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Date: 14 July 2012
Time: 10.15 15.30
GLENCORE and Xstrata look likely to
overhaul their $65bn mega-merger
after another prominent sharehold-
er demanded they alter the terms of
the deal last night.
Executives at the commodities
firms were already seeking to rejig
pay packages linked to the tie-up
when the Qatar Investment
Authority broke cover to seek a better
deal for its 11 per cent stake in
Xstrata.
The sovereign wealth fund, which
was previously thought to be sup-
portive of the deal, said it wants 3.25
new Glencore shares for every one
existing Xstrata share, compared to
the current ratio of 2.8 shares.
Both firms have seen their stock
tumble since the tie-up was
announced in February, eroding the
value of the deal for investors.
Qatar said it still sees merit in the
planned merger, but would like to
see a more appropriate distribution
of benefits.
Other stakeholders, including
Standard Life, Schroders and the
Association of British Insurers, have
hit out at the generous bonuses on
offer for top staff who stay with the
enlarged company post-merger.
Shareholders have been vocal ...
and there is also a silent majority. We
are all working to get the right out-
come, said one source familiar with
the negotiations.
Glencore boss Ivan Glasenberg is now having to contend with Qatars demands
CHANCELLOR George Osborne bowed
to pressure yesterday, scrapping this
years planned fuel tax hike in the lat-
est of a series of screeching U-turns by
the coalition government.
The rise in fuel duty by around 3p
per litre will now be delayed until the
beginning of next year, postponing a
hike due on 1 August a change of
plan that is projected to cost the public
purse around 550m.
The Treasury revealed that it will
make up the shortfall by imposing
more cuts on the budgets of govern-
ment departments.
Osbornes change of heart was wel-
comed by business and motoring
groups, and follows other abandoned
taxes on pasties, caravans, and cathe-
drals, as well as a reversed decision to
cut tax relief on charitable donations.
Backbench discontent over the
planned tax hike is believed to have
scared the government into a climb-
down, while opposition parties threat-
ened to force a vote on the policy in the
House of Commons.
Two Conservative MPs from Essex
constituencies Harlows Robert
Halfon and Clactons Douglas Carswell
have campaigned against the
planned fuel rise.
A big win for the Commons over the
feckless Treasury! Carswell tweeted.
I think this was a decision taken by
ministers when they realised the legis-
lature was going to defeat them,
Carswell told City A.M. Its no surprise,
really, its what parliament is for to
say no Prime Minister, you cant take
more money.
Labours shadow chancellor, Ed Balls,
jumped on the coalitions announce-
ment, describing it as the fastest U-
turn in history. Labour called for this
help for families and businesses this
morning and I welcome the fact the
chancellor backed down this after-
noon, Balls boasted in a statement.
The Treasury said the decision means
that fuel duty will not have increased
for two successive years and will save
the average family with a car 159,
compared to how they would have
fared under the previous plans.
Prices at the pump will be 10p per
litre cheaper than under plans inherit-
ed from the previous Labour adminis-
tration, Osborne argued.
Business groups said that the deci-
sion would help the UK with its tough
economic recovery. Freezing fuel duty
was at the top of our members wish-
lists for improving the UKs competi-
tiveness, so this is welcome news, the
Institute of Directors Simon Walker
said. Increasing the cost of making
deliveries or of staff getting to work
was only going to harm the economy;
many will be relieved that the rise has
been cancelled.
The change of policy should also help
ease the squeeze on consumers and
provide relief to shop owners, the
British Retail Consortium added.
BY MARION DAKERS
FTSE 100 5,446.96 -3.69 DOW 12,534.67 +32.01 NASDAQ2,854.06 +17.90 /$ 1.56 unc / 1.25 unc /$ 1.25 unc
BUSINESS WITH PERSONALITY
LONDON2012
days to go
SIR MERVYN KING CALLS FOR PROBE INTO RBS
See Page 6, Forum Page 20, Debate Page 21
MURRAY WINS PLACE IN WIMBLEDON SECOND ROUND
See Page 28
30
www.cityam.com FREE ISSUE 1,661 WEDNESDAY 27 JUNE 2012
HESTER UNDER FIRE
Certified Distribution
30/04/12 till 27/05/12 is 132,076
BY JULIAN HARRIS
CHANCELLOR
SCRAPS RISE
IN FUEL DUTY
Change of plans for petrol tax is the latest government U-turn
Glencore and Xstrata under
fresh pressure to alter deal
ALLISTER HEATH: Page 2

allister.heath@cityam.com
Follow me on Twitter: @allisterheath
IN BRIEF
SEC goes after Harbingers Falcone
nUS securities regulators could file
an enforcement action against hedge
fund manager Philip Falcone as soon
as this week, according to reports. The
US Securities and Exchange
Commission recently authorised the
filing of a lawsuit against Falcone, who
notified investors in his Harbinger
Capital Partners fund about a year ago
that he was being investigated by
regulators, Bloomberg reported. SEC
officials did not comment. Falcone
could not be reached for comment.
Matthew Dontzin, an attorney for
Falcone, issued a statement saying the
manager would fight any lawsuit.
Pamplona buys UniCredit stake
nPrivate equity fund Pamplona has
bought five per cent of Italy's biggest
bank, UniCredit, becoming its second-
largest shareholder, in a vote of
confidence on the banks future in the
face of a deepening Eurozone crisis.
The stake is worth about 750m at
current market prices and is one of the
largest investments by a foreign
operator in a listed Italian group this
year.
Best Buy founder mulls buyout
nBest Buy founder Richard Schulze is
working with banks including Credit
Suisse to explore a private takeover of
the worlds largest consumer
electronics retailer, according to
sources close to the matter. Schulze,
who set up the firm in 1966 and is its
largest shareholder with a 20.1 per
cent stake, is in the early stages of
determining what steps to take.
National debt goes up as
income tax takings drop
THE UKS public finances took a
hammering last month, according
to data released yesterday by the
Office for National Statistics (ONS).
A budget deficit of 17.9bn for May
pushed the net national debt to
1.013 trillion, hitting 65 per cent of
GDP. Just one year ago, net debt
stood at the comparatively low fig-
ure of 921.3bn, representing 61.3
per cent of GDP.
These headline figures ignore the
cost of bailing out the banks, and
other off balance sheet items the
exchequer is liable for, such as proj-
ects under the private finance initia-
tive and pensions payments.
A spokesman for HM Treasury
argued that it is too early in the
financial year to draw conclusions,
especially as todays data include a
number of one-off factors and tem-
porary distortions. The Treasury
points to the possibility of revisions,
especially since this month marks
the transition from COINS to
OSCAR, a new public spending sys-
tem.
Early tax credit payments due to
the extra bank holiday, and an early
payment of the Department of
Healths social grant are also given
as explanations. As a result, the
Treasury expects this jump in May
to be largely balanced out by lower-
Global role for Citis Asia consumer
head
Citigroup has underlined Asias growing
importance to the bank by naming its
consumer banking head in Hong Kong as
global head of retail banking, according
to an internal email seen by the Financial
Times. Jonathan Larsen has been given
the task of bringing all of Citis retail
businesses into the digital age.
YouView limps to Olympic launch
YouView, the long delayed internet TV
service being backed by several of the
UKs largest broadcasters and broadband
providers, will finally be revealed next
week ahead of the Olympic Games, but
boxes are not expected to be widely
available until later this year as the main
suppliers continue with testing.
City fear over Camerons EU
demands
The City of London has raised deep
concerns over David Camerons strategy
in Europe, warning that the prime
ministers wishlist of safeguards in
December could actually have damaged
its standing as Europes financial centre.
Car insurers fail to reverse years of
losses
Britains motor insurers will rack up losses
over the next two years as premiums rise
more slowly, says Ernst & Young. The
continued failure of price rises to keep
pace with the costs of claims means that
the industry will fall into the red.
John Lewis: collect from our rivals
John Lewis customers will from next year
be able to pick up goods ordered online
at other shops or businesses, its
managing director said.
Goodwin: We werent at fault in RBS
failure
Former directors of Royal Bank of
Scotland, including the lenders
disgraced chief executive, Fred Goodwin,
have denied claims they did anything
wrong before the banks collapse. The
response was to an RBS shareholders
lawsuit.
BP safety back in spotlight
BP faces fresh scrutiny over its safety
record after an explosion at a gas plant in
America killed one worker and injured two.
Arrests made in huge online sting
Federal authorities have arrested 24
people in the US and a dozen other
countries in what they say is the largest-
ever undercover operation targeting stolen
credit-card numbers. The FBI set up a fake
online forum two years ago to attract
thieves who steal personal info.
Delta Air sees fuel-hedging hit
Delta Air Lines said yesterday it expects a
second-quarter operating loss after the
sharp slide in oil prices left it nursing a big
hit on its fuel hedges.
WHAT THE OTHER PAPERS SAY THIS MORNING
ECONOMIC recovery in the UK is
at least five years away, Sir Mervyn
King told MPs at the Treasury
Select Committee yesterday.
The governor of the Bank of
England reiterated his backing for
50bn of further quantitative
easing, and even kept open the
possibility of an interest rate cut.
The Banks monetary policy
committee voted unanimously
against a rate cut in its last
meeting, but narrowly declined to
increase asset purchases, with
King among the dissenters.
He said he was struck by how
much had changed since the May
inflation report, and declared
himself pessimistic about the
Eurozone outlook, especially
since the problem is being
pushed down the road.
King was also downbeat about
Asian prospects, explaining that
his vote for more easing policy
was based on, the worsening in
the position in Asia and other
emerging markets.
Other members of the MPC,
including Martin Weale, have
suggested that further QE may
have little effect as banks are
focusing on rebuilding their
balance sheets. Weale suggests
banks will use the extra funds to
deleverage, rather than extend
extra credit to consumers.
Sir Mervyn King
paints gloomy
picture of UK
The new data throws doubt on the possibility of achieving George Osbornes Plan A
2
NEWS
BY BEN SOUTHWOOD
BY BEN SOUTHWOOD
To contact the newsdesk email news@cityam.com
S
OMETHING very worrying is
happening to the UKs public
finances. Income tax and capital
gains tax receipts fell by 7.3 per
cent in May compared with a year
ago, according to official figures.
Over the first two months of the
fiscal year, they are down by 0.5 per
cent. This is merely the confirmation
of a hugely important but largely
overlooked trend: income and capital
gains tax (CGT) receipts were stagnant
in 2011-12, edging up by just 414m
to 151.7bn, from 151.3bn, a rise of
under 0.3 per cent. By contrast,
overall tax receipts rose 3.9 per cent.
Revenues from income and capital
gains tax had previously fallen
sharply in both 2008-09 and 2009-10,
before recovering somewhat in 2010-
11. They remain below their 2007-08
boom time peak.
There are of course some good rea-
EDITORS
LETTER
ALLISTER HEATH
Falling tax receipts show that weve forgotten Laffers lesson
WEDNESDAY 27 JUNE 2012
sons for this sluggishness in receipts.
The personal allowance has gone up.
Pay isnt rising quickly. Bonuses are
down. Unemployment is elevated.
Asset markets are sluggish. But these
factors are insufficient to explain the
scale of the problem. Total employ-
ment and the economy wide-wage bill
are still creeping up. And overall taxes
on labour and capital have been
hiked: the 50p tax was introduced
from April 2010 (and will fall to a still
high 45p in April 2013), those earning
above 150,000 have lost their person-
al allowance, CGT has risen to 28 per
cent, many workers have been
dragged into higher tax thresholds,
and so on.
In theory, if one were to believe the
traditional static model of tax,
beloved of establishment economists,
this should have meant higher
receipts, not lower revenues. It is also
nonsense to claim, as some did yester-
day, that the May drop in income and
CGT tax receipts was to be expected
given the double-dip recession an
economy that is shrinking by a few
tenths of a percentage point doesnt
respond in such a drastic manner.
It was apposite, therefore, that
Arthur Laffer was in London yester-
day. He is the economist who popu-
larised (via a famous curve) the notion
that there is a revenue-maximising
rate of tax and that if you set rates
is now clearly counter-productive.
These taxes are maxed out; they have
been pushed beyond their ability to
raise revenues. George Osbornes deci-
sion to suspend the August fuel duty
hike is welcome, as far as it goes. The
problem is that spending is too high
central government current expendi-
ture is up by 3.7 per cent year on year
in April-May not that taxes are too
low. The result is that the April-May
budget deficit reached 30.7bn, some
6.2bn higher than a year ago. But the
chancellor will have to make a much
more dramatic U-turn if he wishes to
salvage what is left of his crumbling
fiscal plans: he needs to accept that
only lower taxes on income and capi-
tal can boost growth and, eventually,
nurse his finances back to health.
too high, you raise less because people
work less, find ways of avoiding tax or
quit the country. The world isnt stat-
ic, it is dynamic; people respond to
tax rates, just as they respond to other
prices. Laffer told a gathering at the
Institute of Economic Affairs that this
is definitely true in the UK today
and the struggling tax take revealed
in the official numbers suggest that
he is right. Tax rates and levels are so
high as to be counterproductive:
slashing capital gains tax would
undoubtedly increase its yield, for
example. Many self-employed workers
are delaying incomes as much as pos-
sible until the new, lower top rate of
tax kicks in.
Of course, higher VAT is also damag-
ing growth, though it is still yielding
more. Some taxes can still raise more
but try doing that with income tax,
CGT or corporation tax and the result
L
A
U
R
A

L
E
A
N
/
C
I
T
Y

A
.
M
.
than-expected increases in June.
Current expenditure rose to roughly
55bn in May, which represents a
jump of 7.9 per cent on the year.
However the growth is a more modest
3.7 per cent considering the change
for April and May together.
Tax takings rose, at a rate of 1.6 per
cent, to 38.6bn from just over 38bn
last year. A fall in receipts from
income and capital gains taxes by 7.3
per cent was partly compensated by
an increase of 4.9 per cent in VAT
receipts, as well as gains elsewhere.
Nida Ali at Ernst & Young described
the figures as very discouraging,
especially the rapid increase in gov-
ernment spending, and warned that
the government needs to find
around 11bn of savings over the next
ten months if it is to hit the Office for
Budget Responsibility (OBR) forecast.
The new jobs website for London professionals
CITYAMCAREERS.com
Net debt as a percentage of GDP excluding
nancial interventions
2001 2003 2005 2007 2009 2011
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
INVESTORS applauded News Corp yes-
terday, sending its shares up more
than eight per cent, after the media
giant confirmed it is mulling the
prospect of splitting its empire in two.
News Corp... is considering a
restructuring to separate its business
into two distinct publicly traded com-
panies, the firm said in a statement.
The potential move, understood to
entail the separation of News Corps
entertainment and publishing arms,
pleased shareholders who have long
called for Rupert Murdoch to chuck
his less profitable newspaper unit.
News Corps publishing assets
including the Times, the Sun, the
Wall Street Journal and
HarperCollins brought in revenues
of $8.8bn (5.6bn) last year.
The significantly more lucrative
entertainment arm which includes
WEDNESDAY 27 JUNE 2012
3
NEWS
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T
HE Skys the limit once again
for News Corporation. It took
the first step in what looks like
a bold new strategy to acquire
the remaining 61 per cent of BSkyB
yesterday. The media giant
confirmed that it is considering a
restructuring to separate its business
into two distinct publicly traded
companies understood to mean
the separation of publishing from its
film and television arms. Although
the Murdochs are likely to retain
control of both companies, the split
would help to protect the
entertainment arm from Ofcoms
investigation into whether the
phone hacking scandal means News
Corp is not fit and proper to own
broadcast licences. Better yet, with
its controversial newspapers at arms
length, the new entertainment firm
could find BSkyB an easier buy.
