaviour of the and other commodities makes it very diffi-
MPC, who remain reluctant to raise rates in cult to predict inflation, says O’Sullivan.
gftuk.com | FOREX
free phone 0800 358 0864
GFT Global Markets UK Ltd. is authorised and
regulated by the Financial Services Authority.
CD03UK.150.040511
CITYA.M. 11 MAY 2011
Hewson points out that following the
recent commodities correction oil
came off its £77 high to fall to £65,
but has recovered to £70.
As weak as the prospects for ster-
ling are, those for the euro and dollar
are worse. David Jones of IG points
out that sterling has climbed over five
per cent against the dollar since the
start of 2011. He suggests only with a
move below $1.62 will this position be
threatened. Hewson agrees, adding
that markets are currently expecting
the Fed to raise interest rates even
THE TIPSTER
BUYING EURO
MIGHT STILL
MAKE CENTS
T
HE last week has been volatile, with
the euro dropping more than six cents
against the US dollar. The return of
the Greek debt problem added an
extra twist, but there are early signs of calm
returning. Eagle-eyed chartists have also
spotted a head and shoulders pattern over
the last day – believed by some to suggest
the end of the slide. IG Index quotes euro-
dollar $1.4346-$14348.
The Aussie dollar was lifted after report-
ing that their trade surplus was wider than
expected at Au$1.74bn. For most of last
week, it was trading in a downtrend versus
the US dollar, but it bounced back this
week. The surplus was helped on by an
increase in exports in iron ore and coal, but
the momentum may continue with Aussie
rates expected to rise further. Capital
Spreads quotes Australian dollar-dollar
$1.0783-$1.0784.
19
Sterling should still
ANALYSIS l Sterling's rise in 2011 against the dollar
hold up against major
currencies 1.66
$
Picture: PA
1.62
1.58
1.54
2011 Feb Mar Apr May
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later than the Bank of England. Also,
with the euro having hit the rocks, if
it sinks, many euro-holders will likely
jump ship into sterling.
A protracted recovery in the supply
and demand side of the UK’s econo-
my, declining house prices, sustained
unchecked inflation and low growth
expectations are all working against
sterling. Yet despite this, the dollar
and euro have the potential for
greater downside movements, so as
bad as things are, they could be a
whole lot worse.
The Bank of England inflation With MetaTrader
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 20 Wealth Management | Foreign Exchange CITYA.M. 11 MAY 2011

Euro versus dollar: a scrappy fight

Craig Drake asks IG INDEX of the Greek problem in meeting FOREX.COM peripheral nations, Greece in par-
the experts for DAVID interest rate payments on its
bailout, it is not really fresh news
KATHLEEN ticular.
While the Fed remains commit-
JONES for the markets. The ECB broke BROOKS ted to low interest rates then I
their predictions In common ranks earlier this year and raised The euro story believe euro-dollar will remain
with many interest rates, signalling there will is very differ- supported up to $1.5000. This
on the fate of the other assets, probably be another rise before ent depending is partly due to the European
last week was the summer. on your time Central Bank hiking rates on the
trans-Atlantic not a good one
for the euro.
There still appears to be plenty
more attractive destinations for
horizon. On a
short-term
back of strong German growth,
but it is also down to a weak
currency pairing By the end of the week, euro-dollar
had dropped back by 600 points –
cash than the US dollar at the
moment and, although the euro is
basis, the
euro-dollar
buck fuelling a stronger single
currency.

