BUSINESS WITH PERSONALITY
AN AUDIENCE MUSINGS OF A CITY
WITH MR NOBU DAD: NEW COLUMN
Issue 1,322 Tuesday 15 February 2011
RED TAPE TO
COST FIRMS
EXTRA £23BN
POLITICS
▲
BY MARION DAKERS
A NEW swathe of employment laws
will cost UK companies £23bn over the
next four years, according to the gov-
ernment’s own figures, casting doubt
on David Cameron’s pledge to foster
private sector growth by cutting red
tape.
Employment rules brought in by
the UK and the EU will cost firms a
total of £22.87bn between now and
2015, according to figures compiled by
the British Chambers of Commerce
from the government’s impact assess-
ments.
Despite Cameron’s promise of an
“employer’s charter” last month, a
minefield of rules on everything from
agency workers to employee training
and pensions reform will more than
wipe out any financial gains for busi-
nesses. In 2011 alone, new rules will
cost firms up to £1.4bn, with changes
to employers’ national insurance con-
tributions responsible for most of the
burden.
The coalition has also argued in its
assessments that the removal of the
default retirement age this October
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FOREX TRADING INVOLVES SIGNIFICANT RISK OF LOSS.
THIS AND MORE IN LIFESTYLE P23
will save employers £47.8m a year
WHAT GOVERNMENT RED TAPE
WILL COST UK BUSINESSES
l EU agency workers directive -
starts in October 2011 - will cost
UK businesses £1.55bn a year
l UK pensions reform -
October 2012 - £4.5bn a year
l National Insurance changes -
April 2011 - £1.2bn a year
l Right to request time off work to
train - April 2011 - £175m a year
l Minimum wage increase -
October 2011 - £42.6m a year
Total cost to
businesses through £22.87
to 2015: billion
thanks to a better labour supply and
less paperwork – a claim that has been
widely disputed by industry bodies
such as the CBI.
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www.cityam.com
The director general of the British
Chamber of Commerce David Frost,
said: “Unless the government reduces
this kind of red tape, we will continue
to have high levels of unemployment
and could end up derailing the recov-
ery. Companies cannot generate
growth and create jobs when they are
facing a £23bn bill, just to implement
new employment legislation,” added
Frost.
Businesses must also comply with
the EU’s Agency Workers Directive
from October, which will cost employ-
ers £1.55bn a year once they are
required to treat agency workers
equally after three months’ work.
EU rules do not count as extra regu-
lation under the government’s “one in
one out” policy intended to limit the
cost of red tape.
A spokesperson for the Department
of Business, Innovation and Skills said
last night that many of the costly rules
are currently under review, adding:
“The aim of our ongoing employment
law review is to ensure that the bal-
ance between business confidence,
economic growth and fairness to
employees is right.”
ALLISTER HEATH: P2
£/$ 1.60 unc £/¤ ▲ 1.19 +0.01 ¤/$ ▼ 1.35 -0.01
David Sullivan (l) and David Gold could triple their money, say analysts Picture: REUTERS
West Ham value rockets
following stadium boost
▲
SPORT
BY FRANK DALLERES
WEST HAM’S value has doubled fol-
lowing its successful bid to move into
the Olympic Stadium after the
London 2012 Games, according to ana-
lysts, and could earn owners David
Gold and David Sullivan a joint profit
of £120m.
The Premier League club was worth
just £100m a year ago but its success
in securing the 60,000-seater arena for
a fraction of the £530m construction
cost is estimated to have doubled the
side’s value overnight.
Once the Hammers have completed
their move, which is due to take place
in 2014, and is enjoying increased rev-
enues from corporate tickets and the
sale of naming rights, it is predicted
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the club will be worth around £300m.
“Obviously the value has increased
overnight, the minute they got the sta-
dium,” Stan Lock, an analyst at bro-
kers Brewin Dolphin, told City A.M.
“I’d say now [it’s worth] £200m
without anything happening. And
then once it’s all complete, the corpo-
rate areas are in, it must be £300m.”
Gold and Sullivan together own 61
per cent of the East End outfit, which
they bought last year in deals that
priced the club at around £100m. An
increase in its value to £300m would
see the combined worth of their stake
rocket from £60m to £180m.
The estimate relies on West Ham
avoiding relegation, and on the gov-
ernment and Mayor of London rubber-
stamping their move to the stadium.
ANALYSIS: P26
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 2 News
Why firms need to be freed to spend
EDITOR’S LETTER
ALLISTER HEATH
DESPITE repeated promises from the
coalition that it would tackle the bur-
den of red tape, a raft of new employ-
ment rules are set to come into force
over the next few years. As we report
on page 1, these will cost UK firms bil-
lions of pounds in extra recurring
costs, even on the government’s own
figures; seven major changes are
planned for 2011 alone.
This is an idiotic situation. Public
spending is rightly being reined in
over the next four years to prevent
national bankruptcy. Unfortunately,
this will impact on consumer spend-
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
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Pictures Alex Ridley
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WHAT THE OTHER PAPERS SAY THIS MORNING
BARCLAYS FORCED TO ADAPT COCOS
BONUS PLAN
Barclays has been forced to adapt its
plans to pay bonuses for staff with a
new financial instrument that has
been hailed by regulators as a key tool
for rebuilding the capital strength of
banks. Bob Diamond, the UK bank’s
new chief executive, had hoped to use
the new contingent convertible capi-
tal notes – known as coco bonds – to
pay as much as half of the deferred
pay element of the bonuses.
LARGEST BOND FUND CUTS ITS US
GOVERNMENT HOLDINGS
The world’s largest bond fund sharply
cut its exposure to US government-
related debt in January, before US
bond yields rose this month to their
highest level in almost a year. Pimco’s
Total Return Fund, run by Bill Gross,
a founder of Pimco, reported that its
holdings of US government-related
ing – which is why we need a corpo-
rate sector-led spending recovery to
compensate. That means encouraging
private firms (existing and new) to
spend and recruit. Instead, the coali-
tion – with some exceptions on tri-
bunals – is continuing to heap costs
on UK Plc, or acquiesce to EU rules
which will only discourage such
spending and hiring. It’s ridiculous.
So far, consumer spending has been
stronger than many expected. But this
won’t last – so more corporate spend-
ing will be desperately needed in 2011
and beyond. Ian Stewart, Deloitte’s
excellent chief economist, has
crunched the numbers in a research
note. Over the last year UK consumer
spending rose two per cent in volume
terms, despite lower wages after tax
and inflation. Three forces have kept
consumer spending rising – only
some will keep helping out.
The first is the Bank of England’s
ridiculously low interest rates, still at
0.5 per cent: these (and some delever-
aging) are the main reasons why debt
Eurozone OKs
bailout fund
EUROPEAN ECONOMY
▲
BY MARION DAKERS
EUROZONE countries have agreed in
principle to put aside €500bn (£421m)
to set up a permanent bail-out fund,
finance ministers said yesterday.
The bloc had long planned to
replace its current €440bn stability
fund with a long-term facility, which
expires in 2013, in a bid to settle the
ongoing sovereign debt worries
throughout the Eurozone.
The early-stage agreement between
Eurozone finance ministers, who con-
sulted with the rest of the EU mem-
ber countries, could pave the way for
the new scheme to start before 2013.
Head of the Eurogroup of finance
ministers, Luxembourg Prime
Minister Jean-Claude Juncker, said
yesterday that struggling countries
will be able to borrow the full €500bn
securities fell from 22 per cent in
December to 12 per cent in January.
LLOYDS SHUTS DOWN ITS EQUITIES
ARM
Lloyds Banking Group has pulled the
plug on its equities business as the
government-backed institution refo-
cuses its investment banking division
away from riskier activities. The equi-
ties arm formed part of Lloyds’ capi-
tal markets business and helped
mid-sized corporate customers to
issue shares through rights issues, ini-
tial public offerings and placements.
NORTH BEARS BRUNT OF AUSTERITY
AS SHOPPERS STAY AWAY
The climate of austerity is being felt
disproportionately in the shops of
northern towns with high rates of
public sector employment, research
has shown. Sharp drops in numbers
of shoppers have been recorded in the
north east and Northern Ireland by
research house Experian, which
tracks footfall in shops nationally.
servicing costs have tumbled 25 per
cent over the last two years. Between
2007 and 2010, real wages fell three
per cent in the UK. But an average con-
sumer had more income in real terms
left after taxes and interest payments
to spend in 2010 than in 2007.
The second force boosting con-
sumer spending is that welfare pay-
ments (including the state pension)
now make up 35 per cent of total con-
sumer incomes in the UK and have
risen by 12 per cent over the last two
years, Deloitte’s figures reveal. Some
of this has been clawed back by higher
tax but most hasn’t yet.
The third force has been the stock
market recovery, which has indirectly
and directly boosted millions: since
the first quarter of 2009, households’
net financial wealth, after stripping
out mortgage and other debts, is up
33 per cent. UK households’ financial
assets are worth more than twice as
much as their debts, a rare reassuring
statistic in an otherwise bleak balance
sheet. So despite sluggish house prices
if necessary – double the effective
€250bn lending limit of the interim
fund. He added that the size of the
fund, named the European Stability