A BSkyB purchase, or even a
merger, would revive the companys
plan to unify its European broadcast
assets under the Sky umbrella, a
long-term strategy frustrated by the
recent scandals. But the bump to the
global content providers share price
yesterday was also an admission of
the declining importance of
publishing to Rupert Murdochs
newspaper-founded empire.
The division would not be an equal
one. In recent years, publishing has
accounted for only about 25 per cent
of News Corporations revenues
and just 18 per cent of operating
income in 2011. Back in 2001, it was
33 per cent of revenues and 50 per
cent of operating income. The
headings in Rupert Murdochs 2011
letter to stockholders tell their own
story: Strong Television Performance;
Fast Growing Cable Channels;
Growth on Pay-TV Platforms;
Headwinds in Publishing. As the
annual report spells out: The
company believes that competition
from new media formats and
sources and shifting consumer
preferences will continue to pose
challenges for the publishing
BOTTOM
LINE
MARC SIDWELL
segments businesses. The rapid
growth that investors want to see is
all in film and TV, making
publishing effectively a drag on the
media groups performance.
Still, the overall numbers for
publishing dont look catastrophic.
As a segment of News Corp it made
$865m (554.5m) in 2011 off
revenues of $8.826bn. Higher
advertising and circulation revenues
at The Wall Street Journal were
apparently a significant contributor.
In 2011, News Corps print and
digital circulation revenues rose 12
per cent year-on-year, and its print
and digital advertising revenues rose
11 per cent. Its book publishing
division HarperCollins has also done
well from ebooks and bestsellers like
Wolf Hall.
But not all parts of News Corps
publishing segment are equal,
especially in Britain. The Times and
Sunday Times havent made money
for years. Times Newspaper Limited
has been shrinking its annual loss
recently, but it still stood at 11.6m
for the year to July 2011. If the Times
is cut loose from its entertainment
sugar daddy, it will be interesting to
see how long it survives in its current
form. News Corps Australian
newspaper arm, News Limited, last
week announced a restructuring
that could cost over 1,000 jobs, with
east coast operations slashed from 19
to five. News Corp shares may be
heading skyward, but the publishing
cast-off it leaves behind may need to
take a very unsentimental approach
to some of the worlds oldest
newspapers.
Marc Sidwell is City A.M.s managing
editor.
Rupert Murdoch has reportedly had a change of heart after so far refusing to separate his newspaper and entertainment assets
BSkyB, 20th Century Fox and the Fox
TV networks generated $23.5bn.
The move could be an attempt to
shield BSkyB from the phone hacking
scandal which has plagued News
Corps UK publishing unit since last
summer, and has been pegged by
some analysts as an attempt by the
media behemoth to resuscitate its
failed bid for the 61 per cent of BSkyB
it does not already own.
Shares in the British satellite busi-
ness gained 2.7 per cent yesterday after
News Corps confirmation.
News Corp president Chase Carey
hinted earlier this year that the board
was considering the possibility of sell-
ing the groups newspaper unit.
But it is understood the Murdochs
would retain control of both compa-
nies if the division were to occur.
An official announcement could
come as soon as tomorrow, according
to reports.
Murdochs plan to divide
seen as a path to conquer
Investors cheer
News Corp idea
to split up firm
BY LAUREN DAVIDSON
British Sky Broadcasting Group PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
685
680
675
670
665
660
p
674.00
26 Jun
News Corp
20 Jun 21 Jun 22 Jun 25 Jun 26 Jun
21.8
21.6
21.4
21.2
21.0
20.8
20.6
20.4
20.2
20.0
$ 21.76
26 Jun
IN BRIEF
France increases minimum wage
nFrances new government announced
a cosmetic two per cent increase in the
minimum wage yesterday as it seeks to
soften the blow from tax hikes and
spending freezes to the struggling
economy. President Francois Hollandes
Socialist government has pledged to cut
the public deficit to 4.5 per cent of gross
domestic product this year from 5.2 per
cent in 2011, mainly through a series of
tax increases.
Egan-Jones cuts German outlook
n Credit ratings agency Egan-Jones last
night cut Germanys rating to A-plus
with a negative outlook from AA-minus,
saying that whether or not Greece or
other Eurozone members exit the
monetary union, Germany will be left
with massive additional, uncollectible
receivables. The downgrade came as
GfK said German consumer confidence is
holding up, with its household
confidence index forecast to rise to 5.8
points in July from 5.7 points for June.
Italy offers state support to MPS
n Italy yesterday offered up to 2bn
(1.6bn) to plug a capital gap in the
bank Monte dei Paschi di Siena, the
second time in three years the state has
had to bail out the worlds oldest bank.
Rome said it was ready to underwrite
special bonds issued by the bank to plug
a capital shortfall estimated at 1.3bn to
1.7bn, higher than the 1bn that
investors had expected.
G
E
T
T
Y
EUROPEAN leaders remain on a colli-
sion course ahead of crunch talks that
commence tomorrow in Brussels,
with little sign of compromise
between struggling Eurozone states
and countries that may have to foot
the bill for more bailouts.
German Chancellor Angela Merkel
was yesterday quoted as having
assured her coalition partners that
shared debt liability in the Eurozone
would not happen as long as I live.
Earlier in the day reports in Italy
said that Prime Minister Mario Monti
would threaten to resign unless
eurobonds one form of debt sharing
were introduced.
Several means of easing the debt
burden on troubled Eurozone states
such as Spain and Italy will be on the
table when leaders meet for the two
day summit, but Merkel has been
stubborn in her resistance this week
insisting there are no easy solutions
Europes heads
clash ahead of
crucial summit
BY JULIAN HARRIS
to the crisis.
Yet Germany, the EUs biggest econo-
my and paymaster, appeared ready to
budge on using the Eurozones rescue
funds more flexibly to help banks and
reassure investors spooked by an
increased risk of facing write-downs
on government bonds.
The parties in Merkels centre-right
coalition have proposed allowing a
new permanent rescue fund called
the European Stability Mechanism
(ESM) to funnel aid directly to nation-
al bank rescue funds
And a leading ally of Merkel told a
closed-door meeting of her conserva-
tives that Eurozone governments were
discussing removing the preferred
creditor status of the blocs new per-
manent rescue fund.
Neither Merkel nor finance minister
Wolfgang Schaeuble spoke out in
favour of such a move at the meeting,
sources said, leaving it unclear
whether the idea had the firm back-
ing of the German government.
Debt sharing comes with strings
attached, Brussels report states
EUROPEAN Council chief Herman
Van Rompuy yesterday released a
fresh plan for closer integration,
involving eurobonds as the final
stage of a fiscal union.
In a medium-term perspective,
the issuance of common debt could
be explored as an element of such a
fiscal union and subject to progress
on fiscal integration, the report
said, warning that debt sharing
measures must be conditional on
moves towards a closer union.
Steps towards the introduction
BY CITY A.M. REPORTER
of joint and several sovereign
liabilities could be considered, as
long as a robust framework for
budgetary discipline and
competitiveness is in
place to avoid moral
hazard and foster
responsibility and
compliance, it said.
The report was also
prepared by
European
Commission
president Jose
Manuel
Barroso,
European Central Bank president
Mario Draghi and president of the
Eurogroup, Jean-Claude Juncker.
The report recommends that the
Eurozone should push ahead with a
banking union, a budgetary union,
joint economic policy framework
and to ensure all this has
democratic support. To make joint
debt issuance possible, Brussels
should be able to set annual
deficit and limits for
individual members, it said.
Herman Van Rompuy wants
closer European integration
GREECE yesterday named liberal
economist Yannis Stournaras as its
new finance minister, replacing
Vassilis Rapanos who quit on
Monday after less than a week in
the job.
Stournaras, an economics
professor at the University of
Athens and the head of the
influential IOBE think-tank, has
the nickname Mr Euro in Greece
for his role in negotiating the
countrys entry into the single
Greece chooses euro champion
Stournaras as finance minister
BY CITY A.M. REPORTER
currency back in 2001.
Described by colleagues as
affable, he is considered an ardent
supporter of structural reforms to
make the economy more
competitive ideas that are likely
to win him favour with
international lenders exasperated
with the slow pace of reform.
Rapanos quit earlier this week
on the advice of doctors after
spending four days in hospital with
dizziness and abdominal pains.
Deputy shipping minister George
Vernikos also resigned yesterday.
THE EURO fell against the dollar
and Spanish borrowing costs
jumped yesterday, on doubts about
the outcome of the European
summit starting tomorrow in a bid
to mitigate the debt crisis.
Yields on Spanish three-month
securities hit 2.36 per cent, soaring
from 0.85 per cent at the last such
auction. Spain auctioned off
3.08bn worth of the bills, but the
yield reflected fears over the
struggling countrys prospects.
And nearby Italy also saw yields
rise at a bond auction, but to a less
severe extent. The yield on Italian
two year notes came in at 4.71 per
Cynicism towards crisis meeting
takes toll on yields and currency
BY CITY A.M. REPORTER
cent, up from the 4.04 per cent
paid last time around.
In the currency market, the euro
fell 0.3 per cent against the dollar
at $1.2463 after touching $1.2440,
its lowest level in more than two
weeks although the greenback
also strengthened against other
currencies.
The FTSEurofirst 300 index of
Europes top shares was essentially
unchanged at 986.34 points, wiping
out an earlier 0.4 per cent rise.
MSCIs world equity index dipped
0.12 per cent to 1,186.81, adding to
three straight days of losses.
Investors pared their safe-haven
holdings in gold as well as US and
German government debt.
WEDNESDAY 27 JUNE 2012
4
NEWS
cityam.com
Yannis Stournaras was chief executive of Emporiki Bank, which was sold to Credit Agricole
G
E
T
T
Y
SIR MERVYN King yesterday demand-
ed that a formal investigation be
launched into the RBS and NatWest
technical glitch, adding to pressure
on the bank and its chief executive
Stephen Hester.
Once the difficulties are over, we
will need the FSA to carry out a very
detailed investigation, King argued,
with the focus on first of all, what
went wrong, and then why it took so
long to recover.
A spokesman for the financial
ombudsman service yesterday also
advised account holders to make a
note of conversations they have, diffi-
culties they are facing, and knock-on
effects, warning that the situation
may drag on for an extended period.
Details of the technical failure have
begun to emerge, with reports saying
the problems started when RBS
attempted last Tuesday to update a
batch processing tool called CA-7.
According to a former employee, a
failed update should not have been
fatal, as the process is usually trivial
for experienced programmers.
King demands
full inquiry into
NatWest fiasco
BY BEN SOUTHWOOD
RBS declined to comment on reports
that it is considering legal action
against software provider CA
Technologies.
Despite chief executive Stephen
Hesters claims to the contrary, RBS
has been dogged by allegations that
outsourcing and cost-cutting exacer-
bated or helped cause the problem.
An advertisement for CA-7 trained
consultants on the Indian recruitment
website Quickr, which listed RBS as the
client, fuelled these assertions.
As part of its attempt to shore up its
image, RBS was yesterday forced to
cancel all corporate hospitality at this
years Wimbledon tournament.
Royal Bank of Scotland Group PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
255
250
245
240
235
230
p
227.70
26 Jun
WEDNESDAY 27 JUNE 2012
6
NEWS
cityam.com
W
HETHER NatWests recent
computer problems are
over remains to be seen,
but what is already
obvious is the damage that is
being done to perception of the
brand.
YouGov SoMA (Social Media
Analysis tool) looks at the impact
that campaigns or crises have on
social media.
While an average day generates
tweets about NatWest that are seen
by just 0-2 per cent of the Twitter
population, since the crisis began
that has risen significantly to reach
a high of 23 per cent last Friday.
Over five days, 37 per cent of the
UKs Twitter population was
exposed to tweets about NatWest,
and the storys durability is shown
by a 21 per cent reach score on
Monday, five days after the initial
problem was reported.
RBS ESCAPES THE TWITTER IMPACT
Interestingly, the social media
impact of the story has largely been
confined to NatWest.
Parent company RBS has seen a
slight rise in social media reach but
much of that is due to its down-
grading by Moodys last week, and
the much bigger story last Tuesday
when it announced job losses
(resulting in 26 per cent reach).
BrandIndex, which measures over-
all brand perception, reveals that
NatWest is suffering in the real
world as well.
The brands buzz score (those
hearing positive news minus those
BRAND
INDEX
STEPHAN SHAKESPEARE
Twitter effect hits brands as the impact
on consumer perception becomes clear
hearing negative news) is down
from the usual level of around zero
to -63 on Monday, and its Index (a
composite score of six key percep-
tion measures) has plummeted
from +3 to -20.
RBS has also been hit here, with
buzz down from a normal -10 level,
to -37, and Index falling from an
already low -10 to -22.
So a difficult time for NatWest,
and its clear that this problem has
had an immediately obvious
impact on brand perception.
It will be important for the bank
to repair this damaged image if
they are going to re-convince cus-
tomers that it is a brand that can be
trusted.
BrandIndex
25Jun 20Jun 15Jun 10Jun 5Jun
10
0
-10
-20
-30
-40
-50
-60
-70
NatwestIndex
NatwestBuzz
SoMA
25
Jun
24
Jun
23
Jun
22
Jun
21
Jun
20
Jun
19
Jun
18
Jun
17
Jun
16
Jun
RBS
Natwest
30
25
20
15
10
5
0
RBS boss Stephen Hester is under fire
INTERNATIONAL regulators said
yesterday that banks must reveal
all the components of their capi-
tal from 30 June next year, as their
progress in building up buffers is
monitored by authorities.
The Basel Committee on Banking
Supervision which consists of reg-
ulators from 27 countries includ-
ing the UK, Germany, China and
the US wants to ensure that
lenders are falling in line with new
Basel III rules.
Regulators are attempting to
enforce a strict template on banks,
claiming that reports over capital
levels have previously been
obscured by a lack of a clear and
uniform system.
During the financial crisis, mar-
ket participants and supervisors
were hampered in their efforts to
undertake detailed assessments of
banks capital positions and make
New reporting
template to hit
banks next year
BY JULIAN HARRIS comparisons across jurisdictions,
the committee said. Adding to
these difficulties were insufficient-
ly detailed disclosure by banks and
a lack of consistency in reporting
across banks and jurisdictions.
The report claims that the uncer-
tainty may have made regulators
jobs tougher during the financial
crisis and masked how far banks
were relying on forms of capital
that were insufficiently loss-
absorbant.
The decision to go ahead with the
plans is likely to provoke dissent
from banks, who have previously
complained over the burden of the
new requirements. We find that
the level of detail called for in the
consultative document is clearly
excessive, the Association of
German Banks said earlier this year,
arguing that the amount and com-
plexity of the data required will in
fact make it even more difficult to
comprehend.
POLLY Peck tycoon Asil Nadir yesterday told the Old Bailey he was a broken man with
no chance of a fair trial when he left the UK in 1993. The 71-year-old Cypriot has denied
stealing nearly 150m from Polly Peck and said the company was never insolvent.
