Russia'S Revolution: Rate-Riggers To Face Trial in Usa

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Santa comes
early for the
stock market
TRADERS received some festive
cheer yesterday as the FTSE 100 con-
tinued its pre-Christmas gains to
close just below its 2012 high.
The Santa rally is in full flight as
markets hit their highs, declared
Matt Basi of CMC Markets, as
investors celebrated the traditional
end-of-year gains.
Londons leading share index is up
0.7 per cent this week and finished
yesterday at 5,961. This is just four
points below the years highest clos-
ing mark and with just two and a
half trading days left before
Christmas investors will hope that
it can break the milestone before the
year ends.
Irish building materials firm CRH
posted the biggest rise, with its
shares up 4.9 per cent. Londons sec-
ond tier FTSE 250 index yesterday
added to the yuletide goodwill by
closing at an all-time high of 12,402.
Santa has returned to the mar-
kets, bringing some much needed
cheer before the Christmas break,
said Ishaq Siddiqi at ETX Capital.
Traders are feeling risky as such,
picking up euros, stocks, oil and
even gold but dumping core govern-
ment bonds.
The FSA and US Department of Justice published shocking transcripts of brazen online conversations over Libor manipulation
SWISS bank UBS was yesterday hit
with almost 1bn of fines for Libor fix-
ing around the globe a fine three
times larger than the penalty paid by
British bank Barclays in June.
And the US authorities announced
two former traders, including one
Briton, have been charged with con-
spiracy and face extradition.
Dozens of traders and managers
were found to have fiddled rates in the
inter-bank market for the gain of the
bank, themselves and their counter-
parts at other banks and brokerages.
More than 2,000 requests for false
interest rates to be entered were made
on internal messaging systems, in
order to flatter traders positions and
make the bank look stronger than it
was in the financial crisis, the
Financial Services Authority found.
It thinks many verbal requests were
also made, with 40 staff including 11
managers directly involved, as well as
at least two other managers and five
senior managers aware of the practice.
The bank also corruptly paid tens of
thousands of pounds to brokerages to
enter false information.
www.cityam.com FREE
The US Department of Justice
announced former traders Tom
Alexander William Hayes, a 33-year-old
Briton, and Swiss banker Roger Darin,
41, have been charged with conspiracy
in Manhattan federal court.
The FSA has not revealed the names
of those it believes were involved as
investigations are ongoing.
The watchdog fined UBS 160m for
rate fixing, with US fines taking the
total to 940m. Barclays was fined
59.5m in the UK and 290m globally.
UBSs misconduct is considerably
more serious than Barclays because it
was more widespread within the firm,
being exacerbated by the control fail-
ings, said the FSA.
UBS said it has cleaned up its act,
eliminating conflicts of interest by
moving responsibility for Libor sub-
missions to the group treasury. It is
also winding down riskier activities.
We deeply regret this inappropriate
and unethical behaviour, said CEO
Sergio Ermotti. We are committed to
doing business with integrity.
RBS is expected to be the next bank
to settle. Chief exec Stephen Hester has
made clear he wants to put the claims
behind the bank by February.
The manipulation of Libor may have
cost US mortgage giants Fannie Mae
and Freddie Mac losses of more than
$3bn, their regulator estimates.
OLEG DERIPASKA ON HIS NATIONS CHANGING FACE
BY JAMES WATERSON
FTSE 100 5,961.59 +25.69 DOW M13,251.97 -98.99 NASDAQM3,044.36 -10.17 /$ M1.62 -0.01 / 1.23 unc /$ 1.32 unc
GET SET FOR
THE SLOPES
Top gadgets for skiers, see Page 24
See Page 18
MORE: Page 2, The Forum Pages 18-19

Certified Distribution
01/10/12 til 28/10/12 is 129,297
RATE-RIGGERS TO
FACE TRIAL IN USA
ISSUE 1,786 THURSDAY 20 DECEMBER 2012
RUSSIAS REVOLUTION
FTSE
19Dec 13Dec 14Dec 17Dec 18Dec
5,980
5,960
5,940
5,920
5,900
5,961.59
19 Dec
BY TIM WALLACE
940m fine for UBS
as America charges
two with conspiracy
25 June 2009, in a public chat with 58 participants
Manager: JUST BE CAREFUL DUDE.
Trader-Submitter: i agree we shouldnt ve
been talking about putting fixings for our
positions on public chat.
18 September 2008, a trader to a broker:
if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged
today ... I will f***ing do one humongous deal with you ... Like a
50,000 buck deal, whatever ... I need you to keep it as low as
possible ... if you do that .... Ill pay you, you know, 50,000 dollars,
100,000 dollars... whatever you want ... Im a man of my word.
10 June 2009, a broker to a trader:
mate yur getting bloody good at this libor game...
think of me when yur on yur yacht in monaco wont yu
No more heads to roll at
UBS for key rate fiddling
UBS chief executive Sergio Ermotti
yesterday led the charge to rehabili-
tate the banks image, insisting
major changes have already been
made to make sure Libor fiddling
can never happen again.
The fine comes after a series of
blows shaking up the bank, from
rogue trader Kweku Adoboli losing
1.4bn to the bank deciding to wind
down its fixed income operations,
losing 10,000 jobs over the next
three years.
While Barclayss top brass chief
executive Bob Diamond, chairman
Marcus Agius and chief operating
officer Jerry del Missier all
resigned over the scandal, UBSs
leaders are distanced from the crisis.
Ermotti only joined the bank in
September 2011 from Italian institu-
tion UniCredit, while the Libor-fid-
dling took place from 2005 to 2010.
Similarly chairman Axel Weber
took up the role earlier this year,
joining UBS from the Bundesbank.
And investment bank head Andrea
Orcel was hired in March, and so is
also clear of past wrongdoing.
But that does not mean other
traders are not in trouble the
Financial Services Authority is inves-
tigating dozens of former staff, and
although the US authorities charged
two yesterday they are believed to be
Greece faces make or break year
Next year will be a make or break year
for Greeces future as a member of the
eurozone, the countrys finance minister
has said, warning Europes leaders that
Athens still faces the possible risk of
crashing out of the currency bloc.
We can make it next year if we can stick
to the programme agreed with the EU and
IMF, Yannis Stournaras said in an
interview with the Financial Times.
However, the break would be if the
political system finds the situation too
difficult to handle.
Apax calls time on 9bn fund drive
The intensifying struggle by private
equity groups to raise funds has spurred
plans by Apax Partners to call time on its
current fund marketing push after
reckoning its 9bn target is out of reach.
Poultry scare hits KFC owner
Yum Brands, which owns the popular fast-
food chain KFC, saw its reputation in
China shaken yesterday by allegations
that its suppliers injected antiviral drugs
and growth hormones into poultry in
ways that violated mainland food safety
regulations.
Barratt Homes founder dies
Sir Lawrie Barratt, the man who made
homeowning affordable for millions of
Britons, has died aged 85. He achieved
fame in 1977 when his company launched
TV adverts that featured a helicopter
flying over rows of Barratt Homes.
Royal Crown Derby sold to rival
Royal Crown Derby, the maker of
porcelain tableware, was yesterday sold
for an undisclosed sum to Steelite
International, securing 200 jobs.
Inquiry launched into Plebgate
Scotland Yard yesterday opened a 30-
officer investigation into whether there
had been a police-orchestrated conspiracy
to end the career of Andrew Mitchell, the
Conservative Cabinet minister.
Whyte & Mackay profits soar 24pc
Whyte & Mackay, the distiller caught up in
Diageos 1.3bn swoop on Indias United
Spirits, has seen profits jump almost a
quarter as Scotch whisky exports boom.
The company is owned by Indian drinks
tycoon Vijay Mallyas United Spirits.
Catalonia to vote on independence
Nationalist leaders in Catalonia yesterday
agreed to form a new government and
hold a referendum on independence for
the wealthy region, maintaining a push
for autonomy that poses a major
challenge to Spain's central government.
Computer game publisher bankrupt
Videogame maker THQ yesterday filed for
Chapter 11 bankruptcy, and said its assets
will be acquired by affiliates of private
equity firm Clearlake Capital Group LP in a
roughly $60m deal.
UBS chief executive Sergio Ermotti joined the bank after the Libor fiddling took place
2
NEWS
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
T
HOSE that care about such
things have long suspected that
the Barclays management led by
Bob Diamond achieved little for
themselves by being the first to settle
allegations earlier this year that the
bank manipulated a key interest rate.
By doing so, they may have done
well for their shareholders by agree-
ing a less costly penalty. But that will
be mean little to them as they watch
events unfold in the Libor scandal.
The furore that followed Barclays
290m settlement with regulators
resulted in both chairman Marcus
Agius and chief executive Bob
Diamond falling on their swords with-
in days of the deal being announced.
Yesterday the Swiss bank UBS
announced a 940m settlement for
admitting virtually the same
offences a sum more than three
times the Barclays figure and in con-
Diamonds fall was less to do with Libor, more with image
THURSDAY 20 DECEMBER 2012
trast there is likely to be little call for
management change.
Regulators said yesterday that the
fine was so much larger than
Barclays because the misconduct was
more widespread throughout the
firm.
So why is a management cull unlike-
ly?
Importantly, the key figures at UBS,
headed by Sergio Ermotti, were not
around at the bank during the period
between 2005 and 2010, during which
the interbank rates were being
manipulated.
Oswald Gruebel, for example, quit
the firm in September last year in the
wake of the rogue trader affair that
resulted in a $2.3bn loss for unautho-
rised trading, and many other execu-
tives have come and gone since the
time of the Libor indiscretions.
So the UBS story is very much one of
an institution that has cleared up its
stable ahead of an official verdict on
the affair. But its also possible to
envisage a scenario in which its for-
mer management may have survived
Libor had they convinced onlookers
that they had put in place a better sys-
tem.
In the case of Barclays, which settled
its case in June of this year, the situa-
tion was different.
Diamond, who had earned himself
a reputation as a swashbuckling
combination of chancellor George
Osborne, the FSAs Lord (Adair)
Turner and the Bank of Englands Sir
Mervyn King, made it clear they
would rather Diamond resigned.
UBS, and banks such as Standard
Chartered and HSBC alongside it,
have all been hit with massive fines
for wrong-doing, but there has been
no management clearout.
Diamond, on the other hand, smart-
ing from a very public row over his
large pay package, and his reputation
for thinking big and boldly (witness
the US acquisition of Lehman, follow-
ing its parents demise) appeared to
the establishment to symbolise all
that the public now dislikes about
bankers. In their eyes, he had to go,
but it wasnt just Libor that did it.
investment banker, stepped down
when it became clear that a triumvi-
rate of establishment figures wanted
him out.
Chief operating officer Jerry del
Missier also resigned, the third top
executive to do so after chairman
Marcus Agius walked away.
What seems clear is that Diamond
and del Missiers resignations were
not directly related to the Libor allega-
tions, though of course they didnt
help. In the case of Diamond, the
main regulators cleared him of any
wrongdoing, making it difficult for
the Bank of England and the
Financial Services to force him out.
But in the end, as MPs scrutinised
the machinations of the interbank
lending market, it became clear there
was little political capital to be gained
by standing up for the embattled
banks management. Ultimately, a
considering action against others
involved in rate rigging.
The bank has already acted against
those it knows to have been involved.
The majority have been fired or left
the bank, while those involved on the
periphery were given other sanctions,
for example losing their bonuses or
deferred payments.
And UBS said it has changed its Libor-
setting processes to avoid any repeat.
UBS has continued to strengthen its
benchmark submission processes and
procedures, in line with ongoing
industry discussions around bench-
mark reform such as the reviews initi-
ated by the FSA and European
Banking Federation, it said in a state-
ment.
It is believed to have moved the func-
tion to the group treasury to avoid any
direct conflicts of interest, while the
proprietary trading desk whose posi-
tions benefited from the altered rates
has been shut down.
By acting quickly in the settlement
process, the bank received a discount
on its UK fine, worth 20 per cent and
so reducing the charge from 200m to
160m.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
IN BRIEF
US to sell General Motors stake
nThe US Treasury sold $5.5bn
(3.4bn) of shares in General Motors
yesterday and plans to sell the rest of
its stake over the coming year, all but
assuring a multibillion-dollar loss
following the car manufacturers state
bailout in early 2009. At current prices
the Treasury could lose more than
$12bn on its $50bn investment in GM
but the plan is part of a broader push
to exit controversial bailouts made
during the financial crisis.
Fiscal cliff talks turn sour
nTalks to avoid a US fiscal crisis
appeared to stall yesterday as
President Barack Obama accused
Republicans of digging in their heels
due to a personal grudge against him,
while a top Republican called the
president irrational. Politicians have
until the end of the year to avert a
toxic combination of harsh tax hikes
and spending cuts that could trigger a
recession but deep ideological
divisions remain between both sides.
FedEx profits fail to deliver
nFedExs profit fell 11.9 per cent in
the second quarter, as the package
delivery company struggled to
improve results at its air freight
business, it announced last night. The
US-listed firm reported earnings of
$438m (269m). Disruptions relating
to superstorm Sandy and falling
consumer demand for pricey express
postal services dented the results,
though the drop was less severe than
some investors had feared.
