Cityam 2012-05-31

INVESTORS panicked yesterday as
the European Commission (EC)

warned of financial disintegra-
tion, fleeing risky assets and push-
ing Spanish and Italian borrowing
costs close to breaking point.
The latest polls in Greece showed
the anti-bailout party Syriza back
in the lead putting the country
back on the path to leaving the
Eurozone and sending stocks plum-
meting.
Cash poured into safer German,
British and US government debt,
pushing the countries borrow-
ing costs to record lows as desper-
ate investors fled risky assets.
The rush hammered equities,
putting the FTSE on course for its
worst month since August when
the crisis last reached fever-pitch.
The EC argued that the joint
issuance of eurobonds would
help bring an end to the crisis by
restoring certainty in countries
abilities to pay their debts.
An early confirmation of the steps
to be taken will underscore the
irreversibility and solidity of the
euro, it said, also calling for
increased integration of finan-
cial markets and economic gover-
nance across the Eurozone.
The issuance of jointly-guaran-
teed eurobonds has been backed by
French President Francois
Hollande and Italian Prime
Minister Mario Monti, who
would stand to benefit from
lower borrowing costs as their
debts would be backed by
Germany, but opposed by German
leader Angela Merkel as her taxpay-
ers would be on the hook for
other states spending.
The European Commissions
report also appeared to signal
support for using the Eurozone
bailout fund to bail out banks
directly saying it might be envis-
aged. But commissioner Olli Rehn
said it is not an available option.
Meanwhile a poll put Greeces
anti-bailout Syriza party on 30 per
cent, ahead of pro-bailout New
Democracys 26.5 per cent.
If those results are repeated in
R
E
U
T
E
R
S
Stampede for safe assets as Eurozone crisis enters a dangerous new phase
BUSINESS WITH PERSONALITY
www.cityam.com FREE
WHY TOP CLUBS NEED TO BOOST THEIR MARGINS
BY TIM WALLACE
AND JULIET SAMUEL
ISSUE 1,644 THURSDAY 31 MAY 2012
See Page
38-39
Certified Distribution
02/04/2012 till 29/04/2012 is 100,668
DISINTEGRATION
next months general election and
Syriza forms a government, it could
lead to an attempted renegotiation of
the bailout package, which other
nations say they will not accept poten-
tially leading to another Greek default
and the country leaving the
Eurozone.
Greece is already starting to be
frozen out of markets, with two of
the worlds biggest trade insurers,
Euler Hermes and Coface, saying yes-
terday that they will no longer offer
protection to companies making new
exports to the country, although
they will honour existing contracts.
The increased uncertainty pushed
Spains 10-year borrowing costs up 21
basis points (bp) to 6.656 per cent
perilously close to the seven per cent
danger zone beyond which Ireland,
Greece and Portugal needed bailouts.
Italys 10-year yields jumped 16.8bp
to 5.934 per cent while Greeces shot
up another 64.5bp to 30.127 per cent.
Stocks plunged as investors cleared
out of all risky assets, driving the FTSE
100 down 1.74 per cent, the French CAC down
2.24 per cent, Italys FTSE MIB down 1.79 per
cent and Spains IBEX 2.58 per cent.
Many investors moved into safe haven gov-
ernment bonds Germanys 10-year borrow-
ing costs slid nine basis points to 1.27 per
cent, the UKs fell 13.1bp to 1.65 per cent and
the US dropped 11.8bp to 1.63 per cent.
1.27%
30.13%
GREECE
GERMANY
1.65%
UK
FTSE 100 5,297.28 -93.86 DOW 12,419.86 -160.83 NASDAQ2,837.36 -33.63 /$ 1.55 -0.01 / 1.25 unc /$ 1.24 -0.01
Traders rushed for safe havens, pushing bunds and gilts to record lows
10-year
borrowing costs
have soared
for weak
governments
ALLISTER HEATH: Page 2; MORE: Page 7

