BUSINESS WITH PERSONALITY ISSUE 1,735 WEDNESDAY 10 OCTOBER 2012 www.cityam.com FREE See Page XX WE REVIEW THE NEW ASTON MARTIN DEFENCE FIRM VANQUISH MEGA-MERGER MOTORING ON THE BRINK See Page 23 BY CATHY ADAMS

THE £30bn mega-merger between BAE and GREEKS PROTEST AS MERKEL VISITS ATHENS EADS was on the brink of collapse last night, as EADS denied that talks between govern- ments had broken down. Last-ditch meetings were taking place yes- terday to thrash out the finals hurdles to the merger. European defence ministers, includ- ing defence secretary Philip Hammond, met in Brussels yesterday at a Nato summit where the deal was on the agenda. The boards of BAE and EADS met separately last night, while BAE chief Ian King spoke with EADS boss Tom Enders ahead of the looming deadline of 5pm today, set by the UK Takeover Panel. EADS was forced to deny German reports that the deal had collapsed yesterday after- noon and said that “progress” had been made between the UK and French govern- ments. It is understood that negotiators for the two countries reached a breakthrough over state shareholdings, including capping future stakes in the merged firm. However, Germany is thought to remain opposed to these proposals. A source close to TENS of thousands of angry Greek protesters filled the streets of Athens yesterday, as German Chancellor the transaction said that Berlin is unhappy Angela Merkel visited the country for the first time since 2007. Police fired teargas and stun grenades to hold back crowds, as Prime Minister Antonis Samaras welcomed Merkel as a “friend” of Greece. Merkel on several issues – including concerning gov- ernment stakes in the enlarged firm and offered sympathy but no promise of further aid to the crisis-hit country. EUROZONE: Page 4 where it is headquartered – and could try to block the deal unless these are ironed out. opposed to the two countries owning a com- told City A.M. at the Conservative party con- The merger, which would create the bined 27 per cent. ference in Birmingham: “The longer this world’s largest defence and aerospace com- EADS’s Enders has previously said he wants drags out, the less likely the deal becomes. pany, hinges on whether the governments little state involvement in the new firm to The more we think about this, the more are prepared to limit their holdings in the ensure competitiveness. apparent are the problems and risks to the new defence group. France has been reluc- Multiple sources close to the transaction UK-US relationship if EADS takes over BAE.” tant to agree to a cap on its stake in EADS, said it was more than likely that today’s 5pm Shareholder resistance to the terms of the which could be as high as 13.5 per cent in deadline would be extended due to the polit- merger could also topple the deal. BAE’s the enlarged firm. Germany, while it does ical hurdles that still need to be overcome. largest shareholder Invesco, which holds not want to hold a government stake, wants Tory MP Bernard Jenkin, head of the Public 13.3 per cent of the British firm, said on parity with France, whereas Britain is Administration Select Committee, yesterday Monday that it opposed the tie-up. Cameron tells Tories there are painful decisions ahead BY JAMES WATERSON decisions, unless we show swim, do or decline,” he will The Prime Minister, who DAVID Cameron will today tell determination and tell delegates in Birmingham. celebrated his 46th birthday the Conservative party imagination, Britain may not “If we did what Labour yesterday, will also pay tribute conference that the country be in the future what it has want, and watered down our to the value of “hard work” must take “painful decisions” been in the past because the plans, the risk is that the instilled in him by his disabled to compete globally and that it truth is this: we are in a global people we borrow money from father as well as the is time to “do or decline”. race today. That means an would start to question our importance of strong families “Unless we act, unless we hour of reckoning for ability and resolve to pay off and public service. take difficult, painful countries: it will be sink or our debts.” ALLISTER HEATH: Page 2

Certified Distribution FTSE 100 n 5,510.25 -31.49 DOW 13,473.53 -110.12 NASDAQ n 3,065.02 -47.33 £/$ 1.60 unc £/€ 1.24 unc €/$ n 1.29 -0.01 30/07/12 til 26/08/12 is 128,484 WEDNESDAY 10 OCTOBER 2012 2 NEWS To contact the newsdesk email [email protected] Osborne should move fast and make Tucker next governor ORGET about speeches to the would make a far superior candidate ly – and probably less likely – to get it previous major bubble to have Tory party conference, or even than Turner, despite the Libor row. right than the average, less illustrious befallen the UK economy. Could it the forthcoming Autumn EDITOR’S Tucker has spent years talking to private sector forecaster. They are also just be that unwinding bubbles is FStatement. George Osborne’s market participants. He knows inti- horribly prone to fashion. As part of always painful, and that fiscal policy biggest decision of his entire mately and is comfortable with the its latest U-turn, the IMF is now flirt- is ultimately pretty powerless at chancellorship will be who he LETTER City, with markets and with real-life ing with an ultra-Keynesian view, preventing this? appoints to be the next governor of institutions and people. He is no arguing that every pound cut from As an excellent paper from Michael the Bank of England. No other detached academic. That doesn’t public spending would reduce GDP by Saunders of Citigroup points out, the unelected job in the UK comes with ALLISTER HEATH mean that he would be a soft touch – between £0.90 and £1.70 – up from IMF’s estimate of excessive output so much power: the governor is not he is an old style British central £0.50 previously. this time last year for 2007 was just just in charge of inflation but also, (Adair) Turner, the former boss of the banker, of the sort that wielded But why should we believe it? It has one per cent of GDP. This was already under the new system, of a large CBI and chairman of the FSA. It immense powers in the past. Osborne also now finally worked out that the a revision of its dangerously deluded chunk of financial regulation. The seems that the government has needs to stop wasting time and level of UK GDP was significantly view in 2007 that GDP that year newly re-empowered Bank will yield decided against revolutionary announce his appointment at the above its sustainable potential start- was in line with potential and there- massive influence over thousands of change; it won’t be appointing an earliest possible opportunity. ing in 1999, arguably the year in fore that there was no bubble and nominally private financial outsider or somebody with heterodox which the bubble therefore began, that all was well. It was an astonish- institutions and will be able to make views on how to manage the MISSING THE BUBBLE and continuing every year until 2008. ing failure. Remember: most econo- or break careers in a manner economy or finance, despite the now The tale of the IMF’s ever changing Excessive output peaked at 3.65 per mists get it wrong most of the time – unthinkable in any other industry. It undeniable fact that mainstream views shows how dangerous it is to cent of GDP in 2007 – by far the especially if they work for interna- is increasingly looking likely that the economists failed to understand rely on supposedly credible interna- biggest overheating in the G7 and tional bureaucracies. race to be the next governor will be what was really going on in the tional bodies when trying to obtain even exceeding the 3.1 per cent in between Paul Tucker, the long noughties. useful guidance on the economy. excessive production in 1989, at the [email protected] standing deputy governor, and Lord There is therefore no contest. Tucker These organisations are no more like- peak of the “Lawson boom”, the Follow me on Twitter: @allisterheath Alcoa is above Banking rules forecasts as US Boris slams PM on tax but relaxed by FSA reporting starts to boost loans BY JAMES TITCOMB denies designs on his job BY JAMES TITCOMB US ECONOMIC bellwether Alcoa BY JAMES WATERSON BANKING regulations have been beat Wall Street’s expectations last eased by the Financial Services night, although the country’s BORIS Johnson yesterday insisted Authority (FSA) in a drive to biggest aluminium producer cut that he would not attempt to encourage lending and stimulate forecasts for global demand due to become an MP before the end of his growth, with Britain’s financial China’s slowdown. mayoral term, despite once again institutions now needing less capital Alcoa’s earnings report, which is impressing Tory activists at the in reserve when loaning money to seen as a litmus test for the US party’s Birmingham conference. businesses. economy and kicks off the third- The Mayor of London told the The FSA said yesterday it had quarter results season, saw BBC’s Daily Politics that a return to been relaxing requirements over turnover for the three-month parliament before May 2016 was the last few months to “provide period to October of $5.8bn “not going to happen” and said that them with resources so that they (£3.6bn), beating forecasts of $5.5bn continued speculation over his lead- can lend as well as staying and sending shares up around 0.6 ership ambitions is “getting beyond resilient”. Sources last night per cent in after-hours trading. satire”. suggested banks had welcomed the However, Alcoa posted a $143m He also used the opportunity to changes, which have seen loss, compared with a $172m challenge the government over its regulations on capital requirements profit in the same period last year, tax policy, claiming: “We are start- and liquidity loosened. and downgraded projections of ing to get to a situation where we Banks will now have to hold in growth in global aluminium are being tax-uncompetitive and reserve a fixed amount of capital demand next year from seven per that really does need to be Johnson told the Tory conference that government needs to make life easier for workers assigned by the FSA, rather than an cent to six per cent – the slowest addressed.” amount equal to 10 per cent of since 2009. Johnson’s speech to delegates and far as possible, government needs to attempts to be humorous. lending, which saw banks cut back “Markets seem to be driven more another round of high-profile make life easy for those who get up at Referring to David Cameron’s jibe on loans in order to stay within by headlines than fundamentals media appearances once again five to get their shops or businesses that he was a “blond-haired mop”, lending limits. The banks have also right now, but Alcoa remains showed the Mayor’s star power and ready – the strivers, the strugglers, Johnson directly addressed the Prime been told that loans under the focused on the things within our allowed him to dominate the con- whatever the vogue word is for them Minister: “If I am a mop then you are government’s Funding for Lending control,” said Klaus Kleinfeld, the ference for a second day. today. a broom ... a broom that is cleaning Scheme will be exempt from capital firm’s chairman and chief In a well-received address that pre- “If we can win in a recession and up the mess left by the Labour govern- requirements. executive. ferred laughs over policy, the mayor wipe out a 17-point Labour lead then I ment.” The FSA called the changes a The owner of KFC and Pizza Hut, declared his “confidence” in the know that David Cameron will win in Johnson also claimed that he had “rebalancing” of the rules and Yum Brands, also reported positive capital’s future and said he looked 2015 when the economy has turned been dancing to the South Korean denied that they would lead to results last night, saying sales in forward to a “new age of enter- round – we are already seeing signs of rapper Psy’s song Gangnam Style with greater risk in the financial system. China had held up despite prise”. progress – and when people are bene- Cameron. The Prime Minister’s team The changes are understood to economic headwinds and posting a He said:“I am a Conservative. I fiting from jobs and growth.” later insisted that the Mayor had been have come into effect in the last two nine per cent rise in total revenue believe in a low-tax and low-regula- However the audience warmed joking. to three months, and apply to all for the quarter. tion economy, and I believe that, as most to the Mayor’s numerous VOICE OF THE CITY: Page 6 British banks. WHAT THE OTHER PAPERS SAY THIS MORNING M&S retail veteran to join Asos Kate Bostock, the former head of non- Channel Islands unite over deficits food retailing at Marks and Spencer, is to Facebook to launch a Want button MEP aims to be first female governor Romney: No abortion legislation Guernsey and Jersey are setting aside join Asos, the online fashion group, as a The social network is launching a button Sharon Bowles said that being a “woman Mitt Romney continued his shift to the centuries of rivalry to defeat a common senior executive. Ms Bostock, who letting users to make wishlists informing and an outsider”, as well as her deep centre yesterday, saying he wouldn’t foe: the budget deficit. officially left M&S last week, will join Asos the world which items they desire most, knowledge of financial regulation, made pursue any abortion legislation if he wins Senior politicians on the two islands, and the company’s board in January. in an attempt to lay the groundwork for a her a strong candidate to be the first the presidency, but did promise other which have struggled to balance their push into online shopping. female governor of the Bank of England. moves to limit abortions. books since the onset of the financial Twitter founder to focus on start-up crisis in 2008, are considering radical Jack Dorsey, Twitter's product US trains sights on Wells Fargo Bill Gates rules out Microsoft return China slams Huawei report moves to combine public services, mastermind and the last remaining co- including healthcare and prisons. The US Government has filed a lawsuit Microsoft founder Bill Gates has paid China issued its strongest statement yet founder still working at the social media The two are also co-operating in the against Wells Fargo that accuses the tribute to Apple’s late co-founder Steve against a US congressional report urging site, has stepped back from day-to-day international arena, where austerity has largest lender in the United States of Jobs for “righting” the business but ruled businesses to spurn two Chinese operations to focus on his other start-up, turned up the political heat on offshore behaving recklessly in signing up out making a similar return to his own telecommunications companies, saying payments firm Square. financial centres. mortgage customers. technology empire. the move could hurt relations. CITYAMCAREERS.com The new jobs website for London professionals WEDNESDAY 10 OCTOBER 2012 cityam.com NEWS 3 Retail investors Goldman Sachs rush for shares in Direct Line is a no-show on BY JAMES WATERSON STOCKBROKERS yesterday reported a rush for Direct Line shares as individual investors attempt to grab a stake in the insurer ahead of tomorrow’s flotation. Megafon float Online broker Interactive Investor said that it had seen with BY DAVID HELLIER decided to withdraw around two substantial interest in the offering, weeks ago when it became clear that the first London floatation open to GOLDMAN Sachs was yesterday des- Megafon’s controller Alisher The Bank governor was speaking on the 20th anniversary of its inflation targeting role individual investors since Standard perately trying to douse the flames Usmanov intended to set up an Life in 2006. The firm said that more of an argument that threatens to umbrella company that would hold than a fifth of applications were for jeopardise its business in Russia after stakes in Megafon, along with other the minimum of £1,000, although flouncing out of the London flota- assets he has stakes in such as Arsenal King says Bank of England can the average application was around tion of Megafon. Football Club and Metalloinvest. £4,000 and one retail investor Bankers were yesterday caught on Goldman Sachs has acted for an requested £133,000 of shares. the hop by news that Goldman Usmanov-inspired IPO in the past. Direct Line last night narrowed its Sachs, which had been effectively in The bank joined JP Morgan to lead afford to miss inflation target range to between 170p and 177.5p, the driving seat in the run-up to the the flotation of Mail.Ru, the largest in the lower half of its initial range, flotation plans, was not on the roster internet group in the Russian-speak- BY JULIAN HARRIS “The past five years of financial a source said last night, ahead of a of bank advisers when Megafon’s ing world, two years ago. crisis and turmoil in the world final pricing due this evening. intention to float statement came Neither Goldman nor Megafon THE BANK of England must economy have raised serious Spread betting firm ETX Capital out yesterday. Morgan Stanley and would comment on the investment sometimes veer away from its two questions about the adequacy of Markets told City A.M. that there was Sberbank have been appointed joint bank’s surprise omission but sources per cent inflation target, governor inflation targeting,” King said, an influx on buyers on their grey global coordinators and joint said that there was a phone call Sir Mervyn King said last night. although he stressed that “the case market yesterday morning. This bookrunners instead, with Citi, between the company and the Consumer price inflation has for price stability is as strong pushed their spread – an indication Credit Suisse and VTB Capital bank yesterday, in which both stuck above two per cent for 67 of today as it was 20 years ago” and of the expected price per share at also involved. sides agreed not to brief the last 76 months, reaching levels did not call for an end to the flotation – up to 180-190p. “Clearly there’s been some against each other. The IPO as high as 5.2 per cent. Bank’s targeting. Though the share offering is sort of problem because will give UK and investors “It would be sensible to But King added that the Bank proving popular with the public, Goldman was a shoe-in for the chance to buy into a recognise that circumstances in should weigh up price stability analysts remain sceptical. Barrie this deal,” said one Russian-focused phone which it is justified to aim off the alongside a target for financial Cornes of Panmure Gordon said the banker. company. inflation target for a while in stability. With hindsight, King firm “is facing an increasingly Sources famil- order to moderate the risk of said, the authorities could have difficult regulatory outlook, huge iar with the sit- financial crises,” King told an used macro-prudential measures pricing pressure and low uation said that Alisher Usmanov has audience at the London School of to mitigate the effects of the investment returns for the Goldman Sachs got big plans Economics. recent financial crisis. foreseeable future”. WEDNESDAY 10 OCTOBER 2012 4 NEWS cityam.com How Greece has changed since Merkel’s last visit EU says financial transaction tax GOVERNMENT UNEMPLOYMENT DEBT AS % OF GDP now has support of 11 members Q2 2007Q2 2012 2007 2011 means that we arrive to 11 The initiative is strongly backed BY CITY A.M. REPORTER member states,” Semeta told a by Germany and France, although 23.6% % 165% THE EUROPEAN Union has gained gathering of EU finance ministers there are differences of opinion 8.1% 107.4 support from enough member in Luxembourg. over how much revenue the tax states to get a proposed tax on Italy, Spain, Slovakia and Estonia will generate and what the income GDP PER financial transactions off the are the new countries to support should be used for. ground, it said yesterday. the scheme. Yet several EU members remain INHABITANT Eleven EU countries endorse the And she called for supportive opposed to the introduction of a introduction of a so called Tobin governments to official back the Tobin Tax, including the UK, 2011 Tax according to tax proposal. “I would like to remind Sweden and the Netherlands. 2007 commissioner Algirdas Semeta, those that stated it orally that they Dutch minister Jan Kees de Jager €18,500 clearing the nine votes required to formally, in writing, present their confirmed his stance yesterday. €19,900 legally launch the initiative. request for enhanced cooperation. “The Netherlands is not in favour “We see that four additional Only when we will receive nine or of a financial transactions tax.,” he member states intend to join more formal letters, only then the said. “We are even reluctant about enhanced cooperation, so it process will start.” introduction in other countries.” YOUTH UNEMPLOYMENT 2007 2012 17% 53.9% In July 2007, Merkel visited 15-29 year olds 15-24 year olds Greek PM Kostas Karamanlis Merkel trip sees riot police and protesters clash BY JULIAN HARRIS say that much of the path is already behind us,” she added. GERMAN Chancellor Angela Merkel Samaras – who heads an already- faced angry protests yesterday during unpopular coalition – welcomed her first visit to crisis-struck Greece Merkel as a “friend” of Greece. since the summer of 2007. “The Greek people are bleeding but Tens of thousands of irate Greeks are determined to stay in the euro,” he took to the streets of Athens in said. “They are not asking for more protests against austerity measures money or favours. They only want to that are imposed as conditions for the get back on their feet as soon as possi- Eurozone state receiving ongoing ble and exit this recession.” tranches of its bailout. While the pair spoke, riot police Merkel has maintained a stubborn clashed with protesters in the streets position in recent months, insisting surrounding parliament. that peripheral debt-crises in Europe Up to 50,000 Greeks are believed to are the fault of unsustainable govern- have defied a ban in order to flood the ment profligacy that must be coun- streets, with 30 suffering serious tered but cutbacks and reforms. injuries and police reporting that 300 But yesterday the German leader people were detained. spoke in a more conciliatory and sym- The troika of bailout providers – the pathetic tone. “I have come here today European Union, European Central in full knowledge that the period Bank and International Monetary Greece is living through right now is Fund – are currently in Greece inspect- an extremely difficult one for the ing progress over pledged reforms. Greeks and many people are suffer- Merkel admitted that she is waiting ing,” she said at a new conference for the troika to report before pledging with Greek PM Antonis Samaras. to back more bailout funds. “Precisely for that reason I want to THE FORUM: Page 20 Draghi says Eurozone debtors cannot avoid painful austerity BY BEN SOUTHWOOD levels and “unsustainable”, but said THERE is no alternative to fiscal the ECB couldn’t undertake consolidation, European Central monetary financing. He repeated Bank boss Mario Draghi said that no limits would be set on the yesterday in a speech to the potential size of the Outright European Parliament. Monetary Transactions rescue “It is without doubt that the scheme. process of fiscal But Draghi admitted that even consolidation in the with the scheme, the Eurozone short term will depress,” suffered from a crisis of Draghi said. “But what’s confidence. the alternative?” Draghi went on to ECB boss Draghi is being urged describe deficit and debt to ease Eurozone debt pressures WEDNESDAY 10 OCTOBER 2012 cityam.com NEWS 5 ING sells out to Don’t read too much into shift of focus – it started under Bob ARCLAYS’ purchase of ING not be Jenkins’ doing – and in fact Barclays in UK Direct UK is being seen by many negotiations for this deal kicked off as yet another sign that the BOTTOM when Diamond was still around – the Bbank’s focus, under new chief deal’s credentials will be music to his executive Antony Jenkins, has shifted ears. ING Direct’s mortgage book – val- firmly to its retail arm. LINE ued at £5.6bn with a 50 per cent loan- Jenkins’ early speeches have certain- to-value ratio – boosts the retail unit ly been littered with regulator-pleas- ELIZABETH FOURNIER without impacting cash reserves, and retail bank exit ing pledges to shape up, putting him all at a three per cent discount to face at the front of a queue of UK bank bolt-on retail acquisitions” ever since. value. It should also help Jenkins’ mis- BY MICHAEL BOW The deal will complete in the chiefs lining up to offer promises of Following on from Standard Life sion to deliver an ROE above the bank’s second quarter next year and the cultural change at their institutions. bank in 2009 and Egg in March last 11 per cent cost of equity – a steep ING Direct, the Dutch financial integration of ING’s UK customer base But the ING deal smells more like the year, the ING Direct deal fits with climb given that for the last two years group, yesterday sold its £16.5bn and workforce base will be completed work of a Barclays man with much Lucas’ drive to focus solely on deals its come in at under seven per cent. mortgage and savings book to by 2015. Barclays will ditch the ING stronger ties to Jenkins’ predecessor that are instantly value accretive – this The new boss has promised to out- Barclays at a loss of £168m, as it bid Direct brand after the integration. Bob Diamond – finance chief Chris latest one is not only expected to line his plans for Barclays (all 100 parts farewell to the UK retail banking mar- The sale is the latest push by ING Lucas. The straight man to Diamond’s instantly boost return on equity (ROE) of it) in February. Until then, investors ket. Direct to “sharpen” its focus on com- more mercurial persona, Lucas joined when it completes early next year, but should take this deal at face value, and The deal, which is a major boost for mercial banking and shift away from the board in early 2007, and has been should also have no material impact hold tight. Barclays’ retail base, will see Barclays retail. For Barclays, it follows a pattern pursuing what Ian Gordon at Investec on the bank’s core Tier 1 capital. Elizabeth Fournier is news editor of City take on 1.7m ING customer savings of retail banking bolt-on acquisitions. calls a “string of small, value-accretive, Though the acquisition strategy may A.M. @ej_fournier accounts with deposits of £10.9bn. It It snapped up Egg credit card assets in will also acquire a 40,000-strong mort- 2011 and Standard Life bank in 2009. gage book worth £5.6bn, which has ING was advised on the deal by been sold to the British bank at a Credit Suisse and law firm Freshfields Court hears UBS trader hid risk exposure of $12bn three per cent discount, or £168m. Bruckhaus Deringer. Barclays took The Dutch listed firm, known for its legal advice from Linklaters. according to evidence heard at on trial accused of fraud and false orange lion logo, had been publicly BY CITY A.M. REPORTER Southwark Crown Court. accounting that cost the bank hinting at a sale of its UK retail assets Barclays PLC ALLEGED rogue trader Kweku “This level of risk-taking is $2.3bn. He has pleaded not guilty. since early August, when it formally 232 p Adoboli exposed Swiss bank UBS completely out of proportion with The jury were shown tables of announced a review of its UK and 230 to billions of dollars of hidden anything that would have figures and graphs produced by Canadian operations in a bid to shift 221.55 market risk for weeks on end, been countenanced,” said Weerasekera that he said showed 228 9 Oct its focus to commercial banking. The 226 peaking at nearly $12bn on 8 Ruwan Weerasekera, Adoboli’s true trading positions deal, which is understood to have 224 August last year, a London court chief operating officer of alongside the inaccurate figures he been in development since the sum- heard yesterday. securities at UBS’s had booked in the bank’s systems mer, is the last known strategic move 222 Adoboli disguised his true investment bank. at the time. instigated by former Barclays chief 220 trading position with fictitious Adoboli, 32, The trial continues. executive Bob Diamond, before he 218 hedging trades that made it look was arrested on was replaced by new chief Antony as though the apparent risk to the 15 September, Kweku Adoboli is on trial Jenkins. 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct bank that day was only $2.3m, 2011, and is for alleged fraud WEDNESDAY 10 OCTOBER 2012 6 NEWS cityam.com