EDITORS
LETTER
DAVID HELLIER
Allister Heath is away
david.hellier@cityam.com
1984-1986 Libor developed by the British
Bankers Association to give a daily update
on the rate at which banks were lending
2005 UBS, Barclays and other banks d-
dled various rates around the world in
UBSs case, largely Japanese yen Libor.
Traders tried to x the rate to benet their
trading books.
2007-2009 In the nancial crisis, various
banks entered articially low Libor num-
bers to disguise their true borrowing costs.
2007 In August 2007, US ofcials were
tipped off that rates were being set
articially low by worried banks.
2008 Banks such as Barclays began to
come clean to the authorities that
something was amiss in the Libor system
2009 The BBA reviewed Libor and advised
member banks to do the same but little
action was apparently taken
2011 RBS red staff for alleged Libor-xing
2012 Barclays ned 290m for Libor xing.
Top brass resign after scandal. Regulators
review Libor, taking control from the BBA
and establishing a new board to run the
rate. UBS ned 940m for entering false
data around the globe.
2013 RBS likely to be the next bank to
settle the claims.
TIMELINE: THE
LIBOR SCANDAL
INCOMING Bank of England gover-
nor Mark Carney will receive an
annual housing allowance of
250,000 to cover the cost of renting
in London, it was revealed yesterday.
This is on top of his salary of
480,000 and an annual payment of
144,000 in lieu of pension contribu-
tions. The total package is worth
874,000 per annum.
The size of the deal, which was
signed off by the central banks non-
executive directors yesterday, is
notable at a time when most public
sector workers are subject to a pay
freeze. Mervyn King, the current gov-
ernor, earns the relatively meagre
sum of 305,000 although this
excludes substantial pension contri-
butions.
The government will also cover the
cost of moving Carney and his family
from Canada before he takes up the
post in July 2013, although it is not
known how much the taxpayer will
have to pay.
Carneys generous package is testa-
ment to how far George Osborne was
willing to go in his pursuit of the ex-
Goldman Sachs investment banker.
The chancellor is understood to have
agreed to the substantial housing
allowance so Carney can have the
same standard of life he currently
enjoys at the large home he shares
250,000 extra
to find a castle
fit for a Carney
BY JAMES WATERSON with his wife and four daughters in
suburban Ottawa.
Carney also persuaded the chancel-
lor to let him serve a five-year term of
office rather than the traditional
eight-year period. This has led to
repeated speculation that he is
already planning to take up an active
role in Canadian politics.
Despite the substantial pay package,
yesterday few politicians were willing
to publicly criticise the widely-praised
appointment of a man who will be
tasked with overseeing Britains eco-
nomic recovery and have beefed-up
regulatory powers.
Mark Carney has been governor of the Bank of Canada since February 2008
Despite being handed a 250,000 a year
housing allowance, Mark Carney might
struggle to find his dream five-bedroom
house within easy reach of the Bank of
England. After tax at 45 per cent he will
have a budget of around 2,600 per week
but according to Savills London rents
are such that he could have to make his
four daughters share bedrooms. Savills
can provide a three-bed apartment near
Regents Park for 2,500 per week or an
unfurnished four-bed Hampstead villa for
2,000. A three-bed Belgravia apartment
is 2,650. Alternatively, Carney could rent
somewhere more spacious if he dips into
his combined salary and pension of
624,000 per year.
WHERE TO, GOVERNOR?
3
NEWS
cityam.com
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OXFORD STREET WESTFIELD LONDON WESTFIELD STRATFORD CITY
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PANDORA.NET
My Story, My Design
THE London Stock Exchange is
renegotiating its original offer for
clearing house LCH.Clearnet after
new European regulations
increased the cost of buying the
company.
LCH.Clearnet, which grew out of
The London Clearing House
established in the City in 1888, had
agreed to accept an offer from the
LSE in the region of 460m
(373m), or 18 a share, back in
April after several months of
negotiations.
But incoming regulations from
London Stock Exchange reduces
LCH.Clearnet offer as costs rise
BY MICHAEL BOW
the European Securities and
Markets Authority and the
European Banking Authority
adopted yesterday are set to
increase the capital buffers
LCH.Clearnet needs to hold,
shifting the costs onto the LSE
once a deal is completed.
Yesterday both firms said they
were discussing potential changes
to the commercial terms of the
transaction.
It is thought the LSE has
reduced its offer to 13 a share, or
312m in total. The new offer will
need to be backed by shareholders
and management.
Takeover Panel starts probe
into creation of miner Bumi
THE Takeover Panel has launched
an investigation into the details of
the reverse takeover that created
coal miner Bumi, after ruling that
two Indonesian shareholders were
acting as concert parties.
It deemed that two founder
shareholders Rosan Roeslani and
the Bakrie family, which together
control around 50.3 per cent of
Bumi were acting in concert
with one another.
The Takeover Panels ruling
BY CATHY ADAMS means that Roeslani who stood
down from the Bumi board and
the Bakrie family now have their
voting interests reduced to less
than 30 per cent.
As a result of the ruling,
the watchdog has launched
another probe into why it
was not made aware of the
existence of the concert
party when Bumi came into
being in 2010.
Additionally, the
Bakrie family said
yesterday they
have lodged a formal complaint to
the Takeover Panel regarding the
conduct of Bumi co-founder Nat
Rothschild during the original
reverse takeover in 2011. The
family also reiterated its
demand for Rothschild to give
up his bonus shares awarded
for the deal.
Bumi said it would continue
with the plan to divorce from
Indonesian Bumi Resources.
Bumi co-founder Nat
Rothschild
AN ITALIAN court yesterday found
Deutsche Bank, Depfa Bank, JP
Morgan and UBS guilty of fraud
for mis-selling derivatives to Milan
in a case that could set a
precedent for hundreds of local
governments.
The court ordered the seizure of
just under 90m (73m) from the
lenders, which were each fined
1m. Nine bank employees were
handed suspended jail sentences
of up to eight months.
The verdict related to a swap
contract signed by the city of
Milan council when it issued a
1.68bn, 30-year bond back in
2005.
This is an historic sentence
because it has recognised the
principle that banks dealings
with the public administration
must be transparent, prosecutor
Alfredo Robledo told reporters
after the verdict.
Deutsche Bank, JP Morgan and
UBS said in separate statements
they had done nothing wrong and
would appeal.
Italian court
fines banks for
mis-sold swap
BY CITY A.M. REPORTER
REVENUES at global investment
banks tumbled through 2012 on the
weak equity markets, low merger and
acquisition activity and falling syndi-
cated loan incomes, according
Dealogics annual review, published
yesterday.
But increased bond issuance
stopped the year from being a
washout, as governments continued
to tap the markets heavily and compa-
nies continue to rely on the markets
rather than banks for funds.
JP Morgan topped the industry rank-
ings by wallet share for the year, its
fourth consecutive year at the top,
with 7.6 per cent of total revenues,
down on 8.1 per cent last year.
It was followed by Bank of America
Merrill Lynch, with 6.5 per cent, and
Goldman Sachs on 5.8 per cent.
Weak markets
hit investment
bank revenues
BY TIM WALLACE
Total investment bank revenues
came in at $63.6bn (39.1bn), down
nine per cent on the year and the low-
est total since 2009.
Debt capital markets revenue
accounted for 33 per cent of that, up
from 23 per cent in 2011 and the high-
est share since 1997. In cash terms, rev-
enues rose to $21.1bn.
But equity capital markets revenue
fell to $13.3bn, accounting for 21 per
cent of total revenues, the lowest pro-
portion on record.
Initial public offerings (IPOs) were
particularly sparse, with revenues
falling 33 per cent to $3.8bn just six
per cent of the banks revenues, from
8.2 per cent in 2011.
Syndicated loan revenues dropped
32 per cent to $11.8bn, or 19 per cent
of investment bank revenues.
And merger and acquisition incomes
slumped 15 per cent to $17.5bn.
Fitch warns UK and US could
lose triple-A rating next year
BRITAIN, the US and France are
all at risk of losing their coveted
triple-A credit ratings, leading
agency Fitch warned yesterday, as
all three governments struggle to
control their runaway borrowing.
It notes the USs fiscal cliff
represents the biggest single
problem facing government
finances and economic growth
next year, though it believes the
impending crisis will be resolved.
The ongoing Eurozone
problems are also a key factor, as
well as wider growth concerns.
The fiscal cliff has the
potential to tip the US into an
unnecessary and avoidable
recession, with negative
implications for global growth,
noted its report.
However, the agency expects a
deal will eventually be made, to
dodge the $600bn (368.7bn) in
automatic tax rises and spending
cuts which are due to come in
BY TIM WALLACE
the new year.
Fitch still anticipates a
material fiscal tightening of 1.5
per cent in the US economy in
2013, but this falls well short of
the five per cent implied by the
fiscal cliff.
The renewed Eurozone
recession also presents a
challenge to government finances
and the global
economy.
Significant
challenges still
confront policy-
makers, both in
terms of moving
towards greater fiscal
and financial risk
sharing and
in breaking
the
negative
feedback
loop
between
sovereigns and their banking
systems, Fitch noted.
And it added the UKs negative
outlook reflects concerns over
limited fiscal headroom, high
debt levels and a weaker than
expected recovery.
The UK is struggling to get its
borrowing down, despite political
rhetoric around spending cuts.
The latest figures from the
watchdog, the Office for Budget
Responsibility, expect the deficit
to fall only slowly in the coming
years, coming in at 6.1 per cent of
GDP in 2013-14, 5.2 per cent the
following year and 4.2 per cent in
2015-16.
That will send the
national debt to peak at
79.9 per cent of GDP in
2015-16, missing earlier
targets for it to be in
decline by that year.
Societe Generale has lost a high-
profile lawsuit against a fired
London-based investment banker
that could cost Frances second-
largest bank up to 20m (16.3m).
The UK Supreme Court ruled
yesterday that Belgian banker
Raphael Geys, SocGens former
managing director of European
fixed income sales in London, had
been sacked without proper notice
in 2007.
The bank could easily have done
things properly, said Judge Brenda
SocGen loses bonuses lawsuit
Hale, one of five judges presiding
over the case. But for whatever
reason they did not do so.
Geys, a senior banker who says
he was fired for being too
successful, will now claim around
12.5m in unpaid severance pay
from SocGen. He can also pursue
the bank for damages worth
several million euros more for
failing to ensure his bonuses were
paid in a tax efficient manner.
The judges said an employment
contract can only be terminated
without notice after the innocent
party accepts the decision.
4
NEWS
cityam.com
Raphael Geys has won his case against Societe Generale over severance payments
KNIGHT Capital, the US market
maker which nearly collapsed
over the summer after a trading
glitch, yesterday said it would
merge with its rival Getco
Holdings in a $1.8bn (1.1bn)
deal.
The tie-up, which will create
one of the biggest electronic
market makers in the world,
will see Knight shareholders
receive $3.75 a share, a 13 per
Knight Capital and Getco to
merge making market giant
BY MICHAEL BOW cent premium on Knights
closing price of $3.33 on
Tuesday. The new business will
be publicly listed, with Knight
shareholders being offered
either $3.75 a share or the
option of taking one share in
the new company.
Knight nearly collapsed in
August after a trading glitch
cost the firm $440m. It was only
rescued after a consortium of
investors, including Getco, paid
to save it.
THE EUROPEAN Central Bank
yesterday lifted a ban and allowed
Greek banks to use the countrys
sovereign debt as collateral in ECB
funding operations, allowing the
banks cheaper financing.
The lifting of the ban, which has
been in place since July, is due to
the countrys progress with reform
measures, budget-cutting and
privatisations, the ECB said.
Greek bonds and banking stocks
rallied sharply after the news.
ECB ends ban
on Greek debt
BY JAKOB VILLUMSEN
George Osborne is trying
to cut the UKs huge deficit
THE Co-operative Group has hired a sen-
ior retail executive with no prior finan-
cial services experience to be its new
chief executive, as it prepares to expand
the size of its banking business.
The banking and supermarket con-
glomerate said Euan Sutherland, cur-
rently chief operating officer at home
improvement retailer
Kingfisher, will replace
Peter Marks when he
retires next year.
The mutually-owned
group said Sutherland
brings with him consider-
able experience of the strate-
gic leadership needed
in complex customer-
facing businesses.
The 43-year old, who
has also held senior
Co-op poaches
new group chief
from Kingfisher
BY KASMIRA JEFFORD
roles at Superdrug and Mars, has sat on
the board of the Co-ops food division
since 2010. Nevertheless his departure
from Kingfisher came as a shock.
He was considered an heir apparent to
Ian Cheshire, the retailers chief execu-
tive, and was promoted from running its
high street business B&Q to his current
role in June.
Sutherland was, in our view, a major
contributory factor in the recovery of the
UK business over the last five years, said
Seymour Pierce analyst Freddie George.
The Co-op bought 632 bank branches
from Lloyds this year, transforming the
group into a powerful new rival to the
UKs big retail banks, and expanding Co-
ops high street presence to
around 1,000 branches.