ASIL NADIR DENIES POLLY PECK THEFT
n A disclosure template that the banks
must use from 1 January 2018 has been
set out. This is the date from which the
Basel III requirements will be set in stone,
and when the banks permitted period of
transition comes to an end.
n Until then, there is a modified version
of the template that banks must use.
n Up to 2018, banks are allowed to make
a number of deductions as they near full
compliance. But in financial statements
they file from 30 June 2013, they will have
to lay out deductions according to the
new template, as well as revealing other
elements of their capital positions as
required by Basel III.
n Banks reporting under the new system
will not be limited to annual updates.
Whenever their capital position changes
in a way that affects its compliance with
the regulations.
n Banks must provide a full reconciliation
of all regulatory capital elements back to
the published financial statements.
n In a bid to boost transparency, banks
must publish on their websites the full
terms and conditions of regulatory capital
instruments.
HOW WILL THE NEW SYSTEM WORK?
8
NEWS
cityam.com
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AN INCREASING number of Britons
are planning to switch their food
shops from their usual supermarket
to discounters such as Aldi and Lidl
this year in an attempt to cut costs,
new research shows.
A survey by retail experts IGD
claimed today that a third of
shoppers say they will be visiting
the aisles of budget retailers.
This is the highest level since the
monthly tracking survey began in
2010 and is up from 24 per cent a
year ago.
Events like the Jubilee weekend,
Euro 2012 and the Olympics, are
boosting food and grocery sales,
while lower inflation is helping
British shoppers, said Joanne
Denney-Finch, chief executive of IGD.
The underlying trend, however, is
still one of shoppers putting in more
effort into their food shopping while
contending with considerable
pressures on their budgets.
The survey found that better-off
shoppers, especially those with
children, were more likely to use
discount grocers in the year ahead as
they look to tighten their belts.
But shoppers aged 18 to 24 made
up the biggest category, with 39 per
cent saying they intended to use
discounters this year compared with
26 per cent of people aged over 55.
Shoppers sold
on discounters
to save costs
BY KASMIRA JEFFORD
SHARES in Ocado crashed by 20 per
cent yesterday after the online super-
market admitted that the Jubilee cele-
brations had disrupted trading and it
could see a similar effect during the
Olympics.
The share sell-off came even as the
retailer reported a four per cent
increase in pre-tax profit to 181,000,
in the six months to 13 May, on rev-
enues up 11.4 per cent to 308m.
Ocados sales rose 12 per cent to
332.3m as it started to see improve-
BY KASMIRA JEFFORD
DO YOU SHOP AT A DISCOUNT
SUPERMARKET? Interviews by Lisa Moravec
I shop at both because of the low cost. They
are cheap and also in a good location. In the
town where I live we have Lidl and an Aldi, and I am sat-
ised with the quality.
These views are those of the individuals above andnot necessarily those of their company
RICHARD CORBEN
MINISTRY OF JUSTICE

I shop at Lidl from time to time because it is

close to where I live. But I dont buy vegeta-
bles from there - simply because there is a little nice shop
where I live and prices are a lot cheaper there.
PAOLO ADRAGNA
FIDESSA
It is OK, but it is not the same as Sainsburys or
Tesco. For example for vegetables and meat, it
feels like the other supermarkets put out a better quality
product.
PETER SEAL
BRITISH AIRWAYS

CITYVIEWS
WEDNESDAY 27 JUNE 2012
10
NEWS
cityam.com
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Whilst we recognise that we may have a reputation for perceiving Ocado
from a position of caution, these are poor results with a far from compelling outlook
statement. Further downgrades could be down the line, albeit we will take
the luxury of waiting for Q3 before we dust off our well-used red pen.
ANALYST VIEWS

While we still model a continued reacceleration, we cautiously edge back

our H2 sales growth expectation from 17.6 to 15.8 per cent... Despite the small down-
grades, Ocado is now clearly moving in the right direction again and, con-
dent in the business model and progress, we remain positive.

Ocados results are better than we thought, although the underlying num-
ber is in line and there is no sign of operational gearing. Also, it looks as if third
quarter trading is below expectations and consensus sales growth for the
second half is too high. We remain Sellers with a target price of 50p.

IS OCADOS STATEMENT A
SIGN OF BLEAKER THINGS
TO COME ? Interviews by Kasmira Jefford
DARREN SHIRLEY SHORE CAPITAL

ANDREW WADE NUMIS

PHILIP DORGAN PANMURE GORDON

Ocado sees shares slide
as it lacks Jubilee cheer
ments at its distribution centre. The
Hatfield centres performance led to a
string of profit downgrades last year.
Ocado said its own-brand products
were now found in 80 per cent of bas-
kets compared with 68 per cent last
year, as it further loosens its ties with
its main supplier Waitrose.
But chief executive Tim Steiners cau-
tious outlook for the rest of the year
disappointed analysts after he said
third quarter trading was particularly
hard to forecast.
Unlike its peers who enjoyed strong
sales in the run-up to the Jubilee, he
Ocado Group PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
115
110
105
100
95
90
p
86.00
26 Jun
said it lost out as it could not send out
extra vans to supply customers.
Despite uncertainty over the impact
of the Olympics, Steiner said he was
confident that sales would neverthe-
less increase in the second half overall.
Meanwhile the grocer also con-
firmed that former Fitness First
finance chief Duncan Tatton-Brown,
will join Ocado in the same role.
The new
jobs website
for London
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I
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C
A
R
E
E
R
S
.
c
o
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Carpetright reports
signs of sales growth
BRITAINS biggest floor coverings
retailer Carpetrights full-year
underlying profit fell by 76 per
cent, weighed down by weaker UK
sales, the firm announced
yesterday.
But FTSE 250-listed shares in
Carpetright, which have fallen four
per cent over the past 12 months,
rose nearly five per cent as
investors took comfort from an
upbeat outlook and the beginnings
of positive results from the firms
cost-cutting drive
For the full-year ended 28 April,
underlying profit before tax
BY HARRY BANKS dropped to 4m from 16.9m a year
earlier.
The companys UK sales fell about
four per cent to 381.6m, with like-
for-like sales down 0.2 per cent, as
expected following a string of
forecast cuts. Total revenue fell
three per cent to 471.5m.
Carpetright had issued a series
profit warnings over the past 18
months as cash-strapped Britons
cut back on discretionary spending,
and said low consumer confidence
continued to hurt the floor
coverings market.
We are encouraged to see a
positive impact from the self-help
actions taken during the year,
whilst recognising within our plans
that economic conditions will
remain difficult, the firm said in a
statement.
Singer analyst Matthew
McEachran said there is greater
transparency in these results than
previously, which he credited in
part to new chief executive Darren
Shapland.
The strategy remains consistent
but activity around stores appears
to be increasing and there is clearly
a drive to grow
both beds and
other
categories,
McEachran
added in a note.
Carpetright PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
710
700
690
680
670
660
p
686.00
26 Jun
MARKET SHARE
IN THE 12 WEEKS TO 10 JUNE 2012
MORRISONS
SAINSBURYS
CO-OP
ALDI
TESCO
WAITROSE
LIDL
ASDA
ICELAND
2% 17.2% 2.8% 4.6% 31% 2.8% 6.5% 16.6% 11.8%
WEDNESDAY 27 JUNE 2012
12
NEWS
cityam.com
Directors of collapsed Kaupthing
bank banned from senior jobs
DIRECTORS of the British arm of
collapsed Icelandic bank
Kaupthing yesterday agreed not
to hold senior banking positions
in the UK during the next
eighteen months, escaping a fine
or further punishment.
Following a three-and-a-half
year investigation into
Kaupthing Singer and
Friedlander Limited (KSFL), the
Financial Services Authority
(FSA) concluded that former
BY JAMES WATERSON
chief executive Armann
Thorvaldsson, former non-
executive chairman Sigurdur
Einarsson and former non-
executive director Hreidar Mar
Sigurdsson cannot hold top roles
at authorised British institutions
for five years.
But the punishment has been
backdated to October 2008,
meaning that their ban will
expire at the end of next year.
The FSAs investigation focused
on KSFLs failure during the early
days of the financial crisis to
properly challenge the reliability
of a 1bn finance agreement it
had with its Icelandic parent
bank.
KSFL failed to consider
promptly and properly whether
liquidity stresses in Iceland
would have a detrimental effect
on its own liquidity position, the
financial watchdog said in its
statement.
The FSA said it would have
imposed a significant financial
penalty on KSFL if the firm was
not already in administration.
INSURANCE giant Aviva yesterday
announced a five-year deal with
supermarket firm Tesco that will
enable it to sell life protection to UK
retail customers.
The deal gives Aviva the exclusive
rights to sell three simplified prod-
ucts through the Edinburgh-based
Tesco Bank business life insurance,
over 50s life insurance and life insur-
ance with critical illness cover.
Products will be promoted in
Tescos 2,900 stores but can only be
purchased over the phone or online.
David Barral, CEO of Aviva UK and
Ireland Life Insurance, said: This is
a fantastic opportunity for two
household names to deliver a real
benefit for millions of people across
the UK who have no family protec-
tion in place. We can provide Tescos
customers with peace of mind, offer-
ing a quick and easy way to pur-
chase a range of protection
products.
Barrie Cornes, insurance analyst at
Panmure Gordon, told City A.M. that
forthcoming changes to the way
financial products can be sold
known as the retail distribution
Aviva signs life
insurance deal
with Tesco Bank
BY JAMES WATERSON
review (RDR) will have influenced
the deal.
In our view the move to RDR
which kicks in at the year end will
lead to more tie-ups between distrib-
utors and manufacturers of life prod-
ucts, such as the deal with Tesco.
Aviva manufactures the product,
gives it to Tesco Bank and as long as
Aviva receive a certain value for that
product then they will be happy.
Tescos distribution makes it seem
like a good deal for Aviva.
Aviva has had a troubled year, with
a fall in its share price culminating
in the resignation of chief executive
Andrew Moss amid a row over his
pay deal.
Aviva PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
285
280
275
270
265
p
261.70
26 Jun
SOUTH African bank Absa, which
is majority owned by Barclays,
yesterday issued a profit warning
that blamed an increase in
mortgage-related bad debts,
sending its shares tumbling.
The bank warned its first-half
earnings could fall as much as 10
per cent below last years 4.6bn
rand (347m), causing its stock to
fall by seven per cent.
Credit impairments have
increased due to higher cover
required on our mortgage legal
book, as property prices and
distressed customers remain
under pressure, the firm said.
BY JAMES WATERSON
Absa also said that revenue
growth was sluggish, raising fears
that the South African banking
recovery may be faltering.
They are saying it is just on the
impairments on their mortgage
book, said Charles Russell, an
analyst at Macquarie First South
Securities.
I cannot imagine that is the
only thing that has gone wrong.
The fact that they are not growing
any revenue, that is more of a
pervasive thing than just relating
to their mortgage portfolio.
Shares in Absa closed yesterday
down 8.3 per cent at 14,350 rand
on the Johannesburg Stock
Exchange.
Hreidar Mar Sigurdsson was one of three directors named in the FSA investigation
Barclays South African arm
Absa issues a profit warning
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BRITISH firms have failed to free up
125bn over the last five years due to
inefficient working capital
management, according to research
released today by accountants PwC.
PwC found that if all the UK
companies currently considered to
have bad working capital
management achieved the same
standards as good performers they
could have potentially generated
cash to the tune of 125bn.
Working capital performance is a
UK firms lose 125bn from poor
working capital management
BY JAMES WATERSON
CANADIAN stock exchange
operator TMX yesterday signalled
its interest in further European
expansion, despite the failure of
last years attempted merger with
the London Stock Exchange.
Chief executive Tom Kloet last
night told an audience at Canada
House in Trafalgar Square:
Europe presents exciting
opportunities for all parts of our
business. Our London office
provides us with an important
presence that helps us explore
BY JAMES WATERSON
these opportunities.
Earlier Kloet had talked of
capitalising on new business
opportunities in the capital and
hinted that he might consider
moving listings staff to the city.
The Toronto-based firm opened
its London office in 2011 and
boosted its presence by purchasing
technology firm Atrium Network.
TMX is currently the subject of a
C$3.8bn (2.4bn) takeover bid from
a group of Canadian banks known
as the Maple Group. The deal is
expected to complete next month.
TMX chief executive Tom Kloet was in London to speak at the Trade Canada conference
Torontos TMX stock exchange
eyes European opportunities
measure of efficiency that compares
a firms assets to its liabilities.
Successful companies move away
from short term year-end window-
dressing towards more sustainable
levels of good performance, where
every day key decisions are made
with cash in mind, said Simon
Boehme, PwCs senior manager for
working capital management. Put
simply, those organisations with an
embedded cash culture fare better.
The survey studied Europes
largest 4,000 companies with a
turnover of more than 150m.
In these days of cutbacks and
(relative) austerity among the
worlds investment banks, its good
to see that the Swiss-based
UBS is trying to muster up a
celebratory mood.
UBS is celebrating its 150th
anniversary this year, and
in so doing has given
each of its 65,000
employees worldwide a
Swatch watch.
The gesture has gone
down reasonably
well in London,
where bankers are at
least relieved that
the Swatch, even if it
isnt an Omega or a
Rolex, is wearable.
They compare it with a
gift the bank gave them
around ten years ago,
which featured a cow like
the one pictured.
However, some of the women at
UBS are disappointed that the
UBS celebrates with watches
T
HE good folk at BP can be
forgiven for being a bit miffed
with the bankers at Citigroup
Global Markets. Citis analysts
Alastair Syme and Michael Alsford
have issued a research note that
questions BPs hopes of realising
between $25-30bn for its
stake in its Russian
subsidiary TNK-BP.
The note, entitled
Russian value-release
remains a complex
issue, includes the
suggestion that BP
faces a damages claim
from AAR, mounting to
several billion dollars.
Fridman, one of
the billion-
a i r e s
Citis analysts pour oil
on BPs troubled waters
behind AAR, is considered the most
likely buyer of the BP-TNK stake.
Surprisingly for a research note, it is
based mainly on conversations with
AAR, which is in conflict with BP and
it does not reflect BPs view. A source
close to BP yesterday said the
note appeared a little
unfair. Although the
note refers to our dis-
Mikhail Fridman (left)
and the Citi research
note that has irked
some at BP
Got A Story? Email
thecapitalist@cityam.com
14
cityam.com
cityam.com/the-capitalist
THECAPITALIST
WEDNESDAY 27 JUNE 2012
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City workers have raised 25,000 for charity by testing parts of the official
Olympic Road on their bikes. Teams from City firms, including Ashurst,
Centrica, Deloitte, Moneycorp and UBS, have raised the funds for the development
agency CARE to support some of the poorest people in the world. To take part each
participant had to raise a minimum of 150.
The race, which was sponsored by City A.M, led the bikers out from the centre of
London to Dorking and back. The next cycling challenge to come is a bike tour from
London to Brighton, which will also raise funds for CARE.
watch they have been given is a
unisex one, since they feel it is
perhaps more like a mans than a
womans.
All in all, though, the troops
at the UBS headquarters in
Broadgate have taken the
gesture well and are
getting in the spirit of the
celebrations, which have
been given an
additional lift from a
lunchtime orchestra.
This must contrast
with the mood of
those who work for
Swiss-owned rival
Credit Suisse, where
employees are braced
for some fairly hefty
job cuts by all accounts.
UBS is also awaiting the
arrival of the stylish
banker Andrea Orcel, who
is bound to bring some colour to
the place. But will he arrive in time
to get his Swatch?