O
VER the last fortnight, the
euro-dollar pairing has turned
into a bit of an ugly dog con-
test, with both sides compet-
ing to see who carries the fewest
fleas. However, the euro came out sec-
ond best in this challenge last week,
hit with attacks from all sides.
The tipping point for the pairing
came when the euro took a hammer-
ing on the back of uncertainty about
continued Greek membership of the
euro. Though the short term fears of
a collapse of the European single cur-
rency project may have died down for
now, nervousness remains,
On the other side, things are only
marginally less precarious. The dollar
benefited from a boost in confidence
after strong non-farm payroll figures
for the month. But on both sides of
the pond, the occasional good news
that boosts one currency or the other
is relative and often short-lived, with
the long term issues remaining. The
European sovereign debt crisis rum-
bles on, affecting not just Greece, but
other weak economies dogged by
debt such as Ireland, Italy, and Spain.
The United States are heading
towards the end of the second quanti-
tative easing cycle, and the end of this
money printing will undoubtedly
affect the dollar.
With this uncertainty in the future
of the two currencies, we asked four
experts for their opinion of the pair-
ing’s outlook.
a fall of around 4 per cent, which
was further compounded by
Friday’s late breaking (and ulti-
mately unfounded) rumour that
Greek could be exiting the euro. So
you could be forgiven for thinking
that all this surely means that sell-
ing the euro is the only option.
But this week has seen stability
return and, although it would be
foolish to dismiss the seriousness
HIFX
CHRIS
TOWNER
Over the last
couple of weeks,
the US dollar has
strengthened,
helped by a strong employment
report, while the euro has weak-
ened, haunted yet again by the sov-
ereign debt crisis.
The euro looks vulnerable from a
number of angles. One is the suffer-
ing peripheral economies, who the
rating agencies continue to circle
like birds of prey. However, there is
a more interesting angle to the
future of the euro and it is the for-
tunes of the German economy. The
German economic powerhouse has
kept the euro strong from the core;
unlikely to be the top of anyone’s
list, it would not be surprising to
see another move back by euro-
dollar towards the $1.500 highs.
Since the end of the Irish crisis the
euro is around 10 per cent higher,
even after last week’s slide – so it
is difficult to see why Greece’s cur-
rent issue is going to have that
material an effect on the funda-
mentals at the moment.
yet, recent events on the political
and economic fronts make the
strength of the euro questionable.
On the political front, Angela
Merkel has suffered in the regional
elections for her liberal stance
towards helping other EU
economies. And, from an economic
perspective, although we have seen
very impressive trade data in
March, trade data is historic and
the industrial orders for the month
were shocking with a drop of 4 per
cent. Added to this, the PMI sur-
veys showed slowing levels of
growth, as German companies
start to suffer from a stronger
euro, higher wage and energy
costs. Overall, the euro is in over-
valued territory and with an
upward economic cycle in the US,
we expect euro-dollar to test back
down lower to the $1.300 level.
pairing has weathered the latest
round of sovereign debt concerns
extremely well. It is still in a
technical uptrend and a reversal
in the dollar has yet to materi-
alise in any meaningful way.
Whether you like the idea of
the Eurozone or not, it is clear
that over the last six months the
euro has been immune to the
increased risk of default in the
ALPARI UK
JAMES
HUGHES
It feels like we
have gone full cir-
cle, but of course
Greece is now the
major talking point once again. The
single currency remains under pres-
sure on the back of the fears sur-
rounding the state of Greece’s
finances and the possibility of yet
another restructuring of its debt. The
euro is extremely fickle at the
moment with any good or bad head-
line being enough to see us spike one
way or the other. Over the past cou-
ple of weeks, second quarter earn-
ings news has given us something
else to talk about for euro-dollar but
with this now coming to an end,
But who knows what the
long-term outcome will be in a
year or perhaps in five years?
Can the divergence between the
periphery and the core
economies continue indefinitely?
If not, then the euro may well be
consigned to history. That may
not be our central scenario but I
wouldn’t rule anything out at this
stage.
market focus is gradually returning
to macro data.
Arguably the most important G20
release this week is first quarter
Eurozone GDP on Friday, particularly
after the ECB flagged growth risks
from high oil prices in its 5 May
press conference. However, both
currencies have their problems, with
the US also worrying about the pos-
sibility of its own technical default.
Technical traders are pointing to a
potential bounce off the 55 day mov-
ing average. However, the worrying
news from Greece and the possibility
that any hawkish statement from
the ECB could cause more uncertain-
ty and increase the likelihood of
Greece’s problems working their way
to the likes of Portugal and Ireland
leaves me thinking that the current
uncertainty could float around for a
little while longer yet.

FOREX ANALYST PICKS

FOREX STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
JOHN KICKLIGHTER ILYA SPIVAK JOEL KRUGER

My pick: Long dollar-Swiss franc and dollar-Canadian dollar
Expertise: Fundamental and Technical Analysis with Risk Management
Average time frame of trades: 1 day to 1 week
Both the long euro-sterling and short euro-Canadian dollar setups we
laid out last week saw quick, short-term gains; but the event risk the
euro is confronting makes the currency difficult to trade through short-
term swings. In the meantime, I think it is good to look for those pairs
that are “mispriced” given risk trends and yields. Dollar-Swiss franc is a
safe haven and yield neutral yet is a record low. Dollar-Canadian dollar
draws strong fundamental ties and little yield differential.
My pick: Short euro-dollar (pending)
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months
Weekly charts show euro-dollar has broken the rising trend line support set
from January’s swing low, to form a bearish engulfing candlestick pattern
below the $1.50 figure. Prices are now re-testing resistance-turned-support
at a downward-sloping line set from the record high above $1.60, a barrier
bolstered by the October 2010 top at $1.4281. A break lower would confirm
a major reversal over the weeks ahead, but I will remain on the sidelines for
now and monitor how the pair behaves before committing to a position.
My pick: Buy dollar-Swiss franc at SFr0.8800
Expertise: Technical Analysis
Average time frame of trades: 1 week to 6 weeks
We do not see setbacks extending much further and continue to
favour the formation of some form of a material base over the com-
ing weeks, for an eventual break back above parity. The bullish
reversal over the past few days is encouraging for recovery outlook,
and a break back above SFr0.8800 will help to solidify our recovery
outlook. Buy at SFr0.8800 for an SFr0.9500 objective. Stop at
SFr0.8540.
CITYA.M. 11 MAY 2011
Something is
rotten in the
state of Europe
Those looking at the the future of the
Euro should beware of Greeks bearing
sovereign debts, writes Craig Drake
I
T ALMOST seems that we have
got to the point where billion-
euro bailouts are relegated to
the same news level as dogs
waterskiing and images of Nick
Clegg found on a piece of toast. But
with the Greek debt at €110bn, Irish
at €85bn and Portuguese at €78bn,
these are not trivial sums. As the late
Senator Everett Dirksen famously
said, “a billion here, a billion there
and pretty soon you’re talking about
real money.”
Are any of these countries good for
their debts? Michael Hewson, market
analyst for CMC markets doesn’t
think so: “Even if you cut the interest
payments to zero, Greece still would-
n’t be able to pay. The biggest fallout
from this is political. German tax pay-
ers will be asking their government,
and rightly so, ‘why should we be
working until 67 when Greeks are
retiring to sip Ouzo at 58?’” On
Monday, Standard and Poor’s reduced
its rating on Greek debt from BB to B.
According to Hewson, “the sov-
ereign debt crisis is going to
pop. It’s just a question of
when it happens and the fall-
out is going to be huge.”
On Friday, what started as a
storm in a tea cup resulted in
euro-dollar taking a battering.
German newspaper Der Spiegel
claimed that Greece was on the
cusp of exiting the Eurozone.
The rumours prompted vehe-
ment denials from EU finance
ministers, but many traders ven-
tured that the federalist ladies
and gentlemen protested too
much.
Although markets
calmed a little as the
imminent
fears of
Greek with-
drawal from
the Eurozone subsided, the fears
posed the question of what the
Wealth Management | FX 21
All is not rosy for
Jean-Claude Trichet
and the ECB
Picture: REX
CREATE MORE VALUE
market reaction would be if Greece,
or one of the other struggling
European periphery debtor nations,
such as Portugal or Ireland, left the
Eurozone.
Although it hasn’t happened in
political terms, a break up of the
Eurozone has already happened in
the sovereign debt markets, with the
weak getting weaker and the strong
getting stronger. When Greece and
Ireland were being hit with 15.73 per
cent and 10.67 per cent yields on ten-
year bonds respectively, Austria’s
yields hovered around 3.52 per cent.
According to Angus Campbell, head
of sales for London Capital Group,
though there was an argument
against the bailouts of the weaker
Eurozone nations, they have now hap-
pened and need to be dealt with. “The
The Oxford Private Equity
bottom line for now is that the coun-
tries that have been bailed out really
have to get their houses in order. This
Programme
means paying for the years of profli-
gacy by reining in their government
spending and bringing in more in
tax.” Says Campbell: “That means This prestigious executive Dates:
years of pain and many will
blame the bankers or financial
development programme provides Apply now for 4-7 July 2011
crisis, but the profligate chick- a deep understanding of the
ens have really come www.sbs.oxford.edu/pe
home to roost now
private equity industry, with
so it’s time to pay access to world class research, To learn more about how to
the price.” renowned Oxford faculty and transform your thinking contact
And should
the news unrivalled business networks. steve.brewster@sbs.ox.ac.uk or
break that a on 0845 190 0075
country Delivered in association with CFA
was to Institute, it offers a comprehensive
b r e a k
a w a y framework for assessing
from the opportunities and likely future
E u r o ,
Michael trends in this key asset class.
Hewson
sums up
his advice
in two
words: “buy
gold”.
 22 Wealth Management | Markets CITYA.M. 11 MAY 2011