5
NEWS
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VISIT: WWW.HUGOBOSS.COM
NOW ON
Euan Sutherland, Kingfishers
chief operating officer
Trading watchdog is criticised
over credit fees shortcomings
The UKs trading watchdog has
been slammed by the National
Audit Office (NAO) over its failure
to protect consumers from
inflated credit fees.
A report from the NAO,
published yesterday, found that
the Office of Fair Trading (OFT)
is not delivering value for money
because it is not minimising
harm from unscrupulous trading
practices.
The report found that
consumers lost at least 450m
BY JAMES TITCOMB
last financial year because the
regulator did not address
problems associated with
companies in the consumer credit
markets, such as credit card firms
and payday lenders.
The NAO said that insufficient
sums spent on the issue was to
blame for the watchdogs failures.
The OFT spent 11.5m regulating
the consumer credit market last
year, which was not enough
given the size of the market and
levels of consumer harm.
However, the report did praise
the office in part, saying the OFTs
work was effective when carried
out. The NAO estimated that the
OFT saved consumers 8.60 for
every 1 it spent on enforcing
regulations.
NAO head Amyas Morse said:
The governments proposed new
regulatory system will need to
address these problems.
The Department for Business,
Innovation and Skills responded
by saying that the Financial
Conduct Authority, due to be set
up in 2014, will be better placed to
handle unscrupulous lenders due
to it having wider powers.
RETAIL footfall fell sharply in the
week to 16 December compared with
last year, but improved on the previ-
ous week as trading gathered pace in
the run-up to Christmas.
Shopping centres suffered the worst
decline in visitors, with footfall plung-
ing 4.3 per cent on a year ago, the BRC-
Springboard Footfall Monitor showed,
while out-of-town footfall fell 2.1 per
cent and high streets were down two
per cent.
But footfall rose by 3.3 per cent on a
week-on-week basis, with shopping
centres jumping 5.7 per cent.
BRC director general Helen
Dickinson said there was still time for
retailers to gain lost ground.
Were predicting a last-minute rush
which means its all still to play for in
terms of how Christmas trading ends
up overall, she said.
Diane Wehrle, research director at
Springboard, said the year-on-year
decline was symptomatic of the
pressures on the retail sector and on
consumers this Christmas.
She said the figures were also down
against strong comparatives a year
ago.
Shoppers delay
their Christmas
gift purchases
BY KASMIRA JEFFORD The shift towards online shopping
has also distracted spend away from
shopping centres and high streets.
Visa Europe said this Saturday is set
to be the busiest high street shopping
day of the year, as consumers hold out
for last minute bargains and take
advantage of the extra weekend ahead
of Christmas.
The firm predicts shoppers will
spend 1.26bn on their Visa cards on
Saturday or 15,000 every second.
Visas weekly tracker showed spend-
ing increased by 1.7 per cent in the
week to 16 December but was still
down on the year by 2.9 per cent.
The way in which Christmas falls
this year means that, in comparison to
2011, we appear to be a week behind in
terms of consumer spending, Dr Steve
Perry, commercial director, said.
Lacklustre figures from the
Confederation of British Industry (CBI)
also suggested a weak start to the key
Christmas trading period.
The CBI distributive trades survey
showed that the balance of retailers
reporting that sales were up year-on-
year fell back to +19 in December from
a five-month high of +33.
Analysts had forecast a smaller
decline to +25.
WILL YOU CHRISTMAS SHOP THIS
SATURDAY? Interviews by Jakob Villumsen
No, I will be drinking mulled wine with my
friends. I bought all my presents online this
year to avoid the last minute shopping. In fact, the last
one just arrived with the mail.
These views are those of the individuals above andnot necessarily those of their company
ELLA JENKINS
ACCENTURE
Yes, I am late and still have to buy presents for

my nephews and nieces. But I am not going
shopping per se, because I already know what I want and
will just go and pick it.
JUDE AWANI
AVIVA
No, if I did, I would be in serious trouble. I
have to go and pick up my mother-in-law and
about 10 other errands to do, so I have to get everything
done before the weekend.
MIKE WOOLLARD
SJ BERWIN
Saturday is predicted to be the busiest high street shopping day of the year
CITYVIEWS
7
NEWS
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Making waves
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Festive trading is slow for UK
supermarkets as sales weaken
SUPERMARKET grocery sales have
slowed in the past four weeks, held
back by weak general merchandise
sales and the continued squeeze on
consumer budgets.
According to the latest data from
Nielsen, grocery sales in the four
weeks to 8 December rose 1.3 per
cent year-on-year. That compared
with a two per cent growth in the
previous four weeks.
Volumes sales also fell by 0.5 per
cent compared to a 0.8 per cent
growth in the previous period.
Mike Watkins, head of retailer
insight at Nielsen, said: The
sluggish sales figures are partly due
BY KASMIRA JEFFORD
to shoppers delaying big shopping
trips until the final week before
Christmas when fresh foods are also
purchased.
Investec analysts said the
performance was disappointing
and warned the high amount of
promotional activity could impact
profitability across the sector.
Tesco outperformed peers with
sales up 3.6 per cent in the 12 weeks
to 8 December, helped by the use of
coupons and vouchers and easy
comparatives on last year.
M&S increased sales by 1.2 per
cent followed by Sainsburys up by
1.2 per cent. Morrisons sales trailed
behind, falling by 2.2 per cent.
KODAK has agreed to sell some of its
patents to a group including Google
and Apple for $525m (323m).
The bankrupt photography firm
is selling the patents in order to pay
off its massive debts. However, they
reached far less than the $2.6bn
that had originally been floated.
It is selling around 1,100 patents
to Intellectual Ventures and RPX,
two companies which buy out
patents and then licence them.
Companies contributing to the
purchase include Apple, Google,
Facebook, Samsung, Microsoft, RIM,
and Amazon. The patents concern
digital imaging technology.
Kodak patents
go for $525m
BY JAMES TITCOMB
SHARES in Scottish football giant
Rangers closed at 76p after their first
day of trading on the Alternative
Investment Market (AIM) yesterday,
signalling a dramatic comeback for
the newly formed club.
The previous incarnation of Rangers
fell into liquidation earlier in 2012,
but was rescued by the birth of a new
club led by chief exec Charles Green.
Green has followed through with
his plan to raise around 22.2m from
a listing of more than 30m new
shares, sold for 70p each.
Investors responded well on the
stocks first day of trading, sending
the price higher than the initial price.
Its been an oversubscribed placing,
so they actually achieved 2m more
than they initially forecast, Michael
Jarman of H20 Markets told the BBC.
The club does offer value youre
talking 26 Rangers to buy one
Manchester United.
Yet Rangers are still playing in the
fourth tier of Scottish football, as the
new club was forced to start from the
bottom of the ladder when it was
formed in the summer.
Rangers score
debut goal on
London listing
BY JULIAN HARRIS
The sale gives Rangers a market capi-
talisation of 45.6m, despite it current-
ly lying in the lower leagues.
The money raised from yesterdays
listing will allow it to invest in players
and return to the Scottish Premier
League, Green claimed.
We are delighted to see our plans
for bringing Rangers back to its glory
days coming to fruition; a key part of
which is its listing on AIM today. The
response from investors and fans alike
has been tremendous and we are very
proud to have such loyal
supporters, Green said.
The CEO said that over 5m-worth of
shares have been purchased by the
teams supporters.
S
IR Alan Sugar once compared
the money in football to prune
juice what goes in seems to
be nice and healthy, but in fact
just goes straight back out again.
The figures appear to back up his
claim. In 2010-11, Premier League
clubs enjoyed an eye-watering 2.3bn
in revenue, yet somehow still ended
up with 361m in losses, overall.
In Rangers native Scotland, the
revenue streams are far, far thinner.
So why would anyone other than a
die-hard fan want to buy the stock?
Well for a start, there are notable
exceptions to the rule. Arsenal
shares have soared to over 17,000
from a mid-1990s price of 700.
Like the Gunners mid-1990s price,
Rangers shares are potentially (a
crucial word) very cheap. It may
seem absurd that a fourth tier
Scottish team can be worth 45m,
but Rangers FC remains a real giant.
The team enjoys huge crowds
42,135 watched them beat Annan
Athletic (who?) on the weekend.
They will no doubt achieve
successive promotions and return to
the top division. But Scottish football
is not lucrative, even at the peak,
thus why chief executive Charles
Green keeps talking up the prospect
of a pan-European league.
This, in all probability, is a pipe
dream, and certainly no rational
basis for investing your cash. The
new Gers have got off to a great start
but the long game will prove tough.
BOTTOM
LINE
JULIAN HARRIS
Rangers CEO Charles Green was previously head of English club Sheffield United
Rangers
16:00 14:00 12:00 10:00 08:00
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77.0
74.5
75.0
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NEWS
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* For Business Users only. Advance payment applies. Ocial government fuel consumption gures in mpg (litres per 100km) for the E-Class Saloon range: urban: 20.5(13.8) -
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includes Road Fund Licence for the contract duration. Guarantees and indemnities may be required. Orders/credit approvals on selected E-Class Saloon models between 1 October and 31 December 2012, registered by 31 March 2013. Subject to availability, oers cannot be used in conjunction with any other
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n In 1983 Tottenham became the first
English football club to float on the
London Stock Exchange (LSE). On 16
January this year, it was delisted by
ENIC the investment vehicle of
billionaire businessman Joe Lewis.
n Manchester United floated on the LSE
in 1991 while under the chairmanship of
Martin Edwards. The move raised capital
and later allowed fans to buy shares in a
bid to block takeover bids. Yet in 2005
the Glazer family took over and delisted
the club. Earlier this year the Glazers
issued some shares in a New York based
initial public offering (IPO).
n In the mid-1990s Rangers fierce
Glasgow rivals, Celtic, floated on the LSE
in a bid to raise cash and put the club
back on a firmer financial footing.
n Meanwhile back in London, Arsenal
joined Plus Markets a junior stock
market in 1995. Arsenal had
attempted share issues as far back as
the early 20th century as the club
struggled to stay financially stable while
still based in south east London. But
now the modern Arsenal which has
played in north London since 1913
allowed shares to be bought for 700
each. They are now worth over 17,000.
n A year later the Gunners London
rivals Chelsea were floated on AIM by
Ken Bates. Seven years later, in 2003,
Russian billionaire Roman Abramovich
bought the club for around 140m.
Abramovich still owns the club
outright.
n In the west of the city, Queens Park
Rangers were one of many clubs in the
1990s to attempt to raise funds from the
financial markets. In 1996 the Hoops
were listed again after being merged
with rugby club Wasps.
FOOTBALL FLOTATIONS
Dont bet on dreams of a Euro
League turning into a reality
PROPERTY developer CLS Holdings
has been given the green light for its
500m Vauxhall Square scheme in
Nine Elms.
The 1.5m square foot mixed-use
scheme will include 520 new homes,
410 of which will be in two 50-storey
towers and 110 affordable properties.
The scheme forms part of the
regeneration of the Nine Elms area
and sits near to the new US embassy
and Vauxhalls transport links. It will
also include 245,000 sq ft of offices,
shops, two hotels, a homeless hostel,
student housing and a cinema.
CLS given nod
for Vauxhall
BY KASMIRA JEFFORD
DRUGMAKER GlaxoSmithKline has
reached a $150m preliminary
settlement with US drug
wholesalers who claimed the
company improperly delayed entry
to the market of generic
alternatives to its nasal spray
Flonase, court documents show.
The settlement was reached with,
among others, AmerisourceBergen ,
Cardinal Health and McKesson,
who maintained that Glaxo had
abused the citizens petition
process to maintain a market
monopoly.
GSK settles a
nasal lawsuit
BY HARRY BANKS
DISTRIBUTION firm Bunzl contin-
ued to blaze the acquisition trail yes-
terday, buying two businesses in
Canada and Australia, as it said trad-
ing was in line with expectations.
The FTSE 100 firm announced yes-
terday that it was to acquire
Canadian glove distributor
McCordick Glove & Safety and
Australian medical supplier Atlas
Health Care in a deal thought to be
worth over 30m.
Bunzl has announced nine acquisi-
tions in the year to date, with annu-
alised revenue from 2012 of around
210m. It added that the current
environment for acquisitions
remained positive.
Revenue growth for the year to
December is expected to be around
six per cent, Bunzl said in a pre-close
statement yesterday. Underlying rev-
enue growth for the year is expected
to be around 2.5 per cent.
Bunzls strong cash flow and bal-
ance sheet should continue to
enable the company to take advan-
tage of opportunities to consolidate
further the markets in which it
Bunzl acquires
two businesses
in buying spree
BY CATHY ADAMS
competes and increase shareholder
value, it said yesterday.
The City was not cheered by the
statement though, and Bunzl was
the biggest faller on the blue chip
index yesterday.
Caroline de la Soujeole, industrial
goods and services analyst at
Seymour Pierce, said the results
were a touch below our expecta-
tions.
Trading in the fourth quarter of
2012 was lighter than we anticipat-
ed, she said, downgrading the stock
from hold to reduce.
Bunzl closed down 4.32 per cent at
1,020p yesterday as analysts reduced
their earnings estimates.