Mechanism, will be reviewed at least
every two years.
French finance minister Minister
Christine Lagarde suggested the inter-
est rates paid by countries using the
fund could vary depending on the
member state’s financial track
record, though she warned that the
details are yet to be finalised.
The IMF has also agreed in princi-
ple to provide cash for the fund.
French finance head
Christine Lagarde said
details of the €500bn
Eurozone bailout fund
are still up for debate
PEPSI COMES OFF THE SHELVES AS
PRICE WAR INTENSIFIES
Sainsbury’s customers were unable to
buy Pepsi-Cola for two weeks after a
price dispute with Britvic. The drinks
group, which has sold Pepsi in Britain
since 1987, had asked the supermar-
ket for a rise of as much as 10 per
cent, according to The Grocer. The
supermarket refuse.
VODAFONE’S INSTANT SOLUTION FOR SHELL TO BOOST INVESTMENT IN
NATURAL DISASTERS BRAZIL
Vodafone has developed an “instant
network” that can be set up in less
than 40 minutes to help aid agencies
in disaster areas to begin relief work
straight away. The new network tech-
nology, developed in conjunction
with Chinese equipment maker
Huawei, will be unveiled at the
Mobile World Congress in Barcelona,
and a prototype will be tested by
Télécoms Sans Frontières.
and high debt, the net worth of house-
holds – the sum of assets and liabili-
ties – has risen 13 per cent from the
lows of two years ago.
So what of the future? Equities will
continue to help. Nevertheless, a rise
of one per cent or so in consumer
spending is likely this year, so new
sources of growth are needed.
Necessary interest rate hikes will be
the biggest drag on consumers. Cuts
will hit some benefits – but spending
is driven by higher income house-
holds, which will be less affected. The
top 60 per cent of earners account for
approximately 80 per cent of con-
sumer spending. The best hope is for
inflation to ease – allowing real wages
to start rising – and corporates to start
hiring. Profit-fuelled firms are begin-
ning to splash out – but the last thing
the coalition should be doing is hit-
ting them again and again. Cameron
needs to start delivering on his prom-
ises – and unleash the private sector.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Protesters in the streets of Bahrain yesterday
Bahrain and Iran protest
ENERGY
▲
BY MARION DAKERS
OIL PRICES shot up again yesterday
after a “day of rage” led by anti-govern-
ment protesters in Bahrain and Iran
kept the global markets focused on
Middle Eastern unrest.
Just days after Egyptian president
Hosni Mubarak’s resignation calmed
oil traders, Brent crude rose more
than two per cent yesterday to top
$104 (£64.86) a barrel for the first time
in 28 months, before closing at
GOLD COMPANIES CRITICISED FOR
TREATMENT OF CUSTOMERS
Gold companies criticised for treat-
ment of customers. CashMyGold,
Cash4Gold and Postal Gold agreed to
make changes following an investiga-
tion by the Office of Fair Trading. Two
other companies - CashYourGoldNow
and Money4Gold - have ceased trad-
ing.
Royal Dutch Shell is to boost its invest-
ment in Brazil by billions of dollars
after surpassing its forecasts for oil
production in the country last year.
The Anglo-Dutch company will drill
ten new wells in the next 18 months,
seven of them in the Campos Basin,
around 60 miles off the coast of
Espirito Santo state. Estimates suggest-
ed Shell will invest around $2.5bn
(£1.57bn) in the next wave of drilling.
CITYA.M. 15 FEBRUARY 2011
NEWS | IN BRIEF
Auto Windscreens collapses
Car window repair firm Auto
Windscreens collapsed into administra-
tion yesterday after admitting it had run
out of cash, putting 1,100 jobs at risk.
Administrator Deloitte said it sent
employees home yesterday while it holds
urgent discussions with creditors over
the future of the firm. Deloitte said a
major customer had cancelled its con-
tract with Auto Windscreens, while a
large creditor had served the firm with a
winding up petition. Lloyds Banking
Group, the firm’s main lender, appointed
Deloitte last week to try and find a
buyer or fresh investment for the ailing
firm.
Commodities merger falls apart
Merger talks between top flight com-
modity group Louis Dreyfus and smaller
Singaporean rival Olam have failed,
reviving speculation about the strategy
of Dreyfus. Talks with Olam were
announced in September last year and
Dreyfus has been reported to have held
merger talks with other rivals, including
Swiss-based Glencore. A merger would
have created a firm with revenues of
nearly £27bn.
Picture: REUTERS
$103.08 a barrel for April delivery.
Police in Bahrain used teargas on
the crowds and one man was shot
dead but the clashes have not deterred
thousands of protesters, who vowed to
return to the streets today. Violent
protests also broke out across Iran and
Yemen. In Tehran, large crowds of pro-
testers defied tear gas to march down
a major thoroughfare chanting
“Death to the Dictator” in the biggest
demonstration since the Iranian gov-
ernment effectively crushed the oppo-
sition movement in December 2009.
BNP PARIBAS AND OTHERS SUSPEND
IVORY COAST OPERATIONS
French bank BNP Paribas, Citigroup
and Nigeria’s Access Bank temporari-
ly suspended operations in Ivory
Coast yesterday, after the Central
Bank of West African States warned
on Friday that dealing with the dis-
puted Ivory Coast regime of Laurent
Gbagbo puts banks at risk of being
sanctioned.
ECUADOR COURT ORDERS CHEVRON TO
PAY $8.6 BN
An Ecuadorean court ordered
Chevron to pay more than $8.6bn in
damages for oil pollution that
allegedly took place in the country’s
Amazon region, a milestone in an 18-
year lawsuit. Chevron, which inherit-
ed the lawsuit when it bought Texaco
in 2001, denies the allegations and
vowed yesterday to appeal the court’s
judgment.
CITYA.M. 15 FEBRUARY 2011
Obama faces
Congress spat
over budget
▲
US ECONOMY
BY MARION DAKERS
US PRESIDENT Barack Obama yester-
day pledged to halve the US deficit by
2013 and axe $1.1 trillion (£686m) of
spending over the next decade in an
effort to contain the budget deficit,
but expects to run up a record $1.6
trillion deficit in 2011.
Republicans said the President had
not gone far enough in curbing costs,
setting the scene for a year-long fight
with Congress before the budget can
be passed.
But Obama said as he launched his
budget that swingeing cuts for the
Pentagon, subsidised housing and
college students are a down-payment
for the recovery of the US economy.
Obama’s $3.7 trillion budget pro-
posal for 2012 shows the deficit rising
to a record $1.6 trillion in 2011, then
falling sharply to $1.1 trillion in 2012.
This proposal would trim the
deficit as a share of the US economy
to 3.2 per cent by 2015 from 10.9 per
cent this year, in line with pledges
made by G20 leaders to curb runaway
deficits.
US debt will hit its legal limit of
$14.3 trillion by the end of May unless
politicians act to lift that ceiling.
Two-thirds of the savings will come
from spending cuts, with the rest
coming from tax hikes and higher
revenue as economic growth starts to
pick up.
US companies are set to lose some
tax breaks for income earned abroad
under the plans, with Obama seeking
$129bn over 10 years by cutting big
business benefits.
The budget also calls for extra fund-
ing for financial watchdogs including
the Securities and Exchange
Commission.
FAST FACTS | US BUDGET
● US Presidents publish a budget proposal
every February, which must be approved by the
Senate and the House of Representatives.
● Obama plans to run a record fiscal deficit of
$1.6 trillion in 2011, before cutting back in 2012.
Wheat prices neared a two-and-a-half year high yesterday
Wheat and copper surge
▲
COMMODITIES
COMMODITY prices surged yesterday
with copper touching a record high,
and wheat prices nearing a two-and-a-
half year high on expectations that
demand from China could outstrip
supply.
The rise in prices followed data
from China indicating imports surged
in January as its trade surplus shrank
to $6.5bn from $13.1bn in December,
marking its lowest level in nine
months. Chinese imports of copper,
considered a barometer for the global
economy due to its use in construc-
Picture: PA
tion and power, jumpedby 5.7 per cent
in the first month of the year.
“It could very well be that the
Chinese economy is running hotter
than anyone thinks,” said Bart Melek,
vice president and director of com-
modities with TD Bank Financial
Group.
Copper hit record highs above
$10,170 a tonne, while in Chicago,
wheat futures settled up more than
half a per cent at $8.72 a bushel after
nearing 2-1/2-year highs above $8.80,
as dry weather in crop areas of China
and the United States also helped
boost prices. ECONOMICS: P17
News 3
Foster’s Group
aims to list its
wine offshoot
CONSUMER
▲
AUSTRALIAN brewer Foster’s Group
said it will go ahead with plans to
split up its beer and wine businesses
yesterday, as it revealed lower-than-
expected half-year profit.
Foster’s said yesterday that the split
should be completed in May, in a
move that could attract suitors for its
A$10bn (£6.3bn) beer operations.
The wine business will be separate-
ly listed on the Australian Stock
Exchange, the firm confirmed, with
shareholders getting one Treasury
Wine Estates (TWE) share for every
three shares in Foster’s.
Rumours swept the City last
September of a private equity feeding
frenzy after Foster’s confirmed it had
turned down a bid of between
A$2.3bn and $2.7bn for TWE.
Foster’s said yesterday a spin-off list-
ing was the best way to make TWE
more flexible while saving on operat-
ing costs, but analysts said the leaner
divisions could attract takeover inter-
est once the outlook for beer and
wine sales have stabilised.
Foster’s said a subdued beer market
dented its first-half profit, which fell
12.3 per cent to A$312.1m.
The firm’s wine division made
A$94.7m in underlying profit, 17 per
cent down on the same period last
year.
 4 News CITYA.M. 15 FEBRUARY 2011