CITYVIEWS

PM says Plan B IS BORIS JOHNSON A HELP OR HINDRANCE TO DAVID CAMERON? Interviews by Faiza Malik and Justin Cash ” CARLY TANTAU is not answer FINANCIAL SERVICES RECRUITMENT

Boris is actually a pretty cool guy and

it’s an asset to have him raising a glass to David Cameron. His buffoonery is to gloomy data what’s endearing about him. Carlyle Group, based in Washington, was set up by Bill Conway and others in 1987 ” HENRY DACK BY BEN SOUTHWOOD keep our plans, difficult though they are...but we need to add to that every SALES DIRECTOR THE GOVERNMENT’S resolve to cut measure that business has been ask- the deficit will not be tested by ing for – and that’s what we’re Leveraged buyout deals send dismal new IMF economic forecasts, doing.” Prime Minister David Cameron said But shadow chancellor Ed Balls Is he a laughable buffoon? Yes. I yesterday, instead suggesting the called the downgraded IMF forecasts think he’s a help because he is very government would attempt supply- “another damaging blow to the gov- Carlyle Group fund values up good at PR and they need all the help they can side reform to bring growth. ernment’s economic credibility,” call- get at the moment. The IMF said the government ing on the coalition to expand the BY MICHAEL BOW five per cent over the quarter should delay some spending cuts deficit even further through tax cuts compared to a two per cent drop ” STUART WHITE scheduled for next year if economic and infrastructure spending, in ALTERNATIVE fund manager the in the previous three months. BUSINESS ANALYST data failed to improve, but Cameron order to boost growth. Carlyle Group boosted the value of Return on its real asset funds said the government would not Tullett Prebon boss Terry Smith its funds by three per cent last were mixed after a five per cent soften its austerity plans. said we should give no credence to quarter, it said yesterday, rise in fund value for its real estate “What we need in Britain is not the most recent IMF figures, as previ- stemming a drop in value seen in fund was offset by a fall in its I think at some point he wants David ‘Plan B’, which is more borrowing,” ous sets have all been overly-opti- the previous quarter. energy funds. Overall, the group’s Cameron’s job. He likes the media the Prime Minister told Sky News, mistic. Calling the IMF “another The investment house, which carry funds have increased 18 per “How can you borrow your way out institution we can no longer trust” floated on the Nasdaq in May, cent over the year. Carlyle, which limelight and being at the centre of attention. It’s of a debt crisis?” he said the body has “no regard for found comfort in its traditional was set up by Bill Conway, Daniel not bad for the Conservatives that he is popular. “What we need is what I call ‘Plan facts, the correct course of action, or private equity offering, increasing D’Aniello and David Rubenstein, A+’,” Cameron added. “We need to any pesky questioning of its policies.” leveraged buyout fund values by raised $671m on its float. These views are those of the individuals above and not necessarily those of their company Oligarchs could float TNK-BP Sorry Regus if bid for BP stake is successful successful. better connected with the BY HARRY BANKS A source close to AAR said it Kremlin than AAR. RUSSIAN conglomerate AAR is was likely the company would BP yesterday confirmed it was considering floating off part of float off at least part of the TNK- still looking to sell its 50 per cent TNK-BP if it buys out BP’s stake. BP if the bid is successful, to boost stake in TNK, understood to be It comes after AAR, controlled liquidity in the business. between $20bn to $25bn. by four Russian billionaires, BP has until 17 October to yesterday said it was considering discuss the sale of its stake BP PLC 437.60 disposing of its 50 per cent stake exclusively with AAR. After that 442 p 9 Oct in the Russian oil company. date, the British oil major is free It is understood that AAR’s to discuss a sale with other 440 notification to sell its stake is a interested parties, including state- 438 way of keeping its options open. owned Rosneft. SERVCORP, THE WORLD’S The conglomerate said The source added it was 436 yesterday that it is still working unlikely AAR would go head-to- 434 on an offer for BP’s 50 per cent head with fellow bidder Rosneft FINEST SERVICED OFFICES stake in TNK-BP, and has “no for TNK-BP, as the state-owned oil 432 intention” of selling out if its bid company is understood to have for the entirety of the company is more financial firepower and be 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct Level 17, Dashwood House Level 18 Canary Wharf 69 Old Broad Street, London 40 Bank Street, London IN BRIEF T l 0207 786 6700 T l 0203 059 7945 Promotion for BAML banker VIRTUAL OFFICE - EVERYTHING BUT THE OFFICE Hume-Kendall BY DAVID HELLIER ƒ Your dedicated receptionist RUPERT Hume-Kendall, one the most prolific dealmakers at Bank of ƒ Your prestigious address America Merrill Lynch and short- listed for City A.M.’s investment ƒ Worldwide access to boardrooms, banker of the year award, has just been promoted to a new position meeting rooms and business lounges within the bank. He will now be chairman of global corporate and investment banking for 1ST MONTH FREE - NO FURTHER OBLIGATION Europe, Middle East and Africa. Hume-Kendall has