6.66%
SPAIN
5.94%
ITALY
1.63%
US
Stronger countries
saw yields plummet
as investors poured
cash into safe
haven assets
FOOTBALL PROFITS HIT
GRAFF IPO
PULLED AS
FEARS BITE
See Page 3
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
IN BRIEF
Moulton turns his back on Tories
nBetter Capital founder and
prominent Conservative donor Jon
Moulton has revealed he no longer
supports the party. The venture
capitalist said in an interview with
Management Today that after the
Liam Fox affair and the recent GDP
downgrade, it's difficult working up
much enthusiasm to be a political
donor. Moulton gave 35,000 to a
charity set up by Foxs former flatmate
Adam Werritty last year but said he
felt mugged by the donation after
Werritys unusual role was uncovered.
Fox resigned from the government in
October after self-styled adviser
Werritty was found to have lobbied
donors for cash in the defence
secretarys name.
500m of credit easing launched
nThe Treasury today announced
another 500m of government funds
will be made available for SMEs to
borrow, in an effort to ease the
pressure on businesses that are
struggling to get past banks tough
new lending criteria. The government
is seeking bids from fund managers
who will allocate 400m to medium-
sized firms, which will receive the
credit on a commercial basis. The
additional 100m will be loaned to
small firms by the department for
business, innovation and skills
through non-traditional channels
like peer-to-peer networks. These
proposals are part of our credit easing
programme, passing on the benefits
of Britains creditworthiness to firms,
said chancellor George Osborne.
Liquidators win in $600m
fraud case against hedgie
MAGNUS Peterson, the boss of col-
lapsed hedge fund business
Weavering, has been found guilty
of defrauding investors and
ordered to pay hundreds of mil-
lions of dollars in damages.
Londons High Court ruled that
Peterson, manager of the
Weavering Macro Fixed Income
fund, deceived clients and
breached his duty of care to
investors with a strategy that
could not cope with the vagaries
of markets at the height of the
global credit crisis.
Damages of $450m were award-
ed against Peterson and three
other directors including his wife,
Amanda.
The outcome comes a day after
the Financial Services Authority
doled out a record fine to Italian
academic-turned-fund manager
Alberto Micalizzi.
I do not accept Mr Petersons
assertions that the investors
understood his strategy very well.
He cannot show any document in
which he explained it, Judge
Sonia Proudman wrote in her
judgment.
The Serious Fraud Office (SFO)
dropped probes into both
Micalizzi and Peterson in recent
years, raising questions over
Transparency on banks treasury
units urged
International banks must improve
disclosure of often obscure treasury unit
investments following the recent $2bn
trading loss at JPMorgans chief
investment office, rating agencies and
bank analysts have urged.
Malaysia fund nears 375m
Battersea deal
A Malaysian pension fund is poised to seal
a 375m deal to acquire Battersea power
station, potentially drawing to a close the
UK property industrys longest running
development saga. Employees Provident
Fund is expected to join forces with SP
Setia, Malaysias largest publicly listed
property developer by revenue, and
RREEF, Deutsche Banks real estate arm,
to build a 1.4bn scheme of housing,
offices and shops.
Mars moves to cut cocoa deficit
Mars is aiming to help one million cocoa
farmers double their production as the
worlds biggest confectionery company
ramps up efforts to eliminate a projected
cocoa deficit in 2020.
Hotel wrecked by IRA bombers is
poised to be sold but only when it
looks better than ever
The Brighton hotel bombed by the IRA
during the 1984 Conservative Party
conference is to be put up for sale by De
Vere Group.
Tabbouleh and quinoa: grocer sets
out a new southern stall
WM Morrison is to accelerate its march on
the South of England.
Olympus plans 2,500 job cuts
Olympus, the Japanese electronics giant
hit by a $1.7bn accounting fraud, is said to
be planning to cut 2,500 jobs as parts of
its attempts to turn around its fortunes.
Kayak to delay IPO
Kayak, the online travel service, is said to
be delaying its stock market flotation in
America following Facebooks disastrous
initial public offering. The US business was
seeking to raise $150m in a June IPO but
analysts say it is unlikely to go ahead as
planned.
Stein sworn in as Fed Governor
Jeremy C Stein was sworn in to the
Federal Reserves Board of Governors
yesterday, filling the seven-member panel
for the first time since April 2006.
US sets tariffs on Chinese wind-
turbine towers
The US Commerce Department slapped
tariffs on Chinese wind-turbine towers,
marking the latest chapter in a clean-
energy trade battle between Washington
and Beijing.
WHAT THE OTHER PAPERS SAY THIS MORNING
A CITY lawyer was sentenced to
three years in prison yesterday,
after admitting four counts of
expenses fraud against his former
employer.
Christopher Grierson, a former
litigation partner at Hogan Lovells,
claimed 1.27m in travel
expenses from the firm
over four years before
the fraud described as
sophisticated was
uncovered in 2011.
City lawyer is
jailed for fraud
Paul Clark (l) and Geoff Bouchier (r), liquidators of Weavering, run by Magnus Peterson (inset)
2
NEWS
BY ELIZABETH FOURNIER
BY HARRY BANKS
To contact the newsdesk email news@cityam.com
M
Y abiding memory of the
credit crisis was the delusion
that continued to grip the
City and Wall Street long after
it became apparent to objective
observers that a terrible recession was
about to begin. Most people kept
their heads firmly in the sand when
HSBCs US sub-prime unit reported
losses, for example, or when the
credit markets started to go haywire.
It cant possibly be that bad, we were
assured repeatedly. Until about 2006,
the (preposterous) received wisdom in
the US was that house prices could
never fall in nominal terms. Then it
was that they wouldnt fall by much.
Then that they would bounce back
quickly. Every time, the mainstream
view was wrong. Even when Bear
Stearns had to be gobbled up by JP
Morgan, and Fannie Mae and Freddie
Mac were rescued, many observers
EDITORS
LETTER
ALLISTER HEATH
Eurozone optimists are suffering from cognitive dissonance
THURSDAY 31 MAY 2012
remained deliriously upbeat.
Northern Rocks woes in the UK did
shock the public, but most people
thought that they would soon be able
to return to business as usual. There
might be a recession, we were told,
but it will be short-lived. What non-
sense that turned out to be.
It was not until a large chunk of
Wall Street finally collapsed one
Sunday night that the reality-deniers
changed their tune and that panic set
in. But until Lehman went bust, the
mood was a classic case of what psy-
chologists call cognitive dissonance.
Because the reality was too grim and
too threatening to contemplate, peo-
ple convinced themselves that the
economy couldnt really be that bad
after all and that everything would be
all right in the end. My big fear is that
we have fallen into a similar psycho-
logical trap with the Eurozone. Just
because nobody wants more financial
chaos, many have convinced them-
selves it wont happen.
Take the news that two major firms
have stopped providing trade insur-
ance to exporters to Greece. It is
absolutely devastating that is an
unmistakeable sign of a real credit
crunch. But many people keep trying
to downplay the gravity of the situa-
tion, clinging instead to the view that
Greece probably wont leave, that
even if it does nobody else will, that
real risks have not been fully priced
in. Few are concerned about the
crazed bubble in safe haven UK,
German and US government bonds.
Of course, just as those perma-bears
who feared in the dark weeks of
December 2008 that Western civilisa-
tion might not survive were proved
wrong, extreme doom-mongers will
also turn out to be wrong this time.
Quitting the euro is the only way that
Greece will ever bounce-back; the
euros disintegration is a necessary
evil. But my real problem is not with
ultra-pessimists but with optimists.
The widely-held view that a substan-
tial shock will somehow be avoided is
delusional. A major euro crisis is
inevitable it is time for some hard-
headed realism.
Spain will sort itself out, that
Germany will see sense, that some
magical solution will be found to
avoid too much pain and disruption.
But these are generally evidence-free
assertions made by people who dont
want to lose their jobs or assets or
who are subconsciously or culturally
programmed to be overly optimistic.
That said, the markets psychology
is better than it was in 2006-07. People
are moving out of troubled areas.
Regulators are busily scenario plan-
ning; central banks are not asleep like
they were last time. Banks are taking
new precautions by geographically
matching their assets and liabilities
within the Eurozone in case countries
leave. Companies with exposures to
Greece have, in the main, taken more
precautions than at this stage in the
previous crisis. But in most cases the
reaction has been insufficient. The
Londons ability to uncover and pun-
ish white collar crime. The SFO
claimed that there was not a rea-
sonable prospect of conviction in
the Weavering case and quit its
investigation into Micalizzi citing a
lack of evidence.
Proudman said that Peterson, who
represented himself throughout the
case, may have committed the fraud
out of a sense of invincibility, self-
belief, and a gamblers mentality.
Three other directors at the fund
firm -- Edward Platt, Charanpreet
Dabhia and Amanda Peterson -- were
also found guilty of negligently per-
mitting fraud to happen.
Joint liquidators of Weavering,
Geoffrey Bouchier and Paul Clark,
launched a civil case against Peterson
and other Weavering staff last year
after the SFO dropped its probe into
the 2009 collapse. They were repre-
sented by law firm Jones Day.
Throughout the case Peterson
denied lying to investors.
The case centred on more than
$600m of interest rate swap agree-
ments between the Macro fund and
a British Virgin Islands company
called Weavering Capital Fund,
which was related to Weavering.
Christopher Grierson
pleaded guilty to fraud
The new jobs website for London professionals
CITYAMCAREERS.com
DOCTORS will take industrial action
for 24 hours next month in the first
strike by the profession since 1975.
While emergency care will still be
available, doctors will not provide
non-urgent care on 21 June.
The majority of respondents to a
British Medical Association ballot
voted in favour of action over
pension changes which will increase
doctors retirement age to 68 and
could see contributions hit 14.5 per
cent for the highest earners by 2014.
Junior doctors rallied most
strongly, with 82 per cent of voters
endorsing strike action.
BY LAUREN DAVIDSON
Doctors set first
strike since 1975
THE Royal Borough of Kensington
and Chelsea could become a
technological backwater after BT
sensationally withdrew its plans to
roll out super-fast broadband to the
area.
The telecoms giant had planned to
install 108 street cabinets that would
have provided super-fast broadband
to up to 34,000 homes and
businesses. However, the council
rejected 96 of the proposals as part of
its drive to de-clutter its streets.
BT has already completed, or is in
the process of fitting out, 31 of the 33
London boroughs with broadband
capable of speeds of up to 76mbps
ten times faster than is currently
available in Kensington and Chelsea.
BT says it has no immediate plans to
revisit the negotiations.
A spokesman said Kensington and
Chelsea could become an island of
slow connectivity a desert of 20th
century technology in a 21st century
city. The decision could also have a
long-term effect a planned rollout
next year of broadband speeds of up
to 330mbps is likely to rely on the
same cabinets.
A Kensington and Chelsea
spokesman said: BT has not worked
in a spirit of cooperation and needs
to consider our historic streetscape.
Perhaps one of its competitors will
step into the role.
BT pulls plug
on Kensington
internet plan
G
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T
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Y
GRAFF Diamonds last night decided
to postpone its flotation after late-
stage talks with potential US investors
failed to fill the order book.
As City A.M. reported yesterday, the
advisers to the float had been strug-
gling to attract sufficient orders for
the $1bn share issue to go ahead, with
banks reporting the order book just
50 per cent covered at the bottom end
of the price range.
In a statement issued last night,
Graff Diamonds said its decision to
postpone the Hong Kong listing was
due to adverse market conditions.
The company said it enjoyed high
quality engagement on its
business and strategy from a
very broad range of prospec-
tive investors, however con-
sistently declining stock
markets proved to be a sig-
nificant barrier to execut-
ing the transaction at this
time.
Graff Diamonds
pulls float due
to market chaos
BY DAVID HELLIER
Graff Diamonds added that it will
continue to grow its business irrespec-
tive of the unsuccessful IPO. Sources
close to the situation said that store
openings in Asia are to go ahead as
planned.
Graffs decision to float in Hong
Kong, which is becoming a favourite
market for luxury goods companies,
was seen as a blow to the London capi-
tal markets.
The failed flotation will disappoint
its bookrunners, which include
Goldman Sachs, Morgan Stanley,
Credit Suisse, Deutsche Bank and
HSBC. Graff is being advised on the
deal by Rothschild.
While the diamond firm blamed
volatile markets for the suspension of
its IPO, news that just 20 clients
account for 44 per cent of
the firms revenues would
not have helped the cause
either.
The postponed float will
put a cork in plans to allo-
cate a large chunk of the
IPOs proceeds towards buy-
ing a substantial diamond
inventory from Graff
founder Laurence Graff.
US PRIVATE equity house Bain
Capital is weeks away from kicking
off a $6bn (3.9bn) fundraising.
The buyout firm, co-founded by Mitt
Romney, is preparing to begin
fundraising for its eleventh fund by
the end of June, and will send out a
private placement memorandum
with the final terms.
It will ask for money from pensions
funds and endowments as well as
other institutional investors around
the world.
It comes after a challenging period
for Boston-based Bain, which has come
under repeated attack as former chief
Buyout firm Bain Capital close
to launch of $6bn fundraising
BY PETER EDWARDS Romney marched to victory in the US
Republican presidential contest.
Bain, however, argues that it has cre-
ated hundreds of thousands of jobs in
its 28-year history,
The firm has also told investors a
$2bn co-investment fund will be raised
alongside Fund XI, and that access as
well as terms that investors get on that
fund will be tied to the size of their
commitment to the core fund, sources
said.
Private equity firms have traditional-
ly used the 2/20 fee structure -- charg-
ing a two per cent fee to manage the
assets and 20 per cent carried interest,
but Bain will give investors a series of
options.
EXCLUSIVE
BY STEVE DINNEEN
3
NEWS
cityam.com
Republican presidential hopeful Mitt Romney co-founded Bain, and was its former boss
How City A.M. broke the news
that the float was in trouble
BANKERS to the $1bn IPO of the Mayfair-based jewellery group Graff Diamonds said yesterday that the share issue did not yet have sufficient demand for the deal to go ahead.
With just hours to go before the li i
Graff Diamonds
$1bn IPO fails
to sparkle yet
BY DAVID HELLIER
FOOD wholesaler Booker aims to
turn around the loss-making cash
and carry firm Makro UK after tak-
ing it off the hands of German
retailer Metro in a 140m deal.
It will hand Metro 15.8m and a
9.99 per cent stake in Booker as the
two firms agree to work together on
improving their supply chains and
offering a greater choice of prod-
ucts.
The deal gives Booker, which has
more than 170 branches that supply
convenience stores, restaurants,
pubs, schools and prisons, the abili-
ty to reach hotels and the smaller
firms that are the usual customers
of Makro.
Charles Wilson, formerly a key
lieutenant to Sir Stuart Rose at
Marks & Spencer, has been credited
with turning around the fortunes of
the once heavily indebted Booker
after returning to the firm to take
the top job in 2005.
He hopes to repeat the trick with
Makro, which has 30 British stores
offering 29,000 products.
Booker and Makro UK will
improve choice, prices and service
for retailers, caterers and SMEs
throughout the UK.
Together we will offer a wide
range of foods and non-foods to our
140m deal for
Makro UK will
boost Booker
BY PETER EDWARDS
professional customers, via the inter-
net, delivery and cash and carry,
Wilson said.
The deal will increase revenue at
Booker, which has a 12 to 13 per cent
share of the 30bn wholesale mar-
ket, by around 20 per cent from its
current level of 3.9bn.
The firm said the deal would dilute
earnings in its year to March 2013
and add to earnings in the first full
year following integration.
Last week Booker posted a 27 per
cent rise in pre-tax profits to 90.8m
in the 53 weeks to 30 March on sales
up nine per cent to 3.93bn.
Makro sales and earnings have
declined now for a number of years.
Market trends were largely missed
and transforming the business
model was not as successful as other
places in Europe, Metro chief execu-
tive Olaf Koch said.
BOOKER brought in Investec, Eversheds and
KPMG to advise on due diligence.
The Investec team included James Grace,
head of corporate nance, Grant
Bergman, an associate and Sam Hart.
Grace began his career at PwC and after
working as a corporate recovery specialist
joined Investec in 1995.
Geof Allen and Simon Masters were part of
the legal team from Eversheds where
Masters is a partner and Allen a senior cor-
porate nance lawyer. Masters specialises in
corporate nance transactions including
IPOs, joint ventures and M&As and recently
advised Flybe to acquire Finnish airline
Finncomm and BA Connect from British
Airways. Allen advises on complex high
value and mid-market public and private
M&A, public bids and fundraising.
JPMorgan Cazenove and Freshelds
advised Metro AG.
Simon Marchant, from Freshelds, is a sen-
ior corporate partner based in London but
has also spent time in New York and Hong
Kong. He has previously advised on the
$20bn take-private of De Beers and
Vodafones $190bn purchase of
Mannesmann.
Julia Thomas and Caroline Bjerndahl repre-
sented JP Morgan Cazenove. (Anaam Raza)
ADVISERS INVESTEC
JAMES GRACE
INVESTEC
Booker Group PLC
29May 30May 24May 25May 28May
77.50
80.00
82.50
85.00
87.50 p
87.00
30May
4
NEWS
cityam.com
A tale of two companies shows why chief execs count
I
T WAS the best of times for
Britains biggest food wholesaler
Booker on 24 May. Its preliminary
results showed another good year:
sales of 3.9bn, pre-tax profit up 27
per cent to 90.8m and a net cash pile
of 63.4m. Why then did its share
price rise yesterday by almost 10 per
cent after it acquired a loss-making
firm experiencing the very worst of
times? In the end, because the City
trusts the team at the top.
Bookers newest addition is Makro
UK, a cash and carry chain. It was
owned by Metro, the German retail
and wholesale group, which has not
had an easy year itself, with the
groups first quarter results showing
a net loss of 82m (65.4m).
Under its new chief executive Olaf
Koch, Metro is divesting itself of
businesses that generate insufficient
revenue. Makro UK must have been
high on the list: its revenues have
fallen 12 per cent since 2009. In 2011,
Makro UK managed to turn 800m
of revenue into a 63.2m pre-tax loss.
It could, then, be tempting to see
those horrible figures as the reason
Metros shares rose yesterday by 1.28
per cent, while the rest of Germanys
Dax index fell 1.81 per cent overall.
Yet thats not quite fair. Metro has
not only divested itself of a failing
business. Like those who bid up
Bookers price yesterday, Metro has
taken a stake in someone elses
power to turn it around.
Despite sitting on so much cash,
Booker negotiated a deal where
Metro takes just 15.8m for Makro
UK, along with a 9.99 per cent stake
in Booker, which it has to hold for at
least 12 months. Theres talk of a
strategic UK partnership between
the groups.
Metro and the stockpickers are
ultimately betting on the vision of
Charles Wilson, Bookers chief
executive. After the turnaround at
Booker, they believe in his teams
ability to make a big success of
Makro UK. The announcement
claims that the acquisition will only
eat into earnings for the first year. If
Wilsons plan works, Makro UK will
enhance the groups earnings as
soon as the following year.
Looking at the details, that sounds
pretty optimistic. The acquisition
brings more than 1m new customers
and 30 stores, but these customers
spend 10 times less per head than
Bookers do. The loss-making stores
also stock three times as many lines
as a typical Booker branch. The
increased choice looks costly.
Theres something of a customer
mismatch as well. Makro UK
specialises in small and medium-
sized firms, purchasing items like
furniture and office supplies.
Bookers focus is on the catering
trade. A more obvious fit might have
been an acquisition of cash and
carry retail customers, to exploit the
food and drink ranges Booker brings
to the table.
But in the end none of that
matters. Most analysts believe that
Wilson has spotted potential.
Pending shareholder approval, he
has certainly bought himself a good
relationship with a significant
European player.
Chief executives arent getting
much credit just now, so its
refreshing to be reminded just how
much difference the name at the top
really does make to investors.
BOTTOM
LINE
MARC SIDWELL
PRIME Minister David Cameron's
former spokesman was charged
with perjury yesterday, after deny-
ing in court any knowledge of
widespread phone hacking by
reporters at Rupert Murdochs
News of the World.
The charges against Andy
Coulson, a former editor of the
tabloid weekly, damages Cameron
because it calls into question his
judgment in employing a man so
closely linked to the paper which
was under suspicion of obtaining
stories by illegal means.
Scottish police detained
Coulson at his home in London
early yesterday and drove him to
Glasgow for hours of questioning
before charging him.
Prosecutors said his arrest fol-
lowed his appearance before the
High Court in Glasgow in 2010
over a News of the World story
published when he was editor.
Coulson, Camerons communi-
cations director from 2007 to
January 2011, told the court he
had no knowledge of illegal activi-
ties by reporters while he was the
papers editor. He was arrested
last July by police investigating
phone hacking and bribery at the
News of the World.
Perjury can in theory result in a
life sentence, but sentences of a
couple of years are more typical, a
spokesman for the Scottish gov-
ernment justice department said
yesterday.
Coulson charged with perjury
over phone hacking evidence
BY CITY A.M. REPORTER
G
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Y
BUSINESS secretary Vince Cable yes-
terday told the Leveson inquiry that
he feared being done over in news-
papers owned by News International
if he did not give the go-ahead to its
parent companys 8bn bid for
broadcaster BSkyB.
I had heard directly and indirectly
from colleagues that there had been
veiled threats that if I made the
wrong decision from their point of
view, my party would be, I think
somebody used the phrase, done
over, in the News International
press, he told the inquiry into
media ethics.
I had myself tried to deal
with the process entirely
properly and impartially
and I discovered that
this was happening
in the background. I
took those things
seriously, I was
very concerned.
Cable had been
tasked with
deciding whether
Cable feared
treatment by
Murdoch press
BY JAMES WATERSON
to approve News Corporations
takeover of BSkyB but was forced to
step down from the process after
reporters recorded him saying he had
declared war on Murdoch over the
bid.
Yesterday Cable said he was angry
with myself at what happened but
the perception of bias meant he
understood that there was no alter-
native in this case.
He also attacked attempts to
turn the bid into a political
issue: There was a sys-
tematic attempt to
politicise the process to
imply that somehow or
other the whole process
was governed by Liberal
Democrat politics when
it was not.
The Murdochs politi-
cal influence exercised
through their newspa-
pers have become dispro-
portionate, he said in his
witness statement.
Vince Cable said the Murdochs
had disproportionate power
5
NEWS
cityam.com
Former News of the World editor Andy Coulson was yesterday charged with perjury
THE chairman of RBS yesterday
admitted to investors they would not
recoup the losses from its collapse in
their lifetime.
I dont believe that shareholders
wealth is likely to be restored any
time in my lifetime or some lifetimes
beyond, chairman Sir Philip
Hampton said at the banks annual
shareholder meeting.
Hampton was responding to one
elderly shareholder who said he had
lost thousands of pounds.
Hampton insisted yesterday that
the bank needed freedom to execute
its five-year recovery plan without
excessive interference and vowed to
restore dividend payments to help
pave the way for a sale of the
governments stake.
Hampton said the bank would
look to start paying dividends again
as soon as possible, although most
analysts consider such a move to be
unlikely until 2015 at the earliest.
Very few things would give me
more pleasure than to return RBS to
the dividend list because of all the
other things it would say about the
business, he said.
RBSs pay proposals were backed by
99.31 per cent of investors. The
overwhelming support was largely a
formality due to UK Financial
Investments support. UKFI manages
the governments stake and has 67
per cent of the voting rights.
Investors may
never recoup
losses, says RBS
BY JULIET SAMUEL
BUST Spanish lender Bankia is trying
to lure deposits by offering
customers an exclusive Spiderman-
themed beach towel, a development
that has failed to stem the freefall in
its share price, which dropped
another 8.8 per cent yesterday.
The bank, which is to become
around 90 per cent owned by the
Spanish government when it
receives a 19bn bailout, has
launched a promotional offer to
young customers in an attempt to
draw deposits.
You will have to increase 300 the
balance of your Cuenta Joven
[account] in order to be able to run
away with the exclusive towel of
Spider-Man, it says on its website,
under the title It enters Bankia and
it discovers your superpowers.
Meanwhile, the European Central
Bank denied yesterday that it had
slapped down a proposed bailout
plan from the Spain to recapitalise
Bankia with government bonds and
swap them for ECB cash.
Instead, European Commissioner
Olli Rehn indicated support for the
Eurozones bailout fund to rescue
banks.
Bankia throws
in the towel
for depositors
BY JULIET SAMUEL
G
E
T
T
Y
EUROPE faces a slow and painful
struggle before its economies can
start growing strongly again, warned
Commission president Jose Manuel
Barroso yesterday, praising the
efforts of Eurozone governments in
cutting budget deficits.
The EC published its annual score-
cards judging the success of member
states economic policies, and recom-
mended that even strong countries
like Germany need to reform their
economies further, as well as identi-
fying expected problems in the strug-
gling peripheral and indebted
governments.
Spain was thrown a lifeline by com-
missioner Olli Rehn who said
Brussels is ready to give the country
an extra year to bring down its budg-
et deficit, giving more time to rein in
its profligate regional governments
Euro states told
to prepare for
years of reform
BY TIM WALLACE and recapitalise its troubled banks.
France was not given such an offer
of help the report said the country
is likely to miss its deficit goal next
year unless additional spending cuts
and tax rises are implemented.
In his election campaign new
President Francois Hollande prom-
ised to boost economic growth with
increased spending, and he also
pledged to renegotiate the fiscal com-
pact under which countries promised
to reduce deficits.
The French authorities need to
specify the measures necessary to
ensure that the excessive deficit is
corrected by 2013, said the EC.
The report deemed Germanys
deficit plan plausible, but urged
further reforms to help the country
cope with the cost of long-term
health care, and criticised the lack of
progress in implementing budgetary
controls at a regional level.
EU retail sales
and mood fall
further in May
BUSINESS confidence plummeted
across Europes major economies in
May, European Commission (EC)
data showed yesterday, while retail
sales kept dropping and lending to
firms slowed.
Economic sentiment dropped 2.3
points to 90.6 in the Eurozone, the
EC index revealed, falling 4.3 points
in Italy, 3.9 in the Netherlands and
1.5 per cent in France.
That fall was mirrored in Markits
retail sector purchasing managers
index (PMI) which came in at 43.3,
indicating a sharp fall in activity in
the sector.
BY TIM WALLACE
TWO of the worlds biggest trade
insurers, Euler Hermes and
Coface, have suspended cover for
exporters shipping to Greece
amid fears the debt-laden nation
could be forced out of the euro,
hindering Greek importers
ability to pay their bills.
Euler Hermes has decided no
longer to cover deliveries to
Greece for the foreseeable
future, a Euler Hermes
spokesman told Reuters
yesterday. Coface also made a
similar disclosure yesterday.
In both cases, contracts
already in force will be
honoured, but no new Greek
business will be underwritten.
Greece frozen out as insurers cut
cover for exporting to Athens
Euler Hermes, which insures
exporters against the risk of not
getting paid, had warned last
week that it might restrict cover
for Greece-bound exports.
The company, majority-owned
by German insurer Allianz,
insured export deals worth
702bn last year, making it the
worlds biggest trade insurer
after Atradius and Coface.
The move follows a similar
decision by major European
broker Newedge, which is co-
owned by Credit Agricole and
Socit Gnrale, to scale down
its exposure in Greece by
refusing to take on any new
business in the country. It will
continue to cover existing
business, however.
TWO of Greeces biggest banks
reported a shrinkage in their
deposit bases yesterday as
worried consumers continue to
withdraw cash from the lenders.
Piraeus and National Bank of
Greece (NBG) lost deposits in the
first quarter of this year. Piraeus
said its deposit base shrank by 24
per cent year-on-year to 20.9bn.
At NBG, deposits fell by 2.3bn,
with its loans-to-deposits ratio at
Greek banks see deposits shrink
as customers lose confidence
BY CITY A.M. REPORTER 111 per cent.
NBG made a heavy loss in the
first quarter and rival Piraeus
also lost money as the country's
recession sapped clients ability
to pay back loans and hit new
business.
The banks are having to eat
into their own profit margins by
paying depositors higher interest
rates to discourage them from
withdrawing their funds, a tactic
that squeezes the net interest
income they earn.
7
NEWS
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Greek president Karolos Papoulias recently warned his MPs that the bank run is accelerating.
SPAINS Telefonica, under increasing
pressure to slash its debt pile, said
yesterday that it was preparing to list
its German unit and possibly other
businesses in Latin America,
stepping up its plan for disposals.
Telefonica needs to raise 7-8bn a
year through 2015 to cope with debt
maturities and is also struggling
with sinking revenue and profits in
its home market of Spain, where
one in four is unemployed and the
banking industry is in crisis,
pushing the states cost of
borrowing higher.
Telefonica did not say how much
of its 02 Germany business it would
seek to list.
The group had already
Telefonica eyes sale of German
division as tries to reduce debt
announced efforts to sell 1.5bn in
non-core assets, and the potential
listings would bring in a much-
needed cash infusion, which would
then be used to pay down debt.
Telefonica said in a statement
that its board was in favour of
proactive management of its
assets, and that as well as the
German listing, it was analysing
similar moves in Latin America.
It added it would be paying out
1.50 euros per share to
shareholders for 2012, but would
alter the structure so roughly 0.40
of the dividend would be in cash
and the rest in a scrip dividend and
share buybacks, which would take
pressure off its cash flows.
It plans to pay out a similar
amount for 2013.
THE CONFEDERATION of British
Industry (CBI) called today for the
government to adopt at least some
of the Beecroft reports
controversial proposals to free up
the jobs market, as a new survey
showed most employers think
tough labour market rules are
hitting Britains competitiveness.
The business group believes
excessive red tape stops
entrepreneurs and small firms from
hiring, because they fear the
consequences of firing ineffective
workers.
Adrian Beecroft suggested
reducing the consultation period
on mass-redundancies and allowing
no fault dismissals.
Some form of compensated no-
fault dismissal could help small
firms, said the CBIs Katja Hall.
The report identified the agency
workers directive introduced in the
Autumn as a specific measure
which has hit job-creation, instead
of achieving its stated aim of
protecting agency staff.
Fifty-seven per cent of firms said
they use fewer agency workers as a
result, while 12 per cent lowered
headcount overall.
Alleviating these damaging
effects should be an issue of the
highest priority for the government,
starting with working in Brussels to
get rid of the directive entirely.
CBI: Listen to
Beecroft to
increase hiring
BY TIM WALLACE
9
NEWS
cityam.com
The UK is only the 18th most
competitive country
2012 2011 Country
1 1 Hong Kong
2 1 USA
3 5 Switzerland
4 3 Singapore
5 4 Sweden
6 7 Canada
7 6 Taiwan
8 13 Norway
9 10 Germany
10 8 Qatar
11 14 Netherlands
12 11 Luxembourg
13 12 Denmark
14 16 Malaysia
15 9 Australia
16 28 UAE
17 15 Finland
18 20 United Kingdom
19 17 Israel
20 24 Ireland
#2 USA
#6 Canada
#15 Australia
#14 Malaysia
#16 UAE
#10 Qatar
#19 Israel
#3 Switzerland
#12 Luxembourg
#20 Ireland
#18 UK
#11 Netherlands
#9 Germany
#17 Finland
#5 Sweden
#4 Singapore
#7 Taiwan
#1 Hong Kong
#8 Norway
#13 Denmark
18 20 United Kingdom
UK still struggling to compete
BRITAINS economy is less competi-
tive than European rival Germanys,
and other English speaking nations
like Australia, Canada and the USA,
the IMDs world competitiveness
yearbook revealed today.
High inflation, rising unemploy-
ment and a lack of entrepreneurial
environment all counted against the
UK, although cuts to corporation tax
and gradual steps to reduce the
budget deficit dragged the country
up from 20th place to 18th as other
countries continued to struggle with
BY TIM WALLACE
their debts.
Out of the 59 countries measured,
Britain ranks only 57th for entrepre-
neurship, 49th in language skills and
38th for effective personal income
tax rates.
Competitor Germany climbed the
list from 10th to 9th, as its govern-
ment finances improved sharply,
long-term unemployment fell and its
trade position strengthened even fur-
ther.
Hong Kong came in as the most
competitive economy in the world for
the second year running.
The IMD business school praised the
countrys public finances, low unem-
ployment and all-round resilience.
However, the country was still
warned against becoming compla-
cent, as it faces challenges from the
economic slowdown in China.
Meanwhile the US lost the top spot,
which it held jointly with Hong Kong
in 2011, as it dropped in the govern-
ment efficiency rankings from 19th
to 22nd, with worsening business leg-
islation, while rising inflation and
long-term unemployment also count-
ed against it.
Although the US remains in the
number two spot, IMD professor
Stephan Garelli warned against let-
ting it slip further.
US competitiveness has a deep
impact on the rest of the world
because it is uniquely interacting
with every economy, advanced or
emerging, he explained.
No other nation can exercise such
a strong pull effect on the world.
Europe is burdened with austerity
and fragmented political leadership
and is hardly a credible substitute,
while a South-South bloc of emerging
markets is still a work in progress. In
the end, if the US competes, the
world succeeds.
OVERSEAS investors choosing
London as a safe haven destination
accounted for 75 per cent of the
increase in prime central London
residential prices relative to the rest
of the UK, a new report shows.
Foreign investors have poured into
boroughs such as Knightsbridge and
Chelsea since the mid-1990s and
fears over the demise of the euro
since the 2008 crash has exacerbated
Londons status as a safe haven.
New research commissioned by
property firm Development
Securities reveals safe-haven flows
have boosted the prices of prime
London homes by 30 per cent since
1995 relative to the rest of the UK
and are now above levels reached at
the height of the bull cycle in 2007.
Foreign money accounted for 60
per cent of acquisitions by value
between 2007 and 2011, with more
than half of the residents of
Westminster and Kensington &
Chelsea the two boroughs that
contain the bulk of the prime
market now from overseas.
Michael Marx, chief executive of
Development Securities, said: The
prime central London residential
market has seemingly defied the
laws of gravity in the past few years.
The safe-haven effect has clearly
played its role in attracting foreign
money into Londons most desirable
post codes.
Central London
homes given
overseas boost
BY KASMIRA JEFFORD
THE ROTHSCHILD and Rockefeller
dynasties have announced a tie-up
that will see two of the worlds
best-known business families join
forces in the asset management
industry.
RIT Capital Partners, which is
chaired and part-owned by Lord
Jacob Rothschild, is to take a 37 per
cent stake in Rockefeller Financial
Services, the wealth manager.
The multi-million pound deal,
whose exact value has not been dis-
closed, comes after Rothschild
secured the blessing of David
Rockefeller to buy the stake from
Socit Gnrale Private Banking,
which bought it in 2008.
Together, RIT and Rockefellers
asset manager have some $37bn in
assets under management. They
plan to expand the business in part
via acquisitions after the deals
completion in the autumn.
David Rockefeller, who was previ-
ously chairman of the company
that owns most of Rockefeller
Financial Services, said: Lord
Rothschild and
Rockefellers in
joint venture
BY JULIET SAMUEL
Rothschild and I have known each
other for five decades. The connec-
tion between our two families
remains very strong.
RIT also brings with it a partner-
ship with other members of the
Rothschild family, having become
partly owned by Edmund de
Rothschild Group in March.
Its board also boasts a roster of
well-known City names including
former City minister Lord Myners,
former banking commission mem-
ber and JP Morgan banker Bill
Winters and Credit Suisse banker
James Leigh-Pemberton.
Lord Rothschild has controlled
RIT, or the Rothschild Investment
Trust, since around 1980 when a
family dispute caused him to step
back from his involvement in NM
Rothschild, the investment bank.
The Rothschild dynasty made
much of its fortune investing in
government debt throughout the
eighteenth and nineteenth cen-
turies, but the Rockefellers made
much of their money from the
founding of Standard Oil in the late
nineteenth century.
LORD Jacob Rothschild, 76, sits at the head
of the British branch of the Rothschild
banking dynasty that has played a major
role in European nance for several hun-
dred years.
Jacob, the father of four children includ-
ing Nat Rothschild of Bumi plc, began his
career at the family company, NM
Rothschild, and worked there until 1980,
when he had a falling out with Sir
Evelyn de Rothschild over the banks
investment strategy.
He then founded several compa-
nies including Global Asset
Management and St Jamess Place
Capital and in 1988 became chair-
man of Rothschild
Investment Trust (RIT),
which had been estab-
lished over 20 years
earlier to manage the
English Rothschilds personal wealth.
The listed FTSE 250 wealth manager is
based in Spencer House in St Jamess. Lord
Rothschild was also deputy chairman of
BSkyB from 2003-2008 and has an adviso-
ry position on the board of US private equi-
ty giant Blackstone.
Jacob Rothschild is also heavily
involved in arts philanthropy and
has been on the board of the
National Gallery and the
National Heritage Lottery Fund.
The Rothschild dynasty
made much of its fortune buy-
ing government bonds and is
known in Britain for funding the
war against Napolean
and Britains pur-
chase of the Suez
Canal.
PROFILE: LORD ROTHSCHILD
PROFILE: DAVID ROCKEFELLER
10
NEWS
cityam.com
DAVID Rockefeller, 96, is the grandchild of
John D. Rockefeller, the billionaire founder
of Standard Oil, which was broken up in
1911.
He grew up in New York and began his
career in various political roles in the city
and then joined the army during
World War II. Following the war, he
joined the part family-owned
Chase National Bank now JP
Morgan Chase and became CEO
of the bank in 1969, 14 years
after a merger that saw it
renamed Chase Manhattan Bank.
Having served in a variety of
foreign policy roles includ-
ing as a member of the
Council on Foreign
Relations, he now spends
much of his time donating large parts of his
fortune to charity and has signed up to
Warren Buffetts pledge to give away more
than half of his fortune.
He has also been involved in various
philanthropic projects in arts and economic
development, being a co-founder of the
Rockefeller Brothers Fund, which
works on anti-poverty projects,
and a major donor to the Museum
of Modern Art. Rockefeller is also
a major investor in real estate,
notably buying 12 acres of land
from Columbia University to
house the Rockefeller
Center, which he
then oated. He has
six children but was
widowed in 1996.
GLOBAL BUSINESSES
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E
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Y
FORMER BP boss Lord Browne has
warned that businesses will keep
losing talented staff unless they
crack down on homophobia.
The crossbench peer said the
business world remains more
intolerant of homosexuality than
other worlds such as the legal pro-
fession and urged bosses to
stamp out intolerance.
Browne, who stepped down
from the oil giant in 2007 after he
was caught lying to the High
Court about a gay relationship,
said in a speech: Being gay didnt
harm my career. But hiding my
sexuality did make me unhappy
and, in the end, it didnt work.
I realise now that the people we
dealt with certainly knew I was
gay. Putin had files on everybody.
Browne urges
firms to end
homophobia
BY MARION DAKERS
He said that in private equity,
where he now works, fewer than
one per cent are openly gay due to
fears of marginalisation.
Speaking at the launch of Arups
LGBT [lesbian, gay, bisexual, trans-
gender] network, Browne said tar-
gets for management could help,
but warned against the threat of
political correctness if such goals
are badly implemented.
John Cridland, director general
of business lobby the CBI, said he
had no sense of businesses taking
a particular attitude to sexuality or
any other area, but there is always
a bit of catch up as social norms
change. Business is seldom in
the vanguard of social change, but
it does react very quickly to it, both
in terms of what their customers
demand and in terms of their
workforce, he added.
These views are those of the individuals above and
not necessarily those of their company
I have a few colleagues who are
homosexual and theyre quite open
about it. They have the same opportunities as I do.
Being sensitive to differing tastes is just a function
of literacy but HR processes need to be very thor-
ough and I think a lot depends on who is running
the company. I dont have any data points but Id
assume that the older generation has more ortho-
dox views but that could be a gross generalisa-
tion. I do feel some companies sensationalise the
issue to gain publicity, which is completely wrong.
WRIJU RAY
BT
Ive worked for BP and nancial servic-