Truckers hit Ronald Cohen opens

France for a Big Society account Kremlin kicks
cheap fuel ▲
PROFILE of £200m, is also said to have the
off sale with
VTB offering
BY ROGER BAIRD best political contacts book in
British business.
▲

TRANSPORT
BY JOHN DUNNE
BRITISH hauliers are filling up their
vehicles in France in a bid to avoid
soaring diesel costs at home, losing
the UK an estimated £1.2bn in tax
SIR Ronald Cohen was yesterday
unveiled as an adviser to David
Cameron’s Big Society Bank, which
will support social enterprises. It
also sees the deepening involve-
ment in social investment of the
man credited with inventing the
In the 1970s he twice stood as an
unsuccessful national and
European candidate for the Liberal
Party. In the 1990s he became a sup-
porter of Tony Blair’s New Labour
and made large donations.
He recently said: “Professional CAPITAL MARKETS reduce its stake in the lender to 75 per

every year, petrol retailers claimed
yesterday.
Truck manufacturers are even
building vehicles with bigger tanks so
that drivers can fill-up with as much
foreign, cheaper diesel as possible.
The diesel price has steadily risen
and rather than just trucks it is now
used in high performance cars thanks
to improved technology.
With diesel costing up to £1.47 a
litre in the UK, the companies are get-
ting their fuel at an average of 20 per
cent cheaper in places like Calais,
according to the RMI Independent
Petrol Retailers Association.
Chairman Brian Madderson said:
“This is another example of a govern-
ment own goal. Its fuel policies are
directly contributing to a reduced tax
opportunity for the treasury.” The
RMI estimates that the figures trans-
lates to £1.2bn lost in VAT for the
treasury if all items bought in petrol
stations are taken into account.
British private equity industry
some 40 years ago.
After Oxford and Harvard
Business School, followed by a short
stint as a management consultant
at McKinsey, Cohen and a few col-
leagues started Apax Partners in
1972.
The firm went on to pioneer ven-
ture capitalism in the UK investing
in over 500 companies and becom-
ing one of the few British outfits to
become a global force in the indus-
try.
Some of the firms it put cash into
include AOL, Pret a Manager, Yell,
and PPL Therapeutics, the company
that cloned Dolly the sheep.
However, since 2000 Cohen, a Jew
born in Egypt who fled during the
Suez crisis in 1957, has become
increasingly interested in social
investment.
Cohen, with an estimated wealth
▲
private equity firms came into exis- BY RICHARD PARTINGTON
tence [to] get institu-
tional investors to RUSSIA has kicked off a massive $60bn
invest in venture (£37.4bn) privatisation drive with the
funds. [Now] we sale of part of its stake in the country’s
want to connect second biggest bank VTB, raising
the capital mar- $3.26bn.
kets to the The Kremlin sold a ten per cent stake
social sector.” in the lender, which it stepped in to res-
cue at the height of the financial crisis.
Russian Prime Minister Vladimir
Putin yesterday hailed the placement as
a success, despite the “considerable”
financial challenges his country faced.
In a meeting with the bank’s
President, Andrei Kostin, he said: “I
expect that this move, which undoubt-
edly attests to confidence that investors
have in our financial system and our
economic policy, will be to the benefit
of the financial system, the economy
and to VTB.”
Bank of America Merrill Lynch,
SIR RONALD COHEN Deutsche Bank and VTB Capital advised
on the sale, which sees the government
cent.
The sale comes as Moscow gears up
for a privatisation drive to sell off a
swathe of state-owned assets.
The chief executive of Sberbank,
Russia’s biggest lender, yesterday said
the government will sell its seven per
cent stake in the bank during the sec-
ond half of this year.
German Greff, who is also a former
Russian finance minister, said: “We are
discussing it actively with the central
bank. We will try to place [the 7-per cent
stake] in the second half of the year.”
However, head of Russian investment
banking at Renaissance Capital
Alexander Merzlenko said the govern-
ment was “not sure” about when to
best bring its assets to market.
He said: “Every time the agenda
slightly changes. You have the interests
of finance ministers, who care about
the budget with the interests from busi-
ness ministers, who care about the indi-
vidual businesses.”

@
ANDREA ORCEL

BANK OF AMERICA
MERRILL LYNCH

EXECUTIVE chairman of global

banking and markets Andrea Orcel
led the Merrill Lynch team on the
sale of the Russian government’s
stake in VTB. Chairman of global

@
capital markets Rupert Hume-
Kendall ran the share offering for
Pack your toothbrush! the bank, which acted as sole agent
and financial adviser to the Kremlin,
Fly from Heathrow as well as joint global coordinator
and joint bookrunner.
Deutsche Bank and VTB Capital,
the lender’s investment arm, also
New York from £
345 acted as joint bookrunners.
VTB Capital also acted as joint
global coordinator on the transaction.
Boston from £
379
NEWS | IN BRIEF

@
Miami from £
407
Nairobi from £
443 London Capital faces £7.7m bill
Spread-betting firm London Capital
Group could be forced to pay £7.7m by
Singapore from £
504 the financial ombudsman. The regulator
ruled that the company, which provides
online gaming platforms for Paddy
Seoul from £
532 Power and PartyGaming, must repay
£100,000 to clients who lost money on a
third-party currency fund. The fund, pro-
Return fares, incl taxes vided by London Capital yet sold by
Integrity Financial Solutions (IFS),
reportedly lost investors thousands of
More offers on KLM.com pounds. A further 114 clients who say
they lost money in the fund have come
forward, bringing the claim total to
www.cityam.com

approximately £7.7m. Hampshire-based

Fares quoted are for return flights from Heathrow, including taxes and charges, which are subject to change. Fares to New
IFS, part of parent company UK
York, Boston and Miami are for nonstop flights, operated by Delta Air Lines. Fares to the other featured destinations are via Integrity Group, was said to be under
Amsterdam. Book by 28/02/11. Travel periods vary. Fares are subject to availability. Credit card surcharge will apply. Specific investigation from the Financial Services
booking conditions and the General Conditions of Transportation of KLM and AIR FRANCE apply. Prices correct at 10/02/11. Authority over its sales practices, yet
went into liquidation in October 2009.
Clients who had invested in the fund then
turned to the Financial Ombudsman in an
attempt to claw back lost cash. The new
ruling comes after no action was initially
taken against London Capital.
 Advertisement

HOW TO LE VEL A PL AYING FIELD

Thanks to logistics, even small businesses can have the kind of global reach – to more than 220 countries and territories worldwide – that was once the sole preserve of big businesses.

Historically, doing business on a global scale has
been complex and costly. Thus, most of the winning
players in the global economy were large businesses.
They had something only the biggest
organisations could afford: the processes, the
technology, the connections and the know-how
necessary to reliably deliver around the world and
manage a complex global supply chain. They had
logistics. And it was a big competitive advantage.
Logistics can find your customers no matter where they are.
But today thousands of companies in hundreds
of industries are discovering that they too, can use
logistics to save money, save time and become
more competitive. Today’s business world is now a
– provides customised reports and takes the pain A totally different solution is necessary for
out of inventory management – something that’s Al Nassma, the world’s first and finest camel-milk
greatly appreciated where demand is prone to chocolate producer.
seasonal fluctuations. Getting their wares from
Customers are kept happy too, with UPS Dubai – average summer
providing the reassurance of a simple and speedy temperature 41˚C – to
global returns service that helps protect the customers worldwide is
company’s reputation. a unique kind of logistics
problem. One that UPS
SMARTER SMALL BUSINESSES solved by planning the
Another entrepreneurial company taking advantage optimum direct routes
of the new logistics is Sweet Protection. It all started and using insulated
with a schoolboy making skateboards and helmets thermo-packaging and
in a small Norwegian town. Founder Ståle Møller and custom-made ice packs. Logistics in the palm of your hand.
a group of friends then went on to create safety General manager, Our mobile app lets you track, ship,
find locations and much more.
equipment for their other hobbies – kayaking, Martin van Almsick,
snowboarding and skiing. says, “In UPS we have found a partner who not
Today, by making the most of UPS’s supply chain only understands our specific requirements and
solutions and the world’s best globally-integrated shares our commitment to quality, but who also
logistics system, they are able to supply outlets takes an interest in us and loves our chocolates
from California to Rotorua (in New Zealand) from as much as we do!”
a remote Norwegian warehouse.
But it’s not just about scale. UPS gives small THE NEW LOGISTICS

level playing field: logistics isn’t just for the biggest
companies, but for all companies.
LOGISTICS FOR ALL
Take a company like the Vision Group. They supply
game anglers in thirty-four countries with just
about everything they could want, ranging from
state-of-the-art rods and reels to waders and bags.
They do this with a staff of ten.
Those ten people take care of design, R&D,
accounts, marketing, customer service and
administration – and still find time to go
fishing themselves.
UPS helps make this possible by investing
millions of dollars annually in technology to give
small companies access to powerful new
capabilities and time-saving technologies.
The latest processing software helps prepare
shipments and print-related documents with just a
few clicks of a mouse. While tracking software –
integrated with the Vision Group’s own databases
businesses more control, more options, less worry.
With over 400,000 employees providing a truly
globally-integrated service, logistics finds the best
possible way of getting your product to market.
Gøran Langgård, logistics and sales manager,
says, “Once, to compensate for a production delay,
a large volume of gear had to be sent quickly from
China. The flexibility of UPS services meant that
containers could be switched rapidly from sea to
air freight. Problem solved.”
These are just three companies among thousands
who have discovered the power of the new logistics.
“It is a time of global transformation and change
made possible by logistics innovation,” says
Dr. Lucius Riccio, professor at Columbia Business
School. “A time when the smallest companies can
compete with the largest ones – sometimes with
the advantage of being more nimble and quicker
to seize opportunities.”
Then again, all you really need to know is that
no other company on earth understands the power
of logistics better than UPS.
See how we can level the playing field for you.
Visit thenewlogistics.co.uk.