Alert: Russian value-release
remains a complex issue
The issue of valuation hangs over all
these proposals and, within that, the
issue of damages that AAR claims
are owned for BPs attempted tie-up
with Rosneft in early 2011 (the claim
is this deal breached the AAR-BP
shareholder agreement that placed
TNK-BP as the sole vehicle for both
companies in Russia). We believe
the damage claims that AAR will
seek amount to several billion
dollars.
cussions with AAR management, it
omits to mention that Citi, a big part-
ner of BPs, also took Fridman to meet
a broad selection of UK shareholders
to brief them on his thoughts on BP's
investment in Russia.
Alsford, one of the research analysts
named on the note, said he had not
met with AAR and referred The
Capitalist to the Citi press office.
Shares in Wolfson ended 5.26
per cent higher yesterday at 200p.
IN BRIEF
Profits fall at Domino Printing
nBarcode-printer maker Domino
Printing Sciences reported a nine per
cent fall in first-half profit, as the
fallout from the debt crisis in Europe
prompted customers to delay orders,
and the company said sales for the
year would be similar to those
achieved last year. For the six months
ended 30 April, Domino Printing
reported an underlying pre-tax profit
of 24.7m, down from 27.1m last year.
BAA says charges dent earnings
nAirport operator BAA yesterday
trimmed its earnings forecasts for the
year by 1.2 per cent as parking
charges temporarily dent its bottom
line. The owner of Heathrow and
Stansted said it would recoup the
levies in 2014, and expects to make
1.268bn in earnings before interest,
tax, depreciation and amortisation
during 2012.
Francisco set to win Kewill fight
n Francisco Partners looks set to
take over Kewill, after rival bidder
Symphony said yesterday it will not
raise its bid for the software
company. Fransisco, who swooped in
to top Symphonys offer last week,
will formally win the bidding war
with its 102.7m approach as early as
this week.
Woson Microelectronics PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
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205.00
202.50
200.00
197.50
195.00
192.50
190.00
p 200.00
26 Jun
HBOs Game of
Thrones, starring
Sean Penn, is one of
the webs most
pirated shows
US DATA centre firm Digital Realty
Trust said yesterday it was buying
three properties near London for a
total of 715.6m.
The worlds biggest provider of
real estate for data centres is
looking to the European market
for growth with the 761,000
square feet investment across
three data centres located in
Woking, Watford and Croydon.
Chief executive Michael Foust
said London was a highly
strategic global data centre
market, and that the new sites
Digital Realty invests 715m in
London data centre properties
BY HARRY BANKS would allow it to serve a wide
variety of customers seeking
institutional quality data centre
space.
The Sentrum portfolio, as it is
known, is already 80 per cent let
to 21 tenants, but Digital Realty
said yesterday it saw significant
value-add opportunity to lease the
balance of the portfolios available
space.
Digital Realty owns 20m square
feet of data centre space around
the world at 105 properties. Its
shares have risen almost 10 per
cent this year as it seeks to
increase its portfolio offering.
Wolfson soars on deal to supply Samsung parts
BY HARRY BANKS
Chief executive Michael Foust founded Digital Realty in 2001
MORNING UPDATE
Sign up to
our 10:30am
newsletter at
cityam.com
WEDNESDAY 27 JUNE 2012
15
NEWS
cityam.com
B
T VISIONS surprising capture
of the rights to 38 live
Premier League matches
from the beginning of the
season after next is described as
the largest thing we have done in
television to date by the groups
chief executive Marc Watson.
The problem for BT Vision is that
it could also be one of the most
expensive things it has done in
television to date, with analysts at
Espirito Santo saying it could lose
as much as 240m on its Premier
League investment.
The big question for BT Vision is
to what extent will its Premier
League gamble help the platform
takes subscribers away from its
larger rivals BSkyB and Virgin
Media?
Building a pay television
platform in the UK, as others have
found, is a hopeless task without an
offering of top quality live football.
Whereas films and general
entertainment, such as BSkyBs Sky
Atlantic channel, enhance and help
to maintain a subscriber base, the
biggest driver of pay television has
always been live sport and football in
particular, which partly explains the
price inflation of the recent rights
deal.
BSkyB has always been the
dominant force in sports
programming and others have only
been able to chip away at the fringes.
ITV Digitals foray into live sports
rights was a disaster, as was
Setantas.
The Irish television operator ended
up paying too high a price for the
rights and in the end could not fulfil
the deal. ESPN, which has held the
two small packages of football for
the life of the current contract has
made a better fist of it but has in no
way threatened BSkyBs place in the
marketplace.
MEDIA
MATTERS
DAVID HELLIER
BT Vision gamble might be costly
Ofcom takes new steps
to crack down on piracy
BY LAUREN DAVIDSON
ILLEGAL downloaders could be
reported to copyright owners
under a new system unveiled
yesterday by communications
regulator Ofcom.
The draft code still subject
to a consultation period,
European approval and the
governmental green light
requires the major internet
service providers (ISPs)
to notify their
customers of
allegations that their
internet connection
has been used to
infringe copyright.
Customers who
receive three
letters or
more within
a year could have
anonymous
details of their
piracy sent to the
copyright owners, who will then be
able to seek a court order to obtain
information about the users
identity.
These measures are designed to
foster investment and innovation in
the UKs creative industries,
Ofcoms Claudio Pollack said.
The new rules will initially
affect the countrys biggest
ISPs BT, Virgin Media,
TalkTalk, Sky,
Everything
Everywhere and
O2 which
together cover
more than 93 per
cent of the retail
broadband market.
The policy has
been on the
watchdogs to-do list since the
Digital Economy Act was passed in
2010, but was repeatedly delayed by
block attempts by BT and TalkTalk.
The final hurdle was removed in
March when the telcos lost their
legal appeal against the legislation.
But two companies were
successful in persuading judges
that the ISPs should not have to
foot the bill of enforcing the rules.
Ofcom yesterday said the rights
holders will shoulder most of the
costs. However, the price structure
implies the more infringement
reports the content owners send to
the ISPs, the cheaper it will be per
complaint.
Internet users who wish to
appeal allegations that they have
illegally downloaded content will
have to fork out 20, which will be
refunded if successful.
Customers have almost two years
to mend their ways; Ofcom said it
expects the policy to take practical
effect in early 2014.
SHARES in chipmaking firm
Wolfson Microelectronics rose by
almost seven per cent yesterday
after it announced a deal to
provide audio technology to
Samsungs next Galaxy
smartphone.
The Edinburgh-based companys
ultra low power HD audio hub,
known as the WM8994, will be
used in Samsungs Galaxy S3
handset, which was launched last
month and is expected to sell more
than 10m units in the next month.
A previous version of the
Wolfson technology is already
used in Samsungs Galaxy S and
Wave phones.
Our continued success with
Samsung, particularly within its
range of smartphones and tablets,
is testament to the unrivalled
quality of our HD Audio Hubs, and
the unique features in our
products that allow manufacturers
to create differentiated audio
experiences, said Wolfson chief
executive Mike Hickey yesterday.
Groups football move must
win customers from BSkyB
In many ways, BT Vision, which is
a platform operator as well as a
rights holder, poses more of a
competitive threat to BSkyB.
The big three platform operators,
BSkyB, Virgin Media and BT Vision,
are all after the holy grail of triple
play which means television,
broadband and telephone calls. Bank
of America Merrill Lynch brokers to
BSkyB, by the way reckons that
the combination of fibre plus BT
Vision 2.0 (the new style BT Vision)
plus YouView plus extras sports
rights makes BT a very credible
alternative for most families.
BT Vision is already gaining
subscribers at a faster rate than its
rivals, perhaps attracted by its very
reasonable pricing (4 a month) at
the bottom end of its television
packages. We offer the cheapest
way of getting into next generation
television, says Watson.
The football rights victory now
gives BT Vision additional flexibility
but this flexibility is restricted.
It would be to BTs advantage, for
example, to withhold the 38
matches from its rivals.
But in reality this would prove too
expensive, since it paid out 738m
for the rights and would nowhere
near be able to recoup that cost just
from its own subscribers even if they
did go up substantially.
In any case, Ofcom would almost
certainly not allow it.
BT does have flexibility on its own
pricing and here it depends how
boldly it treads in the hope of taking
subscribers away from its two larger
rivals.
One option might be to offer a
years free trial which, coupled with
access to a subset of the nations
games, might be enough to unhook
Sky or Virgin and to migrate
customers to BT Vision, says Mike
Kennedy, partner at Restoration
Partners.
Many doubt BT Vision, part of BT,
will be allowed to be as bold as it
needs to be to really progress its
customer base.
But at least it now has a firmer
base on which to build.
A version of this article first appeared
on the MediaTel.co.uk website
david.hellier@cityam.com
BRITISH healthcare consultancy
Double Helix has been sold to an
American advertising group for up
to 50m, it was announced
yesterday, leading to a windfall for
founder Wayne Phillips.
Phillips, the doctor and
pharmaceutical exec who set up
Double Helix in 1995, will remain
in charge when Interpublic Group
takes over the firm.
Although the companies did not
disclose financial terms, sources
familiar with the situation said
McCann Health, a division of
Interpublic, would pay 35m
upfront, with up to a further
15m dependent on future
revenue.
Cavendish Corporate Finance
advised Double Helix during the
sale.
Double Helix has more than 90
staff and offices in London,
Singapore and the United States.
Cavendish healthcare
partner Gordon
Hamilton said the two
firms were a good fit
due to Double Helixs
exposure to fast-
growing markets
such as Asia
Pacific.
Payday for boss
as Double Helix
is sold for 50m
BY MARION DAKERS
G
E
T
T
Y
STAGECOACH, one of the UKs
biggest bus and coach operators,
said yesterday it was confident
about the coming 12 months,
despite a 1.5 per cent dip in pre-tax
profits to 202.5m.
Revenues rose eight per cent to
2.6bn, helped by a strong financial
performance at its London bus serv-
ices.
But its East Midlands rail fran-
chise suffered a first-half loss, and
revenue was below the level fore-
cast when the contract was award-
ed, the company said.
Since November 2011, East
Midlands Trains has received state
revenue support payments.
The group is predicting further
positive growth for its budget coach
brand Megabus in the next year, fol-
lowing the launch of its new
European routes, and overall trad-
ing in line with expectations.
Chief executive Sir Brian Souter
said: As well as testing the market
in Europe, we are expanding to new
locations in North America where
the response to the product from
Upbeat outlook
as Stagecoach
grows revenue
BY LISA MORAVEC
consumers has been particularly
strong.
During the Olympics and
Paralympics the public transport
group will be providing 300,000
additional seats by operating larger
trains.
Stagecoach also has a contract
with Locog to transport the athletes
and members of the media around
London during the Games.
In London, our turnaround plan
is progressing well and we have won
new contracts on more acceptable
profit margins, said Souter.
Stagecoach also said its dividend
would increase by 10 per cent to
5.4p.
Stagecoach Group PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
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p
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26 Jun
Wayne Phillips
founded the firm
GRAHAM MACKAY, the chief
executive of the worlds second
largest brewer SAB Miller, was
paid 5.9m last year, putting him
among the 20 best paid bosses in
the FTSE 100.
SABs annual report published
yesterday shows that his pay
package, which includes base
salary, bonuses and benefits, but
excludes stock options, increased
five per cent from last year.
This includes a short term
bonus of 1.69m, a pension
payment of 373,400 and 111,000
of extra benefits.
SAB Miller boss Graham Mackay
gets rise to 5.9m for last year
BY KASMIRA JEFFORD Mackay, who has run the
company for the last 13 years, will
also see his base salary increase by
four per cent over the next year to
1.295m, which SAB said was in
line with the increase for other
UK-based employees.
The London-listed South African
group increased earnings by 12
per cent to $5.63bn last year,
boosted by emerging markets.
In April the brewer announced a
shake-up of its board, with Mackay
to become chairman in July,
controversially combining both
this role along with being chief
executive for a year. He will then
become chairman in 2013.
WEDNESDAY 27 JUNE 2012
16
NEWS
cityam.com
Graham Mackay, SABs chief executive since 1999, is one of the FTSE best paid bosses
IN BRIEF
Falklands partners with French
nFalkland Oil & Gas yesterday brought
in Italian utility Edison as its new partner,
bringing in a large, non-British company
to help it look for oil in the UK-governed
Falkland Islands, where exploration has
angered Argentina. The British company
said Edison, owned by Frances EDF,
would pay around $50m for costs
already encountered in exploration work
and 2012 drilling costs for a 25 per cent
interest in its northern licences and a 12.5
per cent in its southern licences. Edison
will also make a separate cash
contribution of $40m to the firm.
Adecco plans share buyback
n Adecco will buy back up to 400m
(319.5m) of shares from mid-July, the
worlds largest staffing company said
yesterday. Adecco, which has a market
capitalisation of about 4.6bn, said it
would fund the share buyback in the
debt capital market and was planning to
issue bonds in the near future, subject to
market conditions. The Swiss company
last month posted forecast-beating first
quarter profit.
Porvair raises profit forecasts
n Filtration and environmental
technology firm Porvair yesterday raised
its earnings expectations as profits shot
up by 48 per cent in the first half of the
year. Pre-tax profits at the firm were
2.4m in the six months to 31 May.
Porvair expects the coming six months
to be helped by a strong order book and
returns from acquisitions.
G
E
T
T
Y
BP said yesterday it had agreed to sell
its minority stakes in two North Sea
fields to Japanese trading company
Mitsui for $280m (179m), as part of a
plan to focus its portfolio in the
region on larger scale projects.
The oil major announced that
Mitsui would buy a 13.3 per cent
stake in the Alba field and an 8.97 per
cent stake in the Britannia operation
in a cash deal.
BP regional president for the North
Sea, Trevor Garlick, said: The divest-
ments are part of our strategy to
develop a more focused business in
the UK and Norway.
The FTSE 100 firm, which also sold
$400m of gas fields in the North Sea
earlier this year, is selling smaller
assets to concentrate on six major
projects in the Norwegian and British
sections of the North Sea.
The deal is part of BPs $38bn asset
disposal programme, which is raising
funds to help pay for the ongoing cost
of cleaning up the 2010 Gulf of
BP to sell two
stakes in North
Sea for 179m
BY JOHN DUNNE
Mexico oil spill.
The company sold $1bn worth of US
gas assets to Linn Energy on Monday,
and in a deal that could be worth as
much as $25bn if it succeeds, BP said
earlier in June it could sell its 50 per
cent stake in Russian oil joint venture
TNK-BP. The venture has been plagued
by controversy, with both parties seek-
ing an exit.
BP chief executive Bob Dudley said
of yesterdays deal: We are pleased to
have reached this agreement, contin-
uing our global relationship with
Mitsui.
Investment bank Jefferies is advising BP on
its deal with Mitsui.
The team was led by Neil Schroeder, who
has headed up the companys oil and gas
team since 2005. He is also advising Sojitz
and Bridge Energy on UK North Sea divest-
ments, and recently advised Endeavour on
its acquisition of upstream interests in the
North Sea.
Cambridge-educated Schroeder previously
worked at ABN Amro.
Jefferies operations focus on the US,
Europe and Asia and it has advised on a
string of high prole deals in recent months.
In the technology sector it is advising
Paradigm on its $1bn sale to Apax Partners.
while in healthcare it is steering through a
$170m deal to sell IntegraMed to Sagard
Capital Partners.