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 Lifestyle
23

| Motors WORDS BY
RYAN BORROFF

Two cylinders: one hot car

‘the greenest petrol engine in the world’,
Minimum emissions and thanks to some clever engineering
and a turbocharger Fiat has been able to
meet maximum style squeeze as much performance as possible
out of its two cylinders. To put this into
in Fiat’s new eco- perspective Fiat’s entry level 1.2-litre
engine produces 68bhp, takes longer to
friendly 500 model reach 62mph (12.9sec), has a lower top
speed of 99mph and emits 119g/km of CO2
with twice as many cylinders. Which
money it is the most characterful 500. So
what would I change? Well some of the
plastic trim in the centre of the dash
cheapens an otherwise perfectly satisfac-
tory interior. But that’s really about it.
There’s really not much not to like.
Surprisingly we managed to get all of our
weekend baggage into the boot including
a baby buggy. I would have bet money that
this wasn’t possible before driving the car.

F
IAT’S decision to sell its 500 city car
with a super-economical two-cylin-
der engine may not stem from senti-
mentality. But my desire to drive it
does. How would it compare to the origi-
nal iconic Fiat 500, a car that also had a
two-cylinder engine and which I have driv-
en and have a fondness for?
The original 1957 two-cylinder 500 had
a power output of 13bhp. This new Fiat
500 TwinAir has a power output of 85bhp.
I pull up next to an original 500 – a design
that is now more than 50 years old – at
some traffic lights, the first time I’ve seen
one in London in years. Spookily it’s paint-
ed in the exact same colour as the TwinAir
I’m driving – Volare Blue – and its driver
nods at me in recognition. I figure this is
high praise indeed.
So it’s credible then. The truth is there
is something very cool about this car. Its
875cc two cylinder engine makes quite a
lovely noise around town under accelera-
makes this TwinAir engine – with 23 per Beyond economy the TwinAir’s CO2 fig-
cent more power and 15 per cent lower ures are so low that there is no road tax
CO2 emissions and fuel consumption – and no Congestion Charge to pay. Which
quite remarkable. makes it an excellent option for the daily
And its timing is impeccable too. UK commute. Expect to see lots of them
drivers want economical cars – especially buzzing about the City.
commuters – and the TwinAir’s little
engine is capable of 68.9mpg around town
and on the combined cycle. In theory this
THE FACTS:
means it is possible to travel 500 miles on FIAT 500 TWINAIR
a single tank helped by a stop/start system
that seems to work well and an Eco button PRICE: £12,265
tion (0-62mph in 11sec). And in fact it feels Above, Fiat 500 which remaps the engine so that it runs 0-62MPH: (0-62mph): 11.0 secs
really quite nippy. One City friend com- TwinAir looking super more efficiently, albeit at the expense of
mented that it sounded like a sit-on lawn- sleek in Volare Blue some of its pep.
TOP SPEED: 108mph
mower but the sound reminded me of the The real world fuel figures we got were CO2 G/KM: 95g/km
noise the original VW Beetle’s air-cooled very different to Fiat’s numbers. We were MPG COMBINED: 68.9mpg
engine makes. Regardless it’s addictive unable to better 40mpg on a mostly extra-
and I loved it. On the motorway the urban trip to Manchester and back. That THE VERDICT:
engine makes more of a distant drone, said, we didn’t do the whole trip in eco DESIGN hhhhi
like an aircraft engine but it is quite capa- mode so I would have to give it the benefit PERFORMANCE hhhhi
ble and comfortable at 80mph. of the doubt. PRACTICALITY hhhhi
Fiat claim, credibly, that this engine is But it’s still a charming car. For my VALUE FOR MONEY hhhhi