Copyright © 2011 United Parcel Service of America, Inc.

 The Capitalist
6 CITYA.M. 15 FEBRUARY 2011
EDITED BY
ELIZABETH FOURNIER
GOT A STORY? EMAIL
thecapitalist@cityam.com

CHALLENGE Now they’ve

FOR CITY
FIRMS TO
GO OFF ROAD
FOR frustrated finance workers who fancy
themselves as a bit of a Bear Grylls-type
come the weekend, CARE International’s
Finance Adventure Challenge might be
just the opportunity to show your col-
leagues what you’re made of.
City A.M. is supporting the Challenge this
summer, giving City professionals a chance
to ditch the suits and prove their mettle
stretches further than the boardroom. It
takes place in Exmoor on 25 June, and will
see corporate teams from financial firms
pitted against each other in a series of test-
ing trials, including cycling, canoeing and
hiking.
For real suckers for punishment there’s
even a mystery bonus stage – an extra hour
of challenges pitched to the most competi-
tive members in the field.
But the more cerebral types shouldn’t be
put off by the physical demands of the
course – it also promises to test teams’
mental ability, and with fundraising tar-
gets set at £3,000 per team, companies will
need to call on their best mathematical
brain to make sure that all the effort is
worthwhile.
All the money raised goes to CARE’s
microfinance projects, which provide
A Daimler Brand
been nomi-
nated for a
design award,
commuters
can rest
assured Boris
bikes are defi-
nitely cool GIFTS KEEP ON GIVING
If there were any doubt that the British
entrepreneurial spirit lives on, a simple
eBay search this morning would prove
otherwise.
Just hours after the end of Sunday
The Barclays Cycle Hire scheme has been shortlisted for a British design award night’s Bafta ceremony, freebies from
the heavily-sponsored goodie bags start-
financial training and resources to develop- awards recognise innovation in ed appearing on the popular auction
ment programmes around the world. architecture, fashion, furni- site.
ture, graphics, interactive, prod- Top of the search pile last night was a
ucts and transport. The bikes face Bafta-themed Lancome skincare and
SEAL OF APPROVAL stiff competition in their category, make-up gift set in a red carpet box –
In the first six months following their with the world’s first folding elec- yours for just £20 “brand new, unused
launch in July 2010, tourists, commuters tric bicycle and the Riversimple and unopened” – proving perhaps that
and weekend daytrippers have cycled to hydrogen car also up for the prize, high-street products just aren’t enough
the moon and back 13 times on their which will be announced on 15 March to impress those more used to having pri-
‘Boris’ bikes – and the distance is likely to at the Design Museum. vate access to London’s best botox
skyrocket even further once the scheme is But the blue bikes’ supporters will experts.
extended out towards Canary Wharf. surely be heaving a sigh of relief But The Capitalist sincerely hopes that
So the scheme’s 110,000 registered users that they’re not nominated in the no one whose other halves attended the
will be delighted to hear that their chosen “interactive” category alongside ceremony received a Hotel Chocolat solid
mode of transport is now also officially ultra-addictive iPhone game Angry chocolate Bafta mask as their Valentines
“cool”, having just been nominated for a Birds. Not even Colin Firth would Day present.
Brit Insurance Design Award. Tagged as want to be shortlisted next to a There’s entrepreneurial, and then
“the Oscars of the design world”, the competitor like that. there’s just plain cheap.