CAREERS.com CITYAM advised this year on the W l servcorp.co.uk flotation of Ruspetro The new and a sale of shares in 140  locations worldwide jobs website Reckitt Benckiser. for London BAML’s Rupert professionals Hume-Kendall WEDNESDAY 10 OCTOBER 2012 cityam.com NEWS 7 IN BRIEF Wolseley buys US plumbing firm n Wolseley, the FTSE-listed builders’ Hays: banking merchant, has stepped up its US expansion after announcing yesterday it has acquired Davis & Warshow, a New-York-based plumbing supplier, for £49m. Davis & Warshow’s 11 sites will be intergated into its US Blended confidence is Branches business. Chief executive Ian Meakins said: “The acquistion... allows us to enter the greater New York City area, where we have historically been at rock bottom under-represented." B&Q cuts 220 head office jobs Chief executive Alistair Cox is enduring a slump in recruitment BY KASMIRA JEFFORD down in recruitment in the Australian n DIY retailer B&Q is set to make 220 resources market. workers redundant at its head office in RECRUITMENT firm Hays said that The firm reported a 16 per cent rise DOES HAYS’ QUARTERLY banking confidence is at its lowest in net fee growth in its continental Hampshire as part of a move to create point the firm had seen in its 50-year Europe and rest of world division, PERFORMANCE BODE WELL a more “agile, omnichannel retailer”. ANALYST VIEWS The job cuts stem from the group’s history, as firms continue to delay hir- with fees in Germany up a record 25 By Kasmira Jefford FOR THE FUTURE? ing decisions in the face of ongoing per cent. “Martini” plan launched in 2009 by its Eurozone uncertainty. “The quarter has been better than parent company Kingfisher to reduce “Banking is at lowest confidence feared when considering the bad eco- HENRY CARVER PEEL HUNT costs and improve customer service in that we have ever seen and we have nomic backdrop. While a one per cent stores and supply chains. In a been doing recruitment from 1968,” fall in total net fees is not something The first quarter update reads better than recent statements from the statement, B&Q said it was offering group finance director Paul Venables that is going to leave me cheering – it peer group, but trading conditions are still difficult and the outlook is still highly redundancy packages that go “way told City A.M. is a solid set of results result against a “uncertain... With no catalysts on the horizon and risk to forecasts beyond statutory requirements”. He warned that the group expected tough economy,” said Venables. remaining on the downside we maintain our “sell” recommendation. to see continued weakness in the sec- Shares closed up 5.7 per cent yester- tor over the next six months as finan- day on the back of Hays’ robust NUMIS Mitie buys home care provider cial institutions make further cuts to European performance. STEVE WOOLF ” n Bristol-based outsourcing company staff numbers and workers remain Hays PLC Hays’ first quarter net fee performance was slightly ahead of our forecasts Mitie yesterday announced it had cautious about changing jobs in an acquired the UK’s fourth largest home uncertain economic environment. p 79.50 ...While we believe this should allow the shares to regain some of the ground lost 83 9 Oct following Page’s update, we expect them to be constrained until the extent care service provider Enara from His comments came as Hays, which 82 “ places workers in accountancy, con- of the slowdown in the Australian resources market becomes clearer. August Equity and Enara's senior 81 management for £110m. The deal was struction and IT jobs, reported a nine 80 per cent fall in net fees in the UK and funded by bridge loans from existing 79 CAROLINE DE LA SOUJEOLE SEYMOUR PIERCE ” investors and though costs of around Ireland in the quarter to 30 78 September, led by declines in its bank- Following a better than anticipated first quarter trading update, we are £5m are expected to be incurred in the 77 next 12 months to integrate the two ing, construction and property divi- upgrading our stance from “hold” to “buy” with a 90p target price... Hays is, in sions. 76 firms, the acquisition is projected to be Fees from its Asia Pacific region “our view, better placed than its peers to weather the current challenging revenue enhancing by 2014. dropped nine per cent due to a slow- 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct market conditions. ” WEDNESDAY 10 OCTOBER 2012 8 NEWS cityam.com KAREN MILLEN OPENS FIRST STORE IN CHINA Justin King hits Paralympic win out at Osborne BY CITY A.M. REPORTER SAINSBURY’S chief executive Justin King has criticised chancellor George for Sainsbury’s Osborne’s plan to allow employees to swap workplace rights for shares in their firms. The supermarket boss told a retail conference that the plan is “not what we should be doing”, adding that such a scheme would destroy as its sales rise trust between the public and some of Britain’s biggest companies. BY KASMIRA JEFFORD The UK’s biggest grocer last week “Our agenda, if the government reported its first drop in profits for want to help us, should be making J SAINSBURY’S sponsorship of the two decades on the same day that employing people easier and less Paralympic Games and Brand Match Sainsbury revealed a 1.9 per cent rise costly,” he said. campaign has helped the British in quarterly sales. supermarket steal market share from Meanwhile, upmarket supermarket its three biggest rivals. Waitrose achieved its highest ever New figures from industry experts market share of 4.7 per cent in the Kantar Worldpanel showed that period, up from 4.4 per cent a year McLoughlin is Sainsbury’s sales rose 5.6 per cent in ago. Sales grew by 9.3 per cent – the 12 weeks to 30 September, boost- ahead of the big four. ing its share of the UK grocery mar- Asda increased its market share by upbeat on HS2 ket to 16.5 per cent from 16.2 per cent one percentage point to 17.5 per cent, a year ago. while Morrisons posted the slowest BY MARION DAKERS Edward Garner, director at Kantar, growth of the big four, suffering a said the grocer’s high profile advertis- drop in market share to 11.4 per cent TRANSPORT secretary Patrick ing campaign tied to its sponsorship from 11.8 per cent a year ago. McLoughlin insisted yesterday that of the Paralympics “has clearly borne the failure of the West Coast fruit”, boosting its sales in the period. MARKET SHARE OF THE TOP RETAILERS franchise competition will not “The retailer has also been bolstered 2012 2011 scupper the chances of the High by its Brand Match promotion and Speed 2 route linking London to the the ongoing relaunch of its own TESCO 31.0% 31.2% north. label range – both of which are prov- ASDA 17.5% 17.4% He told an event at the Conservative ing popular with consumers,” Garner SAINSBURY 16.5% 16.2% conference that he would not review added. MORRISONS 11.4% 11.8% the case for HS2 in light of the Sainsbury’s glowing performance ALDI 2.9% 2.4% franchise fiasco. contrasts with that of its larger rival KAREN MILLEN opened its first store in China today as part of its ambitious plans to roll- McLoughlin added in an interview Tesco, which has seen its market LIDL 2.7% 2.6% out 60 stores across the country over the next five years. The fashion chain, which has with the Independent that the plans share fall to 31 per cent from 31.2 per WAITROSE 4.7% 4.4% 350 stores and concessions worldwide, also revealed plans to launch a local language would be fast-tracked, with no cent a year earlier. ICELAND 2.0% 1.9% website in spring next year along with a second store, in Shanghai. compromise on the route. WEDNESDAY 10 OCTOBER 2012 cityam.com NEWS 9 West Coast train disaster highlights Virgin’s appeal AST Wednesday the news about Virgin, but that news Its Index score rose from +9 to +17 going from 0 to as low as -6 before government scrapped the reminded them of their positive (and clearly into the lead) after the recovering slightly. award of the West Coast BRAND experiences or generally good First Group announcement, and So while the battle of the bids L Mainline franchise to First impression of the company. has held firm there since. rages on, so far Virgin Rail is win- Group. Looking at buzz (positive minus The First Group brands, by con- ning the battle of the brands. Although the public will take a INDEX negative news) it had been in the trast, have fallen, with First Great Stephan Shakespeare is the chief dim view of the technical flaws in low single digits but fell to -12 by Western in particular suffering, executive of YouGov the bidding process (by 51 per cent STEPHAN SHAKESPEARE 24 August. to 18 per cent in a YouGov/Sunday Buzz around Virgin Rail was Virgin Trains Buzz Index Chart Times poll they thought former the initial announcement. already recovering before last 10 Virgin Trains 20 Virgin Trains transport secretary Justine The original decision, in mid- week’s announcement on the col- Greening should resign) there is lit- August, to take the West Coast fran- lapse of the franchising competi- 5 15 tle doubt that Virgin is preferred to chise from Virgin led to an unusual tion, which added fuel to its 10 First Group among customers. phenomenon in which buzz about upward trajectory (reaching +9 on 0 5 The headline stories from the Virgin Rail brand dropped dra- Monday). - 5 YouGov’s BrandIndex are that matically, while at the same time Virgin has long been seen as one 0 First Great Western Virgin is well regarded and its rep- its Index score (a composite of six of the best domestic train compa- - 10 - 5 utation has improved since the ini- key image attributes) rose. nies in the UK, vying with National First Capital Connect tial announcement, while First This makes sense in the circum- Express for top spot for most of - 15 - 10 Group’s reputation worsened since stances; people were hearing bad 2012. 23 Jul 24 Aug 23 Sep 30 Jul 27 Aug 24 Sep 8 Oct Ryanair bows out of Stansted Airport auction

far include Manchester Airports BY MARION DAKERS Group as well as a string of banks RYANAIR yesterday dropped its and investment funds. Analysts efforts to buy a stake in Stansted, expect the sale to bring in up to blaming the airport’s owner £1bn, with offers due by the end of Ferrovial for refusing to engage. the month. The budget carrier has written to BAA said in August it would sell all of its potential bidding partners off Stansted, after it lost a battle to withdraw from the process, cit- in the Court of Appeal to keep the ing “Ferrovial’s decision to exclude London airport amid competition Ryanair from the Stansted sale”. concerns. Ryanair had been looking to take The firm had been winding its way a 25 per cent stake in the airport as through the appeals system since part of a consortium. 2009, when the Competition “While we fully accept that Commission ruled that the airport Ferrovial is entirely free not to sell and others in Scotland must be to Ryanair, we fail to understand sold off. how it can comply with competi- Ryanair boss Michael O’Leary is a tion law if Stansted’s biggest cus- long-standing critic of the way tomer, accounting for 70 per cent of Stansted is run, calling often for the traffic, is excluded from this costs to be cut and slamming the sale process,” said Ryanair “blatant mismanagement” of aban- spokesman Stephen doned plans for a second runway. McNamara. “The only way Stansted’s traffic A spokesperson for decline can be reversed is if its BAA, the airport opera- uncompetitive charges are signif- tor controlled by icantly reduced, initially by Ferrovial, said the reversing the disastrous 100 per firm would not cent price increase imposed by the comment on any BAA monopoly at Stansted in 2007,” aspect of the the firm said yesterday. sale process. Possible Ryanair boss Michael buyers O’Leary has been linked to scathing about Stansted so Stansted’s owners News Corp shareholders told to throw out Murdoch as chairman

BY JAMES TITCOMB serving in both roles, Pirc said. The group also called for INFLUENTIAL shareholder advice shareholders to support a “one group Pirc has told investors to vote per share” policy. News Corp overthrow Rupert Murdoch as currently operates under a dual- News Corp chairman at next class share structure, which means week’s annual meeting, calling for Murdoch owns 40 per cent of the independence at the head of the media giant’s voting power with company. only 12.5 per cent of the shares. Murdoch, who holds both the A number of heavyweight chief executive and chairman investors have signalled intentions positions at News Corp, cannot to vote against Murdoch’s re- provide “independent oversight” appointment as chairman on 16 and “lines of accountability” while October’s meeting. WEDNESDAY 10 OCTOBER 2012 10 NEWS cityam.com Fraud squad Property firm plans tougher reporting rules PointPark eyes BY ELIZABETH FOURNIER FIRMS that admit internal bribery failings to the UK’s anti-fraud regulator are now more likely to face criminal prosecutions, under tough new rules issued by the Serious a London float Fraud Office (SFO) yesterday. In an update to its guidance on BY KASMIRA JEFFORD The group owns 46 warehouses, last year’s Bribery Act, the SFO said: providing services to logistics, retail, “The revised policies make it clear EUROPEAN warehouse operator automotive and electronics compa- that there will be no presumption in PointPark Properties yesterday nies across Europe. Its portfolio has favour of civil settlements in any € announced plans to raise £250m in a annual rents of 61m and an occu- PointPark CEO Ian Worboys said the company had been looking to IPO for two years circumstances.” float on the London Stock Exchange, pancy rate of 88 per cent. Lawyers said the rules were a marking the first IPO in the real It first emerged as property devel- marked shift from the old focus on estate sector for two years. oper Pinnacle that was set up in ADVISERS reaching settlements with The property group said it plans to Prague in 2001 and later acquired by companies, to a new culture of use the proceeds to buy a €760m Merrill Lynch in 2007, before being 400m rand (£29m). Laing joined the firm in corporate crime fighting. (£612m) portfolio of properties that bought out by Arcapita two years 1995 and has since piloted some of the “The new guidance shows a it currently manages on behalf of its later. biggest deals in Gulf financial history, tougher, blunter approach to parent company Arcapita, the “We started looking at this IPO two CHRISTOPHER including Dubai Port World’s $4.2bn IPO in corruption from the Serious Fraud Bahrain-based investment bank. years ago,” chief executive Ian LAING 2007 and Kingdom Hotel Investments’ Office; it’s likely that they’ll be much Arcapita filed for bankruptcy in Worboys told City A.M. “We have $397m float – notable for being the first more aggressive on alleged the US this year after failing to reach been waiting for the markets to be in DEUTSCHE BANK ever listing on the Dubai International corruption in future,” said Barry an agreement over a $1.1bn ($688m) a situation where we could float.” Financial Exchange. He is joined on the Vitou, lawyer at Pinsent Masons. debt repayment with creditors. He said the company had carried Deutsche Bank is acting as joint global co- PointPark deal by real estate director John The SFO’s policy update covers Under the terms of the offering, out “pilot fishing” activities to test ordinator and joint bookrunner for O’Driscoll and Ben Lawrence from DB’s cor- facilitation payments, hospitality being run by Deutsche Bank and the market sentiment and was PointPark, with Christopher Laing, head of porate broking team. Credit Suisse has also and corporate self-reporting. Credit Suisse, PointPark Properties pleased with the feedback from equity capital markets, leading the team. been appointed joint-bookrunner and joint- But Richard Burger, partner at will issue Arcapita with a 15 per cent potential investors. PointPark is Laing’s third IPO this year after global co-ordinator. Wenceslao Bunge, Reynolds Porter Chamberlain, said equity stake in the listed-group. “The logistics market is one of the he advised NMC Capital, the Abu Dhabi head of real estate investment banking, the fraud agency still had to prove The Czech-based company, also few markets to show long term health services provider, on its £117m was joined by equity capital markets man- itself as a serious player, calling the known as P3, said money raised growth... We don’t have the peaks London flotation in April. In June, he acted aging director Nick Koemtzopoulos and new guidance “meaningless if the from the offering would also be used and troughs of the retail market and as bookrunner to South African financial head of equity syndicate Stephane Gruffat SFO doesn’t have the funding and to reduce the debt attached to this we can provide long term steady services company Transaction Capital, which on the deal, alongside Chris Byrne from the expertise to mount difficult and portfolio as well as to fund growth. income,” Worboys said. listed on the Johannesburg market, raising bank’s UK investment banking team. time exhausting investigations”. UK firms hit three year Julius Baer to Eversheds hands Bryan Hughes cut 1,000 jobs second term as chief executive BY HARRY BANKS BY ELIZABETH FOURNIER despite the challenging economic low for overseas M&A outlook: “Bryan’s steady hand and SWISS private bank Julius Baer will BRYAN Hughes will remain as chief keen eye for business has helped boosting its overseas deal volumes cut up to around 1,000 jobs as a executive of Eversheds until at least the firm to significantly BY MICHAEL BOW from 49 last year to 59 over the first result of its purchase of part of Bank 2017, the law firm said yesterday, improve its cash position, BRITAIN is close to losing its crown three quarters of the 2012. The US has of America Merrill Lynch’s wealth after he won an uncontested profitability”. as the second largest buyer of retained its top spot despite a reduc- management business. leadership election. In June, Eversheds foreign companies in the world tion in deal volumes from 179 to 158 Baer said it planned a “significant Hughes replaced David Gray as reported a 14 per cent amid plunging overseas volumes for over the year. reduction of former Bank of chief executive in 2008, and increase in profits per UK firms, figures out yesterday The figures, compiled by City law America corporate overhead” as earlier this year announced a new partner to £632,000 for the show. firm Allen & Overy, show the UK well as cuts to the middle and back three-year strategy for the firm, 2011-2012 financial year. Mergers and acquisition deals remained the second most popular office functions of the combined including proposals to move Revenues rose three per cent involving a British firm buying an country for foreign buyers. Overseas group, reducing the combined staff to a Swiss verein to £366m. overseas company fell 35 per cent to acquirers closed 74 deals to buy UK of around 5,700 by 15-18 per cent. structure across its 63 in the first three quarters of this firms, well ahead of the third most It said assets under management European offices. Bryan Hughes joined year – a three year low. Japan is clos- popular territory of Canada, which rose to SFr184bn at the end of Chairman John Eversheds as a trainee ing in on the UK’s position after had 43 deals. August from SFr179bn in June. Heaps said that, 27 years ago WEDNESDAY 10 OCTOBER 2012 cityam.com 11 Got A Story? Email [email protected] THECAPITALISTcityam.com/the-capitalist EDITED BY CALLY SQUIRES Inspiration aplenty at E&Y Entrepreneur Awards O the Hilton on Park Lane, Tyrwhitt Shirts, a man who must where The Capitalist began the have taken many a pound from wal- week being inspired and lets around the Square Mile, won the T humbled (only the most consumer award. After thanking his eloquent of self-made millionaires CEO (“I didn’t tell the judges that the can bring a sympathetic tear to the business used to be an absolute disas- eye) at the Ernst & Young UK ter until I gave it to my CEO to run”), Entrepreneur of the Year awards. charmer Nick also thanked his wife This year’s finalists were certainly in for “not entering this award herself – fine company, with previous winners because she runs a business called of the UK title including Tim The White Company which is much Richards (Vue Entertainment), bigger and better than mine!” Michael Spencer (Icap) and Lord Unsurprisingly a financial services Harris (Carpetright), who loyal read- firm won the overall award. Lance ers will remember was recently fea- Uggla of Markit confessed: “I wish I tured in these pages over a pesky made shirts or my wife made sheets. pooch problem. Because that would be a lot more Richard Joseph (above) and twin Antony won the first award Nick Wheeler, founder of Charles exciting than what I do...” Left to right: Kirsty Young, Lucinda Bruce-Gardyne and Lord Young

Fred Done (left) and Kirsty with Mark Sesnan and A.M. LAURA LEAN/CITY Sophi Tranchell (above) Left to right: Winner Lance Uggla, Tim Morris, Susan and Ian Kelly, Kirsty Young, Nick Wheeler and Eric Pfister

A reminder that starting from October 2012, all employers must enrol eligible workers into a qualifying workplace pension scheme. The date you have to do this by depends on the size of your company, but to give yourself time to prepare, visit The Pensions Regulator at www.tpr.gov.uk/actnow where you’ll find out all you need to know. Workplace pensions. We’re all in.

