Cityam 2011-03-28

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BUSINESS WITH PERSONALITY

HATE SHOPPING? YOU ARE NOT THE ONLY ONE MALE FASHION GOES ONLINE Issue 1,351 Monday 28 March 2011



FTSE 100 ▲ 5,900.76 +19.89

Business secretary Vince Cable says he and George Osborne agree over the scrapping of the 50p rate of tax

some of the pain. The Chancellor said in the budget that we’re going to have to move away from that. I agree with him. The Liberal Democrats agree with him. “But it needs to be a change which is fair overall and takes account of the fact that the wealthy have got to pay their share. The emphasis may well have to shift from high marginal rates of tax on income, which are undesirable, to taxation of wealth, including property. The chancellor said that in his Budget.” But the Treasury appeared to distance itself from the comments, releasing a terse statement saying: “The Government’s tax policies were set out in full in last week’s Budget.” Cable argued for a so-called mansion tax while in opposition, proposing a 0.5 per cent charge on properties worth more than £1m. He was forced into an embarrassing U-turn after coming under fire from his own party, after which the proposed threshold was hiked to £2m. Cable has enjoyed a higher profile in recent weeks after months in the wilderness following his unguarded remarks about “declaring war” on Rupert Murdoch.

DOW ▲ 12,220.59 +50.03 NASDAQ ▲ 2,743.06 +6.64

London counts the cost of protest against cuts

London bank branches in the aftermath of the violence Pictures: Micha Theiner/City A.M. ▲

THE two most powerful Lib Dems yesterday called for more tax to be levied on high-value homeowners to offset the scrapping of the 50p rate of tax. Deputy prime minister Nick Clegg and business secretary Vince Cable both said those with expensive properties would be targeted when the 50p rate is eventually dropped but ruled out a revival of the controversial Lib Dem “mansion tax” plan. It is understood council tax bands could be reevaluated so those with high value properties will pay more. Clegg also said the tax hikes could come through changes to the structure of stamp duty, the top rate of which is already going to five per cent next month. Cable said he and Chancellor George Osborne are in agreement over cutting the 50p rate. However, while Osborne reasserted his long-term opposition to the rate, he said in the Budget “now wouldn’t be the right time to remove it.” He also said he will ask HMRC to investigate how much revenue it raises. Osborne said in his Budget speech

that: “There’s one area that needs extra work in the coming months, and that’s on the taxation of very high value property, where evasion and avoidance are widespread and some of the wealthiest are not paying their fair share...we will also be redoubling our efforts to find ways of ensuring that owners of high value property cannot avoid paying their fair share.” A Treasury source told City A.M. Osborne’s emphasis is on reducing tax avoidance. The main scheme being targeted is one which allows some people to avoid stamp duty by purchasing homes via companies. Cable said: “You need to have a proper base for taxing property. That’s one of the things we’re going to have to look at as we change away from these very high marginal rates. “[The tax rate] moved up to 50p in an emergency because we had to have a sense that everybody was bearing

PAUL MYNERS PREDICTS NEW WAVE OF WOMEN DIRECTORS P7 FREE

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TOP LIB DEMS CALL FOR NEW PROPERTY TAX POLITICS BY STEVE DINNEEN

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ALL ABOARD

UK ECONOMY BY STEVE DINNEEN AND PHOEBE TORRANCE

HSBC has slammed the attacks on its branches during Saturday’s protests as “entirely unjustified,” pointing out that it is one of the UK’s top taxpayers. Branches of Santander and HSBC were boarded up yesterday after blackclad, masked youths smashed their way into branches, where they destroyed fittings and scrawled graffiti. Lloyds TSB was also targeted. An HSBC spokesman said: “We feel that damage to our branches is entirely unjustified. HSBC is a top ten UK tax payer. In 2010 we paid £1.12bn tax in the UK, equal to almost all profit made from UK personal and business customers. As for security, our priority is the safety of our staff, branches can be repaired.” Many businesses across London were privately angry yesterday, with some worried that the riots would

£/$ ▼ 1.60 -0.01 £/¤ 1.14 unc ¤/$ ▼1.41 -0.01

damage the UK’s image as an investment centre. The overall cost of lost business this weekend could come to £5m. John Lewis said its takings were down 20 per cent on Saturday. Others – including Sir Philip Green’s Topshop – face clean-up costs which could run into tens of thousands. Councils are also bracing themselves for a bumper clean-up operation. Westminster Council had 100 street cleaners working throughout the night on Saturday and all day yesterday. Trafalgar Square was daubed with paint and the lions at the foot of Nelson’s Column were defaced. The council’s cabinet member for business, Brian Connell, said: “It’s ironic and regrettable that a minority of people claiming to defend jobs are content to damage the livelihoods of the thousands employed in the capital.” At least 250,000 people joined the protest, which ended with 201 arrests. Certified Distribution 31/01/11 - 27/02/11 is 107,265

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CITYA.M. 28 MARCH 2011

Cutting spending through the ages EDITOR’S LETTER

ALLISTER HEATH BEWARE, dear reader: this is a trick question. Which Chancellor of the Exchequer cut spending the most in a single year? Was it George Osborne in his Budget last week, which if this weekend’s protesters are to be believed is pushing through the most “reckless” reductions imaginable? Or was it the great Tory chancellor Nigel Lawson at the height of Margaret Thatcher’s premiership in the 1980s, the Tories’ Ken Clarke in the 1990s or even the 1970s socialist stalwart Dennis Healey? Courtesy of the Office for Budget

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public finances. The most likely Plan B would be more tax hikes and more cuts. There is simply no way that global investors would accept huge increases in spending, Keynesian-style, in the current climate – and any boost to demand from a slight reduction in cuts (as advocated by the more realistic Labour opponents of the Chancellor) would probably be cancelled out by higher rates. The OBR calculates that every percentage point rise in gilt rates would cost the taxpayer another £5bn in 2015-16. Debt interest spending in the first ten months of the year was up 48 per cent. Revenues are also uncertain. The OBR is predicting a 10 per cent fall in the cash value of City bonuses in 201011, compared with a previous assumption of 5 per cent growth. This will cut tax receipts by £1bn a year, as the war on the City backfires. One thing is certain: smashing up a few bank branches and shops will resolve nothing. [email protected] Follow me on Twitter: @allisterheath

POLITICS BY HARRY BANKS GERMAN chancellor Angela Merkel’s conservative party lost power in a regional stronghold yesterday, with early poll results showing the Greens, buoyed by Japan’s nuclear crisis, surging to their first state premiership. In Baden-Wuerttemberg state, where anti-nuclear sentiment has been mobilised by Japan’s nuclear breakdown, the Greens and Social Democrats (SPD) were set to win 47.3 per cent, eclipsing the Christian Democrats who held power there for six decades. Merkel’s CDU and its Free Democrat coalition partners, big backers of nuclear power, won a combined 44.3 per cent, according to projections last night in the state of 11m million people.

Analysts said the loss would cause Merkel some headaches in her party, with many disconcerted by recent policy decisions; but an immediate leadership challenge wasunlikely. “The horrible pictures from Japan and the horrible events in Japan was the main issue over the last two weeks,” said defeated CDU state premier Stefan Mappus. The Greens’ 13 per cent advance was mirrored in the state election in Rhineland-Palatinate, where the SPD held power and was likely to form a coaltion with the Greens.

Global miner Rio Tinto remains short of its target of holding more than 50 per cent of shares in Riversdale Mining , ahead of a deadline this evening on its A$3.9bn (£2.5bn) takeover offer for the Mozambique-focused coal miner. It had reached just under 40 per cent as of this morning, Rio Tinto said, with still no word on whether Riversdale’s two biggest shareholders, India's Tata Steel and Brazil's CSN , would sell any of their shares.

Apple sells out of iPad 2 Apple has already sold out second generation iPads in the UK after massive demand in its first weekend on sale. Those ordering online now face a wait of up to four weeks, with the US taking priority. Analysts believe Apple shifted a staggering 500,000 units in the US over the weekend of the 11 March. It is thought supply could also be hit by component shortages following the Japanese earthquake, which could push waiting times back even further. Apple sold out of first generation iPads within days as demand exceeded all expectations, with supply shortages lasting months.

German chancellor Angela Merkel has lost power in the party stronghold as Greens win on nuclear issue

Former chief executive of the Co-op, David Anderson, will head up the Reclaim Fund

Big Society role for Co-op EXCLUSIVE BY JULIET SAMUEL



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so in 1997-98, taking the total two-year reduction to 2.7 per cent. And what of Osborne? He will be cutting by just 0.6 per cent in 2011-12 (barely any more than Brown managed, and less in cash terms than Healey), followed by 1.1 per cent in 2012-13, 1.3 per cent in 2013-14 and 0.8 per cent in 2014-15. Overall, spending will be reduced by 3.7 per cent. The reason these figures are lower than the ones usually cited is that they take all spending into account – not just a few selected departments. So Osborne’s one year-cuts are modest compared with those of his predecessors – but his reductions are spread over four years and go slightly further than any Chancellor has achieved in the past 40 years. It might have been better politically as well as economically for Osborne to spread the cuts over just two years, and not to backload them in the way he has done. The worrying reality is that Osborne’s austerity package is the minimum required to stabilise the

Rio Tinto still short of shares

Merkel loses in heartland ▲

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Responsibility, which has released all of the data, adjusted for inflation, we can finally calculate the answers. Lawson cut by 2.6 per cent in 1988-89, at the height of his very own inflationary bubble; but the reductions were painless as they were caused by a slump in unemployment benefits. He cut in more difficult circumstances by 1.4 per cent in 1985-86. Spending grew slightly in the following two years – but expenditure over the four-year period fell by 3.1 per cent. Spending only returned to the levels of 1984-85 in 1990-91 – and remained lower as a share of GDP. Remarkably, Labour’s Healey was the joint second biggest one-year cutter: he slashed total public spending by 2.2 per cent in real terms in 197778, after a bankrupt UK was forced to take orders from the IMF. This was almost exactly the same as the 2.2 per cent chopped by Clarke in 1996-97 –though Gordon Brown stuck to his Tory predecessor’s spending plans and went on to cut another 0.5 per cent or

NEWS | IN BRIEF

DAVID Anderson, former chief executive of Co-operative Financial Services, is to head up a non-profit organisation that will provide a major source of funding for David Cameron’s Big Society Bank, City A.M. can reveal. The Reclaim Fund, which will manage up to £400m in assets from “dormant” bank accounts that have not been accessed for 15 years, is to

be established this week as a subsidiary of the Co-op, with Anderson as chairman. Paul Mills, a business leader at the Co-op, will be executive director in charge of administrating the fund, which is expected to channel £100m to the Big Lottery Fund in its first year. The Big Lottery will in turn fund the Big Society Bank, with banks signed up to the government’s Merlin deal providing another £200m in funds.

WHAT THE OTHER PAPERS SAY THIS MORNING HOLLYWOOD MAKEOVER FOR YOUTUBE Google is deepening its ties with Hollywood by enlisting top stars to supply original content for YouTube in a bid to boost profits and user engagement at the company’s online video site. Google has been making the rounds of Hollywood’s biggest talent agencies, outlining plans to create a network of channels based around specific themes or niches, such as fashion, food and video games.

L&G SET FOR REAL ESTATE LENDING DRIVE Legal & General, the UK’s fourth largest insurer, is gearing up for a push into lending money to the UK commercial real estate market to help fill the debt gap left by retreating banks. The insurer has appointed Ashley Goldblatt, who has worked in the company’s fixed income team, to

prepare a strategy to invest into debt in the property market, which has been hamstrung since the credit crisis by the lack of available bank finance.

ODDBINS SEEKS ADMINISTRATION Oddbins, the wine retailer, has applied to go into administration to protect itself from creditors’ claims. The move, which the company described as “purely precautionary”, was enacted at the end of last week after one creditor issued a windingup order.

TULLOW LOOKS TO RAISE GHANA OIL STAKE Ireland’s Tullow Oil is seeking to increase its stake in Ghana’s offshore Jubilee field through the $300m acquisition of shares controlled by allies of John Kufuor, the former president, industry officials in London and Ghana said. Tullow’s bid is higher than offers made by other mostly Ghanaian groups.

NEW INVESTOR SAVOURS TASTE OF WESTBURY’S ROBUST RESULTS Intermediate Capital Group has acquired 20 per cent of Westbury Street Holdings, Britain’s fourthbiggest caterer. The purchase by the FTSE 250 listed investment firm comes soon after it took stakes in Courtepaille, the French restaurant chain, and Quorn, the meat-free food group.

JOHN LEWIS INTRODUCES THE “NEVER ENDING REFUND” TO ENCOURAGE SHOPPERS IN AUSTERE TIMES The days of buying a new dress that you shove in the back of the wardrobe and never wear are over after John Lewis announced it is scrapping its 28 day return limit for a “never ending refund”. The retailer is the first major high street name to scrap the refund limit.

YOU’VE GONE TOO FAR, TOO FAST, POWER CHIEFS TELL CHANCELLOR

BRITAIN SET FOR “BROLLY AND SUNBLOCK” SUMMER

The introduction of a carbon tax in the Budget to penalise coal-fired power stations that emit greenhouse gases threatens to accelerate the closure of generating plant, potentially creating a serious energy supply gap in the middle of the decade. The electricity generating industry has warned the Treasury that it has gone too far, too fast.

Britain faces a “brolly and sunblock” summer with June thunderstorms threatening Wimbledon and Glastonbury, followed by a mixed July and scorching August in time for the school holidays. As the clocks went forward and British summer time started, weathermen predicted this summer will see worse weather than the last two years.

SANTANDER, CCB TO TARGET SMALLER CHINA TOWNS Spain’s Banco Santander SA will take a 19.9 per cent stake in a joint venture with China Construction Bank Corp. to provide banking services outside of China’s major cities, an area of increasing interest to foreign financial institutions looking to make a mark in China.

