ESCAPE
THE CITY
SHERLOCK HOLMES STRIPS
OFF FOR FRANKENSTEIN
Issue 1,330 Friday 25 February 2011
SHOPPERS HIT BY
SOARING PETROL
WORLD ECONOMY
▲
BY JULIAN HARRIS
RETAIL sales growth slowed substan-
tially this month, with consumers
increasingly squeezed by surging
petrol prices, weak wage growth and
spiralling price inflation.
Elevated oil prices, driven up in
recent weeks by the crisis in the
Middle East and surging Chinese
demand, are set to drive petrol close to
£1.40 a litre, some observers said.
The rise imposes more pressures on
the UK, where consumer price infla-
tion is already double the Bank of
England’s two per cent target, and
expected to approach five per cent in
the coming months. It is already high-
er than that on other measures.
Brent crude briefly hit $119 (£74) a
barrel yesterday, before falling back
after the Saudis pledged to increase
supplies. Some analysts argue every
extra $10 a barrel knocks 0.25 per cent
off global GDP. Oil at $120 a barrel may
add 0.48 per cent to retail price index
inflation in the UK, Fathom
Consulting said.
Rising petrol prices could be com-
pounded by a 5p hike in petrol duty,
due in April. Fuel duty is currently
58.94p a litre. Petrol stations are
reporting that more consumers are
limiting their purchases to a set sum
of money, rather than filling their
tanks, a sign of distress.
More than three out of four – 77 per
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ANALYSIS l Petrol prices have hit a record high on
the back of instabilty in the Middle East
Pump
Price
(ppl)
Average Diesel Price
Average Unleaded Price
85.82p
81.44p
2005 2006
cent – of retailers are reporting rising
prices, according to a survey by the
Confederation of British Industry (CBI)
yesterday. With only four per cent
reporting lower prices, the survey’s
inflation index soared upwards by 28
per cent – its most inflationary score
in nearly two decades.
A balance of only six per cent of sur-
veyed retailers reported a rise in sales
during the opening two weeks of this
month -- 36 per cent saying sales have
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2007 2008 2009
increased, and 30 per cent saying sales
have fallen -- according to the CBI.
“With rising food, oil and other com-
modity prices and weak wage inflation,
the outlook for UK household income
growth looks poor,” said Chris Watling
of Longview Economics.
“Such a sustained decline in real
incomes has not been experienced in
the UK since the 1970s,” he added. “The
fruits of western money creation are
now appearing in terms of consumer
WORLD’S LEADING
ALL - INCLUSIVE
RESORTS
134.41p
129.05p
2010 24 Feb 2011
Source: Experian Catalist
price inflation,” Watling said.
A 10 per cent rise in petrol prices
would cost US consumers $40bn a year,
“a reduction in real incomes of around
0.4 per cent,” Capital Economics said yes-
terday. “Retail sales are likely to be more
challenging over the coming months,”
said CBI economist Lai Wah Co. “Prices
are set to rise considerably as the VAT
increase and the soaring cost of raw
materials are passed on to shoppers.”
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RBS REVIVAL
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Cameron in
bid to end
Libya chaos
▲
WORLD
BY ALISON LOCK
DAVID Cameron and Obama last
night vowed to finally bring an end to
dictator Colonel Muammar Gaddafi’s
41-year regime in Libya.
In a statement, after the Prime
Minister spoke to the US President,
Downing Street said that it “had
agreed to work together closely on
the swift evacuation of nationals and
co-ordinate on possible multilateral
measures on Libya.”
Foreign secretary William Hague is
understood to have told the Libyan
regime directly that Gaddafi should
go.
The Swiss government froze all the
colonel’s assets held in the country
yesterday and the White House said
that a no-fly zone was being seriously
considered to stop air strikes against
Libyans.
But Gaddafi yesterday remained
opposed to any concessions and in a
rambling 30-minute speech on state
television blamed Osama bin Laden
and teenagers on drugs for the vio-
lence even as protesters closed in on
the capital Tripoli.
At the same time, forces loyal to
Gaddafi continued brutal counter-
attacks against rebels holding towns
near the capital and moved into
defensive positions on the roads in
and out of Tripoli. Anti-Gaddafi fac-
tions had taken control of the majori-
ty of Libya by nightfall with only the
capital and outposts in the south and
central regions still apparently under
the leader’s control.
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 2 News
Petrol prices are inflicting huge pain
EDITOR’S LETTER
ALLISTER HEATH
BRITAIN is not quite America, where
the price of petrol is one of the most
important determinants of who wins
elections. But the fact that one litre of
unleaded now sets you back a crip-
pling £1.29 is starting to become a
major issue for the public here in
Britain – and it is also beginning to
hurt other parts of the economy, espe-
cially retailers.
In 2005, a litre of diesel cost 85.82p;
today, you would have to shell out
134.41p, a development that is crip-
pling transport firms and increasing
costs throughout supply chains. A
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
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WHAT THE OTHER PAPERS SAY THIS MORNING
AL-JAZEERA IN BATTLE FOR US
COVERAGE
Al Anstey, managing director of al-
Jazeera English, entered Comcast’s
Philadelphia headquarters on
Wednesday with four cardboard
boxes. Inside were printouts of 13,000
e-mails the Doha-based news channel
had received, urging the US cable
company to carry its signal.
EAST EUROPEAN MIGRANT NUMBERS
BACK ON THE RISE
The number of eastern Europeans
coming to work in the UK has risen
for the first time in four years, exacer-
bating the problem facing David
Cameron, prime minister, as he tries
to cut yearly net migration to the
“tens of thousands”. The 7 per cent
increase in 2010 is because Latvians
and Lithuanians are arriving in
droves as they escape their countries’
bleak job markets.
litre of unleaded petrol cost 81.44p six
years ago; as recently as two years ago,
after prices had plunged following
the recession, a litre of unleaded was
still retailing at just 86p. The price at
the pump has rocketed by 50 per cent
since then, punching a gaping hole in
the finances of millions of motorists
and diverting cash away from other
purchases.
No wonder, therefore, that the dis-
tributive trades survey from the CBI –
a good gauge of retail sales – showed a
substantial slowdown in February.
People are still spending more in
shops but the rate of growth has
slowed to a crawl. A similar survey out
earlier this week painted a picture of
a two-tier service sector economy: pro-
fessional services are doing well but
services to consumers are stagnating.
Strong global growth and efficiency
gains means that firms are flash with
cash, despite higher costs, and are
spending more – but individuals are
being squeezed.
It’s not rocket science: prices are
Asset sales
lift AIG profit
INSURANCE
▲
BY HARRY BANKS
BAILED-OUT insurer American
International Group (AIG) earned
$11.2bn (£6.94bn) in the fourth quar-
ter on asset sales, but charges to
expand its reserves for old asbestos
claims pushed its underlying opera-
tions into another loss.
AIG, which was literally minutes
from collapse in the fall of 2008, sur-
vived thanks to a $182bn government
bailout and the divestiture of major
international insurance units like
Alico and AIA to remain in business.
The company, led by chief execu-
tive Bob Benmosche, is hoping to
begin repaying taxpayer funds with
the help of an upcoming stock sale
worth at least $15bn, following in the
footsteps of other bailout recipients
like Citigroup and General Motors.
BA BITTEN IN WEB PROTEST OVER BED
BUGS
British Airways has become the latest
airline to face a sophisticated internet
protest after a passenger posted graph-
ic photos of what she alleges was an
“absolutely disgusting” attack of bed
bugs on two recent international BA
flights. Zane Selkirk, a 28-year-old
Yahoo product manager from Los
Angeles, has published her own web-
site, www.ba-bites.com, to make peo-
ple aware of what she alleges is BA’s
“unhelpful and unfriendly” response
to her complaints.
APPLE, GOOGLE AND SPOTIFY RACE TO
MUSIC MARKET
The digital music market is set to be
shaken up as soon as this summer as
Apple, Google and Spotify race to
deliver new services that labels warily
hope may reverse a decade of declin-
ing revenues. Each company is taking
a slightly different approach with
their new services, as the industry
grapples with a slowdown in sales.
surging as inflation spirals out of con-
trol, led by much higher petrol prices.
Post-tax, post-inflation, post petrol
take-home pay is dropping at an accel-
erating rate; the tax and price index,
an official measure of the cost of liv-
ing, was up 5.5 per cent in the year to
the end of January. Given that average
earnings were up just 2.1 per cent,
Britain faced a national pay cut of 3.4
per cent over the past year. There is
less to spend on discretionary items
after all the direct debits and essen-
tials. It’s neither a surprise nor hard
to understand why retailers will be
facing a difficult 2011; even super-
markets will suffer.
Of course, there are also other pres-
sures on consumer spending: some
public sector workers who feel they
may be at risk will be tightening their
belts. Against that, the net number of
jobs in the UK rose by 218,000 last
year; as long as the private sector con-
tinues to create 3.8 net extra jobs for
each that is lost in the public sector,
the aggregate effect will mean more
AIG’s global property insurance
business Chartis, one of the key units
on which it is staking its future as a
private company, lost $4bn in the
quarter on those asbestos reserve
charges, which had been previously
announced. AIG said it earned
$11.18bn, compared with a year-earli-
er loss of $8.87bn.
The profit in the most recent quar-
ter included a one-time net gain of
more than $16bn on asset sales. AIG
had said in November it would record
a “material gain” on the sale of Alico
to MetLife.
AIG boss Bob
Benmosche said he
does not expect this
set of charges to affect
his asset sales plans
DEMAND FOR NEWEST PHONES SEES
RETURN OF OLD TARIFF
The British love of the most up-to-date
smartphone has forced a return to
old-style phone contracts because
people want to replace their handsets
more frequently. Vodafone and O2
will reintroduce 12-month contracts
allowing customers to upgrade their
handset every year if they pay a fee
starting at about £100 for a new
model.
TATA SALE OF REDCAR STEEL PLANT
SALVAGES 700 JOBS
An historic steelworks in Teesside has
been sold to a Thai metals company,
saving 700 jobs and potentially creat-
ing a further 800 in the North East.
The Corus Teesside Cast Products (TCP)
factory in Redcar, North Yorkshire,
which has been mothballed for a year,
was sold to Sahaviriya Steel Industries
(SSI), for £291 million.
spending power.
There was some good news yester-
day: crude prices fell back, thanks to
Saudi Arabia saying it is in talks to
compensate for lost Libyan output.
King Abdullah’s massive £22bn in
handouts may not have been enough
to assuage all his critics, however. And
even if the oil price stabilises, a huge
chunk of the price at the pump is
made up of tax – 58.95p per litre for
fuel duty alone – which keeps going
up. That is the real scandal.
Politicians and the media are
obsessed with spending cuts, even
though these will be worth only one
per cent of total state spending in real
terms in 2011-12. Yet the impact of
inflation on incomes will be three
times larger – and everybody is being
hit. The coalition would be well-
advised to remember the 2000 fuel
protests: they almost destroyed Tony
Blair, something that not even Iraq
could manage.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Handbag designer Mulberry is not opening a second UK factory due to National Insurance hikes
Mulberry slams tax rate
RETAIL
▲
BY KATIE HOPE
MULBERRY chief executive Godfrey
Davis has blamed the stringent rates of
tax for his refusal to open a second fac-
tory in the UK.
The leader of the luxury goods
retailer, famed for its handbags, said
he had been put off opening a second
plant to supplement Mulberry’s
Somerset factory due to the impact of
rising national insurance rates.
“Over the past 10 years the political
JPMORGAN RAISES $1BN TO INVEST IN
SOCIAL MEDIA COMPANIES
JPMorgan has raised more than $1bn
(£620m) for a fund to invest in social
media companies, as it becomes the
latest Wall Street bank seeking to tap
a wave of interest from investors.
According to a filing with the
Securities and Exchange Commission,
the JP Morgan Digital Growth Fund is
a venture capital fund that has raised
$1.2bn from investors. That eclipses
an initial target of between $500m
and $700m that the fund had report-
edly set itself.
GREENPEACE CAN BRING CASE
AGAINST UK DEEPWATER OIL DRILLING
The safety of deepwater drilling near
the Shetland Islands, where BP, Total
and Chevron operate, will be chal-
lenged in a landmark court case
brought against the British
Government.
CITYA.M. 25 FEBRUARY 2011
NEWS | IN BRIEF
High food prices to continue
The US government yesterday warned
that the world is to face extremely high
food prices for a prolonged period
despite efforts to reduce levels by plant-
ing more crops. It could take take sever-
al years to restore stocks of wheat, corn
and soyabeans to comfortable levels, the
US Department of Agriculture said, and
until then farm-gate prices are likely to
hit new records in the year starting with
the 2011 harvests. That is likely to cause
spiralling food inflation for consumers
throughout the second half of this year.
AIA warns on Asia competition
Asia's third-largest insurer AIA beat
forecasts with a 54 per cent jump in
2010 net profit yesterday, but warned
that a slowdown in regional equity mar-
kets could cloud the outlook for future
earnings growth. Competition from
rivals such as Prudential and Chinese
players such as Ping An looking to
expand in Asia's fast-growing insurance
market weighed on AIA, with the com-
pany calling 2011 "demanding opera-
tionally". AIA's net profit was $1.6bn in
the second half, up from the previously
stated $788m last year.
and economic climate has not been
conducive to investing in the UK,”
Davis said in an interview with
Drapers magazine.
Godrey called on the government to
introduce “NI holidays” for manufac-
turers, saying an ongoing tax break
would be a greater incentive than tra-
ditional golden handshakes used to
attract manufacturers from overseas.
Employer NI contributions are set to
rise to 13.8 per cent from 12.8 per cent
for those earning more than £136 a
week in April.
HUAWEI LOOKS TO LAY US SECURITY
CONCERNS TO REST
Huawei Technologies Co. urged the
U.S. to investigate the company, hop-
ing to quash what the Chinese
telecommunications manufacturer
says are unsubstantiated suspicions
that it poses a threat to U.S. national
security. Friday’s roughly 2,000-word
letter is Huawei’s highest-level public
response to allegations that the com-
pany has ties to China's government
and military.
DREAMWORKS PROFIT FALLS SHORT
DreamWorks Animation SKG Inc.’s
fourth-quarter earnings soared 96 per
cent but the bottom line was skewed
by a large one-time tax benefit. The
movie studio said revenue jumped 42
per cent to $275.7 million but its
gross margin slumped to 29.7 per
cent from 41.4 per cent as costs
jumped 70 per cent.
CITYA.M. 25 FEBRUARY 2011
News Corp
nears BSkyB
deal with OFT
▲
MEDIA
BY ALISON LOCK
RUPERT Murdoch’s News Corp is
closing in on a deal with regulators
over its £7.8bn bid for broadcaster
BSkyB, sources said yesterday.
The media group is close to agree-
ing a series of undertakings with
the Office of Fair Trading that
would satisfy its concerns that a
takeover would unduly concentrate
the UK’s media sector.
The concessions may see News
Corp make structural changes such
as separating out or essentially
surrendering control of its Sky
News unit rather than just ensuring
the two news providers remain dis-
tinct.
Sources close to News Corp told
City A.M. last night that there had
been a lot of back and forth with
the regulators after the company
submitted its proposals to them.
News Corp is keen to avoid a full
Competition Commission probe
into its bid to acquire the remain-
ing 61 per cent of BSkyB it does not
already own and is prepared to
make concessions to do so.
Culture secretary Jeremy Hunt
has said he intends to refer the deal
to the Commission, but last month
granted News Corp an extension to
address media plurality issues.
Analysts have said News Corp would
be unlikely to offer Sky News as a
concession unless necessary.
But Murdoch is now thought to
be keen enough to close the deal for
BSkyB, which is currently valued at
£13.2bn, to agree to it.
It would almost certainly mean
News Corp avoiding a six-month
review by the Competition
Commission.
FAST FACTS | BSKYB TAKEOVER
● News Corp made a 700p per share bid for
BSkyB’s remaining 61 per cent in June 2010.
● The deal values the broadcaster at £13.2bn.
● If Jeremy Hunt approves an agreement, the
deal will go to a 15-day public consultation.
ASSANGE TO APPEAL EXTRADITION RULING
WIKILEAKS founder Julian Assange should be extradited to Sweden to face sexual offence
allegations, a judge ruled yesterday. The extradition under a European Arrest Warrant
to face one charge of rape and three of sexual assault would not breach Assange’s human
rights, the judge said. Assange said the decision was a rubberstamping process but was
nonetheless wrong. He will appeal the ruling.
News 3
Iceland set to
pay £100m full
year dividend
RETAIL
▲
SUPERMARKET chain Iceland Foods is
to pay an £100m dividend this year to
management and creditors of its for-
mer Icelandic bank owners, for the
first time in three years.
Iceland is expected to report a
bounceback in revenues and profits
this year as budget-conscious shop-
pers turned to its stores and the divi-
dend would be paid from cash
reserves, the Financial Times reported.
The dividend will be declared for
the year to 31 March, and is the first
since 2007 when it paid out £300m
after it was refinanced.
Iceland should report earnings
before interest, tax, depreciation and
amortisation of £190m in the year to
March, from £180m the previous year.
Management, including its founder
and chief executive Malcolm Walker,
owns about 26 per cent of the firm
while the rest is held by two Icelandic
banks, Landsbanki and Glitnir, which
collapsed in the financial crisis.
The banks, whose creditors should
welcome the payout, took over the
stake from a third failed investment
group, Baugur, which had invested in
a number of high street retailers.
The winding up board of
Landsbanki is expected to put Iceland
up for sale soon, though no formal
Picture: REUTERS move to do so has been made yet.
 4 News
FOCUS ON RBS RESULTS
Ireland exacerbates painfully slow recovery
THE Qataris might be making posi-
tive noises about snapping up the
government’s bank stakes, but it
will be some time before they are
ready to buy shares in troubled RBS.
Yesterday investors got more of the
same from chief executive Stephen
Hester: steady but painfully slow
progress.
It was Ireland, that troubled
Emerald Isle, which proved the
biggest drag on earnings.
Impairments at Ulster Bank were a
hefty £1.2bn in 2010 and manage-
ment are expecting them to remain
high in the first half of this year.
With around £53bn of exposure, of
RBS revival on
track despite
Irish turmoil
▲
BANKING
BY JULIET SAMUEL
RBS has finally returned to operating
profit, generating £2.01bn versus a loss
of £6.23bn last year and meeting or
overshooting most of chief executive
Stephen Hester’s targets for his five-
year recovery plan.
However, the bank is still losing
money overall to the tune of £239m
pre-tax and £1.23bn after tax. It has
been hit particularly hard by its expo-
sure to Irish real estate: RBS’s Ulster
Bank lost £761m in operating costs
and the bank has an undetermined
amount of additional exposure in its
“non-core” assets.
Ireland’s turmoil has caused impair-
ments in commercial real estate to
continue their rise, bucking the
improving trend in the UK, so that the
sector lost Ulster Bank £4.31bn last
year, up 30 per cent on 2009. Its 2010
returns on equity (RoE) were also
worse: its value dropped 21 per cent,
nearly double 2009’s 11.7 per cent fall.
Ulster’s dismal performance forced
Hester to admit that the bank still has
a “long road” to travel, saying: “We
lent a lot of money against real estate
in Ireland that we shouldn’t have
done.”
Hester says untenable war on pay is Retail banking helps ease
driving away bank’s most talented staff losses at Credit Agricole
▲
BANKING
BY JULIET SAMUEL
RBS is losing its best staff due to the
stringent pay conditions imposed
upon it by the government, said chief
executive Stephen Hester yesterday.
He told City A.M. that “regretted loss-
es” – losses of the bank’s most valued
staff despite efforts to keep them – are
going up. “They’re too high. They need
to come down,” he said.
The disclosure follows a similar rev-
elation from Barclays chairman
which £19bn is in dreaded commer-
cial real estate, it’s clear that the
bank will need to take several further
large impairments (Evolution reck-
ons there is another £3bn to come).
A glance at Ulster Bank’s loan-to-
deposit ratio highlights the problem.
It stood at 152 per cent in 2010 and,
in 2009, it was an eye-watering 177
per cent (proof if it were needed that
Ireland’s property bubble was espe-
cially pernicious). To put that in per-
spective, the loan-to-deposit ratio in
UK retail was 110 per cent.
Yesterday, the shares closed down
3.21 per cent at 45.6p, down from this
year’s high of 49p. That is partly
He emphasised that scaling down
RBS’s unwieldy balance sheet is a top
priority, revising his 2011 target for the
size of its non-core assets from £118bn
to £96bn.
Along these lines, the results showed
that RBS’s loans-to-deposit ratio has
improved, reflecting an effort to lend
from customer deposits, which are cur-
rently considered more stable than
wholesale funding. Fifty-eight per cent
of the bank’s funding is now from
deposits, versus 51 per cent a year ago;
33 per cent is from wholesale.
And Hester has set a return on equi-
ty target of 15 per cent, which was
beaten by the investment banking
division last year. It returned 17 per
cent and brought in £3.5bn in operat-
ing profit.
ANALYSIS l Royal Bank of Scotland
50
p 45.60
24 Feb
46
42
38
29 Nov 17 Dec 11 Jan 31 Jan
Marcus Agius last week. He also told
City A.M. that the bank’s “regretted
losses” are on the rise due to the 50p
tax rate.
Hester added that morale at RBS has
been battered by banker-bashing:
“Working at RBS over the last couple
of years has felt pretty beleaguered,”
he said. Yesterday’s results showed
that RBS’s compensation ratio of rev-
enues to pay for 2010 was 34 per cent,
up from 26 per cent on higher head-
count. Pay at the investment bank cost
£2.9bn versus £2.7bn in 2009, but aver-
because the attributable loss of
£1.1bn missed expectations of
around £700,000. But it also reflects
the fact that the shares, which were
trading at 39p at the beginning of the
year, have had a good run and these
results failed to live up to the hype.
Ian Gordon at BNP Paribas was
right when he told investors to “take
the money and run” on 18 February,
and he likely still is. The recovery of
RBS is very much a work in progress,
and an unremittingly sluggish one
at that.
BOTTOMLINE
Analysis by David Crow
18 Feb RBS chief executive Stephen Hester said the bank’s recovery is going according to plan
age pay per head fell from £150,000 to
£144,000. Bonuses are capped at
£2,000.
RBS chairman Philip Hampton said:
“If we are going to be in [investment
banking], not to pay our people the
market rate is not tenable.”
Hampton also revealed that RBS has
seen some of its hedge fund clients
move to Switzerland to escape the EU.
“London is a less attractive place now,”
he told City A.M., adding that business-
es were concerned about “pay, taxa-
tion, regulation – everything!”
ANALYSIS l Breakdown of RBS tax paid 2010, £bn
0.6
0.7
0.3
1.5
▲
BANKING
FRENCH bank Credit Agricole posted a
smaller-than-feared quarterly loss of
€328m (£280.6m) yesterday, having
warned that its stake in Italy’s Intesa
Sanpaolo had suffered a €1.25bn
writedown.
Operating profit rose to €687m
from €41m a year earlier, helped by
French retail and falling provisions.
The bank’s revenues rose 12 per
cent, though costs also rose seven per
cent on the previous quarter.
CITYA.M. 25 FEBRUARY 2011
Asset protection scheme
Capital gains tax
0.5 Continental capital
Employee payroll tax
0.3 UK bonus tax
Other taxes
Tax bill is
double that
of its rivals
▲
BANKING
BY JULIET SAMUEL
RBS and its staff paid £3.9bn to the
Treasury in taxes last year, the bank
has revealed.
The amount is almost double the
UK tax bills paid by other banks like
Barclays and Goldman Sachs,
because of the bank’s size and its con-
centration in the UK.
The high costs of its taxes is despite
the fact that RBS did not pay any cor-
poration tax because it made a loss.
The bank’s profits were hit by stay-
ing in the government’s asset protec-
tion scheme (APS), an expensive
insurance scheme for certain assets.
RBS must pay £2.5bn to exit the
programme, minus any fees it has
already paid, and has therefore opted
to stay in the APS until the fees it has
paid are equal to the exit penalty.
These fees alone cost the bank £700m
last year.
Chief executive Stephen Hester
echoed calls by others, including
Barclays chief Bob Diamond, chancel-
lor George Osborne and JP Morgan
Chase chief executive Jamie Dimon,
by saying that the time for banker-
bashing is over.
“We have to move on from the cri-
sis, from what went wrong and the
recriminations around that,” he said.
“Banks have a huge role as exporters,
employers and taxpayers in the UK.”
He added that it was time to start see-
ing banks “as economic engines”
rather than as liabilities.
The group plans to propose a divi-
dend of €0.45 a share, flat year-on-
year after a quarter of “solid business
momentum”.
Credit Agricole said it would not
need to raise capital to meet incom-
ing Basel III rules, after revealing a 0.6
percentage point jump in Tier 1 capi-
tal to 10.3 per cent in the fourth quar-
ter.
Its core Tier 1 ratio had risen to 8.8
per cent by the end of 2010, thanks in
part to a new €5.5bn capital guaran-
tee from its parent banks.
CITYA.M. 25 FEBRUARY 2011 News 5