WEDNESDAY 10 OCTOBER 2012 cityam.com NEWS 13 Centamin maintains targets for IEA outlook predicts Iraq’s oil 2012 despite production drop output will double this decade BY CITY A.M. REPORTER six per cent, in line with a EGYPT focused gold miner planned ramp up of that part of that implied by Iraq's targets BP, Exxon Mobil, Eni and Royal Centamin said it was on course to the mine, while the underground BY CITY A.M. REPORTER signed with foreign oil companies Dutch Shell. meet its full-year output guidance operations produced 19 per cent IRAQ’S oil production is on course and the IEA, which advises 28 Industry executives say that for 2012, shrugging off a 10 per less gold as they were affected by to more than double by 2020, the industrialised countries, while Iraq, holder of the world’s cent drop in production in the the strike and a temporary International Energy Agency said highlighted the risk of production fourth-largest oil reserves, has third quarter compared to the shortage of equipment. yesterday, although delays to rising more slowly than expected. enough oil in the ground to hit its previous period. “Although weak quarterly investment could tighten the “This report anticipates target of 12m bpd, infrastructure Centamin, whose Sukari production was expected, the global market in coming decades movement towards possible bottlenecks, red tape and operation in Egypt is the first pressure remains high on the and push prices higher. trajectories for oil output lower bureaucracy make that unlikely by modern gold mine in the country, fourth quarter,” Canaccord analyst In its Iraq Energy Outlook, the than that implied by current a contractual deadline of 2017. yesterday posted total production Dmitry Kalachev said. Paris-based IEA said Iraq’s oil contracts,” the report said. The IEA’s report also presented a of 60,922 ounces in the three Shares in Centamin, which hit production would reach 6.1bn Iraq’s oil production, which delayed scenario, in which energy months to 30 September, falling an 11-month high earlier in barrels per day (bpd) by the end of stagnated for years due to wars and investment in Iraq rises only slowly compared to its second quarter October, closed down 0.8 per cent this decade under its central sanctions, started to rise in earnest from 2011 levels, leading to oil performance after scheduled at 96.85p. The firm is due to post scenario. in 2010, after Baghdad secured production of 4m bpd in 2020 and maintenance and an illegal strike. its third quarter financial results But that rate would be half of contracts with companies such as 5.3m bpd in 2035. Output from the open pit rose on 14 November. IN BRIEF Pennon acquires Pulp Friction n Viridor Waste Management, a Rio Tinto gives subsidiary of FTSE 100 water services and waste group Pennon, yesterday acquired Kent-based paper firm Pulp Friction for a total of £9m. Pennon will also take control of the business, assets and goodwill of SBS Paper, a waste a wary outlook paper sorting service with financial links to Pulp Friction. Pulp Friction processes around 100,000 tonnes of paper and card a year. Viridor expects the acquisition to be earnings enhancing in on China future its first full year of operation. Informa buys intelligence firm just below eight per cent, in line BY HARRY BANKS n with the International Monetary Business and events group Informa GLOBAL miner Rio Tinto yesterday Fund’s revised forecast yesterday. yesterday bought analytics firm cut its growth forecast for China “Economic growth in China is Zephyr Associates from Kemmons and said it was stepping up efforts robust but moderating, and is slow Growth in emerging markets such as China is helping to boost sales of BMWs Wilson Companies for $62m to cut costs, having already slashed and uneven in developed (£38.7m) in cash. Informa expects $500m (£312m), faced with an economies,” Rio said in a statement. the acquisition of Zephyr Associates, uncertain global outlook. Rio also said it has cut $500m in which specialises in business Rio Tinto, the world’s second- costs so far in service and support BMW brand widens sales gap intelligence, to generate a positive largest iron ore miner with more roles, and would now target cost return on invested capital from 2013. than 80 per cent of its earnings in cuts in operations, project studies Peter Rigby, chief executive of 2012 expected to come from the and sustaining capital, predicting over VW’s Audi in September Informa, said the acquisition “is a material, is heavily dependent on that capital spending, forecast at great fit with our existing business in Chinese steel demand picking up $16bn this year, would peak in 2012. BY CITY A.M. REPORTER BMW brand sales rose 8.6 per this area”. and is counting on Chinese infra- “We aim to maintain our single A cent to 1.11m vehicles in the first structure spending plans to drive credit rating and are driving our BMW increased sales of its nine months, or about 12,500 Rolls-Royce renews US contract that demand. cost reduction efforts harder and flagship BMW brand by over 14 more than Audi sold during the n Power systems company Rolls- per cent in September thanks to same period. “Significant stimulus efforts have faster,” Albanese said. Royce has won a $103.3m (£64.6m) been announced in China, the US booming growth in China, Last week, the carmaker said it and Europe, but it’s uncertain Rio Tinto PLC helping the world’s largest has increased sales of its flagship contract extension from the US 3,030.00 Department of Defense to provide exactly when we will see the 9 Oct premium carmaker widen the BMW brand in China by 55 per 3,100 p support for the F405 engines that impact of these on our markets,” 3,050 gap slightly to close competitor cent in September to roughly Rio Tinto chief executive Tom Audi. 27,000 vehicles. power the US Navy’s T-45 training 3,000 Albanese said yesterday. “Given “We expect to see further In the first nine months, China aircraft. Rolls-Royce provides this, and the considerable price 2,950 healthy growth in worldwide sales gained 32.7 per cent to inventory control, logistics support fluctuations in recent times, we 2,900 sales in the fourth quarter,” 219,800 vehicles. and engineering elements for the are somewhat more cautious on 2,850 BMW brand sales chief Ian BMW added that Mini sales F405 engine, covering more than 200 the outlook over the next few quar- 2,800 Robertson said in a statement rose 121 per cent to 2,631 cars in aircraft. Operations between Rolls- ters.” 2,750 yesterday, adding the group was September and gained in the first Royce and the US Navy have been Rio Tinto slightly cut its forecast “well on course” to achieving a nine months nearly 46 per cent to established for nearly 10 years. for Chinese economic growth to 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct new sales record for the full year. 17,256 vehicles. BHP Billiton returns to Aussie Vedanta says India zinc and iron operation slowed in quarter two market with A$1bn bond issue BY CITY A.M. REPORTER extracting in Goa, where monsoons have also hindered banks, which stand among the market since 2001. MINER Vedanta posted a nine per transport in this quarter. BY CITY A.M. REPORTER world’s top financial institutions. The issue was jointly managed by cent drop in metal mined from its The company said it now MINING giant BHP Billiton made a Investors saw the bond issue as Australia and New Zealand Banking Indian zinc operations in its expected to be able to restart return to the Australian bond fair value compared with BHP’s Group and Commonwealth Bank of second quarter, and said that mining in Karnataka once it market after an 11-year absence offshore issues. One fund manager Australia. saleable iron ore output plunged received Supreme Court approval, with a A$1bn (£635.8m) five-year estimated a pick up of around 20 86 per cent, hit by mining bans while in Goa it said it was working issue paying 90 basis points over basis points over a Euro bond, while BHP Billiton PLC and monsoon travel restrictions. closely with the authorities to try bank bill swap rate. another investor who compared it p 1,935.50 Its zinc India business to complete a review. 1,960 9 Oct The issue was heavily with BHP’s US dollar bond offers 1,950 accounted for over a quarter of Mined metal production at its oversubscribed with talk of a total saw only a marginal premium. Vedanta’s earnings in its last zinc India business was expected 1,940 order book around A$2bn, All three buyers, who asked not financial year, with iron ore and to rise in its second half, Vedanta according to one participating to be named because they were not 1,930 oil and gas the second and third said, meaning that full-year investor. He said every account was allowed to speak to the media, said 1,920 biggest earners respectively. production was on course to be scaled back and the notes paid a they welcomed the rare offer from 1,910 Vedanta’s iron ore production higher than the previous year. tighter margin than the 95 basis a borrower that usually sources its 1,900 has been hit by a ban on mining in In aluminium, production fell point spread initially marketed. funding in Europe and the US. 1,890 the Indian state of Karnataka for 10 per cent in the quarter due to There was so much demand that BHP Billiton has not raised over a year, and a more recent the lower supply of bauxite from the issue paid less than Australian money in the Australian bond 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct temporary restriction on third parties. WEDNESDAY 10 OCTOBER 2012 14 NEWS cityam.com IN BRIEF O2 owner AEG starts sale process Inmarsat stays n Billionaire Phil Anschutz has kicked off the auction of his AEG, the owner of the O2 arena as well as a host of US venues and sports teams, with an expectation that the sports and entertainment giant should draw bids on course for a in the $10bn (£6.3bn) range. The initial group of recipients is expected to include rich individuals, rivals, and private equity firms, sources said. Anschutz said last month he was looking at a sale and hired Blackstone positive year Advisory Partners to advise. Reed Elsevier sells off Variety BY JAMES TITCOMB of new contracts for its XpressLink satellite broadband service signed. n Hollywood trade magazine Variety SATELLITE company Inmarsat yester- Performance across the company’s has been sold by British publishing day said trading had been “consis- other business sectors and in the Chief executive Siegfried Heimgaertner said the security of Skrill was key to its success firm Reed Elsevier to US online tent with trends” in the three Solutions business had also been pos- publisher Penske Media Corporation months to October, and that the firm itive, the company’s chief executive for a sum believed to be around $25m was performing in line with full-year officer Rupert Pearce said. (£15.6m). Reed Elsevier said in March expectations. “Trading during the third quarter Online games and new markets that it would put the publication that The FTSE 250 company, which owns has been consistent with trends has covered Hollywood for over a a fleet of ten satellites serving the reported for the second quarter and century up for sale after the paper had maritime, aviation and land sectors, with our guidance for the full year,” bolster web payment firm Skrill been making substantial losses. said that performance had been pos- Pearce added. Penske Media already owns itive in its key businesses. However, Yesterday’s news follows Monday’s Deadline.com, a website for shares fell around 2.5 per cent, with tie-up with computing giant Cisco, BY JAMES TITCOMB security, and has become the the announcement less positive than which will enable Inmarsat to choice of many online poker showbusiness professionals. the firm’s six-month earnings report expand its XpressLink service. EXPANSION into the US led online websites as a result. EU holds fire on Huawei and ZTE two months ago. Inmarsat will report third quarter payments provider Skrill to a 29 “These figures illustrate how In August, Inmarsat had reported a results on 5 November. per cent year-on-year rise in basing our approach on security n The European Commission has 12.7 per cent increase in revenues revenue in the first half of 2012, and simplicity on a global scale, delayed a trade case against Huawei from its maritime business, sig- Inmarsat PLC the company said yesterday. combined with continued product and ZTE, two Chinese telecom equipment makers also under scrutiny nalling a turnaround for the busi- 595 p Skrill, formerly known as innovation, is accelerating our ness and causing shares to rise by 572.00 Moneybookers, said 30m people mission to become the first choice in the US, easing tensions between the almost 10 per cent, although pre-tax 590 9 Oct had signed up for customer for online payments,” Siegfried European Union and its second- profit had fallen from $255m 585 accounts – double the number Heimgaertner, the firm’s chief biggest trading partner. A US (£159m) to $222m in the period due 580 reported 18 months ago. The executive, said. congressional report said on Monday to a number of investments. secure payments company, which Heimgaertner, who pulled a 575 that the two firms were potential The firm said yesterday that the rivals web giant PayPal, said flotation in April last year due to security risks and should be shut out maritime business had continued to 570 movements into online gaming “adverse market conditions”, said of the US market. Huawei recently perform well, with 2,100 new termi- 565 and an increased presence in the the company was focusing on the announced a £1.2bn investment in nals added to its FleetBroadband US had led to the change. fast-growing mobile payments staff and infrastructure in the UK. network in the period, and a number 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct The company prides itself on market. WEDNESDAY 10 OCTOBER 2012 cityam.com NEWS 15 UK trade deficit more than doubles Growth back in UK deeper into third quarter USA BY BEN SOUTHWOOD Norway OUTPUT GREW robustly in the £7.6bn third quarter, according to Import £5.0bn £0.9bn estimates released by a think tank trade deficit as Import Export yesterday, but it warned that this growth was largely down to “special” events. £9.9bn GDP grew 0.8 per cent between Export UK Netherlands the second and third quarters, exports slump the National Institute of Social £7.4bn and Economic Research (NIESR) BY BEN SOUTHWOOD the equivalent figure from a year Import estimated, but “underlying” ago,” he said. growth is much lower, they say. THE UK’S trade deficit widened to Analysts predicted that the balance Stripping out the effects of the more than double its July size in would only move further into deficit £5.7bn economy rebounding from June's August, data from the Office for in the coming months. France Export extra bank holiday, and other National Statistics (ONS) revealed yes- “The UK goods trade balance will one-off movements, the think- terday, driving the pound down remain firmly in deficit into 2013 – £5.7bn tank says the economy grew against the dollar. slowing exports will be the key drag,” Import around 0.2 to 0.3 per cent. The UK imported £4.2bn more than said Melanie Bowler at Moody’s NIESR estimates have been it exported in August, the ONS data Analytics. “Meanwhile, the services closely correlated with official showed, up from £1.7bn in July, push- balance will deteriorate but remain £5.3bn Germany statistics in the past. ing sterling below $1.60, from its in surplus.” Export peaks above $1.63 in late September. The goods deficit with the EU £13.2bn This overall deficit came from a widened by £0.5bn to £4.9bn in Import £9.8bn deficit in goods, partially off- August, while the deficit with non-EU World jobless set by a £5.7bn surplus in services. countries expanded by £2.0bn to The figures will come as another £5bn. £7.4bn blow to chancellor George Osborne’s The data also revealed a £1.6bn – Export hopes for the UK to “pay its way” 24.1 per cent – fall in imports from UK overall trade figures down in the world. Hopes of an Norway between the three months export-led recovery were left to May and the three months to balance BY FAIZA MALIK in tatters, as UK exporters August. in August: UNEMPLOYMENT rates decreased found it harder and harder The Office for National Statistics marginally across Organisation for to shift goods overseas. told City A.M. that this was likely to Economic Cooperation and “The prospect of export- be down to a strike in Norwegian UK trade Development (OECD) member led growth seems as remote gas production – but said they -£4.2bn balance in services: countries in August, data out as ever,” said economist could not be absolutely sure with- (-£1.7bn in July) yesterday revealed, having held Osman Ismail at the Centre out more detailed data. steady for two consecutive months. for Economics and If the trade gap stays Unemployment dropped 0.1m to Business wide, it could see the UK trade balance 47.8m in August, representing a rate Research (CEBR). pound sink further, £5.7bn of 7.9 per cent – numbers which “For the three below its current 55- in goods: have stayed roughly constant since months to day moving average the beginning of 2011. August, even of $1.5905. But differences in unemployment services across OECD countries remain exports -£9.8bn considerable. The US rate fell 0.2 per remain 2.8 Chancellor George cent, yet joblessness in the euro per cent Osborne wants the area climbed for the 13th straight lower than UK to pay its way *in the three months to August month to hit 11.4 per cent. Manufacturing slide drags down industrial production BY BEN SOUTHWOOD “Manufacturing output three per cent fall-off in food, contracted sharply again in drink and tobacco production. INDUSTRIAL production and August, suggesting that the An 11 per cent rise in the manufacturing both slid in return to growth in July was output of transport production August, data from the Office for merely a temporary, one-month, provided a counterweight. National Statistics (ONS) blip,” said Chris Williamson at revealed yesterday. Markit. Manufacturing and industrial production The index of production fell “Industry is suffering from 110 100 = average for 2009 THE PRINT COMPANY 0.5 per cent between July and underlying weakness,” agreed August, the ONS said, while the Melanie Bowler at Moody's 108 Index of Manufacturing THAT NEVER SLEEPS index of manufacturing Analytics. “[This] suggests 106 dropped off 1.1 per cent. These output is likely to disappoint 104 monthly moves left both indices into 2013.” 102 The Color Company araree herheree when you rreallyeally need us. WWee aarere 1.2 per cent below where they The slump in manufacturing 100 London’s leading digital print company with locations throughoutthroughout were in August last year. that dragged down industrial 98 central London with the addeaddedd advantage of a 24/7 branch in thethe Analysts said the data showed production was itself pulled 96 Index of Production heartheart of Mayfair.Mayfair. that world economic troubles down by a nine per cent collapse 94 National Statistics for Office Source: were impacting on the UK. in chemical production, and a May 2010 May 2011 May2012 Our range of servicesservices includeinclude onsite and offsiteoffsite print rrooms,ooms, bbidid production,production, presentations,presentations, lalargerge forformatmat and exhibition graphics,graphics, Japanese car sales in China fall off a cliff all prproducedoduced thrthroughoutoughout the dayday and night. 40.5 per cent, Nissan’s plunged on the Nikkei index. DropDrop in when you need usus,, even if it is 3am and you neneeded BY BEN SOUTHWOOD 35.3 per cent and Suzuki’s The monthly economic report something printed and dispatcheddispattched to New YorkYYoork for next daday*y* JAPANESE car sales in China slumped 42.5 per cent. from the Bank of Japan was also tumbled last month, data “Inventories are growing, gloomy, warning that revealed yesterday, as the factories are operating less, and international weakness would CALL US TO DISCUSSDISCUSS 0800 93 94 93 diplomatic spat over the retail is not going well at all,” said depress factory output in the or FIND YOUR NEAREST STORESTORE on wwwwww.color.co.uk.co.uk.color Senkaku/Diaoyu island chain fed Koji Endo at Advanced Research fourth quarter. through into consumer decision Japan. “I don’t see a single factor One nugget of reassuring data making. that is positive.” for Japan yesterday was the 4.2 Toyota’s sales in China Combined with the impact of per cent increase in the current *Authorised Fedex ShipCentreShipCentre providedprovided iiss plummeted 48.9 per cent in Chinese slowdown, Japanese account surplus in August, driven subject to standardstandard termsterms and conditionsconditions September compared to a year investors were spooked, wiping by improved returns on Japan’s earlier, while Honda sales dived 1.1 per cent off the value of stocks huge portfolio of overseas assets. WEDNESDAY 10 OCTOBER 2012 16 cityam.com