CHIP FIRM GAINS SIZABLE INFUSION A Silicon Valley start-up has raised one of the biggest funding rounds in years in the semiconductor industry, a sector that many venture-capital firms have been avoiding. The $108m infusion in Tabula is also notable because Tabula is targeting a market niche that has attracted a number of other entrants that subsequently went out of business. The company spent nearly eight years perfecting a technology for programmable chips.

News

CITYA.M. 28 MARCH 2011

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EasyJet bets sales on business travellers ▲

AVIATION BY ROGER BAIRD IN AMMAN EASYJET will target business customers to boost sales, according to chief executive Carolyn McCall. The second largest budget airline in Europe is testing a Flexifare system, which offers business travellers preferential boarding, free hold luggage and the ability to change planes just two hours before flight time. “We have been testing this since November and the signs are positive,” said McCall. The service will cost around £100 per journey compared to £250 a trip offered for equivalent services by flagcarriers British Airways, Air FranceKLM or Lufthansa. The airline plans to make Flexifare available on its website by the summer, to target its business customers that work in small or medium sized firms and book their own travel arrangements. Nineteen per cent of easyJet’s current passengers are business travellers. They pay on average between 10 per cent and 20 per cent higher fees because they book later than leisure fliers. McCall was speaking yesterday hav-

ing flown into Amman on easyJet’s inaugural flight to the Jordanian capital (right), just 48 hours after protesters demanding reform clashed with government supporters in the city centre, killing one and injuring 100. But the airline boss insisted the route was safe to fly. “Jordan is stable,” she said. “The Foreign Office’s advice is that we can fly here and we will be guided by that.” The airline has cut 22 of its 550 routes in the last six months, with McCall clear that it would not hesitate to axe further failing routes. “You will see us being much more brutal about what routes work and what routes don’t,” she said. ANALYSIS l easyJet 480

p

440

324.50

25 Mar

400 360 320 10 Jan

28 Jan

17 Feb

9 Mar

EasyJet boss Carolyn McCall said the airline may cut routes Picture:Micha Theiner/City A.M.

Don’t judge growth plans yet DEPSITE stronger than anticipated volume growth in February, shares in easyJet are yet to recover from the 16 per cent tumble they took in midJanuary, when the airline warned that first-half losses could double to £160m due to fuel costs and lost revenue from poor winter weather. Though total revenue for the fourth quarter of 2010 was up by 7.5 per cent at £654m, disruption costs were bigger than anticipated, running to £31m. The continued downward trend since January reflects the fact that despite posting a high load factor of

86 per cent for February – up 3.1 per cent to 3.83m from 3.39m in 2010 – investors are concerned that easyJet’s rapidly expanding fleet means returns won’t match costs. But it’s not time to sell yet. EasyJet’s winter 2011 schedule should provide investors with an opportunity to assess management’s longer-term prudence, and though target prices are falling, most brokers remain neutral on the stock.

BOTTOMLINE

Analysis by Elizabeth Fournier

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CITYA.M. 28 MARCH 2011

Osorio seeks to fill £15bn funding gap before auction ▲

BANKING BY JULIET SAMUEL

LLOYDS needs to find funding to fill a £15bn-£20bn black hole in the accounts of the 600 branches it is trying to sell off in the coming months, according to a source familiar with the situation. New chief executive Antonio HortaOsorio wants to move quickly to offload the branches, which the bank is required to sell due to an EU compe-

tition ruling. But the sale will mean weaning them off the government’s Special Liquidity Scheme, which the overall Lloyds group still relies on for up to £51.6bn of its funding (as of December 2010). The funding for the branches is likely to come in the form of a loan supplied in part by investment banks advising Lloyds on the deal, and in part from potential buyers or private equity backers.

Lloyds has not yet chosen an adviser, but Credit Suisse, Rothschild, Citigroup, UBS and JP Morgan are all thought to be vying for the deal. The ability to line up funding will make a crucial difference to the attractiveness of the branches when Lloyds sends out a prospectus for the sale. Potential bidders include Lord Leven’s investment vehicle NBNK, Virgin Money, National Australia Bank and private equity firm JC Flowers. Lloyds declined to comment.

Lloyds chief Antonio HortaOsorio wants to sell 500 branches Picture: Micha Theiner /City A.M.

Cable to look at Lloyds case ▲

POLITICS BY JULIET SAMUEL

BUSINESS secretary Vince Cable will take legal advice on publishing a dossier that could be potentially embarrassing for his predecessor Peter Mandelson and shine a light on Lloyds TSB’s merger with HBOS, he told City A.M. yesterday. It is the first sign that Cable could push for the release of a document that he called on Mandelson to publish before the General Election. The document relates to a case brought against Lloyds’ tie-up with HBOS by a group of Scottish businessmen, who said it was un-competitive. A “secret dossier” was allegedly compiled to support the government’s argument, with all parties on the case then sworn to silence. Lloyds Action Now, a group of

Lloyds shareholders currently suing the government and the bank’s former directors, say that the document would reveal that Mandelson did not adequately inform the courts that HBOS had drawn on £25.4bn of emerging funding. They claim the revelation could have had a crucial impact on the courts’ decision to allow the merger and recently filed a freedom of information calling on Cable to publish it. Cable told City A.M. that he is not sure what the current legal position is but said: “Now that you’ve pointed it out to me, I will certainly make inquiries as to what the position is.” He added he intends to prioritise “the broad principle that we must have as much transparency as possible over a merger that was very damaging for shareholders”. Lloyds declined to comment.

ECB set to offer struggling Irish banks a medium-term lifeline ▲

BANKING

THE European Central Bank is working on a plan to keep struggling Irish banks afloat in the medium term. The new facility, which would replace the use of the Emergency Liquidity Assistance programme, would give Irish banks more time to shrink their assets and reduce their dependence on emergency funding. Ireland’s banks have an estimated €150bn (£132bn) in loans from the ECB and Irish central bank. And a weekend report in the Sunday Business Post suggested that upcoming stress tests on Ireland’s four main lenders will reveal a capital

hole of around €20bn. Ireland’s central bank will on Thursday publish the new stress test results from Bank of Ireland, Allied irish Banks, Irish Life& Permanent and EBS Building Society. The central bank has declined to comment in advance of the results. A Reuters survey of analysts showed that around €25bn out of the €35bn set aside for the banks under EU-IMF deal would be required as a result of the stress tests. However the creation of a scheme, said to be called a “Facility for Banks Under Restructuring,” would reduce the need for panic banking sales.

News

CITYA.M. 28 MARCH 2011

ITV may buy to boost its studios arm ITV may grow its struggling studios division through acquisitions, according to its chief executive Adam Crozier. The broadcaster is desperate to strengthen the division to provide a revenue stream that is less volatile than advertising income. A bounce-back in the ad market trebled ITV’s pre-tax profits to £321m last year. However, it saw a steep fall in profits at its studio division, which slid 11 per cent to £81m, with revenues dropping 12.5 per cent to £293m. This has led analysts to question how susceptible ITV may be to a second economic downturn. Crozier sees a bolstered studios division as a key growth area, allowing ITV to export programming abroad and cushion against a drop in advertising. A number of high profile independent production firms have been moot-

ed as possible targets, although sources close to ITV have distanced themselves from any imminent bids. A glut of ITV executives have left the firm to start production companies and these firms top the list of likely acquisitions. These include: • Mammoth Screen, the firm run by former ITV executives Michele Buck and Damien Timmer, which produces shows including Wuthering Heights. • Left Bank Pictures, set up by ITV-

Libyan rebels retake towns from Gaddafi ▲



MEDIA BY STEVE DINNEEN

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Chief executive of ITV Adam Crozier is keen to boost its studios division man Andy Harries, which produces Wallander. • All3Media, the so-called “superindie” behind shows such as Midsomer Murders, which is run by former ITV bosses including Steve Morrison, David Liddiment, Jules Burns and Wayne Garvie.

Companies ITV may acquire

• Gallowgate, the Ant and Dec production vehicle with strong ties to ITV. • RTL-owned TalkbackThames, the production arm of X-Factor maker Freemantle, although it is questionable whether ITV could afford it.

WORLD

LIBYA’S ramshackle rebel army pushed west yesterday to retake a series of towns from the forces of Muammar Gaddafi as they pulled back under pressure from Western air strikes. Emboldened by the capture of the strategic town of Ajdabiyah with the help of foreign warplanes on Saturday, the rebels have within two days dramatically reversed military losses in their five-week insurgency and regained control of all the main oil terminals in eastern Libya, as far as the town of Bin Jawad. Rebels said they now had their sights on the coastal town of Sirte, Gaddafi’s home town and an important military base about 150 km further along the coastal road. On the diplomatic front, NATO agreed yesterday to take full command of military operations in Libya. Meanwhile, the United States has vowed to cut its military role in Libya over the next week and join other nations in ejecting Libya’s Muammar Gaddafi from power. US defence secretary Robert Gates also raised the possibility that Gaddafi’s regime could splinter and said an international conference in London tomorrow would discuss political strategies to help bring an end to Gaddafi’s 41-year rule.

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CITYA.M. 28 MARCH 2011

Japanese radiation levels have soared ▲

WORLD

JAPAN is now resigned to a long fight to contain the world’s worst atomic crisis in 25 years after high radiation levels complicated work at its crippled nuclear plant. Engineers have been battling to control the six-reactor Fukushima complex since it was damaged by a 11 March earthquake and tsunami that also left more than 27,000 people

David Cameron will urge the public to become more entrepreneurial. Picture: Micha Theiner /City A.M.

dead or missing across Japan’s devastated north east. Radiation at the Tokyo Electric Power plant has soared in recent days: latest readings at the weekend showed contamination 100,000 times normal in water at reactor No. 2 and 1,850 times normal in the nearby sea. Those were the most alarming levels since the crisis began, experts said. Tokyo Electric conceded it does not know how long the crisis will last.

PM backs the City’s start-up business plans ▲

ENTREPRENEURS BY DONATA HUGGINS

DAVID Cameron will today back a campaign launched by over 60 City firms to encourage people to become entrepreneurs. Firms including HSBC, Deloitte, Google, KMPG, BlackBerry, AXA, Coutts, Intel and Lloyds TSB are offering a package of £1,500 to every startup that participates. Cameron will pledge his full support for the scheme and ask the public to consider starting a business themselves. The initiative founded by StartUp Britain is an entirely private sector led campaign to boost economic growth. The government will not be contributing any funds towards the scheme. Cameron is expected to say: “We won’t build the future we want to see in this country if we go back to the bad old days of big government spending, big borrowing and big debt. The recovery we need is a private sector-led recovery.” A spokesperson for the Department of Business said that the government is already supporting entrepreneurs through measures introduced in last week’s Budget.

The start-up package being offered by City firms includes: · AXA will offer 10 per cent off business insurance. · BlackBerry will offer 1,000 free start-up guides. · Microsoft will train 5,000 start-ups in how to use technology to drive their business and marketing activities, including free technology resources worth up to £400 per company. · Google will provide a limited amount of free advertising. · O2 will offer one month’s free line rental. · PayPal will offer three months free fees for new accounts when signing up to a Powa.com website. · Fujitsu is offering a 30-day free trial and 10 per cent off the annual costs of its cloud computing services. · McKinsey & Co is launching a scheme to encourage innovative graduates to start up their own business. Campaign supporter and entrepreneur Doug Richard told City A.M. the scheme was important because: “Banks and big businesses must work with the government to inspire young businesses and give them a fighting chance to grow.” MORE: P.21

Porsche revs up for €5bn share issue and Volkswagen merger ▲

AUTOMOTIVE

DEBT-LADEN German carmaker Porsche has approved an almost €5bn (£4.4bn) capital increase, clearing the way for a merger with Volkswagen. Porsche said last night it had fixed the subscription price for the new ordinary and preferred shares -which will have dividend rights starting as of August 1, 2010 – at €38 apiece, and the subscription ratio at 1:0.75. The figure is a discount of more than 30 per cent on last week’s closing price of €56. The carmaker added that it expects the public offering to be approved by German financial watchdog BaFin

today. The subscription period for the new shares is then due to last from 30 March until 12 April. Provided that the new shares are fully subscribed, Porsche will raise net proceeds of about €4.89bn. The money will be used to meet €5bn in loans which are due to mature by the end of the year. The firm hopes to reduce its net debt to €1.5bn from €6.34bn. Deutsche Bank, Morgan Stanley and JPMorgan are the lead banks underwriting the deal. Porsche finance chief Hans Dieter Poetsch said last week shareholders subscribing to the capital increase would get a payout in June.

News

CITYA.M. 28 MARCH 2011

The next Boots chief must like foreign deals

Myners: more women will get on boards EX-CITY Minister Lord Myners expects women to make up the majority of board members in at least five FTSE100 companies by 2021, without quotas necessary to bring about the change. Speaking at tonight’s Business Woman of the Year awards, Lord Myners will say that the failure by the private sector to recognise and mobilise female talent is the largest missed opportunity of recent history, with women’s “different, fruitful and, at times, distinctly superior style to decision making and leadership” offering the best opportunity for future growth and economic prosperity. But he will stop short of recommending compulsory measures to encourage gender diversity, insisting that board appointments should be based on merit, with companies responsible for removing internal barriers to appointing female leaders. Myners’ views contradict those

expressed in last month’s governmentcommissioned report from Lord Davies, which said quotas to encourage female board members would have to be introduced if voluntary measures fail. According to a 2010 study by Cranfield University, women make up only 12.5 per cent of FTSE100 board members, just a 0.3 per cent rise from the previous year. Burberry is currently the FTSE100 company with the greatest number of women on its board, but still falls short of Myners’ predictions with just three out of eight female directors. Diageo is the only company with four women on its board, including recently apponted finance chief Deirdre Mahlan. Almost a fifth of the current FTSE100 – 18 companies – have no female directors at all. Lord Davies’ report called for the UK’s largest public companies to make sure female directors make up at least 25 per cent of their board members by 2015.