ANALYSIS | MIDDLE EAST OIL PRODUCTION Oil production Oil production:

2.4m bpd 4.2m bpd Oil production
Oil reserves Oil reserves: 48,000 bpd
41bn barrels Iraq 137.6bn barrels Oil reserves:
Iraq 0.1bn barrels
Iran
Bahrain
Algeria Qatar Oil production
Oil production Libya 1.2m bpd
2.1m bpd UAE
Oil production Oil production Oil reserves:
Oil reserves 1.8m bpd Saudi Oil production
9.8m bpd 2.8m bpd 25.4bn barrels
12.2bn barrels Oil reserves: Oil reserves: Arabia
44.3bn barrels Oil reserves
262.4bn barrels 97.8bn barrels
bpd: Barrels per day

Saudi to plug
oil supply gap
may order the sabotage of the coun-
▲

OIL try’s oil facilities.

BY STEVE DINNEEN
TOP world oil exporter Saudi Arabia
yesterday moved to calm fears of an
oil-supply crisis, saying that it was in
talks with European companies
affected by the disruption in Libyan
supply and is willing and able to plug
any gaps in supply.
Oil industry sources said Saudi
officials have been in touch with
Spanish and Italian oil firms – among
those hit by the Libyan shutdowns –
on how to meet any shortfall.
Spain’s Repsol and Italy’s Eni are
among the oil companies working in
Libya that have had to slow or shut
their Libyan oil output.
The Saudi sources said Saudi
Arabia was able to pump more of the
kind of high-quality crude produced
by OPEC member Libya and that it
could be shipped quickly to Europe
with the help of a pipeline that cross-
es the kingdom.
Saudi’s intervention came as oil
prices continued to rocket yesterday
amid speculation Colonel Gaddafi
Brent crude futures for April deliv-
ery traded at $111.35 yesterday after
retreating from $119.79 – their high-
est since August 2008 – as oil supplies
began to show signs of disruption.
West Texas Intermediate crude for
March delivery was down $1.36 per at
$96.96. Investors also piled into per-
ceived safe-haven assets such as the
Swiss franc and gold – with both trad-
ing near record highs.
Oil prices have surged because of
the unrest and disruption to supply in
Libya. Refineries in Europe import
about 80 per cent of Libya’s 1.8m bar-
rels per day (bpd) of exports, analysts
say. Up to 60 per cent of oil production
in Libya has now been shut down. Oil
traders are worried that the disrup-
tion in Libya means the market’s sup-
ply surplus would be insufficient if
another Middle East producer became
engulged in the crisis.
Julian Jessop, an analyst with
Capital Economics, played down fears
the contagion will spread to either
Saudi or Algeria and said he expects
oil prices to fall to $85 by year’s end.

CITY VIEWS: ARE YOU CONCERNED ABOUT THE RECENT

RISE IN PETROL PRICES?
Interviews by Maria Tadeo IN ASSOCIATION WITH

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 The Capitalist
6 CITYA.M. 25 FEBRUARY 2011
EDITED BY
ELIZABETH FOURNIER
GOT A STORY? EMAIL
thecapitalist@cityam.com

POLO COMES TO THE O2 AS PONIES

AND PLAYERS LINE UP TO IMPRESS
FOR the first time ever, polo ponies
took to the floor at the O2 arena
last night at the inaugural Gaucho
International Polo event.
Teams from England, South
Africa, Argentina and Scotland (fly-
ing the flag for City A.M.) met in
North Greenwich last night to bring
a touch of the country to urban
London, in the world’s first indoor
polo test match.
For those used to taking in a few
chukkers of traditional field polo at
Ham or Ascot, arena polo is a whole
different ball game. The pitch size
is reduced, and instead of the regu-
lation four players per team there
are just three. The result makes for
a fast-paced and frenetic game
where spectators are never too far
from the action – think 20/20 crick-
et on horseback.
Yesterday’s action kicked off with
an Oxbridge varsity derby, followed
by the first international clash,
with City A.M.-sponsored Scotland
triumphing 15-11 against South
Africa in the fight for the coveted
Ambassador’s Cup.
The evening culminated in a
grudge match between traditional
adversaries England and Argentina.
With Argentina laying claim to

Teams from England, Scotland, Argentina and South Africa battled at the O2 last night

jessops.com eight of the world’s current top ten
polo players, the English did spec-
FREE BAG tacularly well, winning 17-16
against Argentina – the team that
has been the undisputed world
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WAS £499 There was even a ‘have-a-go polo’
stand for those inspired by the
action – though The Capitalist can’t
help but pity the poor ponies being
squired around the pitch by anyone
sponsored by Iceland, but all the
food for the expedition is also com-
ing from one of the supermarket’s
suppliers, to keep the climbers
going during their gruelling march
to the top. Though perhaps not
quite up to the standards of food
enjoyed by Sir Edmund Hillary, who
feasted on Fortnum & Mason’s
finest during his climb, vacuum-
packed delicacies for Walker’s trip
will include Boeuf Bourguignon,
Irish Stew and Tuscan chicken – for
a taste of home away from home
among the glaciers.
AN ANTIQUE MEAL
If you’ve ever worried about dropping
a friend’s favourite crystal wine glass
or smashing your mother’s wedding
china, next month’s Dining off
Antiques dinner might just be your
worst nightmare.
But for those more steady of hand,
then eating off a £75,000 silver service
alongside superstar chef Michel Roux
might be just the ticket to food heav-
en. On 30 March, Roux’s new venture
at The Landau will be the scene of a
very exclusive dinner, with just 20
guest places available to dine with the
Le Gavroche chef and his co-host –
Simon Phillips of Mayfair’s Ronald
Phillips antiques.
But while the celebrity names
might be enough to tempt some, at
Dining off Antiques the real star of the
show will be the crockery.
Seated around a Regency Rosewood

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hospitality tent.
Brass-inlaid table, guests will dine
amongst mahogany side cabinets
commissioned for Windsor Castle,
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one of the UK’s favourite With a four-course menu
frozen food retailers, Iceland from The Langham’s archives,
boss Malcolm Walker (right) and matched to one of the
should be used to cold tempera- Landau’s vintage, the dinner
HS System excels in low light allowing tures. And his sub-zero experi- will raise money for
you to capture the real atmosphere of
ence will definitely come London charity
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in handy when he’s scal- The Dispossessed
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month in aid of able to buy on
Alzheimer’s Research UK. the night.
In an expedition led by With the
UK explorer David furniture and
GO IN-STORE OR ONLINE FOR MORE GREAT DEALS Hempleman-Adams, the dining set on
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Errors & omissions excepted. Goods subject to availability. Offers, prices, specifications and services are subject to change without prior notice to pursue the 23,000ft evening of fabu-
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CITYA.M. 25 FEBRUARY 2011 News 7

Imperial Tobacco’s
Alison Cooper
Picture: REUTERS

Female FTSE chiefs: Far left Pearson’s Burberry chief executive Angela Ahrendts
Marjorie Scardino and Anglo American’s (near left) and Alliance Trust’s Katherine
Cynthia Carroll Picture: REX Garrett-Cox Picture: PA, REX

Davies issues
warning over THE WORLD’S FIRST DUAL-SCREEN 14” TOUCHBOOK

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BY MARION DAKERS
women are failing to progress within
LORD DAVIES of Abersoch’s report on their organisations in the first place.
getting more women into the board- This is like painting over a damp wall”.
room stopped short of imposing imme- Law firm Eversheds warned the tar-
diate quotas yesterday, but some firms gets, coupled with the threat of quotas
warned that demanding equality from and EU legislation, could push firms
the top will not improve businesses. into hiring women in a way that leaves
Lord Davies’ study, commissioned by them open to sex discrimination cases.
business secretary Vince Cable last The Institute of Directors was also
August, called for FTSE 100 companies sceptical, arguing that targets for
to “challenge themselves” to increase recruitment and trans-
the number of female directors to 25 parency could lead to
per cent by 2015. the best candidates
He said smaller firms in the FTSE missing out on board
350 should set their own targets, but seats. “Improving flexi-
warned that quotas remain an option ble working opportuni-
if the gender balance fails to improve. ties for aspiring
“This is not about aiming for a spe- female execu-
cific figure and is not just about pro- tives will be
moting equal opportunities but it is central, with
about improving business perform- c o mp a n i e s
ance,” said Davies. rather than
The report said headhunters should govern-
shoulder some of the responsibility by ment tak-
drawing up a voluntary code of prac- ing the lead
tice for promoting gender equality in creating
when sourcing boardroom candidates. these oppor-
PwC partner Dawn Nicholson said tunities,” said Mervyn Davies stopped
the targets were “highly aspirational” the business short of imposing quotas
and merely encourage firms to hire in group.

Apple announces new

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▲

TECHNOLOGY
BY STEVE DINNEEN sion of its operating system, OS X
Lion. This will borrow heavily from
APPLE yesterday announced it will the innovations made for the iPad,
unveil a new range of MacBook Pros including full integration of apps
which the firm says will be twice as across all Apple devices.
powerful as the previous generation.
It packs next generation processors
and graphics and will also feature the
firm’s new Thunderbolt technology, a
port that allows transfer speeds of up 6, 53 & 245
to 10Gbps. TO
TOTTENHAM
TTENHAM COUR
COURTT R
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It has a glass multi-touch trackpad
and built-in HD camera for use with O
ORDER ONLINE:
BOWJLBDPN
RDER ONLINE: BOWJLBDPN O RDER BY PHONE: 