YOUR ONE-STOP SHOP FOR JOB MOVES, CITYDASHBOARD BROKER VIEWS AND MARKET REPORTS in association with CITY MOVES WHO’S SWITCHING JOBS Edited by Annabel Palmer NEW YORK NGBI Private Equity The UK Cards Association head of debt advisory at Investec, worked on KPMG’s Graham Peacop will join the UK Cards Association as debt advisory team and has eight years prior corporate David Turner has joined banking experience with NatWest and Bank of Nova REPORT managing director. He was previously head of card NGBI’s UK team as an Scotia. investment manager. He acceptance in the UK and Ireland division of Mastercard. qualified as an accountant He has over 30 years’ experience within the banking with Grant Thornton before industry including a long career at the Royal Bank of Vestiaire transferring into its corporate Scotland Group. The fashion website has appointed Sarah Bush as UK Jitters on Wall finance team, and was most marketing director. She began her career at Amazon, has recently a member of Hermes Fund Managers worked as lead product manager for Bing, and was most Experian’s corporate The fund manager has announced the appointment of recently senior director for Europe at ShopStyle. Street ahead of development office. Rhodri Mason as head of investment solutions and product strategy. Prior to joining Hermes, he was head of Hammerson UCITS management at Man Investments, and has earnings season Chadbourne and Park The European property company has appointed Iain previously held roles with Blackrock, Barclays Global The law firm has announced that Silvia Fazio has joined Investor, LaSalle Investment Management and M&G Mitchell as UK commercial director with responsibility the firm as an international partner in the corporate S stocks fell yesterday, led by Investments. for leasing, catering, new business and losses in technology after practice. Prior to joining Chadbourne, she was a partner commercialisation. Mitchell brings over 20 years of retail brokerage downgrades of Intel at Collyer Bristow. She has been recognised in several real estate experience at Healey and Baker, Dalgleish, and other major companies as industry publications including Chambers Global, and Deloitte CBRE and most recently Westfield, where he played a U worries increased about third- has authored articles and books on corporate and Nick Soper has joined the professional services giant as a major role in Westfield’s leasing activities at Westfield quarter US earnings. commercial law. director in its debt advisory practice. He was previously Derby and Stratford City. Shares of Intel, the world’s largest semiconductor maker, lost 2.7 per +44 (0)20 7092 0053 cent after negative reports by at SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com least two brokerages. Robert W Baird & Co cut its price target on the stock to $26 from $32, citing weak demand To appear in CITYMOVES please email your career updates and pictures to [email protected] for notebooks. The news triggered selling of large- cap technology shares, including Oracle and Apple. Microsoft shares lost 1.7 per cent and ranked as the LONDON REPORT BESTof theBROKERS biggest drag on both the Nasdaq and the S&P 500. Capita PLC “It’s a good bet that companies aren’t significantly expanding their IMF growth gloom and poor data 780 p tech projects at this point,” said Kim 770 740.00 Forrest, senior equity research 9 Oct analyst at Fort Pitt Capital Group. 760 Nine of the S&P 500’s 10 sectors fell, in manufacturing send FTSE lower 750 with energy the one gainer for the day as crude oil prices jumped on K shares fell for a second session between early June and mid- 640 concerns of a supply disruption in yesterday, dented by a wary view September, the UK benchmark has the Middle East. of Europe’s debt troubles and stalled, trading in a relatively narrow 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct Earnings warnings have left Uconcerns that gloomy global 200 point range over the past month as investors cautious after a rally that economic data bodes ill for the the risks associated with the Eurozone, CAPITA has driven the S&P 500 up nearly 16 upcoming corporate earnings season. economic growth and earnings make Seymour Pierce has downgraded the FTSE 100 professional services per cent so far in 2012, lifting it to an Data showed manufacturing output investors reluctant to push it higher. company from “buy” to “hold” saying “there was not enough new almost five-year high. shrank more than expected in August On individual stocks, analysts are information at the investor day presentation to warrant an increase in Among other large multinationals and exports fell steeply, pointing to starting to reconsider whether our target price”. The broker added that it was “ disappointed to hear that have warned about earnings, deterioration both in the domestic and companies still look attractive after the international expansion does not feature greatly in the company’s citing weak demand in Europe and the global economy. summer rally, prompting a downgrade plan”. The target price has been cut to 770p. China, are FedEx, Caterpillar and The International Monetary Fund on Aggreko by HSBC and on Sage by Hewlett-Packard forecast that the UK economy would Bank of America Merrill Lynch. “Stocks had a big move for the year. contract 0.4 per cent this year versus The shares dropped 3.4 per cent and Asos PLC Now people are waiting for more growth of 0.2 per cent expected in July, 2.2 per cent respectively. 2,286.00 clarity on third-quarter results and and combined this with a more Marks & Spencer was the FTSE 100’s 2,300 p 9 Oct fourth-quarter guidance,” said downbeat view on global growth. biggest riser, up 3.2 per cent, in the 2,280 Michael James, senior trader at That backdrop exacerbated concerns wake of a bullish outlook on the retail Wedbush Morgan in Los Angeles. 2,260 about the third quarter earnings sector from JP Morgan Cazenove. Analysts expect quarterly earnings season, which kicks off with US From a technical point of view, the 2,240 for S&P 500 companies to decline aluminium giant Alcoa after the market is not yet looking negative, 2,220 about 2.3 per cent from the year-ago market close, along with fast food with the 50-day moving average serving period, according to Thomson restaurant operator Yum Brands. as a floor yesterday. Reuters data. “People are getting cautious about “Given we came off the trend line off 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct At the close, the S&P 500 was 7.9 the earnings season. I am quite the highs in September, the price per cent below its all-time closing bearish,” said Nick Xanders, who heads action so far is a little bit ASOS high of 1,565.15, reached five years European equity strategy at broker disappointing. That said ... above 5,800, Panmure Gordon maintained its “buy” rating on the global online ago on this date. BTIG. I'd be tempted to give it the benefit of fashion store, after shares increased by 83 per cent in the year to date – The Dow Jones industrial average “Tonight is going to tell you exactly the doubt,” said Phil Roberts, technical outperforming the FTSE All Share Index by 76.6 per cent. The broker fell 110.12 points, or 0.81 per cent, to which way we are going ... Alcoa will strategist at Barclays. added: “We continue to see in Asos shares a unique opportunity for 13,473.53 at the close. The S&P 500 tell you what’s going in terms of UK Shares in BAE Systems trod water investors to get involved in a global consumer growth and operating lost 14.40 points, or 0.99 per cent, to miners. Yum will be very interesting to yesterday, closing around 0.3 per cent leverage story.” The price target increased to 2530p from 2378p. 1,441.48. The Nasdaq Composite see in terms of Chinese growth.” lower, ahead of today’s Takeover Panel dropped 47.33 points, or 1.52 per The FTSE 100 closed down 31.49 deadline for its planned merger with cent, to close at 3,065.02. points, or 0.5 per cent, at 5,810.25 French aerospace giant EADS. Talks Cookson Group PLC Dow component Alcoa reported points, adding to a 0.5 per cent drop among the firms and the various 625 p quarterly results after the bell and its the previous session. governments with interests in the tie- stock rose to $9.20, adding to the Mining stocks, particularly sensitive up were said to be continuing last 600 slight gain during regular hours. to economic news and a regular night. 575 539.50 Alcoa closed at $9.13, up 0.1 per cent. catalyst for the overall market Shares of Netflix slid 10.9 per cent, FTSE 9 Oct direction, helped pare the FTSE’s losses 5,810.25 550 reversing Monday’s sharp gains after for the day. Vedanta rose 2.1 per cent, 5,900 525 Bank of America Merrill Lynch cut while Rio Tinto put on 1.5 per cent and 9 Oct the video streaming company’s stock Evraz gained 1.1 per cent. 5,880 to “underperform” from “buy”. Concerns about the Eurozone 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct About 5.8bn shares changed hands 5,860 remained in the spotlight, with on the New York Stock Exchange, the Spanish bond yields edging higher as 5,840 COOKSON Nasdaq and NYSE MKT, below the the country continued to drag its feet UBS maintained its “neutral” rating for the industrial materials supplier daily average so far this year of about over a formal bailout request needed to 5,820 saying “we suspect Cookson is suffering from widespread price erosion 6.53bn shares. kick-start a European Central Bank across its ceramics operations, which has further pressured profitability”. A More than three issues fell for every plan to ease the crisis through 5,800 target price of 550p was set, down from 600p. The broker cut its 2012 one that rose in the NYSE. On the sovereign bond purchases. earnings per share forecast by 10 per cent. UBS said: “ We doubt a Nasdaq, about seven stocks fell for After jumping some 700 points 3 Oct 4 Oct 5 Oct 8 Oct 9 Oct demerger or economic recovery offers material upside to our valuation.” every two that rose. WEDNESDAY 10 OCTOBER 2012 cityam.com 17 WEALTHMANAGEMENTMARKET MOVERS The unravellingofChina’s exceptionalism

the biggest problems at the heart of The People’s Republic needs to address the Chinese model is malinvestment. At some point, the state-directed malinvestment issues, writes Craig Drake investments – whether via LGFVs or other mechanisms – need to pay for ARKETS across the world were ening of China the saviour for global themselves. Under China’s creative given a boost yesterday when markets? accounting system, a 10m renminbi the Chinese central bank So is China truly exceptional? There investment in a road would be classi- Mpumped tonnes of liquidity is no shortage of high hopes for the fied as consumption, as it is predicted into the country’s banking system for People’s Republic. It has been predict- that it will then increase economic the second time in a fortnight. The ed that the renminbi will be complete- consumption. If it only brings in 5m People’s Bank of China injected ly free floating within a decade, that renminbi of increased economic activ- 265bn yuan (£26bn) into the money Hong Kong will overtake New York as a ity, then this consumption number market via reverse purchase financial centre within two decades, has been overstated. But due to the pre- agreements, adding to the 2.418 and at the same time, Chinese compa- dictive, rather than retrospective trillion yuan offered since the end of nies will dominate the Fortune Global nature of the Chinese consumption June. 500. But as Michael Pettis, a professor reporting, this shortfall is unaccount- This move came at the same time at Peking University’s Guanghua Building more ghost cities will not rebalance China’s growth model ed for. And as long as this imbalance is that mining giant Rio Tinto trimmed School of Management points out: banking crisis, it stamped out already classified as consumption in the first sustained, it will be maintained by fur- its growth forecast for China, bring- “The reasons for saying that the meagre household consumption. place, boosting Chinese figures, and ther transfers from households via tax- ing it to just below 8 per cent, in line Chinese economy will be much Chinese economic data is notoriously rebalancing its lopsided growth and ation, exacerbating the Chinese with the International Monetary stronger than many people currently unreliable. However, taking a median investment figures. growth imbalance. Fund’s (IMF) recently revised forecast. expect consist largely of citing a series between the China Regional Financial Whether or not this malinvestment “Significant stimulus efforts have of earlier predictions.” Pettis adds: Operation Report and the National MALINVESTMENT can be supported in the short term, been announced in China, the US and “Unfortunately, expert predictions are Audit Office’s estimates put the LGFV’s Bulls argue that the Chinese growth wasting resources is always destruc- Europe, but it’s uncertain exactly notoriously unreliable, and we seem debts, along with other local govern- model, which has encouraged savings tive. If China wants to avoid the twenti- when we will see the impact of these to be especially bad at predicting turn- ment debts, in the 12-13 trillion ren- by constraining consumption, means eth century fates of Japan, Russia, on our markets,” said Rio Tinto chief ing points.” minbi range (in excess of £1.2 trillion) that domestic savings can cover invest- Brazil and Latin America, it needs to executive Tom Albanese, as the miner at the end of 2010 (latest figures). ment. But this misses the point. Crises find a mechanism, whether market- downgraded its outlook. HOUSEHOLD TRANSFERS The Chinese government has done and severe slowdowns are not created driven or state-directed, to allow these One of these turning points was sup- some creative accounting with these by countries running a current investments to create wealth, rather CHINESE SUGAR DADDY posed to be the Chinese debt crisis of numbers. Since these debt pro- account deficit. Japan did not have a than build household debt, flatten But the reaction in the world’s mar- the late 1990s, (which some believe the grammes are in place to provide bet- problem meeting external debt when consumption and create more ghost kets shows just how much investors Chinese simply grew out of). But of ter transport infrastructure and its asset price bubble burst. Nor did its cities. And as long as the global econo- are looking to China for salvation. course it didn’t. It moved the debt bur- better schools, the view is that they domestic savings exceeded invest- my continues to look to China as the After all, with the US in an economic den to the household sector through will later lead to increased consump- ment. driving force for its recovery, let’s hope slump and Europe in turmoil, isn’t local government financial vehicles tion. Therefore, the government justi- Rather than financing these infra- that it achieves this economic miracle the unstoppable growth and strength- (LGFV). Though it may have averted a fies that these outlays should be structure investments outright, one of sometime soon. Why the Dow industrial and transportation divergence may be ominous OW Theory is becoming hard to quarter earnings season could be the worst ignore. Created by Wall Street since the height of the financial crisis. Dow Jones Industrial Average vs Dow Jones Transportation Average Journal founder Charles Dow, it MARKET The success of the Dow Theory was seen in 5,600 suggests that divergences 2007, three months before equities began 14,000 between the Dow Jones COMMENT their two-year slump. But the theory showed 5,400 DTransportation Average (DJTA) and the Dow flaws in 2006 when the DJTA fell 15 per cent, 5,200 Jones Industrials Average (DJIA) indicate only for the industrial average to rally to future trends in the economy. Deep ASHRAF LAIDI record highs in the subsequent 12 months. 5,000 13,000 divergences between the two could mean quantitative easing appears to be weighing As bears grow in confidence from the 4,800 that the DJTA would prevail, and the DJIA (as on bond yields and boosting financial, prolonged divergence, the question is 4,600 Industrial average well as the broader economy) may follow its internet and basic material stocks, which whether the Fed’s stimulus will reverse the Transportation average 12,000 lead. comprise the broader average. Meanwhile, DJTA. Will the Dow Theory be right again? 4,400 The DJTA is down 5 per cent this year, while transportation stocks have been damaged by Keep informed with the expert opinion of 4,200 the DJIA is up 11 per cent. We must bear in uncertainty related to the US fiscal cliff and City Index’s chief global strategist, Ashraf 11,000 Dec Mar Jun Sep Dec Mar Jun Sep mind: the Federal Reserve’s third round of recent profit downgrades, warning that third Laidi: www.cityindex.co.uk/market-analysis 2010 2011 2012 POINT SPREAD* ACROSS THE GLOBE WALL ST | FTSE 100 | FRANCE 40 GERMANY 30 | AUSTRALIA 200

*1 point spread available during market hours on daily funded trades & daily future spread bets and CFDs (excluding futures).