es companies and I know theyre very
good and supportive. Just the other day there was
a new LGBT [lesbian, gay, bisexual, transgender]
group launched at my rm. Instead my hunch is
that smaller companies probably arent as great in
comparison to big PLCs. Having said that I do know
people that work in large organisations and
choose not to be completely open about their sex-
uality because they think that it will inadvertently
hit them in one way or another later.
MARK *
LLOYDS BANKING GROUP
I dont think theyre doing enough.

The senior levels of management
dont seem to think its a big issue whereas at
the bottom its seen as too sensitive to touch so
these problems never get attention in the way
they should. Also, I agree with Lord Browne that
the legal profession and the media are more
open to diversity because people working in
these professions have so much more interaction
with the general public, whereas people in the
City dont have the same level of interaction.
ALISHA FRANCIS
HEALTHCARE AUSTRALIA
ARE BUSINESSES DOING

ENOUGH TO FIGHT
INTOLERANCE TOWARDS
HOMOSEXUALITY?
Interviews by Anaam Raza
CITYVIEWS
Lord Browne is one of a handful of openly gay people to have run a FTSE 100 firm
11
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ONLINE gambling firm Sportingbet
yesterday revealed quarterly profits
that were down by a third to 10.8m
after it was hit by the suspension of
its Spanish operation.
It has been unable to trade in
Spain since 27 March because of a
legal injunction relating to a
dispute over back-taxes that has hit
most off-shore bookmakers with
customers in the Iberian nation.
Sportingbet recently paid Spain
14m (11m) in an attempt to
resolve the issue and is hoping to be
awarded a new eGaming licence
in June and resume trading.
The group will continue to
adjust the European cost base to
mitigate both recessionary forces
and the impact of new taxes,
Sportingbet said in a statement.
There was better news from the
firms booming Australian
operation which now accounts for
two-thirds of all bets wagered and
90 per cent of profits.
Shares in the firm closed yesterday
down 1.7 per cent at 28.8p but ana-
lysts remain confident that there is
room for improvement.
We think the shares could double
within the next 12 months, said
Simon French of Panmure Gordon.
The group should receive a boost
from the granting of a Spanish
eGaming licence and Euro 2012.
Sportingbet laid 555.9m in bets
during the three months to 30 April,
an increase of ten per cent on a like-
for-like basis.
Sportingbet
profits hit by
Spanish woes
BY JAMES WATERSON
GAMBLING site bwin.party yesterday
announced plans to invest up to
$50m (32m) in social gaming over
the next two years as it hopes to gain
a role in the sectors spectacular
growth story.
As part of the strategy it revealed
an agreement to pay $23m to Velasco
and Orneon to buy out the contracts
of around 300 software developers
and establish its own in-house games
studio called Win.
What previously was an interest-
ing internet phenomenon has
become a large commercial market-
place, one that now is worth billions
of dollars each year, the firm said.
Social gaming involves interactive
games that are played against other
users and often piggyback on exist-
ing social networks such as
Facebook.
Although generally free, the games
can be highly profitable because a
small number of heavy users choose
to buy online credits to add addition-
al features or accelerate their
progress through the game.
Analyst Nick Batram of Peel Hunt
told City A.M. that bwin.party had
put together a pretty impressive
Bwin.party bets
big on social
gaming service
BY JAMES WATERSON
team of experienced operators to
run the division. I like their
approach and theyve got lots of cash.
But only time will tell whether they
can turn that $50m investment into a
significant business.
However he raised concerns that
governments could attempt to
restrain the booming market: Social
gaming is not regulated in anything
like the same way that hard money
gaming is. Some countries may look
at social gaming and tax it in some
form or another.
Bwin.party said it expected its first
social gaming product to launch this
summer and that the new strategy
will result in 5-10m (4-8m) of addi-
tional costs in 2012 and 2013.
Shares closed down 2.5 per cent.
FORTRESS Wapping is set for a new
life as an upmarket housing estate,
after homebuilder Berkeley Group
bought the site for around 150m.
Berkeley confirmed yesterday
that it had agreed to take on the 15
acre site from media giant News
International, which has moved to
office space across the road.
The firms subsidiary St George,
which is yet to secure planning
permission, will now work with
Tower Hamlets to plan its Wapping
Village project, which will include
houses, shops and offices.
Berkeley also announced
yesterday that it has paid 5m to
Tom Carey, the former boss of St
George, to end an unfair dismissal
and age discrimination case.
Bwin.Party Digital Entertainment PLC
130
128
126
124
122
120
p
120.50
30May
A 54-year-old man has been arrested as part of a FSA
investigation into the same suspected unauthorised
foreign exchange trading scheme that led to the arrest of
champagne trader Alex Hope.
In April City A.M. revealed 23-year-old Hope, who
achieved notoriety after spending 125,000 on a single
bottle of champagne and leaking the receipt to the
media, had been arrested on suspicion of offences under
the Fraud Act and Financial Services and Markets Act.
The new arrest also relates to the same legislation.
Second arrest from FSA
over foreign exchange
BY JAMES WATERSON
13
NEWS
cityam.com
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WHAT IS SOCIAL GAMING?
Think Farmville, the Facebook
game that encourages users to buy
credits to build their agricultural paradise.
Or think casino games, without the cash winnings.
Even though most players don't pay a thing, a small
percentage do buy credits that enable them to
accelerate their progress in the game.
In short: it's any game that users play for the
experience, with other people.
And it's big business.
Social gaming goldrush
Value of market
$8bn
$15bn
Value of market
in 2015
Typical customer
Female
over 35
Users today
750m
Users in 2015
1.5bn
Farmville Words With Friends Draw Something Zynga Poker
ZYNGA
Q1 Revenues: 207m
Q1 Loss: 54m
GREE
Q1 Revenues: 249m
Q1 Profit: 136m
DeNA
Q1 Revenues: 340m
Q1 Profit: 150m
LEADING COMPANIES
LEADING GAMES
Berkeley to build homes and
shops at 150m Wapping site
BY MARION DAKERS
*
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A
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S
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15 per cent of Facebook
revenues came fromZynga
in the first quarter of 2012
PREMIER Oil yesterday said it would
raise its stakes in two fields off the
coast of Norway.
The FTSE 250 company is paying
$27.5m (17.6m) to give it a bigger
slice of the Bream project.
It is buying 20 per cent of one
licence and 40 per cent of another
from Skeie Energy.
Premiers total interest in the
Bream operation will be 40 per cent
and it will have an 80 per cent stake
in the adjacent licence.
Premier Oil to
increase stakes
BY JOHN DUNNE
L
A
U
R
A
L
E
A
N

/

C
I
T
Y
A
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M
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SHAREHOLDERS of Canadian grain
giant Viterra have voted in favour of
Glencores $5.9bn (3.8bn) takeover.
An overwhelming 99.8 per cent
agreed to the friendly takeover by
the Swiss commodities company.
Glencore, which is also looking to
gain acceptance for a mega merger
with miner Xstrata, still requires a
green light from regulators.
Viterra owns the biggest share of
Western Canadas grain storage and
farm supply outlets and huge grain
storage facilities in Australia.
The acquisition would bring
Glencore into the big leagues of agri-
culture. Currently this is dominated
by four firms Archer Daniels
Midland, Bunge, Cargill and Louis
Dreyfus Corp, the so-called ABCD
quartet of the industry.
Chris Mahoney, director of agricul-
tural products of Glencore, said: We
look forward to becoming part of
the agriculture industry in Western
Glencore given
nod for Viterra
takeover deal
BY JOHN DUNNE
Canada and to contributing to the
expansion of the grains and oil seeds
sector in those communities now
served by Viterra, in Canada,
Australia and elsewhere.
Glencores move comes in one of
the busiest merger and acquisition
periods for agriculture since the late
1990s as improving diets and
incomes in countries like China and
India stoke interest in grain compa-
nies.
Japanese trading house Marubeni
on Tuesday swooped in to buy US
based Gavilon Group for $3.6bn.
BG Group sells off its Philippine
power plants stake for 230m
UK gas producer BG Group said
yesterday it had agreed to sell its 40
per cent stake in two gas-fired power
generation plants in the Philippines
for $360m (230.8m).
The company said it would use
the cash to extend its interests in
more lucrative oil and gas
production.
The sale, to BGs partner in the
plants, First Gen Corporation, is
part of a multi-billion dollar plan
to sell assets and get debt off BGs
balance sheet, so cash can be
diverted into major new finds in
Brazil and Australia.
The sale concerns the Santi Rita
San Lorenzo power plants.
First Gen will now own 100 per
cent of the shares in the power
plants which it tried to sell two
years ago. BGs chief executive Sir
Frank Chapman said: The sale of
our stake in these Philippines
plants is another step to realising
the planned release of $5bn of
capital in the next two years.
On Tuesday the FTSE 100
company confirmed that it has
signed binding agreements to
offload its majority stake in South
American firm Comgs for 3.4bn
Brazilian reais (1.1bn).
JUST a day after strikes were averted on the Tube, workers on Londons Boris Bikes have
threatened to walk out during the Olympics. The RMT union said it will ballot staff in a bid to
secure reasonable working hours and a bonus during the Games. Operator Serco said the
RMT was not a recognised union for the scheme, and that it remained in talks with staff.
BORIS BIKE STAFF THREATEN OLYMPICS STRIKE
BG Group PLC
1,300
1,290
1,280
1,270
1,260
1,250
1,240
1,230
p
1,224.00
30May
Glencore International PLC
340
350
360
370
380 p
345.00
30May
RATINGS agency Fitch has warned
that fresh boardroom acrimony at
Russian oil firm TNK-BP could
result in a debt rating downgrade.
Fitch said the resignation of
chief executive and key investor
Mikhail Fridman this week is the
latest in a series of signs that some
form of separation between the
joint ventures partners appears to
be growing.
BP, which has a 50 per cent stake
in TNK-BP, has said that Fridmans
role was ceremonial but has
locked horns with him on several
issues including BPs failed 10bn
tie-in with Rosneft.
Fitch warns TNK-BP that board
spat could cost its debt rating
BY MARION DAKERS
While Fitch has taken no rating
action yet, it warned that the
company needs to give clearer
messages on how it will be run if
it wants to keep its BBB- rating.
TNK-BPs board of directors has
not met since December 2011 as it
lacked the minimum number of
members to act after two
independent directors resigned, and
Fitch said it considers the
effectiveness of the board as weak.
The agency last put TNK-BP on
downgrade watch in 2008, when
trouble flared between BP and
AAR, the billionaires who own the
other 50 per cent stake. Fridman is
one of the oligarchs represented
by the AAR vehicle.
cityam.com
14
NEWS
THE shareholder spring continued at
yesterdays Centamin annual general
meeting when shareholders voted
down the gold miners bonus plans.
Some 63 per cent of voters were
against adopting the remuneration
report, which partially waived the
targets on which management
bonuses would be based.
Despite the backlash, the FTSE
250 company has no plans to
change the pay deal, blaming
political instability in Egypt for a
recent share slump.
Centamin pay
deal disputed
IN BRIEF
Fresh shake-up at Trinity Mirror
n Media group Trinity Mirror made the
long-serving editors of its flagship daily
and Sunday tabloids redundant
yesterday saying it was moving to a
seven-day publishing model to improve
efficiency. The company appointed
Lloyd Embley, previously editor of its
Sunday tabloid The People, to edit both
titles. Richard Wallace and Tina Weaver
will leave the company with immediate
effect, Trinity Mirror said.
Moodys cuts Danish bank ratings
nCredit rating agency Moody's last
night downgraded the ratings for nine
Danish financial institutions including
Danske Bank, Danske's Finnish
subsidiary Sampo Bank, Jyske Bank,
Sydbank, Spar Nord Bank and
Ringkjobing Landbobank. Moodys said
the downgrade reflected the risk that
some institutions' concentrated loan
books deteriorate amidst difficult
domestic and European conditions, with
adverse consequences on their ability to
refinance maturing debt.
Bank of England announces staff
nThe Bank of England announced three
new members of its Court yesterday
effectively the board of non-executive
directors. Former McKinsey partner
Bradley Fried, Cairn Capital founder Tim
Frost and trade UNISON general secretary
Dave Prentis are joining the Court, replac-
ing Brendan Barber, Mark Tucker and
Harrison Young who step down at the end
of this month.
The numbers are a small beat. In a continuing trend amongst utilities
both interest and tax charges were lower than expected.. Operationally,
the company appears to be doing well.
ANALYST VIEWS
HAVE SEVERN TRENTS

RESULTS MADE A SPLASH?
By Marion Dakers
DOMINIC NASH LIBERUM CAPITAL
15
NEWS
cityam.com
WATER company Severn Trent beat
annual profit forecasts yesterday as
it promised shareholders a special
dividend and raised spending on
upgrade work.
Pre-tax profits fell 38.1 per cent to
156.7m as the firm spent around a
fifth more on infrastructure
improvements, leak reduction and
repairs.
Without exceptional charges, the
firm reported underlying profit
before tax of 275.3m, down 4.6 per
cent but above some analyst fore-
casts.
Operating costs jumped seven per
cent to 1.3bn, and the firm plans to
spend even more on upgrades this
year, with capital expenditure rising
to between 570m and 590m.
Severn Trent is already beating tar-
gets set by Ofwat to preserve water,
and said yesterday it has reduced
leaks by seven per cent this year to
hit a record low.
Severn Trent
raises dividend
and spending
BY MARION DAKERS
The firm also plans to splash out
150m on paying shareholders a spe-
cial dividend of 63p per share.
Severn Trents turnover in the year
rose 3.5 per cent to 1.77bn, helped
by a price hike last April that has off-
set a drop in consumption for cus-
tomers on metered contracts.
The companys services unit has
endured a challenging year, with
writedowns on its Italian business
and a slowdown in US municipal
spending causing a 30 per cent drop
in underlying profits to 18m.
Severn Trent PLC
1,710
1,700
1,690
1,680
1,670
1,660
1,650
1,640
p
1,706.00
30May
The dividend is up 7.7 per cent to 70.1p, in line with the groups policy of
annual growth of RPI plus three per cent. In addition... the board has
declared a capital return of 63p per share.
JONATHAN JACKSON KILLIK & CO

Severn Trent reported slightly disappointing full year results in our view.
Although it announced a special dividend, this was below our expecta-
tions. It also announced further writedowns at its services business.
JAMES BRAND DEUTSCHE BANK