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CITYA.M. 15 FEBRUARY 2011
Credit Suisse CEO
Brady Dougan
has gone to
investors for cash
Picture: REUTERS
CO-COS: THE BASICS
Q.WHAT ARE “CO-COS”?
A. “Contingent convertible bonds”,
are bonds that turn into equity at
a given trigger-point, for example, if a
bank’s capital ratio falls below regula-
tory requirements, or if an institution
has to be taken over by the state.
Q. WHY ARE THEY SUDDENLY SO
A.
POPULAR?
Co-cos have not traditionally been
popular because issuers must pay
a premium to get investors to take on
the risk that their bonds might turn
into equity. But the Basel III capital
NEWS | IN BRIEF
Marriott hotels to spilt in two
Hotel operator Marriott International
said yesterday it plans to split into two
publicly traded companies by spinning off
its timeshare operations into a separate
company. It also reported fourth-quarter
net income of $173m (£108m), com-
pared with $106m, a year earlier, as a
strengthening economy enabled more
companies to send employees back out
on the road to do business.
The Great
Getaway!
o
March t
1
vel from
Tra
Hurry, book now
while stocks last!
*Price single inc. taxes, availability and prices correct as at 7 February 2011. Available to book now
while stocks last. Offer valid on 2.5 million selected seats across our European network available
for £29.99 or less. For travel from 1 March to 13 July 2011 inclusive. Variable charges for hold
baggage apply and some payment methods attract a handling fee. See website for details.
Capital raised:
SFr6bn
Core tier 1 capital
ratio trigger:
7%
rules impose stringent new require-
ments on banks for holding enough
“loss-absorbing” capital. A release on
13 January clarified that co-cos can
count towards this requirement,
prompting more banks to consider
issuing them to meet the rules.
Q.WHY DO REGULATORS LIKE THEM? Q.WHAT ABOUT ALTERNATIVES, LIKE
“BAIL-IN” BONDS?
A. A.
Regulators view them as a way to
align bondholders’ incentives
with regulators’. The aim is to encour-
age banks’ bondholders to keep an
eye on risk-taking, rather than simply
assuming they will be bailed out by
Agilent beats Wall Street view
Agilent Technologies first-quarter profit
beat analysts’ estimates, helped by
growth across all its segments, and the
electronics testing equipment maker
forecast second-quarter earnings above
analysts’ view. The Santa Clara,
California-based company posted a net
income of $193m, up from $79m, last
year. Revenue rose 25 per cent to
$1.52bn.
.99*
£
for 29
13 Ju
ly 2011
News 7
Coupon rates: Credit Suisse
9%
9.5%
co-cos a go-go
BANKING their assets convert into non-interest-
▲
BY JULIET SAMUEL paying equity. They can also be hard to
CREDIT Suisse has tapped its investors
for an extra SFr6bn (£3.85bn) by issuing
sell, because they don’t fit into tradi-
tional investment models balancing
equity and bonds, but straddle the two.
contingent convertible bonds (co-cos), “There’s always been the question of
Q&A
in order to get halfway towards who will buy these,” said Adam Farlow
Switzerland’s new capital require- of law firm Baker & McKenzie .
ments. But with Basel III increasing banks’
The issuance could herald a new era capital requirements and narrowing
the state if the bank
fails. Owners of co-cos have
of popularity for co-cos on the back of
regulators’ enthusiasm for the instru-
down the definition of loss-absorbing
capital, many institutions are turning
every incentive to make sure that
their bank’s capital ratio does not fall
too low, or else their interest-paying
ments. The buyers in the Credit Suisse
deal are state-backed investment firm
Qatar Holding, which will buy $3.5bn
to co-cos to meet the rules.
“A lot of banks had not been keen to
do it because of uncertainty under
bond will turn into non-interest-pay- at a 9.5 per cent interest rate, and the Basel III,” said Georg Schroeder a part-
ing equity. Olayan Group, which will buy SFr2.5bn ner accountants Deloitte. A clarifica-
at nine per cent. tion of the rules on 13 January,
Credit Suisse was not able to say
what premium it had to pay in order to
however, saw Rabobank take the
plunge, now followed by Credit Suisse.
Bail-in bonds are similar to co-cos
in that they can turn into equity,
but the key difference is that the reg-
issue the three-year notes, which con-
vert into equity if the bank’s core tier
one capital ratio falls below seven per
Co-co financing deals are now
reportedly being shopped around the
City by advisory firms, particularly by
ulator decides when this conversion is cent under Basel III definitions. UBS and Bank of America/Merrill
triggered. This uncertainty could Co-co issuers must pay a premium Lynch, both of which advised on
@
make them very difficult to price. because bondholders are loath to see Lloyds’ 2009 co-cos deal.
@
@
MORE NEWS
ONLINE
www.cityam.com
 8 News
Bob Ray (l) and Andrew Lamb (r) of CME Group
Fidessa hits
profit target
for 2010
▲
CAPITAL MARKETS
BY RICHARD PARTINGTON
FIDESSA, the trading systems
provider, has posted full-year results in
line with consensus, although failed
to meet some analysts’ expectations.
Revenues at the company, which
links investors with brokers, dealers
and exchanges, rose ten per cent to
£262.3m over the year to 31 December.
However, the firm warned that its
markets “will remain difficult for
some time to come,” yet said it
believed there would still be growth
opportunities in the future.
Analysts at Panmure Gordon said
its results were “below our top end
expectation.”
Growth increased most significant-
ly for the firm in Asia, jumping 22 per
cent on a year earlier. It also managed
to add 100 new clients over last year.
The company now holds cash of
£63m and no debt. It said it would pay
a special dividend of 45p per share in
addition to its annual payout of 33p
per share.
Chief executive Chris Aspinwall
said: “Fidessa has delivered good
growth throughout 2010 with
progress across all regions, despite the
challenges remaining in the financial
community.”
He added: “We believe that the
strength of our business will enable
us to deliver further good growth
in 2011.”
ANALYSIS l Fidessa Group
1,700 p
1,680.00
14 Feb
1,600
1,500
1,400
15 Nov 3 Dec 23 Dec 17 Jan 4 Feb
G20 backs away from commodities curbs LSE speeds up trading
▲
COMMODITIES
BY MARION DAKERS
THE G20 is set to shy away from tough
curbs on commodities speculation
after leading producers lined up to
oppose any interference in the boom
in raw materials prices.
France, which is currently the pres-
ident of the Group of 20 leading
economies, had pushed for market
intervention to halt skyrocketing
Picture: Micha Theiner/City A.M.
prices linked to aggressive trades.
But France sought yesterday to
downplay expectations, with econo-
my minister Christine Lagarde saying
France had no desire to regulate com-
modity prices.
“What we would like to do, on the
other hand, is try to reduce volatility
by simply shining a light on market
fundamentals,” she told reporters.
The US, Brazil and Canada, all
major producers of foods, metals and
CME to expand in London
▲
EXCLUSIVE
BY JULIET SAMUEL
THE Chicago Mercantile Exchange
(CME) Group is planning a rapid expan-
sion in London, more than doubling its
staff in the City and for the first time
basing five senior managers in the cap-
ital, City A.M. can reveal.
The expansion involves hiring 200
extra UK staff and signing a 15-year
other commodities, have made a
point in recent days of publicly oppos-
ing the French push.
Broad G20 opposition to a global
transaction tax, similar to the Tobin
Tax proposed for banks, has all but
torpedoed the use of such a measure
in the commodities market.
The World Bank said last week it
expected volatile grain prices until at
least 2015 with nearly a billion people
worldwide hungry already.
lease on a 38,000-square foot office in
Land Securities’ One New Change shop-
ping centre. CME did not publish the
cost of the lease but the going rate of
£53 per square foot suggests an invest-
ment of £2m per year.
The firm’s London staff are currently
based in Watling House on Canon
Street, but have “grown out of the
space”, said managing director and
head of the London office Bob Ray. The
FINANCIAL MARKETS
THE LONDON Stock Exchange has trans-
ferred its main trading platform to a
faster system in an effort to gain ground
on technologically superior competitors.
The bourse, which has been hit by
several embarrassing technology
glitches in the past, said the transition
to its new ultra-low latency trading
platform – Millennium Exchange –
went smoothly.
CITYA.M. 15 FEBRUARY 2011
managing directors based here will be
Danielle Dycus, Allan Schoenberg,
Roger Rutherford, Harriet Hunnable
and Felix Carabello, and Andrew Lamb,
chief executive of a new clearing and
settlement operation in Europe that
CME will launch this year. Ray says the
firm wants to “plant the flag in
London. “From a timezone perspective,
London is the centre: you can manage
Asia and the US from here,” he said.
NYSE eyes
merger by
end of year
▲
FINANCIAL MARKETS
BY RICHARD PARTINGTON
A DEAL between Deutsche Boerse and
the New York Stock Exchange (NYSE)
could be tied up by the end of this year,
details due today are expected to reveal.
An announcement on the progress
of the deal could come as soon as this
afternoon after the two companies’
boards meet to vote on the matter.
Any delay to the deal’s approval could
open the door to rival bidders for NYSE
Euronext – one report last night cited
CME Group as a potential buyer.
Chicago-based CME declined to com-
ment. CME officials have been guiding
investors away from expectations that
the company would do a merger deal.
NYSE’s general counsel, chief operat-
ing officer and global head of technolo-
gy last night looked set to keep their
positions following the planned merger.
However, the deal could face stern
opposition from protectionist ele-
ments. Yesterday, a labour representa-
tive from Deutsche Boerse’s
supervisory board raised concerns over
the influence the NYSE could have on
the German exchange. Johannes Witt
said: “It will be a matter of time before
the Americans take control. We should
be wary of this. It won’t be possible to
undo the deal once it is signed.”
The German government has indi-
cated it will play a limited role in
the merger, indicating it could be
successful.
But other people familiar with the
situation said some issues -- such as the
name, job cuts in technology, and
where other promised cost savings
would come -- still need to be worked
out in detail.
Negotiations over a name, and
where to locate various operations
across the two continents, highlight
some of the difficulties in bringing
together companies that are both oper-
ationally complicated and symbols of
national pride.
It is replacing its TradElect system
with one supplied by MilleniumIT, the
Sri Lankan firm it bought for $30m
(£18.7m) in 2009.
Duncan Higgins, head of electronic
sales at Investment Technology group
said: “The opportunity is that they can
step forward and be quicker than they
were but also to be more cost efficient.
The new Linux-based operating sys-
tem will slash trading speeds to less
than a millisecond.
CITYA.M. 15 FEBRUARY 2011
Former Omega chief executive Richard Tolliday is suing the insurance firm
CEOs look
to Asia for
growth
▲
STRATEGY
BY ALISON LOCK
GLOBALISATION and growth are back
on the agenda for chief executives as
they seek to gain from a mixed recov-
ery, a new survey showed yesterday.
Confidence among company heads
worldwide is returning to a level to
rival boom years such as 2005 and
2006, as strict cost control and
restructuring over the past two years
have strengthened business models.
And chief executives’ love affair
with high-growth Asian markets con-
tinues unabated, the 14th Annual
Global CEO Survey from PwC found.
It showed 92 per cent of western
European chief executives expected
growth in their Asian operations,
compared with 48 per cent in their
Europe businesses.
In the finance sector, 36 per cent of
bank heads said they had fundamen-
tally changed strategy in the past two
years to cope with the altered land-
scape and growing focus on risk.
Asset managers and insurance
CEOs were among the most optimistic
and more than half of respondents in
both sectors were investing in new
product offerings. Asset managers
were keen to capitalise on ageing pop-
ulations’ desire to save for retirement,
while a quarter of insurance firm
heads anticipated making a cross-bor-
der acquisition in the next year, with
Asia the most likely destination.
But emerging markets were not the
only target for growth (see graphic,
below), as 22 per cent of chief execu-
tives named the US one of their most
important markets and 14 per cent
named Germany.
Many were concerned over the diver-
gence of recoveries within the global
economy and said their strategy would
change to accommodate this. Volatility
in emerging markets was also a con-
cern for 71 per cent.
ANALYSIS l Reasons why chief executives plan to shift sourcing to these countries
Q: Which countries will be most important for you to source from in future and why?
China - 37%
3%
63%
6%
Source: PwC 14th Annual Global CEO Survey
News 9
Omega sued by ex-boss
shareholder coup ousted chairman of ownership of the company.
▲
INSURANCE
Walter Fiederowicz and the board. If this is upheld, Omega may be
BY ALISON LOCK He has filed a lawsuit at the High forced to pay him millions. He was
RICHARD Tolliday, the former Omega Court in the UK to have the case paid about $1.1m (£687,000) in 2009.
Insurance chief executive, could be heard in Bermuda, where Omega is Omega is currently in takeover
entitled to £6m compensation after domiciled. talks with rival Canopius, which
his forced departure from the firm, Sources said Tolliday’s case focuses made an unsolicited bid last month.
sources told City A.M. yesterday. on his contractual right to a change Tolliday has been seeking compen-
Tolliday is suing Omega for com- of control clause, which entitles sation since his exit from Omega,
pensation relating to his exit from employees to a payment if they are where he had clashed with founder
the company last March, when a dismissed after a takeover or change John Robinson.
Funds target
emerging
markets
▲
FUND MANAGEMENT
BY ALISON LOCK
ECONOMIC recovery in different glob-
al regions is happening at varying
speeds, leading asset managers to
invest in a wide range of emerging
markets for growth, a new survey
found yesterday.
Fund managers are cautiously opti-
mistic that indebted western
economies will deal with sovereign
debt, but are targeting Asia for
returns, a survey by RBC Capital
Markets concluded.
Almost 70 per cent of respondents
expect an Asia rally this year, led by
smaller markets such as Hong Kong,
Singapore and South Korea, which are
thought to hold better prospects for
growth this year than in 2010.
Other favoured emerging markets
include India, which 66 per cent
believed will grow more this year;
China, where 65 per cent anticipated
higher growth and Russia, where 51
per cent expect more growth.
However, optimism was also high
that resource-rich frontier markets
such as Africa would also rebound
strongly this year: 44 per cent were
hopeful of expansion there.
“Emerging markets are more diver-
sified than ever and are growing at dif-
ferent rates,” said Marc Harris, co-head
of global research at RBC Capital
Markets. “Investors are recognising the
need to look beyond the four tradition-
al emerging markets and are now
looking to intra-regional differences.”
Respondents were investing more
carefully and with greater awareness
of risk and volatility, the survey found.
Asset managers had growing faith
in the Eurozone, with just over a quar-
ter expecting a decline in the region
compared with 40 per cent a year ago.
But the US is out of favour, with
respondents expecting equity market
gains falling from 66 per cent to 54 per
cent. .
US - 22% India - 15% Germany - 14% Brazil - 11%
15% 13% 11%
7%
18% 55% 35% 31%
10% 6% 4%
13%
Cost Quality Innovation
 10 Mobile world congress
THE TOP STORIES FROM THE WORLD'S BIGGEST MOBILE PHONE SHOW
Twitter boss
fails to scotch
bid rumours
TECHNOLOGY
▲
TWITTER chief executive Dick Costolo
yesterday refused to scotch talk that
his microblogging site could be
bought for up to $10bn (£6.25bn) by
Google or Facebook.
He avoided the question when
asked about suggestions that Twitter
may be a takeover target, saying only
they were “just rumours” and he had
“no idea where they came from”.
The firm is “already making
money”, Costolo said, with a string of
companies desperate to develop clos-
er relationships with their customers
using the site.
He pointed to a tie-up with Audi,
which has run campaigns encourag-
ing users of the site to interact with
its products.
Twitter is able to monetise this
through charging companies to pro-
mote individual “tweets”, the firm’s
account or “trends” it is promoting,
said Costolo.
He said his focus at the microblog-
ging site is to make Twitter ubiqui-
tous across devices and platforms.
Costolo also said he wants to make
the user experience identical no mat-
ter which platform they use the serv-
ice on.
BOOK
NOW
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Analysts pan
Microsoft and
Nokia tie-up
2011
MOBILE
WORLD
CONGRESS
BY STEVE DINNEEN IN BARCELONA
NOKIA chief executive Stephen Elop
defended his firm’s partnership with
Microsoft yesterday after the deal
sent its shares tumbling a further five
per cent.
Shares in the Finnish firm have
now lost a staggering 19 per cent
since the deal was announced on
Friday, knocking €6bn (£5bn) off its
market value.
Elop said Nokia will receive “bil-
lions” in benefits from the tie-up,
largely expected to be through dis-
counted licenses to Microsoft soft-
ware. Elop, who until recently worked
for Microsoft, also denied suggestions
he is a “Trojan horse” sent to further
the US-based firm’s interests.
Analysts downgraded Nokia stock
yesterday, saying it will be difficult
HERE COMES THE SUMMER
CITYA.M. 15 FEBRUARY 2011
for the firm to integrate Microsoft’s
Windows Phone 7 (WP7) onto its
handsets in time to reach the
Christmas market.
They also warned the deal could
lead to a temporary revenue vacuum,
with customers unlikely to invest in
Nokia’s existing Symbian platform
now Elop has effectively called time
on it.
Speaking last night at Mobile
World Congress in Barcelona, Elop
said the partnership between the two facturer of both traditional and and said a Nokia/Microsoft platform
giants is “rational” and will deliver an smartphones last year and its is worth 1,800 times less than Apple’s
“incredible portfolio of devices”. Symbian operating system was the operating system.
Microsoft chief executive Steve most commonly used platform. But it Ballmer also defended WP7, which
Ballmer said the deal represents a saw its market share slip 7.5 per cent has been slow to chip away at the
“significant moment in the evolu- and Google’s Android overtook it in growing dominance of Google and
tion” of mobile phones. the fourth quarter of last year, with Apple in the high-end smartphone
The two firms hope the deal will the Scandinavian giant struggling to market.
create a third “ecosystem” in the find a foothold in the increasingly He said 93 per cent of people were
smartphone arena that can compete dominant high-end market. “delighted” with the platform. He
with Google’s fast-growing Android UBS analyst Gareth Jenkins expects went on to unveil plans to include
platform and Apple’s iOS. the firm to lose another seven per deeper integration with services such
Nokia was the biggest global manu- cent from its market share this year as Facebook and Twitter.
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CITYA.M. 15 FEBRUARY 2011 Mobile world congress 11