CAR TALK BY RYAN BORROFF

VAUXHALL’S INSIGNIA VXR IS UNLEASHED
Vauxhall has introduced a package to de-restrict the Insignia VXR so
that it’s capable of 170mph. Called the ‘Unlimited’ option the package
removes the ‘regular’ Insignia VXR’s 155mph restrictor and costs just
£250. Available for the hatch, saloon and sports tourer versions it
means the Insignia VXR Unlimited’s turbocharged, 321bhp, 2.8-litre
V6 engine can push the car to 60mph in just 5.6 sec.
DARK KNIGHT: PORSCHE UNVEIL NEW-LOOK BLACK CAYMAN
This is Porsche’s latest limited run model, the Cayman S Black Edition.
On sale in July, the car has a more powerful engine (up by 10bhp to
330hp, so that 0-62mph can be reached in 5.1sec), bigger wheels and
tyres and more equipment as standard than the regular Cayman S.
Only available in black, the interior is all black and even has darker
instrument graphics.
MEET MERCEDES-BENZ’ NEW CONVERTIBLE SLS AMG SUPERCAR
Mercedes-Benz has released images of the convertible version of its
SLS AMG supercar. According to Mercedes, the SLS AMG Roadster
was developed in tandem with the coupe. The roadster loses the SLS
AMG’s famous gullwing doors in favour of a folding fabric roof. The car
will have its speed limited to 197mph when it is introduced at
September’s Frankfurt motor show.
 24 Lifestyle | TV& Games CITYA.M. 11 MAY 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Waterloo Road: News
8.30pm CHOICE Life of Riley
9pm The Apprentice
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Wednesday Night Draws
10.45pm Would I Lie to You?
11.15pm FILM Bad Company
2002; National Lottery Update
1.10am Sign Zone: See Hear
1.40am Sign Zone: Watchdog
2.40am Atlantis 3.40am One Man
and His Campervan 4.10am-6am
BBC News
6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm CHOICE Great British 6.30pm ITV News 6.30pm Hollyoaks 6.25pm OK! TV
Menu 7pm Emmerdale: Jackson 7pm Channel 4 News 7pm 5 News at 7
7pm Escape to the Country tries to put on a brave face in 7.55pm 4thought.tv 7.30pm Zoo Days: 5 News
8pm Two Greedy Italians front of Jerry. 8pm Vacation, Vacation, Update
9pm Wonderland: The Trouble 7.30pm CHOICE Poms in Vacation 8pm Essex Jungle: 5 News at 9
with Love and Sex Paradise 8.30pm Superscrimpers: 9pm NCIS
9.50pm Coast 8pm The National Movie Waste Not Want Not: Financial 10pm Law & Order: Criminal
10pm The Apprentice: You’re Awards advice programme. Intent
Fired! 10pm ITV News at Ten 9pm 24 Hours in A&E
LIFE OF RILEY
10.55pm Law & Order: Special
10.30pm Newsnight: Weather BBC1, 8.30PM
10.30pm London News 10pm Desperate Housewives Victims Unit
Maddy persuades Jim to be more open
11.20pm Stewart Lee’s 10.35pm Cops with Cameras 11.05pm The Big Bang Theory 11.55pm Poker: Aussie Millions about his feelings, while Danny plays host
Comedy Vehicle 11.35pm Long Lost Family 11.30pm Music on 4 12.50am SuperCasino to a French exchange student, but the
11.50pm FILM French Film: 12.30am The Zone 2am Supersize vs Superskinny Kids 4.05am Meals in Moments 4.15am visit awakens Ted’s latent xenophobia.
2008. 2.35am FILM Alien Siege: Sci-fi 2.55am FILM Blanche Fury. 1948. How Not to Decorate 4.55am
1.15am BBC News thriller, with Brad Johnson. 2005. 4.35am Hill Street Blues County Secrets 5.10am Wildlife
4.10am-6am Close 4am-5.30am ITV Nightscreen 5.25am-6.10am Countdown SOS 5.35am-6am House Doctor

SKY SPORTS 1 Golf Show 1.30am Poker 2.30am SKY LIVING 11.50pm Glory Daze 12.45am The DISCOVERY HOME &
SATELLITE & CABLE