Chief exec Tony Wray said the dividend was in response to the firms outperformance
Daily Mails editor sells almost
all of his shares in parent DMGT
DAILY MAIL editor Paul Dacre has
sold nearly three quarters of his
shares in parent company DMGT,
according to a regulatory filing.
Dacre sold more than 100,000 A
shares on Tuesday, netting him
more than 400,000, a company
filing shows.
He is left with just 37,861 shares
in the company, which also owns
the Metro and various regional and
business titles.
The shares were sold at just over
400p each, in line with the market
price on Tuesday, though the stock
fell two per cent to 387.9p
yesterday the lowest
closing price since
December.
Last week the firm
reported a 14 per cent drop
in adjusted pre-tax profit to
105m for the six months
to April as it grapples with
soaring costs amid a
restructuring.
Operating profits at
Associated Newspapers,
the branch of the
business that houses
national newspapers including the
Daily Mail, fell 26 per cent to
34m after advertising
revenues fell four per cent and
the firm made fresh
investments in the fast-
growing digital ventures.
DMGTs press office
did not respond to a
request for
comment.
BREWIN Dolphin will step into
the next calendar year under new
financial leadership, the
investment management firm
announced yesterday.
Andrew Westenberger is set to
assume the role of group finance
director on 1 January 2013,
replacing Robin Bayford.
Bayford, who joined the board
of Brewin Dolphin in 1990 and
was appointed finance director
the following year, is planning to
retire.
Westenberger qualified as a
chartered accountant with
Coopers & Lybrand, and held
Brewin Dolphins new finance
director set to replace Bayford
BY LAUREN DAVIDSON
various senior finance roles at
Barclays Capital in both London
and New York.
More recently, Westenberger
was group finance director of
Evolution, the British fund
manager bought by Investec last
year. He also served as a director
of its principal subsidiary
Williams de Broe.
The appointment
announcement came one day
after Brewin unveiled a 3.3 per
cent rise in pre-tax profits and a
7.1 per cent growth in funds
under management to 25.7bn.
The London-listed holding
company is celebrating its 250th
anniversary this year.
BY MARION DAKERS
Daily Mail editor
Paul Dacre netted
400,000 from his
share sale
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APPLE chief executive Tim Cook said
technology for televisions was of
intense interest yesterday but
stressed the companys efforts would
unfold gradually amid speculation
the iPad and iPhone maker was on
the brink of unveiling a revolution-
ary iTV.
Industry insiders and executives say
Apple may unveil a TV-based device
in late 2012 or 2013 that has the
potential to shake up the cosy televi-
sion content and distribution indus-
try the way the iPod and iPhone
disrupted music and mobile content,
but Cook has steered clear of com-
menting on that issue directly.
This is an area of intense interest
for us, Cook said, referring to
Apples existing television set-top box
product. Were going to keep
pulling this string and see where it
takes us.
When asked specifically if Apple
was making a television set, Cook
said he was not going to answer that
Apple boss says
he is intensely
interested in TV
BY HARRY BANKS
question.
Apple already sells a 90 set top box
called Apple TV that streams Netflix
and other content. Cook, who has pre-
viously said the Apple TV product had
a hobby status inside the company,
noted the company was sticking with
it despite not being known as a
hobby kind of company.
Heres the way we would look at
that, not just at this area but other
areas, and ask can we control the key
technology? he said in response to a
question about how Apple thinks
about improving the television experi-
ence for consumers.
Can we make a significant contri-
bution, far beyond what others have
done in this area? Can we make a
product that we would want?
Apple has been in negotiations with
content companies for its devices. It
began talks earlier this year to stream
films owned by EPIX, which is backed
by three major movie studios.
The company has a good relation-
ship with content owners and doesnt
see the need to own a content busi-
ness, Cook said.
Tim Cook deflected questions about whether an iTV was in the offing
16
NEWS
cityam.com
PROPERTY developers Telford Homes
and St Modwen said the residential
property market in London and the
south east of England remained
robust and would underpin their
growth in 2012.
East London residential developer
Telford Homes said pre-tax profits
for the year to the end of March
leapt 20 per cent to 3m, helped by
its growth in the UK capital.
The group reported strong sales
across all of its developments,
particularly at Bow Trinity and
Matchmakers Wharf near to the
Olympic Park.
The fundamentals of the London
housing market remain robust and
our forward sales position includes
over 65 per cent of the open market
homes expected to complete in the
year to March 31, 2013, said Telford
Homes chief executive Jon Di-
Stefano, adding that he expects to
see a substantial increase in profit
before tax in the new financial year.
Meanwhile regeneration specialist
St Modwen, whose projects include
the Elephant & Castle shopping
mall, said recent trade had been
strong and that it expected 2012
profit to be ahead of last year.
Our strategic focus on the
residential sector is underpinning
our forward momentum,
particularly in London and the south
east, chief executive Bill Oliver said.
St Modwen and
Telford upbeat
on south east
BY KASMIRA JEFFORD
LONDON & STAMFORD, the property
firm run by real estate veterans
Patrick Vaughan and Raymond
Mould, is to set up a 200m venture
with two sovereign fund partners to
buy homes in central London.
The company will own 40 per cent of
the venture, while Middle Eastern
partner Green Park Investments and a
second unidentified investor will own
30 per cent each.
Prime London home prices have
surged to record levels since 2008 as
economic uncertainty overseas has
turned the capital into a favourite des-
tination for investors seeking a safe
place to store their wealth.
L&S, which already owns 266 flats in
areas like Islington and Battersea, said
it was close to buying 150m of prop-
erties for the new venture and is also
in talks with undisclosed banks over
loans for making the purchases.
The venture would become its main
vehicle for investing residential assets
and may sell some of its existing
schemes as a result.
L&S announced the plans as it
Property firm
plans a 200m
London venture
BY KASMIRA JEFFORD
reported a 5.25 per cent drop in net
asset value 119p a share and a 60 per
cent increase in underlying profit for
the year to 31 March.
The firm said it now has a war chest
of 900m to spend with 300m of
investments currently under offer.
This puts London & Stamford in a
very strong position in a market which
we believe is offering increasingly
exciting opportunities for investment
in good quality assets with good
covenants at reasonable prices,
Mould, chairman, said.
L&S said it continues to explore a
disposal of its 15.7 per cent stake in
the Meadowhall shopping mall in
Sheffield it co-owns with British Land.
NORDIC building firm Skanska has won a 57m contract to start building a 225,000 square
feet office scheme (plans pictured) near Moorgate for completion in 2014. The 140m
redevelopment of the former Telephone Exchange on Fore Street is being undertaken by
private equity fund manager MGPA, US-based CarVal Investors and property firm Quadrant.
SKANSKA TO BUILD 140M MOORGATE OFFICES
London & Stamford Property PLC
108
107
106
105
104
103
102
p 107.80
30May
17
NEWS
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THERE were some weary sighs
yesterday amongst the bankers
working on the possible IPO of the
German chemicals group Evonik
after the selling shareholders
appointed Rothschild to advise
them on the deal.
Thats all we need, said one of
the syndicate working on trying to
sell Evonik shares to the public, if
the 5bn share deal goes ahead.
The sellers, who include CVC,
are already being advised by the
Swiss outfit Lilya, and few expect
the deal to get any easier with
another adviser on board.
Rothschild gets
new mandate
R
E
X
W
EVE had the move from the
City to Canary Wharf and
then to Mayfair, where
many stockbroking
companies and hedgies have located
themselves.
But from 1 June, two former Merrill
Lynch corporate financiers, now
housed at the boutique Global Leisure
Partners, will be plying their trade
from Dean Street, Soho, an altogether
more bohemian place to hang out.
Mervyn Metcalf, one of the founders
of Dean Street Advisers, says he hopes
the move will encourage investment
banking with a twist.
Theres lots of cultural and political
history in Soho which we hope we can
combine with some of the values of
the old British merchant banks like
Schroders and Morgan Grenfell, he
says.
Metcalf, an active collector of con-
temporary US and British art, is team-
ing up with his colleague at Global
Leisure Graeme Atkinson to start the
new venture.
It is being funded initially
through the partners own
resources and will work
closely with Global
Leisure on complimenta-
ry deals.
While at Global, Metcalf
has been busy on several
City bankers in move to Dean St
transactions including
the CVC bid for Virgin
Active, the BetFred bid
for the Tote and
more recently the
Teachers offer for
Goals Soccer.
At the new firm he hopes to extend
the breadth of his sector coverage to
include health and business services.
I would like to hope that people hire
you for your insight and advice as well
as sectoral knowledge rather your sec-
toral knowledge alone.
Got A Story? Email
thecapitalist@cityam.com
18
cityam.com
cityam.com/the-capitalist
THECAPITALIST
Roll up, roll up! Like the sound of
130,000 for three days work a
week? Want the financial world
hanging on your every word? Why not
apply to be the next external member
of the MPC? The right candidate needs
to be an economist of the finest
pedigree, with the technical
expertise to make independent
monetary policy decisions. But dont
worry too much about the requirement
to meet the inflation target its in
the brief for the job but chancellor
George Osborne hasnt so far shown
much sign of being tough with the
miscreants who have allowed inflation
to consistently remain above target.
Mervyn Metcalf(left) and Graeme Atkinson discuss their new Dean St vision
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GERMAN lender Commerzbank came
under fresh attack from a High Court
judge yesterday as it failed to win the
right to appeal against an order to pay
out 52m (41.6m) in bonuses to its
former City staff.
Mr Justice Owen slapped an interest
charge on the unpaid bonuses for
2008 cut during the financial crisis
and criticised the highly reprehen-
sible manner in which
Commerzbank sacrificed the contrac-
tual rights of employees on the altar
of public perception.
He rejected the banks request to
appeal after 104 ex-investment
bankers at Dresdner Kleinwort, which
it acquired in 2009, won their claim
earlier this month.
Now Commerzbank, which has
spent two-and-a-half years fighting
the payouts, will consider whether to
apply directly to the Court of Appeal.
If it decides against another attempt
it will be ordered to make a prompt
payment of 5.3m to the bankers to
cover half of their expected legal bill.
BY PETER EDWARDS
Commerzbank AG
1.44
1.42
1.40
1.38
1.36
1.34
1.32
1.33
30May
THE PAY packets of Frances top
bosses are set to shrink after
president Franois Hollande
yesterday unveiled drastic salary-
cutting measures.
Top executives of companies
which are majority owned by the
state will have their salaries capped
to twenty times that of the firms
lowliest worker in a law set to be
approved as soon as next month.
The measure will affect the 52
companies which are majority
owned by the state, such as
Electricite de France (EDF) and
Hollande set to slash pay of
bosses at state-owned firms
BY LAUREN DAVIDSON Areva but businesses which are less
than 50 per cent owned by France
are not guaranteed to escape scot-
free.
The government, which holds a
15.9 per cent stake in Air France,
said earlier this week it will today
vote against a 400,000 indemnity
payment to the loss-making
airlines former chief executive
Pierre-Henri Gourgeon.
The salary-slashing step was one
of Hollandes election campaign
vows alongside his pledge to
introduce a 75 per cent top rate of
tax deemed by the newly elected
president to be an act of morality.
19
NEWS
cityam.com
Commerzbank
bonus breach
appeal refused
It will also pay most of the bankers,
whose claims range from around
15,000 to 2.6m, interest on their
damages at a rate of five per cent
above base rate. Twenty one bankers,
whose offer to settle was rejected in
2010, will get an interest rate of 10 per
cent from March 2010.
Commerzbank said the interest
charges and costs would bump up the
cost of the claim to about 70m.
It has argued the Dresdner sub-
sidiary was justified in cutting bonus-
es as losses hit 6.5bn and threatened
the survival of the business.
SPECIALIST venture capital fund BP Marsh
yesterday announced the value of its net assets
has edged over 50m, alongside a 40 per cent
rise in year-end post-tax profits to 3.6m.
Highlights include selling part of its stake in
insurer Hyperion for 4.5m.
But analysts point out that the firm, which
invests in financial services, has seen the value
of its investments rise out of line with its share
price.
BP Marsh is currently trading at a 48 per cent
discount to its 31 January net asset value of 171p
a share, which we view as wrong, particularly
given that its remaining Hyperion stake is valued
at more than the entire market cap of BP Marsh,
said Barrie Cornes of Panmure Gordon.
Chairman Brian Marsh provided a restrained
outlook for the year ahead, say-
ing: The groups investment
strategy remains
unchanged; to take minori-
ty positions in profitable
businesses with strong
management teams and
good growth potential.
Shares in BP Marsh closed
yesterday up 2.3 per cent at
91p.
The firm has decided to
declare a dividend of 1p.
Investor BP Marsh
sees asset value jump
BY JAMES WATERSON
Brian Marsh said the groups
strategy remains unchanged
20
NEWS
JP MORGAN American Investment Trust plans to
test the appetite of the market by issuing nearly
1.2m new shares.
The trust, run by Garrett Fish, will issue up to
1.19m new ordinary shares to professional
investors at a price to be announced today and at a
premium of at least 1.5 per cent to net asset value.
The stock will be offered on a first-come-first-served
basis. Its ten largest investments were Exxon Mobil,
Apple, Microsoft, IBM,
Berkshire Hathaway,
Merck & Co, Pfizer,
Williams, ConocoPhilips
and Philip Morris
International at 31
December.
High-profile manager
Fish hit the headlines last
year when he said
stockmarkets were being
hurt by the right moving
more to the right and the
left becoming more left.
JP Morgan US trust
issues 1.2m shares
BY PETER EDWARDS
Garrett Fish runs the trust
UK-BASED engineering company Amec has
bought Brisbane-based consulting and
engineering group Unidel for A$27m
(16.9m).
A further A$41m may be paid over three
years if Unidel achieves its profit targets.
Unidel is a 260-person company with
experience in gas field exploration,
development, production,
transmission, water
pipelines and coal bed
methane infrastructure
services similar to those
of Amec.
The acquisition would
lift the companys
Australian presence to
1500 employees, as well as
boosting its capabilities,
said Amec chief operating
officer Neil Bruce.
Amec buys Unidel to
up Aussie footprint
BY ANAAM RAZA
Neil Bruce says the deal
will boost its capabilities
21
LONDONREPORT
ASIFMA
The Asia Securities Industry and
Financial Markets Association has
appointed Mark Austen as its new
chief executive. Austen joins from
the Association for Financial
Markets in Europe, where he
served as head of capital
markets, acting chief executive
and most recently chief operating
officer.
Inmarsat
Andy Start has been appointed president of the global
government business unit at the satellite communications
service provider. Start was most recently a president at
Harris Corporation and has served as managing director
and vice president of BAE Systems Platform Solutions.
Old Mutual Asset Managers
The financial services group has appointed Steven Brown as
head of advisory distribution, with responsibility for
strategic partnerships in the UK wholesale market. Brown
has over 20 years experience in asset management sales,
working for M&G, Principal Global Investors and most
recently RBS Global Banking & Markets.
Investec Investment Banking
Jerry Ho and Brian Gallagher have been hired into the UK
oil and gas equity research team at the investment bank. Ho
joins from GMP Securities Europe, where he was a research
associate. Gallagher joins from Dolmen Securities.
Libra Investment Services
The risk management service provider has appointed
Robert Winterton to its pan-European sales team.
Winterton started his career at BZW, and he subsequently
worked for Credit Suisse and BNP Paribas, before joining
Landesbank Baden-Wurttemberg in 2007.
FinnCap
The specialist small-cap financial adviser has appointed
Matt Goode as corporate finance director. He joins from
Collins Stewart. Simon Hick also joins the firm as an analyst
in its corporate finance team.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
US stocks drop
as euro angst
lifts fear gauge
U
S stocks tumbled yesterday as
surging bond yields in Spain
and Italy ratcheted up tensions
in financial markets about
Europes ability to solve its growing
debt crisis.
Angst over Europe drove investors
away from risky assets and into safe
havens. US Treasury benchmark yields
fell to their lowest in at least 60 years,
prices for crude fell more than 3 per
cent and the euro dropped below $1.24
to a 23-month low.
The S&P 500 has fallen nearly 6 per
cent in May, heading for its worst
monthly performance since
September as traders focused on
Europe. However, US data later in the
week, including first-quarter gross
domestic product and monthly pay-
rolls, could delink Wall Street from
overseas headlines.
Yields rose sharply at an Italian sale
of five- and 10-year debt, and investors
worried about Spains plans to raise
new funds to shore up its banks even
as borrowing costs rose there.
Adding to worries was Greeces
upcoming election, which could deter-
mine if the country will stay or not in
the Eurozone.
The CBOE volatility index, a gauge of
market fear, jumped 14.8 per cent, its
largest gain in almost three months.
The Dow Jones industrial average
lost 160.83 points, or 1.28 per cent, to
12,419.86. The S&P 500 Index dropped
19.10 points, or 1.43 per cent, to
1,313.32. The Nasdaq Composite fell
33.63 points, or 1.17 per cent, to
2,837.36.
B
RITAINS top shares dropped
yesterday, snapping a four-session
rally, as rising bond yields for Italy
and Spain and the latest poll results
in Greece stoked fears about the Eurozone
debt crisis, sapping investors risk
appetite.
The FTSE 100 index closed down 93.86
points, or 1.7 per cent at 5,297.28, reversing
much of the rally seen since last Thursday
and putting it on course for a monthly
drop of more than 7.5 per cent in May, its
worst performance since August 2012.
Weak energy stocks and miners were the
two biggest drags on the blue chip index,
as the demand picture for commodities
was hit by the Eurozone crisis and by fad-
ing hopes for stimulus measures from top
metals consumer China.
Banks were also among the worst per-
formers affected by Eurozone debt expo-
sure concerns, with Royal Bank of
Scotland down 3 per cent as JPMorgan
Cazenove cut its target price to 25 pence in
a cautious UK sector review.
Lloyds Banking Group shed 2.3 per cent
as JPMorgan reduced its target to 30 pence
from 40 pence, although it upgraded its
rating to neutral on valuation grounds.
British banks ended off lows, however, as
investors saw some cause for optimism
after the European Commission said the
Eurozone should move toward a banking
union, consider eurobonds and the direct
recapitalisation of banks from its perma-
nent bailout fund as well as boost growth
and cut debt.
Worryingly, the latest poll from Greece
showed the radical leftist SYRIZA party has
taken the lead over the pro-bailout conser-
vatives ahead of next months election.
FTSE rally snapped by rising bond
yields and fears over Greek election
BESTof theBROKERS
Home Retail Group PLC
24May 28May 30May
p 78.5
78.0
77.5
77.0
76.5
76.0
75.5
75.0
76.60
30 May
Wolseley Plc
24May 28May 30May
p 2,340
2,320
2,300
2,280
2,260
2,240
2,220
2,200
2,220.00
30 May
Petra Diamonds Ltd
24May 28May 30May
p 137.5
135.0
132.5
130.0
127.5
125.0
130.40
30 May
HOME RETAIL GROUP
JP Morgan believes shares in the
owner of Argos, Homebase and
Habitat are overweight and has a
target price of 133p. Although the
first quarter has been difficult for the
retailers, the upcoming bank holidays
along with an accelerated store
closure programme should provide
some comfort to the markets.
DASHBOARD CITY
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
NEW YORK
REPORT
in association with
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
5,420
5,400
5,380
5,340
5,280
5,360
5,300
5,320
5,297.28
30 May
WOLSELEY
UBS rates the buildings supplies
company as a buy but has cut its
target price by 150p to 25. The
broker sees a slowdown in Europe
muting momentum in the short term
but thinks the economic recovery and
Wolseleys improving market share
keep the investment case intact.
PETRA DIAMONDS
Bank of America Merrill Lynch has
upgraded the diamond producer to
buy, raising its target price to 170p.
The broker believes there will be a
slight dip in prices in 2012 followed by
a smaller rebound in 2013, while
demand led by China is expected to
keep prices high in the long term.
NEWS CONTINUES
ON PAGE 22