Also in that sector the company is advising
Novartis on its $1.5bn purchase of Fougera.
In energy, it is advising Williams Partners on
its $2.5bn acquisition of Caiman Eastern
Midstream.
Jefferies has been in business for nearly 50
years and operates in 30 cities around the
world. As well as M&A it works on corporate
restructuring, private placements and high
yield, convertible debt and equity place-
ment.
ADVISERS JEFFERIES
NEIL SCHROEDER
MD OIL AND GAS
INVESTMENT BANKING
Serco warns that sluggish sales
in US will lead to a revenue dip
OUTSOURCER Serco yesterday gave a
downbeat trading update in which
it said the US market was sluggish.
The company, whose contracts
include running prisons and the
Docklands light railway, said it
expected revenues to dip in the
first half before picking up.
It said the UK was proving
resilient compared with its
business across the Atlantic.
The FTSE 100 company said in a
statement: In our regional
frontline operations we have seen
further strong growth, an
improving outlook in the UK, but
BY JOHN DUNNE conditions in the US federal market
remain very tough for our Americas
division. Accordingly, for the first
half of the year, we expect a small
reduction in the groups organic
revenue.
Robin Speakman, an analyst at
Shore Capital, said: We believe
earnings per share is set to decline
by up to 20 per cent on the first half
but we expect a strong second
half performance to follow, led by a
lower cost base and the noted
contractual success.
Serco, which will release its half
year results on 29 August, added:
Our financial performance (includ-
ing revenue growth, margin progres-
sion and free cash generation) will be
weighted to the second half of the
year when we expect a strong finan-
cial result.
This reflects excellent perform-
ance over the last few months in
securing new contract awards that
will flow through to organic revenue
growth; the successful conclusion of
our change programme; and the
benefit of recent acquisitions.
Analyst David Brockton at Espirito
said: While we expect to make no
material change to our forecasts, the
balance of risk would appear to
remain to the downside.
Shares in Serco fell 1.9 per cent to
529.5p yesterday.
Coca-Cola chairman and chief executive Muhtar Kent
BPs Bob Dudley is making progress on the oil firms plans to sell off assets
BP PLC
20Jun 21 Jun 22Jun 25Jun 26Jun
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425
420
415
410
405
p
401.60
26 Jun
COCA-COLA announced a further
$3bn (1.92bn) in investment in
India over the next eight years
yesterday as the worlds biggest
soft drinks maker seeks to expand
in a country where its flagship
brand trails rival Pepsi.
The investment by Coca-Cola
and its bottlers, on top of a $2bn
five-year plan announced in
November, will hearten Indian
officials who are trying to restore
investor confidence after growth
fell to a nine-year low in the first
quarter. The announcement
comes days after Swedish retailer
IKEA said it would invest 1.5bn in
the country.
Coke to invest
$3bn in India
BY CITY A.M. REPORTER
WEDNESDAY 27 JUNE 2012
17
NEWS
cityam.com
ONCE Irelands richest man, Sean
Quinn was found guilty of contempt
yesterday and may go to jail after a
court ruled that the bankrupt
businessman had blocked a state
bank from seizing property worth
hundreds of millions of euros.
Quinn, whose 4bn (3.2bn)
business empire collapsed after a
disastrous investment in now-
nationalised Anglo Irish Bank, is
being pursued by the bank for debts
of almost 3bn.
The Irish Banking Resolution
Corporation (IBRC), created from the
remains of Anglo, asked the High
Court to declare Quinn in contempt
for violating an order not to interfere
with foreign property assets worth
an estimated 500m.
I find it impossible to accept his
evidence that he had no hand in
matters after April 2011 His evidence
is not credible, Justice Elizabeth
Dunne told a packed courtroom in
one of the most keenly anticipated
judgments of Irelands financial
crisis.
The judge will decide on
sentencing after hearing arguments
from both sides this coming Friday
about what action should be taken
but said it would be difficult to
persuade her that there should not
be a custodial element in the
penalty.
If he is jailed, Quinn, 65, would
become the first major player in
Irelands economic collapse to be
imprisoned.
BY CITY A.M. REPORTER
Sean Quinn faces jail
BRITISH oil services company
Petrofac said yesterday contracts
worth $1.1bn (705m) were in its
pipeline and would soon be
signed, giving it confidence on its
profit targets for this year and in
the longer term.
Petrofac, which designs and
builds oil and gas infrastructure
and also invests with producers in
oil fields, said that its backlog of
orders was $9.1bn but that an
extra $1.1bn of awards would be
added when a number of deals
were formally signed. Analysts at
JP Morgan called Petrofac's
statement reassuring after a
period of concern about the
company's backlog.
Petrofac sunny
about profits
BY CITY A.M. REPORTER
CORYTON refinery, which was
formerly run by now insolvent
Petroplus, will be turned into a
fuel import terminal after
administrator PwC agreed to sell
the site to the joint venture of
Vopak, Shell and Greenergy.
PwC said the new owners will
now start significant
reconfiguration of the existing
site in Essex.
Energy minister Chris Hendry
said that while it was very sad
news for the workers at Coryton
that it was not possible to keep
the site running as a refinery, the
investment pledged by the new
owners will keep the site viable
for many years.
Coryton site
sold to Shell
BY CITY A.M. REPORTER
LOWER rates of home ownership are
set to cost the government an extra
8bn a year in housing benefit, a
think-tank said this morning.
Once todays generation of renters
retire, there will be 3.45m pension-
ers claiming housing benefit by
2060, the Strategic Society Centre
(SSC) has calculated.
In todays prices, these claimants
will cost the state 13.45bn a year
around two and a half times the size
of the current 5.32bn bill for hous-
ing benefit.
In the debate on generation rent,
what everyone forgets is that most
pensioners who rent rely on state
support, said SSC director James
Lloyd. So, in future, when there will
be far more pensioners than today, if
more pensioners are renting, the
cost of housing benefit to the state is
going to explode.
Elevated house prices have forced
prospective buyers to remain in the
rental market, driving up leasing
costs, particularly in London.
People who want to buy, cant
UK heading for
time bomb over
housing benefit
BY JULIAN HARRIS
and this pushes up rent, which raises
the housing benefit bill, added
Jonathan Portes of the National
Institute for Economic and Social
Research (NIESR), a separate think-
tank based in Westminster.
We are in a very weak recovery
with low interest rates and many
unemployed people now is the ideal
time for a house building boom, like
the kind which dragged us out of the
1930s recession, Portes argued.
Matt Griffiths of the campaign
group Priced Out complained that
the government seems happy to let a
generation of young people become
renters, as house-building numbers
stagnate and private landlords buy
up greater levels of the existing hous-
ing stock.
THE MIDDLE fifth of households
experienced the sharpest drop in
average incomes according to a
recent years data published
yesterday by the Office for
National Statistics (ONS).
Disposable incomes flopped by
an average of 4.3 per cent for the
so called squeezed middle between
2009-10 and 2010-11 a fall of
1,100 per household.
Across all the measured
demographics, annual incomes
were down by 200 in real terms,
the ONS said.
The figures, which also measure
the effect of taxes and benefits on
Squeezed middle most affected
by falling incomes, figures show
BY JULIAN HARRIS household incomes, showed that
the wealthiest quintile paid 24 per
cent of their gross income (19,700)
in direct taxes such as income tax
and National Insurance.
The poorest fifth paid just 10 per
cent of gross household income
(1,300) in direct taxes, yet
proportionally were hit harder by
indirect taxes, largely due to the
hike in VAT.
Higher levels of state benefits
are claimed by the second poorest
quintile, not the poorest largely
because the second poorest group
includes more pensioners.
The stats also demonstrate the
degree to which taxes and benefits
slash income inequality (see right).
US HOUSE prices rose again in
April, while consumer confidence
dipped further, according to data
published yesterday.
The S&P/Case-Shiller house price
index rose 0.7 per cent in April,
marking the third consecutive
month of gains.
Prices are still down 1.9 per cent
on the year, but this beats the 2.6
per cent fall in the year to March.
Consumer confidence for June
slumped to a five-month low of 62
on the conference boards
sentiment index, from a revised
64.4 in May. This low figure reflects
worries about unemployment and
could point to worsening house
prices as confidence drops.
Third month of
US home rises...
BY BEN SOUTHWOOD
THE LONG spells many Americans
are spending without work risk
leaving a lasting scar of higher
unemployment on the US economy,
the OECD warned yesterday.
In its biennial report on the US
economy, the OECD said the
unemployment rate which the
economy could sustain without
generating inflation was 6.1 per
cent, up from 5.7 per cent in 2007.
In May, the rate stood at 8.2 per
cent.
It left its 2012 growth forecast of
2.4 per cent intact, but the OECD
called on the US to prepare for the
fiscal cliff at the end of the year,
when numerous spending cuts are
due to kick in.
...as OECD calls
for work plan
BY HARRY BANKS
WEDNESDAY 27 JUNE 2012
18
NEWS
cityam.com
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more tax than they receive in benefits*
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AFTER TAX
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Income after tax and benets
For 2010/2011
All
households
Highest
income
4TH 3RD 2ND Lowest
Income
90k
80k
70k
60k
50K
40k
30k
20k
10K
0
*on average
19
WEDNESDAY 27 JUNE 2012
LONDONREPORT
Mayer Brown
Andrew Block has been
appointed as a partner in the
pensions group of the law firm.
He was previously a partner at
Travers Smith, and started his
legal career at Linklaters. Block
acts in occupational pension
scheme matters. He will be based
in Mayer Browns London office.
Manches
The law firm has announced that Jon Bartley will join its
London office as a partner in early July. He arrives from
Shoosmiths, where he has been a commercial partner since
2008, and co-manager of its commercial team. Bartley also
spent eight years in Baker & McKenzies London commercial
team, and one year at its San Francisco office. He specialises
in data protection compliance.
BDO
The accountancy firm has promoted six of its tax and audit
experts to the partnership. Of the four London-based
appointments, Ian Clayden joined BDO in 1995 and serves
as head of professional sports. Ed Goodworth joined in
2001 and is an audit director. Andy Goodman joined in
2003 and is a tax director. Richard Montague joined in
2000 and is also a tax director.
Capco
Chintu Ramchandran has been appointed as chief executive
for the business consultancys offshore operations. He joins
from Accenture, where he has spent 15 years of his career,
most recently in leadership positions in the UK and
Germany. Ramchandran will focus on growing Capcos
offshore offering from Bangalore.
Energetix
The alternative energy product developer has appointed
Peter Richardson as group chief executive officer. He joins
from Dyson, where he is currently chief operating officer.
Richardson joined Dyson in 1997 as UK sales director, and
he previously served in management roles at Cadbury
Schweppes, Coca-Cola and Colgate-Palmolive.
A2e Venture Catalysts
Richard Higginson has joined the board of investment
company, which specialises in small to medium-sized
enterprises. He was most recently managing director at
Warburtons, and previously spent 15 years at Shell,
including as managing director of Shell Direct.
APS
The marketing solutions provider has appointed Simon
Taylor as client services director for London and the South.
He has held client management and operation roles at APS
for eight years, and will relocate from the groups
Manchester headquarters.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
US stocks rise
after upbeat
property data
M
AJOR US stock indexes
bounced back yesterday, but
trading was light with the
outlook clouded by doubts
before yet another summit to tackle
the European debt crisis.
US stocks partly recovered from loss-
es of more than one per cent on
Monday, led by housing shares after
stronger-than-expected data on home
prices.
The consumer discretionary sector
was the top gainer on the S&P 500, fol-
lowed by energy shares, which were
boosted by a 2.3 per cent jump in Brent
crude prices.
Traders remained cautious as
Spanish short-term borrowing costs
nearly tripled and US consumer confi-
dence fell in June to its lowest level in
five months.
Certainly in the United States stocks
are nicely priced, and for a long-term
investor it is an attractive entry point,
but then what about these macro risks
hovering around the market? I think
its having a dampening effect, said
John De Clue, global market strategist
at US Banks wealth management
group in Minneapolis.
Spanish 10-year bond yields rose after
demand at a shorter-term bill sale fell
despite significantly higher yields.
Hopes faded that the European Union
summit later this week would produce
game-changing measures to ease the
debt crisis.
Madrid has formally asked for funds
to bail out its banks in a move some
see as a prelude for a full-blown
bailout of the Eurozones fourth-
largest economy.
Rupert Murdochs News Corp said it
was considering splitting into two pub-
licly traded companies, and sources
said publishing would be separated
from entertainment. Shares jumped
8.3 per cent to $21.76 on volume of
73.1m shares, making it the Nasdaqs
most actively traded stock.
The Dow Jones industrial average
rose 32.01 points, or 0.26 per cent, to
12,534.67. The S&P 500 Index gained
6.27 points, or 0.48 per cent, to
1,319.99. The Nasdaq Composite Index
gained 17.90 points, or 0.63 per cent, to
2,854.06.
About 5.9bn shares changed hands
on the New York Stock Exchange, the
Nasdaq and NYSE Amex, below the
daily average of 6.82bn so far this year.
JPMorgan Chase & Coshares rose 1.1
per cent to $35.71 after Goldman
Sachs added the bank to its conviction
buy list. Morgan Stanley, cut to neu-
tral by Goldman, added 0.2 per cent.
The PHLX housing index jumped 2.6
per cent after S&P/Case Shiller data
showed home prices in 20 US metro-
politan areas gained 0.7 per cent on a
seasonally adjusted basis, topping
economists expectations for a 0.4 per
cent gain.
Facebook shares rose 3.2 per cent to
$33.10 a day before the underwriters of
its recent IPO are expected to release
research on the company.
Advancing issues beat decliners on
the New York Stock exchange by about
nine to five.
B
RITAINS top shares dipped into
negative territory in a lacklustre
session yesterday, hampered by
banking stocks, with market
movements likely to remain muted ahead
of a summit of European leaders later in
the week.
While a two-day summit in Brussels on
28-29 June was very much the market
focus, traders pointed to an element of
investor fatigue given it is the 20th time EU
leaders have met to try to resolve the debt
crisis since it began in Greece in early 2010.
Scepticism that it would result in a posi-
tive outcome was also fuelled by
Germanys resistance to the idea of com-
mon Eurozone bonds that mutualise debt
across the region, perceived by some as the
best solution to putting an end to crisis.
German Chancellor Angela Merkel has
been quoted as telling a meeting of one of
the parties in her coalition that Europe
would not have shared total debt liability
as long as I live.
Expectations have probably been
stretched beyond what is reasonable and
achievable if markets are expecting euro
zone leaders to agree on debt mutualisa-
tion in euro bonds, Mike Lenhoff, chief
strategist at Brewin Dolphin, said.
Two things will be of interest the
approach to banking integration of some
sort and fiscal integration... If put forward
in a manner that indicates that these are
serious intentions and theres a timeline
associated with it being addressed, then I
think the markets could respond well.
The FTSE 100 ended down 3.69 points, or
0.1 per cent, at 5,446.96, steadying after a
three-day sell-off which saw it shed around
three per cent, having vacillated between
positive and negative territory in a tight 40-
point range yesterday.
UK banking stocks came under some
pressure, with investor risk appetite sub-
dued, while defensive pharmaceutical and
tobacco stocks posted modest gains.
The crisis escalated on Monday when
credit rating agency Moodys downgraded
the ratings of 28 Spanish banks after a cut
to Spains sovereign rating to just above
junk status earlier this month.