CONSUMER





CORPORATE GOVERNANCE BY ELIZABETH FOURNIER

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Myners, pictured with wife Alison, says more women will join FTSE100 boards

ALLIANCE BOOTS is on the hunt for a new chief executive to make international deals after Andy Hornby suddenly stepped down on Friday, a source close to the pharmaceutical and beauty group said yesterday. Executive chairman Stafano Pessina, viewed as the driving force behind Boots, is understood to be chasing new contracts in China and wants a chief that is happy to spend life on the road. Hornby, who was in charge at HBOS when the bank was bailed out in 2008, resigned last week saying he needed a break after less than two years in the top job. “The job is relentless,” a friend said. The firm has not yet hired headhunters to look for an external candidate. Company policy requires Boots to also look at internal candidates, with the division heads seen as favourites. Head of health and beauty Alex Gourlay and pharmaceutical chief Ornella Barra will look after day-to-day operations while a permanent successor is found. Shore Capital analyst Clive Black said of the search for Hornby’s successor: “Boots is a relatively complex corporate animal… [it] therefore needs a chief executive that can pull all these levers as well as working with some strong characters.”

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News

CITYA.M. 28 MARCH 2011

9

Waterstone keen on HMV ▲

M&A BY JENNY FORSYTH

Tim Waterstone is keen to repurchase his eponymous brand

Picture: Graeme Robertson

TIM Waterstone may be poised to buy back the bookshop chain that bears his name after he and his business partners entered into exclusive talks with its owner, HMV Group. Waterstone, 71, has teamed up with Russian millionaire Alexander Mamut in a a bid to seize control of

the debt-laden chain. HMV Group issued a profit warning earlier this month, advising that profits would fall below market expectations of £45m and it could breach the terms of its bank loans. HMV Group last week admitted it was considering the sale of Waterstone’s and HMV Canada, its Canadian music chain. The sale of Waterstone’s could net up to £75m.

HMV also said that no discussions are taking place with respect to an offer for the whole group. Waterstone, who has run a book chain with Mamut in Russia, has frequently been linked to possible bids and also tried to buy the chain back in 2006. HMV shares closed 4.48 per cent higher on Friday at 17.50p after the company confirmed sales talks.

Southern Cross aims for rent deal

BA could face Easter walk-out

PROPERTY BY MARION DAKERS





STRUGGLING care home operator Southern Cross is preparing for “hardball negotiations” with landlords to cut its massive rental bill, a person close to the firm said yesterday. Southern Cross last week wrote to around a third of its landlords to request a switch from quarterly to monthly payments, after taking on KPMG’s Richard Fleming and Tim Bolot of turnaround specialist Bolt Partners to thrash out a better deal. Most of the firm’s biggest landlords already accept monthly payment, paving the way for tough negotiations in the next few months, one person familiar with the firm said. Rental payments cost the firm £250m a year, eating more than a quarter of the firm’s revenues, after the company sold a swathe of care homes to rent back on long leases before the recession. The company said the 2.5 per cent average annual rent hikes under the leasing deals had become “unsustainable” earlier this month, sending its shares plunging 60 per cent. Southern Cross warned that it was likely to breach debt covenants, though its banks, Barclays and Lloyds, remain “fully supportive”. A company voluntary agreement, similar to that won by Fleming for JJB Sports last month, is thought to be off the agenda due to the large number of subsidiaries in the Southern Cross structure. Southern Cross landlords reportedly include the Qatar Investment Authority, NHP, Lloyds Properties and property tycoon Nick Leslau’s Prestbury. Southern Cross and its advisers KPMG and Bolt Partners all declined to comment yesterday. The firm’s shares closed at 15.5p on Friday, down from 130p a year ago.

BRITISH Airways could face yet more staff strikes, with the result of the latest ballot due out later today. Workers represented by Unite voted again on whether to organise a staff walk-out, with members expected to overwhelmingly back the action. The ballot raises the possibility of a fresh wave of strikes over the Easter break in a repeat of last year’s walkout that caused misery for millions of travellers and cost BA tens of millions of pounds. A BA spokesman said: “We have had positive talks with Unite and expect talks to continue.” The long-running dispute is being fought on a number of fronts, with union members complaining about cost cutting and disciplinary action against several of its members. Incoming BA chief executive Keith Williams has held talks with Unite general secretary Len McCluskey. Workers fought furiously against outgoing BA boss Willie Walsh, who they accused of attempting to break the union. In his first interview since taking over the airline, Williams told City A.M. last week it was time for a fresh start at BA. He said: “BA has not grown for some considerable period of time. It’s time to put some growth back into this business. “It is on the edge of some tremendous opportunities due to our merger with Iberia and partnership with American Airlines.”

AVIATION BY STEVE DINNEEN

New BA boss Keith Williams has held talks with Unite over a possible walk-out over cost cuts.

Schaeffler sells down Continental stake Socrates is voted back FAMILY-OWNED German ball-bearings maker Schaeffler is working on a major refinancing plan through which it will sell some of its indirectly held shares in German automotive supplier Continental AG, it emerged yesterday. The proceeds from the sale of the Continental shares will be used to

partly repay some of its debt. Interest rates and maturities of the remaining loans are expected to be improved through the deal, the people familiar with the negotiations said. Up until now, Schaeffler has controlled 75 per cent of Continental’s shares with some shares held by banks on its behalf. After the deal, Schaeffler will control around two thirds of the shares.

Schaeffler took control of the much larger German auto supplier Continental about two years ago after launching a hostile $18bn (£11.2bn) bid in which it ended up collecting more shares than it could afford, lumbering itself with billions of euros of debt. Schaeffler and Continental had originally planned to merge their businesses but Schaeffler boss Juergen Geissinger last September backed away from the deal.





INDUSTRY BY HARRY BANKS

BANKING

INTERIM Portuguese Prime Minister Jose Socrates has been voted back in as leader of his Socialist Party after quitting last week. He had walked out after parliament voted down the Socialists’ austerity budget, but his victory in the party vote means he will lead them into an election in two months’ time. He won 93 per cent of 32,000 members’ votes.

Markets continue to be unsettled by the political crisis in Lisbon, however, with yields on the country’s five year debt sky-high shooting over 8.5 per cent, compared to under eight per cent a week ago. EU leaders unveiled a “comprehensive package” to solve the region’s debt crisis after a two-day summit on Friday. The agreement made progress on establishing the Eurozone’s permanent bailout fund.

10

The Capitalist

EDITED BY HARRIET DENNYS

CITYA.M. 28 MARCH 2011

Got A Story? Email [email protected] Follow The Capitalist on Twitter: @citycapitalist

CONVERSATIONS IN DARK CORNERS FOR CITY’S BRIGHTEST TALENTS THE guest list included some of the most talented young people in banking and finance – but they were still incapable of finding the party without first getting lost in the neighbouring Barbican housing complex. However, once safely inside the Square Mile World Spreads 30 Under 30 Awards at the elusive Museum of London, small-talk between the bright young things turned to more tradi-

tional topics, such as who had bought the most tables at £3,000 a go? Cheviot Asset Management and the Canadian Imperial Bank of Commerce came out on top here, but the real focus of the evening was the 30 rising stars, with the banking and finance winners including Jeremy Cook, chief economist at World First; Nicholas Toubkin, the youngest-ever private banker at Coutts; and Marc

Davies, known for his “fast and accurate judgement” at Frontier Capital Management. However, their achievements paled into insignificance compared to those of guest speaker Anton Kreil, who set up his own hedge fund from his bedroom in Liverpool at 18, was poached by Goldman Sachs at 21, and retired at 28 to teach lesser mortals the secrets of trading in his BBC2

Anton Kreil addresses the Square Mile World Spreads 30 Under 30 Awards show Million Dollar Traders. Kreil, in the company of awards host Krishnan Guru-Murthy, kept the pace going at the 30 Under 30 afterparty at Chinawhite, where The Capitalist hears the networking was intense, with “literally thousands” of business cards handed out. The free-flowing champagne from associate sponsor Louis Roederer didn’t hurt the introductions either – and, as the evening drew on, some guests exchanged “more than just business cards”. As one partygoer reported: “When you have young, energetic people under 30 in a champagne-filled room with dark corners, taking things further is inevitable.”

THE KING’S SPEECH MEANWHILE, the crowd who turned up to pay their respects at the retirement party for BGC Partners’ David Buik was “old-school City”, with Sky News correspondent Jon Craig mixing with Shroders fund manager Andy Brough and the Bank of England’s deputy governor Paul Tucker at The Royal Exchange last Friday night. As is customary for a retiring legend, Buik hopped onto a step to make a speech outlining some of the highlights of his illustrious career in finance. But while his daily email commentary dispatches to the City regularly reach a wide audience, his parting words fell largely on deaf ears. “No-one could hear a thing,” said a mole, who blamed the acoustic issues on an unfortunate combination of “a large room, a large number of guests and too many echoes coming from the packed restaurant upstairs”.

ARTISTIC LICENSE MEAN Fiddler founder Vince Power took a break from the investor roadshow as he prepares to float his latest venture Music Festivals on Aim next month to attend Merchant Securities’ spring party at the Paternoster Chop House. Merchant Securities is handling the listing for Music Festivals and has valued the live music company at £20m, so Power had a strong incentive to make an appearance – but Lord St John of Bletso, Gartmore fund manager Rob Giles and Kate Tidbury of Octopus showed up simply for the “Best of British” food and the entertainment by Magic Circle member Robert Pound, who conjured pound coins into their closed hands. Also on hand was a caricaturist, who had been briefed to be “savage and spare no blushes”, making guests wince at his unfor-

giving likenesses. But he had clearly been tipped off about who was paying for the party, since Merchant’s chief executive Patrick Claridge (pictured bottom, right with the artist), “got off pretty lightly”. .

NOT MY GENERATION THERE are perks to being John Phizackerley, the EMEA chief executive of Nomura. No, not planning next month’s opening party for the bank’s new fortress at One Angel Lane – which will be marked by a traditional Kagami Biraki ceremony – but the chance to spend a large part of last week listening to gigs at the Royal Albert Hall, thanks to the bank’s twoyear sponsorship of the Teenage Cancer Trust series. Phizackerley was particularly impressed by The Who last Thursday,

Reformed characters: Beady Eye but he was noticeably absent on Friday, when the Manchester crowd turned out in force to hear former Oasis frontman Liam Gallagher take to the stage with new band Beady Eye. With beers flying everywhere over the crowdsurfing audience, The Capitalist hears the Nomura executives and their guests Lucy Ward and Anthony Harte from the Teenage Cancer Trust were pleased to be “safely in their box”.

12

News

CITYA.M. 28 MARCH 2011

Budget sends the right signals to UK business CITY COMMENT

STUART FRASER

P

RIOR to last Wednesday’s announcement, George Osborne said he wanted to produce a Budget for growth. With a gaping hole in public

finances, it was always clear that any growth could not be funded through Government largesse. It will be up to the private sector to generate wealth and offset public sector job losses. Unless we see a further substantial devaluation of sterling we are not going to get a German style surge in manufacturing any time soon. So all parts of the private sector will have to grow, including our financial services industry – internationally owned and with a big base in London. London has huge strengths as an international city but we must never take this for granted. If global firms are to stay here then we must ensure

their staff are happy to be in the UK. If the talent moves so will the firms. There is no doubt that recent events have caused international investors to question if Britain is as welcoming a business environment as it once was. This week however the Chancellor promised us something different; a Budget to attract investment to the UK and to demonstrate that we are once again open for business. And there was much to commend it, both in terms of tone and content. A cut in corporation tax; relief for non-doms investing in the UK; the establishment of 21 enterprise zones and increased support for SMEs, not to

mention an explicit acknowledgement of the importance of a worldclass financial services industry, will all produce economic benefits and provide reassurance for firms and their staff that want to be based here. Perhaps even more importantly, the chancellor acknowledged that the 50p tax is a seen as a temporary measure and, following calls from Labour for it to be revisited, we heard no further reference to the bonus tax. These measures represented policymaking at its lowest ebb – they went against the most basic tenets that ought to underpin a fair and predictable tax regime and proved dam-

aging to our reputation in the international business community. It will be a long haul to repair that damage but I believe this government is heading in the right direction. Even with spending cuts, balancing the books will be difficult and patience and understanding is needed. This of course should not be extended to those who continue to vilify the industry and appear intent on either shrinking its size or who refuse to take into account that we live in a very competitive world, hungry for the talent we are lucky to have on our doorstep. Stuart Fraser is policy adviser to the City of London.

Services look for a rebound ▲

UK ECONOMY BY JULIAN HARRIS

PROSPECTS for economic recovery in 2011 will be clearer this week, when official data is released on the UK’s largest sector. The index of services fell 0.6 per cent in the final month of last year, yet is expected to rebound in 2011. January’s data is released on Wednesday, by the Office for National Statistics. Severe winter conditions were partly responsible for the knock to Demember’s figures, although services are failing to bounce back as strongly as many hoped. “We are seeing manufacturing grow very strongly, at some record rates, whereas services are struggling,” said Chris Williamson of Markit. Markit’s purchasing managers’ index hit an eight-month high of 54.5 for the services industry in January, as it sprung back from the December decline. However, growth (represented by all figures over 50 in the index) slipped to 52.6 in February, reflecting ongoing weakness in services. Growth in manufacturing, mean-

while, hit a 20-year high in January and continued to thrive into February, according to the PMIs. “Domestic consumer spending still accounts for 65 per cent of GDP, so weak domestic demand hits a lot of areas,” Williamson said. While much of the services industry can turn to expanding demand for exports, the rebalancing of the UK won’t be strong enough to push the whole sector forward, Williamson said. In December, hotels and restaurants saw output plummet by an annualised rate of 5.4 per cent. Business and finance, less affected by the weather and domestic demand, slipped just 0.8 per cent. ANALYSIS l Index of Services, % Change 8

%

4 0 -4 -8

Source: Timetric 2008

2009

2010

ECONOMISTS’ VIEWS: IS THE UK SERVICE SECTOR IN GOOD HEALTH? Interviews by Phoebe Torrance DAVID KERN | BRITISH CHAMBERS OF COMMERCE

“ “ “

I think there will be some bounce back in this week’s figures on the service sector, since what happened in December was distorted because of the severe winter weather. And financial, creative and business services are areas which can benefit from growing exports.