Trade today at Spread betting and CFD trading can result in losses greater than your initial deposit. www.cityindex.co.uk/theglobe 18 WEALTHMANAGEMENT FOREX cityam.com Fresh wave of volatility may strike the euro

Euro-dollar $ 1.4

1.35

1.3

1.25

1.2 NOV ‘11 JAN ‘12 MAR ‘12 MAY ‘12 JUL ‘12 SEP ‘12 The currency may resume its downtrend after its recent run, says Yogesh Chandarana ONCERNS about Europe’s tisations in Spain). Managing director economic slowdown have put a of the ESM Klaus Regling has con- halt to the euro’s surge firmed that legacy assets have not yet C upwards. Since summer lows, been discussed. Traders may want to the single currency has risen against keep an eye on this spanner; it could the dollar, recently testing the $1.30 undermine the ESM’s effectiveness. level. But it has failed to convincingly Troubled Greece is back in the spot- stay above this level. light. The country is expected to run In its biannual world economic out- out of cash in November and eagerly look, the International Monetary awaits the next €31bn (£25bn) Fund (IMF) revised its forecast for tranche of its bailout. However, euro area growth. It now expects GDP Greece needs to meet budgetary tar- to contract by 0.4 per cent in 2012, gets to be guaranteed the bailout, and a meagre 0.2 per cent growth in which is not likely. Officials are piling 2013. on the pressure: IMF director The organisation squarely places Christine Lagarde yesterday said that the blame on the doorstep of policy- there was still more that could be makers, saying that failure to get a done “on all fronts” before the next grip of the fiscal situation is making tranche is released. Greece now has a “slow and bumpy recovery” more until 18 October (when the heads of perilous, and that a resolution to the EU states are due to meet) to imple- crisis “depends on whether European ment reforms. In a familiar sense of and US policymakers proactively deal déjà vu, the question is now whether with their short-term economic chal- Greece should be given further lenges”. reprieve. Shavaz Dhalla of Spreadex The IMF is not alone in its critique thinks that, contrary to the rhetoric, of policymakers. European Central Greece will be given flexibility: “You Bank (ECB) president Mario Draghi can’t impose this level of austerity last week insisted that the ECB has and still expect them to service their done everything it can to help secure debts .” the euro’s survival, and “now it’s real- Fortunately, dialogue has been ly in the hands of governments”. more constructive than in previous Draghi was hinting at Spain, which showdowns. Yesterday, German has been reluctant to request a Chancellor Angela Merkel visited bailout from the European Stability Greece. How much traders should Mechanism (ESM), the Eurozone’s read into this is debatable. Michael permanent bailout fund. Derks of FxPro says “Merkel is a busy Much of the euro’s recent strength lady and hasn’t been to Greece in has come on the back of the ESM’s three years. You have to ask: why ratification, as well as Draghi’s out- would she bother?” right monetary transactions policy, The volatile nature of the Eurozone helping to increase confidence in the implies that traders should be cau- euro. Spain has used this confidence tious not to overextend themselves. to delay seeking aid, with minister of Derks believes that the strategy the economy Luis de Guindos claim- should be to “buy into euro weak- ing that they are in no rush, exasper- ness, but not in a substantial way”. ating policymakers and investors. He sees scope for euro appreciation However, uncertainty remains: against sterling over the next few whether the ESM can be used to buy months and it could hold its own “legacy assets” of Spanish and Irish against the dollar. But traders should banks is unclear (legacy assets are bad not get complacent about this period investments that banks made, for of relative calm, which may turn out example, sub-prime mortgage securi- to be an aberration. WEALTHMANAGEMENT FOREX 19

A striking impact South Africa’s woes hit the rand to lows Industrial action takes its toll, writes Yogesh Chandarana

EARS that miners’ strikes are having an impact on the broader South African economy have dragged the rand down to three-year lows F against the US dollar. With industrial action threatening to creep into other sectors, the outlook is bleak for the economy and is reflected in its currency. The rand is seen as a gauge of emerging market strength. South Africa is one of the world’s leading mining and mineral-producing economies, and the combination represents approximately 60 per cent of South Africa’s exports. But the rand has been suffering recently: slowing global demand – particularly from emerging markets like China – has dragged on exports, putting downward pressure on the rand. South Africa’s 2.6 per cent forecast for GDP growth now looks to be in jeopardy. Up until recently, domes- tic demand was holding up well, which helped to off- set the loss in exports. But the fallout from industrial action could extinguish this flame. Traders should factor in weak economic performance in the third quarter and, if the situation does not improve in the short term, the final quarter too. At a time when South African unemployment is already at an eye-watering 25 per cent, Sven Richter of Renaissance Capital says that we may see further strains on the jobs market as a result of the industrial action: “As corporations see what is happening, they will start controlling their wage bills more tightly,” and will be discouraged from adding to staff levels. Ironically, the weakness in the rand may help boost demand in the medium-term for the very commodities whose production is being crippled by strikes. Richter says: “I am not too worried about a weakness in the rand. We could see it fall down to 9.5 rand per dollar before strengthening, which I am comfortable with.” Richard Wiltshire of ETX Capital believes that, although “recent rand losses may be overdone, the cur- rency is still in trouble in the near term against the dollar”. From a price perspective, dollar-rand has shown a bullish breakout, but Angus Campbell of Capital Spreads says “there is a high degree of uncer- tainty”. Regardless of the latest unrest, the rand has been depreciating against the dollar for some time and “the technical trends point to further weakness”. Yesterday, news emerged that some freight workers ended their strike, but Wiltshire says that “any positive news is likely to be a concern for the ‘late to the party’ rand shorts” who only took positions due to the recent negative headlines. The lesson for traders is to proceed with caution. Richter says that the currency is one of the most volatile in the market and traders should “be extremely careful. The rand can turn against you very quickly.” Dollar-rand R 8.5

8.0

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6.5 JAN ‘10 JUL ‘10 JAN ‘11 JUL ‘11 JAN ‘12 JUL‘12 WEDNESDAY 10 OCTOBER 2012 20 THEFORUM cityam.com/forum The EU’s unstoppable ambition is stirring up trouble for the future N EUROPEAN cinemas a short ond film, produced last year, features Take European commissioner ambition and complete lack of interest video called Hidden Treasures of Kung-Fu fighters who eventually drop Viviane Reding’s plan to submit enter- in reality that makes the European Europe was broadcast last year. their arms and are peacefully sur- prises to a binding minimum quota of class so dangerous. Regardless of the Produced by the European rounded by the twelve yellow stars of women. In the name of human rights costs, the cultural and political differ- Commission, it starts with the EU flag. The clip was withdrawn and non-discrimination, this quota ences, the economic stagnation, the Isynthesizer chords reminiscent of because it was allegedly racist. A third will surely mean a lot of extra work for resistance of the people; this elite just Bach. We see a mountain lake and project was a European diary – distrib- Brussels – extra rules, extra employees, goes on chasing its goal of European hear church bells. The question THIERRY BAUDET uted to schools in over 3m copies. The extra importance, extra everything. unification. The most intrusive rules “Sweden?” appears, followed by the aim was to make children comfortable And, in time, it will surely require are devised to make the project legiti- answer “Montenegro”. Two girls region is different and this is what with European unification from an mate. The most ridiculous clips are watch their mobile phones. The makes it so vibrant, exciting and fasci- early age, and to make clear that the shown in cinemas to persuade the question “France?” appears. And then nating. But is it that different?” EU is a multicultural undertaking. The Regardless of the public. the answer: “Serbia”. The game goes Like the five-star hotels and business diary mentioned the festive days of all ‘ But it just doesn’t work. Our national on for a while, until the sequence lounges that make up the living envi- religions – Islam, Buddhism, costs, the Brussels elite differences are the strength of this finishes with an Hellenic temple. ronment of a European commissioner, Hinduism, and so on. Except for one. continent. And the more they are “Greece?” “Albania”. A cute little girl parks and office buildings are indeed Christianity. Forgotten. just goes on chasing its upset by Brussels’s bureaucratic bul- frisks happily over the sunny grass. similar in different countries. But that My work brings me to Brussels every lies, the likelier a violent response The screen turns blue, and the text “So is not the case with the people popu- now and then. The old city centre feels goal of unification becomes. The reasonable solution to similar, so different, so European” lating them. like it’s under siege, infested by several the EU’s current crisis is orderly dis- appears. A map of Europe including Deep political, moral, cultural, lin- kilometres of EU offices. Huge banners mantlement, like the dissolution of Turkey looms up, and underneath it: guistic, religious, historical and eco- are draped along the facades of the additional regulations and interven- Czechoslovakia in the 1990s. The “Growing together”. nomic differences divide Europe, as massive bureaucrats’ offices, proclaim- tions. For once it is established that a longer political leaders deny this reali- The European Commission spent the euro crisis has shown. That the ing the official political agenda. For certain percentage of women should ty, the likelier a Yugoslavia will be about €500,000 (£401,000) on this film. EU’s officials are unable to distinguish instance: “Improving animal welfare – be employed, a quota for female stu- instead. It was an initiative of the European Germany from Turkey, France from Jose Manuel Barroso”. Or: “Creating dents at European universities must Dr Thierry Baudet is a teacher at Leiden commissioner for enlargement, the Serbia, and Sweden from Montenegro, strong economic governance”. These surely come within reach, inevitably Law School and author of The Significance of Czech Stefan Füle. The clip is meant to is as hilarious as it is tragic. are slogans no one can really object to, followed by uniform child care provi- Borders. He is speaking at the Battle of Ideas show “just how gorgeous and surpris- The EU’s total budget for “communi- but which are then used to regulate sion across the continent. festival at the Barbican on 20-21 October, ing southeast Europe can be. Yes, the cation” is around €140m a year. A sec- our lives in every detail. It is the combination of boundless partnered by City A.M.

Agree? Disagree? Got a sharp comment? The Forum wants you to join the debate. Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected] Top responses will be reprinted in The Forum. Krugman’s senseless manifesto is good on rhetoric but bad on economics OBEL Prize winner Paul recession, 4.25m net jobs have been monetary policy. This only served to fell only 4 per cent, compared to the Krugman will shortly be in created. Contrary to widespread intensify the fall in output. 27 per cent in the 1930s. town. With Lord Richard AGAINST perceptions in Britain, the This time round, we had more The world was very fortunate that Layard, he will be calling for Americans have been shrinking the luck. The chairman of the Federal the chairman of the Fed was an more public spending and size of the state. Public sector Reserve, Ben Bernanke, was an economic historian and not from the Nborrowing. The two have issued a THE GRAIN employment has fallen by half a academic who specialised in the academic economic mainstream. Manifesto for Economic Sense. But is million. The private sector has more economic history of the 1930s. In the There, the bizarrely named dynamic it? PAUL ORMEROD than filled the gap, with terrifying autumn of 2008, neither stochastic general equilibrium The opening sentences make employment expanding by 4.75m. he nor anyone else knew exactly models dominate. Their policy dramatic claims: “More than four There is one massive difference in what to do. But he knew what not to prescriptions might very well have years after the financial crisis began, world economy is booming, but it is the conduct of economic policy do. precipitated a repeat of the 1930s. the world’s major advanced just as wrong to claim that the during the 1930s and since the crash Bernanke understood that there But the calls from people like economies remain deeply depressed, world’s major advanced economies of 2008. Milton Friedman and Anna was a real risk of a dramatic cascade Krugman and Layard for fiscal in a scene all too reminiscent of the remain deeply depressed. Schwartz wrote a monumental tome of bank failures. So after Lehman expansion and bigger deficits, 1930s. And the reason is simple: we Output in both the United States entitled A Monetary History of the Brothers, no other bank was allowed argued from the best of motives, can are relying on the same ideas that and Germany is above the previous United States. It languished unread to fail. He realised the catastrophic be just as dangerous. governed policy in the 1930s.” peak levels at the onset of the for a number of years until Friedman impact of tight monetary policy in Paul Ormerod is an economist at This makes for good rhetoric. No recession in 2008. Unemployment in sprang to fame 40 years ago. They the 1930s, hence quantitative easing. Volterra Partners, a director of the think- doubt the BBC will swallow it whole. America has fallen from a high of 10 show that throughout the Great So policy has been completely tank Synthesis and author of Positive Unfortunately, it is simply not true. It per cent to 7.8 per cent in September Recession of the 1930s, the American different this time round, and much Linking: How Networks Can Revolutionise would be foolish to say that the this year. Since the trough of the authorities ran a contractionary more successful. Output in the US the World.