7pm Sky Sports News 7.30pm Live
Scottish Premier League Football
10pm You’re on Sky Sports!
11.30pm Football’s Greatest 12am
Scottish Premier League Football
1am Boots ‘n’ All 2am FIFA Futbol
Mundial 2.30am Scottish Premier
League Football 3.30am Football’s
Greatest 4am Boots ‘n’ All 5am
FIFA Futbol Mundial 5.30am-6am
Football’s Greatest
SKY SPORTS 2
6.55pm Live Spanish Football 9pm
Live Spanish Football 11pm Total
Rugby 11.30pm FIFA Futbol
Mundial 12am Ten Pin Bowling 1am
Championship Rugby Union 2.30am
Total Rugby 3am Ten Pin Bowling
4am-6am Superleague Netball
SKY SPORTS 3
6.30pm PGA Tour Golf 7.30pm Live
Championship Rugby Union 10pm
Cage Fighter 10.30pm PGA Tour
Golf 11.30pm Inside the PGA Tour
12am F3 Euroseries 1am Asian Tour
Champions Tour Golf 3.30am
European Tour Weekly 4am Asian
Tour Golf Show 4.30am-5.30am
NFL: Total Access
BRITISH EUROSPORT
7pm Cycling: Giro d’Italia 8.15pm
Wednesday Selection 8.20pm
Badminton Horse Trials 9.20pm
Riders Club 9.25pm PGA Tour Golf
10.25pm European Tour Golf
10.55pm Golf Club 11pm Yacht
Club 11.15pm-12.30am Table
Tennis
ESPN
6.45pm Premiership Rugby Union
7.45pm Live Coppa Italia 9.45pm
Premier League World 10.15pm
ESPN Kicks: Extra 10.30pm French
Cup – Road to the Final 11.30pm
FIA GT1 World Championship
12.30am ESPN Press Pass 1am
Live Major League Baseball 4am
Premier League World 4.30am FA
Cup Preview Show 5.30am-6am
ESPN Game of the Week
7pm CSI: Crime Scene
Investigation 8pm Four Weddings
Revisited 9pm Bones 10pm Grey’s
Anatomy 11pm Criminal Minds
12am CSI: Crime Scene
Investigation 1.50am Ghost
Whisperer 2.40am Charmed
4.20am Nothing to Declare
5.10am-6am Maury
BBC THREE
7pm The Apprentice: Sixteen
contestants vie for a chance to
start their own business. 8pm The
World’s Strictest Parents 9pm
Bizarre ER 10pm Russell Howard’s
Good News 10.30pm Family Guy
11.15pm Young, Rich and
Househunting 11.45pm Bizarre ER
12.45am Family Guy 4am Russell
Howard’s Good News
4.30am-5.30am The Apprentice
E4
7pm Hollyoaks 7.30pm Friends
9pm FILM Black Knight 2001.
10.50pm My Name Is Earl
Event 1.40am Ugly Betty 2.20am
The Event 3.05am Heartland HEALTH
3.50am The Class 4.10am Style 7pm Bringing Home Baby 8pm 10
Her Famous 4.35am-6am Switched Years Younger: The Challenge 9pm
Diagnosis X 10pm Hospital Sydney
HISTORY 11pm A&E: Outback 11.30pm GREAT BRITISH MENU
7pm America: The Story of the US Chopper Rescue 12am Diagnosis X BBC2, 6.30PM
8pm Ax Men 10pm Swamp People 1am Hospital Sydney 2am A&E: Scottish chefs Philip Carnegie, Tony
11pm Ax Men 1am Swamp People Outback 2.30am Chopper Rescue Singh and Michael Smith prepare their
2am Deep Sea Salvage 3am 3am 10 Years Younger: The main courses, including barbecued
America: The Story of the US 4am Challenge 4am Labour and Delivery lamb and pink fir apple wedges.
The Universe 5am-6am Ice Road 5am-6am Bringing Home Baby
Truckers
SKY1
DISCOVERY 8pm Emergency with Angela
8pm How It’s Made 9pm Britain’s Griffin 9pm Brit Cops: Zero
Toughest Cops 10pm I Almost Got Tolerance 10pm Fringe. The team
Away with It: A man who examines the case of a woman who
committed 40 bank robberies. appears to be immortal. 11pm
11pm Behind Bars 12am Bear Martina Cole’s The Runaway 12am
Grylls: Born Survivor 1am Deadliest Ross Kemp on Gangs 1.50am UK
Catch 2am Frontline Battle Border Force 2.40am Cold Case POMS IN PARADISE
Machines with Mike Brewer 3am 3.25am A Town Called Eureka ITV1, 7.30PM
Hitler’s Henchmen 3.50am World 4.10am Secret Life of Suburbia New series. Documentary following
War Two: The Complete History 5am Bite Size Brainiac the stories of British expats who have
4.40am How the Universe Works 5.15am-6am Don’t Forget the settled in the city of Gold Coast in
5.30am-6am Destroyed in Seconds Lyrics US Queensland, Australia.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
14 16 4 38
12 11
13 16 13 20  
15 19
Place the numbers from 1 to 9 in each empty cell so that each 14  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 17 24 6
15 34
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 36
   
above or to the left of it.
You can only use the digits 1-9 3 10  
    and you must not use the
22
7 15    
same digit twice in a block. 23 30 18
  The same digit may occur 29 9 
5 28
  more than once in a row or
column, but it must be in a
41
6

10 21 10
    separate block.
11 7
12 11
  14 15
 

    ACROSS DOWN
1 Sharpens (a razor) (6) 1 Water vapour (5)
 