” ” ”

ANDREW GOODWIN | ERNST AND YOUNG ITEM CLUB

Survey evidence shows that the service sector rebounded in January, so we are definitely expecting positive numbers next week. I expect business and financial sectors to grow, yet more domestic sectors like hotels and retail distributors could struggle over the next couple years.

CHRIS WILLIAMSON | MARKIT

Large chunks of the sector were affected in December because of the snow, such as travel and leisure activities -- yet our purchasing managers’ index showed a bounce back in January. The UK still has an advantage in financial services, which we should not be dismissing.

News

CITYA.M. 28 MARCH 2011

North Sea oil groups reconsider strategies

ANALYSIS l North Sea oil fields

Oil fields and production (barrels per day) Share of well (%)

WEST DON

Sea

EnQuest 25.7 % Valiant 19.3% Shetland

351,000

81,000

BG Group 31% Chevron 31% EnQuest 37.5%

ENERGY BY MARION DAKERS

Esso 50% Shell 50%

BROOM

HEATHER Orkney

BRENT



234,000

249,000

NORWAY

EnQuest 55 % Wintershall 29%

BALMORAL

100,000 TEAL

135,000

Esso 50% Shell 50%

KYLE

UK

197,000

Premier Oil 78%

ERSKINE

439,000

BG Group 30% BP 18% Chevron 50%

DENMARK

Premier Oil 40% Dana Pet. 15%

OIL FIRMS in the North Sea remain lucrative, a report out today claims, despite a number of firms hastily rewriting their strategies in the wake of the shock North Sea oil profit tax announced in last week’s Budget. Independent firms such as Premier, Nautical and Encore have a strong enough financial base and approach to risk to give “spectacular returns”, according to Edison Investment Research. Smaller companies can develop blocks that have been left by the oil majors as the North Sea reserves dwindle, Edison said. But the majors might find it problematic to exit the region since the tax hike made mature fields less lucrative, analysts warned. ConocoPhillips and ExxonMobil yesterday declined to comment on reports at the weekend that they had

shelved plans for a North Sea asset sale following the tax hike. The two firms put assets worth an estimated £800m on the market last year. BP also put all of its operated gas fields in the southern North Sea on the market in February, with a reported asking price of £600m. The Chancellor raised the supplementary charge for profits in the North Sea from 20 to 32 per cent in last week’s Budget to fund a 1p per litre fuel tax cut and a fuel stabiliser, which absorbs some of the cost of higher oil prices. Firms with older fields face a marginal tax rate of 81 per cent, experts forecast, as fields drilled before 1993 must pay a 50 per cent petroleum revenue tax. Other companies will have a corporation tax rate of 62 per cent. The UK government made £6bn in revenues from oil and gas production in 2009 / 10, according to figures from HM Revenue & Customs This was the lowest sum for five years, despite oil

prices edging closer to the all-time highs seen in 2008. The government said it expects to make around £2bn a year from the tax hike, though the Treasury will this week meet with industry groups to try and lessen the impact on companies with the biggest exposure to the North Sea, in an attempt to stop investors from leaving the region. The North Sea has around 21bn barrels of oil left to extract, after producing 39bn barrels since the reserves were first drilled in the 1960s. Last week’s Budget introduced plans to restrict tax relief for the costs of decommissioning from 2012, which Edison said could encourage firms to simply abandon rigs once the oil dries up. However, around 65 per cent of businesses think raising taxes for the oil industry is a positive step, according to a survey of 620 company directors by the Institute of Directors released at the weekend.

Lehman investors in HK to be repaid 



BANKING BY HARRY BANKS SIXTEEN Hong Kong banks have agreed on a deal to enable investors in structured products of the now bankrupt Lehman Brothers recover a majority of their investments. Investors in Hong Kong lost nearly HK$2.5bn (£199m) on structured products, called “minibonds” offered by US investment bank Lehman Brothers, which collapsed in 2008. A statement from receivers PricewaterhouseCoopers yesterday said the agreement was to result in most of Lehman’s minibond investors recovering over 80 per cent of their original investment from the underlying collateral. He Guangbei, BOC Hong Kong chief executive and the chairman of the

Hong Kong Association of Banks, said that, under the new compensation package, minibond investors will receive up to 96.5 per cent of the principle amount they invested. Distribution to minibond investors by the 16 banks, including Bank of China Hong Kong and Bank of Communications Hong Kong, is set for June this year. The resolution is likely to put an end to the long-running negotiation for compensation to the minibond investors, who had complained they were misled that the products were safe. Asian-focused lender Standard Chartered agreed to buy back HK$1.48bn worth of equity-linked products guaranteed by Lehman, Hong Kong regulators said earlier this month.

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Bank dove predicts fall in inflation by mid-2012 ▲

ECONOMICS

THE Bank of England's leading dove Adam Posen has predicted that inflation will tumble to 1.5 per cent by the middle of next year as George Osborne’s austerity drive and the underlying weakness of the economy stifle consumer spending. In an interview with the Guardian, Posen said: “If I have made the wrong call, not only will I switch my vote, I would not pursue a second term. They should have somebody who gets it right and not me. I am accountable for my performance. I'm holding my nerve because it is the right thing to

13

do.” Posen challenged the view of the three hawks on the committee on four separate counts. He said so-called “core inflation”, did not suggest that the economy was overheating; the recent strength in manufacturing only affected 13 per cent of the UK’s total output; it was too simplistic to say that the economy was overheating if inflation was high; and it would only be costly to take a wait-and-see approach to raising interest rates if there was a risk of an inflationary spiral. “We could get inflation back to target really fast if we put the economy through the wringer,” he said.

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14

News

CITYA.M. 28 MARCH 2011

What crisis? Optimism reigns despite turmoil CNBC COMMENT

ROSS WESTGATE

C

risis, what crisis ? The FTSE 100 starts trading this week at 5,900 after rising over three per cent last week. It was up six of the past seven trading days. We’re now

above the levels before the Japanese earthquake, we still have rising Middle East tensions, an unresolved European debt crisis, and an inflation problem that could strangle Britain’s economic recovery before it’s really started. Two weeks ago, pessimism reigned and now we’re facing a chorus of optimism, so what’s going on? First of all, I’m inclined to follow the advice of CNBC contributor Doug Kass and avoid all this noise. Things were never as bad as the pessimists believed – but nor are they as good as the optimists would have us believe. Lena Komileva at Brown Brothers Harriman described last week as the

un-pricing of Japan’s triple shock across global asset prices. This has also prompted a return to the global correlation of markets. Dollar down, risk assets up – backed up by central bank liquidity and strong corporate balance sheets. Helping this “risk trade” has been the reaction of the global authorities to events. After the stupor of a decade of G7 inaction, the concerted move to stem the yen’s rapid ascent was a real surprise. This came in the same 24 hours that the UN once again became relevant with its action in Libya. Suddenly, investors got the sense that authorities can indeed rise to the

challenge. Even the ECB’s policies can be seen in this light. You might disagree with its looming rate rise – but it could be argued that at least the bank is being strong on its mandate and showing a resolve to act, an action which says “we’re in control”. But this sense of control may prove costly. As Komileva says, “at this juncture, with so much confidence invested in beliefs that global policy will prevail over local risks, the risk from a potential policy mistake is huge.” That’s why the debate about what the Bank of England should do is key. I’ve written before in these pages about the risks of a rate rise but I

absolutely agree with the damage that higher inflation can and already is doing to the economy. It’s also why if the OBR’s projections for UK growth, especially in 2013 and 2014 turn out to be too optimistic, the government will need a Plan B. Until now stock investors have been buoyed by corporate profit growth and supportive global policy. I’d suggest the former is peaking and the latter is uncertain. That makes us, in the words of Doug Kass, “still hostage to more adverse developments.” Ross Westgate hosts Strictly Money and co-hosts Worldwide Exchange daily on CNBC.

SUSHI SAMBA Restaurant opening in autumn

Heron Tower rent hunt hots up as McDermott moves in ▲

PROPERTY BY MARION DAKERS

US LAW firm McDermott Will & Emery becomes the first tenant to move into the Heron Tower on Bishopsgate today, kicking off a new round of marketing to fill the remaining 37 floors. McDermott is moving into the eighth and ninth floors of the 46storey skyscraper, taking 25,000 square feet of space for a rumoured £55 a square foot, just a week after building work ended. Gerald Ronson’s Heron International is expected to announce more tenants in the

LANDMARK PLC Serviced offices to rent

MCDERMOTT WILL & EMERY moves in today

THE DRIFT Restaurant and bars open in May

next few weeks once contracts have been exchanged. Agents CB Richard Ellis and Cushman & Wakefield have held talks with several international firms keen to take space, including US and Chinese companies looking for a base in London, a person close to the firm said yesterday. For comparison, the Gherkin was 50 per cent pre-let when it was finished in 2004. However, this was taken up by a sole tenant – the building’s owner, insurer Swiss Re. The Shard, due to complete in May 2012, has one pre-let taking 22 per cent of the tower’s space.

News

CITYA.M. 28 MARCH 2011

Strong dividends entice investors back into equities ▲

FINANCIAL MARKETS BY ALISON LOCK RETAIL investors are buying into the stock market at pre-financial crisis levels, new research from a share registration consultancy today showed. Private shareholders ploughed a net £473m into equities in the quarter ending in February to take their holdings to £233bn, the highest level since November 2007, the Capita Registrars Private Investor Watch report said. Market turmoil following the dual catastrophes in Japan wiped £16bn off private portfolios by 16 March, when the FTSE 100 closed at a threemonth low of 5,598 – though £8bn had been recovered by 23 March when it returned to 5,796. A recovery in stock prices combined with ultra-low interest rates

TESCO CAPS ITS PRICE CHECK OFFER

15

NEWS | IN BRIEF BlackBerry maker buys new app

and poor house prices has enticed retail investors back to the market. “Private investors have been attracted by strong dividend yields and the recovery in corporate profits,” said Capita Registrars chief executive Charles Cryer. Retail investors bought and sold £980m of stock in the three months to February and traded £6.1bn in the year to February, though turnover remains low as investors have added rather than sell shares. The buying has reflected the current huge market volatility, with investors targeting defensive stocks and those expected to benefit from economic recovery in what Cryer called “cautious optimism”. Retail investors’ holdings now make up 12 per cent of the UK stock market, up from a low of 10.9 per cent in May 2010.

BlackBerry maker Research In Motion says it has bought Ontario-based startup tinyHippos Inc, creator of Ripple, a cross-platform mobile application development and testing tool. The company was acquired for its “extensive experience in web and mobile widget/web development,” Tyler Lessard, RIM’s vice president of global alliances and developer relations, said on the developer’s blog. Terms of the deal were not disclosed. The acquisition comes as RIM prepares to launch its Playbook tablet computer next month, entering an increasingly crowded market dominated by Apple’s iPad and various devices running on Google’s Android platform.

Warning from Canada watchdog

TESCO has been forced to cap its offer to refund double the difference on products that can be bought for less at Asda. The supermarket giant has introduced a £20 maximum refund on its Price Check offer after canny shoppers researched Asda deals and made sizeable claims. Tesco claims they profited by finding Asda promotions. Picture: PA

Canada’s banking watchdog warned yesterday that the next global financial crisis may not be far off and that now is the time for regulators to get tough on the financial industry. “I think we have seen this movie before, but the amazing thing is we continue to expect a different ending,” said Ted Price, assistant superintendent of the Office of the Superintendent of Financial Institutions (OSFI), according to the prepared text of a speech in Calgary, Alberta. The world’s banks are now entering a “dangerous” where profits are strong and they are increasingly willing to invest in risky assets for high returns, he said.

Bonuses are on the rise as top pay stalls ▲

REMUNERATION BY ALISON LOCK WARY shareholders are keeping pressure on companies to rein in executive salaries ahead of annual meetings this year, a new survey today found. Executives at FTSE 350 companies are expected to see minimal pay increases with more than a fifth of boards planning a pay freeze on top staff despite firms’ performance bouncing back strongly since the financial crisis. But bonus payments are rising, with FTSE 100 chief executives’ bonuses rising by nearly a third last year to 111 per cent of base salary, the PwC FTSE 350 Executive Remuneration Survey found.

Where awarded, salary rises are expected to be low at about three per cent, a slight increase on the average 2.8 per cent raise in 2010 and a sign that boards are aware restive shareholders may oppose large pay deals. Institutional investors voiced concern at HSBC’s proposed £13.3m award to new chief executive Stuart Gulliver last week. In 2007 and 2008 salaries rose by six per cent. “Shareholder activism on pay has stepped up substantially over the last few years and seems to be having an effect. It looks like 2011 will be the third consecutive year of pay rise restraint,” said PwC reward partner Sean O’Hare. Firms keen to keep top staff are pushing bonus ceilings up to com-

pensate, with 30 per cent planning to increase executives’ maximum potential bonuses this year. In 2010 the median bonus ceiling jumped 25 percentage points to 175 per cent of base salary. Deferrals are becoming more common as boards bow to regulatory pressure. About three quarters of FTSE 100 companies and 58 per cent of FTSE 250 companies now defer about half of all bonus awards. A fifth of companies also operate clawbacks, where bonuses can be reclaimed in the event of material change at a company. Another fifth are planning to add clawbacks. Remuneration plans will be presented by boards to shareholders at the many annual general meetings scheduled for April and May.