ANALYST VIEWS: WHY HAS NOKIA’S DEAL BEEN SO BADLY RECEIVED?

Interviews by Alison Lock
Microsoft boss
Steve Ballmer (left)
and Nokia’s CEO JAMES CRAWSHAW | GARETH JENKINS | UBS
S&P EQUITY RESEARCH

“ “
Stephen Elop
defended the tie-
up
It was a mistake to kill off While no outcome would have
Symbian prematurely. It will take two or been particularly palatable, we under-
more years to transition to Windows stand the rationale for adopting

” ”
and meanwhile no-one will want to buy Microsoft. This said, the clear winner in
a Symbian phone. the deal is likely to be Microsoft.

TERO KUITTINEN | MKM PARTNERS

ANALYSIS l Nokia

8.6 €
“ We expect that Nokia’s smartphone market share will collapse as developers abandon
Symbian support following Elop’s dismissive comments about Symbian and Qt software
platforms.

”
8.2
6.68
7.8 # 14 Feb
7.4
7.0

8 Feb 9 Feb 10 Feb 11 Feb 14 Feb

NEW PRODUCT LAUNCHES

HP VEER
The smallest smartphone on show at MWC was the HP
Veer. In fact, measuring in at smaller than a credit card
and thinner than a deck of cards, it is among the smallest
smartphones ever constructed. It features access to all
major social network feeds and has a slide-out qwerty
keyboard. The question is: how small is too small? And
the answer: probably this.

LG OPTIMUS 3D
The Optimus has a glasses-free 4.3” 3D LCD screen and
dual 5 mega-pixel camera for recording 3D video. Using
Google’s Android operating system, the device features
8GB memory, advanced multimedia capabilities and
HDMI output. The technology is impressive but it
remains to be seen whether people will pay extra to
make calls in the third dimension.

SONY ERICSSON XPERIA PLAYSTATION PHONE

The PlayStation phone was finally unveiled at MWC,
with the firm promising at least 50 games will be
ready in time for its launch in March. The Android-
powered phone has a touch screen, a 5 Megapixel
camera and expandable memory of up to 32GB. Sony’s
fight back against the all-conquering Nintendo DS has
begun.

Dotcom frenzy Echostar to

as Zynga gets buy Hughes
$9bn price tag in $2bn deal
▲

TECHNOLOGY
▲

TECHNOLOGY
ONLINE gaming group Zynga is hold-
ing talks with potential investors
which could lead to it raising $250m
(£156m) in new funding.
That may give Zynga a valuation of
between $7bn and $9bn, in yet anoth-
er example of rich valuations for
technology companies that some
analysts have compared to the dot-
com boom.
Zynga, known for games including
FarmVille and Mafia Wars, filed
papers in April authorising the
issuance of new stock that valued the
company at about $4bn.
Last week, Google and Facebook ,
plus others, held low level takeover
talks with Twitter that give the sensa-
tion a value as high as $10bn.
Facebook is said to be worth a cool
$50bn, according to a recent private
placing.
ECHOSTAR Corp agreed to buy
Hughes Communications for about
$1.33bn (£830m), excluding debt, as
the digital set-top box maker looks
to beef up its broadband satellite
services offerings.
Under the terms of the deal,
Hughes’ shareholders will get $60.70
per share, a 31 per cent premium
over the stock’s 19 January close, a
day before Hughes had hired
bankers for a sale.
EchoStar, co-founded by Dish
Network chief executive and billion-
aire Charlie Ergen, will pay $2bn for
the acquisition including debt.
EchoStar’s offer for Hughes fol-
lows its largest customer Dish
Network’s deal earlier this month to
buy DBSD North America, a satellite
network operating under bankrupt-
cy, for $1bn.
12 News CITYA.M. 15 FEBRUARY 2011

The only surprise was the price GE paid

EVERYONE knew Wood Group was
about to sell its well support unit to
GE, but few thought it would fetch
as much as $2.8bn (£1.75bn).
Management have covered them-
selves in glory with this deal.
Whatever multiple you look at – 17.4
times 2010 ebitda or 30 times earn-
ings – it is clear that Wood drove a
hard bargain.
The firm’s decision to return
$1.7bn of the proceeds to sharehold-
ers, most likely through a buyback,
will be 20 per cent accretive to earn-
ings per share, according to Wood’s
advisers. As surprises go, this is a
particularly nice one.
Investors would be wise to look
again at other businesses with simi-
lar assets, after GE was willing to pay
such a handsome sum for a well sup-
port arm. AMEC and Petrofac in par-
ticular deserve attention.
It wasn’t just the multiples, how-
ever. Management rightly believes
that the deal will allow them to
focus on the firm’s core oil and gas
business, as well as its gas turbine
arm.
We reckon the firm is also a more
attractive takeover target, especially
for the likes of AMEC. The pair now
share a core focus on engineering,
and would be a neat fit, although
yesterday’s deal will make any valua-
tion more challenging.
So what of the rest of the group?
Well Support accounted for $166m
of group ebitda in 2010, around 41
per cent, but the firm still looks
undervalued after yesterday’s jump.
The residual Wood Group now
trades at around 12 times earnings,
against a sector average of around 18
times, suggesting a flurry of
upgrades in the pipeline. There will
likely be some profit taking in the
short term – there always is after a
rally of this kind – but long-term
investors should sit tight.
BOTTOMLINE
Analysis by David Crow

Wood Group chief executive Allister Langlands is returning $1.7bn to shareholders