G
E
T
T
Y
BANK lending fell again in the three
months to April, Bank of England fig-
ures showed yesterday, while con-
sumers also cut back on new
unsecured credit.
Overall lending to non-financial cor-
porations dropped by an annualised
4.9 per cent in the three-month peri-
od, with construction lending falling
10.1 per cent and services down by the
same and real estate lending down 4.8
per cent.
The manufacturing sector was an
exception, with loans up 0.2 per cent.
Credit card lending to consumers
slowed to a crawl, rising by an annu-
alised 0.1 per cent in the three-month
period, and falling 0.2 per cent in
April alone.
The falling back in net unsecured
consumer credit in April after a limit-
ed spike in March indicates that con-
sumer appetite for new taking on
new borrowing remains limited while
there is also an ongoing strong desire
Consumers cut
back on credit
card borrowing
BY TIM WALLACE
of many consumers to reduce their
debt, said economist Howard Archer
from IHS Global Insight.
It is very possible that increased
worries over the outlook resulting
from news that the economy is back in
recession and from the situation in
the Eurozone is intensifying the desire
to improve personal finances.
However, there were continued signs
of gradual improvement in the hous-
ing market, as 12.5bn of mortgage
lending was approved in April, up
from 12bn in March.
ONS defends its GDP estimates
against sceptical economists
EARLY estimates of economic
growth are very accurate, and there
is no reason to delay publication of
official data, the Office of National
Statistics (ONS) declared yesterday,
defending its record on GDP figures.
The agencys GDP figures for the
first quarter of this year were widely
questioned by economists and
statisticians when they were first
published in April, showing the
country had gone back into
recession.
BY TIM WALLACE
However, the ONS second
estimate, published last week,
showed the fall in GDP was even
greater than first thought, and
yesterday explained that its initial
estimates are usually very accurate.
Recent average revision is
negligible between first and third
estimates of GDP, it said.
Over the last five years the
average GDP revision between the
preliminary and third month
estimates of GDP is minus 0.02
percentage points. The average
absolute revision, without regard to
whether the revision is positive or
negative, has been 0.13 percentage
points.
However Timetric statistician
Simon Briscoe said this analysis
misses the point.
It is not the small revisions
between the first and third estimates
that are the issue it is that even the
third estimate is not very good, he
told City A.M. It is only with the full
reconciliation of data at the end of
the year that the errors are
discovered for example, the major
revisions last Autumn showed the
boom was bigger and the bust
deeper than previously thought.
IN BRIEF
US home sales in surprise drop
n Contracts to purchase previously
owned US homes unexpectedly fell in
April to their lowest level since
December, industry data showed
yesterday. The National Association of
Realtors pending sales index fell 5.5 per
cent in April to 95.5. Despite the housing
market being the US economys weakest
link, economists expect the sector to
add value to economic growth in 2012
for the first time since 2005 but the
report on pending contracts could
temper that optimism.
Spencer Dale: No more QE needed
n More asset purchases by the Bank of
England may not be warranted even if
Britains economy continues to struggle,
and the Bank should keep its focus on
bringing down inflation, its chief econo-
mist said yesterday. Spencer Dale said
the 325bn of quantitative easing (QE)
to date had helped cushion the economy
against the impact of turmoil in the
Eurozone but the Banks top goal had to
be getting inflation back down to two
per cent. The current policy stance looks
broadly right, he told CNBC.
Households are reluctant to borrow despite the Bank of Englands Mervyn King cutting rates
22
NEWS
cityam.com
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Linda-Jane Con, Director at S&P Capital IQ fund research,
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What dierentiates the gradings?
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This marketing communication is directed only
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The analyses, including fund gradings, of
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not statements of fact or recommendations to
purchase, hold, or sell any securities or make any
investment decisions. Users of fund gradings or
other analyses should not rely on them in making
any investment decision.
Copyright 2012 by Standard & Poors Financial
Services LLC (S&P), a subsidiary of The McGraw-
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& POORS and S&P are registered trademarks of
Standard & Poors Financial Services LLC.
CAPITAL IQ is a registered trademark of Capital IQ.
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FEARS that the economy is
worsening has kept consumer
confidence at extreme low levels,
according to the Gfk confidence
index published today, making
consumers increasingly unlikely
to commit to making major
purchases.
The overall confidence index
improved slightly, up from minus
31 in April to minus 29 in May,
BY TIM WALLACE
but the general economic
situation index dropped from
minus 57 to minus 58 and the
climate for major purchases
index slid from minus 30 to
minus 32.
In light of last weeks revised
GDP figures, its worth noting
that the index is at exactly the
same level it was when the
economy was entering recession
in January and February this
year, said Gfks Nick Moon.
UK confidence at rock bottom
Lending to companies fell again in April
2010 2011 2012
-15
-10
-5
0
5
10
15
20 %
CANARY WHARF LONDON
LUXURY & STYLE canarywharf.com
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of 25 or more), David Clulow Opticians, Dorothy
Perkins (Saturday only), Dune, Fiorelli, French
Connection, Gap, Hackett, Hobbs,
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Womenswear, Jones Bootmaker, Karen Millen,
Kurt Geiger, Levis, L.K.Bennett (excludes Signature
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& MediSpa, Robert Dyas, Sean Hanna (services
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Fashion Shows
OUTSOURCING group Capita has
sealed another small takeover deal
with the acquisition of healthcare
technology firm Clinical Solutions.
It bought Clinical from a private
equity consortium led by
Bridgepoint for 20m on a cash
free and debt free basis.
Clinical, which has offices in
Britain, the US, India and
Australia, provides patient
management software and
technology which have been used
in more than 70m clinical calls
over the past 10 years.
It made an operating profit for
its financial year to 31 December of
6.5m on a turnover of 24.2m.
This acquisition strengthens
our ability to assist health services
in driving down costs while
providing quality patient care,
said Capita chief executive Paul
Pindar.
It also gives us a data centre
that already delivers a high volume
and high availability service to the
NHS. It will add important new
expertise to Capitas range of
health services.
Clinical has 160 staff, mainly in
Basingstoke.
Last month Capita bought
Bluefin Corporate Consulting, an
employee benefits business from
insurance firm Axa, for 50m on a
cash-free and debt-free basis.
Capita in 20m
deal for health
tech business
BY PETER EDWARDS
LOVEFILM, the movie on demand service owned by Amazon, yesterday announced a
partnership with film giant Universal. Lovefilm subscribers will be able to stream the
latest Universal releases, including Snow White and the Huntsman (pictured above), via
a range of devices including computers, tablets and games consoles.
AMAZONS LOVEFILM GETS UNIVERSAL MOVIES
24
NEWS
cityam.com
A unique exhibition in celebration of Her Majesty The Queens Diamond Jubilee.
Featuring fascinating stories and objects from the Citys Livery Companies.
OPEN NOW Guest curator: David Starkey
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Detail from London: The Thames on Lord Mayors Day, Looking Towards the City and St Pauls Cathedral, before 1752, by Canaletto; The Lobkowicz Collections, Czech Republic
Greenwich Cutty Sark (Only two stops from London Bridge)

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CAPE yesterday named a new chief
executive, filling a post that has been
vacant since March, in a move that
comes less than a week after a shock
profit warning from the resources
industry services provider.
The company said Joe Oatley, for-
mer chief executive of British engi-
neering company Hamworthy, will
take over as chief executive at the
end of June, replacing Martin May,
who stepped down unexpectedly ear-
lier this year after six years at the
helm.
Oatley joined Hamworthy -- anoth-
er provider of equipment and servic-
es to the marine, oil and gas, and
industrial sectors -- as chief executive
in 2007.
He led the company through the
financial crisis until it was eventual-
ly bought by Finnish ship and power
plant engine maker Wartsila. The
stock had shed about 29 per cent of
its value since Cape issued the profit
warning last week.
Investec analyst Keith Morris said of
Oatley: I think hes the right guy, so
Cape appoints
new leader as
woes increase
BY HARRY BANKS
I think its a very good catch for Cape
to get somebody of Joes capability.
The appointment comes two
months after the company stunned
investors and analysts by announcing
Mays departure soon after Cape said
the timing of the work releases on a
key project had been slower than
anticipated.
Last week the company said it
would take a charge for losses on that
project in Algeria -- one of its two
largest contracts -- that will hit profit
for the year. Its not the easiest time
to come into the company,
Northland Capital Partners analyst
Andy Hanson said.
Cape PLC
260
280
300
320
200
220
240
340 p
238.00
30May
G
E
T
T
Y
Winners rarely compete well without long-term preparation
SENIOR LEGAL DIRECTOR
SINGAPORE
200k-300k pa
An accomplished lawyer is required to manage
compliance for a leading investment managers
Singapore-based operations. Candidates must
have at least 10 years relevant experience.
http://www.cityamcareers.com/job/12399
COMMODITY QUANTITATIVE ANALYST
NEW YORK
$200k-$350k pa
A New York analytics house wants to grow its
commodity quant team through the addition of
an experienced analyst. The ideal candidate will
have a PhD in a quantitative subject.
IT SECURITY PROGRAMME DIRECTOR
CENTRAL LONDON
130k-150k pa, plus bonus + benefits
A leading organisation requires candidates, with
experience of programme direction within com-
plex financial services firms, to deliver business-
critical IT security projects across 26 entities.
SENIOR FORENSIC FRAUD ACCOUNTANT
CENTRAL LONDON
50k-65k pa, plus benefits
An established boutique firm, with mainly insur-
ance clients, requires an ACA-qualified account-
ant. Candidates must haveat least twoyears
experience, and language skills are useful.
INSOLVENCY ADMINISTRATOR
CENTRAL LONDON
A well-respected north London accountancy
firm requires an insolvency administrator. Only
candidates with at least two years of experience
will be considered.
JOBSoftheWEEK
W
ERE all job seekers now. Thats
the message of recent Ipsos Mori
research, commissioned by
professional networking site
LinkedIn. In a survey of 2,400
professionals, it found that 67 per cent felt
the optimum time to spend on their
career each day was 30 minutes or more.
The survey took a broad, rather quaint,
look at what it takes to encourage career
progression. One question asked whether
making tea for your boss is of equal
importance to building a network or
finessing a CV not necessarily relevant to
a London professional. But the broad
message is useful. If everyone else is
working hard, engaging in continuous
career management, as personal
branding expert William Arruda puts it,
then you should be too. And it neednt
leach your time. If LinkedIn is correct,
effective career management could take
up as little as nine minutes a day.
So how can you manage your career
progression in the long-term, without
making a full-time job of it? Of course
there are things you can do yourself
networking, skills building, active career
Let others take the burden
as a passive career hunter
Finding that perfect new role neednt be a full time job in itself, writes Tom Welsh
management, in short but, handily,
much of the burden can be carried for you.
ASK THE EXPERTS
Its tempting to view job hunting as
something you do when youve lost your
permanent role, or youre dissatisfied,
unfulfilled or desperate to advance. This is
somewhat foolish. Its far better to know
how the employment market has
developed, and where its going, before
your hand is forced by circumstances.
A long-term relationship with a
recruiter can go some of the way to
providing you with that knowledge. Steve
Yendell, executive director at Selby
Jennings, the financial services recruiter,
says its a good idea to make early contact,
even if youve no specific wish to leave
your current role. They will provide
advice and guidance, as well as
appropriate opportunities, he says.
Theres no obligation to follow this
advice, but being known to a recruiter,
and engaging with them over a sustained
period, gives you the luxury of keeping
your options open. And if they do
highlight the perfect next role (while
youre still safely ensconced in a
permanent job) then your choice can be
considered rather than desperate.
FACTS AND FIGURES
You may be reticent to approach a
recruiter. Its reasonable not to want to
raise the suspicions of a current employer
by frequent contact with the facilitators of
a potential poaching. Recruiters can,
however, provide indirect advice through
the research they issue.
Robert Half puts out a yearly Salary
Guide. It suggests, for instance, that
someone with three to seven years in
regulatory accounting should expect
58,750 to 90,250 a year. If youre in such
a role, and youre earning less, this may
inform your career planning. Salary may
not be all important, but the knowledge
could at least jolt you out of a comfortable
complacency.
Similarly, recruiters often release
statistics on the numbers of vacancies in a
given sector, and the candidates chasing
those vacancies. Morgan McKinley releases
a monthly report April 2012 saw 3,339
new financial services jobs on the market,
and 5,440 new candidates available to
chase those jobs. Although these
particular figures are limited by their
generality, more specific figures are
available and knowledge of a strong
upsurge in demand for a skill or
experience you possess could mean its
time to consider a change of position.
AN ONLINE PERSPECTIVE
One way of combining knowledge of
salary trends with the potential for
finding the perfect job is by joining an
online jobs site. There are plenty around
and its a good idea to visit several but
one with a wide breadth of roles, potential
employers and recruiters will stand you in
best stead.
Why are jobs sites useful? In a few short
clicks, you can see exactly who is hiring
and where. And not in worthy generalisms
but in specific, concrete job openings.
Theres no need to plough through
countless recruiters theyre all there.
And if theres nothing immediately
available or appropriate, then many have
tools for uploading a CV, for activating
specific alerts, for tailored searches for the
perfect new position.
Ultimately, no recruiter or website can
tell you when its a good time to change
role. But there are plentiful reasons for
being prepared.
Visit Cityamcareers.com to see how City A.M.
can help you in your passive career hunt.
5,700
jobs
in total
More than
CITYAMCAREERS.com
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in IT
Over
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26
G
E
T
T
Y
MATT GINGELL
27
cityam.com
CORPORATE TAX MANAGER
HAMPSHIRE
45k-90k pa
Candidates arerequiredtoenter at manager or
senior manager level at a Hampshire-based firm,
with opportunities for career development.
Excellent technical knowledge is required.
ANTI-MONEY LAUNDERING INVESTIGATOR
CENTRAL LONDON
35k-50k pa, plus pension + bonus
A leading forensic investigations consultancy
requires a specialist with experience in large
banks. The job may involve work on cases with
high media coverage.
E-FX SALES
CENTRAL LONDON
60k-80k pa, plus commission
A growing firm requires an experienced e-FX
salesperson to market its FX platform to institu-
tional clients. Successful candidates must havea
portable client base.
HEDGE FUND PARTNER
CENTRAL LONDON
80k-150k pa, plus partnership
An additional senior manager is required to work
alongside this hedge funds chief investment
officer. Candidates need the gravitas to work as
part of the management team and meet clients.
ELECTRONIC TRADE SUPPORT
CENTRAL LONDON
A niche, technology-focused hedge fund
requires a trade support analyst to join its
Londonteam. Candidates must becompetent in
at least one scripting language.
N
EGOTIATING an employment
contract, whether youre
about to start a new role or
renegotiating an existing
package, can be a daunting
prospect.
Receiving a job offer brings
mixed feelings for most people, as
many agonise over the terms of the
offer and whether to take the
plunge into negotiating a better
deal. Others are so pleased to receive
the offer they simply sign on the
dotted line without considering the
terms.
When youve been offered a new
job, the last thing you want to do is
read through the small print and
negotiate terms. You may feel that
doing so would risk jeopardising
your relationship with your new
employer. However, if you dont, you
may come to regret it. The detail of
your contract is very important
especially when the relationship
comes to an end.
The negotiating process can leave
an employee in a better position.
Businesses expect to engage in some
sort of negotiation. If you dont
believe in your worth and the value
you will bring to the job, why should
the employer?
There is always room for
negotiation and while some terms
may not be flexible, many are.
The major areas for negotiation,
apart from the obvious like basic
pay and holidays, include bonus
terms, benefits, notice provisions,
and restrictive covenants (which
restrict you from competing with
your employer after you leave).
BONUS TERMS
Most bonuses are discretionary
under FSA rules, and there is little
that can be done about this.
However, payments can be
negotiated to compensate for any
stock left behind (although the FSA
states that this payment must
remain deferred to remove any
incentive to change jobs).
You need to look at the conditions
attached to this payment
sometimes employers will specify
that it can be clawed back if you
leave within a certain period. You
need to make sure that this claw-
back will apply only if you leave
voluntarily or are dismissed for
gross misconduct and not, for
example, if you are made
redundant.
But what happens to the bonus
when an employee leaves? The
typical position is that bonuses are
only payable if you are still
employed and not under notice at
the time it is due. However, this can
be negotiable, and it is particularly
appropriate to do so if you are in a
sales role and the bonus represents
commission on sales.
BENEFITS
Other ways to enhance the package,
if your salary is fixed, could be share
options and pensions. These are tax
efficient ways to improve a position.
But ensure that benefits are
maintained in any clause dealing
with payment in lieu of notice. Your
employer will often be seeking only
to pay salary in lieu of notice, and
not take into account wider
benefits.
NEGOTIATE NOTICE
Its important to think about
negotiating on notice period. While
a notice period of between one and
three months would be fairly
typical, employers do propose longer
or shorter periods.
Dont accept a term that requires
you to give more notice to your
employer than it is required to give
to you. Longer notice periods often
tend to favour employees but they
can operate against you if your
employer wants to keep you away
from a competitor when you leave,
especially if the employer operates a
garden leave clause.
RESTRICTIVE COVENANTS
As well as notice, clauses like garden
leave and restrictive covenants
should also be considered. Typical
clauses would restrain you for a
certain period from competing with
your employer, trying to poach
clients, dealing with clients whether
you poached them or not, and
trying to get colleagues to come to
your new employer with you.
The general rule is that such
clauses are only enforceable if they
are reasonable, and go no further
than necessary to protect the
legitimate interests of the business.
But they are often enforced by the
courts. It is very easy, when joining a
new employer, to overlook what will
happen when you leave. But unless
you are planning on staying until
retirement, this is the likely
scenario. By then it will be too late
to negotiate the covenants, which
could prevent income for perhaps
six or 12 months.
The time to negotiate your
employment contract is prior to
your employment commencing. This
is a very complex area and you
should always obtain specialist
advice. It can pay huge dividends
when you leave.
Matt Gingell is a partner at Gannons
Solicitors.
An employment
lawyer offers advice
on where there is
space to bargain
Contracts arent
easily torn up so
make sure youre
happy with yours
from the start
Negotiate your future
with your job contract
Its very easy, when
joining as a new
employee, to overlook
what will happen
when you leave