The countdown down begins, begins, join join us us on on 17 Octoberf for the CA City A.M. A Awards. Grange St.Paul’s Hotel, London Visit: www.cityamawards.com to book your place.

in association with champagne reception sponsor venue sponsor category sponsors WEDNESDAY 10 OCTOBER 2012 21 The Forum is open for you to take part. Got a sharp comment on one of today’s columns? Do you have another subject you want to share your opinion on? We want to hear your views. Email [email protected] or comment at cityam.com/forum RAPIDresponses Robust copyright Sharing is caring TOP TWEETS is invaluable for a [Re: Osborne’s employment incentives idea Enterprise matters. Start-ups that scale up The popularity of Boris Johnson illustrates how is no game changer, Tuesday] are the lifeblood of a modern economy. UK politics has become reduced to a mixture of If the purpose of the idea is to give workers Launching a successful business, however, is Big Brother and the X Factor. a vested interest in the business, with the no mean feat and high-impact @DrNostromo carrot of not paying capital gains tax on any entrepreneurs are still too rare a breed. The thriving economy profit that those shares make, then there are chancellor’s announcement yesterday is a Obama projected a 2012 budget deficit of $557bn. It is actually double that at $1.1 trillion. already existing schemes in operation such welcome step forward. New employee OPYRIGHT. Can you think of as the Executive Management Incentive owners will be able to exchange some of We can’t afford four more years. @realDonaldTrump anything more boring, more scheme. And what of the charge to income their employment rights for company old-school, more passé? tax, and national insurance; will these shares, free of capital gains tax (CGT). We Poor Angela Merkel. We’ve all been to the Surely it stands in the way of disappear? They were not mentioned by the need greater flexibility for employers and Mediterranean and bought a souvenir we wish people just helping chancellor. As a one size fits all proposal for employees and action on CGT on shares; this we hadn’t. She bought the entire Mediterranean. themselvesC to the things they find “one nation” it is sadly lacking. The proposal is an imaginative approach that hits @Queen_UK online? Its defenders are old could more accurately be described as elements of both. We need to do everything businesses who want to use it to DOMINIC YOUNG dividing rather than uniting the nation. we can to help our start-ups to scale up. I applied to the Bank of England. I listed my cheat, because they can’t compete Phiip Henson, partner and joint head of Chris Yiu, head of the digital government unit main aim as privatising it. You never know! their way to online success. But be a particularly sophisticated econ- employment law at DKLM LLP at Policy Exchange @Joe_Armitage before we all rush off to the brave omist to know that if everyone new world where everything is free, could have unlimited amounts of let’s take a look at another money then it would all be worth- similarly artificial, legally less, and you don’t need vast conjured, economic intervention: amounts of imagination to see how money. dramatically that would affect our Should home owners have the right to use Money has more than a passing society. The idea of it is just absurd. resemblance to copyright. It is a Yet when it comes to copyright we legal construct rather than a natu- are asked to believe that because ral phenomenon. It works through the technology for copying exists, disproportionate force against intruders? restrictions and limitations, mainly attempts to regulate or control it of supply, and by doing so creates are futile. Credulous legislators wealth and hugely complex mar- seem to be seduced by the idea that kets of every kind. we are creating a great new digital Money depends on legally created economy in which creators’ rights restrictions and ownership rights. are pretty unimportant. You can’t legally get more money The last decade or so of a largely just by copying it, even if it’s techni- copyright-free internet has generat- cally simple. If you get caught try- ed huge wealth, for sure. But a few, YES NO ing, you go to jail. Everyone wants lucky, mostly American, billionaires more of it, but money is relatively have been the big winners in the hard to obtain. Demand outstrips content game. Creators, and those Robert Buckland Michael Wolkind supply. Despite this we have become who invest in them, have found steadily wealthier over time, and meagre rewards even when they The government is right to want to give home owners the peace Chris Grayling continues his campaign for householders to have because people can choose what to reach enormous new audiences. of mind to know that they can defend their homes and their the right to use disproportionate force against intruders. Longer do with their money its uses have It is time to call a halt. And there property without fear of being treated like a criminal. We have term he might be aiming for the right to jump on the dead body become ever more diverse and are signs globally that the creative all heard stories about the victims of burglary finding of your burglar. His proposals are a noisy nothing. He should ingenious. industries have stopped apologising themselves prosecuted and the time has come to send out a know that the current law allows the use of reasonable force. He Copyright worked for 300 years to for copyright and started fighting clear message: that criminal activity will not be tolerated and should know that action taken instinctively and honestly is ensure that the same happened in back – whether in the courts that criminals should expect to meet resistance. Burglary should strong evidence that it was reasonable. He should know that in the creative field, as a casual glance against exploitative businesses, as be regarded as an offence against people, not against property, practice his proposals will make no difference to decisions to at the countless books, TV channels, the Newspaper Licensing Agency because a householder’s sense of security and well-being is prosecute or jury verdicts. The current law doesn't ask for newspapers, magazines, records has done, or via the launch of new destroyed by burglary. Which is why we need to support the impossible restraint. It doesn’t impose a test of “cold light of and other media can confirm. But copyright compliant services, such secretary of state’s proposals that would clearly put the law on day” reasonableness. Prosecutors and courts always look are now we’re told that because copy- as the streaming of music and e- the side of the home owner. There should be no confusion about the reality of the circumstances – the dangers the householder ing is easy, it’s inevitable, and the books which encourages consumers who is the victim and who is the offender. faced and the fears he felt. price paid by individual creators to act legally. Robert Buckland is a barrister, MP for South Swindon and is a Michael Wolkind QC is a criminal trial and appeals barrister at 2 and companies is outweighed by Dominic Young is an entrepreneur, for- mer chairman of the Newspaper Licensing member of the Justice Select Committee. Bedford Row. the benefit to society overall. That’s nonsense. You don’t need to Agency and blogs at copyrightblog.co.uk

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LIFE&STYLE MOTORING BY RYAN BORROFF Aston Martin strikes the right balance While it may look similar to past models, the Vanquish is all new and looks pretty good on the eye too T’S THE best car we’ve ever made,” says Dr Ulrich Bez of the new Vanquish. I resist the temptation I to ask Aston Martin’s boss whether its new flagship GT is better than the £1.2m-plus One-77 hypercar or the less extreme, but almost as exclusive, V12 Zagato now on sale. To be fair, Bez isn’t referring to the hand-formed special edition cars that push the brand even higher into über-exclusivity. He’s referring to how the new £190k DBS replacement gives buyers access to some of the technologies previously only avail- able on its special edition cars. Like the One-77, the Vanquish is built from carbon fibre and alumini- um. It has an elegant waist, muscular haunches and side strakes which extend into the doors. Its carbon fibre body panels mean previously unachievable forms are now possible; so the door side strakes look as if someone just pinched them out and the lip of the rear spoiler rises upwards in a sculptural fashion above the LED rear light “blades.” Unlike the more brutal-looking DBS it replaces, the new Vanquish man- ages to be both elegant and athletic. This visual balancing act is important because the new Vanquish has been built to be much more agile but with- out sacrificing the comfort required The elegant and of a long distance grand tourer. And athletic body of the the results are stunning. Vanquish From a sporting perspective, there’s no doubt 2012 belongs to the British athlete so it’s a good year to intro- duce a quintessentially British sports THE FACTS: car. Unusually, the car is launched to ers chose it so what do I know? trols (and the paddle shifters) have a But as anyone who drives such cars the world’s press in England on some Despite having essentially the same rubberised feel, while glass buttons regularly will tell you, straight roads ASTON MARTIN VANQUISH very challenging roads between footprint, the interior of this vibrate their feedback when you oper- are for Americans; Europeans like cor- Newport Pagnell and Newmarket. Vanquish is bigger than the DBS it ate the greatly improved infotain- ners. Here the Vanquish is surprisingly PRICE: £189,995 Brave indeed because some of these replaces. As absurd as it sounds, the ment system. The result is an interior adept. Make no mistake, the Vanquish Fen roads undulate like a sound wave cockpit is not only luxurious – soft that looks and feels a great deal feels like a big GT but now, much less 0-62MPH: 4.1 secs rollercoaster which is a difficult sur- cream leather, chrome and carbon younger. so through the bends. It’s agile and face for any car to get to grips with, fibre – but roomy. Aston Martin has Hit the start button and the engine feels more responsive and while the TOP SPEED: 183mph let alone a supercar. gone to great lengths to squeeze every thunders into life. The resonant ride is firm, it is comfortable in nor- CO2 G/KM: 335g/km As I drop into the driver’s seat I find millimetre of space it can out of the 565bhp 6.0-litre V12 engine has an mal mode and more characterful in myself looking at a square steering cabin. Instead of a glovebox there is even better note and sits lower in the sport mode with the baffles constant- MPG COMBINED: 19.6mpg wheel. For accuracy, I should say it more legroom. As any Aston Martin chassis to improve handling. I hit ly open. isn’t actually square but squircular. owner will tell you, the glovebox in launch control then push the accelera- Is this Vanquish the best Aston It’s the same steering wheel found in the DBS was so small that you could tor down “beyond 80%.” There’s a beat Martin ever made as Bez claims? It’s THE VERDICT: the One-77. I grow accustomed to it only ever keep the owner’s manual in pause and then off it goes with virtual- certainly better than the DBS it DESIGN hhhhh but I don’t love it. Thankfully you can it, which – trimmed in leather – was ly no wheel spin. So well-controlled is replaces. Do you need one? Of course PERFORMANCE hhhhi choose not to have it – though Aston such a lovely thing it was kept away in it that I lament the lack of drama. Of not. Nobody needs a fast and beauti- PRACTICALITY hhhii Martin says more than two-thirds of the house anyway. The centre console course, with figures showing 0-62mph ful supercar. But then that is not the hhhii Vanquish sales so far have seen buy- is narrower; the dial turn audio con- in 4.1 seconds, this is a very quick car. point. Is it? VALUE FOR MONEY CAR TALK BY RYAN BORROFF

The new Volkswagon Golf The new Kia Sorento The new Caterham Seven Volkswagen has released prices for the new seventh-generation Golf. Kia’s latest Sorento SUV has been revamped and will now be sold only Ever dreamed of racing professionally? Buying the latest, fastest-ever Starting from £16,330, it will be sold with a choice of four petrol engines as a seven-seater. The new re-engineered car is bigger inside and Caterham and racing it in the top class in next year’s Superlight R600 and two diesel engines. All will have seven airbags, semi-automatic air- should be more refined and more fun to drive. It should also be cheaper Championship might be the closest you’ll ever get. The Superlight R600 con and a touchscreen entertainment system with DAB radio that’s teed to run than its predecessor. With all-wheel drive and a 2.2-litre CRDi is the first supercharged production Seven the iconic British sports car up for your bluetooth phone, MP3 player and USB card. GTI and turbo-diesel engine as standard, it’s an appealing choice for family maker has ever produced, with a 2-litre Ford Duratec engine, producing BlueMotion models follow in 2013. trips. 275bhp. It’s yours for £44,995. WEDNESDAY 10 OCTOBER 2012 24 LIFE&STYLE FASHION cityam.com Get ready for the Simons effect