ORDER 


Apple’s FaceTime video calling soft-
ware. Prices will start at around
£1,000.
 8 News
Ashmore buys stake in US firm
▲
ASSET MANAGEMENT
BY RICHARD PARTINGTON
EMERGING markets fund manager
Ashmore Group has increased its
assets under management (AUM) by
12 per cent to $46.7bn (£28.9bn).
The firm saw net inflows of $5.2bn
in the six months to 31 December
Net revenue for the asset manager
jumped 17 per cent to £173.7m,
while profits before tax increased 14
per cent to hit £127.6m.
Analysts had expected the group
to post total revenues of about
£183.7m and pre-tax profits of about
£130m.
LSE takes on
rivals with
new platform
▲
TRADING TECHNOLOGY
BY RICHARD PARTINGTON
THE LONDON Stock Exchange (LSE) is
to launch a new pan-European deriva-
tives trading platform in a bid to
crack the dominance of rivals NYSE
Euronext and Deutsche Boerse.
The European futures market has
traditionally been dominated by the
New York and Frankfurt-based
exchanges, which announced plans
to merge earlier this month.
Yet the LSE yesterday revealed it
would launch a rival trading venue,
named Turquoise Derivatives, as early
as June this year.
Based on technology provided by
TMX Group, the Canadian exchange
it plans to merge with, the new busi-
ness will allow institutional investors
and hedge funds to trade across
Europe.
The platform, developed aside
from the merger deal, will offer the
trading of futures and options con-
tracts on companies.
Trading of LSE derivatives would
take place on Turquoise Derivatives,
formed through the acquisition by
Turquoise – the LSE’s existing pan-
European equities trading platform,
operated with 12 shareholder banks –
Extreme weather losses push Royal Record revenue at Allianz
Sun Alliance profits down 14 per cent despite catastrophe costs
▲
INSURANCE
BY ALISON LOCK
BURST pipes put a dampener on insur-
er Royal Sun Alliance’s full-year
results yesterday, though profits were
better than analysts expected.
Damage to homes from extreme
winter weather caused RSA’s pre-tax
profit to fall 14 per cent to £474m,
from £554m in 2009, despite raising
premium income 11 per cent to
£7.5bn from £6.7bn.
Chief executive Andy Haste also
Group finance director Graeme
Dell said the firm had been hit by
the weakening pound against the
dollar on its foreign exchange
hedges, hitting profits.
Ashmore’s results came as it
announced the purchase of a 63 per
cent stake in US-based Emerging
Markets Management (EMM).
The firm said it bought the con-
trolling stake to beef up its equities
expertise.
Ashmore said it would pay up to
$246m for the stake in a part-cash,
part-shares deal.
The acquisition will bring its
assets under management to $57bn
of a 19.9 per cent stake in the LSE’s
existing EDX derivatives platform
held by TMX Group, operator of the
Toronto and Montreal bourses.
EDX London already uses TMX’s
Sola trading technology, which will
be used on the platform.
Europe’s largest clearing house
LCH.Clearnet will operate as clearer,
despite LSE owning a clearing facility
operated by Borsa Italiana – the
Italian exchange it bought in 2007.
Chief executive of Turquoise David
Lester said: “Turquoise Derivatives,
combined with the proven operating
and clearing model already enjoyed
by EDX customers, will be the start of
the process that turns the sector on
its head.”
In a separate development, the
Chicago Board Options Exchange
(CBOD) became the latest market
operator to join a global frenzy of
boerse mergers. Chief executive
William Brodsky said yesterday
CBOD’s focus on equity derivatives
had kept it competitive against larger
rivals, but said remaining a niche
player “may not be the only way that
we will succeed.”
His comments leave the door open
to joining the consolidation wave that
has swept the industry.
announced a shift towards emerging
markets in 2011 and a target to dou-
ble emerging market premiums to
£2.2bn by 2015.
Haste said 2010 was “an extremely
tough year for the industry”, with
group losses £255m more than nor-
mal levels and £175m up on 2009.
Analysts said RSA was strongly man-
aged and the results were expected
after a profit warning. “The headline
figures were fractionally above guid-
ance,” said Panmure Gordon analyst
Barrie Cornes, adding that return on
and will deliver an immediate
bounce in earnings.
Arlington-based EMM, founded in
1987, will continue to run its own
funds.
Graeme Dell said: “We had a long
stated ambition to grow our equity
investment team so it does exactly
that.
He added: “We anticipate it being
a business where the employee con-
tinues to be incentivised by being
equity shareholders in the venture,
we’re delighted to have been able to
have the opportunity at the transac-
tion to complete a significant reallo-
cation of that equity.”
Seymour Pierce chairman Keith Harris has deferred his move to Gerova
Seymour Pierce merger
shaky as Gerova delists
▲
M&A
PROPOSED Seymour Pierce buyer
Gerova Financial Group has been
delisted from the New York Stock
Exchange due to concerns over its
financial disclosure.
Bermuda-based Gerova’s shares were
suspended by the NYSE on Tuesday
amid allegations it failed to report its
financial dealings accurately to
investors and its shares have been sub-
ject to insider trading.
Its share price was in freefall after a
equity was an “impressive” 16 per cent
before weather-related losses.
ANALYSIS l RSA Insurance
145
p
138.90
24 Feb
135
125
115
29 Nov 17 Dec 11 Jan 31 Jan
Meet Mr Emerging Markets
▲
ASSET MANAGEMENT
BY RICHARD PARTINGTON
ANTOINE Van Agtmael
coined the term “emerging
markets” in the early 1980s
at a time when placing assets
in the so-called “third world”
was considered an unusual
and risky business.
He founded Emerging
Markets Management in 1987
to pioneer investment into a
broad group of up-and-coming
nations.
Before founding the firm,
Vat Agtmael was deputy direc-
Picture: Jason Alden/City A.M.
torrent of bad news hit the firm.
It disclosed last week that a manage-
ment overhaul caused the resignation
of its chairman Gary Hirst and four
board members, while new chairman
Dennis Pelino walked away from the
job before starting it.
Seymour Pierce chairman Keith
Harris has also deferred his move to
Gerova and the merger looks shaky.
The NYSE also flagged concerns last
week about “unusual market activity”
in Gerova shares, a sign it believes
there is insider trading, traders said.
▲
INSURANCE
INSURANCE giant Allianz posted a
22.4 per cent jump in net income for
the year yesterday, although analysts
grumbled that the 9.8 per cent divi-
dend hike was not enough.
Revenues rose 9.3 per cent to an all-
time high of €106.5bn (£91.1bn) with
strong sales in the UK and South
America outweighing a drag from the
US, France and Germany.
The impact of natural catastrophes
18 Feb including storms and earthquakes
CITYA.M. 25 FEBRUARY 2011
tor of the capital markets
department of the
International
F i n a n c e
Corporation, the pri-
vate sector orientat-
ed affiliate of the
World Bank.
Today, as chairman
of Emerging Markets,
he oversees more
than $10bn
(£6.2bn) of
assets under
management.
ANTOINE VAN AGTMAEL
NEWS | IN BRIEF
Barratt upbeat on house sales
Housebuilder Barratt Developments said
sales had picked up since the start of the
year, as it posted losses of £4.6m –
down from a £178m loss a year ago as
the recession hammered house sales.
Barratt said that while the tough mort-
gage market continued to dampen its
trading figures, the firm’s focus on prices
rather than volume led to a 5.7 per cent
jump in the average house sale to
£175,800. The firm also cut its net debt
by 11 per cent to £537m and it is fore-
cast to fall further to around £400m by
the middle of the year.
Boeing wins $30bn tanker contract
Boeing yesterday won a contract worth
over $30bn to build new refuelling
planes for the US Air Force, beating out
Europe’s EADS, the Pentagon said yes-
terday. Air Force secretary Michael
Donley told reporters the contract was
worth over $30bn and Boeing’s shares
rose nearly four per cent in after hours
trading. Deputy defense secretary
William Lynn said Boeing was the clear
winner in the competition, contrary to
expectations of many analysts earlier
yesterday.
US trumps Asia in IPO issuance
After trailing Asia for the past two
years, the US has reclaimed its place as
the top region in terms of IPO issuance,
according to a report from Renaissance
Capital. This is despite 2011 being
described as many as the year for
emerging markets to dominate. In the
the first two months of 2011, the US has
had 24 IPOs, representing a rise of 85
per cent from the year-earlier period’s
13 deals, according to the report. The
amount raised is up to $8.1bn from
$1.9bn. The increase comes despite an
overall slump in IPO activity. There have
been only nine IPOs outside the US larg-
er than $100m in 2011. Yet in 2010,
there were 19 for the same period.
tripled in 2010 to €1.3bn for the
German firm.
“Uncertainty factors will continue
to be significant: volatility in the finan-
cial markets, indebtedness of govern-
ment budgets, concerns about
inflation,” chief executive Michael
Diekmann said.
The dividend rise to €4.50 was below
consensus estimates. “I think there
had been some expectation that if
they had a good end to the year maybe
they could do a little bit more,” said
Collins Stewart analyst Ben Cohen.
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 10 News
Turnaround
gains pace at
Nat Express
TRANSPORT
▲
BY MARION DAKERS
NATIONAL Express showed further
signs of rehabilitation yesterday as it
posted a 38 per cent jump in adjusted
annual profits to £160.5m.
Revenues fell 22 per cent to
£2.13bn, however, after the firm gave
up its loss-making East Coast rail fran-
chise in November 2009.
National Express said it will pay a
dividend of six pence per share, the
first payment in two years.
Chief executive Dean Finch, who
took the top job last February said:
“This is a renewed company. Our
much improved financial perform-
ance provides a platform to drive fur-
ther growth, continue targeted
investment and restore a dividend.
With a clear focus on our strategy we
are confident in the year ahead.”
The group, which cut net debt by
seven per cent to £610.4m, said it was
seeing good margin progression and
revenue growth in 2011 so far and
was confident on prospects for the
balance of the year. The firm’s fuel
use is fully-hedged for 2011 and 75 per
cent hedged for 2012.
The number of passengers using
National Express’s UK bus services fell
four per cent in 2010, which the firm
said reflected lower economic activity
in the Midlands and Dundee, where
Mouchel shares jump after it reveals
Luxury for less advanced talks with mystery bidder
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most of its services operate.
The firm said the 20 per cent cut to
the bus service operators grant
announced by the government in
October will cost it £4m a year once it
kicks in during 2012.
National Express’s coach division
saw broadly flat revenues of £250.3m
as the firm consolidates its longer-
haul services.
Rail revenues fell 46 per cent to
£637.5m after the government took
control of its East Coast franchise just
over a year ago because the firm
could not run the line profitably.
Margins rose by 4.3 percentage points
to 5.3 per cent thanks to cost control.
Panmure Gordon said the results
were slightly ahead of forecasts, while
analysts at RBS said the firm has
made strong progress.
Shares in the FTSE 250-listed firm
fell one per cent to 247p yesterday.
ANALYSIS l National Express
265 247.00
p
24 Feb
255
245
235
225
29 Nov 17 Dec 11 Jan 31 Jan
From
From
✓

CITYA.M. 25 FEBRUARY 2011
STV sees its
ANALYSIS l National Express Annual Results 2010
North America
Overall operating profit
Operating profit
£36.9m £204.2m
profits more
11.6 per cent 44.4 per cent
than double
▲
MEDIA
BY STEVE DINNEEN
STV is likely to bid for a licence to
Spain broadcast as part of Culture
Secretary Jeremy Hunt’s radical
Operating profit shake-up of local television.
£86.2m STV chief executive Rob
9.7 per cent Woodward said he is “excited” by the
plans and told City A.M. he “wouldn’t
be surprised” if a bid was made,
adding he is in talks with the depart-
United Kingdom ment of culture, media and sport.
Centre costs
Operating profit The channel yesterday announced
£13m it has more than doubled its pre-tax
3.9 per cent £94.1m profit from £6m to £13m as the
27.0 per cent advertising market continued to
recover. Operating profit grew 57 per
cent to £14m.
Operating profit TV revenues increased 16 per cent
£28.3m year-on-year and Woodward expects
7.5 per cent advertising to grow a further six per
cent in the first quarter of 2011.
Bus The news sent STV shares surging
15 per cent, with Woodward saying
he sees no signs of an advertising
relapse.
Operating profit He said: “This is a strong set of
£32m results. The most positive part is that
we are now delivering growth across
2.3 per cent
all parts of the business.
Coach “Digital has been especially
encouraging and we have already
beaten the usage metric set for 2012
so we are going to upgrade our fore-
Operating profit casts. This confirms the rebound –
£33.8m the positive momentum is continu-
21.8 per cent ing and we see no signs of a slow-
down.”
Train Overall revenue at STV increased
from £110m to £112m, with debt also
18 Feb increasing from £49m to £52m.
SERVICES takeover deal could calm Mouchel’s shareholder value.
▲
BY RICHARD PARTINGTON angry shareholders, who had called Analyst at Arden Partners Geoff
on the board to sell out. Allum said: “Given that the price
SHARES in professional services Major shareholders approached [Costain] offered was a pretty rea-
firm Mouchel leapt yesterday after chairman Bo Lerenius last month sonable one, any such improved
the firm said it was in advanced calling for a sale, after the firm had offer might’ve meant more cash.
takeover talks with an unknown refused to accept repeated offers “It does at least say we’re in the
bidder. from Costain. end game. Shareholders of course
The embattled company had been The engineer said yesterday it had will be pleased.”
the subject of several approaches improved its offer for Mouchel as He added: “It gives some justifica-
from Costain, yet the engineer yes- recently as last week, without tion to management for holding out
terday said it was not a suitor for the revealing the details of the fresh as long as they have. It’ll be good for
firm. approach. them, especially if they can get a
Rivals linked with Mouchel Analysts said the new suitor’s higher price and a better offer than
include the outsourced service offer would have to beat Costain’s from Contain.”
providers Carillion, Interserve and sweetened 153p per share bid made Mouchel shares closed up 12 per
£79* Balfour Beatty. last month in order to meet cent at 152.5p per share, valuing the
The prospect of an imminent Mouchel’s pledge to maximise firm at £171.4m.
£89*
Toyota to recall another 2.2m vehicles
AUTOMOTIVE return have agreed to close their equipment issues.
▲
BY HARRY BANKS investigation into the safety crisis “These problems are going to
that damaged the firm’s once-fault- haunt the company until they get
TOYOTA yesterday said it was recall- less reputation. to the real root of the issue,” said
ing nearly 2.2m vehicles over the Although Washington officials Sean Kane, president of Safety
risk that the accelerator pedal recently handed the carmaker a Research & Strategies.
could be trapped by loose or mis- huge victory by finding that its Since Toyota’s recalls of a wide
placed carpet mats on the driver’s electronic throttle systems were range of models, including its top-
side. not a factor in the recall saga of selling Camry, the carmaker has
 


  

 