E
VER since it became clear that
hed be facing Barack Obama
in November, Mitt Romney has
frustrated the Democrats. The
expected gaffes have rarely
surfaced, his stump speeches have
improved and the Republican
candidate has remained on message,
consistently focusing on the
economy and jobs. Its a development
that has seen some Democrats, who
had privately predicted a cakewalk
only a matter of weeks ago, develop a
case of collective amnesia.
After Tuesdays Texas contest,
President Obama is now facing a
Republican candidate officially
stripped of the ideological stress-test
that comes with arduous primaries.
Romney is raising money lots of it
G
OVERNMENTS across the
world are working to close
the gap between education
and the workplace. High
youth unemployment has
focused attention on schools ability
to prepare young people to compete
for jobs, and concerns over growth
are shining a spotlight on whether
education systems encourage and
enable sufficient numbers of young
people to become entrepreneurs.
A report published today by the
Education and Employers Taskforce
and Pearson ThinkTank, highlights
widespread variation in access to
entrepreneurship education in
schools. It sets out the first findings
of a review of the future of enterprise
education. Supported by the
Department for Business, Innovation
and Skills (BIS), its publication coin-
cides with a visit to William Morris
Sixth Form in west London by Lord
Young, the Prime Ministers enter-
prise adviser, and follows Mondays
launch of the 82.5m start-up loans
scheme for young entrepreneurs.
A nationally representative survey of
cityam.com/forum
State schools lack
access to volunteers
with experience of
running businesses
In association with
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
28
ANTHONY MANN
State and private school kids face
damaging gap in enterprise skills
1,002 young people, aged 19-24 years,
was undertaken by YouGov for the
review. Those who studied at gram-
mar or independent schools were
more than twice as likely to have
experienced long-term entrepreneur-
ship competitions than peers educat-
ed in non-selective state schools. This
gap must be addressed if the UK is to
be globally competitive.
One obstacle facing ordinary state
schools is free access to volunteers,
with experience of running their own
businesses or social enterprises, will-
ing to come into schools to talk to
pupils about their own experience.
To close the gap between classroom
and workplace, the Education and
Employers Taskforce and BIS are
working to create an army of enter-
prise champions, people with first-
hand insights into running an
enterprise, to volunteer a couple of
hours a year to talk to young people
about the reality of self-employment.
This new volunteering programme is
for everyone, from organisations of
every size and sector. Managed
through Inspiring the Future, which
launches in July, its an important
step in levelling the playing field for
state schools.
On average, 30 per cent of young
adults recall enterprise activities. But
much higher proportions (close to 40
per cent) of former grammar and
independent school pupils report par-
ticipation than their peers from non-
selective state schools (27 per cent).
Such activities became more popular
over the last decade. And large pro-
portions of those involved, especially
if they undertook them over the age
of 16, say that taking part, even in
one-day business competitions, made
a difference to them in deciding on a
career, getting a job after education
or getting into higher education.
For a smaller number of schools,
enterprise education is more akin to
an educational philosophy, which
privileges learning-through-doing
across a wide range of tasks. The pur-
pose is more than giving a pupil a
taste of entrepreneurial life, but to
build personal confidence and atti-
tudes commonly described as employ-
ability skills. In such enterprising
schools, pupils have extensive oppor-
tunities to come into contact with
employers. And there is good evi-
dence that, after controlling for
attainment levels, young adults who
encountered high numbers of
employers while in school are much
less likely to be Neet not in educa-
tion, employment, or training at 19
to 24 and, if in employment, earn
much more than their peers who
went through their school days with-
out the benefit of employer involve-
ment. There are compelling reasons
for employers to act to secure their
own future talent pipelines, by help-
ing young people to understand bet-
ter the complexity of the modern
labour market and successful
approaches to securing the career
aspirations.
Pupils are particularly attentive to
professionals they come into contact
with, building their understanding of
the reality of labour market opportu-
nities and successful career naviga-
tion. In contrast to independent
schools, where parental and alumni
networks provide easy access to
employee volunteers, state schools
typically have weaker organisational
contacts. This is why Inspiring the
Future can make such a difference.
Anthony Mann is head of policy and
research at the Education and Employers
Taskforce. Enterprise Education Value
and Direction is released today.
and has rallied the base and created a
sense that November is an entirely
winnable contest. The Republican cur-
rently has poll leads in the swing-
states of Florida and North Carolina.
The Presidents re-election cam-
paign has certainly got off to a splut-
tering start. Obama is clearly
uncomfortable running as the incum-
bent, knowing that he cant sell four
more years of the same. His campaign
has acknowledged that theyll be
going almost entirely negative
through November. And yet, the
attacks on Romney have appeared
sloppy. In addition, Obama has con-
trived a slogan, but lacks a com-
pelling narrative to sell to voters.
Forward certainly rings with the
bear with me I predicted a few
months ago, but it hardly breeds con-
fidence with an electorate thats
growing more pessimistic by the day.
One might say the first challenge for
the President before November is next
weeks gubernatorial contest in
Wisconsin. This contest, according to
Democratic chairman Debbie
Wasserman Schultz, has given the
Obama for America operation an
opportunity to do the dry run. Its
therefore telling that the President,
knowing his electoral limitations, has
avoided the contest in the Badger
State altogether. If Republican
Governor Scott Walker can hold on it
will provide substantial momentum
for the Romney campaign in that
state, forcing Democrats to expend
significant resources in a state some
have taken for granted. The polls have
Obama and Romney tied in
Wisconsin, a state Republicans last
won in Ronald Reagans landslide in
1984. Its also a sign that Obamas re-
election hopes are far rockier than
most think.
Of course, Romney still faces chal-
lenges of his own. As residents in
Aberdeenshire know all too well, its
tough to jettison Donald Trump (who
claims Obama was born in Kenya and
so is ineligible for the presidency),
especially when he brings such size-
able economic benefits. Trumps
embarrassing utterances regarding
the Presidents birthplace are a need-
less distraction for Romney and may
have finally provided Democrats with
an ideal opportunity to taint and stig-
matise his candidacy. But Democrats
delighted that they have finally
knocked Romney off his stride will be
quite aware that this is temporary.
Come next Tuesday evening, the
Presidents problems could be much
more long term.
Ewan Watt is a Washington DC-based
consultant. You can follow him on
@ewancwatt
THE WHITE
HOUSE RACE
EWAN WATT
Romney gears up for Novembers election that Obama could still lose
29
Agile office space
[Re: Londons developers have a prime role
in ensuring its future success, Tuesday]
I couldnt agree more with George
Iacobescus assessment. It is vital for
property developers to respond to changing
business needs. However, greater property
market flexibility could also be achieved by
owners being open to new ways of making
space available. More flexible ways of
occupying offices would make businesses
more agile and efficient. This could be in
managed offices, where third party
suppliers provide the total package for
occupiers, in serviced offices, or even co-
working spaces. Gone should be the days of
one-size-fits-all, where firms have no choice
but to take long and inflexible leases.
PatrickElliott, chief executiveof Instant Offices
Private solutions
[Re: Cheap money and more debt wont
help the young, Tuesday]
Syed Kamall [Rapid Responses, yesterday]
is wrong to criticise Philip Salter. Kamall
completely ignores why entrepreneurs are
not getting loans from the private sector
that their proposals do not warrant the risk
involved. Does government know better
than private investors?
AndrewBates
[Re: Surging labour costs are keeping UK
unemployment high, yesterday]
Easy hire, easy fire would free up the
employment market. Relationships can go
sour at any point. Unemployment insurance
policies are a far better solution to all this.
AlexWild
I
TALY is the lumbering hippo of
the Eurozone, more notable for
its size rather than its speed.
Compared to what was going
on elsewhere in the run-up to
2008, Italy was not drinking from
the cheap credit oasis in the same
way as its neighbours. It wasnt
running as fast, with growth
averaging 1.5 per cent between
1999 and 2007. Spain was running
2.5 times faster than Italy and
Ireland four times faster during the
same period. But Italy was bloated,
always carrying a triple-digit ratio
of government debt to GDP, with
modest dieting allowing a fall from
113 per cent to 103 per cent over
the same period.
Although everyone knows the
risks of obesity, theres no knowing
just quite when, or how, problems
may manifest themselves. Italy may
have shed some pounds during the
good times, but problems were
building. As with other peripheral
nations, competitiveness was erod-
ed, labour costs rose far faster than
in Germany and the current
account surplus of the start of
European monetary union was slow-
ly replaced by a modest deficit.
Its been known for years that Italy
is facing a population time-bomb
greater than most other nations. By
2030, the OECD reckons Italy will
have a dependency ratio of one
working aged person for each one
over the age of 65. Even more fright-
ening is that there is no other major
country which is set to see this ratio
rise faster. We may struggle to fore-
cast one day to the next in the
Eurozone crisis, but when it comes
to forecasting the big trends in pro-
creation and deaths, economists
tend to have a better track record.
The problem isnt going to go away,
whatever government is in power.
Wasnt the current government
TOP TWEETS
I wouldnt notice if my GP was on strike. They
only open Monday to Friday, 8.30am to 4pm.
@ivoted
More than half of the universities in the UK
say the governments student visa policy is
damaging. Why doesnt it change course?
@PMCallaghan
We shouldnt pay too much attention to
Greek polls. Voters are so confused and
depressed, theyll change their mind again.
@YanniKouts
Making dozens of countries use one currency
is the past. The future will see dozens of cur-
rencies used in any one country.
@DouglasCarswell
Are the coalitions efforts to curb student
visa abuse damaging Britains economy?
YES
Government policy to reduce net migration is sending the message
that the UK does not welcome genuine international students. It
could also damage a profoundly successful UK export at a time
when the UK economy needs growth. Competitor countries, like the
US and Australia, are taking active steps to encourage international
students and are communicating a very different message. There is
growing demand for international higher education and the UK
cannot afford to lose its leading position. The UK excels in this area,
with 9.9 per cent of the total market share in 2009, and export
earnings of 7.9bn. International students also bring significant
cultural richness and long-term political and social benefits to the
country. Genuine international students should not form part of the
governments immigration targets. Students are not long-term
migrants and the vast majority leave after finishing their studies.
Nicola Dandridge is chief executive of Universities UK.
Nicola Dandridge
NO
Priti Patel
Britains businesses and universities should be able to attract the
brightest and the best from around the world to work and study in
London and throughout the country. But the government must also
get to grips with the uncontrolled levels of immigration inherited
from Labour and restore public confidence in the immigration
system. Action taken to remove abuses in the student visa system,
and end the era of bogus colleges, should be welcomed. 116 licences
to colleges have been revoked and a further 179 licences suspended.
We need foreign students to contribute and study, not come here to
seek a backdoor route to live in Britain. There are other reforms
needed to address wider immigration problems and this
governments policies to deport more foreign criminals and process
asylum applications more quickly will make our country safer and
our immigration system fairer.
Priti Patel is Conservative MP for Witham.
RAPIDresponses
Italy must reform:
It cant wallow in
the mire forever
meant to be different, though? Soon
after Mario Montis appointment as
Prime Minister in November, yields
on Italian bonds plummeted by over
2 per cent to below 5 per cent,
helped by the ECBs injection of
funds into the Eurozones banking
system. Furthermore, yields moved
below those of Spain. The going is
now proving a lot tougher though,
for two main reasons.
Firstly, and not surprisingly, Monti
is meeting stiff opposition to his
central pillar of labour market
reform and is already being forced
to compromise on key points. While
Ireland has seen labour costs fall 13
per cent from their peak in 2009,
theyve risen 4 per cent in Italy. Its a
long road.
Secondly, as other peripheral
nations are drawn ever-closer to the
vortex of a possible Eurozone exit,
investors become less and less dis-
cerning when it comes to investing
in anything other than liquid, high-
ly-rated government debt. Just look
at US and German yields.
If the hippo is to survive, it needs
to lumber preferably trot down
the road of reform. If nothing is
done, by 2030 less than one-third of
over 16s will be working, presuming
a constant 57 per cent employment
rate in the working age population
and that the OECDs aging assump-
tions turn out to be true.
However, the hippos legs will
buckle well before then and possibly
this year if Greece leaves the euro.
Simon Smith is research director at FxPro.
SIMON SMITH
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30
DIRECTOR UK ENTERPRISE, CISCO
Q
Why is cloud becoming such a
hot topic?
A
Most UK businesses are already
using some sort of cloud service
and are looking to provide more of
their IT capability this way.
Ahead of the obvious reasons
like reducing costs and easier
maintenance, todays drivers are
increasingly around performance,
agility and efficiency. Providing a
modern, mobile workforce,
business partners and end
customers with access to cloud
services anytime, on any device,
anywhere in the world.
When delivered well, cloud
consumption models facilitate
growth. They provide flexible
business models that allow
scalable services to be launched
more rapidly and efficiently,
without compromising security or
functionality.
Q
Which is the right solution?
A
We are becoming a world of
many clouds. There is no one-
size-fits-all solution. Organisations
are looking to consume their
technology in a variety of models;
either using public cloud services,
their own internal, private clouds,
or hybrid solutions that combine
both. Most organisations require a
variety of sources and want the
flexibility to change as their
businesses and requirements
evolve.
We see most of our customers
balancing risk and taking a phased
approach to moving any IT
services. I recommend addressing
the areas that will have an
immediate, tangible impact on the
business. For instance, areas such
as web conferencing, video
conferencing and unified
communications appear to be
creating the highest levels of
interest, with healthy growth
forecast by industry experts.
TIM SKINNER
BUSINESSTECHNOLOGY
Q
What do organisations need to
consider?
A
There are a wide variety of
innovative vendors available
that can provide and deploy
solutions to integrate with your
chosen cloud model. However,
there are pitfalls, not least the
absence of industry standards. Lack
of consensus around definitions
makes the distinction between
cloud and managed services
unclear. One key consideration
should be accountability, should
things go wrong.
Whichever models you opt for,
user experience is fundamental
when selecting those right for your
organisation. User adoption
denotes success and the role that
the network plays in assuring the
experience is key. A cloud
intelligent network ensures a
secure and consistent experience
across delivery models for all the
ways that people choose to
consume them.
We dont know what devices
people will be using to access
services two or three years from
now, but a cloud intelligent
network approach will ensure your
organisation is prepared.
The new networking sky is flled with all kinds of clouds. Big ones.
Small ones. Public. Private. Even hybrid. Your people, partners,
citizens and customers must move swiftly and securely between
many clouds. Not just one. Thats why Cisco Data Center and
Cloud services ensure the same agility, efciency and security as
the rest of the Cisco architecture. So your data, your relationships and
your business can remain protected at every level. And you can focus
on taking your business to new heights through innovative growth.
Learn how businesses in every industry are entrusting their data with
Cisco Data Center and Cloud services in the physical workplace,
and the virtual one, at www.cisco.co.uk/ucs
In the past year,
67% more
companies
moved to cloud.
(But not just to one.)
An intelligent cloud network is
the bright and flexible solution How the cloud can
I
NCESSANT talk of big data over
the last 18 months has gone
hand-in-hand with talk of the
abilities of cloud storage and
computing to meet these demands.
Just what is cloud storage and what
can it mean for your business
requirements? It can mean different
things to different people, but its
aim is to provide on-demand net-
work access to a shared storage pool
that can be rapidly provisioned with
minimal management effort.
The banking and insurance sectors
will see a continues onslaught of legis-
lation and regulatory requirements
the likes of the Markets in Financial
Instruments Directive review (Mifiid II)
will increase exponentially the trans-
action reporting requirements for
financial institutions. On the insur-
ance side, Solvency II will create simi-
larly increased demands for storage
that is scalable with data that is easily
accessibly and on demand. So what are
cloud computings advantages and
how can it respond to the demands
being placed upon data storage?
1
SCALABILITY. One of the biggest
advantages of cloud storage is
its relative ease of scalability it
is much easier to bolt-on
increased cloud storage to your
existing system than it is to upgrade
an internal data centre. And as the
storage, archiving and reporting
requirements are ramped up across
the financial sector, cloud
computing is well placed to respond
to the ever-increasing storage
demands.
2
REDUCED IT COSTS. With a well-
configured system, the
implementation of cloud
computing and storage can cut
the costs of network management
As the data storage requirements for
financial institutions increase, they need
flexible solutions, writes Craig Drake
and overall IT spends. Rather than
having huge amounts of storage and
processing power in reserve just in
case, by pooling hardware and
software in the cloud, you pay for
what you use.
3
ACCESSIBILITY. Cloud storage
can give businesses and
their clients access to data
from anywhere with an
internet connection. It has also
opened up possibilities for bring
your own device. As employees
amass an increasing number of
powerful personal mobile
computing devices, from smart
phones to tablet computers, they
have begun to demand the same
level of flexibility in their work
environment and the ability to
connect these devices to their
professional IT network. Cloud
computing makes this achievable
and helps IT systems
administrators manage the
devices connected to their
network.
4
DATA SECURITY. By backing up
company data on a remote
cloud by its very nature
spread across a number of
locations risks of losing
company data to fire, f loor or
another natural disaster are
mitigated.
5
EASE OF MAINTENANCE. Rather
than maintaining the in-
house data centre yourself,
cloud storage software and
hardware are updated by the
cloud storage provider. Though
this will form part of your usage
fee, these costs will be greatly
reduced compared to traditional
in-house storage networks.
The cloud can help you to administrate your data
31
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.