When it comes to setting the agenda, Dior’s Raf Simons leaves YSL in the shade Clockwise from top HE TENTS are down, brands capture the imagination of tomor- allowed himself to be held back by left: An have packed up and press and row’s luxury customers and it would- the brand’s history. The ball gown, updated buyers have finally retreated FASHION n’t be too harsh to say that both Dior for example — something very few ball gown T back to their respective cities; and YSL have been lacking on that designers have been able to update at fashion month is well and truly over. front for a some time. While the for- — came pared down with a black Christian And with everything coming to an SENSE mer has been embroiled in drama sweater style up top; a clear sign if Dior; a end, people’s attention has quickly upon drama since John Galliano’s fall ever that today’s woman wants to strapless moved from the collections to the from grace, the latter hasn’t done live in her clothes rather than simply ongoing feud between the New York NAOMI MDUDU anything particularly ground break- admiring them from afar. coloured Times’ Cathy Horyn and Yves Saint ing either so both appointments were The same wasn’t true at Yves Saint dress at Dior; Laurent’s new creative director Hedi movie — there’s the long standing not coincidental. Both are seen as Laurent. Despite inititally coming Raf Simons’ Slimane (Horyn was allegedly forced rivalry between the two fashion hous- innovators and the kind of designers across as quite the rebel when take on to review the show from images after es, the drama and the intrigue – but that dance to the beat of their own announcing his decision to change futurism; a being refused an invitation). As much more than anything else, the collec- drum and this year is particularly the brand’s name to Saint Laurent floral as the battle has, to a large extent, tions were an important indicators of important for both labels as Dior Paris, Slimane actually proved him- embroidered detracted from what has actually where fashion is headed. turns 65 years-old and YSL, 50. self to be more loyal to the brand’s ‘Bell’ jacket at been a very strong season, in reality it Forgive me if I sound a tad on the The big question, then, is did they heritage than many had expected. To Dior; a model perfectly mirrors the raised dramatic side but it’s true. All you do it? Raf Simons certainly did. Like that effect, the collection didn’t steer wearing a classic temperature and drama that need to do is look at the effect Phoebe for couture, he made sure to pay hom- too far from what the label produced wide brimmed characterised Paris fashion week. Philo had when she arrived at Céline age to the past. He did this by tapping in the 60s and 70s, leaving editors hat at Yves Saint Women’s Wear Daily was not far off back in 2008 at a time where just into the label’s signature ‘bar’ silhou- wishing that he’d put his own stamp Laurent; Edie the mark, then, when it ran the head- about everything was embellished ette, but thankfully the nostalgia on things, which, in fairness, was Cambpell line, “Paris Face-Off,” accompanied by and hemlines were just as high as the ended there. Dresses came in high- what they initially criticised him for. modelling a an image of Slimane pitted against shoulder pads on Balmain inspired tech iridescent fabrics and had a sexu- The lesson learnt? If you want to suede outfit at Dior’s new creative director, Raf jackets. She completely changed the al feel to them, showing that Simons’ know where fashion is headed not just YSL; Hedi Simons. The anticipation surround- way women dressed and the same pared down aesthetic isn’t as diamet- for next season but in years to come, Slimane’s take ing both designers’ respective wom- was expected of Slimane and Dior. rically opposed to sexuality as one look no further than Raf Simon’s new enswear debuts has had all of the Luxury brands are increasingly look- might have thought. More than any- vision at Dior. Where he goes, the rest on “Le characteristics of a great Hollywood ing for ways to tap into the “new” and thing, it proved that he hasn’t will most certainly follow. Smoking.” WEDNESDAY 10 OCTOBER 2012 cityam.com TV & GAMES 25 BBC1BBC1BBC2 ITV1 CHANNEL4CHANNEL4 CHANNEL5 TV PICK 6pm BBC News 6.30pm BBC 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away London News 6.55pm Party 6.30pm Strictly Come Dancing 6.25pm Party Political 6.30pm Hollyoaks 6.30pm 5 News at 6.30 Political Broadcast –ItTakesTwo Broadcast 7pm Channel 4 News 7pm Eddie Stobart: Trucks and 7pm The One Show: BBC News 7pm The Story of Wales: 6.30pm ITV News 7.55pm 4thought.tv Trailers: 5 News Update 8pm Watchdog A New Beginning 7pm Emmerdale 8pm The Food Hospital 8pm CHOICE New Emergency 9pm CHOICE Who Do You 8pm Great British Food Revival 7.30pm Coronation Street 9pm Grand Designs Think You Are? 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Errol Morris’ Jackpot247; Dance 1.25am Style Studio 2am 12.45am SuperCasino TERRESTRIAL of political intrigue and treason. the Top 2.25am Cash Britain documentary about a notorious ITV News Headlines FILM My Brother Nikhil 2005. 3.55am Great Scientists 4.20am 2.55am Celebrity MasterChef kidnapping case. 2010. 3am British Touring Car 4.05am Deal or No Deal 5am House Doctor 4.45am Michaela’s 3.25am Celebrity MasterChef 1.15am BBC News 3.55am-6am Championship Highlights Countdown 5.45am-6.10am Wild Challenge 5.10am-6am 3.55am-6am BBC News BBC Learning Zone 4.15am-5.30am ITV Nightscreen Baking Mad with Eric Lanlard Wildlife SOS SKY SPORTS 1 Campus 9.30pm Wednesday Market 9pm Mount Pleasant Viral Ads 11.05pm Shameless Hunters 4.40am Raging Planet 9.35pm 10pm 12am 12.05am 5.30am-6am 7pm Live Darts 11pm FIFA Futbol Selection Show Jumping Supernatural Mount The Big Bang Theory Meerkat Manor 10.35pm Riders Club 10.40pm Pleasant 1am Bones 1.50am 1.10am How I Met Your Mother Mundial 11.30pm A League 11.10pm 2.40am 1.40am 2.05am 12am 2am European Tour Golf Ladies Criminal Minds Scrubs The IT DISCOVERY HOME & Football Masters Tennis 11.20pm 3.30am 2.35am 3.15am 2.30am European Tour Golf Golf Supernatural Bones Crowd 90210 One FIFA Futbol Mundial Total 11.25pm 11.30pm 4.20am 5.10am-6am 4am HEALTH 3am Club Yacht Club Medium Tree Hill Being Erica DCI BANKS Rugby Trans World Sport 11.35pm 4.40am-6am 7pm Dr Oz 8pm Born 4am 4.30am Alexia’s Selection America’s Next Top Model: All- Switched FIFA Futbol Mundial 11.45pm Schizophrenic: January’s Story ITV1, 9PM CABLE Wednesday Selection Stars Rugby 5am A League Football 9pm Tennis: Mats Point HISTORY Born Schizophrenic: January’s The detective goes in search of his 5.30am-6am FIFA Futbol Mundial 10pm 12.15am-12.30am GT Academy: BBC THREE 7pm Storage Wars 7.30pm Pawn Next Chapter Trauma: Life in estranged brother, just as new recruit CABLE & 11pm Race to Dubai 7pm Great Movie Mistakes III: Not Stars 8pm Storage Wars 8.30pm the ER I Want To Hurt My Helen Morton finds evidence linking SKY SPORTS 2 12am in 3D 7.20pm FILM Meet the Storage Wars: Texas 9pm Swamp Baby Born Schizophrenic: Banks to the body of a murder victim. & 7pm 8pm 1am Trans World Sport ESPN Parents 2000. 9pm Be Your Own People 10pm Ax Men 11pm January’s Next Chapter 10pm 12am Masters Tennis Poker 6.30pm Live WSL Continental Cup Boss 10pm Unzipped 10.45pm Storage Wars 11.30pm Pawn Stars Trauma: Life in the ER 2am I Want World Eightball Pool Final 9.30pm Premier League Family Guy 11.30pm American Dad 12am American Pickers 1am To Hurt My Baby 3am I’m 1am-5am Championships Darts World 10pm ESPN Kicks: MLS Weekend Viewers’ Vote No 6 Swamp People 2am Ax Men 3am Pregnant and 55 Years Old 3.30am 10.30pm ESPN Kicks: Extra 11.55pm American Dad Weekend Swamp People 4am The Last Days I’m Pregnant and a Hoarder SKY SPORTS 3 10.45pm ESPN Kicks: Brasileirao Viewers’ Vote No 5 12.15am of World War Two 5am Pawn 4am-6am A Baby Story 7pm Inside the PGA Tour 7.30pm 11pm ESPN FC Press Pass Unzipped 1am Be Your Own Boss Stars 5.30am-6am American European Tour 8pm Golf 10pm 11.30pm UFC: The Ultimate Fighter 2am Creationism: Conspiracy Road Restoration SKY1 Cage Rage 12am Asian Tour Golf 12.30am Live Major League Trip 2.55am-3.55am Don’t Tell the 8pm The Glee Project 9pm Trollied Show 12.30am Golf 2.30am Inside Baseball 3.30am 30 for 30 Bride DISCOVERY 9.30pm An Idiot Abroad 2 the PGA Tour 3am European Tour 5.30am ESPN Kicks: Extra 7pm Bear Grylls: Born Survivor 10.30pm Road Wars 11.30pm Dog NEW EMERGENCY BIKERS SATELLITE SATELLITE 3.30am NFL 4.30am-5.30am 5.45am-6am ESPN Kicks: E4 8pm American Guns 9pm Fast ‘n’ the Bounty Hunter 12.30am Road CHANNEL 5, 8PM World Endurance Championship Brasileirao 7pm Hollyoaks 7.30pm How I Met Loud 10pm Auction Hunters 11pm Wars 2.30am The Top Ten Martin Smith has a close encounter Your Mother 8pm The Big Bang Gold Divers 12am Fast ‘n’ Loud 1am Show 2.40am UK Border Force with flying debris in North Yorkshire BRITISH EUROSPORT SKY LIVING Theory 8.30pm 2 Broke Girls 9pm Auction Hunters 2am Sons of Guns 4.35am Best of Oops TV and Cornish paramedic Keith Moran 1pm Live WTA Tennis 9pm 7pm Criminal Minds 8pm Cooks to Meet the Parents 10pm Rude Tube: 3am Fast ‘n’ Loud 3.50am Auction 5.30am-6am Airline helps a woman in agonising pain. 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11 32 15 4 12 17 34 5  SUDOKU KAKURO 12 28  23 10 Place the numbers from 1 to 9 in each empty cell so that Fill the grid so that each    each row, each column and each 3x3 block contains all the 3 7 block adds up to the total 13 33 35 4 numbers from 1 to 9 to solve this tricky Sudoku puzzle.     in the box above or to the 29 21 8 left of it. 45        You can only use the 22    digits 1-9 and you must not 14 18 24 16 33 9 use the same digit twice in 45    a block. The same digit may 13 11    occur more than once in a  row or column, but it must 16 13    be in a separate block. 11 17 13 8  29 15     14 30     ACROSS DOWN 1 Captivate (5) 1 Gossamer structure (6)    5 Seedcase (3) 2 Intruders (11) WORDWHEEL 7 Hawaiian greeting (5) 3 Overly eager speed (5)   O N 8 4 Using only the letters in the Wordwheel, you have Makes tea (5) Spool-and-string 9 toys (2-3)   ten minutes to find as many words as possible, Fragrant rootstock D I of various irises (5) 5 Treating with an none of which may be plurals, foreign words or 12 apparent kindness proper nouns. Each word must be of three letters S Particular look on someone’s face (10) which betrays a feeling or more, all must contain the central letter and W L LAST ISSUE’S 16 Scottish hillside (4) of superiority (11) letters can only be used once in every word. There 17 6 Raised platform (4) SOLUTIONS KAKURO is at least one nine-letter word in the wheel. FE Upon (4) 19 Hypothesis 10 Uproar (4) 11 Keen on (4) QUICK CROSSWORD 1 2 4 3 689 3 that is taken for 7 689 4 6 2 1 SUDOKU granted (10) 13 Medical ‘photo-   TEAMS JADED 4 9 2 3 9 22 Abnormal swellings graph’ (1-3) U O U O U     5 1 9 7 8 1 2 on the body (5) 14 Remainder (4) SNARL SELLS    K POST L T 9 3 4 71 5268 23 Board used with 15 Add together (3) SASH IMI SPY 1 5 9 3          a planchette (5) 18 Moving in the S SN I FF E 4 5238716 9 WORDWHEEL    SHE CL I ENTS 7 9 1 52 7 8   24 Of the country- direction ahead (6) A M LEER U 2 8 9 1 8          side (5) 20 T ABOO DR AWN The nine-letter word was Appropriate (5) I E T E N 2 714 75 9 8 FLYWEIGHT   25 Belonging to him (3) 21 Town in Dorset (5) NORTH I TCHY 8 9 4 6 1 3 52   26 Advanced slowly (5) 22 Money (4) 26 WEDNESDAY 10 OCTOBER 2012 SPORTcityam.com/sport @cityam_sport Three Lions, four stoppers Hart not best in JOE HART MAN CITY The 25-year-old is world yet, says one of the first names on England’s team sheet. An exception- ally athletic and con- fident individual, Hart is widely considered ‘66 hero Banks one of the world’s best goalkeepers, is possi- bly the greatest in the Premier League, and EXCLUSIVE The same goes for Man City – he continues to improve his game. mustn’t think ‘don’t worry, I’ll do BY DECLAN WARRINGTON what I want and I won’t worry about ENGLAND’S only World Cup if I make a mistake because I’ll get JACK BUTLAND winning goalkeeper Gordon Banks picked again’. If he gets that attitude BIRMINGHAM believes Joe Hart is not yet the then he won’t be as good a goalkeep- Great Britain’s goal- world’s finest and has conceded that er as he wants to be.” keeper at the London the lack of a genuine back up to him The reality is that Hart’s selection 2012 Olympic Games, is a sincere concern. is as common a matchday feature for Since succeeding David James as England as the Three Lions crest that Butland has long been England’s first-choice goalkeeper fol- appears on each individual kit. Like considered a future lowing the disastrous 2010 World perhaps no other English goalkeeper England international Cup campaign, Hart has developed to with the exception of David Seaman but, at 19, is surely still too raw for Roy the previously unpredictable level and Banks before him, Hart’s position Hodgson to rely on. It also shouldn’t be over- of a world-class individual and one is under little threat from any which looked that he’s still a Championship player. of the national team’s most is partly why in scarcely over five important players. The recent atten- months in charge, England manager tion bestowed upon him is a product Roy Hodgson has already given inter- JOHN RUDDY of both his consistently exceptional national debuts to two goalkeepers – NORWICH form and his public outburst of dis- Jack Butland and John Ruddy – and The former Everton tress when club side Manchester City included a third, Fraser Forster, in the conceded two late goals in a 3-2 international squad for the first time. goalkeeper was a sur- defeat away to Real Madrid, and The theme of England’s lack of prise inclusion in Roy Banks, as qualified a judge as any, is strength in depth is a growing one in Hodgson’s Euro 2012 among those that believe his grow- the national game, and there are squad and, like ing reputation to be justified. multiple theories for that particular Butland, made his “Hart’s definitely a terrific goal- predicament, but for Banks the debut in England’s 2-1 friendly victory over keeper. For his age, he’s doing problem is considerably more simple tremendously well, and he can even and obvious. Italy. Could struggle for recognition if get better with experience. I’m look- “I think it’s the foreign managers Norwich’s poor form continues. ing for him to be the [world’s] best that we have in this country,” Banks goalkeeper,” Banks told City A.M. at explains. “They’ve got a little bit of FRASER FORSTER the launch of The Football Pools 90th money to spend and they will go and Season campaign. buy players from their country, or for- CELTIC “I don’t think he’s there just yet, eign countries, instead of giving the The £2m arrival from he’s still got a bit of time, and as the English players a chance to get Newcastle, 24, is the first years go on you become better through. Not just the goalkeepers, Scotland-based player to with experience. The Spanish goal- but outfield players too. That’s why receive an England call keeper, Iker Casillas, [is the best]. Mr Hodgson’s only got a few people to up since Alan Thompson I’ve liked him for a few years now, select from. It’s a concern.” in 2004. A highly-rated individ- he’s excellent. Gordon Banks was speaking at the “Hart’s done really, really well. But launch of The Football Pools 90th Season ual with Champions League experience. I wouldn’t want him to get over con- campaign – In the 90th – that crucial Though uncapped, Forster could yet emerge fident, because we haven’t got any- minute when fortunes are decided. Play as Hart’s most promising rival. one that’s pushing him for his place. now at www.thefootballpools.com. IN BRIEF Results World Twenty20 illustrates difficulty Bolton sack manager Coyle AF?EJKFE<ËJG8@EKKIFG?PJFLK?i`djYp)# 9Xiifn*Jflk_gfik)#;Xik]fi[(8=:K\c]fi[+#=fi\jk>i\\e It’s no coincidence that these energies on replacing Andy Flower’s success in recent years, with game the “cancer” of football. “It is (KXdnfik_)#>Xk\j_\X[)DXZZc\j]`\c[)#B`[[\id`ejk\i* three teams are the top Test sides in men at the head of the world Test acrimony between players and board becoming a little bit of a cancer within ?p[\'#Clkfe)9iX`eki\\Kfne*#DXej]`\c['C`eZfce:`kp'# E\ngfik:flekp(L<$HL8C@=P@E>GFFC the game. to combine a great T20 side with reminded us is that when they are severely punished for that,” he said. )ÇLmXE\okmPfibj_`i\ Af_Xee\jYli^ 1LmXE\ok(,'$. Undoubtedly both England and a top Test set-up, but so different all fit and playing they are a brilliant )'%'fm\ij %Pfibj_`i\(,($, (0%*fm\ij %Pfibj_`i\ )gkj  South Africa were distracted from are the two disciplines that it’s one-day side who can compete Y\XkLmXE\okYp,n`Zb\kj% their preparations for the World very difficult. against anyone. Murray hopes for further success Twenty20 by the Test series between The other surprise of a hugely Andy Lloyd is a former England Test n TENNIS: Andy Murray has admitted KF;8PËJ;@8IP the two teams during the summer. enjoyable tournament for me was cricketer and captain of Warwickshire he is targeting a strong end to 2012. .%+,gdlec\jjjkXk\[ Having concentrated all their that West Indies lifted the trophy who also acted as the county’s chairman. 9cl\JhlXi\9\kGi\d`\i1JkfZbgfik:flekpmNi\o_Xd% WEDNESDAY 10 OCTOBER 2012 cityam.com 27 Britons Mo Farah and Jessica Ennis have been rewarded for their Olympics success with respective nominations for the IAAF’s male and female world athlete of the year awards Cole conclusion League won’t ban Wonga deal

BY FRANK DALLERES area with the highest personal season in the top flight. The short- is a relief for insolvency rates in the country, term, high-interest lender still PREMIER League chiefs have ruled while the Football Association sponsors the Tangerines, now in the out intervening in the row over responded to supporter concerns by second tier, and Scotland’s Hearts. happy Hodgson Wonga.com’s sponsorship of insisting it would raise the issue Wonga is paying £6m per season Newcastle United, despite the storm with leagues. from next term to adorn Newcastle’s BY DECLAN WARRINGTON that greeted yesterday’s £24m four- The Premier League declined to shirts. The deal will also see the year deal between the club and the comment but it is understood that it club’s stadium revert to its original ENGLAND manager Roy Hodgson controversial payday lender. will not object to the deal, having name, St James’ Park, having been has revealed his relief after Ashley Industry experts accused the not done so when Wonga sponsored rebranded the Sports Direct Arena 11 Cole personally apologised to the company of cynically targeting an Blackpool during the club’s 2010-11 in November last year. Football Association chairman David Bernstein for calling the organisation a “bunch of t***s”. The FA have given Hodgson full MCILROY AND WOODS LOSE OPENING MATCHES authority to decide if the Chelsea Amir Khan’t defender should play in Friday’s World Cup qualifier at home to San Marino and while he may yet be afford to lose rested ahead of the more difficult fixture anticipated away to Poland BY DECLAN WARRINGTON four days later, Hodgson was regardless pleased to learn that the FORMER world champion Amir Khan incident had been concluded. has accepted he will have nowhere to “I’m pleased the chairman has turn if he falls to a third consecutive gracefully accepted the apology from defeat against Carlos Molina in Los Ashley,” said Hodgson. “I know how Angeles on December 15 and saddened he was by it and I’m glad believes that a failure to win will end it’s been resolved. I always hoped this a potential fight with Ricky Hatton. would be sorted out and I’m very In his last two fights, Khan happy with the outcome.” dropped a controversial decision to Though Bernstein said that he felt drugs cheat Lamont Peterson before it unlikely that 98-cap Cole would suffering a fourth-round knockout captain England when he makes his defeat to Danny Garcia to prompt a 100th international appearance, he change of training camp and trainer also insisted that he holds no grudge. from Freddie Roach to Virgil Hunter. He said: “He showed real remorse. I That he is not yet talking up a fight looked him in the eye and I accept with Hatton for a sport so reliant that. He is free to play for England.” upon promotion and hype perhaps Yesterday’s training session was highlights his focus and this, the first following the official coupled with mentions of world opening of the FA’s £105m centre of titles over money, shows that Khan excellence at St George’s Park in recognises he can no longer take his Staffordshire for which the Duke and career for granted. Duchess of Cambridge were “I don’t want to lose this one, I’m also present, but it was one that both not going to lose this one,” said the captain Steven Gerrard and Khan, who did not discuss Monday’s Frank Lampard would miss. car-jacking incident. “I don’t want to Both midfielders participated in a be in that position where, if I lose it, warm-up but they were thereafter it’ll be where can I go from here? restricted to work on their individual “For me, this is make or break. fitness. Gerrard is suspended for Everything’s in this fight for me, Friday’s match so Lampard, who is that’s why I changed everything. expected to be available, is likely the “Maybe Hatton [is a future fight], if lead the team in his absence. Also World No1 Rory McIlroy and American great Tiger Woods last night lost their opening he’s a world champion. I want Ricky unavailable was Jermain Defoe, who rounds of the inaugural World Golf Final in Turkey. McIlroy, who was part of Europe’s to be on a good winning streak, I was in the gym, and Ryan Bertrand victorious 2012 Ryder Cup team, lost to the American Matt Kuchar by six shots in his first want to be on a good winning streak, who was unwell. Group One Game, while Woods lost to Charl Schwartzel at the eight-man event. “I need so that it’s worth fighting. If I lose to win both matches to advance,” said McIlroy. “I just struggled for a bit motivation.” and Ricky loses then it’s pointless.”

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