Weve certainly been more cautious
about where markets are likely to go on a
very short-term view, Henk Potts, market
strategist at Barclays, said.
On a three- to six-month view, weve
been telling our clients: Hold more cash
then you normally would, be less aggres-
sive in terms of your stance to equity mar-
kets, and have a good weighting in terms
of government bonds.
The anxious mood was made worse by
UK public borrowing which came in high-
er than expected in May as income tax
receipts fell and spending rose, in a sign
the government may face a struggle to
meet its debt reduction target as the econ-
omy weakens.
Royal Bank of Scotland, also under pres-
sure to rectify an IT glitch that paralysed its
online banking operations last week, fell
3.8 per cent to become the FTSE 100s
biggest faller.
Drugmaker Shire rose to the top of the
blue-chip leader board, ahead 3.2 per cent,
as a raft of brokers upgraded their ratings
on the stock following a sharp sell-off in
the previous session.
Shire sank 11.3 per cent on Monday after
the unexpected US approval of a new
generic version of its Adderall XR attention
deficit hyper disorder treatment, produced
by Actavis.
Societe Generale and Berenberg both lift-
ed their ratings for Shire to buy, whilst
Panmure Gordon raised its recommenda-
tion to hold.
BSkyB was the second biggest riser, up
2.7 per cent, on news that parent company
News Corp is considering splitting itself in
two.
FTSE slides on banking shares and
scepticism over EU leaders summit
BESTof theBROKERS
Croda International PLC
2,240
2,220
2,200
2,180
2,160
2,140
p
20Jun 21Jun 22Jun 25Jun 26Jun
2,183.00
26 Jun
CRODA
JP Morgan has upgraded the speciality chemicals group from neutral to
overweight and increases its target price to 2,600p, saying that the
firms main characteristic in the last downturn was resilience, and says
that this is unlikely to change.
FTSE
5,600
5,625
5,475
5,450
5,500
5,550
5,575
5,525
20Jun 21Jun 22Jun 25Jun 26Jun
5,446.96
26 Jun
DASHBOARD CITY
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
NEW YORK
REPORT
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
in association with
Mediterranean Oil & Gas PLC
8.75
8.50
8.25
8.00
7.75
7.50
7.25
7.00
p
20Jun 21Jun 22Jun 25Jun 26Jun
8.75
26 Jun
MEDITERRANEAN OIL & GAS
Liberum Capital has initiated coverage of the UK oil and gas group with a
buy rating and a target price of 13.9p, saying that the company is now
back on its feet and looks ready to embark on a growth path. The broker
says the current share price is close to its valuation of just the firms
Italian fields that are already producing, and ignores its prospective
resources in Italy, Malta and France. It expects an ambitious path from the
company to drive growth outside of the Italian operations.
Shire PLC
2,000
1,950
1,900
1,850
1,800
1,750
p
20Jun 21Jun 22Jun 25Jun 26Jun
1,798.00
26 Jun
SHIRE
Societe Generale has upgraded the pharmaceutical giant from hold to
buy with a reduced target price of 2,192p from the previous 2,310p. Despite
the US regulator approving a generic competitor for the companys Adderall
XR drug last week, the broker does not expect multiple generics to be
approved from here, so continues to see growth in revenues and profits from
the franchise. However, Soc Gen has cut its forecasts aggressively, leading to a
drop in group revenue estimates for 2012-15 of up to three per cent.
J
OHN Maynard Keynes is on
many minds at the moment.
Lots of talking heads are
prescribing a dose of Keynesian
medicine: more spending and
borrowing. However, Keynes didnt
get us out of the Great Depression
and he should be ignored today.
The 1930s and the Great
Depression are often cited as an
exemplar. Some assert that deficit
spending saved us then, so lets do
the same now. This is an urban myth.
In May 1933, at roughly the same
stage in the cycle as we are now,
Keynes made the case for tax cuts
and infrastructure spending to boost
growth and reduce unemployment.
He had little time for fiscal
masochism, noting: The more
F
OUR years ago, Stephen Hester
was CEO of British Land. Not a
company many people know of,
let alone its boss. But today, not
only is Hester running RBS
one of Britains best known banking
groups and owners of NatWest he is
a household name. First it was his
salary, then it was his bonus. And now
RBSs software glitch has been front
page news for days. Hester is making
headlines again for all the wrong
reasons.
With 100m banking transactions
delayed after a systems upgrade went
badly wrong, Hester shouldnt be sur-
prised to find himself at the centre of a
media firestorm. Salaries werent paid
and day-to-day payments went
unprocessed. But then the story
stepped up a gear. A couple couldnt
move into their new home because the
payment failed. A hospital in Mexico
supposedly threatened to withdraw
life-saving treatment for a 7-year-old
cancer victim because a British charity
couldnt transfer the necessary funds.
A man was held in prison over the
weekend because the court couldnt
DEAUVI
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cityam.com/forum
Hester sounds like
hes been dropped from
a planet only distantly
related to our own
In association with
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

20
WEDNESDAY 27 JUNE 2012
JAMES HUTCHINSON
Useless PR has turned NatWests
woes into a corporate nightmare
tell if his bail money had been paid.
The story has it all and is a corporate
communications nightmare. An every-
day product or service failing on a mas-
sive scale, with some deliciously
media-friendly human-interest angles.
And at times like this, any big compa-
ny is looking for the boss to step up.
Hester has failed to do so and he
shouldnt be surprised to see headlines
calling for him to lose another bonus.
RBS has done some things right. It
has proactively communicated, send-
ing regular texts and emails to cus-
tomers, and printed numerous
apologies in newspapers, many from
Hester personally.
However, none of the messages have
adequately communicated a detailed
explanation for what has happened.
Almost a week into the crisis, the state-
ment on the banks home page refers
euphemistically to problems rather
than precise details of the cause. There
has been no shortage of apologies, but
a significant shortage of explanation.
Lack of information about a problem
rather than the problem itself can
be the key driver of customers frustra-
tion. Apologies do not assuage anger.
Too many companies think that grov-
eling is the answer. Its not. Dont apol-
ogise explain and take action. Then
youll reduce anger.
There has certainly been no shortage
of anger. Much of it has been on
Twitter. None of the banks retail arms
have strong, efficient Twitter services,
evidenced by their relatively small
number of followers. This anaemic
online presence has exacerbated their
problems. It is a key communications
channel neglecting it is like having
half your staff walk around with their
fingers in their ears. Hester probably
cant tell you much about hashtags
and trends, but he needs to sort out his
companys social media policy.
Hesters biggest blunder was to send
out Susan Allen, director of customer
services, to do extensive TV and radio
interviews, rather than front-up him-
self. Rumored to be relatively inexperi-
enced in front of the media, Allen
managed to communicate with her
head cocked inquisitively to one side
making it look like she was asking
questions and not answering them.
The little things matter, and she
lacked gravitas and the rank to front
what was fast becoming a national
emergency. RBSs initial description of
the failure as a glitch was equally
puzzling. It is profoundly unwise to go
anywhere close to an understatement
in such circumstances.
Eventually the penny dropped and
Hester himself appeared. His initial
absence was a major strategic blunder.
Perhaps the reason he kept away was
the knowledge that he is not a natural
performer. He sounds like he has been
dropped into RBS from a planet only
distantly related to our own. His
choice of vocabulary is strange, his
delivery halting. He described in great
detail how his technical teams had
been overwhelmed rather than how
they were fixing things, and provided
little sense of command, control or
resolution. He showed little empathy
with the problems people were facing,
just blandly stating how sorry he was
and how hard everyone was working
to put it right.
In one BBC News interview, Hesters
lack of preparation became painfully
clear: I think we should be doing the
right thing in the most intensive way
possible. A statement of such vacuous
meaning that its little wonder that
the bank got itself into this mess in the
first place.
James Hutchinson is a corporate messag-
ing and communications consultant.
www.hutchinsoncommunications.com
pessimistic the chancellors policy,
the more likely it is that pessimistic
anticipations will be realised and
vice versa. Whatever the chancellor
dreams will come true.
Despite his eloquence, Keynes did
not then influence policy either here
or in the US. Fiscal masochism
continued to be dominant.
When Keynes urged more
spending and more borrowing in
1933, the economic situation looked
dire. In 1932, real GDP only grew by
0.8 per cent. Unemployment was at a
record high of 14 per cent. The table
shows what happened next (while
spending as percentage of GDP fell).
No sooner had Keynes made his
intervention than optimism broke
out. The economy boomed and
unemployment nearly halved. The
same happened in the US. Its
economy grew even faster than the
UKs, by 7.7 per cent in 1934, 7.6 per
cent in 1935 and an astonishing 14.2
per cent in 1936.
The key to a sustainable recovery is
the private sector. Companies
innovate, invest and create jobs.
Today, many of Europes large
companies are sitting on massive
piles of cash. If confidence is
restored, this cash will be spent and
we will see growth rates similar to
those of the mid-1930s.
The fact that corporate sentiment
recovered in the 1930s is no
guarantee the same will happen
today. But a stable framework is
needed, with no surprises.
Countries like France, Spain and
Italy must come clean about the
position of their banks. The leaking
of bad news in dribs and drabs has a
wholly negative effect on confidence.
We must know the true position
now. Of course, people only want to
be told the truth by their doctors if
theyre well. But getting everything
out into the open is a much better
way to improve business confidence
than the current veil of secrecy.
Paul Ormerod is an economist and his
book Positive Linking is published by Faber
on 4 July.
AGAINST
THE GRAIN
PAUL ORMEROD
Deficit spending didnt end the Great Depression and it wont save us now
Year Real UK GDP growth % UK Unemployment %
1933 2.9 12.7
1934 6.61 0.7
1935 3.9 9.9
1936 4.5 8.5
LLE
]PJLBook at cityjet.com
From City Airport to
Deauville from just
133
*
return.
(Golf clubs go free.)
21
UK tennis failures
[Re: Tennis is booming financially but the
cash is wasted, yesterday]
Its good to read someone is tracking the
failures of British tennis. My eight year old
son has been playing for three years and
support for young players is shockingly
inadequate. Most of those parading as
coaches add little to improving the game,
and a recent trip to Barcelona showed the
appalling attitude of young players, who are
often indulged by coaches. Its difficult to
see where the Lawn Tennis Associations
annual budget goes. Its not difficult to
produce top players, but attitudes must
change and support for younger players
should be more available beyond the
platitudes we read once Wimbledon is on.
OlaitanEyiowuawi
Forgive NatWest
[Re: Customers should vote with their feet to
punish bad service, Monday]
This article is wrong on two counts. Yes, RBS
has made a massive error. I have a NatWest
personal and business account and the rent
for one of our shops wasnt honoured, put-
ting us in technical breach of the lease. But,
this is not to say someone senior should be
sacrificed. This is playing a blame culture.
Nothing is foolproof and IT systems are very
fallible. This is like the BP disaster in the Gulf
of Mexico and could happen to any financial
institution. Its a wonder it doesnt happen
more often. Secondly, advising customers to
vote with their feet would cause massive tur-
moil in the financial sector. And remember,
the UK taxpayer ultimately carries the can.
SteveBradford
T
HE headline-grabbing words
of warning from MI5 chief,
Jonathan Evans, on Monday
night dished up a timely
reminder that the City could
be in for a nervous summer. The
comments, detailing the levels of
cyber attacks on UK industry, have
raised many eyebrows.
It was the first speech from Evans
in more than two years and he had
stockpiled his ammunition high. In
stark words, he admitted that the
extent of attacks was astonishing.
Key warnings were given to busi-
nesses, underlining the threat to
the integrity, confidentiality and
availability of information.
Courtesy of the Olympics, London
is about to be given the biggest
cyber test in its history. China and
Russia our traditional cyber com-
batants are reportedly displaying
an eager appetite to cause embar-
rassment during the Games. Rapid
developments in Iran and parts of
the Arab world pose new, difficult to
assess cyber dangers. As we put our
feet up to watch the sports, bigger
battles may be taking place in less
public arenas.
The major concern with cyber
threats is their anonymity. The
trusty shield to modern global secu-
rity has always been the fear of
reprisal. Anonymous attacks
remove a dangerous barrier to our
safety.
McAfees chief technology officer,
Raj Samani, recently explained the
threat posed by cyber attacks.
Sourcing an attack should be, in
theory, just like dialling 192.
However, you now have hackers
bouncing through 20 or 30 different
countries. Detailing the original
source can become almost impossi-
ble. When we have been able to
source the paths of attacks it has
always been a complex process.
TOP TWEETS
The effort that NatWest is using to text and
email me apologies is the effort it should be
using to fix its business.
@mon_chanel
The UK budget deficit goes up. So much for
savage cuts. Cut the Lib Dems adrift and sort
this country out. Low tax, low expenditure.
@LeatherbarrowA
HS2 should go even further and start looking
at joining Dublin via Holyhead tunnel to
Birmingham.
@Doug_Kent
Germany keeps putting on the bandages but
Europe is still bleeding underneath.
@thewaiter67
Is Lord Oakeshott right that RBS should be
split up into a retail and investment bank?
YES
The RBS failure has highlighted just how critical basic banking
services are to consumers and small businesses. It is crucial that
high street banking is protected from instability. Our Future of
Banking campaign recommended that essential retail banking
services should be ring-fenced to help protect depositors from
risk-taking elsewhere within the bank. The governments plans
to ring-fence high street banking from riskier investment
banking is a major step towards restoring consumer confidence
and transforming the culture of banking. These plans must not
be derailed by vested interests and the government must stick to
the proposed timetable so that consumers never again have to
foot the bill for a banking bailout that last time cost every man,
woman and child 2,000.
Richard Lloyd is executive director of Which?, the consumer
protection campaign group.
Richard Lloyd
NO
Andrew Lilico
While RBS should and will be broken up, its retail and investment
banking activities need not be separate. EU Single Market
authorities have already instructed RBS to sell parts of its
business. No company dependent on state aid can be permitted
to use that to maintain a competitive advantage over rivals. If
administration procedures had been adequate in 2008, RBS
would have been broken up then, instead of bailed out by the
government. But it is a mistake to think such a break-up should
separate retail from investment banking. Retail banking is not
safe and investment banking not so notably more risky that it is
not useful to combine them. Insofar as there should be ring-
fencing, that should be between a new form of deposit storage
deposits, 100 per cent backed by government bonds separated
from both retail and investment banking activities.
Andrew Lilico is chairman of Europe Economics.
RAPIDresponses
Get ready for an
Olympic summer
of cyber attacks
The business world can take some
comfort in major government
spending and specialised initiatives.
An Olympics cyber coordination
team will work 24 hours a day dur-
ing the Games. In the event of an
attack, the team is designed to
ensure coordinated responses across
the UKs cyber community.
But online safety may not be the
biggest cause for concern. The
biggest shock may be in the palm of
our hands.
Stephen Watterson, chief technol-
ogy officer at leading data security
specialists Company85, has been
investigating a different concern:
We have our eye on potentially seri-
ous mobile issues. Watterson
thinks a combination of factors
will combine to make mobile dis-
ruption inevitable. Networks in
London are already under huge
pressure. The amount of data being
consumed during the summer is
going to break records. A large num-
ber of people will be watching
Olympic events on mobile devices;
combine this with people from
around the world pouring into
London and there is cause for alarm.
Even minor disruption to mobile
data will have a major impact on
the City. But Watterson says we
should not be entirely despondent.
He thinks a truly dire situation has
probably been averted. But a lot is
resting on probably.