Rajat Gupta steps down from Gates Foundation as Galleon case proceeds ▲

REGULATION

RAJAT Gupta, the former head of McKinsey, has stepped down from his role as a senior adviser to the Bill & Melinda Gates Foundation while he defends himself against insider trading charges related to Galleon Group head Raj Rajaratnam. Gupta has already resigned from the Indian Business School and other directorships including Procter & Gamble and American Airlines. The US Securities and Exchange

Commission laid charges against him this month over links with Rajaratnam, and Gupta has denied any wrongdoing. US prosecutors say Rajaratnam, the founder of Galleon Group, illegally made $45m (£28m) from 2003 to 2009 in stock trades based on tips from insiders, including highly placed executives in the corporate US. Rajaratnam maintains his trades were based on his own research and publicly available information. The Gates Foundation said Gupta had taken the decision to

step down last week. It stated: “Rajat has stepped down from his role on the Foundation’s Global Development advisory panel until these matters are resolved.” Gupta had chaired the panel, which is one of several at the foundation. It meets twice a year and was last convened in February. It was designed to draw in more senior outsiders, partly over criticism that the foundation was unaccountable beyond Mr Gates, his wife Melinda, and Warren Buffett, their co-trustee.

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CITYA.M. 28 MARCH 2011

CITY MOVES | WHO’S SWITCHING JOBS

The real estate fund and asset management firm has appointed Jeremy Thorman as sales liaison manager for its mixed-use development in Finzels Reach, Bristol. Thorman will manage the link between sales and construction for the £255m development, working with senior managing director Michael Baker. Thorman joins from European Land and has also held roles at Westcity and Northacre.

Norton Rose Fei Kwok has joined the Shanghai

office of the international law firm as a counsel in its Shanghai office.

To appear in CITYMOVES please email your career updates and pictures to [email protected]

Kwok joins from Shearman & Sterling LLP’s Shanghai office, where she was a senior associate in the banking and projects team. She specialises in shipping finance and energy-related transactions in China, including LNG procurement, midstream facilities, downstream facilities and petrochemical projects.

UBS The investment bank has strengthened its Global Capital Markets (GCM) division by appointing David Soanes as global head of GCM, and a

marketing and commercial roles at Asda Walmart, McCain and ConAgra.

member of the IB EC, and Rob Jolliffe as deputy global head of GCM.

Panmure Gordon

IAWS Foods

The stockbroker and investment bank has appointed a senior banker and two equity analysts. Fred Walsh joins from Arden Partners as a director in the investment banking team, and Chris Smith joins from Merchant Securities as a specialist financials analyst. The firm has also re-hired Philip Dorgan to its retail team from Altium, to work alongside retail analyst Jean Roche. The three new hires

The specialist baker has appointed Jon Smythe as UK marketing director to oversee all UK marketing activity across brands including Delice de France, Cuisine de France, La Brea and Otis Spunkmeyer. Smythe joins from Hain Celestial UK, the manufacturers of the Linda McCartney brand, where he was UK commercial director. He has also held

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BEST OF THE BROKERS

morganmckinley.com

To appear in Best of the Brokers email your research to [email protected] 25 Mar

600 p

483.55

ANALYSIS l BP

550.50

ANALYSIS l Compass Group

in association with

Edited by Harriet Dennys

HDG Mansur

17

510

486.60

ANALYSIS l Essar Energy

25 Mar

p

600

25 Mar

p

560 520

475

560

480 440

520

3 Jan

19 Jan

8 Feb

28 Feb

18 Mar

440 3 Jan

19 Jan

8 Feb

28 Feb

18 Mar

10 Jan

28 Jan

17 Feb

9 Mar

COMPASS GROUP

BP

ESSAR ENERGY

Deutsche Bank rates the caterer “buy” with a target price of 685p ahead of its half year pre-close trading update on Thursday. The broker thinks that success in North America and in new markets should offset any impact from recent natural disasters in Japan, and is expecting 4.9 per cent organic growth in the first half of 2011. However, the broker sees a continued risk of public sector spending cuts hitting growth.

Citigroup rates the oil major “medium risk” with a 12-month target price of 525p. The broker sees last week’s arbitration ruling against BP as a setback but not the end of the dispute. Citi believes BP AAR’s respective stakes in TNK-BP have a book value of around $10bn, and could fetch more in the current market, though the broker thinks BP needs to maintain relations with AAR to protect the value of the firm.

Morgan Stanley has cut its target price on the India-focused power firm by two per cent to 415p but maintains its “underweight” rating. The broker has reduced its forecasts following news of delays to new projects announced last week, but remains impressed by the firm’s ambitious growth plans. There is still scope for further delays and forecast reductions, Morgan Stanley adds.

Strong data should keep stocks heading higher MARTIN ON THEMARKETS

MARTIN SLANEY

A

FTER their biggest weekly gain for six months, European stocks could well press even further ahead on this morning’s open. In out-of-hours trading, GFT is forecasting the UK’s FTSE 100 index to open

up 12 points from Friday’s close at 5,912. The German DAX is quoted to open up 14 points at 6,960 and the French CAC up 10 points at 3,982. The Dow finished the week up 50 points on Friday, up over 360 points for the week, and that is set to support the current momentum for European markets today. The fact that the rally has come despite no clear-cut resolution to the unrest in Libya nor the Japanese nuclear crises tells a cold but clear story: the selloff which took stocks to their lowest levels since July 2010 was an over-reaction, a classic panic sell. Instead, at least for now, focus is now firmly back on economics and global growth. With that backdrop, the coming few days could see some sharp moves in stock markets given the heavyweight economic data due to be released. Yes, it’s non-farm payrolls week again, where markets globally sit up and take

notice of the US employment numbers. A big number is the call – consensus is for a rise of over 200,000 jobs in March – and that is how traders are positioning their books, so the risk is to the down side. Ahead of those on Friday, get ready for US consumer confidence out tomorrow and ADP private payrolls data on Wednesday. In Europe, the other headline market mover will be Portugal; although the markets have all but fully priced-in an eventual bailout by the EU the debt-ridden country still faces much political uncertainty before that looks like becoming a reality. Martin Slaney is director of GFT's global dealing operations

ANALYSIS l FTSE

5,900.76

25 Mar

6,100

6,000 5,900 5,800 5,700 5,600 5,500

6 Jan

26 Jan

15 Feb

7 Mar

ANALYSIS l Dax Index

25 Mar

6,946.36

7,600

25 Mar

7,400 7,200 7,000 6,800 6,600 6,400

6 Jan

26 Jan

15 Feb

7 Mar

25 Mar

WALL STREET WEEK AHEAD

U

S stock investors could scramble to pick up some of the market’s recent best performers this week as the quarter comes to an end, putting the spotlight on energy and industrial companies. But worries about Japan, the Middle East and oil prices will persist

and keep uncertainty high, analysts said, even as the VIX, the CBOE Volatility Index, slid 27 per cent over the past week. Another driver could come from economic data, with the US government’s March payrolls report – the most widely watched economic indicator of the month – due on Friday.

Economic data lately has taken a backseat to geopolitical events, with Japan’s massive earthquake and tsunami sparking fears of a nuclear disaster in the country and driving the most recent pullback in stocks. But many expect window dressing, where fund managers sell stocks with big losses and buy ones with big gains

to spruce up their portfolio’s quarterly performance, to dominate trading. “I think a number of people viewed the harshness of the sell-off as an opportunity to pick up some inappropriately punished stocks,” said Michael Strauss, chief economist of Commonfund, based in Wilton, Connecticut.

The strategy contributed to a bounceback late last week, with the Dow Jones industrial average and Nasdaq posting their best weeks since July. The benchmark Standard & Poor’s 500 had its best week since early February. The earnings reporting period is set to start in the second week of April.

18

Wealth Management Spread Betting |

THE TIPSTER

BET THE HOUSE ON BELLWAY

L

AST week's budget certainly gave a fillip to the construction industry. The sector has hardly had an easy ride since the free-flow of credit dried up in 2008, but with some of the froth knocked out of the market, progress seems to have been emerging in recent months. Housebuilder Bellway will be releasing its interims on Wednesday, so expect outlooks here to have the ability to sway this stock and the peer group as a whole. IG Index offers Bellway 694.8p-699.2p. With DBK coming out with their figures today, trading either the Dax or DBK directly could offer some volatility. WorldSpreads offer a spread of €41.55€41.65 on DBK and a spread of 6,9556,956 on the rolling Dax future. This week is a big one for the travel industry, with trading updates due from Thomas Cook tomorrow and TUI Travel on Thursday. Thomas Cook’s share price fell in early trading on Friday following an announcement that the Olympic Games Committee suspected pricing of hotel packages for the 2012 Games might not be fair. With the summer coming up, and the Olympics around the corner, this could be a bargain price for one of Europe’s largest travel firms. Cantor Index offers a spread of 167.76p-168.55p. After a torrid week where its share price fell 70p to 570p in the space of a few days, Ted Baker has bounced back in a big way. It released annual figures showing revenues up 15 per cent to £187m and pre-tax profit up 24 per cent to £24m. This encouraged the share price to recover to its current 666p level. Their latest statement shows an intention to break into the Chinese market. Capital Spreads quotes 674.1p-677.4p. Heating and plumbing products company Wolseley is due to announce its first half results on Tuesday and given the continued fragile nature of the US housing market and the number of UK public sector contracts it has, it could well be as good as it gets for the company as it seeks to rebuild its business and return to profit after two years of losses. CMC Markets offers a spread of 2,074.40p-2,079.54p. Philip Salter

Fitzdares to spread into financial bets Entrepreneur Balthazar Fabricus talks with Philip Salter about his move into financial spread betting

S

TARTED in 2005 with an injection of cash from venture capitalist Ben Goldsmith, Fitzdares markets itself as “the bespoke bookmaker for the discerning gambler.” In six years it has developed into a successful niche bookmakers catering to some of London’s wealthiest gamblers. With a solid track record in sports, it has now moved into the business of financial spread betting. Balthazar Fabricus is the entrepreneur behind Fitzdares. Having joined Ladbrokes from university, he had “a burning desire to start a business that would offer a best of breed customer service to discerning gamblers.” Initially, Fitzdares specialised in offering a fixed odds service on sporting events, but after a couple of years moved into sports spread betting. Motivated by demand from existing clients to access more markets, Fabricus has now launched a joint venture with WorldSpreads to offer financial spread betting. Customer service is the USP of Fitzdares and it relies principally on word-of-mouth to get new business. Fabricus believes that even though financial spread betting is a highly competitive market, it can find a comparable niche as they found in sports betting. Traditionally a phone-based company with the feel

of a private members’ club, Fitzdares’ spread betting members will trade mostly online, so the firm is launching mobile phone apps alongside a new trading platform. Fabricus believes spread betting is a growing sector, but recognises that he operates at a different level to most of the competition. He has no ambitions to be the next IG in financial spread betting, any more than he wishes to see a Fitzdares on every high street instead of Ladbrokes. But Fabricus would love Fitzdares to be the Coutts of betting. Ironically, many of the big name players in sports betting started out offering a similar service to Fitzdares. Ladbrokes was on Old Burlington Street and William Hill on Carnaby Street, and their success was built upon old school turf account philosophy. Fabricus’ aim is to “herald a return to those principles of yesteryear.” A challenge for Fitzdares might be in differentiating itself in spread betting where digital interactions dominate. Fabricus counters this by saying that unrivalled customer service – even through emails – combined with the look and feel of his website will distinguish Fitzdares from the competition. Given his success to date, it would take a brave man to bet against him.

THE WEEK AHEAD

Ladder Trading

COMPANY NEWS

ECONOMICS NEWS

POLITICAL NEWS

l Travel company Thomas Cook group is going to announce its second quarter interim management statement on Tuesday. This will be followed by figures being released by TUI Travel on Thursday, where we may see indication of how the Middle East turmoil affected the performance of travel companies.

l On Monday, the US will announce personal income and spending figures for February.

l On Monday, drinkers will be hit by a 7.2 per cent hike in tax on a pint of beer. This comes ahead of proposals to be tabled by Sarah Woolaston on Wednesday which would give the state further control over alcohol advertising.

l Housebuilder Bellway will be announcing its interim profits on Wednesday. Professional Trading Professional Spread Betting

www.ProSpreads.com Spread betting can result in losses that exceed your initial deposit. Authorised and regulated by the Financial Services Commission, Gibraltar.

in association with

l Apple will be hoping that it will be celebrating its 35th birthday on Friday with news of a successful first week of sales of the latest incarnation of the iPad.

l Tuesday will see the release of Japanese overall household spending figures for February. l Tuesday will also see the release of Japanese unemployment figures. It is expected that the decline in industrial production will have yet to hit employment figures. l Figures will be announced on Tuesday of the number of UK mortgage approvals in February. l The US non-farm payroll figures will be released on Friday.

l On Monday, John Woodcock will be proposing legislation on a matter that weighs heavily on many peoples’ minds: protection of Bowling Greens (Development Control). l On Tuesday, the UK is to host a summit to discuss the military action in Libya and implementation of UN Security Council Resolutions 1970 and 1973.

CITYA.M. 28 MARCH 2011

CITYA.M. 28 MARCH 2011

19

HOW TRADERS CAN PROFIT ON EVA MENDES

ANALYSIS l Bollinger bands -5,295

-5,290

-5,285

-5,280

TOM HOUGAARD

-5,275

CONSULTING ANALYST, INTERTRADER

-5,270

-5,265 11:48

12:00

12:12

12:24

12:36

12:48

13:00

13:12

13:24

13:36

13:48

Add fizz to your trades M by using Bollinger bands Using this indicator can help you to identify and capitalise on intraday trends, writes Craig Drake

T Balthazar Fabricus, boss of Fitzdares, is going beyond sports betting

HOUGH long term trends are relatively easy to identify, tracking intraday trends is often more tricky to do, as short term developments often disappear before you’ve even identified them or before they can be used to your advantage. This is where Bollinger bands can serve as a useful tool for day traders. Whereas most indicators work better and smoother on longer timeframes because the irrationality of the market has time to work itself out over a multitude of bars, Bollinger bands are designed for the express purpose of profiting on trends and their reversals and for tracking market volatility. Developed by John Bollinger, Bollinger bands consist of a centre line of an exponential moving average and two price bands either side of it based on standard deviations of the stock being studied. The bands will expand as the stock becomes more volatile or

contract if it becomes bound into a tight trading pattern. When the stock price hovers around the upper band, the shares are thought to be overbought and when they stay near to the bottom band they are thought to be oversold, triggering a buy signal. Tom Hougaard outlines the use of stochastics in his column on the right of this page. By using these techniques in combination with Bollinger bands, you have the ideal set up of technical indicators to find overbought and oversold territory. For example, when both the Bollinger bands and stochastic indicator curve up near a low, it is often a buy indication, and when the opposite occurs it is a strong sell signal. By using these techniques you should be able to better identify intraday trends and profit from them once you have done so.