Wood Group
soars after
$2.8bn sale
interest and GE’s ability to pay extra
▲

ENERGY
BY ALISON LOCK
SHARES in oils services business John
Wood Group rose more than 14 per
cent yesterday after it sold its well
support unit to General Electric for
$2.8bn (£1.75bn).
The sale was labelled “top dollar”
by analysts as the price was substan-
tially over estimates of $1.5-2bn.
Aberdeen-based Wood Group’s
shares gained 14.06 per cent to 652p
after the company said it would
return $1.7bn of the proceeds to
shareholders and use the rest to pay
down its debt, estimated at $1bn.
Chief executive Allister Langlands
said the price reflected “the signifi-
cant investment programme in well
support over the years” and GE would
“accelerate the future international
growth of the business.”
Sources told City A.M. a number of
bidders had pursued the deal. That
for the synergies with its own busi-
ness pushed the price up to almost 17
times the unit’s’ core earnings.
The Well Services business employs
3,800 people and generated sales of
$947m in 2010. GE snapped up the
division to gain expertise in uncon-
ventional fuels, such as shale gas, and
extraction of more oil from existing
wells, where demand is set to grow
fast as production from current wells
declines at six per cent per year.
ANALYSIS l John Wood Group
600 p 652.00
14 Feb
560
520
480
15 Nov 3 Dec 23 Dec 17 Jan 4 Feb

JAMES Heineken and Carlsberg’s purchase of

LEIGH-PEMBERTON
CREDIT SUISSE
CREDIT Suisse and JP Morgan
Cazenove advised John Wood on the
sale, while Citigroup advised GE.
The Credit Suisse team is headed by
James Leigh-Pemberton, its UK chief
executive and a former adviser to the
Treasury on the bank bailout.
The City veteran has worked on
high-profile deals such as the sale of
steelmaker Corus to Tata and
Scottish & Newcastle. But Leigh-
Pemberton, the son of former Bank of
England governor Sir Robin Leigh-
Pemberton, has also experienced first-
hand the damage the financial crisis
has done to investor confidence and
capital markets. He was part of the
team advising New Look on its abort-
ed IPO a year ago, and chief adviser
to Prudential when it was forced to
abandon its takeover of AIA and
scrap a planned huge rights issue.
Michael Wentworth-Stanley heads
the JP Morgan Cazenove team. A JP
Morgan Cazenove managing director
since 2005, he joined Cazenove & Co
in 1975 and was made a partner at
the firm in 1982.
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CITYA.M. 15 FEBRUARY 2011 News 15

Advisers line up for the biggest deal in town

biggest deals in town.
So naturally Barclays Capital and
RBC Capital Markets were as pleased
as punch to be advising the London
Stock Exchange on its £4.3bn merger
with Canada’s TMX. (Note that the
long-term corporate brokers JP
Morgan Cazenove and Nomura are
THE INSIDE TRACK not working on the transaction).
Barclays Capital has been quietly
DAVID HELLIER picking up corporate broking man-
dates and recently hired Richard
Last year BarCap advised on
Resolution’s bid for Friends Provident
where it worked on the transaction
with RBC Capital Markets, which is
fast gaining a reputation for being
one of the most aggressive hiring
banks in town, as well as one of the
more innovative.
Some view the Royal Bank of
Canada-owned firm as the
Manchester City of the financial mar-
kets, with rival firms often unable or
return to form for a bank which suf-
fered in the immediate aftermath of
the credit crunch and was only sta-
bilised in 2008 after Mitsubishi
bought a 21 per cent supportive
shareholding.
Morgan Stanley had an enormously
successful 2010, advising on the
BSkyB News Corp deal, Sanofi
Genzyme deal and International
Power GDF Suez deal, to name but a
few. Its LSE team includes Simon
CHAUCER’S TALE
A niche advisory firm, Willis Capital
Markets and Advisory Services, has
been selected to advise the Lloyd’s
insurance broking group Chaucer –
valued at around £350m – in its
response to bid approaches.
Willis, which is working alongside
financial adviser Kinmont, won the
gig after giving Chaucer some specific
unrelated advice ahead of the recent
approach from Guy Hands’ Terra

W
HEN you’re trying to build
up a franchise in mergers
and acquisitions, there’s
nothing better than being
signed up to work on one of the
Taylor from Bank of America Merrill
Lynch to join a team that already
includes former Morgan Stanleyite
Mark Warham and Matthew
Ponsonby.
unwilling to match the pay packages
on offer to potential joiners.
The experienced player on the deal
though is Morgan Stanley and its
involvement underlines a significant
Robey, one of the doyens of the UK
investment banking scene, Chris
Carter (who is originally from
Toronto), Matthew Jarman and
Dougal McDonald.
Firma.
Lexicon drops out of the team.
Former Bank of America Merrill
Lynch man Tony Ursano leads Willis.
david.hellier@cityam.com

CREATE MORE VALUE

SEC chairman Mary Schapiro will appear before the House Financial Services Committee today

SEC tries to
reassure on
trading rules The Oxford Finance Programme
▲

REGULATION the-counter derivatives market.