  WORDWHEEL E N
4 Clip at (4)
6 Banked oval track for
bicycle or motorcycle
2 Bird associated with the
Tower of London (5)
3 Column (6)
Using only the letters in the Wordwheel, you have
    ten minutes to find as many words as possible,
P R racing (9) 4 Caustic remark (7)
8 One of four playing 5 Food in a pastry shell (3)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters R cards in a deck (3)
7 Angora yarn (6)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
A I 10 Madman (6)
13 Pale grey (4)
9 Salted roe of a
sturgeon (6)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
T S 14 Emblem of 11 Masses of snow
Christianity (5) permanently covering
QUICK CROSSWORD 2 4 9 7 3 6 2 16 Shoot (a gun) (4) the land (7)
T U R F T U L I P
3 9 8 9 7 9 7 SUDOKU          17 Stratagem, ploy (6) 12 Sprocket (3)
3 1 5 4 2 8 1
H E L B A O A
6 2 7 2 1 5 3
         20 Source of metal (3) 15 Small meat and
R O A D I R L         
21 Cessation of normal vegetable turnover
O M O N
B A S R A
O L
P
O G
N
U E
R
3 8 8 9
5 7 8 2 6 1
4
3 4 9 WORDWHEEL 

















operation (9) of Indian origin (6)
T A G L I N E
S E A P E T E R
7 4 9 2 6
         22 Hooligans (4) 18 Fillip, incentive (5)
W O R K S H E E T I
2 1 6 3 4 2 1 The nine-letter words were 19 Portable shelters
4 2 9 7 6 5 3          23 French sweet
A D A D E A F CONTAINER, CRENATION and          (usually of canvas) (5)
M A K I L L L 9 8 1 2 8 5 9 blackcurrant liqueur (6)
I A M B I E R N E 1 3 6 7 9 7 1 NARCOTINE          21 Purchase (3)
 Sport
25
“EXCO MEMBERS BEHAVIOUR
NOT ETHICALLY ACCEPTABLE”
FIFA FACING CORRUPTION SCANDAL
AFTER TRIESMAN ACCUSATIONS: P27

Britain’s unlikely track star Results

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8jkfeM`ccX%%%%%%%%%%%%%%%%%%%%%*- (' () (+ +, ,/ $(* +)

H
EARD the one about the
record-breaking sprinter
who switched over when the
Olympics came on televi-
sion? Montell Douglas is the
fastest woman Britain has ever pro-
duced and one of the best home
medal chances at London 2012,
but that wasn’t always the way she
intended it.
Growing up in south London,
Douglas, now 25, flamboyant and
adorned with facial piercings,
dreamt of being a dancer and plas-
tered her bedroom walls with pic-
tures of Cristina Aguilera, Britney
and the Backstreet Boys rather
than Flo-Jo or Michael Johnson.
Although the Commonwealth
gold medallist oozed early athletic
promise, her passion was music.
She admits she used to be a lazy
trainer, but happily devoted end-
less hours to copying the steps of
her favourite hits.
“A lot of kids are like, ‘Oh my
dream is to be in the Olympics’,
but it’s never been like that for
me,” confesses Douglas, who was
speaking at the launch of the City
of Sport, an initiative aimed at get-
ting Square Mile workers active.
“I don’t even remember watch-
ing Flo-Jo. People say: ‘I remember
watching the Olympics’. I didn’t
watch; I was watching MTV Base.
Douglas shot to fame in 2008 when she broke the British 100m record Picture: PA
was where I got my first sense of
competition.”
Her progress since then has
been fitful. An experiment with
the high jump was abandoned
and, although she was UK under-
17 champion in 100m and 200m,
injuries frequently interrupted
her. She arrived at sixth form with
plans to be a physiotherapist and,
in 2005, when London was award-
ed the Games, Douglas “wasn’t
even thinking about it”.
Then, aged 21, her first break-
through came. Monty, as friends
call her, hit top gear at
the 2007 under-23
E u r o p e a n
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email sport@cityam.com
of a meet in Loughborough. It was SUPPORTED BY
SUPPORTED BY
a huge shock, although she had
run 10.95 in the semi-final, a time
that cannot count as a record
because of a strong wind. Adventure
The CARE Finance Adventure Challenge
Suddenly she had qualified for
the 2008 Olympics, although Park,
25 June 2011, Exmoor National P Somerset
ark, Somerset
Beijing ended on a sour note for
Douglas. She failed to make the
semi-finals and then, more disap-
pointingly she says, a baton mix-
up sabotaged the fancied 4x100m
team’s final.
Some consolation came at last
year’s Commonwealth Games,
where the team took gold, but
there are bigger prizes looming.
She has put her ticket applications

Photo: CARE / Thomas Schwartz

I’d record all the dance videos, Championships, set-
learn them and do them back-to- ting four new per-
back. That is what I was doing. I sonal best times in
did sport, but I didn’t watch it. I six races over just
still don’t massively watch it.” three days to ensure her
Her restless energy spills into place at a first senior
her engaging staccato speech as championships, the
she adds: “I’m a massive dance Worlds that same year.
freak. If I didn’t do track I would “That was the first time
probably dance. That’s what I was I remember thinking:
really interested in when I was ‘I can do this. I’m
younger. Music is a massive part of good’,” she says.
my life, I listen to it 24/7; in my car, She would
when I get up in the morning, get even bet-
when I get ready. I’m half ter – better, in
Jamaican and it’s in my blood; it’s fact, than she
just me.” could have
Her promise was spotted at pri- hoped – one July
mary school, where she was pitted day the following
against the year six boys on sports summer, when she
day because girls proved no com- ran the 100m in 11.05
petition. “There was only one of seconds to break
them who could beat me, and my Kathy Cook’s 27-
teacher bet me a fiver I couldn’t year-old British
beat him,” Douglas recalls. “That record in the final
in like the rest of us just in case,
but Douglas won’t entertain not HIS CHALLENGE…
making the final in London next
year. “I’m not throwing that possi-
bility out there into the cosmos!”
she jokes.
“My ambition before was to run
sub-11 seconds, and then I ran it
[albeit with illegal wind
assistance]. So I had to say
to myself: what are you
gonna do now? I have a
sheet where I wrote
down eight years ago
my short-term, mid-
term and long-term
goals. All of them are
done. What do I do
now? The next thing
is win an Olympic
medal, that’s my all-
time dream ambition.”
For more details of the City Y R CHALLENGE…
OUR
YOU
of London’s new scheme
visit www.cityofsport.org
Registered
Registered Charity number