Toyota’s decision to recall the nearly 8m vehicles in 2009 and lost market share and had to resort
vehicles was part of an agreement 2010, yesterday’s action raises new to discounts to win back American
it made with US regulators, who in questions about mechanical and consumers.
CITYA.M. 25 FEBRUARY 2011
Firms push for job rules reform Net migration to Britain
▲
UK ECONOMY
BY JULIAN HARRIS
RADICAL reforms must be intro-
duced if the private sector is to grow
the UK out of recession, the British
Chambers of Commerce (BCC) will
say today.
The minimum wage must be
reduced for young people, and all
new employment regulations
scrapped, the BCC is expected to
state.
“If the government provides a rad-
ical framework, business will do
what it does best – creating wealth
and jobs, innovating to deliver
UK consumer
morale stuck
in depression
▲
UK ECONOMY
BY JULIAN HARRIS
BRITAIN’S slump in consumer confi-
dence has continued into February,
according to a survey commissioned
for the European Union, released
today.
The GfK NOP index rose by one
point compared to January yet, at a
score of -28, remains 14 points below
where the index stood this time last
year.
“Overall confidence remains low
and, although it has not reached the
depths of two years ago, it is 10
points down on six months ago,”
said Nick Moon of GfK NOP Social
Research.
The index’s headline figure had
floated around the -20 mark for the
second half of 2010, yet plummeted
to -29 in January.
Consumers in the UK are being
squeezed by a combination of low
wage growth and rising inflation.
Consumer price index inflation
hit four per cent in January -- twice
the Bank of England’s target rate –
and is tipped to reach five per cent in
the early months of this year.
However, there was a positive
move in the survey’s recording of
ANALYSIS l Consumer morale and inclinations to save
16
have both dropped since last year
6
4
Index score
-14
-24
Inclination to Save
Consumer confidence
-34
Mar 10 May 10
strong companies and providing the
much needed growth for this coun-
try,” said the BCC’s David Frost.
Youth unemployment, which has
risen sharply due to the recession,
could be tackled by cutting the
youth minimum wage, the BCC said.
“The minimum wage is no use to
you if you’re out of work – like near-
ly a million young people,” agreed
Eamonn Butler of the Adam Smith
Institute, a Westminster think tank.
“Many employers today, squeezed
by high taxes and low demand, sim-
ply cannot afford to hire young,
unskilled, inexperienced kids at
minimum wage rates,” Butler said.
personal finance situations.
Respondents indicated a small
improvement in personal finances
over the past twelve months, and
expected improvements over the
coming twelve months.
Both measures increased by two
points, with the index scores rising
to -16 and -10 respectively.
Questioned on whether the cur-
rent time is a good climate to make
major purchases, consumers provid-
ed some hope to the British retail
sector, delivering a four point uptick
in the index.
However, the measure of appetite
for major purchases remains low at
-25, which is nine points below its
level in February last year of -16.
Meanwhile, Britons continue to
consider this a bad time to save, with
the “savings index” plummeting six
points to -11, five points lower than
the same time last year.
Confidence in the economic out-
look remains notably weak, with the
survey reporting a further point
drop in the “general economic situa-
tion over the next 12 months.”
On this variable the index score
fell to -31, considerably below its pos-
itive score of plus four points, record-
ed in February 2010.
Jul 10 Sep 10 Nov 10 Jan 11
The BCC will also call for tax
incentives to motivate companies to
take on young people.
Additionally, the BCC wants to see
the creation of targeted “opportuni-
ty zones” across the UK, to provide
“businesses with tax breaks and the
total relaxation of planning laws.”
On capital allowances, the BCC is
concerned that smaller firms may
miss out on the government’s reduc-
tion in corporation tax.
“Businesses should be able to
carry forward unused relief, thereby
helping them to make the choice to
invest in new plants and grow their
operations,” the BCC said.
SENTANCE: GROWTH NOT BUILT ON EASY MONEY
BANK of England rate setter Andrew Sentance last night said he was pleased to see his
endorsement of higher interest rates gaining ground among Bank colleagues. Stressing
that inflation has been around three per cent for most of his term on the monetary policy
committee -- and has now hit four per cent -- Sentance dismissed talk of “temporary”
effects. “Solid growth is not built on a platform of easy money,” he said. Pic: Micha Theiner
Eurozone mood highest since August
2007 as Germany’s recovery continues
▲
EUROZONE ECONOMY
BY JULIAN HARRIS
BUSINESS confidence in the
Eurozone sprung back in February,
rising above the expectations of econ-
omists to a 41-month high, official
data showed yesterday.
The EU’s sentiment index recorded
107.8, a point up from January’s
upwardly revised score of 106.8.
“Consumers, industry and services
confidence all contributed to the
rise,” said Eoin O’Callaghan of BNP
rises by more than a fifth
▲
MIGRATION
THE Conservatives’ election pledge to
slash net migration from “hundreds
of thousands to tens of thousands”
faces an uphill battle, after official
figures yesterday showed a 22 per
cent rise in the number of people set-
tling in the UK.
Meanwhile, the number of people
emigrating fell in 2010, by 15 per
cent, according to the statistics.
Net migration in the year to June
2010 reached 226,000, the Office for
Paribas.
“The breakdown remains one of
divergence, however, with exception-
ally strong sentiment levels in the
core, particularly in Germany, and
weaker, below average levels in the
periphery.”
The news came after German GDP
growth for the final three months of
the year was announced at 0.4 per
cent on the previous quarter.
The score was generally seen as pos-
itive for the Eurozone’s largest econo-
my, which, like the UK, was hit by
Economics 11
National Statistics (ONS) estimated.
The government is unlikely to
meet its target, the Institute for
Public Policy Research has said. And
the proposed cap on migration from
outside the EU will harm the econo-
my and education sector, it argued.
Referring to possible restrictions
on student visas, the IPPR said: “Tens
of thousands of genuine internation-
al students could be turned away
from universities and colleges, cost-
ing the UK billions of pounds, in pur-
suit of an artificial target.”
NEWS | IN BRIEF
GDP revisions expected for UK
An updated estimate of British GDP in
the final three months of the year will be
released by the Office for National
Statistics today. Last month the ONS
shocked economists by announcing a 0.5
per cent contraction in the economy,
according to its first estimate.
Durable goods orders up in US
There was mixed news for US invest-
ment in durable goods order figures,
released yesterday. Headline durable
goods orders were up 2.7 per cent in
January, yet the figure excluding volatile
transport orders fell by 3.6 per cent on
the previous month of December. “This
should not worry us as consumer spend-
ing seems to be taking over as the main
engine of domestic demand,” said ING’s
Rob Carnell.
American jobless claims drop
New unemployment benefit claims in
the US dropped to 391,000 in the week
ending 19 February, while continuing
jobless claims fell below 3.8m. “The con-
tinued improvement in this week’s
report signals that the weather-related
spikes in January did not alter the
downward trend in claims, and we take
this as evidence that the labour market
recovery has not lost momentum,” said
Nicholas Tenev of Barclays Capital.
US house price slump continues
American house prices continued to fal-
ter in December, dropping 0.3 per cent
on the previous month, the Federal
Housing Finance Agency said yesterday.
In the final three months of the year,
prices were 0.8 per cent down, com-
pared to the three months to
September. “Lingering unemployment
and elevated inventories of for-sale
homes contributed to the ongoing
decline of house prices,” said Edward
DeMarco, acting director of the Federal
Housing Finance Agency.
severe winter conditions.
“A drop in inventories subtracted
0.4 per cent from quarterly GDP
growth and then the weather related
plunge in construction activity in
December subtracted another 0.4 per
cent,” said Howard Archer of IHS
Global Insight.
“These influences should be
unwound in early 2011,” he predicted.
And there was more good news for
the German recovery, as Munich-
based Ifo Institute reported an easing
of credit constraints in February.
 12 Consumer News
Centrica profit rise fuelled by cold spell
ENERGY
▲
BY JOHN DUNNE
CENTRICA yesterday reported a sharp
rise in full-year profit, boosted by
higher power demand during the
severe winter and as it added more
residential customers.
The energy company, which owns
Britain’s biggest household energy
supplier British Gas, reported an
adjusted operating profit of £2.39bn,
on sales marginally higher at £22.4bn
Analysts expected an operating
profit of £2.31bn, on revenue of
BAT triggers
buyback but
shares drop
CONSUMER
▲
BY JOHN DUNNE
BRITISH American Tobacco’s (BAT)
resumption of its share buyback pro-
gramme and an upbeat 2011 outlook
yesterday failed to offset concerns
about declining cigarette volumes.
Shares in the London-based maker
of Kent, Dunhill, Lucky Strike and Pall
Mall cigarettes, fell 1.5 per cent
despite the £750m share buyback
plan and BAT saying the worst of the
recession was behind it.
BAT, the world’s second-biggest cig-
arette maker and most globally
spread of the big tobacco groups, said
it had gained from raising prices, the
purchase of Indonesia’s PT Bentoel
and a weak pound as it posted a 15
per cent rise in annual earnings.
However, underlying cigarette vol-
umes are still in decline and likely to
stay weak in 2011. BAT has suffered as
smokers switch to cheaper – and
sometimes smuggled – cigarettes as
they have been hit by excise tax rises
and high unemployment levels.
BAT has sought to offset this with
price rises and cost savings.
The group’s global cigarette vol-
umes fell two per cent to 708bn ciga-
rettes in 2010, but after price rises
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CITYA.M. 25 FEBRUARY 2011
Sportingbet in
Australia boost
£21.8bn. On Wednesday Centrica signed its Centrica’s shares yesterday closed
“British Gas has had a strong year, first long-term contract to buy lique- 0.5 per cent lower at 333.6p.
▲
LEISURE
both operationally and financially... fied natural gas from the world’s
meeting around 30 per cent of the biggest LNG exporter, Qatar -- a deal ANALYSIS l Centrica ONLINE gaming firm Sportingbet
country’s total gas demand,” the com- worth about £2bn at current UK mar- 350
333.60 reported an increase in second-quar-
p 24 Feb
pany said. ket prices. ter earnings yesterday and said
The number of British Gas Adam Forsyth an analyst at Matrix: strong growth in Australia, Turkey
accounts increased by 529,000, while said: “With a generally rising whole- and its emerging markets had offset
residential energy accounts were up sale price environment in both gas 330 weakness in Europe.
by 267,000 as Britain was hit by a and electricity, we think Centrica will The company said EBITDA (earn-
severe winter and one of the coldest struggle to retain this level of prof- ings before interest, tax, deprecia-
Decembers on record. itability in supply in the coming 310 tion and amortisation) rose to
The group also increased its full- years. £14.5m in the three months to the
year dividend by nearly 12 per cent to He added: “The one high point was end of January from £13.6m the year
14.3p. the dividend.” 29 Nov 17 Dec 11 Jan 31 Jan 18 Feb before.
Britvic hit
by rising
tide of costs
CONSUMER
▲
BY HARRY BANKS
SOFT drinks maker Britvic yesterday
forecast higher raw material infla-
tion than it previously expected as
annual revenues rose five per cent to BAT chief executive Paul Adams Picture: REX the cost of products it uses to make
£14.9bn. soft drinks, cans and bottles rises,
On an underlying basis BAT vol- though it still expects to post a high-
umes fell three per cent in line with
industry declines. ANALYST VIEWS: IS BAT’S SHARE BUYBACK er profit this year.
Shares in Britvic, which have lost
However, rival Imperial has seen a
rebound in volumes. The share buy-
ENOUGH TO SATISFY INVESTORS Interviews by John Dunne about 14 per cent over the past three
months, closed 11.7 per cent lower
back scheme also disappointed some yesterday at 369p.
analysts who had suggested it would
be worth £1bn rather than £750m.
TINA COOK | CHARLES STANLEY Britvic, whose brands include
Robinsons, Tango, J2O and Fruit
“
BAT chief executive Paul Adams Shoot, said input-cost inflation for
said: “Some emerging markets are These results are in line with expectations but it seems that volumes Britain and Ireland would be 9 to 11
now showing strong economic have disappointed while the economic headwinds which have put pressure on con- per cent, reflecting price increases of
”
growth and even developed markets sumers have taken their toll. These factors seem to have outweighed the share steel and sugar.
are returning to growth, yet unem- buyback which the market usually likes. It previously expected inflation to
ployment remains stubbornly high in be five to six per cent. Britain’s sec-
many parts of the world and dispos- ond biggest soft drinks maker behind
able incomes are still under pres-
sure.” Operating officer Nicandro
KEITH BOWMAN | HARGREAVES LANSDOWN Coca-Cola Enterprises said inflation
would impact both its half-year and
“
Durante will succeed Adams, who is full-year results and, warned that it
retiring, as chief next month. Despite broadly progressive figures, the results appear to have remind- does not expect an improvement in
ed investors that even perceived inelastic demand for tobacco can be tested. operating profit margins in 2011.
”
ANALYSIS l British American Tobacco “What we had previously guided
Nonetheless, the fall in volumes has been offset by continued group cost cutting,
2,550 p and the reintroduction of the buyback scheme should soothe nerves. was on an operating margin improve-
2,396.50 ment, but clearly with the impact of
24 Feb
the increased raw materials we do
2,450
JULIAN HARDWICK | RBS not believe that operating margin
percentage will move,” Britvic chief
“
executive Paul Moody said.
2,350 Britvic said yesterday that its oper-
The size of the buyback is sensible. The £750m effectively utilised
their cash flow. Anything more than that, it would have been borrowing to ating profit for 2011 should rise
”
2,250 fund its purchases. despite higher inflation because of
29 Nov 17 Dec 11 Jan 31 Jan 18 Feb strong performance during the sec-
ond quarter.
M&S | INTERNATIONAL STORES
M&S hires overseas retail chief Bahrain Latvia
Bermuda Libya
RETAIL out plans to grow M&S’ overseas Bulgaria Malaysia
▲
BY JOHN DUNNE business with a view to becom- China Malta
ing a multi-channel internation- Croatia Montenegro
MARKS & Spencer (M&S) has al retailer by 2015, growing
poached Jan Heere from sales, excluding Ireland, from Cyprus Oman
Spanish fashion group Inditex about £500m this year to Czech Republic Philipines
to lead its drive for business £800m-£1bn by 2013-14. Egypt Poland
overseas. Emerging markets in India Estonia Qatar
The clothing, homewares and and China are seen as key Gibraltar Romania
food retailer yesterday named to achieving that goal.
Heere as its new director of Heere’s appointment Greece Russia
international, reporting to chief comes two weeks after Guernsey Saudi
executive Marc Bolland. It said M&S poached Laura Hong Kong Serbia
Heere, fluent in English, Wade-Gery from super- Hungary Slovakia
Spanish, French, Dutch and market group Tesco to
Russian, has worked for Inditex head its internet busi-
India South Korea
Indonesia Spain
in a variety of international ness, underscoring
roles, most recently in Russia. Bolland’s commitment Jersey Turkey
Last November Bolland set to also grow sales online.
JAN HEERE Kuwait Ukraine
CITYA.M. 25 FEBRUARY 2011
BASF dividend back on track
▲
CHEMICALS
BY HARRY BANKS
GERMANY’S BASF returned to form
with an improved dividend payout for
2010, although fourth-quarter earn-
ings at the world’s biggest chemicals
company by sales fell short of fore-
casts.
BASF cut its 2009 dividend for the
first time in 16 years after the global
economic crisis forced it to leave many
plants idle.
It has since been helped by a buoy-
ant auto sector and a fledgling recov-
ery in demand from builders for its
insulation foams, allowing it to pass
Profits return
to GM as debt
and costs cut
▲
AUTOMOTIVE
BY HARRY BANKS
GENERAL Motors yesterday posted
fourth-quarter results that topped
Wall Street expectations, capping its
most profitable year in over a decade
after slashing costs and debt in a land-
mark bankruptcy.
Profit for all of 2010 was $4.7bn
(£2.9bn), GM’s first full-year earnings
since 2004 and its largest profit since
1999, when it earned $6bn on boom-
ing sales of trucks and SUVs.
Separately, GM said the audit com-
mittee of its board had determined
the company’s financial operations
under finance chief Chris Liddell had
remedied a “material weakness” in
financial reporting, addressing a lin-
gering concern for investors.
The automaker said it would pay
more than $200m in bonuses to
hourly workers, including payouts of
about $4,300 for each of its roughly
45,000 US factory workers represented
by the United Auto Workers union.
Liddell said he expected the current
quarter would represent a “strong
start” to 2011 and said the fourth-quar-
ter had been slightly ahead of the
automaker’s internal projections.
“From our point of view it was a
Aegon plans €1bn rights issue and US RWE embarks on asset
insurance sale to repay Dutch state aid sales and investment cuts
▲
INSURANCE
BY HARRY BANKS
DUTCH life insurer Aegon is to raise
about €1bn (£850m) from a share
issue to help repay €2.25bn of state
aid by the middle of the year.
The repayment would free Aegon
from EC restrictions imposed on
companies that received government
cash during the credit crisis.
“After repayment the limitations
that were imposed on us will disap-
pear,” Aegon’s chief executive, Alex
on higher material costs to customers.
BASF said yesterday that sales and
operating earnings in 2011 are set to
clearly exceed last year’s levels, and
gains should also continue next year.
The maker of coatings and catalytic
converters proposed an annual divi-
dend of €2.20 (£1.19) per share, up
from €1.70 last year and ahead of an
average analyst estimate of €2.14.
After incurring roughly €1bn in
integration costs for Ciba, the plastics
and paper chemicals maker it
acquired in 2009, BASF is now reaping
the full benefits from cost cuts that fol-
lowed the tie-up.
Fourth-quarter sales came in at
very good result,” he said.
Fourth-quarter net income was
$510m, or 31 cents per share. Earnings
for the first three quarters of 2010
totalled $4.2bn.
After adjusting for a one-time
charge for buying back preferred
shares held by the US Treasury, fourth-
quarter earnings per share were 52
cents, at the high end of Wall Street
expectations.
On an adjusted basis, GM’s earnings
before interest were slightly below
expectations at about $1bn, reflecting
higher costs as the automaker ramped
up vehicle development efforts and
spent more on advertising.
Fourth-quarter revenue was $36.9bn,
up from $32.3bn a year earlier.
GM’s European operations posted a
loss of $568m for the fourth-quarter
and a loss of $1.7bn for the year. The
automaker has said it hopes the unit –
known for its Opel brand – will break
even this year.
General Motors chief
executive Dan Akerson
said he was pleased the
company was achieving
sustainable profitability
Wynaendts said, adding “we can put
the crisis behind us”.
The removal of state shackles will
allow Aegon and other Dutch finan-
cial services groups to go on the
prowl once again for acquisitions
and give them more room to com-
pete.
The Dutch government paid nearly
€40bn to rescue the domestic finan-
cial sector in 2008 when it provided
capital injections for Aegon, ING, and
SNS Reaal and was forced to nation-
alise ABN AMRO.
€16.42bn, above the €15.69bn expected
by analysts, as higher raw materials
costs were largely passed on to cus-
tomers.
ANALYSIS l BASF SE
62
€ 59.00
24 Feb
60
58
56
14 Dec 3 Jan 21 Jan 10 Feb
TARGET PROFITS LIFTED BY HOLIDAY SALES
US RETAILER Target has posted a 10.5 per cent increase in quarterly profit, helped by
strong sales early in the holiday season and fewer write-offs of bad credit card debt. Sales
rose 2.8 per cent to $20.28bn (£12.6bn), while sales at its established stores rose 2.4 per
cent, outperforming its larger rival Wal-Mart Stores. The US discount chain earned net
income of $1.04bn, or $1.45 per share, in the fourth-quarter ended 30 January.
Aegon received €3bn of state aid in
2008.
The company said its share issue of
173.6m shares – about 10 per cent of
its common share capital – would
begin yesterday via an accelerated
book build.
Aegon, also one of the top 10 life
insurers in the US, where it owns
Transamerica, said in a statement it
was in talks with one party to sell the
reinsurance unit of Transamerica, a
plan which it had announced last
year.
Oil prices provide boost
to Repsol as margins rise
▲
OIL
SPANISH oil firm Repsol met analysts
estimates yesterday with a doubling of
adjusted fourth-quarter net profit
thanks to higher oil prices and refin-
ing margins.
Repsol’s refining margins in its core
Spanish markets rose to $2.9 per barrel
from zero in the fourth quarter of
2009, while its oil fetched 16 per cent
more year-on-year.
Net debt at the company fell by
over a third in the fourth-quarter to
▲
UTILITIES
GERMANY’S RWE, Europe’s fifth-
largest utility, said it will cut invest-
ments and sell assets to counter a
worsening outlook for profits in the
coming year after the 2010 result beat
expectations.
The power provider is now forecast-
ing operating profit will drop 20 per
cent this year to €6.16bn (£5.24bn),
more than the 16 per cent decline pre-
dicted by an analyst poll.
“The company is preparing for a dif-
News 13
€7.22bn (£6.2bn), helped by the sale of
assets in Brazil, mainly a stake in its
upstream operations to China’s
Sinopec in October.
Repsol’s adjusted earnings before
interest and taxes increased 41 per
cent to €1.06bn. Repsol’s fourth-quar-
ter earnings were also driven by capac-
ity hikes in liquid natural gas from a
new plant in Peru, together with a
modest recovery in gas prices.
The company also said yesterday it
may delay the exploration of its Libyan
drilling projects.
Porsche hit
by delays to
VW merger
▲
AUTOMOTIVE
SHARES in Porsche fell 10.7 per cent
yesterday to €55 after the German
car group said its merger with
Volkswagen is likely to be delayed, as
German prosecutors continue to
investigate two of Porsche’s former
board members.
Prosecutors said they had found
evidence of further crimes by former
Porsche chief executive Wendelin
Wiedeking and former finance chief
Holger Haerter, and that the investi-
gation had been extended to suspi-
cion of breach of trust.
“There is suspicion that the for-
mer board members took existential
risks for the company by doing share
price hedging deals in connection
with the attempt to take over
Volkswagen,” the Stuttgart prosecu-
tors’ office said in a statement yester-
day.
Volkswagen shares slipped 3.8 per
cent on news of the delay.
ANALYSIS l Porsche
80
€ 55.00
24 Feb
70
60
50
29 Nov 17 Dec 10 Jan 28 Jan 17 Feb
ficult market environment,” RWE said
yesterday. “We are rolling up our
sleeves.”
The largest emitter of carbon diox-
ide in Europe predicted its operating
profit would be at €5bn in 2013, when
it will have to fully pay for emission
certificates.
That is almost 30 per cent less than
it previously predicted and 20 per cent
less than what analysts expect.
RWE said operating earnings in
2010 had risen eight per cent to €7.7bn,
more than the €7.5bn expected.
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CITYA.M. 25 FEBRUARY 2011 News 15

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

SRL Global
The technology investment platform has made
a new appointment by hiring Robin Ellison as a
new member of its executive advisory board.
In this role, he will primarily focus on strength-
ening SRL Global’s position in the pension fund
market. Ellison previously served as chairman
of The National Association of Pensions Funds
(NAPF). In his work at SRL, he will be spread-
ing use of the firm’s investment aggregation
platform, Nexus Enterprise Solution, which
enhances the efficiency of asset management.
appointed Steffen Doyle as managing
Jefferies director and European head of lodging
The investment banking group has and gaming investment banking. Based
in Jefferies' London offices, he will focus
primarily on the company’s European
REGAL franchise as well as its
American counterpart US REGAL. Doyle
previously served as head of European
lodging and gaming investment banking
at Bank of America/Merrill Lynch.
TUI Travel
The leisure travel group has announced
the appointment of Minnow Powell as
non-executive director of the board and
chairman of the audit committee. With
more than 34 years of experience in
international accounting and consulting,
Powell recently served as senior audit
partner with Deloitte where he was
responsible for a number of the firm’s
major multinational audit clients.
Mazars
The international accountancy firm has
appointed James Gilbey as its new
director. He will focus on strengthening
the litigation support and expert wit-
ness practice within Mazars’ forensic
and investigation service team. Gilbey
brings experience in dealing with an
extensive portfolio on fraud and regula-
tory investigations on behalf of the
Financial Services Authority. He has also
given evidence in both international
arbitrations and High Court disputes.
Oasis
Aurora Fashions, the group that owns
numerous high street clothing brands
such as Coast, Karen Millen, Oasis and
Warehouse, has announced the appoint-
ment of Barbara Horspool as design
director at Oasis. She comes to the firm
with extensive fashion experience and
previously served as head of design for
Womenswear at M&S.
Aurora has also named Andy Griffiths
as brand communication director for its
Oasis stores. He previously led Diesel’s
divisional communication.