PLANS for a 40bn four-runway airport on sandbanks off the east coast of Kent were unveiled
yesterday by maritime engineers at Beckett Rankine. Goodwin Sands is being proposed as the
the most sustainable solution to expand airport capacity in the south east. The proposal
would need to fend off competition from Heathrow and the Thames Estuary plan.
40BN AIRPORT HUB PLAN UNVEILED
Bunzl PLC
1,040
1,050
1,060
1,010
1,020
1,030
1,070
1,080 p
1,020.00
19Dec
10
NEWS
cityam.com
However, yesterdays update will
have reassured the bidders about the
strength of the business, especially in
Australia where amounts wagered
were up 11 per cent year-on-year.
Sportingbet shares rose 2.6 per cent,
although those close to the deal batted
away suggestions that the cost of the
acquisition would be revised ahead of
tomorrows deadline.
Sportingbet, William Hill and GVC
extended a deadline for the bidders
to make a formal offer on Tuesday.
They now have until 5pm tomorrow
to finalise a bid.
Meanwhile, Sportingbets
annual meeting yesterday
saw one third of shares
either vote against or
abstain over the compa-
nys executive remunera-
tion plan. Around 300m
votes were in favour of
the plan, while 82m
opposed it and 63m
abstained.
It came after share-
holder advisory group
Pirc opposed the plan.
ONLINE bookie Sportingbet said yes-
terday that trading has been back on
track in recent weeks, following a dis-
appointing set of first-quarter results
that preceded William Hill and GVC
Holdings cutting their offer for the
company.
In a trading update before
yesterdays annual meeting,
Sportingbet said the group
had seen a return to more
normal levels of activity in
November and in the first half
of December, following chal-
lenging conditions in
the previous quarter.
Sportingbets first-
quarter results had
raised worries about its
lucrative Australian
business, and an
agreed price of 530m
was cut to 485m a few
days after the results.
Sportingbets
trading ticks up
ahead of sale
BY JAMES TITCOMB
IN BRIEF
WPP sells Madison Avenue office
n After 86 years under one owner, ad
giant WPP has sold 285 Madison Avenue
building in New York for $189m (116m).
The property has housed WPP
subsidiary Young & Rubicam (Y&R) since
1926. Y&R is one of the last advertising
firms still on Madison Avenue, which
typified the industry in the 20th century.
Penguin agrees ebook price deal
n Penguin is the latest book publisher to
agree a settlement with US authorities
over alleged ebook price fixing. The firm,
owned by Pearson, was accused of
colluding with Apple and other major
publishers. The decision means the likes
of Amazon can now discount ebooks.
BAT buys out e-cigarettes firm
n British American Tobacco (BAT) has
made further strides in the e-cigarette
market, buying Manchester-based CN
Creative. The cost was not disclosed,
but is believed to be in the tens of
millions of pounds. BATs Kingsley
Wheaton said that the firm is looking to
provide safer alternatives to cigarettes.
Sunset+Vine scores BT contract
n BT yesterday awarded a deal to
produce its forthcoming sports channel
to broadcaster Sunset+Vine, which
produced Channel 4s Paralympic
coverage. Sunset+Vine will handle BTs
sports coverage, including Premier
League football, from next season.
Sportingbet boss Andrew
McIver is selling the firm
11
NEWS
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On his naughty
list? Revenge
of Secret Santa
One City-based broker told the story
of a colleague with a poor deskside
manner, who would frequently
return from lunch with grease stains
and basically his entire meal on his
shirt.
Our spotless broker couldnt believe
his luck when he drew the messy
neighbour in the floors Secret Santa
sweepstakes: I bought him an
adult bib that has a tie printed on
it, and some baby wipes.
Ho-ho-ho. But how did he
remain incognito, you
ask? I wrote it with my
left hand so that he
didnt know it was
me.
Broadgates ice taxi is on the road - tweet a photo to win a free skating session
13
cityam.com
Breaking news from the bookies
the world is highly unlikely to end
tomorrow. Ladbrokes are taking bets
on the fate of the earth, with those who
think the Mayans are right able to take
odds at 2,112/1 and odds the other
way for the no doom today, thanks
camp at 1/9,999. However,
The Capitalists spy at the bookmakers
confided that: Weve racked up a
decent liability on the world ending to
our Mexican customers. He also
revealed that bets will be settled
according to the state of the world at
midnight on Friday. Which begs the
rhetorical question, who would be left
to pick up their winnings if it all goes
apocalyptic?
As tradition dictates, singing City
boys flocked to the Lamb and Flag
in Covent Garden last night, for the Kew
Occasionals rugby club's now legendary
Christmas carol session. The annual
recital has become a regular fixture for
many young City warblers, so much so
that pub staff, worried that they hadnt
received word of this years choral
outing, contacted the captain of the self-
styled best looking rugby club in
London, to check it was still firmly on the
festive agenda. Led by broker and head
chorister Phil Boon, favourites such as
Silent Night were belted out in several
languages alongside the most
traditional of Celtic carols, Fairytale of
New York. Most memorable? Executive
recruiter John Purcell's enthusiastic
rendition of Mariah Carey's All I Want for
Christmas is You.
cityam.com/the-capitalist
THECAPITALIST
EDITED BY CALLY SQUIRES
Got A Story? Email
thecapitalist@cityam.com
COMMUTERS hailing cabs around
Liverpool Street station should
keep an eye out for Broadgates ice
taxi that has been cruising around
the City.
Budding skaters who snap a
photograph of the cab driving
through town can tweet their
picture using #BroadgateIce to be
in with the chance of winning a
two-for-one skate voucher at the
rink.
City winter sports fans who
fancy themselves as team players,
as opposed to solo superstars,
might consider ditching the blades
altogether and getting involved in
a game of broomball.
An import from Canada, the six-
a-side sport resembles ice hockey,
with a ball and broom replacing
puck and stick. No doubt Mark
Carney will be coaching a Bank of
England team next year, so best to
start practicing now. The ice cab
will be on the road until 28
December, so spotters would be
advised to get their skates on.
Your Secret Santa will
let you know if you
have been naughty
or nice
Snap the cab and win a skate,
or sweep, at Broadgate ice rink
A DISTURBING Christmas survey
from NPW, the supplier of impulse
purchase products to high street
stores such as John Lewis and
Paperchase.
The firms Christmas elves told The
Capitalist that not only do a
third of us now enter into
office present-giving via a
mystery Father Christmas,
but 32 per cent of chief
executives use Secret
Santa as an excuse to
anonymously wreak
revenge on their least
favourite colleagues.
The Capitalist was
sceptical but con-
ducted its own
research, and dis-
covered Santa style
punishment was rife
in the Square Mile.
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THE GOVERNMENTS flagship
lending scheme is boosting the
mortgage market more than it is
improving the supply of credit to
small businesses, a Bank of England
report said yesterday.
The Funding for Lending Scheme
(FLS) was introduced by the Bank
and the government this year, with
the intention of loosening credit
and aiding economic growth.
The FLS works by incentivising
banks to lend by providing
conditional funding at low rates.
But the Banks latest agents
summary of business conditions
said: The FLS appeared to be having
a more immediate impact on the
mortgage market than on business
lending. Demand for bank
borrowing among smaller firms
remained weak.
Many small firms are preferring
to pay down existing debt or build
cash reserves, the report said,
while larger companies are able to
access very favourable terms via
corporate bond markets or private
funds.
A spokesperson from the
Federation of Small Businesses told
City A.M.: Recent data shows the
FLS having more of an impact for
homeowners. We should see next
year that small businesses start to
access it more; we will be keeping
an eye on the figures.
Lending plan
mainly boosts
house market
BY JULIAN HARRIS
EIGHT of the Bank of Englands nine
rate-setters voted against more quanti-
tative easing at this months meeting,
with the panel warning that inflation
is likely to stay above target for anoth-
er year.
Yet the minutes of the Monetary
Policy Committee, published yester-
day, also warned that the economy
could have contracted in the final
three months of 2012.
David Miles was the only member of
the nine-man committee to vote for a
further expansion of the Banks bal-
ance sheet. Miles, who has been
notable for making dovish noises
of late, said the Bank should
expand its asset purchases from
the existing 375bn total, to
400bn.
His colleagues were not con-
vinced, however, and the
Bank will end 2012
with its stock at
375bn, and
with interest
rates held
again at 0.5
per cent.
Inflation to stay
above target in
2013, Bank says
BY JULIAN HARRIS
Most members agreed that develop-
ments on the month had done little to
alter the balance of arguments
between maintaining and increasing
the size of the monetary stimulus,
the minutes said.
Octobers inflation level of 2.7 per
cent on the consumer price index was
higher than had been anticipated by
the committee, it admitted. Figures
released this week showed that infla-
tion stuck at 2.7 per cent in November,
too.
Regarding economic prospects, the
minutes said: The
Committees best judge-
ment was that the out-
look was for broadly
unchanged underlying
output over the turn of
the year. Taken togeth-
er with the unwind of
the third-quarter boost
to GDP from the Olympic
Games, it was quite likely
that headline GDP would
register a contraction
in the fourth quarter.
THE WORLD Bank has raised its
2013 economic growth forecasts for
China and developing East Asia,
saying yesterday the region remains
resilient despite the lacklustre
performance of the global
economy.
For 2013, we expect the region
to benefit from continued strong
domestic demand and a mild global
recovery that would nudge the
contribution of net exports to
growth back into positive territory,
a trend projected to continue into
2014, the World Bank said.
However, it warned of risks such
World Bank increases its growth
forecast for China and East Asia
BY HARRY BANKS as a sharp drop in investment
growth in China that could shake
global confidence.
Conversely, it said countries
should keep an eye on its currency
and inflation rates as overseas
investors race to invest in Asia.
The World Bank said China was
expected to expand by 8.4 per cent
next year, fuelled by fiscal stimulus
and the faster implementation of
large investment projects. This is
higher than the 8.1 per cent cited
in October. For developing East
Asia as a whole, next year's growth
is expected to come in at 7.9 per
cent, up from an earlier forecast of
7.6 per cent.
15
NEWS
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This Christmas, most
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But others, like Emma,
will be wishing more
than anything, for their
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Will you be a Santa for the NSPCC and send
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Shanghai has been an engine of growth in China
Sir Mervyn Kings Bank
warned over inflation
IN BRIEF
Fresh takeover bid for Billabong
nA fresh $555m (341.6m) offer for
Billabong found little favour with
investors yesterday as the stock dived 13
per cent on concern the Australian
surfwear firms latest profit warning
might lead the suitor to lower or even
withdraw the bid. Billabong said a
consortium led by board director Paul
Naude and New York-based private
equity firm Sycamore Partners had
offered A$1.10 a share far lower than
TPGs A$3.30 offer in February and
subsequent A$1.45 bids from TPG and
BP sells stake in China gas field
nOil giant BP yesterday announced
that it is to sell an interest in a Chinese
gas field in a $308m (189m) cash
deal. The sale of its 34.3 per cent
interest in Yacheng, in the South China
Sea, to Kuwait Foreign Petroleum
Exploration Company is part of BPs
ongoing divestment programme. The
sale of Yacheng takes BP's total
divestments announced since 2010 to
$37.8bn. BP said yesterday it will
continue to work in the nation.
Gulfsands buys into Morocco
nJunior stock market-listed
Gulfsands Petroleum has acquired a
Moroccan oil explorer for around
$30m (18m). Cabre Maroc, acquired
from Caitness Petroleum Limited,
operates several highly prospective
oil and gas licences in North Morocco.
Completion of Gulfsands Petroleums
acquisition is due to complete in
January, and development and
exploration activity will start next
year. RBC Capital Markets advised on
the deal.
THE INSURANCE industry celebrated
yesterday after Swiss Re said the total
bill for natural catastrophe payouts
in 2012 will be around $65bn (40bn),
down from last years near-record
$120bn.
Most of the total can be ascribed to
the roughly $25bn cost of superstorm
Sandy, which swept across the
Caribbean and United States in late
October. However the first nine
months of 2012 were free from any
disaster on the same scale as 2011s
Japanese tsunami, New Zealand
earthquake or Thai floods.
Swiss Re estimates the total eco-
nomic losses from natural catastro-
phes and man-made disasters to
hit $140bn in 2012, of which
almost half will be covered
by insurers or reinsurers.
Although insurance
cannot bring back lost
lives, many people and
businesses can rely on
financial relief from insur-
ance cover, as is the case
for the US, said Swiss Res
chief economist Kurt Karl.
Insurers win as
disaster claims
halve in 2012
BY JAMES WATERSON
However, in large parts of the globe
that are prone to severe weather
events, people and businesses could
increase risk-preparedness by elimi-
nating underinsurance.
Meanwhile Lloyds of London yester-
day revealed that the insurance mar-
ket will pay out $2bn to $2.5bn to
meet claims from superstorm Sandy.
Lloyds said that it would be able to
pay out with minimal impact on its
members capital and it would not
have to dip into its central fund a
reserve fund used to meet claims if a
syndicate finds itself unable to
pay.
Chief executive Richard
Ward said: The Lloyds insur-
ance market remains finan-
cially strong and, while
claims from this storm
could still evolve over
time, the markets total
exposure is well within
the worst case scenarios
we model and prepare
for.