Y FELLOW trader, Dr David Paul, came to me with a new setup he wanted to trade. We tested it extensively, and it fulfilled the criteria we were looking for: good risk to reward, good hit ratio, good Sharpe ratio and all the other boring stuff that makes most people’s eyes glaze over. In fact it proved to be a sizzling hot setup (which will be fully disclosed below), which we have traded and taught on our course over the last couple of years. So we decided to name it after an equally hot Hollywood Goddess – Eva Mendes. Now to the setup, which is a divergence setup between price and stochastics, which measures the relationship between closing prices and price range over a given time period (the stochastics settings are the generic ones for any charting package: 14-3-3). We use it on the hourly and four-hour chart, so it lends itself perfectly to swing trading. The rules are simple: you trade in the direction of the trend, as defined by some trend measure. It can be a three-day high or low, or simply a 50period moving average. The Eva Mendes set-up happens when the stochastics indicator has made a lower low, but price is making a higher low, in the direction of the trend. In other words, the previous low on the price chart will correspond to a low on the stochastics indicator. The next low will have to be higher low on the price chart, while at the same time stochastics will have to take out the previous low. Our entry comes by using a four-bar fractal reversal. I will have to discuss that setup in the next instalment. Now you get the setup, and next time I will teach you the entry method. The views and comments in this article are not the views of InterTrader.com. The provision of this information should not be construed in any circumstances as a recommendation or solicitation to buy or sell any security or financial instrument.

20

Wealth Management | Markets

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Business Features

21

| Entrepreneurs

SME Budget bonanza: “ entrepreneurs react

JULIAN HICKMAN | PARTNER AT LONGBOW CAPITAL

The Budget has put venture capital trusts (VCT) and the enterprise investment scheme (EIS) back where they belong and that’s at the heart of enabling private investors to get behind British innovation and allow more companies – not just start-ups – to benefit from tax-efficient investment. Pre-Budget fears that the Chancellor would turn his back on VCTs and EIS have proved unfounded. EIS investments will become really attractive to investors as a result of the Chancellor’s changes.

Do the new measures go far enough? Donata Huggins asks business owners what they think

W

ITH David Cameron urging the British public to be more entrepreneurial in a speech today, many are asking whether the government is doing enough to support startups and small businesses. Last week’s Budget was dubbed the “Budget for growth” and offered a number of measured aimed at entrepreneurs and small businesses, but not everyone is convinced they will have an impact. Mark Littlewood, the director general of the Institute of Economic Affairs (IEA), for example, is not convinced: “As a budget that was intended to be about encouraging growth, this is a disappointment. Even on

the areas where the Chancellor is doing the right things, his reforms are tiny. He committed himself to simplifying tax rules, but has only eliminated 100 pages from our 10,000 page tax rulebook and has added many more.” Others were more positive. Miles Templeman, the director general of the Institute of Directors said: “This was a Budget aimed at changing perceptions and boosting business confidence about long-term economic prospects in the UK. The Chancellor didn’t have much money to play with but he played his hand well”. City A.M. asked some entrepreneurs what they thought.

FACTS | BUDGET l

Osborne announced the lifetime limit for entrepreneur’s relief will double from £5m to £10m.

l The Enterprise Investment Scheme (EIS) and

Venture Capital Trusts (VCT) will be reformed, if the EU grants approval. l 21 enterprise zones will be rolled out across the UK. l Start-ups

to be exempt from new domestic regulation for three years.

JASON STOCKWOOD |

ENTREPRENEUR, SIMPLY BUSINESS



The introduction of 21 Enterprise Zones provides an opportunity for encouraging start ups. The financial discounts on business rates, extra capital allowances for manufacturing and super-fast broadband will generate hubs of excellence where small businesses can work together and contribute to developing successful businesses. But this kind of support is important for all new and small businesses, and it is important that they are not neglected. We need to encourage and support businesses across the country, whatever their location.

l The small business rate relief holiday will run

MARK NEEDHAM |

for another year from 1 October.

ENTREPRENEUR, WIDGET UK

l A consultation on merging national insurance

and income tax. l If approved by the EU, research and development tax will increase to 200 per cent for small and medium-sized business. l Further deregulation promised.







It is about time that income tax and national insurance (NI) were merged. I hope the consultation is short. It wasn’t so long ago that I used to do the payroll myself. The different thresholds at which NI and income tax kick in made it hard to tell people what a pay increase would mean in their pocket. The consultation is not really needed: the current categories are a mess and we all know the money goes to the same place in the end.



22

Lifestyle

In association with

CITYA.M. 28 MARCH 2011

| Travel

Refresh, revive and get fit at a Swiss mountain retreat With breathtaking architecture, scenery and spa, it’s no wonder Susan Sherwin found a stunningly nourishing antidote to City life at the Tschuggen Grand

W

HETHER it’s the ski season or the summer holidays, the Swiss Alps are crawling with tourists. If people aren’t whizzing down a snow-covered hillside in the winter, come summer they’re resolutely trudging up a wellmarked, well-trodden path. But head to these same Alpine villages only a week or two out of season and you’ll have the place almost to yourself, offering the perfect retreat from the stress of City life. And after a sticky London summer battling with overheated public transport, a stuffy office and a distinct lack of sun, it was with much relief that I hopped on a plane for a long weekend in Arosa, a small Swiss resort about 1,800m above sea-level. Arosa is not as well known as its bigger and more famous neighbours of Davos and Klosters. It’s a compact Alpine village by comparison, but it has more than enough in terms of walking, cycling and horse riding trails to keep you occupied. It’s about three hours from Zurich airport but don’t bother hiring a car. For a start, the train is just as quick as driving, it works like clockwork – three changes, not one missed connection – and the final leg is not to be missed. It’s a narrow-gauge railway that wends its way steadily higher up the valley towards Arosa from the valley town of Chur and you’ll get some stunning views if the weather’s favourable. The five-star Tschuggen Grand is certainly the place to stay in Arosa and we were met at the tiny station by an immaculately-dressed member of staff who drove us the short distance to the hotel, which is perched just above the village, and used to be a sanatorium. But those hoping to stay in a chocolate-box Swiss chalet will be disappointed. Rebuilt in the late Sixties after a fire destroyed the original hotel, the Tschuggen Grand did not escape the architectural penchant of the time for concrete and glass. But while the exterior of the hotel might be somewhat drab, the interior

is faultless thanks to Swiss designer Carlo Rampazzi, who spruced it up substantially in 2006. All the rooms have a smart, modern feel with bright quilted headboards – mine was a patchwork of vibrant orange and zebra stripes. Eyecatching, certainly, but I was glad I didn’t have to wake up facing it. The large bathroom, with its clean lines, glass and local Grisons granite was just as up-to-date and as well appointed. While the hotel is certainly modern, the adjacent Bergoase spa, which opened in December 2006, is verging on the futuristic. It is carved into the hillside and is topped by nine glass sails, which blend into the trees during the day but glow different colours at night. The spa is joined to the hotel by a suspended glass walkway so I was able

Spa and waffles at a Cork golf retreat This spacious resort is a no-nonsense Irish winner, writes Zoe Strimpel FRIEND of mine from Cork, who has lived in London, Cambridge and Stockholm, decided to reconnect with her roots for her wedding. Very considerately, she chose to

A

have it at a proper resort, with golf course, ballroom and, of course, a fully-fledged hotel. So deciding to take a room there was a no-brainer; if you can avoid that tired, drunk journey back with your

CITYA.M. 28 MARCH 2011

In association with

23

5 POLLEN ST

NEW ITALIAN BEHIND REGENT STREET REVIEWED TOMORROW

Those hoping to stay in a chocolate-box chalet will be disappointed; the Tschuggen Grand did not escape the 1960s penchant for concrete and glass

TRAVEL NOTES | by Zoe Strimpel

EQUESTRIAN CLINICS AT LUCKNAM PARK

to walk to and from my room wrapped in an over-sized dressing gown and slippers. Although the spa is built into the rock, its sheer size (an astounding 5,000 sq m over four floors) and light make the whole place feel open and relaxing. Whether you’re there to exercise, get pummelled or relax completely, there’s plenty of choice, though fitness fiends wanting a work-out before breakfast may wish the spa opened earlier than 8am. I decided to start in the gym – a tad later than 8am, I’ll admit – before heading to unwind in the outside relaxation pool and then enjoying a detoxifying lunch in the spa’s own restaurant, which rounded off the morning nicely. A full body sports massage was just the trick for my troubled back though I could have chosen to go for any number of other treatments, including

reflexology and ayurvedic massages. If you’re really pushing the boat out or looking to impress, then you can also hire one of the two private spas, which include treatments for two. It would be very easy to laze in the spa for days on end without feeling the need to ever venture outside the hotel. This will certainly more than fill those common days in the mountains when low cloud, rain and even snow put paid to the best-laid plans. But if you’re lucky to have excellent weather, then there’s really no excuse not to make the most of the staggering surroundings. The hotel can arrange all manner of activities – from yoga up the mountain at 2,000m to cycling, walking and horse riding. And if you feel you need a bit of a helping hand to get you started like we did, then the hotel’s private mountain railway – the Tschuggen Express – will

take you up the first 150m of altitude in just over two minutes. If you’re heading off into the hills – or even if you’re not – there’s plenty of opportunity to fill up at breakfast. Faced with the biggest continental spread I have ever seen, it was tempting to try a little bit of everything, safe in the knowledge I would work it off later. Fresh trout, local cheeses and meats, bircher muesli and boiled eggs all made it onto my plate while if you feel the need for something hot, they’ll cook almost anything. It’s not just breakfast that’s taken seriously at the Tschuggen Grand. There are no fewer than five restaurants, which all put plenty of emphasis on local ingredients and the crisp and delicious Grisons white wine, whether you’re dining at the gourmet La Vetta or the less up-market but extremely fun Bunderstube, which offers local specialties such as cheese fondue and raclette as well as a skittles alley to try your luck after dinner – if you can still move, that is. I left the Tschuggen Grand feeling energetic and healthy with all my City lethargy and worries gone. More than a hundred years ago, people started arriving in Arosa in search of better health. While the Tschuggen is anything but a sanatorium now, this is still true today. For 7 nights at Tschuggen Grand Hotel on B&B Basis including flights, Kuoni (01306747008 www.kuoni.co.uk) offer prices from £1290pp based on two sharing.

Country house hotels and horses go beautifully together. Now you have a chance to hone your equestrian skills at the supremely lovely Lucknam Park, the sort of place that Mr Darcy would have considered a reasonable abode. With an all-weather arena, shiny new show jumps and a cross country course designed by Badminton course builders. Legends Stephen Hadley and Richard Waygood MBE will be in charge of your equestrian treatment in the 500 acres of parkland at Lucknam Park. Show Jumping with Stephen Hadley, 20-21 April and 27-28 July; Combined training with Richard Waygood MBE, 1-2 June.

Clinics cost £60 per person. To book, call 01225 742 777 or visit www.lucknampark.co.uk

HOTEL DU CAP EDEN ROC REOPENS The Ritz of the Cap d’Antibes, Hotel du Cap Eden Roc is now bigger and better than ever, after a four year, €45m refurb, its first since the 1950s. All one-bedroom and two-bedroom suites now have sea views and there’s a new grill restaurant with sushi bar; a new swimming pool and beach area; a new restaurant and terrace; and a new kitchen area to service the famous Cabanas, where time has stood still. Reopens 15 April, www.hotel-du-capeden-roc.com

THINK ROOMS...

with

WALDHOTEL NATIONAL 4* Tomelistrasse | Arosa | 7050 Surrounded by mountains and majestic firs, Waldhotel National is an impressive hotel to match its impressive location. The lovely pine rooms manage to create a stylish and modern feel without ever losing that welcome touch of traditional cosiness. And the spa here, complete with outdoor sauna, is the ideal place to return to after a winter’s day skiing or summer’s day hiking.

GOLF & SPORTHOTEL HOF MARAN 4* Maranerstrasse |Arosa | 7050

stilettos in your hands, then you absolutely should, right? Fota Island is not necessarily my kind of place – it’s neither boutique nor particularly unusual in its design, spa or restaurants. But sometimes that’s a good thing. It’s not pretentious, it gets the job done and it has everything you need for a good stay. It’s also nestled in a vast spread of nature – woods as well as fields and the golf course, a space used creatively with a variety of “lodges” away from the main building that families or friends can rent. My room was spacious and modern, with a massive window door opening out into the sunset. It was cold, but I stuck my nose out long enough to hear birds cheeping, before running a bath in my capacious bathroom.