To appear in CITYMOVES please email your career

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

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

ANALYSIS l Henderson Group 156.50 ANALYSIS l Travis Perkins ANALYSIS l Informa 419.10
170
p
24 Feb 1,150
p
984.00 470 24 Feb
24 Feb p

1,050 450
150
430
950
130 410
850
390
110 750
29 Nov 17 Dec 11 Jan 31 Jan 18 Feb 29 Nov 17 Dec 11 Jan 31 Jan 18 Feb 29 Nov 17 Dec 11 Jan 31 Jan 18 Feb

HENDERSON TRAVIS PERKINS INFORMA

Morgan Stanley rates the asset manager “overweight” with a target price
of 200p. The broker believes that the market has underestimated the cost
synergies of the firm’s tie-up with Gartmore, and believes Henderson can
retain around 85 per cent of assets once the deal is complete. It adds that
Henderson’s full-year results were inline with expectations and suggested
a positive outlook.
Seymour Pierce rates the construction supplier “add” with a target price
of £11. The firm’s results this week were better than the broker “had
dared to believe”, showing an outperformance of a flat market. The broker
has raised its forecasts for 2011 and expects a pre-tax profit of £296.3m,
pushing the dividend yield up to 1.7 per cent. It expects the integration of
BSS to be earnings enhancing this year.
RBS rates the media group “buy” and has raised its target price by 30p to
530p. Informa remains one of the broker’s favourite plays on late-cycle
recovery, with revenue expected to grow this year after a flat 2010. RBS
has raised its target following a rapid deleveraging of the firm’s balance
sheet, and expects improved sales in the events, training and commercial
information divisions to drive growth to four per cent in 2011.

Energy stocks rally but RBS Wall St falls again

leads the FTSE downwards on Libya concerns
It is down 2.7 per cent so far this motive and aerospace parts group to and potential undervaluation, be

THELONDON week, on track for its biggest weekly

drop in nearly eight months as the
“hold” from “buy” ahead of upcom-
ing full-year results. THENEW YORK ready to take advantage of it.”
The S&P 500 was holding above

REPORT
price of oil has hit multi-year highs,
threatening to derail the global eco-
nomic recovery.
“Oil is the lubricant of economic
REPORT
“We sense a pause in the pace of support, suggesting a bigger market
its recent rapid profit rise,” pullback may not be in store yet.
Citigroup says in a note. The week’s declines have driven
Capita was the star FTSE 100 per- calls that a correction is near. The S&P

U
NREST in the Middle East and expansion, and its rising price acts former, up 7.2 per cent, as the out-

North Africa hit Britain’s top
shares again yesterday, though
rising crude prices and upbeat
comment from oil major BP on its
Indian activities lifted energy stocks.
The FTSE 100 closed down 3.55
points, or 0.1 per cent, at 5,919.98,
pinned just below a seven-month
technical support level of 5,920.
US crude oil futures rallied for a
third session yesterday as prices
soared to their highest since late
August 2008 as escalating violence
in Libya sparked supply worries.
Tullow Oil added three per cent.
BP’s Indian head, Sashi
Mukundan, estimated there were 15
trillion cubic feet of gas resources in
the 23 blocks it has bought into in its
$7.2bn deal with Reliance Industries,
and there could be more.
BP gained 0.9 per cent on the
news, which also helped spark a 2.4
per cent rally in oil explorer Cairn
Energy.
Cairn Energy, which has blocks in
India, is currently trying to sell a
majority stake in its Indian arm
Cairn India to Vedanta Resources.
However, weakness from risk-sen-
sitive banks helped keep the index in
the red for a fifth session.
as a tax on global growth, which is
making investors risk averse and
encouraging them to book profits,”
said Henk Potts, strategist at Barclays
Wealth.
The FTSE volatility index, which
measures investor appetite for risk,
is up 35 per cent this week.
Banks were the most significant
drag on the index, as investors
looked uneasily at the unrest in the
Middle East and North Africa.
RBS came off worst, down 3.6 per
cent, as its results met with disap-
pointment.
Bad debts from Ireland, an unin-
spiring investment banking per-
formance and lack of dividend put
pressure on the shares, traders said.
British American Tobacco fell 0.7
per cent, after the maker of Kent,
Dunhill, Lucky Strike and Pall Mall
cigarettes reported full-year results.
“[The numbers] all looked in line,
the dividend was slightly better than
expected, and [it announced] a
£750m buyback, but the market
expected £1bn, so that was a little
disappointing,” said Alwyn Phillips,
a trader at IG Index.
GKN shed 2.3 per cent after
Citigroup cut its rating for the auto-
sourcing group's full-year results and
strong bid pipeline pleased the mar-
ket.
Miner Antofagasta continued its
winning streak, up 2.7 per cent yes-
terday, while outsourcing group
Serco rose 2.6 per cent.
Outside the top flight, Mouchel
rose 12 per cent after it revealed
advanced talks with a potential
takeover bidder.
Sports retailer JJB tanked 23.9 per
cent in reaction to the news that one
of its landlords planned to reject its
last-ditch rent agreement.
Soft drinks group Britvic fell 11.7
per cent after it said rising commod-
ity costs would cause it to miss profit
forecasts.
ANALYSIS l FTSE 5919.98
6100 24 Feb
5900
5700
5500
29 Nov 17 Dec 11 Jan 31 Jan
U
S stocks fell for a third day yes-
terday as US crude oil prices
hovered near $100 (£61.73) a bar-
rel on violence in Libya.
Oil’s sharp rise this week has
fuelled worries about the effect of
energy costs on consumers and busi-
ness. US crude oil futures were at
their highest since late August 2008,
as the escalating problems in Libya
sparked supply worries. Brent crude
futures hit an intraday high at
$119.79 and then pulled back to
$114.45 at midday.
But while the Dow and S&P 500
closed down, they finished well off
the day’s lows, suggesting investors
weren’t ready to give up on the rally.
Oil does have “an economic slow-
ing impact as the price goes, and so
the question is, ‘How long will this
last?’ and ‘How significant will it be?’
... It’s hard to decide at the moment,”
said Stephen Lieber, chief investment
officer of the Purchase, New York-
based Alpine Mutual Funds.
Investors may need to take a “wait-
and-see” attitude until there's a clear-
er idea of how events in Libya and
elsewhere will turn out, he said.
“My bias is that we are still likely to
be in a recovering economy, and if
18 Feb this creates dumping of securities
500 is up about 24 per cent since the
start of September, roughly when the
recent rally began.
The CBOE Volatility Index, Wall
Street’s fear gauge, was down 0.5 per
cent at 22.02, reversing course for the
first time in two days. The index has
an inverse correlation to the S&P 500,
indicating stocks could rise.
Helping to limit the Nasdaq’s loss
was Priceline.com, which jumped 7.2
per cent to $456.55 after a number of
brokerages raised their price targets
on the stock. The online travel agency
reported a larger-than-expected profit
late on Wednesday.
General Motors’ earnings topped
estimates, but the stock slid 4.1 per
cent to $33.16.
The S&P 500 was trading just above
support at 1,296, the index’s January
highs, while analysts were also eyeing
the S&P 500’s 50-day moving average
– now at 1,287 as further support. A
break below those levels could indi-
cate further weakness lies ahead.
The Dow Jones industrial average
was down down 37.28 points, or 0.31
per cent, to end at 12,068.50. The S&P
500 Index was down 1.3 points, or 0.1
per cent, to finish at 1,306.10. The
Nasdaq Composite Index was up 14.91
points, or 0.55 per cent, at 2,737.90.
 Wealth Management
16 CITYA.M. 25 FEBRUARY 2011

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 Business Features | Entrepreneurs
UK GRADS ARE
NOT MOTIVATED
FOR REAL WORK
JOHN STRAW
FOUNDER AND CEO OF LINKDEX
W Joe Cohen who has
E’RE on the receiving end of a
tidal wave of bad news about
the economy. From government
debt, to the jobs shortage and
rising fuel prices. This, however, doesn’t
worry me.
What worries me – no, terrifies me – is
the way we have, in the last 12 years, man-
aged to reduce the assault rifle-like compet-
itive edge in our graduates to the
effectiveness of a flintlock muzzle loader.
We know how it’s happened but it’s not
even in public debate and, unless we get the
edge back, our long term economic outlook
will surely suffer. Where are the competitive
business people of the next 20 years?
The rot set in a dozen years ago when we
started to see the win/lose concept disap-
pear from our state schools. No one won
but, more to the point, no one loses either;
regardless of whether you are more inclined
towards sports or academia. The very basis
of competition was nobbled. Within five
years, the rot had set in and kids were enter-
ing university thinking that competition was
something that didn’t exist in their Facebook
world.
Here’s an interesting fact, though.
Britain’s medal trawl that year was the best
of any Olympics we have competed in.
Nearly 50 per cent of the medals we won
came from competitors who had received
their education from private schools, which
represents only 5 per cent of the education
system. Goldman Sachs will have hired all of
those before I get a look in.
My startup has been looking for grads to
take on in sales and public relations roles.
We’ve been stunned by what appears to be
a universal indifference to ambition or drive.
Sales and profit are dirty words. Being in a
career with your mates seems to be the
highest level of ambition.
Actually, there is a solution. Want to hire
ambitious young people who want to learn
and want to get their hands dirty?
Hire Aussies and Kiwis. We’ve
got a collection in the office (and
some Canadians thrown in for good
measure) and they get the whole ambi-
tion and work ethic thing brilliantly. All
they seem to want in return is a fair
salary package but also the real ability
to learn and gain experi-
ence. For me as an employ-
er it’s a great package.
The only downside is
that they gain huge
experience and eventu-
ally take it back home
to benefit their local
economies in long
term.
I’m still worried.
John Straw is a seri-
al entrepreneur. His
current venture is
Linkdex, a company
that organises
Google search opti-
misation campaigns
for clients.
Agree with John Straw?
We welcome debate. Do
you have a strong view on
small business and entre-
preneurship in the UK?
Email: donata.huggins
@cityam.com
17
The entrepreneur who
has found just the ticket
Donata Huggins meets
been disrupting the
ticketing market
I
AM worried about the Olympics.” Joe
Cohen, the founder and CEO of
Seatwave, leans forward to explain.
“They are capping the cost of all the tick-
ets at face value, which is a stupid idea. It’s
simple economics that whenever you have a
situation where demand exceeds supply and
you have a price cap, a black market is creat-
ed,” he sighs. “It is just going to open millions
of people up to being ripped off.”
“I’ve tried campaigning against it, I’ve even
made suggestions on how to prevent it. But
there’s no political will to push for a safe,
transparent, floating price exchange. It’s like
live entertainment is the last industry where
it is wrong to make money from solutions.”
Cohen’s business, Seatwave, could offer
the Olympic solution. The company is an
online secondary ticket exchange that pro-
vides a safe and transparent way for people
to buy and sell tickets to major events. It dis-
plays all the different tickets on sale in com-
parison to one another next to a map of the
venue. “I’m trying to create competition
between sellers and allow users to develop a
price mechanism.” Seatwave tries to reassure
its customers by making those selling tickets
provide their card details and sign a pledge
saying that they own legitimate tickets and
will deliver them to the buyer on time. If not, The man who is shaking up the live entertainment industry Picture: Micha Theiner/City AM
then they are liable for the cost Seatwave
pays to obtain the buyer a ticket. get it out of my head.” notion that if there’s any money to be
With a handshake agreement for fund- made above the face value ticket price then
A DREADFUL EXPERIENCE ing from a venture capitalist, Cohen quit it should be made by those inside the
Cohen explains that he started up the site his job and started Seatwave. venue or show. Anyone else and then
because he had a dreadful experience in “I don’t want to make what I do sound there’s an ‘ethical issue’.”
2005: “I wanted to go to this big American easy, it’s not. It’s really hard, but I don’t Cohen said the exchange is already
football game with my Dad and two friends. I have to convince people to want to go see improving the market. Over the last three
was living in the UK, so I thought if I was Justin Bieber. They want to do that already. years the average price of a ticket on the
going to go all the way to the States, I wanted That’s why it’s a great business model, but exchange has dropped to only twice the
a good seat.” But the only way he could get it got a really violent reaction from promot- original face value of the ticket. “The viscer-
hold of these tickets was to bid on eBay. He ers and venues, and ticket managers.” al reaction I’ve got from those in the indus-
tracked down four tickets next to each other, Cohen says. try made me realise that I’m on to
but they were being sold in two blocks of two “Within the industry there is still this something.”
by the same seller. “We really needed them
to be all together,” Cohen explains. So he and CV | JOE COHEN
all his friends were determined to win and
all bid for them. His friends won, paying
$1,100 for each ticket. “It was a dreadful con- Job title: Founder and CEO Idol: Jeff Bezos
sumer experience, made so much worse by Age: 43 Talents: “I make a mean grilled cheese sand-
the fact the next day I got nine emails from Born: Cleveland, Ohio, USA wich.”
people claiming to be the winning bidder, Studied: “I flunked out of four universities Favourite business book: Leadership Secrets
offering to sell their tickets to me. It was and never finished.” of Attila the Hun by Wess Roberts
absolute fraud.” Motto: “It's not the size of the dog in the First ambition: Documentary maker
Cohen had been working for the UK divi- fight, it's the size of the fight in the dog." Awards: GP Bullhound Media Momentum
sion of Match.com at the time. His wife had
just had their third child and they had Drinking: Patron Silver tequila Awards, 2009; Fast Growth Business Awards,
recently bought their first home. “I sat on the Reading: "Wikileaks" by Luke Harding 2009; Tech Media Invest Awards
idea for Seatwave for a while, but I couldn’t
ENTREPRENEURS NEWS | IN BRIEF
A Dragon in Romania New crowdsourcing site launched Review of Small Business Act
The founding Dragons’ Den panellist Doug A new crowd-funding website called The European Commission this week published a
Richard has been drafted in by Romania’s Crowdcube has been launched that makes it review of the Small Business Act, implemented
Post-Privatisation Foundation (PPF) to deliver possible for the general public to buy shares between 2008 and 2010 with the aim of alleviat-
an intensive training course which aims to in start-ups and growing businesses. ing administrative burden, facilitating SMEs’
help Romanian entrepreneurs turn their ideas Entrepreneurs can showcase their business access to finance and supporting their access to
into fast-growth successful businesses. The and investment potential to thousands of new markets. Business and Enterprise Minister
program will train 250 Romanian entrepre- micro-investors by uploading a “Dragons’ Mark Prisk said: “I fully endorse the idea of an EU
neurs and thanks to the PPF, the School for Den” style video pitch, images and supporting forum for small business ministers and I look for-
Start-ups will be able to offer scholarships to documents. People can support an idea, per- ward to meeting European business ministers to
cover 80 per cent of costs. Richard says: son or business by investing small amounts of learn from one another's experiences and examine
“Entrepreneurship is a skill that can be taught money, starting at £10, in exchange for how we can work together to unleash entrepre-
and must be learned.” shares in the business. neurial talent and small business growth.
 Living
18
Making interiors
more fashionable
Donata Huggins finds what its like to live in a
home styled by designer label Felder Felder
B
LACK leather rock and roll was cer-
tainly a feature of this year’s
London Fashion Week. Kate Moss
was slapped across yesterday’s
papers for finishing the week in a floor
length leather dress. But she wasn’t the
only one to be upping the ante and
embracing cow skin. The German twins,
Daniela and Annette Felder, behind the
Felder Felder fashion label, grabbed some
lime light too, trotting out their latest
gothic-themed collection.
The blonde pair (pictured right), how-
ever, are not just jumping on the grungy
bandwagon. They are punk rock through
and through. How do I know? Because I
spent a night inside a flat they designed
before Christmas.
The result certainly has impact. The
walls screamed with personality. Not dif-
ficult when they were decorated with
leather-studs, blood red paint, and col-
laged like a ransom note.
The one-bed apartment once housed
Jim Henson’s muppets. The fact it was a
factory allows for enormous windows
across its studio kitchen-dining-living
area. The room’s raw brick and stone-
effect walls provide the necessary level of
sophistication you required to balance
out the designers’ quirkier features. The
corrugated iron breakfast table, for
instance, needs to be bathed in natural
light to be appreciated.
FACTS | THE DESIGNER FLAT
l The flat is located in Camden Lock within
the Henson building, developed by
Londonewcastle.
l It costs £500,000 including furnishings.
l The Henson building has a 24 hour
concierge service.
Another development by
CITYA.M. 24 FEBRUARY 2011
| Design
Daniela and Annette
Felder, the fashion
designers behind the
Felder Felder label.
They have brought the individuality of
their clothes to interior design. And this
looks set to become the latest craze. With
Jade Jagger styling the Baglioni hotel in
Marrakech and Jean Paul Gaultier
launching a distinctively stripy home-
ware collection, there seems to be greater
appetite for creating homes with more
character.
So forget Magnolia walls and stick on
your artist’s beret. Now is the time to
step-up your creative credentials.
Annette Felder explains: “We wanted
to bring the outside in, make the flat
reflect the Felder girl we design clothes
for and her surroundings.” This is no sim-
ple task considering that the flat sits This designer flat is
between the excitement of Camden Town located in the
and the gentler world of Primrose Hill. Henson building,
“The Felder girl,” Annette says, “is like us: developed by
fun-loving, but also likes luxury. She Londonewcastle.
loves music, has a creative job and likes
to have a good time.”
But does one go about creating interi-
ors like that? Annette explains: “We tried
to create moods in the different rooms by
working with signature pieces from flea
markets. The couch, for example, we
found in Paris and then got it re-uphol-
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l It is a one-bedroom flat with a total area
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 20 Living | London Property CITYA.M. 25 FEBRUARY 2011

London’s hidden
property gems
Traditionally non-glamorous areas can
have pockets of real value, says Amy Higgins

ROTHERHITHE, SE16
The renaissance of this former dock has
gone largely unnoticed, and house prices
are generally cheaper than surrounding
areas. Carl Davenport, of estate agents
Chesterton Humberts, says Rotherhithe is
the “overlooked neighbour” of Tower
Bridge. “Prices are in many cases cheaper by
up to 20 per cent on a like to like basis,” he
says. “Though once thought of as a bit of a
no-man’s-land connecting Tower Bridge
and Canary Wharf, the area is currently
undergoing a massive makeover which will
serve to neaten up the passageway”.