Saudi plane price dispute could
knock earnings at BAE Systems
BAE Systems yesterday warned that
its 2012 earnings could take a hit if
it does not reach an agreement with
Saudi Arabia on the pricing of a key
contract in the next two months,
potentially hampering growth.
The arms maker, Europes largest
defence contractor, is hunting for
growth as a standalone company
after failing to complete a $45bn
(27.7bn) merger with the Franco-
German maker of Airbus civilian
jets, EADS, in October.
BAE said it remains in discussions
with Saudi Arabia over the pricing
of a contract to supply 72 Typhoon
aircraft, which was signed in 2007.
The Salam deal, as it is known, is
worth around 4.5bn.
Should an acceptable agreement
not be reached before the group's
full year results announcement, the
impact on 2012 trading guidance
would be to reduce the groups
underlying earnings per share by
approximately 3p per share, the
company said in a statement
yesterday afternoon.
BAE in August forecast that it
would deliver modest growth for
2012 subject to agreeing the deal
with Saudi Arabia, which chief
executive Ian King had said he
expected in the second half of the
year.
The firm is thought to be close to
securing a deal with Oman for 12
Eurofighter Typhoon combat jets by
the end of the year.
Colt swinging axe on 250 staff
in bid to turn company around
IT group Colt is set to cut 250 jobs as
it attempts to transform its
struggling telecoms business and
focus on becoming a successful data
centre operator.
The company, which saw revenues
dip in the third quarter of the year,
said losing five per cent of its
workforce would accelerate the
transformation of its business.
The losses come as part of a 44m
(35.8m) cost-saving plan designed
to protect Colts profit margins. The
BY JAMES TITCOMB
firms legacy telecoms business has
been hit by difficult conditions and
chief executive Rakesh Bhasin has
outlined a plan to focus on the
growing data centre market. Earlier
this week Bhasin poached Telecitys
Adriaan Oosthoek to run the data
centre business.
Given the economic backdrop, we
believe now is the right time to
accelerate the transformation of our
cost and skills base, Bhasin said.
This will result in Colt becoming a
more efficient business, and one
that is better positioned to execute
on its strategy. The City welcomed
yesterdays news, sending the shares
up 4.3 per cent.
Colt Group SA
95
96
97
94
98
99
97.50
19Dec
p
BAE Systems PLC
337.5
340.0
342.5
345.0
347.5
341.90
19Dec p
New Jersey governor Chris
Christie has been fighting
insurers over the scale of
superstorm Sandy payouts
AN OVERWHELMING majority of
City women oppose quotas to
encourage greater female
representation on company
boards, with most saying they are
not the answer.
A survey from recruitment
agency Randstad found that 94 per
cent of professional women
interviewed oppose EU plans to
introduce gender quotas.
The research claimed that three
in four of the high-powered
women surveyed put self-doubt
as the major reason why women
are under-represented in the
We dont want gender quotas
say high-powered City women
BY JAMES TITCOMB
boardroom. The survey shows an
opposition to European
Commission vice-president Viviane
Redings plans for a quota of 40
per cent of women on boards.
Wolseley yesterday followed the
recent lead of Hobbs and Ryanair
with a new female board member.
The plumbing and builders
merchant signed up Pilar Lopez,
the chief financial officer of
Telefonica Europe, as a non-
executive director. Chairman
Gareth Davis said she brings a
great deal of corporate and
financial experience, having
worked in a range of senior roles
at Telefonica and JP Morgan.
16
NEWS
cityam.com
Wolseley has appointed Telefonica Europe chief financial officer Pilar Lopez to its board
INFRASTRUCTURE and
construction groups Balfour
Beatty, Morrison Utility Services
and Skanska yesterday netted
themselves a 2.8bn payout from
National Grid, after winning
eight-year contracts with the gas
and electricity firm.
Balfour Beatty has won two
contracts worth 1.2bn, for eight
years each, to upgrade the gas
distribution network in the
North West and the West
Midlands.
It will invest 55m of working
capital into the projects.
The award of these new
contracts builds on our ongoing
strategic focus in the power
Infrastructure firms snap up
2.8bn of National Grid deals
BY CATHY ADAMS
market and is an excellent
example of partnership with our
clients to deliver continuing
value as well as ongoing certainty
to a core element of the UK's
infrastructure, chief executive
Ian Tyler said yesterday.
Separately tRIIO the joint
venture between Morrison Utility
Services and Skanska was
awarded an eight-year contract
worth 1.6bn to deliver National
Grids mains replacement
programme in the East of
England and North London,
which will also include gas mains
replacement, connections and
diversions.
Work on the eight-year
contracts is due to start next
April.
BRITISH safety and environment
technology group Halma has
acquired US-based MicroSurgical
Technology (MST) in a deal that
could cost up to $100m (61m), the
company announced yesterday.
Halma, which makes products
such as smoke detectors and door
sensors, said MST would continue
to be run separately from its own
health division. MST makes and
markets products used in
opthalmic surgery.
Andrew Williams, Halmas chief,
said the acquisition continues our
strategy of focusing on critical
Halma to pay an eye-watering
$100m for opthalmology firm
BY JAMES TITCOMB
products in niche markets with
strong growth drivers, expanding
our surgical product offering in
ophthalmology.
The cash deal was welcomed by
analysts and investors yesterday,
with Halmas shares rising by
almost two per cent. Halma will
pay $57m originally, and shell out
up to $43m extra depending on
MSTs performance.
Investecs Chris Dyett called the
deal an eye opening acquisition.
Halma has a very successful and
high-margin presence in the
Health Optics market and the
purchase of MST should enhance
this, Dyett added.
17
Fiscal cliff fight
dampens gains
on Wall Street
U
S stocks sold off late in the day
to close at session lows
yesterday as talks to avert a
year-end fiscal crisis turned
sour, even as investors still expect a
deal.
The S&P 500 slipped after a two-day
rally that took the benchmark index
to its highest close in two months.
Defensive-oriented shares led the
decliners, including health care and
consumer staples.
General Motors bucked the overall
weakness to surge 6.6 per cent to
$27.18 after the carmaker said it will
buy back 200m of its shares from the
US Treasury, which plans to sell the
rest of its GM stake.
President Barack Obama and
congressional Republicans are
struggling to come up with a deal to
avoid early 2013 tax hikes and
spending cuts that could send the US
economy into recession.
House Speaker John Boehner, the
top Republican in Congress, said his
chamber will pass a proposal that
Obama had already threatened to
veto as it spares many wealthy
Americans from tax hikes needed to
balance the budget.
Banks and energy shares groups
that outperform during periods of
economic expansion have led
recent gains, indicating a shift to
focusing on the economy as Wall
Street looks past the budget talks.
Defensive sectors led yesterdays
downturn, with the S&P health care
sector index down 1.1 per cent.
The Dow Jones industrial average
dropped 98.99 points, or 0.74 per
cent, to 13,251.97.
The S&P 500 lost 10.98 points, or 0.76
per cent, to 1,435.81.
The Nasdaq Composite fell 10.17
points, or 0.33 per cent, to 3,044.36.
B
RITAINS blue-chip share index
scaled fresh nine-month highs
yesterday on growing expectations
of a US budget deal, and nearing
tough technical resistance levels en-
route to the 6,000 mark.
Although the US political ping-pong
continued, the main parties looked to be
closing in on an agreement to avoid the
fiscal cliff of tax hikes and spending
cuts that threaten to depress the world's
biggest economy next year.
A deal would potentially pave the way
for a year-end stock rally as investors
seek a last-minute boost to their annual
returns, which traders said could see
Britains FTSE 100 reach 6,000 points for
the first time since July 2011. Such flows
have helped the index gain for the past
nine Decembers in a row.
I dont see anybody looking to sell the
market, said Max Bascombe,
institutional sales trader at Merchant
Securities.
The market will move on the basis of
the balance of sentiment but ... one way
or another something will be muddled
through. The States isnt going to go to
the wall. If they dont come to
agreement, everybody loses.
The FTSE 100 gained 25.69 points, or
0.4 per cent, to finish at 5,961.59.
Banks were the biggest gainers, up 1.8
per cent, on some relief following an as-
expected fine for Swiss peer UBS over
rigging of Libor interbank rates a
scandal which has also embroiled most
of the big UK names.
On the downside Bunzl, supplier of
carrier bags and toilet rolls, dropped 4.3
per cent after an update on its 2012
revenue outlook disappointed.
BESTof theBROKERS
Ladbrokes PLC
p 202
200
198
194
196
199.94
19 Dec
LADBROKES
Panmure Gordon has cut
the bookmaker from
buy to hold on
valuation grounds. The
broker keeps its target
price at 195p, and believes
that much of the firms
turnaround potential has
been priced in.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
5,980
5,960
5,940
5,920
5,900
5,961.59
19 Dec
Informa PLC
p 460
455
450
435
440
445
455.35
19 Dec
INFORMA
Westhouse cut its rating
for the publisher from
buy to neutral
following a 15 per cent rise
in the companys share
price over the last month,
which the broker thinks is
due to bid speculation. It
keeps its target at 470p.
Interserve PLC
p 390
385
380
365
370
360
375
387.60
19 Dec
INTERSERVE
Numis expects the support
services groups purchase
of The Advantage
Heathcare to add 2.5 per
cent to 2013 earnings and
provide strategic
opportunities. Numis has
an add rating and a
target of 426p.
Kleinwort Benson
Nick Bennett has been appointed
head of private wealth
management in the private
banks Guernsey office. He joins
from Schroders Private Banking,
where he was most recently head
of private banking in the Channel
Islands. Bennett has also held
roles at Lloyds TSB.
Development Securities
The property investment firm has appointed Marcus
Shepherd as its group finance director. He joins from Aviva
Investors, where he was finance director for global real
estate. Shepherd has also held senior roles at Valad
Property Group and Teesland.
PwC
Craig Hughes has been appointed leader of PwCs real
estate practice. He joined as a partner in September from
Ernst & Young, where he worked for 19 years. Hughes takes
over from John Berriman.
Dechert
The law firm has announced 12 partner promotions, with
three in London. Abigail Bell and Christopher Gardner both
work in Decherts financial services practice, focusing on
alternative investment funds. Timothy Lindsay works in its
international dispute resolution group and advises clients
on international arbitration matters.
Moorhouse
The transformation consultancy has appointed Richard
Jones as a director in its health team. He joins from PA
Consulting, where he worked in its programme
management practice. Jones has also held roles at JDS
Group, Michael Page International, and Deloitte.
KKR
The investment firm has announced two promotions to its
partnership. Silke Scheiber joined KKR in 1999 and is
responsible for the industrial and chemicals industry within
its European private equity platform. Philipp Freise joined in
2001, and heads KKRs European media industry team.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
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LONDONREPORT
NEW YORK
REPORT
in association with
in association with
US budget hope and Christmas
cheer push FTSE close to 6,000
B
REAK up the banks! goes
up the rallying cry. Its not
coming from the mob,
however, but from various
pockets across Parliament.
For those wanting to appear tough
on banks, it has become almost
obligatory: youll only be taken
seriously if you push for the
nuclear option.
With banks as unpopular as
they are, this is apparently good
politics (though I dont hear
people in the pubs calling for it).
But that doesnt mean it is good
policy. In fact, it is quite the
opposite. Almost all the
arguments used to justify
breaking up the banks are readily
refutable.
B
RITISH statesman Lord Curzon
once famously said that every
Englishman enters Russia a
Russophobe, and leaves it a
Russophile. Though time has
passed since the Great Game of
Rudyard Kipling, the saying is still
relevant.
According to a recent Economic
Intelligence Unit survey of 200 interna-
tional senior executives, less than 15
per cent would view merging or being
acquired by a Russian partner as a pos-
itive development. They would prefer
to deal with firms from any other Bric
economy over Russia. The same survey
highlighted the continued mistrust
and lack of confidence about manage-
ment attributes, and the abilities of
Russian companies in general.
Competitiveness, flexibility, reliability
and transparency all ranked very low.
Taken in isolation, this is solemn
reading for Russian businesses, with
the same old, tired stereotypes coming
to the fore. But delving a bit deeper,
these perceptions are not reflective of
reality. For those companies that have
previously done business with Russian
cityam.com/forum
Global firms realise
that Russia could
become the largest
market in Europe
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
18
OLEG DERIPASKA
Russian business stereotypes need
to be consigned to the distant past
counterparts, nearly three quarters
stated it was a positive or very positive
experience. Access to energy, technical
abilities, financial strength and the
education of the workforce were all
highlighted as key advantages.
In the last two years, Basic Element
companies have signed over a dozen
cooperation agreements with foreign
partners. We now sell aluminium to
China through our joint venture with
Norinco, manufacture Skoda vehicles
with Volkswagen, and produce alu-
minium in Australia with Rio Tinto, to
name but a few. Russian businesses
understand global opportunities and
are consistently developing, as they
look for more partners in different
countries. Nor is this one way traffic.
Increasingly, my old partners from the
West are asking for our recommenda-
tions on other Russian players, as they
look to increase their Russian expo-
sure. They understand that Russia has
the potential to become the largest
market in Europe.