So what would you miss more,
phone calls or emails?
Justin Stoneman is a journalist.
WEDNESDAY 27 JUNE 2012
JUSTIN STONEMAN
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Extreme tech: Atos sees Olympics
exposure as a real-time showcase
Patrick Adiba says
the IT firms Olympic
partnership has a
strong business case
Q
Whats your brands primary
reason for being involved with
the Games?
A
Weve been involved since
Barcelona in 1992. We became
a worldwide IT partner in 2001,
and were committed through
to Rio in 2016. Theres two reasons
why it works. I think the
International Olympic Committee
(IOC) decided to partner with Atos
because we share the same values:
fair value, teamwork, clean
competition. When the IOC had a
worldwide tender in 1999 to find its
new worldwide IT partner, I think we
won because of this match. Our
partnership is pretty unique because
you have to work together on a long-
term basis, and technology changes.
Its not a commercial contract, its
very intensive in people and
technology. You must be prepared to
take risks, to anticipate trends and to
share the same ambition.
At the same time as using the
Olympic brand, we help to make it
stronger its a give-and-take game.
And its a fantastic showcase for Atos.
For the Olympics, we use nearly all
the services that exist in the IT
industry, but in an extreme way. If
you can do anything for the
Olympics, you can do it for any other
customer. If you can secure the
Games, or deploy for something of
this magnitude, you can do it for a
bank or a telco or a manufacturing
company. Its a live showcase of
everything we can do in a very
mission critical environment.
Q
How have you structured your
business to maximise the
opportunities?
A
We have a group of business
units doing the Olympics and
other major events. Weve done
technology for about 60 events
since the groups creation in 1989
30 DAYS TO GO
COUNTDOWN
TO THE LONDON
2012
OLYMPIC
GAMES
OLYMPICBUSINESS
22
WEDNESDAY 27 JUNE 2012
cityam.com
all kinds of events, from the soccer
World Cup to the Pan-American
Games, and non-sporting events too.
We try to limit our sponsorship to
the Olympics, because its not just
about sport but values. Sometimes
that means were not visible. We did
the IT for the Fifa World Cup in
2006, but nobody knows this
because there was another sponsor.
Weve a specialised business unit
and we maintain the knowledge in a
given centre, with the same team
about 30 per cent were in Barcelona
in 1992.
We transfer experience between
events. We also transfer expertise from
the Olympics to other businesses.
Everything we do for the Olympics can
be adapted. If you want to do the IT
security of a bank, its very similar to
what we do here. We can transpose
many things, including people. Lots of
Atos employees work on the Games to
acquire experience. We also use the
Olympics to attract talent at universi-
ties. We are launching an IT challenge,
asking universities to compete on a
given technology challenge. It allows
us to explain to students what Atos
does. Its important because were a
people company: our assets are our
people.
Q
How did the announcement
that you were involved affect
your business?
A
Its amazing to see that all the
customers who are exposed to
the Games learn something
about Atos, including those
customers that have been with us for
20 years.
In the industry, they know a compa-
ny for a certain service. And then dis-
cover the breadth of what we can do,
and that really is the magic of the
Olympics. Its an accelerator of the
sales process.
If I talk to someone who doesnt
know Atos at all, after two hours of dis-
cussion using the Olympics, you are
immediately credible to do anything.
It could otherwise take years. If you
can do it for the Olympics, you can do
it for them.
Q
Which are the most crucial
commercial opportunities
and how will you be using
these for maximum return?
A
We are a B2B company, so we
use our involvement on a
personalised basis. We activate
our rights not through TV
promotions, but by showing people
what we do. One of our advantages is
that we can take people to the
Technology Operations Centre (TOC)
in Canary Wharf. Very few can access
the TOC, even in the Olympic
committee. During the Games, its
very powerful you can see
competition actually happening,
problems being solved. Its amazing.
We talk to thousands of people. We
have between 2,000 and 5,000
customers or prospects relevant to
our business, and the idea is to bring
some of them to see what we do.
Q
What has surprised you most
about your involvement to
date?
A
After six Olympics, Ive found
that Games are both similar
and different. Common
elements allow us to learn and
reproduce systems, so that we safely
deploy our technology. But they are
all different because each Olympic
committee has its own objective.
They want to use the Games to
showcase their country. We must
understand specific circumstances
and adjust to what the committee
wants.
London is very different from Beijing
or Athens. Londons challenge is that
it will be the most connected Games
in history. There will be 8bn devices
connected to the internet around the
world by this summer. This changes
how people view the Games more
real-time, more mobile, more social
networks. TV will not be the only
medium. That changes our role in
terms of providing the right informa-
tion at the right time.
Patrick Adiba is chief executive of the
Iberian region and executive vice president of
the Olympic Games and major events for
Atos.
Patrick Adiba if a company can work on the Olympics, it can deploy that expertise for any other kind of firm
WORDS BY MARC SIDWELL
F
UEL-EFFICIENT, inexpensive,
able to seat four and easy to
park was British Motor
Corporations original brief to
designer Alec Issigonis for its Austin
Design Office Project 15 back in
1957. Out of the Suez Crisis, ADO 15
became the original BMC Mini and
carmakers have rarely managed to
produce a car thats as well-
packaged since.
But now Volkswagen is back in the
small car business and its diminu-
tive Up model (badged up!) has
arrived late to a tiddlers party that
includes the Citroen Aygo, Fiat 500,
Smart Fortwo and Toyota iQ. It is
arguably the most Mini-like car
weve seen in recent years.
Small, cheap and practical is back
in vogue. Our own modern fuel cri-
sis is encouraging downsizing again
and the Up looks set to make a big
impact amongst trendy bright
young things. It is rocking some
good looks too, albeit in a sensible
kind of way. It also properly seats
four people, unlike some of its com-
petitors, which at just 3,540mm in
length makes the Up one of the
smallest four-seaters on sale. VW
have managed to achieve this by
designing a car that has a long
wheelbase with very short body over-
hangs and which has the engine
mounted well forward to maximise
cabin space. At 251 litres the boot is
unusually big too for this size of car.
The perfect layout of a small com-
pact car is based on a box with a
wheel at each corner, says Up
designer Volkswagen Brand Design
Chief Klaus Bischoff. Which is how
the Up manages to pack four adults
in so effectively and also why the
cars boxy looks wont appeal to
everyone. The design is functional,
clean and simple with a smiling
bumper and an unusual rear end
boot lid. The result is a city car that
is cheeky and cute, which is all
important for a car in this segment.
The Up is powered by a three-cylin-
der petrol engine with a choice of 60
and 75 PS outputs. There is also a
Bluemotion version of each which
adds Stop/Start a battery regenera-
tion system and eco tyres for an
additional price. Weve been driving
the top-end High Up! which comes
in at 10,515 with a 75PS engine. Its
worth mentioning that the entry-
level Move Up! costs just 7,995 with
a 60PS 1.0-litre engine. There is also a
middle option Move Up! (geddit)
available.
Inside, the Up is comfortable and
spacious. It genuinely isnt cramped,
even when locating a child seat in
the rear (as we were). Its worth not-
ing that we found the extra wide
doors to be remarkably useful for
toddler extraction. The old adage
that you have to have a five-door car
when you have kids doesnt seem to
apply to this car.
The dashboard and instruments are
refreshingly unfussy. In front of the
driver is a three dial binnacle and in
the centre console, heating and ven-
tilation controls and thats pretty
much it. Our car though has the
Maps & More personal infotain-
ment device (PID) that sticks up from
the dash and is exceptionally simple
to use. It docked with our phone in a
jiffy and graphically it looks very
nice.
Unsurprisingly, in the City is where
the car is most at home. Around
town the ride is fine, though it can
be a little harsh over speed bumps.
Out on the open road the Up proved
itself eager and surprisingly quiet.
Speedy it isnt but it is perfectly com-
fortable on the motorway and was
great for shortish trips out of
London.
VW thinks the Up could become a
design icon, just like the original
Mini. For now its enough to know
that it has a quality feel that belies its
sticker price and feels like a lot of car
for the money. In a world of increas-
ing technological complexity it is
refreshingly simple. And if youre
after a small city car it will be diffi-
cult to resist.
The entry-level Up costs from 7,995
The surprising power of the slow
Trendy and super compact, VWs new Up city car is actually rather spacious inside
24
WEDNESDAY 27 JUNE 2012
LIFE&STYLE
cityam.com
MOTORING
CAR TALK
BY RYAN BORROFF
Astons new Vanquish
Aston Martin has revealed its new Vanquish model, which will replace
the DBS. Available as a 2+2 or 2+0, the super GT has an upgraded
565bhp 6.0-litre V12 engine and is capable of 0-62mph in 4.1 seconds
and 183mph. Styling cues including its elegant waist, elongated side
strakes and LED rear lights come from the One-77 supercar. Cost: 190k.
WORDS BY
RYAN BORROFF
THE VERDICT:
DESIGN hhhhi
PERFORMANCE hhhii
PRACTICALITY hhhhi
VALUE FOR MONEY hhhhi
THE FACTS:
VW HIGH UP
PRICE: 10,515
0-62MPH: 13.2 secs
TOP SPEED: 106mph
CO2 G/KM: 108g/km
MPG COMBINED: 60.1mpg
Jag F-Type
A development prototype of Jaguars forthcoming F-Type sportscar will
make its public debut at the Goodwood Festival of Speed. The two-
seater convertible will be driven up the famous Goodwood Hill by Mike
Cross, Jaguars head of vehicle integrity. Inspired by the C-X16 concept,
the road-going car will be sale mid-2013 and should cost under 60k.
Land Rover meets Bowler
Land Rover has joined forces with performance 4x4 maker Bowler,
builders of the Wildcat. In future Bowler's EXR rally car and EXR S road car
which are based on the Range Rover Sport will be badged Powered
by Land Rover. The road-legal EXR-S uses a 550bhp supercharged 5.0-
litre V8 and is capable of a 0-60mph in 4.2sec. It costs 155k.
25
TV & GAMES
cityam.com
SKY SPORTS 1
5.30pmLive T20 Cricket 9pm
Ashes Memories 9.30pmTotal
Rugby 10pmFootballs Greatest
10.30pmYoure on Sky Sports!
11.30pmAshes Memories 12am
T20 Cricket 2amYoure on Sky
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FIFA Futbol Mundial 12am
European Challenge Tour Golf
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European Tour Weekly 8pmBoots
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Fighter 10.30pmTrans World
Sport 11.30pmPool 12.30am
Professional 8 Ball Pool Masters
1.30amCage Fighter 2am-3am
Bowls
BRITISH EUROSPORT
7pmUEFA Euro 2012 Show
7.30pmPhoto Finish 7.45pm
Wednesday Selection 7.50pmPGA
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8.55pmEuropean Tour Golf
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10pmYacht Club 10.05pmAlexias
Selection 10.10pmWednesday
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Magazine 11pmUltra Trail
11.15pm-12.30amAuto GP
ESPN
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round-up of the latest news.
7.30pmWorld Series by Renault:
The latest news and highlights from
the motor racing series. 8.30pm
ESPN Films: Roll Tide/War Eagle
9.30pmFourth & Goal: How Will
You Be Remembered? 11.15pm
ESPN Kicks: Brasileirao 11.30pm
Press Pass 2012 12amFriday Night
Fights 2amNBA 2012 Draft
Preview3amESPN Films: Catching
Hell 5am-6amWorld Series by
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SKY LIVING
7pmCriminal Minds 8pmBattle of
the Brides 9pmBones 10pm
Bedlam11pmCriminal Minds 1am
Bones 1.50amAmericas Next Top
Model 2.40amMedium3.30am
Bones 4.20amNothing to Declare
5.10am-6amJerry Springer
BBC THREE
7pmDoctor Who 7.45pmDoctor
Who Confidential: Behind the
scenes of filming in Utah. 8pm
Dont Tell the Bride 9pmCherry
Healey: How to Get a Life 10pm
FILMThe Proposal 2009. 11.45pm
Family Guy 12.30amCherry Healey:
How to Get a Life 1.30amCan We
Trust the Police? 2.25amDead Boss
2.55amSnog, Marry, Avoid?
3.25amDont Tell the Bride
4.25am-5.25amComing Here Soon
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmFILMNacho
Libre 2006. 9.50pmRude Tube
10.55pmChannel 4s Comedy Gala
11.45pmThe Big Bang Theory
12.40amScrubs 1.15amRude Tube
2.10amHow I Met Your Mother
2.35amRules of Engagement
2.55amThe War at Home 3.20am
90210 4amGreek 4.45am-6am
Switched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmStorage Wars 9pm
Swamp People 10pmAx Men
11pmStorage Wars 11.30pm
Pawn Stars 12amAmerican Pickers
1amSwamp People 2amAx Men
3amIce Road Truckers 4amLock
n Load 5amPawn Stars
5.30am-6amAmerican Restoration
DISCOVERY
7pmBear Grylls: Born Survivor: The
adventurer visits Alaska. 8pmThe
Truth Behind the Moon Landings
9pmRiver Monsters 10pmSons of
Guns 11pmGold Rush 12amRiver
Monsters 1amSons of Guns 2am
Auction Kings 3amAmerican
Chopper 3.50amIce Pilots
4.40amBear Grylls: Born Survivor
5.30am-6amDestroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmDress of Your Dreams
8pmI Didnt Know I Was Pregnant
9pmHospital Sydney 10pm
Embarrassing Illnesses 11pmReal
ER: The Bronx 12amHospital
Sydney 1amEmbarrassing Illnesses
2amReal ER: The Bronx 3amDress
of Your Dreams 4amA Baby Story
5am-6amBirth Stories
SKY1
7pmThe Simpsons 8pmFuturama
8.30pmThe Simpsons 9pmAn
Idiot Abroad 10pmAn Idiot
Abroad 2 11pmBrit Cops: War on
Crime 12amRoad Wars 1am
Armed and Dangerous: Ultimate
Forces 1.55amBrit Cops: Law &
Disorder 2.55amSo You Think
Youre Safe? 3.45amMedical
Emergency 4.10amReal Filth
Fighters 5.05am-6amDont Forget
the Lyrics
6pmBBC News
6.30pmBBC London News
7pmCHOICE Match of the
Day Live: Euro 2012
10pmBBC News
10.25pmRegional News
10.35pmThe National Lottery
Wednesday Night Draws:
10.45pmHave I Got Old News
for You
11.15pmFILMThe Greatest 2009;
National Lottery Update 12.50am
Weatherview12.55amSign Zone:
See Hear 1.25amSign Zone: Brick
by Brick: Rebuilding Our Past
2.25amSign Zone: Fake Britain
3.10amSign Zone: Great British
Menu 4.10am-6amBBC News
5.50pmWimbledon 2012:
Further live second-round
singles coverage.
8pmToday at Wimbledon:
John Inverdale and guests
reflect on the third days play.
9pmThe Secret History of
Our Streets: The changing
fortunes of Portland Road,
Notting Hill.
10pmCHOICE The Culture
Show
10.30pmNewsnight: Weather
11.20pmThe Fruit & Veg
Market: Inside New Spitalfields
12.20amBBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
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8pmMidsomer Murders
10pmITV News at Ten
10.30pmLondon News
10.35pmEuro 2012 Highlights:
Portugal v Spain.