WHAT TO BUY: Modern apartments can be

picked up for as little as £160,000. A smart
studio flat in the Windsor Court develop-
ment, with under-floor heating, a patio
looking overlooking the river and use of a
communal pool is on the market for
£194,000 with Foxtons (0800 369 8667,
www.foxtons.co.uk). Living on a boat is a
funky option for the open-minded buyer,
and can offer surprisingly good value for
money: a spacious, smartly decorated two-
bedroom Dutch Clipper moored in the
marina can be purchased for £249,950 with
River Homes (020 7407 2000, www.river-
homes.co.uk).
UPMINSTER, RM14
For most people, Upminster is simply the
word that pops up as a final destination for
District line trains, but it is a leafy Essex
suburb that’s worth waiting to the end of
the line for. Away from the hubbub of more
built-up areas, it has a quiet atmosphere
with plenty of space for kids to roam
around. Interesting features include the
oldest working windmill in greater London
(who knew there were any working wind-
mills in London at all?). There are some
excellent schools – and, of course, you
reach the City without having to change
trains (and you’re pretty much guaranteed
yourself a seat).
WHAT TO BUY: Rambling houses with
extensive gardens can reach in excess of
Clockwise from top: £1m, but there are significantly more
Rotherhithe marina, affordable properties too. Three and four
Upminster Windmill, bedroom, bay-fronted semis from the
and a smart Victorian 1930s can be found for under £500,000,
street in Harlesden. and a three bedroom semi-detached bun-
galow close to the station is currently on
the market for £359,995 (contact Baglores
on 01708 463005 or go to www.baglore-
sproperty.co.uk).
HARLESDEN, NW10
A vibrant, buzzy enclave in northwest
London. Often held back by a reputation
for knife crime and muggings, crime levels
in Harlesden have in fact fallen, and its
affordable Victorian terraces are attracting
increasing numbers of young profession-
als priced out of neighbouring Kensal
Green and Queen’s Park. It’s an easy jour-
ney into central London via the Bakerloo
line, while the smart delights of Ladbroke
Grove, Maida Vale and Notting Hill are
nearer at hand.
WHAT TO BUY: One bedroom flats in pretty
period terraces can be snapped up for as
little as £150,000, while family-friendly
three-bedroom houses can be found for
under £300,000. A well-maintained ter-
raced cottage with three large double
bedrooms near Willesden Junction tube
station is going for £299,950 with
Mathesons (020 8965 2250, www.math-
esonsestates.com).
BERMONDSEY, SE1
Nestled on the south bank of the Thames,
Bermondsey has come a long way from its
days as one of London’s most notorious
slums, when it was described by Dickens
in Oliver Twist as representing “every
loathsome indication of filth, rot and
garbage”. Extensive redevelopment has
transformed much of Bermondsey into an
appealing but affordable place, particular-
ly appropriate for City people. There’s plen-
ty of culture and entertainment within
walking distance, from Tate Modern and
Shakespeare’s Globe to the restaurants
and bars clustered round Borough Market.
The riverside development More London
has brought more vibrancy to the area,
while Bermondsey Square is home to a
swanky new hotel, shopping and residen-
tial complex.
WHAT TO BUY: Bermondsey Central, a
block of smart, high spec apartments
built around a shared courtyard, is typical
of the new developments springing up in
the area. The project is set to complete this
summer, and prices start at £280,000 for a
one bedroom apartment. You’ll find more
info at www.bermondseycentralse1.com.
COLLIERS WOOD, SW19
Residents of Colliers Wood can enjoy the
prestigious SW19 postcode – famous for
the All England Tennis Club – without the
hefty Wimbledon Village price tag. It
might be home to London’s ugliest build-
ing – the Colliers Wood Tower, as voted in
a BBC poll – but the fact that residents
cite this as the worst thing about Colliers
Wood is reassuring if anything. Being on
the Northern line, it has easy access to the
City and the West End while overground
travel from Raynes Park takes you into
Waterloo, or out to the shopper’s paradise
of Kingston.
WHAT TO BUY: Two bedroom apartments
go for around £200,000. A well-presented
one bedroom apartment on Merton High
Street station has an asking price of
£150,000 (call 020 8544 2828 or go to
www.allinthepostcode.com).
 11th-13th March 2011 Earls Court 2 London

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 22 Living | Focus On CITYA.M. 25 FEBRUARY 2011

STRATFORD RENTING
BY AMY HIGGINS

DOWNSELL ROAD
Price: £239,995
This two bedroom Victorian
cottage would make an
appealing starter property
for young professionals. It
has been recently redeco-
rated in soft neutral colours
and boasts a compact but
LETT ROAD
Price: £795,000
Fancy having a front
row seat for the 2012
Q&A
Olympics in your living
room? A brand-new Tim Hassell
DIRECTOR OF CENTRAL LON-
energy-efficient devel-
opment at the heart of DON LETTINGS FIRM,
DRAKER LETTINGS
Stratford is able to
promise just that. This WWW.DRAKER.CO.UK
plush three-bedroom

Q.
I have a rental property that
pretty garden. Ideally locat- apartment is packed has been on the market for
ed for commuters on the with top-of-the-range some time now. I have also not
Stratford/Leyton border, fittings and eco-friend- heard from my agent for a while. Is
with no less than five rail or ly touches (each flat there anything I can do to speed
tube stations under a mile has a dedicated cycle things up?
away. Contact: Jason rack). Contact: Currell
New Homes on 020
A.
Joseph at Keatons on 020 There are four things you can do
8534 7788 or go to 7226 6611 or go to when a property is not letting as
www.keatons.com. www.currell.com. quickly as desired. Firstly, you can
fire your agent; but beware – if they have
viewed the property regularly, this may not
be the problem. Secondly, you can improve or
PORTWAY NEED TO KNOW | AREA INSIGHT redecorate the property. Look carefully at the
cleanliness and condition of each room with a
Price: £475,000 critical eye – this is what your tenants will
A commanding family Commuting: First-rate connectivity. comprehensives. If you’re opting to go
do. You may just need to give the property a
home with five bedrooms Liverpool Street is just five minutes private, expect to travel further afield. little TLC with regard to presentation.
and many period features away on the central line, while the Thirdly, you can drop the price. This is often
including sash windows, jubilee line can transport you to Canary Restaurants and bars: Hidden the last thing a landlord wants to do, but can
high ceilings and original Wharf in a quarter of an hour. amongst the fast-food outlets is Circus often be the most logical choice. If you have
fireplaces. Rooms are Eats – a budget eatery that fuses a property that looks great and is being regu-
exceptionally spacious, and Crime: Crime rates are higher than Caribbean and East End cuisine. larly viewed without success, the price is nor-
many boast views of near- national averages, but regeneration Particularly novel are their “school din- mally the only variable left to change. Finally
by West Ham Park. Kids in you can wait a bit longer, an option I would
particular will relish the projects (most notably – the Olympics) ners”: meat and two veg followed by a
avoid – especially if you have been waiting
proximity to the park, should encourage these to fall. sponge and custard for a snip at £4.50. for a while.
which has tennis courts, a
Education: Stratford might not boast Leisure: The biggest urban mall in
Q.
cricket square and several I have just moved in with my
football pitches. Contact: the most rarefied selection of schools, Europe – Westfield Stratford City– will partner and want to let my flat
Jason Joseph at Keatons but St. Angela’s (for girls) and St. open in 2011. Cultural stimulation can out. There are so many agents to
on 020 8534 7788 or go to Bonaventure’s (for boys) are decent be found at The Theatre Royal. choose from and they all seem to
www.keatons.com. charge different prices. Can you give
me any advice on how to choose and
whether I should have more than one?
CURRENT MORTGAGE DEALS BY AMY HIGGINS Source: MoneySupermarket.com

A.
Lettings is generally a multi-agency
business. Most landlords instruct
two or three agents and the first
Lender Fixed/Flexible Rate Until Standard Rate APR Maximum Loan past the post wins and gets paid (no AV sys-
(per cent) (per cent) (per cent) to Value (per cent) tem here!) When deciding who to choose, I
would take into account the agencies person-
Santander Flexible 2.65 April 2013 4.24 4.2 60 alities and approach to the market. You have
larger companies who can be very good at
HSBC Flexible 2.99 April 2013 3.94 4 70 generating mass viewings, but may leave you
stone cold with their level of service offered.
Loughborough BS Flexible 3.55 2 years 4.99 5 80 This is fine as long as you have a little experi-
ence, and do not expect much more than a
Leek United BS Flexible 3.75 March 2014 5.19 5.1 75 tenant thrown through your door and a large
fee taken. Next you have the more reliable
Skipton BS Flexible 3.78 April 2014 4.95 4.9 60 brands that are generally very good and tend
to reflect market trends: for example, if it is
First Direct Fixed 1.99 2 years 3.69 3.5 65 busy they will get the job done; if the market
Santander Fixed 2.19 2 years 4.24 4 60 is quieter, they may struggle. Finally you have
the more local, boutique agencies that can
HSBC Fixed 2.29 Term 3.94 2.3 60 give a more personal level of service and tend
to be more personality driven. My advice
Yorkshire BS Fixed 2.29 April 2013 4.99 4.6 60 would be to choose one of each and see
which one comes out on top.
NatWest Fixed 2.39 April 2013 4 3.9 60

PROPERTY NEWS
BY AMY HIGGINS

HOMEBUYERS GAIN INVESTOR POWERS
A new service which will enable homebuyers to enjoy
many of the same perks as property investors has been
launched this week by property company Assetz.
“Assetz Homes” will help buyers to secure the best
properties at the most competitive prices by negotiating
discounts on their behalf – a significant advantage in
what are challenging market conditions for buyers. For
further information go to www.homes.assetz.co.uk.
GAZUMPING HIGH IN PRIME LONDON MARKET
Gazumping has made a dramatic return to the capital’s
prime property market, according to research by estate
agency Marsh & Parsons. Agents have reported an
increase in cases of gazumping – where a vendor rejects
an accepted offer in favour of a higher price – as
demand for properties hit record highs, averaging at
14.3 applicants per property. A speedy exchange of con-
tracts is recommended to avoid being caught out.
CASA FORMA REVEALS NEW LUXURY FLAT
Architectural and interior design firm Casa Forma has
unveiled a new bespoke property, adding to its collection
of aspirational high-end London residences. The four bed-
room flat is housed in a Georgian building with a prime
location on Davies Street between Grosvenor Square and
Bond Street. The finest natural materials have been used
to give the apartment a sense of understated luxury. For
further information go to www.casaforma.co.uk.
DEMAND FOR RENTED HOMES HITS RECORD HIGH
Demand for rented homes hit a two-year high during
the final quarter of 2010, says buy-to-let lender
Paragon Group. The percentage of landlords reporting
increased tenant demand rose from 36 per cent to 40
per cent in the last three months of 2010. Just 4 per
cent of landlords said that they had seen a decrease in
demand. The high comes as more and more people are
unable to secure mortgages and are forced to rent.
 O Ma
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 Lifestyle
24
Monster raving brilliance on stage
Danny Boyle has
created a night of
unforgettable theatre
from Mary Shelley’s
Gothic horror classic
Theatre
FRANKENSTEIN
National Theatre, Olivier
hhhhI
EPIC in every way – from its vast scenery to
its geographical sweep (Switzerland,
Scotland, Arctic tundra) via themes that
include creation, love, original sin, revenge,
sexual politics, religion – this adaptation of
Mary Shelley’s masterpiece is as memo-
rable a piece of theatre as you’ll find.
Directed by Oscar winner Danny Boyle and
starring Benedict Cumberbatch and
Johnny Lee Miller (who rotate the roles of
Frankenstein and his creation each night),
it lives up to its considerable hype.
The show opens with the Creature’s
birth – flopping naked onto the stage he
twists, writhes and flaps about as he
becomes sentient and learns to move.
Rejected by his revolted creator, he never-
theless learns to reason, to speak, to love
and eventually to despise.
In the Olivier’s grand space we witness
stunning sunsets, a terrifying steam train, a
ALSO OUT THIS WEEKEND
FILMS, MUSIC, GAMES
FILM
I AM NUMBER FOUR Ropey sci-fi drama with Alex
Pettyfer in peril as an alien survivor on Earth.
ANIMAL KINGDOM Highly-acclaimed, award-win-
ning Australian crime drama.
THE RITE Antony Hopkins stars in this not-very-
scary excorcism thriller.
| Reviews
grand house rising from under the stage,
and a far-flung Hebridean bothy, while a
Milky Way of dangling lightbulbs shim-
mers above. This is visionary stuff, and
makes one excited for the Olympic opening
ceremony Boyle will direct in 2012.
But the two lead actors are more than a
match for the spectacle, particularly as the
creature – a cobbled-together monster who
they invest with the grace of a dancer.
The play is not without its flaws. The dia-
logue can be clunky; the character of Viktor
is a comically blinkered, one-dimensional
putz, and his sensible fiancée Elizabeth
(Naomi Harris) is an utter sap. But this is an
unforgettable night’s theatre, with a sim-
ply spellbinding finale.
Timothy Barber
FILM
NO STRINGS ATTACHED
Cert: 15
hIIII
YOU know the sort of bouncy, feel-good,
anything-can-happen kind of optimism you
exit a great romcom? Don’t expect to feel
that after No Strings Attached. Instead,
you’ll be nursing a mild abdominal cramp
from endless cringing and stifled groans.
The premise is sound enough – commit-
ment-phobe Emma (Natalie Portman)
makes a pact with Adam (Ashton Kutcher)
to be on call for sex anytime. No dates, no
flowers, just booty calls.
Cue a series of hurried sex scenes, flat
jokes and god-awful wardrobe choices, and
you’re ready to give up cinema-going for
DVD
DESPICABLE ME Enjoyable kids’ animation, with
Steve Carrel on lead vocal duties.
BURKE & HARE Simon Pegg and Andy Serkis are
the famous Edinburgh grave robbers.
CYRUS Very strange comedy with Jonah Hill, John
C Reilly and Marisa Tomei.
Johnny Lee Miller as
the monster, clutch-
ing his creator,
played by Benedict
Cumberbatch. They
alternate the roles.
good. The worst thing is, the filmmakers go
to great lengths to make “friends with ben-
efits” seem new – did they sleep through
the 80s? By using the ultra-modern medi-
um of text messaging, vulgar language and
the occasional clumsy Facebook reference,
this tired concept fails in every way to be
brought to life.
Beyond the stale script, a peripheral cast
of freaks and geeks and the fact that
Portman is unlikely to ever convince as a
romcom queen, there is a seedy, sexist
undertone. Apparently Ashton Kutcher
purposely didn’t pump iron for the movie,
so he’d appear more insecure in the sex
scenes – shame. If he’d buffed up, there’d at
least be something to admire beyond
Portman’s ever-luminous smile.
Leo Bear
WEST IS WEST
Cert: 12A
hhIII
THE sequel to 1999’s East is East (which fol-
lowed the travails of British Asian brothers
growing up in 70s Salford) is disappointing-
ly bland. It focuses on the coming of age of
the youngest member of the Khan brood,
the formerly parka-wearing Sajid (Aqib
Khan). Now a disengaged and unruly teen,
he is caught stealing and sent to Pakistan
by his tyrannical dad George (Om Puri), to
learn some “bloody” discipline. What fol-
lows fails to ring true in the way that the
original did so spunkily, and acerbic bite is
replaced by cosy melodrama. The culture
clash is resolved with clichés, with Sajid
performing an about-turn from disen-
MUSIC
FRANKIE & THE HEARTSTRINGS Second album
from the old-school indie band.
THE SECRET SISTERS Country music the way it
should be played.
THE LOW ANTHEM Folky follow-up to last year’s
debut, titled Smart Flesh.
CITYA.M. 25 FEBRUARY 2011
Natalie Portman and
Ashton Kutchner
limp through a tire-
some rom-com
about, erm, booty
calls.
chanted shoplifter to heritage-loving young-
ster, best mates with the local holy man
and devoted to finding a suitable wife for
ultra-religious brother Maneer. The film
feels unsatisfying, sorely missing the color-
ful sibling interaction and rough Salford
streets that gave East Is East such energy.
Amy Higgins
ART
THE BRITISH ART SHOW
Hayward Gallery
hhhhI
THIS annual feast of new work is a quiet,
fascinating, enjoyable way to fall in love
with contemporary art, and an antidote to
the slick shock tactics which tend to grab
headlines. It contains one genuine master-
piece and quite a lot that nearly qualifies.
The masterpiece is not by a British artist.
But there’s no doubting the appeal of
Christian Marclay’s “The Clock”, a twenty-
four hour video made up of snippets from
existing films. Each clip shows the exact
time you’re watching it – it’s both uncanny
experience and extravagant timepiece.
Other highlights include a video (there’s
a lot of video) by Nathaniel Mellors, and
some creepy new sculpture by YBA stalwart
Sarah Lucas. Haroon Mirza’s turntable and
strobe installation is much more fun than
it sounds, and Phoebe Unwin presents
some seductive paintings. Oh, and there’s a
naked man on a bench, if that does any-
thing for you.
Benjamin Street
GAMES
KLLZONE 3 (PS3) Interplanetary first-person shoot-
em-up set in a variety of tough environments.
BULLETSTORM (PS3, X360, PC) Interplanetary
first-person shoot-em-up yada yada yada...
TWO WORLDS II (PS3, X360 PC, MAC OS,
ONLIVE) Swords ‘n’ sorcery role player.
 Lifestyle SPA HEAVEN IN 25
MARRAKESH
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Luxe power-dressing ruled at LFW

Get the red W
OMEN fond of statement power-
dressing and cosy-sexy outfits
rejoice: Autumn/Winter 2011
Formula One tycoon Eddie Jordan’s daugh-
ter) was big on lacey, vintage, curve-hug-
ging dresses. House of Holland was

carpet look promises to be a riot of silky knits,

tweedy suits, luxuriant fabrics and stunning
colours in hyper-autumnal hues.
At City favourite Aquascutum there was
strident architectural outwear – coats and
jackets in sharp boxy shapes (see picture).
brilliant fun: sequenned prom dresses in
loud patchwork were a favourite of mine.
Amanda Wakeley presented great, sharp
looks for the professional woman:
graphite-style lines and colours; pebble,
patent tweed, stretch fur (there was much
You can dress like an Oscar There was a real emphasis on suit dressing:
immaculate matching separates in lovely
fur) and sculptural collars. At Erdem,
tweeds ruled and Roksanda Ilincic pre-
winner too, says Zoe Strimpel shades that are feminine but strong. Evening
wear was slinky and silky – long dresses with
sented still more sleek luxury.
Holly Fulton was a powerhouse of sexy
low-cut necks. Irwin Jordan (Zoe Jordan is prints and long dresses. Zoe Strimpel

1 For ladies with perfect all-

round bods: Rachel Gilbert
Sasha dress (£1,052)

2 For skinny minis who

need to create curves:
Madame X blue and gold
dress (£695)

3 For the curvy hour glass

figure: Rachel Gilbert black
sparkle dress (£832)

4 For women with broader

upper bodies who prefer to
show their
legs and
hide their
arms:
Irwin and
Jordan
lace 3
dress
with
sleeves
(£420)

2
4 1

HOW TO GET
DRESSED: OSCAR
Q&A
SPECIAL
Clare Rous & Kara Iland
FOUNDERS OF ROUS ILAND MEMBERS’ BOUTIQUE, WWW.ROUSILAND.COM

Q.
With the Oscars on Sunday, I
fancy going all-out with a big,
glamorous dress soon. Any tips
on how I can look like a star?