SPORT | IN BRIEF Take

Take a day to make a didifference.
fference. JJoin
oin teams
ffrom
rom across
across the
the City
City aand finance
nd fi nance iindustry.
ndustry.
number 292506

Owen slams Henson inclusion Toulon have released former England 37, and Thanou, 36, have been sen- Challenge YYourself:
Your
ourself: As four, you’ll
As a team ooff four, you’ll complete
complete a trail
trail challenge, bik
challenge, bikee route
route
RUGBY UNION: Former Wales captain winger Paul Sackey just one year into tenced to 31 months in jail for false and
and canoe
canoe relay.
relay. Each
Each member
member of
of your cover a marathon
your team will cover marathon distance.
distance. After the
the
Michael Owen is embarrassed by cur- his two-year deal. Sackey, 31, statements made to police on the eve challenge, enjoy a post-event
challenge, enjoy post-event meal,
meal, prize
prize giving
giving and
and party.
party.
rent head coach Warren Gatland’s England’s top try-scorer at the 2007 of the Athens Olympics.
decision to include Gavin Henson in his World Cup, joined from Wasps last Poverty: CARE
Challenge Poverty: CARE IInternational
nternational fi ghts p
fights overty and
poverty and injustice
injustice iin
n
squad for next month’s clash against summer. United must wait for trophy over 70 countries.
over countries. We
emergencies and
emergencies
We provide
and work
provide relief
relief to
work with communities
to families
families affected by
communities to to help
help people
by humanitarian
people work
humanitarian
work themselves
themselves
the Barbarians. Henson has not repre- FOOTBALL: Manchester United will
sented his country in over two years. Greek athletes guilty of perjury not receive the Premier League trophy of poverty.
out of poverty. Our economic
help people
help
economic development
people gain access
access to
development and
to credit
credit and
and acquire
and microfinance
microfinance programmes
acquire skills
skills to
programmes
to start or expand
expand
Owen said: “I think it’s embarrassing ATHLETICS: Former Greek Olympians should they win the title this weekend.
their business,
their business, enabling
enabling people
people toto transform
transform their
their own
own lives.
lives.
because we’re fawning over a player Kostas Kenteris and Katerina Thanou United need only one point from their
who doesn’t merit that treatment.” have been handed have received sus- final two games of the season to www.carechallenge.org.uk/finance
www.carechallenge.org.uk/finance
pended jail sentences for staging a secure a record 19th league crown and Email: challenge@careinternational.org
challenge@careinternational.org Tel:
Tel: 020 7934 9470
Sackey released by Toulon motorbike crash during the 2004 could do so on Saturday on the same
RUGBY UNION: French Top14 club Games to avoid a doping test. Kenteris, day as the FA Cup final.
 26 Sport
+++ RACE FOR EUROPE ++ RACE FOR EUROPE ++ RACE FOR EUROPE ++ RACE FOR EUROPE +
CITY’S REVENGE
Crouch own goal ends Tottenham’s Champions
England manager Johnson Picture: PA
League hopes as City guarantee top four finish
RFU U-turn
is a big boost
for Johnson
RUGBY UNION
▲
ENGLAND manager Martin Johnson
will not have his influence compro-
mised by the incoming performance
director after the Rugby Football
Union performed a dramatic u-turn
by diluting the role.
The governing body had outlined
their intention for the new man,
potentially World Cup winning
coach Sir Clive Woodward, to oversee
the whole elite structure, from the
senior Test squad down to age-group
level.
But the RFU have drastically
redrawn the job specification to the
extent that Johnson will now remain
the figurehead of English rugby and
will continue to report to chief execu-
tive John Steele, at least until after
September’s World Cup.
An RFU statement read: “With the
Rugby World Cup starting in the
autumn and the positive develop-
ment of the senior team so far, the
RFU board is keen not to upset the
momentum established.
“It has therefore approved a
change to the job description for the
role. The changed job description and
removes the senior team and its man-
agement from the performance
director responsibilities.
“It caps their involvement at the
England Saxons level to reinforce the
point that this is about talent devel-
opment up through the men and
women's age group teams and about
defining a long term performance
strategy.”
The three candidates for the per-
formance role, including Woodward,
will be interviewed later this month
based on the new brief.
CITYA.M. 11 MAY 2011
MAN CITY 1
TOTTENHAM 0
▲
FOOTBALL
BY JAMES GOLDMAN
TOTTENHAM manager Harry
Redknapp insists his side’s season
should not be branded a failure
after Manchester City ensured entry
to the Champions League for the
first time in their history at the
expense of last season’s first time
qualifiers.
Peter Crouch’s own goal after half
an hour was the difference between
the sides in a complete role reversal
of last season’s corresponding fix-
ture when the England striker’s
goal meant Spurs, rather than City,
embarked on a European adven-
ture.
Spurs now face a fight to main-
tain fifth place and a shot at the
Europa League next season – they
travel to Anfield to meet in-form
Liverpool at the weekend – but
Redknapp insists he is proud of the
way his team have performed this
season.
“I take a lot of pride out of the
season with the way we’ve per- Crouch’s own
formed – last eight of the goal came after