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answer data needs
At Wunderman we have been using the
cloud for all of our email services since
June last year. We were one of the first
marketing agency of any size to embrace
cloud services for email and our 340 staff
in the UK migrated all email services to
cloud technology.
The move has allowed us to enjoy a
mailbox 25 times the size of our previous
ones, with a size of 25GB. This means we
no longer have to archive our emails out
of our inbox, in fact many of us have been
moving our old archived emails back into
our inbox, which makes it far easier to
track down that now essential email from
2009.
We anticipate many other advertising
agencies within the UK of all sizes will
follow our lead and make the leap into the
cloud. As a marketing agency we have lots
of people using different hardware and
from various locations, the creative
department all use Macs, the account
managers PCs, so we need software and
storage solutions that work across the
board within our network or outside. This
is a lot easier with cloud-based email
solution as we dont have to use different
software with different configurations.
Having our email on the cloud also means
we dont have to worry about having huge
and costly email servers on site or
expensive disaster recovery strategies. I
would really recommend other businesses
of our size to move to the cloud as well,
whatever their sector.
storage network
Legal considerations
for off-site storage
I
N traditional outsourcing, when
an activity is transferred by an
outsourcer to a service provider,
the outsourcer may retain
regulatory compliance
responsibility. Cloud computing is a
new form of outsourcing and many
traditional outsourcing concerns
and issues apply equally.
Compliance responsibility remains
unaffected: you can outsource the
fulfillment of the regulatory
requirement, but you cannot
outsource your regulatory status. As
such, the regulation of cloud
computing is a paradox: cloud
computing is regulated, but there is
no entity to be regulated rather,
normal rules apply to a new
business model for ICT delivery and
consumption.
Cloud for financial companies is
no more complicated than for any
other organisation. Normal consid-
erations apply: what solution is
appropriate; what data goes into the
cloud; which processes? The wrin-
kles start to appear when a financial
organisation is thinking about plac-
ing key client data offshore and/or
putting key processes into the cloud.
It would be wrong to say that the
cloud is specifically regulated. But it
would also be wrong to say that it is
not regulated at all. In fact, there is
a whole host of law and regulation
that underpins online and cloud
activities. Some of the most relevant
regulatory regimes are noteworthy
because they typify the concerns of
organisations seeking to embrace
utility computing.
There are three key considerations
for financial companies looking to
outsource to the cloud.
The first is reliant upon the identi-
fication of critical or important
functions performed by an outsourc-
ing company on behalf of a financial
company. It is imperative that any
regulatory demands on a business
are met by outsourcers and that
there are contractual provisions for
this. Terms like this are normal for a
full-blown outsourcing arrange-
ment, but onerous if compared to a
normal cloud vendors terms.
The second key consideration is
whether a financial organisation
will be putting data into the cloud
and the security issues there are
with this what some might say is
the Achilles heel of cloud comput-
ing. This is a particularly important
consideration when dealing with
personal and sensitive data. There
are obligations under the Data
Protection Act that need to be met.
First assess the nature of the data
and its sensitivity and second, con-
sider the public perception of this
being stored in the cloud.
Lastly, there is the issue of exactly
where the data might be going. A
benefit of cloud computing is that
data is held elsewhere typically in a
cheaper jurisdiction. This may raise
no issues at all for raw, non-personal
data. But the EU Data Protection
Directive requires that personal data
is not transferred to a country or ter-
ritory outside of the European
Economic Area unless that country
or territory ensures an adequate
level of protection for that data.
To successfully pick your way
through the relevant regulation it is
first critical to understand the busi-
ness need, the available technology,
the relevant data and the terms and
conditions upon which the cloud
offering can be secured. Blending
together those considerations will
allow customers and cloud vendors
to achieve a community of interest,
in a regulatory compliant way.
Mark O'Conor is partner and London
location head for IPT at DLA Piper.
cityam.com
CASE STUDY WUNDERMAN MARKETING AGENCY BRENDAN TANSEY, CEO
G
E
T
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Y
MARK OCONOR
T
en years is a long time for a
computer game. They age in dog
years, which makes the Diablo
franchise 112 years old. And it
has been a particularly long wait for
Diablo 3 the most hotly-anticipated
PC game of the year. The franchise
has won die-hard fans through its
incredibly simple but impossibly
addictive formula: click enemy, kill
enemy, pick up loot. The question is:
how will this translate to a
generation of gamers used to more
complex titles?
IS IT ANY GOOD?
For those who were worried Blizzard
might have ruined their beloved fran-
chise, you can relax: Diablo 3 is an
excellent game. Youre thrown into a
familiar world peopled with a vast
array of monsters and villains to hack
to pieces in your desired manner (you
can choose to play as either a
Barbarian, Monk, Wizard, Demon
Hunter or, most bizarrely, Witch
Doctor). The simple gameplay is,
appropriately, satisfying as all hell. For
those familiar with the earier titles,
there are plenty of trips down memo-
ry lane (Hmmm... Fresh meat!) but it
certainly doesnt rely on nostalgia.
The landscapes are now expansive
and luciously coloured a big depar-
ture from the sometimes-repetitive
corridors of the previous iterations.
THE REAL MONEY AUCTION HOUSE
One of the biggest developments from
the previous games is the introduc-
tion of an Auction House, which
allows you to flog the loot you pick up
to other players for in-game gold or
(soon to go live) actual money.
Watching as the exchange-rate
between in-game and real cash tries to
stabilize will be fascinating both in
the context of the game itself and as
an indication of how digital
economies might work in the future.
The value of items is currently fluctu-
ating wildly, with people trying to fig-
ure out what represents a worthwhile
investment an axe that went for
7,000 a few days ago might end up
Diablo 3 sees the return of some familiar villains, like the sinister, cleaver-wielding Butcher
cityam.com
32
LIFE&STYLE
TECH NEWS
BY STEVE DINNEEN
New poker app lands on Android and iOS
A new app from PokerStars will let you show off you silky card skills or give
your cash to strangers on the go. The slick app, which is available on iOS and
Android, is easy to use and fiendishly playable. Former pro Victoria Coren played
a tournament to show it off. She was second out - hopefully youll fare better.
GAMES
DIABLO 3
Cert: 15 | By Steve Dinneen
hhhhi
TECHNOLOGY
Reasons you
should never
feed the trolls
T
rolls are a tricky thing to deal
with. Not the things that hide
under bridges a can of pepper
spray and a flaming pitchfork
tends to work for them. Im
talking about internet trolls: people who
post inflammatory messages online with
the intent of getting a rise out of you. And
there are millions of them: an entire army
of faceless, shuffling, impotent (probably.
Almost certainly) half-wits.
The really nasty ones make headlines;
the ones who post racist abuse or make
offensive comments on dead childrens
Facebook memorial sites. But this is the
grubby tip of a vast fecal iceberg.
Messageboards one of the great
democratising achievements of the internet
are besieged. And you only have to click
on a YouTube video to find hundreds of
comments saying: This thing you like?
Well its AWFUL. And I hope you DIE. Lol.
Scrolling through YouTube comments is like
staring into the dull, lifeless gutter of
humanity; a miserable black-hole of venom
and pent up sexual frustration.
Trolls tend to be contrary creatures.
Right-wing trolls love nothing more than
posting comments on left wing websites
and vice versa. The less imaginative ones
usually say something along the lines of:
X isnt as good as he/she/it used to be,
Im never coming back to this website
or, simply, This article is rubbish, which
makes you wonder why they went to the
trouble of not only reading it but taking
the time to complain too. Its a bit like
queuing up for a roller-coaster you know
youre going to hate then queuing up
again to spit at the guy who presses the
button to make it go.
Websites have agonised over ways to
get round the problem, like insisting that
people register with their real name and
email address before posting. But this is a
barrier to debate, and is easy to
circumvent for a determined troll. Others
heavily moderate their discussion boards:
generally more effective but its a fine line
between moderation and censorship.
If only the trolls had listened to their
mothers and only spoke when they had
something nice to say. Or maybe thats
not my opinion at all; maybe Im just
trolling the trolls, hoping it will make
them disappear in a puff of logic.
GEEK
SPEAK
STEVE DINNEEN
unsold today, even if its listed for a
third of the price. In terms of game-
play, the Auction House has its ups
and downs. Serious players those
bleary-eyed people who will invest
months of their lives in the game
will benefit: it makes it very difficult
for third parties to siphon off the best
items and sell them on the black mar-
ket, thereby skewing the games bal-
ance. For more casual players, like
me, it makes the loot you find your-
self markedly less valuable whatev-
er you pick up, someone else will be
selling a better version. At low levels
it also means your character is ridicu-
lously over-powered. In around 20-
hours of gameplay Ive died exactly
once. Conversely, later in the game,
you wont get anywhere without
sourcing the best gear, again making
the stuff you find seem a bit worth-
less.
THE TECHNICALITIES
Blizzard has simplified the customi-
sation aspect of the game. Kill
enough monsters and you will go up
a level, unlocking extra skills, which
you can opt in and out of whenever
you feel like it. In the earlier levels
you can happily switch between skills,
radically changing your playing style.
Later on, youll have worked out your
strategy and youll bloody-well stick to
it. Youll be too busy trying not to die
to get bored.
THE ALWAYS ONLINE DEBACLE
The most controversial element of
Diablo 3 is that you always need an
internet connection to play even if
youre playing solo. The servers
crashed in quite spectacular fashion
in the first few days, meaning lots of
extremely irate fans were unable to
access the game. My copy arrived
three days after launch and Ive not
experienced any issues, though, even
on a copper-wire broadband connec-
tion. Multi-player with four of five oth-
ers, which can be pretty intensive in
terms of things exploding all over the
screen, worked fine too.
SO SHOULD I BUY IT?
Diablo 3 is a time-killer of the highest
order. An hour becomes three,
becomes a whole night. It wraps its
tentacles around you and refuses to
let go. Click, smash, slash, grab: its a
winning formula.
Diablo 3 is fiendishly addictive
Queues amass on launch of Samsung Galaxy S3
The latest flagship handset from Korean giant Samsung has gone on sale,
leading to winding queues reminiscent of an iPhone launch. Samsung and
Apple have been fighting it out for the top-spot in the handset wars. See City
A.M. next week for the low-down on the new pretender to the throne.
Sky makes Pirate Bay walk the plank
Embattled file-sharing website The Pirate Bay has been blocked by Sky in the
UK, following a similar move by Virgin. It is understood the controversial site,
which is involved in legal proceedings in various regions, has already switched
its IP address to give access to its contents.
Reducing complexity has never been simpler.
Designed for growing business, the IBM System x3650 M3 Express server with the latest
Intel
Xeon
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simple start-up, intuitive management and tool-less design, this server is easy to deploy
and managewhether your IT infrastructure is physical or virtual, onsite or remote.
Additionally, you get the valuable expertise of IBM Business Partners to create an IT
environment optimised to keep up with tomorrow, today.
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Quarterly price quoted is based on IBMs 0% System x Solution Finance offering (FMV lease). Terms & Conditions Apply: Offering availability subject to credit approval; for more details and full Terms
and Conditions please visit: http://www.ibm.com/financing/uk/lifecycle/acquire/xsolutionfinancing.html Rates and offerings are subject to change, extension or withdrawal without notice. Prices
include VAT at a rate of 20%. IBM hardware products are manufactured from new parts or new and serviceable used parts. Regardless, our warranty terms apply. For a copy of applicable product
warranties, visit http://www.ibm.com/servers/support/machine_warranties. IBM makes no representation or warranty regarding third-party products or services. IBM, the IBM logo, System Storage
and System x are registered trademarks of International Business Machines Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or
other companies. For a current list of IBM trademarks, see www.ibm.com/legal/copytrade.shtml. Intel, the Intel logo, Xeon and Xeon Inside are trademarks of Intel Corporation in the U.S. and other
countries. All prices and savings estimates are subject to change without notice, may vary according to configuration, are based upon IBMs estimated retail selling prices as of 01/01/2012 and may
not include storage, hard drive, operating system or other features. Reseller prices and savings to end users may vary. Products are subject to availability. This document was developed for offerings
in the United Kingdom. IBM may not offer the products, features, or services discussed in this document in other countries. Contact your IBM representative or IBM Business Partner for the most
current pricing in your geographic area. 2012 IBM Corporation. All rights reserved.
Find a system that fits
your business.
IBM System x3650 M3 Express
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External disk storage with 6GB/s Serial Attach SCSI (SAS) interface
technology
Scalable up to 48TB with 500GB NL-SAS 2.5" drives
Support for 96 drives with combination of EXP3512 or EXP3524 expansion
enclosures
Field upgradeable with FC or ISCSI host interface cards
Self encrypting drive options available for secure data at rest
DS3512 also available with 3.5" drive support
Intel Xeon 5620 processor (2.4GHz four-core), maximum of two
processors
Up to 192GB Registered Dual Inline Memory Modules (RDIMMs) or
48GB UDIMMs high-performance, new generation Double Data Rate 3
(DDR-3) memory
Internal storage flexibility with up to sixteen 2.5" hot-swap Serial
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Up to 192GB Registered DIMMs (RDIMMs) or 48GB UDIMMs
high-performance, new generation Double Data Rate 3 (DDR-3) memory
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For four weeks City A.M. and Brewin Dolphin will be shining a spotlight on
a series of City Treasures as we celebrate some of the great places and
institutions around us. Many of them are established with a long
and interesting heritage yet they still exude their core values
based on service and excellence.
Tomorrow is the Burlington Arcade.
www.brewin.co.uk
Boodles members club on St Jamess
L
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A
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here are many pretenders to
Boodles crown as the most
distinguished private
members club, but few can
match it for prestige or status. It was
founded in 1762 by the Earl of
Shelburne, who went on to become
Prime Minister.
The famous institution is this year
celebrating its 250th anniversary. In
that time it has seen 54 Prime
Ministers come and go, including its
founder, and nine monarchs.
Countless distinguished members
have passed through its doors.
Hundreds of them deserve comment
but three are particularly worthy of
mention.
Perhaps the most famous econo-
mist of them all, Adam Smith,
would spend his spare time at the
club; Sir Winston Churchill, the
most lauded of all the British Prime
Ministers, was a member; and James
Bond creator Ian Fleming drew
inspiration from the club, basing
the Blades Club on the institution
and referencing it in Moonraker.
It is name-checked in works of fic-
tion by authors including Charles
Dickens (in Bleak House) and Oscar
Wilde (in An Ideal Husband).
It goes without saying that mem-
bership is by no means guaranteed
it is very strictly invitation only and
the club doesnt list pricing on its
sparse website if you have to ask, it
doesnt matter whether you can
afford it, its probably not for you.
Inside, the club isnt a million
miles from its 18th century begin-
nings, all chandeliers and
Winchester sofas. Its members are
attracted to its timelessness; a space
where traditional values remain and
gentlemen can gather on the terrace
to chew over the politics of the day
over a fine cognac and a cigar.
Boodles is that rare thing an
institution that never gets old. In
250 years time, when it celebrates
its 500th anniversary, more genera-
tions of the great and good of British
society will be pulled from the auspi-
cious ranks of its bulging members
list.
THE MOST PRESTIGIOUS MEMBERS CLUB OF THEM ALL
Sizzling accessories
for your beach trip
Heat up your look with these cool pieces, says Zoe Strimpel
cityam.com
34
LIFE&STYLE FASHION
BOODLES

Antony Peto Salvador
straw hat, 143,
matchesfashion.com
Understated but clearly very hip,
this high-quality hat looks equally
perfect on an urban rooftop pool
or terrace as it does in an Indian
Ocean hideaway.
Agent Provocateur beach towel, 135,
agentprovocateur.com
This soft velour towel takes on a whole new level of sass,
we think, with the patent portable halter. The towel is
good for those who want extra heat: the black will soak it
up.
Athena Procopiou Inez
printed silk kimono, 305,
netaporter.com
Kaleidoscopic colours take the
seasons colour trend up a notch.
Youll be sure to catch eyes with
this gorgeous piece, which would
work over neutral colours.
Belle by Sigerson Morrson
Randy sandals, 150,
matchesfashion.com
Totally lovable sandals that are
seriously on-trend with their nod
to neon. We like the no-nonsense
at sole and good support from
the ankle strap.
Missoni patchwork knitted
wrap dress, 510,
harveynichols.com
OK, its dry-clean only so maybe
not one to pull on over the sandy
wet swimsuit. It is, though, one
for a seriously elegant look for a
beach or poolside dinner.
Cath Kidston Pinny
Flowers Tote Handbag,
45, johnlewis.com
Cute tote bag with CKs signature
practical touches: nished in prac-
tical wipe clean oilcloth, it also has
magnetic fastening and an inter-
nal zip pocket.
Diane Von Furstenberg
Aaliyah printed silk-
georgette kaftan, 335,
netaporter.com
Supremely elegant boho look from
the queen of prints, with a lovely
oating diaphanous texture thats
perfect for the poolside cocktails.
35
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
7pmSky Sports News at Seven
7.30pmGreat Matches of European
Football 8pmLive PGA Tour Golf
11pmEuropean Tour Golf 1am
Premier League World 1.30am
Time of Our Lives 2.30amRingside
3.30amThe Rugby Club 4.30am
NRL Fulltime 5am-6amSuper
Leagues Supermen
SKY SPORTS 2
4.30pmLive ECB 40 League
Cricket 10pmWWE: Late Night
Raw12amWWE: NXT 1amNRL
Fulltime 1.30am-2.30amSuper
Leagues Supermen
SKY SPORTS 3
7pmRacemax 8pmThe Rugby
Club: Rugby union magazine.
9pmRingside: Boxing magazine.
10pmGreat Matches of European
Football 10.30pmTime of Our
Lives 11.30pmRingside 12.30am
The Rugby Club 1.30amAmericas
Cup Uncovered 2am-2.30amATP
Tour Uncovered
BRITISH EUROSPORT
9.30amLive French Open Tennis
8pmGame, Set and Mats 8.30pm
French Open Tennis 10.45pmWorld
Superbikes 11.45pmInternational
Football 12.15am-12.50amGame,
Set and Mats
ESPN
5.15pmNBA 7.15pmPress Pass
2012 7.45pmESPN Kicks: MLS
8pmLive International Football
10pmWorld Series by Renault
11.30pmPress Pass 2012 12am
ESPN Kicks: Brasileirao 12.15am
Premier League World 12.45am
ESPN Kicks: Extra 1amNBA Action
1.30amNBA Tonight 2amLive
NBA Basketball 4.30amPress Pass
2012 5amNBA Action
5.30am-6amFIBA Basketball
SKY LIVING
7pmCriminal Minds 8pmFour
Weddings US 9pmBattle of the
Brides 10pmThe Biggest Loser
USA 11pmUnforgettable 1am
Steps: On the Road Again
1.50amCriminal Minds 2.40am
Bones 3.30amMedium4.20am
Bones 5.10am-6amJerry Springer
BBC THREE
7pmLive Athletics 9pmRussell
Howards Good News 9.30pmLive
at the Electric 10pmEastEnders
10.30pmBritain Unzipped
11.30pmFamily Guy 12.15am
American Dad! 12.55amRussell
Howards Good News 1.25amLive
at the Electric 1.55amAngry Boys
2.25amSnog, Marry, Avoid?
2.55amBritain Unzipped 3.50am
Britains Hidden Homeless
4.50am-5.20amSnog, Marry,
Avoid?
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmThe Big Bang
Theory 8.30pmHow I Met Your
Mother 9pm2 Broke Girls 9.30pm
Dont Trust the B**** in Apartment
23 10pmRules of Engagement
10.30pmVery Important People
11pmWorlds Greatest Body
Shockers 12amCardinal Burns
12.35amThe Big Bang Theory
1.35amScrubs 2amHow I Met
Your Mother 2.25amRules of
Engagement 2.50amDesperate
Housewives 3.35am90210 4.15am
Greek 5am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmIce Road Truckers 9pm
American Restoration 9.30pm
Pawn Stars 10pmStorage Wars
11pmAmerican Pickers 12am
Storage Wars 12.30amPawn Stars
1amStorage Wars 2amHeir
Hunters 3amIce Road Truckers
4amHeir Hunters 5am-6am
Ancient Discoveries
DISCOVERY
7pmBear Grylls: Born Survivor
8pmGold Rush 9pmFreddie
Flintoff Goes Wild 10pmAuction
Hunters 11pmDeadliest Catch
12amFreddie Flintoff Goes Wild
1amAuction Hunters 2am
Deadliest Catch 3amFlying Wild
Alaska 3.50amWheeler Dealers
4.40amBear Grylls: Born Survivor
5.30am-6amDestroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmA Wedding Story 8pmTwins,
Twins and More Twins 9pmUntold
Stories of the ER 10pmAddicted to
Food 11pmTrauma Unit 12am
Untold Stories of the ER 1am
Addicted to Food 2amTrauma Unit
3amA Wedding Story 4amA Baby
Story 5am-6amBirth Stories
SKY1
7pmThe Middle 7.30pmModern
Family 8pmThe Simpsons 9pm
FILMGlee: The Concert Movie
2011. 10.30pmNCIS: Los Angeles
11.30pmThe Avengers Special
12amRoad Wars 1amLuton
Airport 2amBrit Cops: Zero
Tolerance 2.55amRoss Kemp on
Gangs 3.50amThe Boy Who Was
Tied Up for Life 4.40amReal Filth
Fighters 5.05am-6amAll Star
Dont Forget the Lyrics
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders: BBC News
8pmCHOICE Britains Lost
Routes with Griff Rhys Jones
9pmCrimewatch
10pmBBC News
10.25pmRegional News
10.35pmCrimewatch Update
10.45pmQuestion Time 11.45pm
FILMA Fish Called Wanda 1988.
1.30amHoliday Weatherview
1.35amSign Zone: Euro 2012:
Stadiums of Hate Panorama
2.05amCountryfile 3amAntiques
Roadshow4amThe 1952 Show
4.45am-6amBBC News
6pmEggheads
6.30pmTOTP2: Featuring the
video for the new single by
Coldplay and Rihanna.
7.30pmGreat British Menu
8pmSpringwatch 2012: An
update on the fortunes of the
kingfisher family.
9pmSpringwatch Unsprung
2012
9.30pmThe Meat Market:
Inside Smithfield
10.30pmNewsnight: Weather
11.20pmShe-Wolves:
Englands Early Queens
12.20amBBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmThe Parent Trap:
Tonight
8pmEmmerdale
8.30pmCoronation Street
9pmLong Lost Family
10pmITV News at Ten
10.30pmLondon News
10.35pmPrince Charles: The Royal
Restoration 11.35pmPiers
Morgans Life Stories: Jimmy
Tarbuck 12.30amJackpot247; ITV
News Headlines 3amThe Parent
Trap: Tonight 3.25amITV
Nightscreen 4.35am-5.30amThe
Jeremy Kyle Show
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmPhil Spencer: Secret
Agent
9pm CHOICE Married to the
Moonies 10pm24 Hours in A&E
11.05pmRandom Acts 11.10pm
Jimmy and the Giant Supermarket
12.10amThe Secret Millionaire
1.10amEdward VIII: The Plot to
Topple a King 2.05amUnreported
World 2.30amThe Real Mr & Mrs
Assad: Channel 4 Dispatches 3am
Hidden Talent 3.55amDeal or No
Deal 4.50amGlamour Puds
5.20am-6.05amCountdown
6pmCHOICE Home and Away:
6.30pm5 News at 6.30
7pmPolice Interceptors: 5
News Update
8pmWorlds Scariest Animal
Attacks: 5 News at 9
9pmCowboy Builders:
10pmFILMHostel: Horror,
starring Jay Hernandez. 2005.
11.50pmThe World of Stupid
Criminals
12.15amSuperCasino
3.55amHouse Doctor 4.20am
Divine Designs 4.45amDivine
Designs 5.10amWildlife SOS
5.35am-6amMichaelas Wild
Challenge
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7 8 9
10 11
12 13 14
15 16
17 18 19
20 21 22
23 24
25 26
29 30
13 14
23
17 16 8
34 22
6 18
9 16
13 23 3
38
24 27
10 11
8
17
15
12
10
37
24
7
6
21
28
21
23
12
39
12
8
17
44
9
16
11
3
4
ACROSS DOWN
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4