A.
Looking like a star is all about radi-
ating confidence and inner poise –
see Sandra Bullock, last year’s Best
Actress winner, pictured right.
Most of us don’t have the chance to
wear Oscar-worthy gowns much. The clas-
sic trap is to fall in love with a dress as an
object or “work of art” rather than your-
self in the outfit. If you aren't careful you
can end up feeling exposed and gawky
gaucheness is never glamorous.
The key is to focus on a style that best
fits your body in a fabric and cut you feel
comfortable in. Don’t shy away from mak-
ing adjustments to your dress to ensure it
looks like it was coutured for you. If dress-
es just aren't flattering then try exquisite
separates for effortless elegance. A long
sequined skirt and simple top or silk
trouser suit in a beautiful colour can be
more head turning than the fussiest gown. styles or separates, choose one larger
Find one part of your body you are most statement cuff, earrings or necklace
happy to flaunt as a focal point. Avoid rather than dated sets of little pearls or
looking tacky by showing too much flesh. sparkles.
A thigh length split, low back or plunging There are plenty of independent design-
neckline can be individually elegant but ers who cut amazing gowns if you would
not when combined together. The new rather not bankrupt yourself on couture.
mood is to cover up so don’t shy away Favourites include Rachel Gilbert,
from sheer or fitted arms when going full Leifsdottr, Ginger & Smart and Lisa Ho to
length. name just a few. Under-exposed creations
Don't hide behind accessories. If your from these up and coming talents will help
dress is very bright, lacey or glittery then you avoid the embarrassment of bumping
you won't need anything else. For plainer into anyone else with the same outfit.
 26 Lifestyle | TV& Games CITYA.M. 25 FEBRUARY 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm BBC London News 6.30pm My Life in Books 6.30pm ITV News 6.30pm Hollyoaks 6.30pm Home and Away
7pm The One Show 7pm Forget the Oscars, Here 7pm Emmerdale 7pm Channel 4 News 7pm Five News at 7
7.30pm Deadly 60 on a Are the Kermodes 7.30pm Coronation Street 7.25pm 4thought.tv 7.30pm Vets in Action:
Mission: BBC News 7.30pm An Island Parish 8pm Children’s Hospital 7.30pm Teen Horse Whisperers Five News Update
8pm EastEnders 8pm Mastermind 8.30pm Coronation Street: 8pm Relocation: 8pm Ice Road Truckers: Hugh
8.30pm QI 8.30pm Britain from Above Steve grows concerned by Phil Down Under Rowland believes his truck has
9pm New Tricks 9pm CHOICE Hidden Treasures Becky’s manic state. 9pm Embarrassing Bodies been sabotaged; Five News at 9
10pm BBC News of Australian Art 9pm CHOICE Benidorm: New 10pm CHOICE 9pm The Mentalist
10.25pm Regional News 10pm Fast and Loose series. The Garveys discover Friday Night Dinner 10pm Law & Order: The
10.35pm The Graham 10.30pm Newsnight Madge has sold up and left. 10.30pm Lee Evans: Big – Live at murder of a Muslim man is HIDDEN TREASURES OF
Norton Show 11pm The Review Show: 10pm ITV News at Ten the O2 11.35pm 10 O’Clock Live
linked to terrorism. AUSTRALIAN ART BBC2, 9PM
11.20pm The National Lottery Weather 10.30pm London News 12.40am Music on 4: CTRL MX
Friday Night Draws 11.30pm FILM 1.10am 4Play: Boxer Rebellion 10.55pm NCIS Griff Rhys Jones explores the art that
High Crimes: 2002; Weatherview
11.50pm ICC Cricket World 10.35pm The Cube 1.20am My Name Is Earl 2.05am 11.55pm Cops in Crisis is still being created by indigenous
1.25am Sign Zone: South Riding Cup Highlights 11.35pm Take Me Out Modern Toss 2.30am FILM 12.15am SuperCasino people around the world, beginning by
2.25am The Chinese Are Coming 12.50am FILM Shadow of the 12.40am The Zone; Powwow Highway. 1988. 4am 3.55am Motorsport Mundial visiting the Torres Strait Islanders.
3.25am Horizon: The Secret World Vampire: 2000 ITV News Headlines Brothers & Sisters 4.45am Great 4.20am Royal Navy Caribbean
of Pain 4.25am Rip Off Britain 2.10am BBC News 2.40am In Plain Sight 3.30am- British Brands 5am Wogan’s Perfect Patrol 5.10am Wildlife SOS
4.55am-6am BBC News 4.55am-6am Close 5.30am ITV Nightscreen Recall 5.25am-6.10am Countdown 5.35am-6am House Doctor

SKY SPORTS 1 5am Premier League Preview Minds 12am CSI: Crime Scene 1.10am Gok’s Clothes Roadshow DISCOVERY HOME &
SATELLITE & CABLE

7pm Sky Sports News at Seven
7.30pm Live Super League
10pm Take It Like a Fan
10.30pm Premier League
Preview 11pm Football League
Weekend 12am ICC Cricket
World Cup 2am Take It Like a
Fan 2.30am Premier League
Preview 3am Football League
Weekend 4am Super League
5.30am-6am Take It Like a Fan
SKY SPORTS 2
7pm Road to London 7.30pm
Live Football League 10pm
Tennis 12am NFL: Total Access
1am Super League 2.30am
Tennis 4.30am NFL: Total Access
5.30am-6am Football’s Greatest
SKY SPORTS 3
7pm Live World Golf
Championship 11pm Tight Lines
12am British Rally
Championship 12.30am World
Golf Championship 4.30am
British Rally Championship
5.30am-6am Kings of the Snow
BRITISH EUROSPORT
6.40pm Alpine Skiing 7.45pm
Live Boxing 10pm Strongest
Man 11pm World Superbikes
12am-12.30am Video Gaming
ESPN
7pm Goal! 7.30pm Live
Bundesliga 9.30pm Premier
League Preview 10pm ESPN
MMA Live 10.45pm ESPN
Kicks: Extra 11pm Freestyle
World Cup Magazine 11.30pm
Poker 12.30am NBA
Countdown 1am Live NBA
Basketball 3.30am UFC
Unleashed 4.30am ESPN MMA
Live 5.15am ESPN Kicks: Extra
5.30am-6am Total Italian
Football
SKY LIVING
7pm Ghost Whisperer 8pm
Bones 9pm Criminal Minds
10pm CSI: Crime Scene
Investigation 11pm Criminal
Investigation 2.40am Charmed
4.20am Four Weddings US
5.10am-6am Maury
BBC THREE
7pm Almost Famous IV 7.05pm
Doctor Who 8pm The Real
Hustle on Holiday 8.30pm The
Lock Up 9pm Little Britain
9.30pm Lunch Monkeys 10pm
EastEnders 10.30pm Junior
Doctors: Your Life in Their Hands
11.25pm Two Pints of Lager and
a Packet of Crisps 12.25am
Family Guy 1.10am The Lock Up
1.40am Coming of Age 2.10am
Lunch Monkeys 2.40am Junior
Doctors: Your Life in Their Hands
3.35am The Real Hustle on
Holiday 4.05am Snog, Marry,
Avoid? 4.35am-5.05am Hotter
Than My Daughter
E4
7pm Hollyoaks 7.30pm Friends
9pm Gok’s Clothes Roadshow
10pm Wife Swap 11.05pm Tool
Academy 12.10am Scrubs
2.05am Wife Swap 3am
Samantha Who? 3.40am Young, HEALTH
7pm A Baby Story 8pm How
Sexy and Royal 4.25am Running
in Heels 4.45am-6am Switched Clean Is Your House? 9pm Born
on a Bad Day 10pm Raising 10
HISTORY Kids: The Hayes Way 11pm BENIDORM
7pm Heir Hunters 8pm Swamp Emergency: Life in the ER 12am ITV1, 9PM
People 9pm IRT Deadliest Born on a Bad Day 1am Raising
Roads 11pm Swamp People 10 Kids: The Hayes Way 2am The Garveys arrive at Madge’s villa,
only to discover she has sold it to a TV
12am IRT Deadliest Roads 2am Emergency: Life in the ER 3am
Disappearing Britain 3am How Clean Is Your House? 4am personality, and Gavin turns up at
Machu Picchu: City in the Clouds Bringing Home Baby 5am-6am Solana with a new companion.
4am Decoding the Past 5am- A Baby Story
6am Ancient Discoveries
SKY1
DISCOVERY 7.30pm The Middle 8pm The
8pm How Do They Do It? Simpsons 8.30pm Modern
8.30pm How It’s Made 9pm Family 9pm Raising Hope
Aircrash Confidential: The chaos 9.30pm The Simpsons 10pm
caused by fires on aircraft. 10pm Louie Spence’s Showbusiness
Weird or What? 11pm Monsters 11pm Got to Dance 12.30am
Inside Me 12am Bear Grylls: Road Wars 1am Body Language
Born Survivor 1am Deadliest Secrets 1.50am Inside: FRIDAY NIGHT DINNER
Catch 2am Future Weapons 3am Surviving Prison 2.40am Glenn CHANNEL 4, 10PM
Greatest Tank Battles 3.50am Martin, DDS 3.30am Threshold New series. Comedy following two
The First World War 4.40am 4.20am Don’t Forget the Lyrics brothers who visit their parents’ house
Treasure Quest 5.30am-6am 5.10am-6am Sell Me the once a week for dinner. Comedy,
How Does That Work? Answer starring Simon Bird and Paul Ritter.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
34 6 14 20 17 18 
22 19
10 12 30 
45
Place the numbers from 1 to 9 in each empty cell so that each  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 13 16
11
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 10 4 16
  
above or to the left of it. 13 23
You can only use the digits 1-9 21 8  
   and you must not use the
8
10 9   
same digit twice in a block. 26 15 16 17 28
    The same digit may occur 4 39  

  more than once in a row or

column, but it must be in a
11
21 14
3 5

35 11
   separate block.
9 15 
45
  7 24


   ACROSS DOWN
1 French brandy (6) 1 Diced (5)
 
    WORDWHEEL A L
6 Fill with optimism (6)
7 Harsh or corrosive
2 Country (6)
3 Inhibit (4)
Using only the letters in the Wordwheel, you have in tone (6)
   ten minutes to find as many words as possible,
I E 4 Sorcerers (7)
8 Indistinct or hazy
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters L in outline (6) 5 Remains in place (5)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
S E 10 Lure (5) 9 Large luxurious
car (abbr) (4)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
T T
13 Without weapons (7)
11 Barrier to vision (7)
16 Attack (5)
QUICK CROSSWORD 9 7 4 8 5 8
12 US university (4)

B A T H E R B E T A
7 6 1 4 5 3 2 SUDOKU         
18 Song of devotion
or loyalty (6) 14 Ceasing (6)
4 2 5 3 1 9 2
L A A O S         
I P A R A L Y S I S
2 9 3 4 2 7 3 1
         20 Frozen spike (6) 15 Perhaps (5)
N E W C G 4 8 2 1 9 8 6
G U S T A V O G L E 1 4 7 3 8
        
21 Short underpants (6) 17 River which flows
        
D E X I
O D I N A
S T
U T
O
H O R
1 4 2
6 8 3
6 1
7 9
9 8
2 7 1
WORDWHEEL          22 Small stamp or
through Nottingham (5)
E U T O O
3 9 3 2 4 1 6          19 Fail to hit (4)
P R E O C C U P Y U The nine-letter word was seal on a ring (6)
A U R L N 6 4 8 2 3 5 1         
W I G S D E F E N D 5 9 9 6 8 7
SHORTCAKE         
 Punter
27

| Racing

RACING TRADER BILL ESDAILE, OUR RACING EXPERT, TAKES A LOOK AT THE BEST BETS OVER THE WEEKEND

McCoy to land
another Racing
Post Chase with
Fistral Beach
T
HE first three horses to immediately
catch my eye in tomorrow’s Racing
Post Chase were Nacarat, Tatenen
and FISTRAL BEACH.
The first named of the trio finished sec-
ond in this race 12 months ago, having
won it back in 2009, while Tatenen is
showing signs of a return to the form that
saw him sent off favourite for the Arkle
Chase a few seasons ago.
Yet, the combination of trip, ground
and weight means that I’m prepared to
swerve those two in favour of Fistral
Beach, although the trends suggest
that shouldering a burden should be no
problem.
According to www.racingtrendsre-
vealed.co.uk, 10 of the last 13 winners of
the race have remarkably carried 10st 13lb
or more.
However, Nacarat is set to lug 11st 12lb
tomorrow and he would have been beaten
further by Razor Royale last year if Nigel
Twiston-Davies’ runner hadn’t ploughed
through the last. I’m also slightly con-
cerned about the form of his trainer who
has had a few horses disappoint in recent
weeks.
As for Tatenen, who looked back to his
best at Ascot last time, he is a really inter-
esting each-way proposition at around
14/1 with Victor Chandler and would be
half his current price if still in the hands
of Paul Nicholls.
The worry with him is that I’m not real-
ly sure he’s ideally suited to three miles
and his legs may turn to jelly late on.
Fistral Beach will be bidding to make
amends for 12 months ago when he was
sent off favourite for this race and unseat-
ed early on.
He looks a progressive eight-year-old
who had a wind operation over the sum-
mer and won nicely over a shorter trip at
Wincanton on his seasonal reappearance.
At around 11/2 he is a rock-solid each-way
proposition and has AP McCoy in the sad-
dle looking for his third win in this race in
six seasons.
This race tends to go to one of those
towards the head of the market, but I
wouldn’t rule out Howard Johnson’s DOOR
BOY each-way at a massive 25/1. He had
some decent form over hurdles and he
could have a chance of sneaking into a
place off his feather weight.
The totesport.com Eider Chase is always
one of the most difficult handicaps of the
season and the 12-year-old Comply Or Die
will be attempting to win the race for a
second time. He was successful in 2008
before going on to win the Grand
National, but he’s an old boy now and may
be susceptible to one of the younger
improvers.
Charlie Longsdon has his string in fine
fettle and this has been the target for
MINELLA BOYS since his brave second to
West End Rocker at Warwick last month.
He was staying on at the death that day
which indicates that he will relish this
marathon slog.
He should be a good each-way price and
the danger could be the Victor Dartnall-
trained Giles Cross who ran a stormer to
finish second to Synchronised in the
Welsh National.
POINTERS...
FISTRAL BEACH e/w 3.00pm Kempton (tomorrow)
DOOR BOY e/w 3.00pm Kempton (tomorrow)
MINELLA BOYS e/w 3.15pm Newcastle (tomorrow)

COUNTDOWN TO CHELTENHAM
With just 17 days to go until the
start of the best four days racing
in the calendar, the majority of
the ante-post markets on the
non-handicaps are pretty settled.
Finding horses that will start
considerably shorter on the day
is no easy task, but there are a
few that catch the eye.
Firstly, there is no way that
Willie Mullins’ Irish Hennessy
winner KEMPES will trade big-
ger than the 17.0 currently avail-
able on Betdaq for this year’s
Cheltenham Gold Cup. His win
at Leopardstown earlier in the
month was his second Grade 1
chase success over trips of three
miles or more in his four latest
starts – not many others in the
race can boast similar levels of
form.
However, the two main rea-
sons to believe that Kempes’
price will collapse are that he
will probably be Ireland’s lead-
ing hope in the race and will
almost certainly be ridden by AP
McCoy.
Sticking with Willie Mullins
and the masterful Irish trainer
indicated this week that his
promising hurdler RAPTOR will
most likely be aimed at the
Albert Bartlett Hurdle. He is cur-
rently trading at 34.0 for that
race and I’d be amazed if he isn’t
at least half those odds on the
day.