Champions League – we’ve played half an hour
fantastic football,” he said. “We’ve
had Champions League football for Picture: REUTERS
the first time since the Premier
League’s started and you’ve got to
keep improving, it’s hard to get in.”
Despite their early dominance almost immediately and when James hamstring injury ahead of Saturday’s
City struck moments after
Luka Modric had missed
Milner drilled low into the six-
yard box Crouch inadvertently
FA Cup final against Stoke, who have
now qualified for the Europa League
TOP SIX
TEAM PLD W D L F A PTS
the best opportunity of poked beyond Carlo Cudicini as a consequence of last night’s
the first-half when he from almost the exact same result. Man Utd 36 22 10 4 73 34 76
narrowly failed to steer spot he scored the goal “When you have a target and get it, Chelsea 36 21 7 8 67 30 70
his shot on target and which catapulted Spurs into it is very important for your job, but I
beyond Joe Hart after the Champions League a am happy for the supporters and the Arsenal 36 19 10 7 69 39 67
Aaron Lennon’s cut- year ago. club first of all,” said City boss Man City 36 19 8 9 55 33 65
back had located the City retreated into their Roberto Mancini said. “We deserve to
Croatia playmaker. shells thereafter and were later be in the Champions League because Liverpool 36 17 7 12 59 41 58
Spurs were caught out by a short able to give Carlos Tevez a runout as a we were between first and fourth Tottenham 36 14 14 8 51 45 56
corner routine at the other end substitute after a month out with a position all season.”
 CITYA.M. 11 MAY 2011
+ RACE FOR EUROPE ++
EUROMILLIONS | WHAT IT’S WORTH
Qualification to the Champions League
group stage is estimated to be worth at
least £30m in prize money, matchday
revenue and television rights
£44m
What 2010 champs
Inter got in TV and
prize money alone
£6.5m
Equivalent for
Europa League
winners
£21m
Potential matchday
earnings for run to final
Carragher hails
Suarez impact
LIVERPOOL defender Jamie
Carragher believes new Kop idol
Luis Suarez is the key to ensuring
the Merseysiders challenge
Manchester United’s supremacy.
Carragher claims Liverpool,
whose form since the appointment
of Kenny Dalglish as manager has
catapulted them to the brink of
qualifying for next season’s Europa
League, have a player in Suarez
who is capable of helping them
bridging the gap.
“The only way of us getting back
on top is winning titles, not relying
on others,” he said. “Suarez has
proved he’s going to be a real player
for Liverpool, not just between now
but for years to come.”
SPORT
MONTELL
DOUGLAS
Britain’s fastest
woman on her
Olympic dream and
her passion for
dance music
Page 25
Sport 27
Triesman takes swipe at unethical Fifa
winning the vote, which went with
▲
FOOTBALL
BY FRANK DALLERES Russia.
Fifa vice-president Warner, whom
THE WORLD CUP bidding process is Triesman says asked for £2.5m for an
under fresh scrutiny after further education centre in his native
allegations of vote selling were made Trinidad, called the claims “a piece of
against six of the men who decide nonsense”. He added: “I’ve never
who hosts the tournament. asked Triesman nor any other person,
Former Football Association chair- Englishman or otherwise, for any
man Lord Triesman accused four money for my vote at any time.”
members of world governing body Mike Lee, the British public rela-
Fifa’s all-powerful executive commit- tions guru who helped win London
tee of seeking incentives to support
England’s failed bid to stage the 2018
event.
the 2012 Olympics vote and worked
for Qatar’s bid, told MPs: “My experi-
ence is I would have had a sense if
And it is alleged that two more such things were going on and I had
ExCo members received substantial no sense of that.” Lord Triesman made claims against four ExCo members Picture: ACTION IMAGES
sums in return for voting for Qatar,
who surprisingly won the right to
host the 2012 tournament last year,
the culture, media and sport commit-
tee heard yesterday.
Fifa chairman Sepp Blatter voiced
his shock at the claims, which he said
would need to be supported by evi-
dence, while pointing out the ExCo
members were not appointed by him.
“They are coming from other confed-
erations, so I cannot say that they are
all angels or all devils,” said Blatter.
Triesman, who was initially chair-
man of England’s bid, accused ExCo
members Jack Warner, Nicolas Leoz,
Ricardo Teixeira and Worawi Makudi
of asking for cash or incentives in
return for support, saying their
behaviour had been “below what
would be ethically acceptable”.
The committee also heard
Conservative MP Damian Collins
describe evidence submitted by a
British Sunday newspaper that
claimed to show two more Ex Co
members, Issa Hayatou and Jacques
Anouma, had been offered money to
vote for Qatar.
Fifa’s ethics committee banned two
ExCo members, Amos Adamu and
Reynal Teymarii, from last year’s vote
following allegations of impropriety
relating to votes.
Triesman pledged to submit evi-
dence in support of his claims to Fifa,
and said the FA had chosen not to
complain at the time because they
feared it could harm their chances of
FIFA IN THE DOCK | VOTE CLAIMS
A total of eight of Fifa’s 24-man executive
committee have now been accused of impro-
priety relating to votes.
BANNED
Amos Adamu Reynal Teymarii
ACCUSED
Nicolas Leoz Jack Warner
Ricardo Teixeira Worawi Makudi
Jacques Anouma Issa Hayatou
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