So why do the negative stereotypes
persist? The problem is that the global
business community knows compara-
tively little about Russia. We faced this
problem when the first wave of global
expansion by Russian companies came
in the early 2000s. For RUSAL, it was a
question of survival. Our Siberian
smelters lacked bauxite the primary
raw material for alumina production
and we had to prove ourselves and gain
the trust of international partners to
ensure our future. It took us seven
years to build the supply chain by inte-
grating assets in Ireland, Jamaica,
Guinea, Guyana, Australia, Italy and
Ukraine. We managed to persuade
Glencore to merge our assets it was
one of the first merger and acquisition
deals in Russia that included assets
abroad. All the others were about glob-
al companies coming to Russia to buy a
share of local markets.
Russias expansion was stopped by
2008-2009 global downturn, but it will
inevitably resume. The countrys
recent accession to the World Trade
Organisation demonstrates that its on
track to integrate itself into the global
economy. As investment gradually
improves, Im positive we will see deals
taking place in and outside Russia.
This will be even more evident as we
approach the 2014 Winter Olympic
Games, where there are countless com-
mercial opportunities for internation-
al cooperation with Russian firms.
The ongoing uncertainty caused by
the global downturn means businesses
from across the globe should look to
work together, putting stereotypes and
past quarrels aside. Im not suggesting
that the task ahead is small. It isnt and
it will not be easy. However some con-
cerns are easily tackled. For example,
communication issues will soon be a
distant memory, with the number of
Russians learning foreign languages,
primarily English, growing 10-15 per
cent annually for the last three years.
Certain areas of Russian business still
need to make further progress in fields
like transparency and corporate gover-
nance. But these are principles that
need be implemented not only in the
boardrooms and C-suites, but from the
top to bottom of every company from
the chief executive to the last intern.
As one of the final conclusions of the
survey demonstrated, over two thirds
of global executives intend to do busi-
ness with Russian companies in the
medium term. I believe Russia is step-
ping up to the task. Im confident that
we will prove Lord Curzon right and
convert our future international part-
ners into Russophiles.
Oleg Deripaska is chairman of Basic
Element, president of En+ and chief executive
of UC RUSAL.
First, it is often said that
universal banks combining
wholesale and retail banking arms
are inherently less stable.
But the financial crisis affected
banks of all sizes and business
models, and there is no evidence to
suggest that smaller or monoline
banks are intrinsically safer.
Indeed, the International
Monetary Fund has warned of the
risks posed by small institutions
in Germany, Spain and the US, as
they do not benefit from the
diversified revenue streams of
banks with a universal business
model.
It is secondly argued that, in
universal banks, the
swashbuckling culture of
investment banking infects the
retail side, leading to miss-selling
to ordinary customers such as
the payment protection insurance
and interest rate swaps scandals.
There is no excuse for miss-
selling, of course. But it is clearly
not confined to banks with
wholesale arms (or even to banks
in general). Pure retail outfits of
almost all structures (and almost
all sectors) have also been found
guilty. Whatever the root cause of
miss-selling, it cant be having a
wholesale bank in the group.
What breaking up the banks
would do, however, is make it
more difficult for the banking
sector to serve large complex
clients, such as major
corporations, therefore making it
far more difficult for banks to
promote economic growth.
Many governments around the
world from the UK to the US to
France have considered forcing
their banks to break up. They
have all come to the same
conclusion: it doesnt make sense.
The UKs Vickers Commission,
and the EUs Liikanen group both
examined the case for breaking
up the banks, and rejected it
(preferring ring-fencing instead).
The government is now legislating
for Vickers ringfencing. But even
before that has come into effect,
there are calls to go further.
If the UK did go down that
route, we would be the only
country in the world that
responded to the financial crisis
by forcing the separation of
wholesale and retail banking.
Thats an extraordinary step for a
country that wants to remain host
to the worlds leading financial
centre.
Anthony Browne is chief executive of
the British Bankers Association.
ANTHONY BROWNE
Recent scandals are no excuse to break up universal banking in Britain
MORNING UPDATE
A.M.
19
The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
The cost of green
[Re: Green energy subsidies are failing to
deliver cheap low carbon power, yesterday]
Renewable energy, like all good things,
costs money. That politicians like Dominic
Raab allow the energy companies to pass
the cost straight to the consumer is a
symptom of political weakness, not that the
intention is wrong. Decentralised energy
production, not shale gas or nuclear energy,
is the future for Britain.
DavidChristenson
The reason behind the declining efficiency
of renewable energy doesnt matter. What
matters is that it has declined. It shows how
uneconomic renewable energy sources are
unless they are subsidised by consumers.
JimMorrow
French tax exodus
[Re: French tax exodus accents Londons
continued allures, yesterday]
As if we didnt know socialism doesnt work.
The more Francois Hollande increases taxes,
the less revenue he will generate. This is
especially true when transferring wealth is
just one click away.
ColinAverick
London may be better than France, but
thats not saying much. Britains relative
competitiveness is suffering a long-term
decline and our economic rivals are
obviously no longer the sclerotic countries
of Europe. Yes, 45 per cent income tax is
better than 75 per cent. But it still effectively
punishes success.
RichardMartin
C
HRISTMAS is a time of
consumption and, this year,
despite some conflicting
statistics, central London
seems heaving. The New West
End company estimated that the
first weekend of December saw 16
per cent more shoppers than in 2011,
many from abroad. Retail sales in
December are typically twice those
of other months and, for many high
street firms, this couldnt come
quickly enough. With the threat of a
triple-dip recession and bitterly cold
weather, the economy could do with
some festive cheer.
But theres a downside to all this
consumption. Yes, spending is up and
the economy benefits. But growth is
built on production, not consump-
tion. Or rather its built on the coordi-
nation of production and
consumption.
The main problem with Christmas
spending is that its often used to buy
gifts. And the problem with gifts is
that they can generate dead weight
loss. Most of us have a pretty reason-
able understanding of our own tastes
and, although we can buy things we
regret, we have a strong incentive not
to do so. Indeed, its typically our
tastes that we regret, rather than our
consumption choices. Perhaps this is
why gifts make more sense for chil-
dren, because we take a more active
role in trying to shape their tastes.
When it comes to adults, the poten-
tial for waste is a lot higher. In almost
every conceivable situation, the
recipient would prefer the cash value
of a gift to the gift itself. Its always
better to have the choice of 50 or a
garish sweater, than a garish sweater
that cost 50. Some argue that gifts
serve a deeper purpose, since they
demonstrate thought and considera-
tion. But often the only thing they
demonstrate is complete ignorance.
If you want to argue that the prac-
TOP TWEETS
Its essential we restore the reputation of
financial services, given its importance to
the UK economy and our global lead.
@ChukaUmunna
UBS Libor fine in context. It will widen the
banks fourth quarter net loss. But it will not
need to raise new capital.
@jgrovum
The argument against elected
commissioners was that theyd politicise the
police. Looks like thats happened already.
@DanHannanMEP
Once Britain and the US leave Afghanistan,
the Taliban will come back and we all know
it.
@NickRedmayne
Has UBSs 940m fine for manipulating Libor
threatened the UKs role in interbank lending?
YES
Does the UK financial sector serve the UK or international finance?
The scandal surrounding Libor is a microcosm of that issue. If Libor is
seen to be susceptible to the interests of UK financial stability, it
cannot be credible as an international benchmark. In the past, many
were comfortable with the idea that UK financial markets served the
UK by being a fair-minded banker to the world. But its value to
international finance is now being questioned. The worlds emerging
economies dont have large international financial sectors, and their
domestic systems seem less crisis-prone and more fit for purpose. In
the long term, the interests of international finance will prevail. This
requires a less radical change in the way Libor is composed surveys
will always play a role in estimating illiquid rates and more in the
way that it is governed, ensuring independence from all interests.
Avinash Persaud is chairman of Intelligence Capital and a fellow of
London Business School.
Avinash Persaud
NO
Louise Cooper
We should remember that it was a Swiss bank that was fined this
week. Clearly banks and traders from all over the world were
involved in manipulating Libor and British banks were just part of
the filthy game. And if you think it was only Libor that was being
manipulated, think again. There is speculation that the
European and Japanese equivalents (Euribor and Tibor) have
been similarly susceptible to greedy and corrupt bank traders.
This scandal does not challenge Londons dominant position. But
it may be the straw that breaks the camels back, in terms of
greater oversight from regulators. Politicians may decide that this
is one corruption too far, and then back their anti-bank rhetoric
with real action. More regulation and greater scrutiny is coming.
And any bank executive who doesnt understand this new world
order should leave now.
Louise Cooper is a financial analyst at Cooper City.
RAPIDresponses
The best Christmas
gift cant be found
on the high street
tise of gift-giving serves a deeper pur-
pose, at least acknowledge that this is
a benefit to the giver not the receiver.
In a seminal article called The
Deadweight Loss of Christmas, Joel
Waldfogel estimated that holiday
gift-giving destroys between 10 per
cent and a third of the value of gifts.
It is possible that, if the recipient
lacks information, a gift can make
economic sense. One of my favourite
presents was a small replica of
Superlambanana, the famous
Liverpool piece of public art. My wife
has a good understanding of my
tastes, and I was just unaware that
you could buy them. It was a classic
present. But if the value of the gift is
the information, theres a simple
alternative. Rather than buy it, tell
the recipient what the gift is and give
them the cash to buy it themselves.
To some extent the rise of gift
vouchers is the response to all this
waste. But these also generate ineffi-
ciencies. Unless you can redeem the
cash value, you are forced to buy
something at that store and spend
marginally more than face value.
Yesterday was my work Christmas
lunch, and our Secret Santa instruc-
tions were to spend a maximum of
5. The lucky recipient of my contri-
bution received a cardboard box con-
taining two things: a 5 note and a
message that said: read City A.M..
Merry Christmas.
Anthony J. Evans is associate professor of
economics at ESCP Europe Business School.
Web: www.anthonyjevans.com, Twitter:
@anthonyjevans.
ANTHONY J. EVANS
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20
DIRECTOR UK ENTERPRISE, CISCO
Q
How have advancements in the
internet and online networking
helped businesses through the
difficult economic period?
A
Three of the key reasons for any
company to use the internet are
business model innovation,
reaching more customers, and
reducing costs. To quote Jeff Bezos,
founder and chief executive of
Amazon.com, the good thing is,
with innovation, there isnt a last
nugget. Every new thing creates two
new questions and two new
opportunities. Business skills
training is just one sector that
recognised very early the webs
potential to innovate and accelerate
student development by accessing
training content in new ways. Cisco
training partner Global Knowledge
uses a range of communication
technologies to ensure its courses
can be accessed globally. A
significant portion 65 per cent of
its classes utilise web resources, like
online learning and virtual
classrooms (delivered using high
definition), and life-size business
video known as telepresence.
Q
Has networking helped
individuals further their careers
and companies find suitable
candidates?
A
Networking has always been a
priority route to finding a new
job only now it takes place online
and at twice the speed. At the date
of writing, Arras Peoples 2012
Project Benchmark Report quoted
63 per cent of project managers as
having been approached with work
opportunities via their LinkedIn
account.
Q
How has networking helped
businesses engage with their
customers and employees more
effectively?
A
As we approach the holiday
season, a great example of a
sector reaching customers in new
TIM SKINNER
BUSINESSSTRATEGY
ways is the travel industry. A quick
visit to the majority of hotel
websites will illustrate how social
media sites such as Facebook,
Twitter, YouTube and LinkedIn are
used to broaden customer contact
strategy. The internet widens a
companys catchment area from
local to global, and the travel
industry, more than most, relies on
customers from outside its
immediate geography.
Q
How can businesses use
networking to prepare for an
unpredictable future? What new
products are coming to market
that will help companies develop?
A
To quote Peter Drucker: The best
way to predict the future is to
create it. One rapidly developing
capability enabling companies to do
this is the explosion of mobile
connectivity. Ciscos 2012 Visual
Networking Index forecasts that, by
2016, there will be 10bn mobile
devices in the world, many of which
are capable of supporting real time
applications such as high definition
video. Organisations that embrace
these technologies, and embed
them in their culture and business
model will be preparing themselves
for the future.
The new networking sky is flled with all kinds of clouds. Big ones. Small
ones. Public. Private. Even hybrid. Your people, partners, citizens and
customers must move swiftly and securely between many clouds. Not
just one. Thats why Cisco Data Centre and Cloud services ensure the
same agility, efciency and security as the rest of the Cisco architecture.
So your data, your relationships and your business can remain protected
at every level. Enabling you to focus on taking your business to new
heights through innovative growth.
Learn how businesses in every industry are entrusting their data with
Cisco Data Centre and Cloud services in the physical workplace, and
the virtual one, at www.cisco.co.uk/ucs
In the past year,
67% more
companies
moved to cloud.
(But not just to one.)
Embracing new technology gets
companies ready for the future
Business networking
N
ETWORKING has always played
an important role in career and
business progression, but it has
seen a significant
transformation in recent years. The
most notable change has come in the
way professionals network: from a
face-to-face business card exchange to
making hundreds of connections on,
for example, LinkedIn. Executives at
global companies no longer need to
be in the same room to hold
meetings; telepresence and group
video systems mean they can hold
place across different regions, but
without the travel costs.