Join now for a risk free £20 bet and 2.5% in association with:
commission until March 31st (Betdaq T&Cs
Apply, see site for details.) www.betdaq.com
0870 178 1221
 28 Punter | Sport
SPORT TRADER DAVID WILD AND OLLIE DREW BRING YOU THE BEST RUGBY
AND CRICKET BETS AHEAD OF A TOUGH WEEKEND FOR ENGLAND
England can make toast
of French in Le Crunch
ENGLAND
FRANCE
TOMORROW – 5.00PM BBC1
M
ARC LIÈVREMONT does not like
the English. The French coach
admitted so this week, initiating
the mind games ahead of ‘Le
Crunch’ tomorrow.
The fact is hardly surprising, given that
it is the English that stand in the way of a
Grand Slam for Les Bleus, while England
themselves also have one eye on their first
lossless Championship since 2003.
Lièvremont’s admission might also have
been expected given his frustrations at his
nation’s recent record at Twickenham,
the venue for tomorrow’s showdown. Two
wins from five matches at HQ for the
French flatters to deceive - look a little
closer and there is plenty to favour the
hosts.
The Red Rose won by a margin of 24
points on the last meeting on English soil,
two years ago, and secured a 26-18 victory
in the 2007 tournament. France narrowly
won a World Cup warm-up in August 2007
against a largely experimental England
side - only James Haskell and Andrew
Sheridan from that starting XV will start
tomorrow - while the French win in 2005
was by a solitary point. Without getting
carried away, against Italy England at
times showed form of the like that we
haven’t seen in any England team since
the Grand Slam-winning side eight years
ago. Then, with Martin Johnson as cap-
tain, the Red Rose lauded over their Gallic
opponents with a 31-point victory.
Rugby Union has moved on consider-
ENGLAND
INDIA
SUNDAY – 9.00AM SKY SPORTS 2
ENGLAND’S victory against Netherlands
in their first World Cup outing did little to
dispel fears about their tournament
hopes. The plucky Dutch, powered by a
sublime innings from Ryan ten
Doeschate, forced the Three Lions into the
third-highest successful run-chase in com-
petition history and can be disappointed
not to have defended their total having
seen the way Andrew Strauss’ men played.
Uncharacteristically feeble in the field,
England were let down by bad bowling
too. James Anderson, in particular, had a
BEHIND THE LINES
Tomorrow evening’s game between
England and France at Twickenham is
likely to decide the destination of this
year’s Six Nations Trophy. We are offer-
ing even money on both sides of the
handicap – with England giving up five
points and France getting a five point
start. Martin Johnson’s side are 4/9 in the
outright market on this game and pun-
ters can also get 8/11 for them to win the
ably since then, so while we should not
expect such a pronounced win again, I am
confident enough to predict England will
overcome their five point handicap. Get
on with Victor Chandler who are offering
evens on all Six Nations handicap bets this
weekend.
Similarly to their record in southwest
London, France’s opening two results in
this Championship perhaps paint a rosier
picture than is deserved. A two-point victo-
ry at Lansdowne Road had more to do
with Ireland’s lack of discipline and fail-
ure to take advantage of their chances
than any exceptional rugby by their oppo-
nents. France took a while to get going in
that match and when faced with a bar-
rage of sound from a fired-up
Twickenham perhaps the same should be
expected of them this weekend. England
to lead at both half-time and full-time
looks good at evens, also with Victor
Chandler.
In a gem of match against Scotland,
France showed moments of genius but, on
shocker and will wince if he ever looks at
the scorecard again having conceded 72
runs without a breakthrough. Anderson is
almost certain to keep his place, but the
selectors will need to decide whether to
draft in an additional specialist spinner,
in the shape of Michael Yardy, to support
the bowling attack at Bangalore on a track
expected to offer little for pacemen.
Something certainly needs to change if
England are to avoid embarrassment
against India. Our pre-tournament selec-
tion justified their favouritism in the out-
right market with a commanding 87-run
win over Bangladesh. India blasted their
way to 370/4 from their allotted overs and,
having seen England bleed 292 runs
against the Associate side, spread bettors
might like to consider buying India’s runs
at around 290 with Sporting Index should
they bat first.
It is hard to see the host nation failing
tournament and 7/4 to do the Grand
Slam.
England play India in the Cricket
World Cup on Sunday morning and they
will have to play a lot better than they
did against the Dutch if they’re going to
win this one.
We were looking to take on the Three
Lions at the start of the tournament and
we’ve seen nothing to make us change
CITYA.M. 25 FEBRUARY 2011
the downside, they also shipped three
tries. To put that in context, the Scots
failed to score a single touchdown at
home against an average Wales side a fort-
night ago and managed only three during
the whole of the 2010 Championship.
There will be chances for the home side,
which will please Chris Ashton in particu-
lar, while the nature of England’s new
breed of rugby will likely present open-
ings too. We made a packet buying
Ashton’s try minutes a fortnight ago
(bought at 47, makeup 158), but I think
the French backs will pay extra attention
to him tomorrow - they’d be daft not too.
Gaps may appear elsewhere, though, and
it is still worth buying total match tries at
3.9 with Sporting Index.
POINTERS...
England to win with 5pt handicap at evens with Victor
Chandler
England to lead HT/FT at EVS with Victor Chandler
Buy total match tries at 3.9 with Sporting Index
to win this one and 4/9 on Betdaq is a fair
price for them to accomplish that. Those
wanting to have a punt on England are
advised to back Graeme Swann to be top
English bowler.
Swann was one of the few to emerge
with any credit from Nagpur where he
took two wickets and would have had
another but for a horrendous mix-up
between Kevin Pietersen and Anderson in
the field. He should find the conditions to
his liking here and at 11/4 with Victor
Chandler is the standout choice in the
market.
POINTERS...
India to win at 4/9 on Betdaq
Buy India runs at around 290 with Sporting Index if
batting first
Graeme Swann to be top English Bowler at 11/4 with
Victor Chandler
our minds. India are 4/9 to win the
game, with England at 9/4 and we expect
the Indians to be too strong.
The Carling Cup Final on Sunday gives
Arsenal the chance to win their first tro-
phy since 2005. Birmingham will be
tough opponents, but we reckon the
Gunners will be celebrating. They are
1/2, the draw is available at 3/1 and a
Birmingham victory 5/1.
 Sport
Big test for England centres
F
RANCE boss Marc Lievremont
has aimed a few shots across the
bows by accusing the English of
arrogance ahead of tomorrow
RBS 6 Nations match, but the players
know that’s all just hype. They’re also
accustomed to it; whenever they pull
on the shirt and no matter who
they’re playing the opposition want to
ENGLAND V FRANCE: KEY CLASHES rip their heads off.
KYRAN BRACKEN England proved they can handle
hostility by winning in Wales earlier
VS
l BEN YOUNGS l DIMITRI YACHVILI
VS
l NICK EASTER l SEBASTIEN CHABAL
VS
l SHONTAYNE HAPE l YANNICK JAUZION
l Kyran Bracken was speaking courtesy of GamePlan Solutions: Managing high profile and popular sport stars; Speakers, Leaders, Motivators, Ambassadors
www.gameplansolutions.co.uk
29
JOHNSON PROMISES ENGLAND
WILL COPE WITH PRESSURE
BOSS SAYS HIS SIDE WILL DELIVER
WHEN IT COMES TO LE CRUNCH: P30
SPORT | IN BRIEF
Cipriani to be investigated
RUGBY UNION: Former Wasps fly-half
Danny Cipriani is to be investigated by
his club, Melbourne Rebels, after an
this month. France, however, pose a alleged incident in a nightclub. “We are
much bigger test. Les Bleus know looking into it and will speak to Danny
about winning, are Grand Slam cham- today but we won’t be making any
pions and have a really big pack who statement about it before the game
will take England on.
For a change England have the bet- VERDICT [against ACT Brumbies today]," said a
Rebels spokesman.
ter back line, but a major question
mark lingers over the long-term England will win. If they score early South Africa on the march
prospects of Hape-Tindall centre pair- it’ll be by 15 points, if not they’ll edge CRICKET: South Africa got their World
ing. Martin Johnson’s men are at it right at the end. In any case it defi- Cup campaign off to a winning start
home and will be favourites, but it is
sure to be an incredible battle.
nitely won’t seal the title; Ireland may
yet prove tougher opponents.
with a crushing seven-wicket win over
West Indies in Delhi. Leg-spinner Imran
Tahir took 4-41 on debut, while AB de
Villiers scored an unbeaten century as
the Proteas reached their victory target
I’ve always been a big fan of Yachvili. He has an incredible of 223 with over seven overs to spare.
record against England, so much so that he is something of a
nemesis. He is not as quick as he used to be but his kicking to Westwood and McIlroy are out
corners and at goal is very good indeed, so England can’t give GOLF: World No1 Lee Westwood and
him an inch. Youngs is a very exciting scrum-half who can
change the game in an instant with a break, although he is
still green. This is his first taste of playing France and, while
Yachvili has the badges to prove his worth, this is Youngs’
chance to show he belongs at the top level. The Northampton
No9 has done well in his last few games. Against France he
Rory McIlroy were both beaten at the
WGC Match Play. Westwood lost by one
hole to Nick Watney, while McIlroy lost
8&7 to American Ben Crane.
will require extreme flair, which he showed against Australia
last year, but if he produces that he can turn the contest.
Results
8aXo%%%%%%%%%%%%%%%%%%%%%%%% )  ) 8e[\ic\Z_k%%%%%%%%%%%%%%%%'  '
8^^1,$'%
Chabal is a talisman for the French, and something of a folk 9Xp\iC\m\iblj\e'  ) =:D\kXc`jkB_Xib`m% '  '
hero. He is an incredibly powerful runner and astonishingly 8^^1-$'%
competitive. When he gets the ball you will hear a roar erupt 9iX^X%%%%%%%%%%%%%%%%%%%%% )  ) C\Z_GfqeXe%%%%%%%%%%%%%%'  '
from the French supporters. What’s more, he also hates the 8^^1)$(%
English. But tomorrow he comes up one of the best No8s in ;peXdfB`\m%%%%%%%%%%(  + 9\j`bkXj%%%%%%%%%%%%%%%%%%%%%'  '
the world at the moment. Easter is so strong, gets forward and 8^^1/$(%
=:Kn\ek\%%%%%%%%%%%%%%(  ) IlY`eBXqXe%%%%%%%%%%%%%% )  )
understands the way this England team plays. He may not get 8^^1+$)%
the headlines of Youngs and Ashton, but he is the unsung hero C`m\igffc%%%%%%%%%%%%%%%'  ( JgXikXGiX^l\%%%%%%%%%%'  '
of Johnson’s current crop. He is from the old school and excels Blpk/- 8kk1+)#0+0
in the tight just like his old boss at Harlequins, Dean Richards, 8^^1($'%
once did, taking balls off people at will, holding it and moving DXe:`kp%%%%%%%%%%%%%%%% )  * 8i`jJXcfe`bX%%%%%%%%%%%%'  '
forward without going to ground early. Without realising it, ;q\bf.#()
Kfli\PXpX., 8kk1*-#.+/
England desperately need Easter to have a good game. 8^^1*$'%
GJ>%%%%%%%%%%%%%%%%%%%%%%%%'  ' 98K<%%%%%%%%%%%%%%%%%%%%%%%%%%%'  '
8^^1)$)2GJ>n`efeXnXp^fXcjilc\%
I’m not sure the French realise just how good Yannick Jauzion GJM%%%%%%%%%%%%%%%%%%%%%%%%'  * C`cc\%%%%%%%%%%%%%%%%%%%%%%%%%%%%%(  (
is. He is so strong, has plenty of pace and on his day is very 8^^1,$*%
JgXikXbDfjZfn%%'  ( 9Xjc\%%%%%%%%%%%%%%%%%%%%%%%%%%%(  (
tough to stop. Shontayne Hape, meanwhile, has a lot still to 8^^1+$*%
prove. He is riding the wave of success that England’s backs Jgfik`e^%%%%%%%%%%%%%%%%%(  ) IXe^\ij%%%%%%%%%%%%%%%%%%%%%%(  )
have generated over the last 12 months but is yet to really D\e[\j+) ;`fl])'
come out of his shell in the way, say, Toby Flood has during this ;aXcf/* <[l0'
RBS 6 Nations. He can show and go, tackle and get around  8kk1(,#*.,
8^^1*$*%IXe^\ijn`efeXnXp^fXcjilc\%
well, but this is a huge test for him. From the changes they M]9Jklkk^Xik%%%%%%%'  ' 9\e]`ZX%%%%%%%%%%%%%%%%%%%%%%%(  )
have made it looks like France will target England’s centre pair- 8^^1($+%
ing; the question is whether Hape and Mike Tindall have the M`ccXii\Xc%%%%%%%%%%%%%%% )  ) EXgfc`%%%%%%%%%%%%%%%%%%%%%%%%%%(  (
capability at the highest level. Tomorrow at Twickenham they 8^^1)$(%
have the chance to show they do. Q\e`kJkG\k\ijYli^(  * Pfle^9fpj%%%%%%%%%%%%%%%%%(  (
8^^1+$*%
email sport@cityam.com
 30 Sport
KP made 39 against Holland Pic: GETTY
Tresco a fan
of Pietersen
promotion
▲
CRICKET
BY JAMES GOLDMAN
FORMER England opener Marcus
Trescothick believes the decision to
promote Kevin Pietersen to the top of
the order could be a masterstroke,
but wouldn’t be surprised if it took
until the knockout stages of the
World Cup for KP to master the role.
Pietersen made an uncharacteristi-
cally sluggish 39 from 61 balls against
Holland in England’s six-wicket win
over Holland on Tuesday.
Trescothick, England’s most prolif-
ic century maker in one-day cricket, is
confident that despite the early
teething problems the South Africa-
born star will get to grips with the
demands of his new job.
“I think it will take him time
to learn the role and we mustn’t
panic if he makes a couple of low
scores in these group games,” he told
City A.M.
“If he can learn how to exploit the
power plays then the way Andrew
Strauss is playing at the other end
England have got the makings of a
very strong opening partnership.
“We’ve really got to give him a good
couple of goes to just how it’s gone
and not expect instant results. He’ll
love the extra responsibility though
and I know he’ll thrive on it.”
Marcus Trescothick was speaking at his new
signing with Mongoose Cricket www.mon-
goosecricket.com
Johnson
hunting
revenge
l England boss desperate to beat France
l ’We want to be in the headlines’, he says
RBS
6 NATIONS
BY FRANK DALLERES
ENGLAND manager Martin Johnson
last night urged his side to hog the
back-page headlines by triumphing
in tomorrow’s potentially decisive
RBS 6 Nations showdown with
France.
Johnson is still hurting from last
year’s 12-10 defeat to Les Bleus in
Paris, when his embryonic young
team paid for a lack of ruthlessness,
and considers it the most painful
loss of his tenure.
But following an encouraging
autumn and a 100 per cent start to
the championship he is convinced a
much-improved Red Rose outfit are
ready to avenge that pride-denting
setback.
And after naming just one
change to the side that thrashed
Italy two weeks ago – the return of
prop Andrew Sheridan – he called
on England to beat their old ene-
mies and justify their burgeoning
reputation.
“We will go out and give it an
absolute crack. The good thing with
these lads is they will go out and
play,” Johnson said.
“Over the last 18 months we have
had a group of young players who
have forced their way into the team,
they have had their opportunities to
play and taken them. The form and
consistency has improved and you
start getting some of the good
things that happened last week and
the week before.
“France have a very good all-
round game and are dangerous but
we back ourselves as well. You want
to be in the headlines and hopefully
we can do that with our perform-
ance on Saturday.”
Johnson is mindful of the threat
posed by a powerful French pack, in
particular tighthead Nicolas Mas,
and is relieved to be able to select fit-
again Sale loosehead Sheridan.
“It is pretty clear when you look
at what was happening last year, we
have to be very strong on our loose-
head side,” Johnson said.
“Mas likes to get into that gap and
put a lot of pressure through there.
We have to stop him. We know it’s
coming. We have got to be up to it.
CITYA.M. 25 FEBRUARY 2011
Sheridan is strong and powerful
and he stands up in the toughest
physical challenges in world rugby.”
France, too, have won both of
their games so far, prompting pre-
dictions that whoever prevails at
Twickenham will go on to lift the
trophy. Les Bleus enjoyed that privi-
lege 12 months ago, thanks to that
win over England, which still burns
within Johnson.
“It was a very, very disappointing
game to lose when you think what
we did in their stadium, against the
Grand Slam champions,” he said.
“It was my most disappointing
defeat. Afterwards, the players are
back at their clubs and we are sit-
ting there thinking ‘if only’. Once it
is done on Monday morning it is a
quiet place. Who says I am over it?”
 CITYA.M. 25 FEBRUARY 2011
THREE KICKS TO THE GAULS
Twickenham 1991: Having been distinctly
second best to the French throughout the
80s, England had the chance to turn the
tables at the start of the 90s. France scored
arguably the greatest try the tournament
has ever seen, started by Serge Blanco on
his own try line and finished by Didier
Camberabero, but England clinched the
Grand Slam under the captaincy of Will
Carling with a thrilling 21-19 win.
Sydney 2003:
England had swept
all before them on
their way to the
Grand Slam eight
months earlier and
were strong
favourites to win the
World Cup. France and torrential rain stood
between Sir Clive Woodward’s men and a
place in the final against Australia.
England’s pack mastered the conditions bet-
ter than their opponents, for whom talis-
manic fly-half Frederic Michalak had
something of a mare, as Jonny Wilkinson
(above) kept his nerve to kick all of his side’s
points in a 24-7 win.
Paris 2007: Four years after they failed to
turn up in Sydney, France had their shot at
revenge on home soil. England hit the
ground running after a moment of hesitation
from Damien Traille allowed Josh Lewsey to
nip in for a second minute try, the boot of
Lionel Beauxis looked like it had put the
hosts into the final. But a Wilkinson penalty
in the 75th minute and a trademark drop
goal three minutes later time crushed French
dreams.
Captain Fabregas ruled
out of Carling Cup final
▲
FOOTBALL
BY FRANK DALLERES
ARSENAL captain Cesc Fabregas faces
a race to be fit for next month’s emo-
tional homecoming Champions
League clash at Barcelona after
admitting defeat in his quest to play
in Sunday’s Carling Cup final.
Fabregas was last night ruled out of
leading the Gunners at Wembley as
they go in search of a first trophy for
six years owing to the hamstring
injury he sustained early in
Wednesday’s Premier League victory
Fabregas was
injured against
Stoke
Pic: ACTION IMAGES
over Stoke.
But the Spain midfielder was
offered hope that he could recover for
the return leg of the last-16 tie with
his former club Barca at Camp Nou
on Tuesday 8 March by manager
Arsene Wenger’s assessment.
“It is a very small injury but cer-
tainly Cesc will be out for Sunday. For
how long I don’t know but definitely
for Sunday,” said Wenger. “He is disap-
pointed. We all feel sorry and sad for
him. The only way we help him now
is to win the Carling Cup as he con-
tributed a lot in this competition.”
TACTICS | WHO’LL REPLACE CESC?
Wenger could replace Fabregas by
switching Samir Nasri into the centre,
drafting in fit-again Abou Diaby or going
for the more conservative Denilson, with
Jack Wilshere pushed further upfield.
Nasri looks the most likely option given
how he has thrived in his skipper’s
absence this season: in nine games with-
out Fabregas in the side he has scored
nine times, but netted just five in 20 when
they have played together. Yet Wenger
could be tempted to pick Diaby, who
would add muscle to midfield and allow
Nasri to stay on the left, with Andrey
Arshavin right of Robin van Persie.
On whether Fabregas would be fit
to protect their first-leg advantage in
his native Catalonia, Wenger added:
“It is very difficult to give a deadline.
It is impossible.”
Winger Theo Walcott looks likely
to miss the Barcelona trip after
Wenger admitted his ankle sprain,
also sustained against Stoke, would
need another “one or two weeks” to
heal. Those two aside, Wenger has an
almost full squad to choose from
against Birmingham after Robin van
Persie, Laurent Koscielny and Abou
Diaby were all passed fit.
Sport 31
FOOTBALL ROUND-UP
Liverpool and City
progress in Europe
A LATE Dirk Kuyt header booked
Liverpool’s place in the last 16 of the
Europa League as the Reds overcame
a stubborn Sparta Prague at Anfield.
Kuyt guided in an 86th minute
Raul Meireles corner as the home
side finally converted one of their
chances.
Meanwhile, Manchester City also
made it through to the last 16 after a
comfortable 3-0 win over Aris
Salonika.
Edin Dzeko struck twice in the
opening 12 minutes to give City, who
drew the first leg 0-0 in Greece,
breathing space, and Yaya Toure con-
firmed the win in the 75th minute.
Redknapp: Bale could
be fit for Milan clash
TOTTENHAM winger Gareth Bale
could make his comeback against AC
Milan in the Champions League,
according to his manager Harry
Redknapp.
Bale has missed the last month
with a back injury but could have
recovered by the time the Serie A
leaders come to town on 9 March.
Redknapp said: “He’s back in train-
ing today so we’ll look at him tomor-
row. He’s started to run, which is
good, so he could be available. He’s an
important player for us.”