11.35pmPerspectives: Andrew
Lloyd Webber A Passion for
the Pre-Raphaelites
12.30amJackpot247; ITV
News Headlines
2.35amBritish Touring Car
Championship Highlights
3.45am-5.30amITV Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv 8pmSupersize
vs Superskinny 9pm24 Hours in
A&E 10pmA Short History of
Everything Else 10.35pmThe Killing
11.30pmRandom Acts 11.35pm2
Broke Girls 12amMusic on 4:
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Gignics 12.45amMusic on 4: Roots
Presents: Delorentos 1amMusic on
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Music on 4: Launched at Red Bull
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St Elsewhere 4.10amDeal or No
Deal 5.05amCountdown
5.50am-6.10amGlamour Puds
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6.30pm5 News at 6.30
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News Update
8pmNew Emergency Bikers:
Lucy Watson deals with a
drunk lorry driver; 5 News at 9
9pmCHOICE NCIS
10pmBig Brother
11pmBig Brothers Bit on the
Side
12amPoker: The Big Game
1amSuperCasino 3.55amGreat
Artists 4.20amMichaelas Wild
Challenge 4.45amMichaelas Wild
Challenge 5.10amHouse Doctor
5.35am-6amHouse Doctor
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7
8 9 10
11
12 13 14 15
16
17 18
19 20 21
22 23 24
25
26 27
11 10
45
24 13 6
39
20 17
15 23 14
6 8
43
16 15 6
45
12 29
13
10
20
20
23
35
3
7
12
10
30
45
28
22
13
4
3
15
38
27
7
17
15
ACROSS
1 Device used to
connect computers
by a phone line (5)
4 Aromatic grey-
green herb (4)
7 Coral reef (5)
8 Chap (3)
10 Assist in doing
wrong (4)
11 Falls (5)
12 Lever that activates
the ring mechanism
of a gun (7)
16 Edge of a plate (3)
17 Building for housing
poultry (3-4)
19 Plant exudation (5)
22 Nark, chafe (4)
24 Maiden name
indicator (3)
25 Secret agents (5)
26 Manufactured (4)
27 Exhales audibly (5)
DOWN
1 Soft or weak (4)
2 Lower part of an
interior wall (4)
3 Outstanding
musician (7)
4 Informal language (5)
5 Liturgical vestment (3)
6 Come in (5)
9 Bicker (5)
13 Brazilian port, ___
de Janeiro (3)
14 Make an impact on (7)
15 Premium Bonds
computer (5)
17 Living quarters for
female relatives in a
Muslim household (5)
18 Thin pancake (5)
20 Problem (4)
21 Information reported
in the papers (4)
23 Hallucinogenic
drug (inits) (3)
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P R O M A N C E
S T A M I N A C T
O S S S H E E R
R T O K Y O A
T W O S N E R V Y
7 5 2 9 5 3 9
9 8 6 6 1 1 2
6 1 2 5 5 2
3 9 8 6 8 7 6 9
1 7 3 9 2 5 6 4 8
5 7 4 9 8
8 2 4 5 1 6 3 7 9
9 5 7 8 1 2 6 3
1 9 5 3 1 4
6 3 3 6 9 8 7
9 4 2 1 4 9 1
4
4
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The nine-letter word was
REPUTABLE
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
WEDNESDAY 27 JUNE 2012
MATCH OF THE DAY LIVE: EURO
2012 BBC1, 7PM
Portugal v Spain (Kick-off 7.45pm).
Gary Lineker presents coverage of the
opening semi-final at the Donbass
Arena in Donetsk, Ukraine.
THE CULTURE SHOW
BBC2, 10PM
Mark Kermode talks to William
Friedkin about his film Killer Joe,
while Alexei Sayle and Andrew
Graham-Dixon attend an exhibition.
NCIS
CHANNEL5, 9PM
An investigation into the death of a
seaman leaves the investigators
wondering whether Gibbs is about
to leave NCIS again.
TVPICK
FORMER England manager Fabio
Capello has accused Manchester
United striker Wayne Rooney of
failing to perform for his country
and insisted he only plays to his
potential at club level.
Rooney has been criticised for the
underwhelming nature of his
performance during the European
Championship quarter-final defeat to
Italy and Capello, also from Italy,
believes some of it to be justified.
After watching the last game, I
think that Rooney understands only
Scottish, said Capello. Thats
because he only plays well in
Manchester, where [United manager]
Sir Alex Ferguson speaks Scottish.
The negativity surrounding
Rooney greatly contrasts the praise
directed towards Italys influential
Andrea Pirlo, to which the ball-
playing midfielder has responded by
comparing Englands approach with
the ultimately successful tactics
Chelsea used to win last seasons
Champions League.
I think England played in a very
prudent and careful way, said Pirlo.
They were sitting back for the
match like Chelsea did in the
Champions League final against
Bayern Munich.
They tried to keep that same
shape. For them going to a penalty
shoot-out was already a good result.
G
E
T
T
Y
BRITISH teenager Laura Robson
lamented a lost opportunity after
squandering the chance to seal
a sensational victory over former
French Open champion
Francesca Schiavone.
Robson lost 2-6, 6-4, 6-4 to the 24th
seed after a medical time-out for
Schiavone, with the former
Wimbledon junior champion one set
up and with break points in the sec-
ond, proving to be the crucial turning
point upon which Robson admits to
conceding control of play.
I thought I was in control of it,
and then just made a few mistakes
and let her get back into the match,
said the wildcard. I definitely
believed that I could win. I think I was
just trying to go for too much because
she was getting much more balls
back and I was just trying to stay the
aggressive player in the point, keep
the rallies short.
Im really disappointed today. But
shes a grand slam champion and I
am definitely closer to winning
matches like this.
Robsons defeat was the solitary
blemish on an otherwise successful
day for Britains female competitors.
Anne Keothavong and Elena Baltacha
both qualified for the second round
after respective victories over Spains
Laura Pous-Tio and Karin Knapp of
Italy, with Baltacha fighting back
from a set down to win 4-6, 6-4, 6-0,
and Keothavong winning 6-3, 6-3.
There were also wins for Petra
Kvitova over Akgul Amanmuradova,
Victoria Azarenka over Irina Falconi,
and Serena Williams, who defeated
Barbora Zahlavova-Strycova.
WEDNESDAY 27 JUNE 2012
26
BY DECLAN WARRINGTON
Rueful Robson
out after lead
turns to loss
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SIC
EPSOM LIVE! THE ENTERTAINMENT NEVER STOPS
Enjoy a great evenings racing followed by one of our fantastic outdoor concerts.
Adult tickets from 32 and children from 18.
To book now call 0844 579 3004 or visit epsomdowns.co.uk
Thursday 5th July
Britains Laura Robson, 18, won the womens Wimbledon junior championship in 2008
BY DECLAN WARRINGTON
Capello critical
of Rooneys
England form
SPORT
cityam.com
TODAYS HIGHLIGHTS
Mens singles
n R Federer [3] v F Fognini
n N Djokovic [1] v R Harrison
n R Sweeting v J Tipsarevic [8]
Womens singles
n M Sharapova [1] v T Pironkova
n H Watson v J Hampton
n A Hlavackova v K Clijsters
27
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IN BRIEF
Mitchell to fight Burns in Glasgow
n BOXING: Kevin Mitchell is to challenge
WBO lightweight champion Ricky Burns,
of Scotland, in Glasgow on 22
September. This is a real fight between
the two best in the division and its not
going to be for the faint hearted, he
said. I rate Burns very highly.
Bradford Bulls enter administration
n RUGBY LEAGUE: Bradford Bulls have
gone into administration and could fold if
a new buyer is not found within 10 days.
This club is on the brink of extinction,
said joint-administrator Brendan
Guilfoyle.
Gillies killed in holiday accident
n RACING: Jockey Campbell Gillies has
died after an accident suffered on holiday
in Corfu, Greece. "Very sad news about
Campbell Gillies a very good jockey but
an even better bloke, said Tony McCoy.
cityam.com
WEDNESDAY 27 JUNE 2012
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Results
Portugals Cristiano Ronaldo is the biggest threat to Spains chances of reaching the Euro 2012 final
PORTUGAL captain Cristiano
Ronaldo insists he is unconcerned
about carrying the hopes of a nation
as he bids to tonight inspire his side
to the Euro 2012 final with victory
over reigning European and world
champions Spain.
I dont feel pressure playing
against Spain, said Ronaldo. These
games are part of my life. I have
spent 10 years playing these type of
games for club and country and I
have to be accustomed to it.
I feel responsibility, yes. But
pressure? No. Its beautiful for
Portugal to be able to reach
another final.
Ronaldo was last season
instrumental in Real overcoming
bitter rivals Barcelona in La Liga and
tonights fixture represents a revisit
to that particular rivalry, with
Barcas Spanish defender Gerard
Pique warning his compatriots of
Ronaldos threat.
We know we cant give him a
moment to think or even breathe,
said Pique. Not even an inch.
Ronaldo ready
for Portuguese
responsibility
T
WO heart-warming tales involving
up and coming English players
dominated the weekends results,
with Danny Willett and Melissa
Reid both overcoming recent troubles to
record landmark wins.
I was delighted to see former world
amateur No1 Willett earn his first
European Tour victory after several near
misses and some injury problems, which
had interrupted his rise.
The 24-year-old had racked up 19 top
10 finishes and several runner-up spots,
so to finally land the BMW International
Open in Cologne on Sunday was
fantastic for him.
Ive kept my eye on his progress as my
former caddie used to caddie for him,
and Ive admired his game because he is
aggressive. I like the way he plays, its
great to see him break through and I
GOLF
COMMENT
SAM TORRANCE
BY DECLAN WARRINGTON
could see it being the first of many titles.
I remember my first win and how
much of a boost that was. What it does is
teach you that you can handle the
pressure and pull through it, and in this
case, that you can handle a play-off,
which is even harder for your first one.
Willett has broken a lot of barriers.
Congratulations are also due to Alan
Dunbar, the Northern Irishman who won
the British Amateur Championship at
First victory will prove to Willett he
can handle pressue and win again
Troon on Saturday, and to Australian
Marc Leishman, who earned his maiden
PGA Tour win with a great closing 62 in
Connecticut on Sunday evening.
But the other triumph that really
deserves attention this week is that of
Reid, who won the Prague Masters in her
first event back since the recent tragic
loss of her mother.
Its a terribly sad and poignant episode
and she must have had mixed emotions
to say the least, but the performance was
a tremendous credit to Reid, a popular
figure on the Ladies European Tour.
Sam Torrance OBE is a multiple Ryder Cup-
winning golfer and media commentator. He
has won 21 European Tour titles in a career
spanning 40 years and famously sank the putt
that clinched victory for Europe in the 1985
Ryder Cup. He also captained Europe to glory
in 2002. Follow him on Twitter @torrancesam
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10/3 Portugal 9/4 Draw Spain 10/11
Kick-off 7.45pm, Live on BBC1
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Koscielny convinced me to join Arsenal, says 13m Giroud
G
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BRITISH No1 Andy Murray
revealed his delight at his stunning
start to Wimbledon after ruthlessly
dismissing Russias Nikolay
Davydenko to underline his potential
to challenge for a first grand
slam title.
Murray defeated Davydenko 6-1, 6-
1, 6-4 on Centre Court to dissolve
remaining doubts about his fitness
and form after a shock early exit
from Queens was preceded by back
trouble at the French Open, though
he was not alone in impressing.
Jamie Ward fought for five fasci-
nating sets to overcome Spains
world No36 Pablo Andujar 4-6, 6-0, 3-
6, 6-3, 6-3 to reach the tournaments
second round for the first-ever time
with an equally excellent victory.
The first two sets were very good,
said Murray. I got off to a great start.
Ive been waiting around since
Queens, Ive been itching to
get going.
I wanted to get out of the blocks
quickly today. I was hitting the ball
very cleanly, I used my slice very well.
I probably settle into matches a
bit quicker than I used to. Theres
been a lot of talk from a lot of people
so I just wanted to start the tourna-
ment. The first rounds never easy but
it was a good start.
Murray will face the winner of Ivo
Karlovic versus Dudi Sela, while Ward
meets Mardy Fish, and remains on
course to reach a semi-final with
Spains world No2 Rafael Nadal, who
yesterday started slowly before beat-
ing Thomaz Bellucci in straight sets.
Nadal was broken twice in the
opening set and trailing 4-0 before a
confident comeback inspired a 7-6 (7-
0), 6-2, 6-3 victory and may have to
overcome Frances Jo-Wilfried Tsonga
in the quarter-finals after the fifth
seed defeated 2002 champion Lleyton
Hewitt in straight sets.
I have to improve a lot in the next
round, said Nadal. I made more mis-
takes than usual, I was very lucky to
come back from 4-0 down.
Joining Nadal in the tournaments
second round is Juan Martin del
Potro, after his four-set victory over
Robin Haase, and 12th seed Nicolas
Almagro, who overcome Olivier
Rochus in five sets.
Spaniard David Ferrer will today
resume play against Dustin Brown,
over whom he holds a two-set lead.
Arsenals Olivier Giroud was in Frances Euro 2012 squad
TEENAGE sprinting revelation Adam
Gemili has ended doubts over his
participation in this summers London
2012 Olympics be declaring he is
mentally ready to carry the home
nations 100m hopes.
Gemilis coach warned at the weekend
that the Games may have come too soon
for the 18-year-old, whose sudden rise to
prominence and competitive schedule
had, he said, left the youngster an
emotional wreck.
The former Chelsea trainee footballer
was unheard of until clocking 10.08
seconds earlier this month, and had
planned his summer around the looming
World Junior Championships.
But Gemili sealed his eligibility for
London 2012 at the national trials on
Saturday by finishing second behind
Dwain Chambers and insisted yesterday
he is ready to run in Spain and Stratford.
My plan is to go to the Olympics and
compete with the worlds top sprinters
and not get beaten too badly, he said.
Ive got two weeks until the World
Juniors so Im just going to get my head
down and train hard for that.
WEDNESDAY 27 JUNE 2012
28
SPORT
cityam.com/sport
BY DECLAN WARRINGTON
British No4 Laura Robson
misses out on Wimbledons
second round after her loss to
Italys Francesca Schiavone
Tennis: Page 26
Sprint hope Gemilis Games green light
Majestic Murray
starts in style as
Brits impress
at Wimbledon
FRANCE forward Olivier Giroud has told
how international colleague Laurent
Koscielny talked him into joining Arsenal,
after completing his 13m transfer from
Montpellier yesterday.
Giroud, who topped the scoring charts
and won the French top-flight title last
season, discussed a possible move to north
London with Gunners centre-back Koscielny
while together at Euro 2012 this month.
We talked a lot, said the 25-year-old. I
asked him about life, the club and the
environment of the club. We talked about
English football because Ive wanted to play
here since I was a kid. It was my dream to
play in the Premier League so Arsenal was
ideal for me and Laurent told me it was a
good choice.
Giroud, who only made substitute
appearances during Frances European
Championship campaign, which ended with
a quarter-final defeat to Spain on Saturday,
is Arsenals second major summer signing
after versatile Germany forward Lukas
Podolski, an 11m arrival from Cologne.
Arsenal is a big English team that is well
known in France, added Giroud, who
idolised Gunners record scorer Thierry
Henry. There are lots of French players who
were a success here like Henry, [Sylvain]
Wiltord, [Robert] Pires and many others.
BY FRANK DALLERES
British No1 Andy Murray will today find out who he faces in the second round Croatias Ivo Karlovic or Israels Dudi Sela
BY FRANK DALLERES