The creation of online social and pro-
fessional networks also means small
businesses can operate globally. Sales
teams have adapted accordingly, with
social media forming a sizeable por-
tion of marketing strategies. Everyone
from chief executives to the White
House (which encourages citizens to
tell us what you think on its Twitter
feed) are using social media for mar-
keting or visibility purposes.
Technology is enabling people to be
more intimate with one another and
this gives companies a huge opportu-
nity.
CAREER DEVELOPMENT
LinkedIn is possibly the best example
of the enormous impact social net-
works have made. With more than
187m members (with two more join-
ing every second) in over 200 coun-
tries, the website has revolutionised
the recruitment marketplace.
According to Richard George at
LinkedIn, professionals join the net-
work to establish their professional
identity, connect with their profes-
sional network, and access better
insights and opportunities to be better
at what they do. But LinkedIn is not
exclusively for the benefit of employ-
ees it is transforming the way that
companies approach the recruitment
process. More than 13,000 companies
worldwide use LinkedIns recruiting
service, with most favouring its flag-
ship service Recruiter to the less cost-
effective recruitment agency option. It
also enables companies to tap into pas-
sive talent only 20 per cent of
LinkedIns members are job-hunting.
But as there are more than 2m com-
pany pages, companies have to com-
pete to present the best products and
services to their professional audience.
Another challenge is effectively pre-
senting their culture, vision, and job
opportunities to appeal to profession-
als who may want to work there.
VIRTUAL INTERACTION
In the first five years of social medias
existence, many companies had a pol-
icy of rejecting and ringfencing it by
saying it was purely social, says Julia
Hobsbawm, founder of Editorial
Intelligence. But in the past year, this
approach has turned on its head.
Facebook and Twitter have progressed
beyond social media sites to become
key channels for communication.
Using Facebook, Twitter, Pinterest and
other social media platforms is a use-
ful selling tactic, giving businesses the
visibility that used to cost millions
through mass-media advertising.
The development of mobile devices
means that the internet in general
and social media in particular are
being increasingly used by firms for
marketing and customer engagement.
It has given a voice to consumers, seek-
ing to share their experiences, with a
number of companies performing all
customer feedback through Twitter.
The social media site has more than
500m registered users, and handles
1.6bn search queries each day. But
everyone has access to this informa-
tion, thus forcing companies to con-
tinually adapt and innovate to stay
ahead of their competitors.
INTERNAL AFFAIRS
Businesses are embracing the social
media revolution in their workplaces
with many having internal plat-
forms for internal cooperation and
learning. Business-to-business and
business-to-consumer transactions are
key for brand awareness, enhancing
Advances in technology have led to key
changes in marketing strategies and how
we self-promote, writes Annabel Palmer
21
has been transformed
how companies transact internally
and with their consumers. A recent
HubSpot article cited how Cisco creat-
ed a SuperFan Spotlight on its
Facebook page, which rewards mem-
bers of the online Cisco community
who share news and information
about the company. By rewarding
brand advocacy from consumers, com-
panies are working to secure repeat
business, as well as build up a good
online reputation.
Businesses are also seeking ways to
network within themselves and with
their client base. The market for
immersible video telepresence sys-
tems continues to gain traction.
Indeed, a recent Gartner report found
that its expected to grow at 25.7 per
cent per year through 2013, from a
base of approximately $547m (337m)
in 2010. Telepresence technology is
used to conduct senior leadership
meetings aimed at travel reduction
and rapid decision-making.
But there are those who are sceptical
of purely technology-led connections.
Indeed, Hobsbawm has said that the
problem is that there are too many
people doing it and good networking
happens with the few. Certainly,
firms have yet to find a way to directly
sell through online networks. But they
are no doubt seeking to replicate the
success of Google AdWord through
social media.
Seeking new ways
to stand out from
the crowd
SMEs need an online
presence to prosper
L
IKE all smaller companies,
FusePump has found
networking technology
essential for gaining business
as well as enabling it. The internet,
in particular, has meant that even
smaller businesses like ours can
have a global reach, with companies
now conducting meetings and
business transactions online
without having to be in the same
country. FusePump, for example,
recently gained its first Australian
client as a result of a previous
customer moving to Australia and
getting in touch.
Although we do travel overseas to
meet new clients, FusePump also
uses GoToMeeting high definition
video conferencing, which enables
us to host webinars do-it-yourself
web conferencing with up to 1,000
people and presentations. It lets us
collaborate with colleagues and
clients in real time, and allows us to
host a meeting from a desktop or
mobile device and connect with any-
one, anywhere.
Having so much data available
online has made research into
potential clients, partners, and com-
petitors much easier companies
tend to lay themselves bare on web-
sites, blogs and social networks. Like
other firms, we use Twitter to share
key snippets of information with
clients whether links to informa-
tion, articles or infographics weve
seen. It also gives us information as
it happens, such as breaking news
from our clients, partners, and our
market competitors. As e-commerce
becomes multichannel and people
start shopping from mobile devices
on the go, companies need to be visi-
ble across these channels.
As the chief executive, I post blog
pieces on Econsultancy a website
that publishes independent
research, analysis and advice on dig-
ital marketing, social media, e-com-
merce and technology for
businesses. They can be seen by its
180,000 members and 300,000
unique monthly users. Our own blog
tends to have more specific pieces
about the company or any
announcements, which we then pro-
mote through Twitter and LinkedIn.
Indeed, several staff members were
recruited through LinkedIn, either
through recommendation or from
their past experience. It has given us
new business by offering us access to
individuals through our network.
We also use LinkedIn as a sharing
platform posting links to articles
we have published elsewhere. They
are then shared by readers, thus
exposing the articles, and our brand,
to a broader audience.
Most of our networking and mar-
keting is business-to-business.
Nonetheless, weve been surprised
by the popularity of our Facebook
soft content, which can be a useful
customer-engagement tool. Like all
companies we are keen for our per-
sonality to shine through, which is
why we supported Movember on
Facebook, posting two blogs that
accumulated over 1,000 reads.
As more and more business net-
working technology becomes avail-
able, companies have to embrace it
to ensure they keep up with clients
and respond to their needs.
Networking technology has allowed
FusePump to be visible to our net-
works across the various online
channels; however these may also be
accessible to our competitors. So we
continually need to respond to this
pressure to stay ahead of the compe-
tition.
Robert Durkin is chief executive of
FusePump, a small London-based technol-
ogy company.
cityam.com
G
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ROBERT DURKIN
23
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Fill the grid so that each
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in the box above or to the
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Using only the letters in the Wordwheel, you have
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letters can only be used once in every word. There
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Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
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KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6
7
8 9 10 11
12 13
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15
16 17 18 19
20
21
22 23
16 16
35 6
11 39
17 14
45
4 22 15
45
6 5
23 9
24 34
3 15
8
7
13
21
20
19
10
9
17
45 23
15
14
45
33
13
7
15
21
22
11
9
7
ACROSS
1 Trinket (5)
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14 Norse goddess (5)
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16 Loud (8)
20 Cab (4)
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22 Pale yellowish-
green colour (4)
23 Push roughly (5)
DOWN
1 Spanish sparkling
white wine (4)
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3 Musical
composition (4)
4 At the back (8)
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uninteresting (5)
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infection (4)
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11 Curl of the lip (5)
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15 Asian pepper
plant (5)
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March, advice given
to Julius Caesar (4)
18 Basic unit of currency
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19 Melody (4)
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4

A T L A S P M A C
F U T U B E A
F E V E R L D F
R I L S H A M E
A C O L Y T E L
Y L E L V
I C A P T I V E
B I N G O A O R
O I L L U N G S
M S P O T S U
B I T N Y E A T S
8 3 1 9 4 2 7 1
7 4 6 8 2 5 1 9 3
9 2 7 1 2 3
3 1 2 7 6 8 9
8 7 2 1 1 5
4 7 1 9 5 3 2 6 8
1 9 3 1 1 7
2 5 9 7 6 9 8
5 4 1 2 4 9
1 2 7 8 4 3 9 5 6
3 9 8 6 1 2 3 5
4
4
4
4
4
4
4
4
4
The nine-letter word was
CONSPIRED
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
YOUNG APPRENTICE
BBC1, 8PM
Its the final and just four candidates
remain, all eager to get their hands on
the 25,000 investment into their
business future.
LIVE CELEBRITY WHO WANTS TO
BE A MILLIONAIRE? ITV1, 9PM
A Christmas special of the big-money
quiz, in which famous faces try to win
as much cash as possible. Chris
Tarrant hosts.
WORLDS STRONGEST MAN 2012:
QUALIFIERS CHANNEL5, 8PM
James Richardson presents action
from the fifth and final Giants Live
Series event, which was staged in
Kartuzy, Poland.
TVPICK
cityam.com
24
LIFE&STYLETECHNOLOGY
T
HE WEATHERS cold, but you
want to spend all day on the
slopes, right? Luckily the latest
gear will keep you toasty in
spite of the elements. And the 2012-
13 season includes enough new
gadgets to help even novice skiers
look like pros and measure your
progress along the way.
For a jacket that lets you tackle the
toughest off-piste terrain, you cant
beat the Arcteryx GORE-TEX
Sidewinder jacket (1). Its totally
waterproof, breathable, and scuff
resistant, with a helmet compatible
storm hood and allows plenty of
movement for big mountain riding.
Like most top of the range jackets, it
has a Recco avalanche detector and
its offset front zipper avoids having
zips scratching under your chin
when youre belting down a couloir.
For a truly James Bond day on the
piste, try the Recon MOD Live (320,
snowandrock.com), for use with a
pair of Recon compatible ski
goggles (2). The Android-powered
device beams a HUD (head up
display) into your goggles a system
originally developed for fighter
pilots, which shows everything from
trail maps to real-time speed. You
can view text messages, speed,
altitude and calls via the remote
control on your wrist. Its even
compatible with your iPhone. The
vital stats are shown on a tiny
window in the corner of the goggle
so it doesnt obscure your vision or
distract you while checking your
speed. Playlist mode puts all your
music on your phone/MP3 player at
your disposal and the Recon App
centre allows you to download
further apps so you can control
additional devices such as HD Action
cameras (PVRs) and heart rate
monitors via Bluetooth.
If youre looking for a great GPS,
try the Suunto Ambit watch (3). This
cool gadget gives you all the tricks
heart rate function for training,
barometer for weather forecasting,
altimeter for navigation and logging
vertical gain and a GPS for location
and an accurate trace. The battery
lasts 15 hours in full exercise mode
and it is water resistant up to 100m.
Upload data for analysis and sharing
on movescount.com.
Salomons Guardian binding
(320, ellis-brigham.com) will
change the way skiers approach and
enjoy off piste skiing by providing
the ski tourer with the benefits of a
very convenient hiking system. The
bindings low profile chassis features
a lower stand height for greater
stability, and the oversized platform
enables maximum power
transmission and responsiveness for
quick and more precise turns. A hike
and ride switch, which is easily
engaged with a ski pole, means it is
no longer necessary to remove skis
when switching between hiking and
riding modes. After climbing, simply
use the ski pole to flip the climbing
bar to skiing position, step down
with your heel until the binding
locks securely into place, and youre
ready for the turns youve just
earned.
If you are heading off piste, you
would be mad not to carry a
transceiver in case you get caught in
an avalanche or you need to find
others who are buried. The Ortovox
Zoom + transceiver (4) is one of the
easiest and most intuitive Avalanche
transceivers produced to date.
Reduced to two function buttons
and with a simple easy to read
display, it offers even the novice a
fast and efficient way to search for
any avalanche victim. If you are
unfortunate enough to be buried,
the onboard smart antenna
technology analyses its position in
the avalanche and automatically
switches to the best transmission
antenna, so you are found by your
friends as quickly as possible.
If youre caught in an avalanche,
airbag technology can boost your
survival chances. Yank the rip cord
on your arm strap and an air bag will
burst out of your backpack, giving
you vital buoyancy to stop you being
buried in the snow. There are two
main systems; the ABS (699, abs-
airbag.de) and Snowpulse (5).
With more winter sports insurers
insisting on helmets, you may as
well turn one into a useful tool to
record your best jump of the season.
Attach a GoPro Hero3 Silver edition
camera (6) to your bonce. Its got
built-in wi-fi and is smaller and
lighter than previous models. The
camera is waterproof to 197ft (60m),
and is capable of capturing ultra-
wide 1080p 30 frames per second
(fps) and 720p 60 fps video.
Theres apps for almost
everything these days, but its
worth shelling out for the Ski
School Intermediate (2.99, Apple
App Store), which gives handy tips
and demonstrations from instructor
Darren Turner. Or for in the bar
afterwards, you can play Touch Ski
3D (free or 1.99 for a full version)
and let your fingers do the skiing.
Also useful is the Ski Webcams app
(free, Apple App Store), which
provides footage from more than
1,500 webcams in more than 400
resorts, and the Ski Tracks app
(69p, Apple App Store), which
tracks your runs so you can mull
over your fastest run, distance
travelled and average speed at the
end of the day.