To help limber up for the wedding, I went down to the spa, which is a big and bustling space. The large, curving swimming pool was my first port of call, and – though full of couples – it was jolly nice to have a paddle. I slept well in my comfortable, mega-sized bed and rose for one of the best hotel breakfasts I’ve ever encountered. Irish delights abounded: soda bread, wonderful butter, pastries and cakes (banana bread was my favourite) and – the show stopper – honeyed waffles with chocolate syrup. Fota Island is, first and foremost, a golf retreat. The course is huge and there is a golf school. In true Irish style, this is also a family-oriented place, and I saw many kids frolicking about happily. The adults looked just as pleased to be there. Rooms from €104 per night. www.fotaisland.ie

Hof Maran is right at the heart of the activity in Arosa. You can ski right up to the front door, cross country trails pass right by, the golf course is opposite and it even has its own ice rink. And when you’re done with being active you’ll appreciate relaxing in the sauna and steam bath, or outside on the sun-soaked terrace. The rooms are fresh and modern here, and all enjoy striking panoramic views.

HOTEL METROPOL & SPA 4* Matterstrasse 9 | Zermatt | 3920 With beautiful views of the Matterhorn mountain (the most photographed mountain in the world no less!), Hotel Metropol provides a charming Swiss stay. This modern and tranquil hotel is right in the heart of Zammatt and is a great base for all your summer or winter activities. There’s a swimming pool and spa, and we love how the big windows surrounding the pool let you look out whilst you swim. To book your stay at any of these fabulous hotels, or to discover a whole world of other accommodation possibilities, visit LateRooms.com or call 0161 831 3894.

24

Lifestyle

CITY DAD

THE STORY CONTINUES TOMORROW

Men ditch high street for fashion on the web

Q&A Clare Rous & Kara Iland FOUNDERS OF ROUS ILAND MEMBERS’ BOUTIQUE, WWW.ROUSILAND.COM

HOW TO GET DRESSED: ADDING COLOUR

Q.

I am stuck in a rut of buying blacks and greys. I want to wear colour but don’t have any confidence in what suits me. Should I get my colours done?

Chaps hate shops, which is why more of them are buying clothes online, writes Lucie Greene

M

ENSWEAR online has always been seen as second fiddle to women’s wear,” says Jeremy Langmead, newly anointed editor-in-chief at Mr. Porter, Net-a-Porter’s new online men’s fashion mecca. “You always had to find menswear by scrabbling around for the button hidden away at the top left or right hand corner of a women’s wear website. There hasn’t ever been a dedicated global men’s style destination for men.” That is, until now. Mr. Porter launched last month and already is setting the hearts of stylish men aflutter. Langmead (former editor of Esquire and Wallpaper*) said he wanted the site to be as much a place to read and pick up style tips as to shop. It will, he says, “make shopping easy and enjoyable, but also make men feel comfortable being on a shopping site mixing editorial, style advic, and inspiration.” Men have traditionally been averse to shopping on-line, but that is changing. “We’ve seen huge growth in the online designer retail market, which is continuing to grow,” says Sarah Curran, CEO at My-wardrobe, where Burberry, Polo Ralph Lauren, Vivienne Westwood and Paul Smith are all best sellers. “We launched menswear in January 2009, achieved over £1m in sales in the first year and have consistently recorded over 100 per cent year-on-year sales growth since. The market is one of the biggest opportunities as more time poor men realise the efficiency of shopping this way.” It helps that menswear itself is booming. “It’s the biggest area of expansion in the fashion industry, partly because until now it’s been under-developed,” says Robert Johnston, associate editor at GQ. “Menswear is on fire,” agrees Ed Burstell, buying director at Liberty. “We are current-

A.

John Smedley shirts.

ly experiencing a double digit increase over last year. We have also just increased the size of the department by over a third.” Do men shop differently to women? “They are more brand driven and direct. They go Mulberry men’s bag. specifically for the items they want. They also buy in multiples. For example, I’ll go to Green and Jack’s and buy 10 shirts at once,” says Johnston. “Men are less interested in trends and more interested in the stories behind clothing and how they’re made and the craftsmanship,” adds Max Reyner from LSN Global, a trends prediction company.

Men – unlike women – also like direction: “Male shoppers are surprisingly receptive to outfit-building suggestions,” says Gordon Richardson, fashion director at Topman. A key feature of Topman’s site is a selection of helpful complete outfit looks. Reyner says there is an opportunity for online men’s fashion companies to attract new consumers, previously wary of shopping. “Lots of men still tend to be intimidated by some store environments. Shops have tried to overcome this with bars and pool tables, but it has varying success,” he says. “Online men’s wear sites are a great way to research and find the products without having to deal with any of that.”

DON’T be fooled into thinking that there are clear rules about colours that you haven’t been taught. There are too many factors to influence what we individually feel good wearing to be simplified into general terms. We all have our own particular associations with certain shades – influenced by school uniform pet hates to aspirational style icons. We also all have a unique set of colouring and our own way of wearing make-up/styling our hair which itself changes depending on our mood and the season. You just need to be brave and try different colours on and trust your own reaction. In every colour family there will be a shade that suits you. To start with try different colour accessories. A skinny belt in gold, cobalt blue or even coral pink will add a little pop of colour to black and grey ensembles: try Black & Brown’s rainbow selection of styles. Oversized cashmere scarves in modern digital prints, as perfected by British designer Lilly and Lionel, are an easy way to introduce colour near your face in a simple item you can take on and off depending on how brave you are feeling. For your clothes chose new modern neutrals: olive and khaki greens, French navy blues, and mushroom taupes are all flattering options and easily paired with your existing blacks and greys. Finally don’t forget about the texture of the fabric. Silks worn on the upper body reflect light up to the face to enhance the natural colour of your eyes, skin and hair.

Python double buckle waisted belt, Black and Brown, £149.99

FASHION NEWS | BY LUCIE GREENE GQ FASHION MAG LAUNCHES GQ Magazine has launched a new swanky fashion-focussed partner, a hip bi-annual accompaniment to its monthly edition – coffee table candy for boys, basically. The magazine is being headed by ex-I-D Magazine editor Ben Reardon and features Oscar nominee James Franco on the cover, along with shoots styled by Louis Vuitton’s men’s wear designer Kim Jones. Simon Mills also writes about why British menswear is back on the map.

can rejoice – the Spanish brand is opening its first flagship on Mayfair’s prime luxury spot Mount Street any minute, selling its complete range of accessories and a capsule range of clothing. (Look out for the brand’s iconic logo print pieces.) The store itself promises to be a bit special. Peter Marino – the designer behind Christian Dior and Ermenegildo Zegna and Louis Vuitton’s temples of luxury – styled it.

LOEWE LOVE

SHOE STORY

Fans of Loewe’s chic understated designs

Oliver Spencer’s Lambs Conduit

A bag from Loewe.

Street store already has a cult following. (If you’ve not discovered it yet, think cool workwear basics, cable knits and naval winter coats a-plenty.) Now he is launching a footwear boutique in collaboration with Simon Spiteri, ex-head of menswear at Liberty. The store launches next month and will sell a range of Oliver Spencer boots, including the Northampton lace-up, a selection of independent shoe brands and accessories by Il Bussetto and Sean Marshall. Not to be missed. Prices will start at £50.

Lifestyle | TV& Games

SATELLITE & CABLE

TERRESTRIAL

CITYA.M. 28 MARCH 2011

BBC1

BBC2

6pm BBC News 6.30pm BBC London News 7pm The One Show

7.30pm Bang Goes the Theory: BBC News 8pm EastEnders 8.30pm The Big Squeeze: Panorama 9pm Waking the Dead

10pm BBC News 10.25pm Regional News 10.35pm Mrs Brown’s Boys 11.05pm Late Kick Off 11.35pm FILM Goodbye Charlie Bright 2001; Weatherview 1.05am Sign Zone: Young, Jobless and Living at Home 2am Silk 3am Music, Money and Hip-Hop Honeys 4am Life in a Cottage Garden with Carol Klein 4.30am-6am News

SKY SPORTS 1

6pm Eggheads 6.30pm Royal Upstairs Downstairs 7pm Chilean Miners: What Happened Next 8pm University Challenge 8.30pm Raymond Blanc’s Kitchen Secrets 9pm CHOICE Neil Morrissey: Care Home Kid 10pm Never Mind the Buzzcocks 10.30pm Newsnight: Weather 11.20pm The Brain: A Secret History 12.20am An Island Parish 12.50am BBC News 4am-6am BBC Learning Zone

BRITISH EUROSPORT

4pm Live WTA Tennis 7.45pm euroCRASH! 8pm World Superbikes 9.30pm Live WTA Tennis 11.15pm World Superbikes 12.15am-12.30am WATTS

ESPN

5.30pm IRB Rugby Sevens 7.30pm Live Speedway 9.30pm NASCAR 10.30pm Boots ‘n’ All 11.30pm Speedway 1.30am European Tour Golf 2.30am PGA Tour Golf 3.30am-5am Wonderful World of Golf

SKY SPORTS 3

SKY LIVING

SKY SPORTS 2

4pm Live Masters Tennis 12am WWE: Late Night – Afterburn

7pm Ghost Whisperer 8pm Katie 9pm Four Weddings

12.10am Music on 4: 360 Sessions: My Chemical Romance 12.40am European Poker Tour 1.35am Rome Wasn’t Built in a Day 2.30am Royal Deaths and Diseases 3.30am Codex 4.25am The Bible: A History 5.20am-6.05am Ugly Betty

11.35pm River Monsters 12.30am The Zone; ITV News Headlines 2.35am UEFA Champions League Weekly 3.05am The Jeremy Kyle Show 4am-5.30am Nightscreen

7pm Working Girls 8pm Freak Like Me 8.30pm The Lock Up 9pm Thailand: Tourism and the Truth – Stacey Dooley Investigates 10pm EastEnders 10.30pm Bizarre ER 11pm Family Guy 11.45pm Thailand: Tourism and the Truth – Stacey Dooley Investigates 12.45am Bizarre ER 1.15am The Lock Up 1.45am Working Girls 2.45am Freak Like Me 3.15am The World’s Worst Place to Be Gay 4.15am Snog, Marry, Avoid? 4.45am-5.15am The Lock Up

COFFEE BREAK

SUDOKU

KAKURO

Place the numbers from 1 to 9 in each empty cell so that each row, each column and each 3x3 block contains all the numbers from 1 to 9 to solve this tricky Sudoku puzzle.

 

Fill the grid so that each block adds up to the total in the box above or to the left of it. You can only use the digits 1-9 and you must not use the same digit twice in a block. The same digit may occur more than once in a row or column, but it must be in a separate block.

        

8pm How Do They Do It? 8.30pm How It’s Made 9pm Mythbusters 10pm Dual Survival 11pm Monsters Inside Me 12am Bear Grylls: Born Survivor 1am Deadliest Catch 2am Future Weapons 3am World War Two in HD Colour 3.50am Stephen

   

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14 35

12 12 37

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QUICK CROSSWORD P I A N O M R A R I R A I T A L I C S B S A H E L M D T E A S E C P M W H I P P E E E A S I D E

T H A P T R F E D L O D T U S C

U M A U R T L Y A R Y E L T T E N

P E

K I S M E T

THE GADGET SHOW

CHANNEL 5, 8PM Pollyanna Woodward and Suzi Perry team up with a robotic army for a paintballing challenge, and Ortis Deley rates his top five digital photo frames.

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7

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11



16











6 15

 

10 11

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10



23

KAKURO 1 5 6 9 8 2 5 6 3 6 8 9 4 3 2 3 1 9 2 5 6 7 2 9 1 4 5 7 9 7 8 7 4 6 2 5 1 5 3 2 9 1 2 6 2 8 7 9 3 9 8

9 6 2 4 7 8 1 6 3 4 1 2 2 8 5 1

4 2 1 5 8 2

9 6

SUDOKU WORDWHEEL The nine-letter word was BIOGRAPHY

        

        

        

        

1 3 6 7

B K

Using only the letters in the Wordwheel, you have ten minutes to find as many words as possible, none of which may be plurals, foreign words or proper nouns. Each word must be of three letters or more, all must contain the central letter and letters can only be used once in every word. There is at least one nine-letter word in the wheel.

I

E

N

R W         

        

        

        





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WORDWHEEL



 

10

30 16

5

12





ACROSS



LAST ISSUE’S SOLUTIONS

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9

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ITV1, 7.30PM Jim begs Steve to reconsider throwing Liz out of the Rovers, while Jack Duckworth’s grandson Tommy (Chris Fountain) arrives looking for Tyrone.

8pm Road Wars 9pm Ross Kemp in Search of Pirates 10pm Spartacus: Gods of the Arena 11.15pm A League of Their Own 12.15am Night Cops 2.10am Road Wars 3.05am Cold Case 3.55am Lost 4.45am The Filth Files 5.10am-6am Sell Me the Answer



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Part one of two. The actor explores his childhood in care, hoping to understand how the experience has affected him as an adult.

QUICK CROSSWORD

45

11

NEIL MORRISSEY: CARE HOME KID BBC2, 9PM

SKY1

DISCOVERY

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

6

TV PICK

CORONATION STREET

7pm A Baby Story 8pm I Didn’t Know I Was Pregnant 9pm Trauma Unit 10pm Untold Stories of the ER 11pm Critical Condition 12am Trauma Unit 1am Untold Stories of the ER 2am Critical Condition 3am I Didn’t Know I Was Pregnant 4am Bringing Home Baby 5am-6am A Baby Story

7pm How the Earth Was Made 8pm Pawn Stars 9.30pm Mud Men 10.30pm Pawn Stars 11pm American Pickers 12am Mud Men 1am Pawn Stars 3am Timewatch 4am UFO Files 5am-6am Ancient Discoveries

7pm Hollyoaks 7.30pm Friends 9pm Glee 10pm Great British Hairdresser 11.05pm Gleeful: The

4.05am The FBI Files 4.55am Animal Rescue Squad 5.10am Wildlife SOS 5.35am-6am House Doctor

DISCOVERY HOME & HEALTH

HISTORY

E4

6pm Home and Away 6.25pm OK! TV 7pm 5 News at 7 7.30pm How Do They Do It?; 5 News Update 8pm CHOICE The Gadget Show; 5 News at 9 9pm FILM You Don’t Mess with the Zohan 2008. 11.20pm FILM Deuce Bigalow: European Gigolo: Comedy, with Rob Schneider. 2005. 12.55am SuperCasino

Hawking’s Universe 5.30am-6am How Does That Work?