4
4

4
C O S T S C A M E L
A O N R X
P A M P A S R O T A
I M R I C E R
T I E R E D A L A S
A I E R T
L A M P C A S S I A
R O P A L H N
B O S S R O T U N D
M T U N B
E A S E L D I T T Y
2 4 3 1 5 8 3
6 3 9 2 8 7 1 5 4
7 8 9 8 6 9
3 2 1 8 9 3 7 2
9 1 6 9 2 4 1
2 1 5 3 4
8 2 1 6 8 3 1
9 6 8 4 7 7 9 4
1 4 3 9 2 5
4 3 9 2 6 8 1 7 5
9 7 1 2 5 8 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
MYSTIFIED
1 Ski run densely packed
with snow (5)
4 Addition, subtraction,
etc (abbr) (5)
7 Social outcast (6)
9 British nobleman (4)
10 Gas used in lighting (4)
12 Crack in a lip caused
usually by cold (4)
13 Communion table (5)
15 Append (3)
17 Kindly endorsement
and guidance (5)
19 Introduce to solid food (4)
21 Beware the ___ of
March, advice given
to Julius Caesar (4)
23 Arabian ruler (4)
24 Three times (6)
25 Marked by aggressive
ambition (5)
26 Assignation between
lovers (5)
1 Tenure of ofce
of a pope (6)
2 Family
appellation (7)
3 Distinctive and
stylish elegance (4)
5 Broker (5)
6 Alone,
unaccompanied (4)
8 Pair of
earphones (7)
11 Ancient (3)
14 Convenient
facility (7)
15 Assist (3)
16 Inoculate by using
a needle (6)
18 Band around a
horses belly (5)
20 Gather, as of
crops (4)
22 Fired a bullet at (4)
T
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
BRITAINS LOST ROUTES WITH
GRIFF RHYS JONES BBC1, 8PM
New series. The Welsh actor sets out
on a journey to discover the most
influential pathways in the nations
history
MARRIED TO THE MOONIES
CHANNEL4, 9PM
An insight into the Unification Church,
a religious movement founded in
South Korea in 1954 by Sun Myung
Moon
HOME AND AWAY
CHANNEL5, 6PM
Sasha realises she needs help to deal
with the trauma of her relationship
with Stu, while Liam tries to help
Hayley beat her drug addiction.
TVPICK
ENGLAND coach Stuart Lancaster
has warned Manu Tuilagi to adapt
his tackling technique to avoid
potential future disciplinary
problems, though he stressed the
young centre does not have a
thuggish streak.
Tuilagi was cited for a tip tackle
on England and Harlequins scrum-
half Danny Care during the London
clubs Premiership final victory over
Leicester and, though cleared to join
Englands three-Test summer tour of
South Africa, Lancaster is keen for
him to avoid further controversy.
I have had a one-to-one with every
member of the touring party, said
Lancaster. I had a good conversation
with Manu on the strengths of his
game and the areas we need to make
sure he is on top of.
Part of that is tackle technique
and discipline. He understands that.
He is a young player and still getting
experience.
I am pleased to see the people in
charge found it was dealt with on
the pitch at the time. I am delighted
he is available.
People recognise Manus
intention was not to hurt anyone,
he added.
The first Test is on 9 June in
Durban, the second, in
Johannesburg, is on 16 June and the
third is in Port Elizabeth on 23 June.
Tuilagi warned
about tackling
by Lancaster
G
E
T
T
Y
BY DECLAN WARRINGTON
36
SPORT
cityam.com

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T N U O C S I D 5% e a
LONDON Welsh won the
Championship with a final victory
over Cornish Pirates to increase the
pressure on the Rugby Football
Union over their controversial deci-
sion to deny them promotion to the
Premiership.
The Exiles will not be permitted
promotion, consequently preserving
Newcastles Premiership status,
because the RFU claims they fail to
fulfill the necessary criteria demand-
ed of any side competing in the
top flight.
The clubs chairman Bleddyn
Phillips, however, has pledged they
will do everything within their
power to overturn the decision after
securing primacy of tenure in a deal
already enjoyed by some Premiership
clubs to share what they consider to
be a suitable home ground, Oxford
Uniteds Kassam Stadium.
Pressure builds
on RFU inWelsh
title triumph
London Welsh already had a 16-
point advantage from the first leg but
had to fight back from a losing posi-
tion to overcome the plucky Pirates,
who after scoring a try through
Canada winger Matt Evans, and
points from the boots of fly-half
Aaron Penberthy and full-back Rob
Cook, led 13-6 at half-time.
Penberthy had put the Pirates in
front with a 45-yard dropped goal
and, though full-back Alex Davies
kicked six points to keep the Exiles in
contention, it was the visitors who
ultimately dominated.
In the second-half, however, three
quick penalties from Davies put
Welsh back in front as they took con-
trol of play, with winger Joe Ajuwa
particularly impressive. As the Pirates
chased the game, a 67th-minute try
from Exiles centre Hudson
Tongauiha effectively sealed victory
and prompted a celebratory mood.
It may have been that that con-
tributed to a try from Pirates prop
Ryan Storer but, in reality, little
changed. Scrum-half Jack Moats
touched down again for the home
side and this time the Championship
title, if not promotion to the
Premiership, had been truly sealed.
WEST Indies pace bowler Kemar Roach will miss the remainder of their tour of England
because of a shin injury, and has been replaced by Sunil Narine. We are all gutted by his
departure, said coach Ottis Gibson. The final Test of the three-match series is on 7 June
at Edgbaston though, with England winning the first two, their 2-0 lead is unassailable.
West Indies lose Roach for rest of England tour
LONDON WELSH................29
CORNISH PIRATES .............20
CHAMPIONSHIP RUGBY UNION
BARRING THE WAY
Jarkko Nieminen
n30 years old (born in 1981)
nHas won 15 matches in 2012
nHas lost 12 matches in 2012
nCareer highlights: quarter-finals at
2005 US Open, quarter-finals at 2006
Wimbledon, quarter-finals at 2008
Australian Open
Julia Goerges
n23 years old (born in 1988)
nHas won 18 matches in 2012
nHas lost 14 matches in 2012
nCareer highlights: fourth round at
2012 Australian Open, third round at
2011 French Open, 2011 Wimbledon
and 2011 US Open
G
E
T
T
Y
WORLD No3 Roger Federer survived
dropping the third set to Adrian
Ungur to win 6-3, 6-2, 6-7 (6-8), 6-3 and
advance to the third round of the
French Open with a record 234th
grand slam match victory.
Federer, who won at Roland
Garros in 2009, instantly assumed
control of the match until midway
through the third set, where he sur-
vived two set points to the world
No92 before conceding the lead in
the tie-break.
The fourth and final set was once
again a comfortable affair where-
upon Ungur, of Romania, rarely
threatened. Federer now eclipses the
retired American Jimmy Connorss
record of 233 grand slam match
wins, something world No1 Novak
Djokovic remains some distance
behind, regardless of his form.
The Serb was again superb against
Blaz Kavcic of Slovenia, taking the
opening set in just 23 minutes in a
6-0, 6-4, 6-4 victory. Kavcic took a 4-1
Federer breaks
Connors record
with Ungur win
lead in the second set before Djokovic
levelled and closed out the match.
Americas Venus Williams, mean-
while, joined her sister Serena in exit-
ing in the opening rounds following
her 6-2, 6-3 defeat to Agnieszka
Radwanska of Poland, the tourna-
ments third seed.
Jo-Wilfried Tsongas finely-bal-
anced match against Cedrik-Marcel
Stebe was delayed by rain with the
score at 2-6, 6-4, 1-1.
Murray and Watson both aim for progress
IN BRIEF
Six fillies declared by OBrien
n RACING: Aidan OBrien has declared
six fillies for the Investec Oaks at Epsom
on Friday, his wife Anne-Marie
yesterday confirmed on Twitter.
Betterbetterbetter, Maybe, Devotion,
Twirl and Was are five contenders,
though Kissed will only run if the
ground eases.
Khan eyes Mayweather match up
n BOXING: British light-welterweight
Amir Khan has reiterated his desire to
take on the worlds leading fighter,
Floyd Mayweather. Khan is preparing for
his 14 July fight against WBC champion
Danny Garcia but is targeting a future
fight against the American. Ive got
ambitions in life to face the best, like
Floyd Mayweather, said Khan. But its
a waiting game at the moment, Ive got
Garcia in front of me.
Bolt dismisses Gatlin challenge
n ATHLETICS: Jamaican world record
holder Usain Bolt has dismissed former
Olympic 100m champion Justin Gatlin
as a threat at London 2012. Gatlin
recorded 9.87 seconds in Doha two
weeks ago, but Bolt remains
unconcerned. I dont want to sound
rude, but Gatlins had his chance, said
Bolt. He's been on top, but to say get
ready for the Gatlin show is funny. He
has a few guys to get past before he
should be worried about me.
Roger Federer, with 234, now possesses the record number of grand slam match wins
LONDON 2012 spectators will be
charged 8 for fish and chips or
pie and mash at this summers
Olympic Games, with a 500m
bottle of Coca-Cola to wash it
down costing 2.30.
The most expensive dishes on
sale to the public will be the
Singapore noodles and the lamb
curry with rice, which are both
priced at 8.50, with 10 inch pizzas
for 7.50.
Cheaper options include a
chicken burrito, a roast pork roll
and a pasta with chicken and
mushroom sauce, all at 6.50, a
tuna and potato salad for 5.90
and a jacket potato filled with
chicken and bacon for 5.80.
Drinks start with bottled water
at 1.60, with a cup of tea costing
2 and coffee 2.60. Alcoholic
offerings include Heineken beer at
4.20 and red wine at 4.80.
Details of a selection of the fare
on offer were revealed yesterday
by Games organisers.
London 2012 chiefs expect to
serve 14 million meals during
across the Games 40 locations in
what they say is the worlds largest
peacetime catering operation.
BY FRANK DALLERES
Olympic pie and mash for 8 as
London Games menu revealed
BRITAINS Andy Murray may have
devoted his career to trying to
emulate the achievements of
tennis greats like Andre Agassi,
but today his focus will be on
avoiding a similar upset to that
experienced by the American
seven years ago.
Murrays second-round
opponent is 30-year-old Finn
Jarkko Nieminen, who conquered
Agassi in the first round of the
2005 French Open, and, though he
continues to pursue a first grand
slam title, in this instance he will
not be using Agassi as inspiration,
despite a desire to match his
grand slam winning feats.
He [Nieminen] beat Agassi here
a number of years ago, so hes a
very, very good player, said
Murray, 25. He has a lot of
experience.
Nieminen has in some ways
already exceeded expectations
having, until now, failed to
advance beyond the first round of
a grand slam since 2010, though
he previously reached the quarter-
finals of the 2005 US Open,
Wimbledon in 2006, and the 2008
Australian Open.
Murrays performance in
reaching last years semi-finals was
his best yet, though it cannot be
overlooked that this is the Major
in which he has struggled the
most. His challenge, however, is
not as daunting as that faced by
20-year-old British prospect
Heather Watson, who must beat
Julia Goerges of Germany to reach
the third round of a grand slam
for the first time.
Goerges, 23, is steadily
improving and so it proved when
she reached the fourth round of
the Australian Open in January,
her best-ever run at a Major. In
2011, she also made it through to
the third round of each grand
slam, something Watson has yet to
achieve anywhere.
Regardless, the tenacious
Watson has already expressed her
love for the clay courts of Roland
Garros and on Tuesday, having
defeated Russias Elena Vesnina,
said she had nothing to lose
against her more experienced
opponent.
Given her ambition of qualifying
for London 2012 would be boosted
by victory, another upset is hardly
unthinkable; Watson could be
inspired to her greatest
achievement yet.
SPORT
37
Results
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TODAYS HIGHLIGHTS
Mens draw
Jarkko Nieminen v Andy Murray (4)
Denis Istomin v Rafael Nadal (2)
David Ferrer (6) v Benoit Paire
Womens draw
Heather Watson v Julia Goerges (25)
Ayumi Morita v Maria Sharapova (2)
Na Li (7) v Stephanie Foretz Gacon
ENGLAND midfielder Frank
Lampard will today undergo a
scan on a thigh injury as manager
Roy Hodgson braces himself for a
second major blow to his plans for
the looming European
Championship.
Chelsea star Lampard suffered
the problem in training yesterday,
just 24 hours after joining the
squad, raising grave doubts over
his fitness for the tournament,
which starts on 8 June.
Liverpool midfielder Jordan
Henderson, 21, has been placed on
stand-by for an emergency call-up
as England prepare for their final
warm-up, against Belgium at
Wembley on Saturday, before
flying to Poland.
Hodgson has already lost one
senior midfielder in Manchester
Citys Gareth Barry, who withdrew
on Monday with a stomach muscle
tear, as the manager prepares for
his first tournament in charge.
If Lampard, 33, is ruled out,
Hodgson is permitted to call on a
replacement at any time before
Englands opening match against
France in Donetsk on 11 June,
provided doctors from European
chiefs Uefa verify the injury.
Withdrawal threatens to deprive
Lampard of a final major
tournament, and could prompt
him to consider retiring from
international football after 90 caps
in order to prolong his club career
at Stamford Bridge.
It would also mark a sour
ending to a rollercoaster season
for the former West Ham trainee,
who had to fight to win his place
back in the Chelsea side before
helping them to FA Cup and
Champions League glory.
A squad missing Lampard, Barry
and Rio Ferdinand deprives
England of a wealth of experience,
although captain Steven Gerrard,
John Terry, Ashley Cole and Wayne
Rooney are seasoned campaigners.
Former France coach Raymond
Domenech, meanwhile, has
delivered a withering assessment
of Englands current crop.
Domenech said France would find
it easy to win their group fixture
against Hodgsons men, whom he
added have no quality.
England sweat
over Lampard
Euro 2012 KO
G
E
T
T
Y
G
E
T
T
Y
ENGLISH football has been told to
take corrective action after operat-
ing profits in the Premier League
plunged to the lowest levels for more
than a decade despite ever-increasing
revenue.
Operating profit in the top flight
fell to 68m for the 2010-11 season,
down 117m from its 2007-08 peak
and the smallest figure since 1999-
2000, according to research
published today by advisory
firm Deloitte.
Concerns have also been
raised that operating mar-
gins, which stood at 16 per
cent when the Premier
League began in 1992-93,
have been slashed to three
per cent, the annual review of
football finance found.
Wages to turnover ratio, seen as a
reliable measure of footballs finan-
cial health, has risen sharply, the
report notes, and reached an all-time
high of 70 per cent, while the overall
financial picture is even bleaker in
lower divisions.
Certainly its clear quite a num-
ber of clubs need to take corrective
action, Deloittes Alan Switzer told
City A.M. The Premier League contin-
ued to do well in terms of generating
revenue, but on the cost side there is
an amount of work to do, definitely.
The struggle of Premier League
clubs to break even only 11 of 20
recorded a profit comes despite rev-
enues increasing 12 per cent to
2.5bn (2.3bn), a bigger local curren-
cy growth than any of the other big
five European divisions of Germany,
Spain, Italy and France.
Income from broadcasting rights
grew 13 per cent, thanks to a lucra-
tive new overseas TV deal, while com-
mercial earnings swelled by 18 per
cent, although largely due to the
efforts of Manchester United,
Liverpool and Manchester City.
But clubs failed to take advantage
of the extra earnings, 80 per cent of
that 241m growth being swallowed
up by a major increase in wage costs,
with a 14 per cent rise in the top
flight total from 1.4bn to 1.6bn.
That failure to control costs
dragged operating profit down from
84m to 68m, the first time it has
fallen in the first year of a new broad-
cast deal, which typically acts as a
boon to clubs financial health. Only
once, in 1999-2000, has the figure
been so low since 1995-96.
The aggregate figure does not
illustrate the vast gulf between the
biggest operating profits of United
(100m) and the most extreme
losses of City (82m), who
have spent extravagantly
to sign stars such as mid-
fielder Yaya Toure.
We were disappoint-
ed that just as much of
the additional revenue
generated by Premier
League clubs has been
paid out in wages, added
Switzer, who said there was
surprise at the poor figures given
looming European and
domestic financial fair play
rules designed to force
clubs to break even.
The operating margin
of three per cent is
described as wafer thin
by Deloittes Dan Jones,
who warns that some
clubs revenues could
decline and the majority of
top-flight sides may post losses
next season.
It is not unrealistic to foresee a
levelling out of Premier League
clubs revenue in the short term, and
potentially even a decline for some
clubs in our next couple of [annual]
editions, writes Jones.
Noting that operating profit typi-
cally decreases over the length of a
broadcast rights contract, Jones
adds: If this trend is repeated we
could see Premier League operating
profits fall to levels comparable with
those seen in the leagues infancy
and a majority of Premier League
clubs reporting losses.
Deloitte note that Championship
and Football League clubs face more
immediate challenges, with opera-
tional expenditure in the second tier
30 per cent greater than revenues.
Clearly an unsustainable position,
says Jones, who edited the report.
70
%
Premier Leagues
wages to turnover
ratio a record
Manchester City have spent big on stars such as Yaya Toure with top-flight clubs spending increased revenue on rising wages
Lampard injured his thigh yesterday
38
SPORT
cityam.com/sport
BY FRANK DALLERES
BY FRANK DALLERES
0
40
80
200
160
120
Premier League
92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11
Aggregate operating prot/(loss) for Premier League and Football League 1992/93 to 2010/11 (m)
Prot
Premier League reduces
to 20 clubs; Div 1 up to
24 clubs (Aug 1995)
Bosman Judgement
(Dec 1995)
New (Second) BSkyB TV
deal announced
(June 1996)
New TV deals
announced
(June 1996)
New TV deals
announced
(May 2006)
New TV deals
start
(Aug 2001)
ITV Digital collapses
(June 2002)
New three year
Premier League TV deal starts
(Aug 2004)
New three year Premier
League TV deal starts
(Aug 2007)
BSkyB TV deal with
Football League starts
(Aug 1996)
Second BSkyB TV
deal starts
(Aug 1997)
Clubs warned as profits
plunge to an 11-year low
0
250
44%
500
1,250
1,000
750
1,500
1,750
60% 62% 61% 61% 59% 62% 63% 62%
Up 241m
Up 201m
67% 69%
2,250
70%
Relative growth of Premier League clubs revenue, total wages
and wages/revenue ratio 1991/1992 and 2000/2001 to 2010/2011 (m)
2,000
91/92 00/01 01/02 02/03 03/0404/0505/0606/0707/0808/0909/10 10/11
Premier League revenue
Premier League total wages
3%
Operating margin of
Premier League, down
from 16 per cent in
1992-93
S
o
u
r
c
e
:

D
e
lo
it
t
e

a
n
a
ly
s
is
39
RODGERS FACTFILE
n1973: Born 26 January in Carnlough,
Northern Ireland
n1987: Begins playing career as a
defender with Ballymena United
n1990: Joins Reading before injury
forces him to retire. Remains at the
club in their coaching set-up
n2004: New Chelsea manager Jose
Mourinho appoints Rodgers as
Chelsea youth-team manager
n2006: Promoted at Chelsea to
reserve team manager
n2008: Appointed manager of
struggling Watford and leads them to
safety in the Championship
nJune 2009: Returns to Reading as
manager after Steve Coppell fails to
inspire Premier League return
nDecember 2009: Leaves Reading by
mutual consent after an
underwhelming start at the club
nJuly 2010: Joins Swansea City as
manager
nMay 2011: Guides the Swans to
promotion to the Premier League, via
the Championship play-offs, the first
Welsh club to reach the top flight
nMay 2012: Impresses throughout
first Premier League season. Swansea
play good football and comfortably
finish in 11th place, despite spending
little in the transfer market, just three
places behind big-spending Liverpool
nMay 2012: Liverpool agree three-
year contract for Rodgers to join as
manager after sacking fans favourite
Kenny Dalglish
G
E
T
T
Y
Former Chelsea coach and Jose Mourinho protege Rodgers has agreed a three-year deal
British pair Murray and Watson prepare for
second-round battles at French Open
cityam.com
LIVERPOOL are poised to confirm
the appointment of Brendan
Rodgers as their new manager
after Swansea last night
announced the former Chelsea
coach has agreed to join the Reds.
The 39-year-old, a former
protege of Jose Mourinho at
Stamford Bridge, is set to sign a
three-year deal at Anfield, subject
to the clubs thrashing out a
compensation fee of around 5m.
He beat Wigans Roberto
Martinez to the role, with the
Spaniard yesterday reaffirming
his commitment to his current
employers following the snub.
Rodgers chance at one of the
worlds most iconic clubs, despite
a recent failure to challenge for
major honours, caps a meteoric
rise just four years after starting
his managerial career at Watford.
For Liverpools American
owners Fenway Sports Group his
appointment represent a major
gamble, having sacked the popular
Kenny Dalglish and replaced him
with a man sacked by Reading just
two and a half years ago.
Since then, however, he has
made Swansea the first Welsh club
to play in the Premier League and
drawn plaudits for keeping them
there while playing attractive
possession football.
Liverpool moved for Rodgers on
Tuesday evening and were granted
permission to begin talks, which
progressed quickly enough for
Swansea chairman Huw Jenkins to
bid him farewell last night.
Following on from discussions
with Liverpools owners, Brendan
has informed us that he would like
to take up their offer to manage
Liverpool, said Jenkins.
We are currently in talks with
the owners to agree compensation.
We are trying to finalise that
within the next 24 hours. We
didnt wish to stand in his way.
Rodgers in at Anfield
as Reds take chance
on Swansea manager
BY FRANK DALLERES
Tennis preview and round-up: Page 37

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