And if youre looking to tap your
smart phone without having to
remove your gloves, youd better get
your hands on the Dakine Raptor
Touch Tec glove (7), which has
touch technology to work on touch
screen devices. Or you can talk to
the hand literally with the KJUS
GSM glove (199.99,
snowandrock.com). It has
Bluetooth technology for answering
calls and ear and mouth pieces set
into the glove.
You may look hot stuff blasting
down a black run, but if your toes
are freezing youll be whimpering
for a hot chocolate by 11am while
your mates laugh at you. Ski longer
by keeping your toes warm with a
Hotronic E4 footwarmer pack (8).
The set includes two battery packs,
heating elements, insoles: no more
chilblains.
Make sure youre
properly kitted
out for the ski
season. Keith
Perry picks out
the tech essentials
Arcteryx GORE-TEX
Sidewinder Jacket
480
snowandrock.com
Uvex Recon 9
Ski Goggles
129.99
snowandrock.com
1
Suunto Ambit Watch
400
suunto.com
3
Ortovox Zoom
& Transceiver
199
ellis-bringham.com
4
GoPro Hero3 Silver
Edition Camera
279.99
ellis-brigham.com
6
Dakine Raptor
Touch Tec Glove
94.99
snowandrock.com
7
Hotronic E4
Footwarmer Pack
145
ellis-bringham.com
8
2
How to stay cool on the snow
5
Snowpulse
from 620
snowpulse.com
snowandrock.com
The device beams
a display inside your
goggles, showing your
speed, altitude and
even text messages
ARSENAL manager Arsene Wenger

has declared his intention to build
his team around a core of young
British talent, after tying
midfielder Jack Wilshere and four
other players to new long-term
contracts.
Full-backs Kieran Gibbs and Carl
Jenkinson and midfielder Alex
Oxlade-Chamberlain all full
England internationals and Wales
star Aaron Ramsey have joined
Wilshere in committing to the
Gunners.
But Wenger looks increasingly
likely to miss out on January
transfer target Klaas-Jan Huntelaar,
with the prolific Holland striker
expected to snub Arsenal and sign
a new deal at Schalke.
Forward Theo Walcotts future
remains in the balance, meanwhile,
with the 23-year-old free to leave at
the end of the season and able to
discuss terms with interested clubs
in less than two weeks.
We are delighted that these five
young players have all signed new
long-term contracts. The plan is to
build a team around a strong basis
of young players, in order to get
them to develop their talent at the
club, said Wenger.
Five sign but
Arsenal set to
miss Huntelaar
ENGLAND stand-in Twenty20
captain Eoin Morgan believes the
Test sides landmark victory in India
this week can give his men extra
impetus when they resume
hostilities today in Pune.
Alastair Cooks team ended a 27-
year wait for a series win in India by
clinching a 2-1 victory in Nagpur on
Monday, and Morgan, deputising for
the injured Stuart Broad, insists it
has lifted the tourists.
Absolutely, as weve seen in the
past when the Test side has done
well, its had a knock-on effect with
the other two teams, he said.
Certainly well be looking to win
these two games and take
confidence and momentum from
the Test side and keep the
winning habit up.
To inflict further misery
on an Indian team that,
unlike England, has
the same core as
the Test side,
Morgans men
will have to
improve on
their last
outing, a
record defeat to
the same
opponents at the
World Twenty20.
Were going in as underdogs,
which is a great label to have
with such a young side, Morgan
added. In this cauldron that is
India its tough conditions, but it
would be great to win these two
games.
Regular England
T20 stars Kevin
Pietersen, Graeme Swann
and Steven Finn have been
rested following their Test
heroics, while Broad is
recuperating from a heel injury.
Wenger sees Wilshere as a new leader
26
SPORT
cityam.com/sport
BY FRANK DALLERES
BY FRANK DALLERES
@cityam_sport
MAYOR Boris Johnson says London
will recapture the spirit of this
years Olympics in 2017, after being
awarded the Paralympic Athletics
World Championship.
The competition will take place
at the Olympic Stadium just weeks
before it hosts the World Athletics
Championship.
It is the first time any city has
staged both major events in the
same year.
Johnson said: By bringing the
IPC Athletics World Champion-
ships to our wonderful Olympic
Park just a month before the World
Athletics Championships, the
capital is poised to recreate the
magic of 2012.
Capital set for
Olympics MkII
BY FRANK DALLERES
LEEDS UNITED.............................1
CHELSEA.....................................5
BY FRANK DALLERES
CAPITAL ONE CUP
CHELSEA manager Rafael Benitez
hailed his players powers of recovery
after they shrugged off jet-lag and
came from behind to thrash Leeds
and set up a Capital One Cup semi-
final against Swansea.
A shock looked in prospect when
Luciano Becchio put the hosts ahead
but the Blues hit back after the break
with a flurry of goals from Juan Mata,
Branislav Ivanovic, Victor Moses, Eden
Hazard and Fernando Torres.
Victory came just three days after
Chelsea flew back from Japan follow-
ing defeat in the Club World Cup
final against Corinthians, and with-
out stars John Terry, John Obi Mikel
and Ramires.
I think the team was quite good in
the first half their keeper was doing
well but the reaction in the second
half was fantastic, said Benitez.
After coming back from Japan
the jet-lag, changing a lot of players
because the rest were tired the way
they played was amazing.
Of Swansea, their opponents in the
last four, Benitez added: They like to
play football and play on the floor so
well have to do well.
Historic enmity between the clubs
and bad blood between Benitez and
Leeds boss Neil Warnock, as well as
teeming rain, contributed to a spiky,
hurtling, archetypal cup tie.
Leeds goalkeeper Jamie Ashdown
was kept busy all night and saved two
stinging efforts from Moses early on
before Becchio stunned the European
champions shortly before half-time.
Chelsea defender David Luizs way-
ward pass allowed Leeds to counter,
and when left-winger Jerome Thomas
flicked a low cross with the outside of
his boot Becchio, arriving at speed,
adroitly turned it past Petr Cech.
United defender Tom Lees should
have doubled the lead seconds before
half-time but headed over, and Mata
punished them straight after the
interval with a shot that squirmed
under the keeper.
Ashdown denied Torres and Frank
Lampard before Ivanovic opened the
floodgates on 64 minutes, heading in
Lampards corner. Moments later
Moses cut in from the left and drilled
a superb third from 20 yards.
Substitute Hazard streaked onto
Luizs through-ball to tuck away a
simple fourth in the 81st minute,
before cutting back for Torres to tap
in and complete an emphatic win
seven minutes from time.
Aston Villa meet Bradford, shock
winners over Arsenal in the quarter-
finals, in the other semi-final. First
legs will be played on 8/9 January, sec-
ond legs on 22/23 January. Mata (right) started Chelseas five-goal revival with the equaliser just after half-time
Morgan is set to lead a callow England side
in the absence of injured skipper Broad
Test series has given underdogs
England a T20 lift, says Morgan
Jack is certainly the best known,
the leader of this group but the
other four players are exceptional
footballers, and were very happy
that we could conclude their new
deals at the same time.
Wenger, who has faced questions
about his own future amid
Arsenals worst start to a Premier
League season, hopes a British core
will prove more loyal than departed
foreign stars Cesc Fabregas, Samir
Nasri and Robin van Persie.
He added: Im a strong believer
in stability and I believe when you
have a core of British players, its
always easier to keep them together
and thats what well try to achieve
going forward.
Huntelaar, who scored against
Arsenal home and away in the
Champions League this season, has
only six months left on his Schalke
contract but reports in Germany
suggest he is set to stay in
Gelsenkirchen.
Arsenals Boxing Day fixture at
home to West Ham has been
postponed due to the planned Tube
strike. The rescheduled match is set
to take place on Wednesday 23
January if either side reaches the
second round of the FA Cup, or
Saturday 26 if neither progresses.
Jet-heeled
Chelsea set
up Swansea
semi-final
27
IN BRIEF
Hillsborough verdicts quashed
nFOOTBALL: A new inquest into the
death of 96 fans at the Hillsborough
disaster has been ordered after the
original verdicts of accidental death
were quashed yesterday. A fresh
police inquiry has also been ordered.
Ahern accused of corruption
n HORSE RACING: Jockey Eddie
Ahern faces a corruption probe after
being charged with rule breaches by
the British Horseracing Authority.
Footballer-turned-racehorse owner
Neil Clement has also been charged.
ARSENAL, Chelsea and Tottenham
will discover their next European
opponents today when the draws
for the last 16 of the Champions
League and last 32 of the Europa
League are made.
Arsenal cannot meet
Manchester United or group stage
foes Schalke in the Champions
League, but could face Barcelona,
and former Gunners Cesc Fabregas
and Alex Song, for the third time
in four years. Paris Saint-Germain,
German giants Bayern Munich and
Borussia Dortmund and Chelseas
conquerors Juventus are also
possible opponents, while Malaga
look the least threatening option.
Chelsea have been seeded for
the Europa League last 32,
meaning they could get Atletico
Madrid, Ajax or Inter Milan.
Tottenhams most dangerous
potential opponents look to be
Lyon, Benfica and Rubin Kazan.
cityam.com
BY FRANK DALLERES
CITY A.M.S RACING EDITOR BILL ESDAILE WITH ALL THE LASTEST RACING INFORMATION
FOR THE
CHELTENHAM
FESTIVAL.
THE
In association with
JOINING US FROM THE WORLD OF CRICKET
Phil Tufnell - The most loveable bad boy
of English cricket.
JOINING US FROM THE WORLD OF GOLF
Sam Torrance - A member of the European
Ryder Cup team a remarkable 8 times! A golng legend!
For full Terms & Conditions please visit www.mbnpromotions.co.uk
To make a booking or request further information please
email mark.hudson@mbnpromotions.co.uk. Alternatively
drop us a line on +44 (0) 845 543 8277
Thomas Castaignede
Former French rugby union international. Known as Le Petit
Prince with 54 caps for France.
Premier Table of 10 1,800 + VAT
Pre-event complimentary drinks reception, prime positioned
table, 3 course lunch, gift for each guest, half bottle of wine per
guest, quarter page advert in the souvenir programme.
Individual Tickets 155 + VAT
JOINING US FROM THE WORLD OF RUGBY
TO DIGEST THE SIX NATIONS 2013
Josh LewseyMBE - Rugby World Cup
Winner. 55 caps for England and 3 for the British & Irish Lions.
ALSO IN ATTENDANCE
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England & Warwickshire cricketer Andy Lloyd,
Premiership rugby players.
PRICES...
Standard Table of 10 1,400 + VAT
3 course lunch, cash bar, company logo in the souvenir
programme.
PLUS The Girly Show - A collaboration of
Londons hottest and most requested dancers. Deanne Berry is
the lady who stars in the Call on Me video!
Grown Ups Sports Day - There will be
an interactive sporting competition throughout the lunch. Who
can beat our rugby stars with the fastest pass or Sam Torrance at
the longest drive? Let the competition begin!
THE CITY COMES TOGETHER FOR THE ANNUAL LONG LUNCH. LOTS OF FUN, BANTER, DRINKS &
GREAT FOOD, WITH ABSOLUTELY NO STUFFINESS! ALL UNITED BY OUR LOVE OF SPORT! PLUS
TABLES COMPETE IN A HOST OF INTERACTIVE SPORTS IN OUR VERY OWN GROWN UPS SPORTS DAY!
FRIDAY 8TH MARCH 2013
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X N TTIONS 2013 AAAT AT

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US

ALS LSO IN TTTTENDA DA AAAT AT

ANCE

London clubs hope to
avoid Euro giants in
knockout stage draw
Results
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FORMER Wales and Ospreys coach Scott Johnson looks set to take charge of Scotland,
Englands first opponents, for the Six Nations. The Australian, who joined Scotland as
assistant in the summer, is expected to be named Andy Robinsons successor this week.
Robinson quit after defeat in all three autumn Tests saw them drop to 12th in the world.
AUSSIE JOHNSON SET FOR SCOTLAND JOB
THE DRAWS
nChampions League last 16
Pot one: PSG, Schalke, Malaga,
Borussia Dortmund, Juventus, Bayern
Munich, Barcelona, MAN UTD
Pot two: Porto, ARSENAL, AC Milan,
Real Madrid, Shakhtar Donetsk,
Valencia, Celtic, Galatasaray
nEuropa League last 16
Pot one: LIVERPOOL, Viktoria Plzen,
Fenerbahce, Bordeaux, Steaua
Bucharest, Dnipro, Genk, Rubin Kazan,
Lyon, Lazio, Metalist Kharkiv, Hannover,
CHELSEA, Cluj, Olympiacos, Benfica
Pot two: Anzhi Makachkala, At Madrid,
Borussia Monchengladbach, Newcastle,
Stuttgart, Napoli, Basel, Inter Milan,
Sparta Prague, Tottenham, Bayer
Leverkusen, Levante, Dinamo Kiev,
Zenit, Ajax, BATE Borisov
nTeams cannot be drawn with clubs
from the same country or who
qualified from the same group
Barcelona manager Tito Vilanova will undergo
surgery today and begin weeks of chemotherapy
after suffering a relapse of his cancer

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Yes, I am late and still have to buy presents for

ARSENAL manager Arsene Wenger

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