Real Show Choirs of America 12.10am My Name Is Earl 1.05am Ugly Betty 1.50am Gleeful: The Real Show Choirs of America 2.45am Important Things with Demetri Martin 3.05am Privileged 3.45am The OC 4.30am-6am Switched

BBC THREE

6.30pm Talk of the Terrace 7.30pm Live Under-21s International Football 10pm Between The Lines 10.30pm ESPN Pardon the Interruption 11pm Premiership Rugby Union 12am UFC 2am NHRA Drag Racing 3.30am ESPN Press Pass 4am Talk of the Terrace 5am Between The Lines 5.30am-6am Baseball Tonight

CHANNEL5

6pm The Simpsons 6.30pm Hollyoaks: The rape trial begins. 7pm Channel 4 News 7.55pm 4thought.tv 8pm Dispatches: BP – In Deep Water: The role of BP in the 2010 Gulf of Mexico oil spill. 9pm One Born Every Minute 10pm Heston’s Fairytale Feast 11.10pm The Event

6pm London Tonight 6.30pm ITV News 7pm Emmerdale 7.30pm CHOICE Coronation Street 8pm The Dales 8.30pm Coronation Street 9pm Law & Order: UK 10pm ITV News at Ten 10.30pm London News 10.35pm Real Crime: Murder at Harvey Nicks

10pm Step Kids In Love 11pm Criminal Minds 12am CSI: Crime Scene Investigation 2.40am Charmed 4.20am Four Weddings 5.10am-6am Maury

1am WWE: NXT 2am-4.15am Live WWE: Late Night – Raw

6.30pm The Sky Sports Years 7.30pm Live Football League: Oldham Athletic v Tranmere Rovers (Kick-off 7.45pm). 10pm The Sky Sports Years 11pm Netbusters 11.30pm Soccer AM: The Best Bits 12.30am Football League 2am FIFA Futbol Mundial 2.30am NASCAR 3.30am Watersports World 4.30am Max Power 5.30am-6am FIFA Futbol Mundial

CHANNEL4

ITV1

25

        

D A

9 10 11 13 14 16 17 19 20 22 23 24 25

Make parallel (5) Stated (4) Notify of danger (4) Derek ___, British actor knighted in 1994 (6) Egyptian goddess of fertility (4) Large open vessel for liquids (3) Arid region (6) Word that denotes an action (4) Take an exam (3) Birthday missive (4) Discontinued (6) Mischievous little fairy (3) Shade of green tinged with blue (4) Globe (6) Appear (4) Dry biscuit, a teething aid (4) Authoritative proclamation (5)

DOWN 1 One who studies and settles conflicts and disputes (11) 2 Item worn on the hand (5) 3 ___ Lanka, country (3) 4 Replies (7) 5 Unruly (11) 6 Clever joke (9) 8 Establishments where alcoholic drinks are served (4) 12 Do something to a greater degree (7) 15 Short-term worker (abbr) (4) 18 Greenfly, for instance (5) 21 Basic unit of money in Albania (3)

26

Sport

Neymar in racism row at Emirates ▲

FOOTBALL

Test heroes help Saints rout Wasps ▲

RUGBY UNION

NORTHAMPTON boss Jim Mallinder tipped Dylan Hartley as a future England captain after helping to inspire a 39-3 win over Wasps. Red Rose stars Ben Foden and Chris Ashton were among the five tries as Saints climbed back into the Premiership’s top four. Mallinder said: “Dylan is maturing all the time and has the right credentials to be an England captain. He had a great game.” Saracens moved to within three points of leaders Leicester with a 24-9 victory over Newcastle, James Short and Jared Saunders scoring the tries.

Capello faces new headache over captaincy ▲

CHELSEA target Neymar complained of racist abuse after starring in Brazil’s 2-0 win over Scotland at Emirates Stadium yesterday. The teenage Santos forward scored both goals, one a penalty, and then alleged a banana had been thrown onto the pitch during the friendly. “This atmosphere of racism is totally sad,” Neymar said. “They were jeering me a lot – even when I was about to kick the penalty the entire stadium was jeering.” Brazil coach Mano Menezes said he had not seen the banana incident, while Scotland manager Craig Levein said he was not aware of it either.

CITYA.M. 28 MARCH 2011

FOOTBALL BY JAMES GOLDMAN

ENGLAND manager Fabio Capello is faced with a fresh captaincy conundrum ahead of tomorrow’s friendly against Ghana after he agreed to release five senior players from his squad, including reinstated permanent skipper John Terry. The Chelsea defender, along with his club colleagues, Frank Lampard and Ashley Cole, have been granted a break, as have Wayne Rooney and Michael Dawson, with their hectic domestic and European schedule in mind. Capello may have thought he’d put the captaincy issue to bed last week with Terry’s reappointment, but after admitting to not enjoying “seeing the armband passed about” the Italian must select his next captain, from a largely inexperienced group of players, carefully. Gareth Barry is the favourite to wear the armband, but the Manchester City midfielder’s recent loss of form, coupled with Scott Parker’s emergence, means he is no longer guaranteed to start. Jack Wilshere, impressive in a new

midfield formation during Saturday’s straightforward 2-0 win in Wales, has been mentioned as a potential England captain by Capello himself, but at only 19 years of age the manager may wish not to burden the Arsenal midfielder with even more responsibility. Steven Gerrard, also overlooked for the captaincy in favour of Terry and currently injured, has revealed Capello spoke to him regarding his change of captain, despite not informing Rio Ferdinand. “I did actually get a call,” he said. “The manager spoke to me. He spoke to me and just explained what he’d been doing; he didn’t have to.” Meanwhile, Club England managing director Adrian Bevington, expects that Capello will attempt to calm the waters between himself and Rio Ferdinand, who is understood to have been aggrieved at losing the captaincy. Bevington said: “I believe, that maybe the communication could have been better and he expressed some regrets. I look forward to seeing Rio again in an England shirt – and I’m sure Fabio will pick up with Rio soon after these internationals.”

TOP OF THE CLASS: WHO SHONE FOR ENGLAND IN CARDIFF? Darren Bent: Three important goals in three games for the striker suggests his happy knack of being in the right place at the right time for his club will extend to the international scene.

Ashley Young: The Villa winger supplied the assists for both goals and his intelligent movement off the flanks hinted at the extra touch of versatility he has added to his game this season.

Scott Parker: Playing the best football of his career by his own admission. Adding extra energy to the engine room in place of Gareth Barry and looks set to make up for lost time in an England shirt at long last.

Jack Wilshere: Was fractionally off with his final ball on a couple of occasions, but that’s nit picking. Provides industry and genuine flair in equal measure. For once, the hype is fully justified.

%$ #3*5"*/µ4#*((&45%":065 %$

Featuring the world’s greatest flat race Investec Derby Festival – 3rd & 4th June 2011

The Investec Derby Festival is one of the most iconic events of the sporting and social calendars. With an anticipated 125,000 on Investec Derby Day alone, the Festival is one of the most popular sporting events in Britain. And for good reason. The Festival attracts a diverse range of people, creating

27

CITYA.M. 28 MARCH 2011

Hamilton glee as Vettel lays marker

Walsh to ride National favourite RACING: Ruby Walsh will ride ante-post Grand National favourite The Midnight Club in the iconic race on 9 April.

Pendleton out in semis CYCLING: Victoria Pendleton missed out on a third medal at the World Track Championships after she was knocked out in the semi-finals of the keirin event.



FORMULA ONE BY FRANK DALLERES

Coach tips rower for 2012 ROWING: Teenage Boat Race winner Constantine Louloudis has been tipped to star at the London 2012 Olympics by his Oxford coach Sean Bowden. Vettel (left) swept to victory ahead of Hamilton (right) in the season’s first race

fight, only a few points behind the guy in front who has a much, much faster car. But we’ll close that gap, I have no doubts about that.” Renault’s Vitali Petrov earned a podium debut after the Russian took third place, while Ferrari’s Fernando Alonso pipped home favourite Mark Webber to fourth, and Hamilton’s team-mate and compatriot Jenson Button was sixth. Scot Paul di Resta came in 10th on his Formula One debut, the Force India driver being promoted two places when the Saubers of Sergio

Perez and Kamui Kobayashi were disqualified for a technical infringement. Vettel was last night slashed to odds-on to retain his title by bookmakers William Hill, despite there being 18 more races left this season, but the 23-year-old attempted to play down his success. “I don’t really like the word dominant at this stage, because there is a long, long way to go,” he said. “Yes, the car was perfect, and all in all, I’m very happy. We’ve learned a lot and we now need to move forwards.”

Picture: ACTION IMAGES

AUSTRALIAN GRAND PRIX RESULTS 1. Sebastian Vettel, Red Bull 2. Lewis Hamilton, McLaren 3. Vitaly Petrov, Renault 4. Fernando Alonso, Ferrari 5. Mark Webber, Red Bull 6. Jenson Button, McLaren 7. Felipe Massa, Ferrari 8. Sebastien Buemi, Toro Rosso 9. Adrian Sutl, Force India 10. Paul Di Resta, Force India

1h 29m 30s 1:29:52 1:30:00 1:30:02 1:30:08 1:30:24 1:30:55 Lapped Lapped Lapped



FORMER England skipper Michael Vaughan believes Andrew Strauss will relinquish the captaincy of the one-day side following Saturday’s savage World Cup beating at the hands of Sri Lanka. England’s head coach Andy Flower revealed he would consult with Strauss over his future plans, but only once the dust has settled on the side’s ignominious 10-wicket quarter-final defeat in Colombo. And Vaughan who, like

Strauss, combined the roles of Test and one-day captain during his playing career, believes the pressures of combining professional duties and maintaining a stable life at home will see the Middlesex man step down. “He is a mature bloke and a mature captain and his heart is in the captaincy,” said Vaughan. “But he’ll also understand that when he gets home he needs to decide what is best for the England set-up. “You are away for so long. He has a lovely young family and it comes

to a stage when he needs to ask himself if he needs to be doing that consistently. “Will he be at the next World Cup in four year’s time. You have to say he probably won’t be. “He may carry on into the summer for continuity into the India series. But I have a sneaky suspicion that [the Sri Lanka quarterfinal] was his last game.”

ENGLAND ODI CAPTAIN | WHO NEXT? Alastair Cook: Not a part of the one-day set-up but would be a like-for-like replacement and is favourite to inherit the Test captaincy too. Stuart Broad: Spate of on-field controversies raise doubts over his temperament, but winter stint as a pundit revealed a tactical understanding not previously given credit for. Jonathan Trott: Unflappable and sure of his place in the side. Only been on international scene for two years though.

an exhilarating carnival atmosphere. This year’s Investec Derby Festival will be no exception. The two–day Festival starts with Investec Ladies Day on Friday 3rd June, followed by Investec Derby Day on Saturday 4th June. Hospitality packages are available. Book ahead and you can be there for the whole show. Book now: 0844 848 3256 | epsomdowns.co.uk

Hunt call for end to cash row OLYMPICS: Culture Secretary Jeremy Hunt has called for an end to the cash row between the British Olympic Association and 2012 organisers Locog.

Crusaders win Super XV game RUGBY UNION: Dan Carter and Sonny Bill Williams helped the Canterbury Crusaders to a 44-28 win over the Natal Sharks at Twickenham.

Results =FFK98CC

Vaughan tips Strauss to quit as skipper CRICKET BY JAMES GOLDMAN

Balotelli in trouble again FOOTBALL: Man City striker Mario Balotelli faces more disciplinary action after he was said to have thrown darts in the direction of youth team players.

Champion kicks off season in style but McLaren star revels in second place ENGLAND’S Lewis Hamilton vowed to rein in champion Sebastian Vettel after the German got his title defence off to the ideal start with a pole-toflag victory at the Australian grand prix. Vettel underlined his status as hot favourite to win the drivers’ title again with an exemplary performance in Melbourne, the Red Bull driver comfortably claiming the first race of the 2011 season by 22 seconds. But Hamilton was delighted to finish runner-up, having feared his McLaren would again be off the pace this term, and predicted he and his team would continue to chip away at the recent dominance of Vettel and Red Bull. “I feel really privileged to be up here [on the podium] because we thought it was going to be quite a bad weekend,” said the Stevenage driver. “Now, I’m back up here, back in the

SPORT | IN BRIEF

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email [email protected]

Libyan oil production and Suez trade route threatened.

Political pressure increases threat of regulation on drilling companies.

Combined clean-up and well-capping costs exceed $40bn.

Oil price rapidly hits $100 a barrel.

Production uncertainty increases nervousness over global oil reserves.

But dividend payments restored in March 2011.

Speculative interest in smaller oil exploration companies increases.

Does the FTSE feel the benefit? Take a position at igindex.co.uk

Rockhopper ups forecasts for its Falklands well.

Political unrest erupts onto the streets of Cairo and Tripoli.

How did oil prices get so pumped up?

Are shares a good prospect? Take a position at igindex.co.uk

But Desire Petroleum and Falkland Oil and Gas come up dry.

BP’s 2010 financial report shows first annual loss since 1992. BP’s dividend payouts suspended, June 2010.

Spread betting can result in losses that exceed your initial deposit.

Will the rise protect sterling’s value? Take a position at igindex.co.uk

Hybrid car sales feel a boost.

MPC considers raising interest rates.

Demand for alternative fuels increases.

Is oil heading back to its all-time high? Take a position at igindex.co.uk

Where next for BP’s share price? Take a position at igindex.co.uk

UK inflation rises.

Will shares in Toyota, Nissan and Renault accelerate? Take a position at igindex.co.uk

Costs hit UK drivers at the petrol pump.

Spike in demand for biofuel ingredients causes commodity bubbles.

How far will wheat and sugar prices rise? Take a position at igindex.co.uk

April 2010, BP oil spill creates worst environmental disaster in US history.

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