BY HARRY BANKS
THE TOP US securities regulator will
seek to assure lawmakers today that
the agency is treading carefully as it
crafts new over-the-counter deriva-
tives rules to ensure that they will not
have a harmful impact on the mar-
ket.
“We are progressing at a deliberate
pace, taking the time necessary to
thoughtfully consider the issues
raised by various rulemakings before
proposing specific rules,” Mary
Schapiro said in prepared testimony
released a day early by the House
Financial Services Committee. “We
will take a similar approach as we
move toward consideration of the
final rules.”
Schapiro is slated to appear before
the House Financial Services
Committee today alongside
Commodity Futures Trading
Commission chairman Gary Gensler
and Federal Reserve governor Daniel
Tarullo. All three regulators are
tasked with implementing sweeping
new regulations in the Dodd-Frank
Act to police the $600 trillion over-
Their testimony comes just after
the Obama administration called for
major funding boosts for the SEC and
for Senior Executives
CFTC to help them implement Dodd-
Frank. House Republicans have been
resistant to budget increases, in part Accelerate your ability to create Dates:
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 16 News
Rolls Royce
bags £1.4bn
Emirates deal
ENGINEERING
▲
BY JOHN DUNNE
ENGINE maker Rolls Royce yesterday
announced that it has won a $2.2bn
(£1.37bn) long-term maintenance con-
tract with Emirates airline.
The deal covers Rolls Royce’s
engines in the airline’s fleet of 70
Airbus craft. It adds to current con-
tracts to take the total number of
Emirates aircraft serviced by Rolls-
Royce to 128.
“We are delighted to sign this con-
tract with Emirates,” said Mark King
of Rolls-Royce Civil Aerospace.
Emirates, the airline of the United
Arab Emirates, is a key Rolls-Royce
customer and this deal will help the
engineering giant repair the reputa-
tion of its Trent engines after they
suffered problems last year.
AssetCo slumps
as it faces debt
facility struggle
▲
SERVICES
ASSETCO, the largest outsourcing
partner to London Fire Brigade, has
said it is discontinuing offer talks
with a third party as it faces certain
short-term funding issues, sending its
shares down 21 per cent to close at
36p – their lowest in nearly two years.
In December, AssetCo sold three of
its businesses to restructure its bal-
ance sheet. The company said it was
in advanced talks related to a short-
term debt facility of £3.5m, which
will be used for its immediate require-
ments.
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from Sydney to Signapore, forcing
the pilot to make an emergency land-
ing. The incident caused Qantas to
ground its fleet of A380s to investi-
gate the problem and led to costs of
£56m, Rolls Royce said last week.
ANALYSIS l Rolls Royce
680
p
654.50
14 Feb
640
600
15 Nov 3 Dec 23 Dec 17 Jan 4 Feb
SVG halves stake in
retailer New Look
PRIVATE EQUITY
NEW LOOK’S private equity owners
have slashed the value of their stake
in the retail chain after tough high
street conditions caused a fall in
sales, according to figures.
Investment group SVG Capital – an
investor in New Look through buyout
group Permira, which owns a 27.7 per
cent stake in the retailer – revealed it
has almost halved the value of its
holding in the fashion group.
Full-year results from SVG showed
it cut the value of its investment in
New Look by 47 per cent, to £13.5m at
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BERGGRUEN FUND LISTS FOR £900M
BILLIONAIRE Nicolas Berggruen’s Justice Holdings fund raised a greater than planned £900m
from its listing of 90m shares at £10 a share yesterday, after hedge fund manager William
Ackman bought into the deal. Justice said this would enable it to pursue its objective of acquir-
ing a target business with an enterprise value of between £1bn and £7bn.
the end of last year from £25.7m a
year earlier.
Permira is also the owner of compa-
nies such as fashion group Valentino
Hugo Boss and German satellite
broadcaster ProSieben. Many of these
are improving, with earnings up 27
per cent across the portfolio and mar-
gins and market shares increasing.
SVG has been Permira’s largest
investor by far, allowing public mar-
ket investors access to Permira’s buy-
out funds, but it is hoping to diversify
its offerings after the credit crisis
badly hurt private equity deals.
Picture: GETTY
Nomura loses key banker
after only 18 months
▲
BANKING
THE global co-head of the financial
institutions group (FIG) at Nomura
has quit after less than 18 months
with the Japanese bank. He is one of a
number of high profile Nomura
bankers to have left the bank within
the past year.
Dan McNamara, who was global co-
head of the FIG business with Hubert
Bastide, has resigned with immediate
effect. London-based Bastide is cur-
rently acting as sole global head, a
position he will continue to hold.
Nomura said yesterday that Petter
Sternby would become head of the
bank’s Asian FIG group.
CITYA.M. 15 FEBRUARY 2011
NEWS | IN BRIEF
Losses fall at MGM Resorts
MGM Resorts International, which
sources said last week plans to publicly
list shares in its Macau operations at the
end of February, has reported a smaller
loss in the fourth quarter. The casino
operator posted a net loss of $139.2m
(£86.8m), or 29 cents a share, com-
pared with a net loss of $433.9m, or 98
cents a share, last year. Net revenue was
$1.5bn, in line with analyst estimates.
Sinclair Pharma to buy IS Pharma
Specialty pharmaceutical company
Sinclair Pharma is in advanced talks to
buy IS Pharma in an all-share deal that
creates a company worth over $200m
(£124.7m), based on Friday’s closing
share prices. Sinclair Pharma sharehold-
ers will own 62.4 per cent and IS
Pharma shareholders would own 37.6
per cent of the new company, to be
called Sinclair IS Pharma.
Uniq pension deal boosts shares
Shares in chilled sandwich and salad
maker Uniq rose 6.9 per cent to 7p yes-
terday after Friday’s agreement to cede
90 per cent of its shares to its pension
scheme in order to escape the burden of
the size of the pension fund which is
larger than its market cap. Uniq, which
has already received approval from the
Pensions Regulator and the Pension
Protection Fund for the deal, still needs
to receive shareholder approval. After
the deal is completed, Uniq shares will
trade on the junior Aim market.
McNamara joined Nomura at the
end of 2009 from Citigroup, where he
was co-head of investment banking
for Asia-Pacific.
Yesterday sources said he was leav-
ing the bank to go to the US where his
family live. They said he did not have
a job to immediately go to.
Nomura’s FIG team has lost four
other high profile executives since
the beginning of last year and last
week the bank suffered the blow of
not being chosen to work on the LSE’s
£4.3bn merger deal despite being the
LSE’s corporate broker. Nomura says
that it fares comparatively well in
retaining employees.
CITYA.M. 15 FEBRUARY 2011
Demand for
London office
space jumps
ECONOMICS
▲
BY DAVID CROW
OPTIMISM about the UK commer-
cial property market is at its highest
level since the onset of the credit
crunch, thanks to a rebound in
demand for central London offices,
according to the Royal Institute of
Chartered Surveyors (RICS).
In the fourth quarter, 18 per cent
per cent more surveyors said they
expected new sales and lettings to
increase rather than fall in the next
three months, up from eight per
cent in the third quarter. This is the
highest reading since the onset of
the credit crunch in the first quar-
ter of 2007.
And more businesses appear to be
planning to expand, after eight per
cent more surveyors reported a rise
in occupier enquiries in the fourth
quarter, compared to a balance of -
22 per cent in the three months pre-
viously.
Tenant demand for commercial
property stabilised overall in the
fourth quarter, RICS said, with a net
balance of zero against -6 per cent in
the earlier quarter.
Demand for office space was
strongest, with a net balance of zero
surveyors reporting available space
– the lowest number since the
fourth quarter of 2007. In central
Chinese trade gap shrinks giving it
ammunition in battle with the G20
ECONOMICS
▲
BY HARRY BANKS
CHINA’S trade surplus fell to its low-
est in nine months in January after
imports surged, supporting the gov-
ernment’s case ahead of a G20 meet-
ing that it is doing enough to spur
domestic demand without speeding
up currency appreciation.
The trade surplus shrank to
$6.5bn (£4.1bn) from $13.1bn in
December, well short of forecasts for
a $10.7bn gap.
Global stocks and commodity
prices climbed higher, with the sur-
prisingly strong imports highlight-
ing China’s massive appetite for raw
NEWS | IN BRIEF
Retailers plead over Budget
Shop owners have called for a “retail
friendly” Budget next month, after
new data showed a spike in the num-
ber of empty shops. Figures from the
Local Data Company, published today,
show shop vacancy rates climbed to
14.5 per cent at the end of 2010, com-
pared to 12 per cent a year earlier. The
British Retail Consortium has called on
the chancellor to limit the impact of an
impending rise in business rates and to
cancel any further rises in the national
minimum wage.
London, 42 per cent more surveyors
recorded an increase in demand
rather than a fall, up from 25 per
cent in the third quarter.
However, empty space continued
to tick up in the industrial and
retail sectors, with a balance of +5
per cent and +4 per cent respective-
ly.
But even as demand stabilises, the
outlook for rents is poor. Though
the outlook for London offices is
more positive, retail rents are
expected to decline in all regions of
the UK, while industrial rents are
expected to decline everywhere but
London and the South East.
Overall, seven per cent more sur-
veyors said they expected rents to
fall rather than rise.
The expectations are that rents
will continue to decline in the
Midlands, North and South, while
they are expected to rise in London.
ANALYSIS l Change in sales and lettings
% of commercial property
40
balance
20
0 GDP contracted in the fourth quarter
-20
-40
-60
-80
Year 98 00 01 02 03 04 05 06 07 08 09 10
materials and its solid export
growth hinting at solidifying recov-
eries in the US and European
economies.
In the past, a weaker surplus
would have caused concern for the
Chinese government, but more
recently it has been trying to shift
the economy toward greater
reliance on consumption and less
on exports, in part to address critics
who say that its success has come at
the expense of other countries.
It was the third consecutive
month of a declining trade surplus,
and though not enough to mark a
definitive change, that streak pro-
vides a symbolic boost to China
Eurozone industry dips
Industrial production in the Eurozone
area fell by 0.1 per cent in December,
according to official statistics.
Economists blamed the decline in the
16 countries that use the single curren-
cy on heavy snow during the month,
which was particularly bad in Euro-
powerhouse Germany. The figure,
which follows strong increases in the
previous two months, is unlikely to
have any major affect on today’s
Eurozone growth figures, according to
economists.
Economics 17
OECD index
ANALYSIS l GDP in 2010
JAPAN $5.47tr is pointing
USA to growth
CHINA
▲
BANKING
BY HARRY BANKS
THE growth outlook for major indus-
trialised economies is picking up,
although big differences in momen-
tum remain between countries, the
$5.88tr $14.66tr OECD’s leading indicator for
December showed yesterday.
The Paris-based Organisation for
Economic Development and Co-oper-
ation (OECD) said its December com-
posite leading indicator (CLI) for 29 of
its member countries rose to 102.8
from a revised 102.5 in November,
China economy overtakes
pointing to stronger growth momen-
tum.
Japan, the United States and
Germany were leading the charge, it
the land of the setting sun
said, with a more moderate outlook
for Canada, France and Britain, and
signs emerging of a downturn in
Italy. It had previously given its
OECD-area indicator for November as
102.8. Japan’s reading jumped to
months to the end of December. That 103.9 from a revised 103.3 and
▲
ECONOMICS
BY DAVID CROW left Japan’s nominal GDP for 2010 at Germany’s rose to 105.0 from 104.7.
479.223 trillion yen or $5.474 trillion, France’s indicator inched up to 102.3
CHINA overtook Japan last year to below China’s $5.879 trillion figure from 102.2, while Italy’s reading
become the world’s second-biggest for the same year. slipped to 102.3 in December from
economy in nominal terms, accord- This marked the first time that 102.4 in November.
ing to Japanese GDP figures released nominal Chinese GDP has surpassed The OECD revised down its recent
yesterday. Japan’s on a full-year basis, although readings for China, which is not a
Japan ceded its second spot after it has done so on a quarterly basis sev- member of the club of industrialised
eral times before. The US is still well nations, and said the CLI for
due to an export slump that was in the lead with nominal 2010 GDP of December slipped to 100.5 from a
exacerbated by the strong yen; the $14.66 trillion. revised 100.7 the previous month.
end of subsidies for carmakers; and a Economists said the event was “New data for China point to a
new tax on cigarettes. largely symbolic, as China has been downturn, reversing the tentative
Gross domestic product slowed 1.1 ranked as the second largest econo- signs of regained growth momen-
per cent in real, annualised, seasonal- my in terms of purchasing power tum reported in last month’s assess-
ly adjusted terms in the three since April 2008. ment,” said the OECD.
before the G20 meeting this week of
finance ministers from the world’s
biggest developed and developing
economies.
Analysts warned, however, that
its surplus could rebound later this
year. “There tends to be a seasonal
pattern and there is generally a
decline in the trade surplus at the
beginning of the year,” said Jian
Chang, an economist with Barclays
Capital in Hong Kong. “Exports tend
to be weak in the first quarter, while
there is no such pattern in imports.”
The G20 meeting in Paris on 18
and 19 February will try to hash out
a gameplan for tackling global eco-
nomic imbalances.
Indian inflation eases
The Indian government expects head-
line inflation to ease to seven per cent
by the end of March, finance minister
Pranab Mukherjee said yesterday,
matching other economic forecasts.
The wholesale price index, India’s main
inflation gauge, marginally eased to
8.23 per cent in January but the cen-
tral bank will likely keep tightening
monetary policy because price pres-
sures – which are being exacerbated
by surging food costs – are still above
its comfort zone.
 18 News
NEWS | IN BRIEF
Thales warns of operating loss
French defence group Thales yesterday
warned of an operating loss for 2010
which it blamed on charges and provisions
exceeding €700m (£589m) related to
several contracts, including one in
Denmark. The group said it would make
an operating loss of close to €100m for
2010. Previously it forecast an operating
margin of three to four per cent. Thales
said it expected 2010 revenue to reach
€13.1bn, marking a two per cent rise
against 2009.
Nexans forsees rise in sales
Nexans, the world’s biggest cable maker,
expects its sales to rise and operating
margin improve this year, the company
said yesterday, as it sees a pick-up in trad-
ing and manages to pass on higher metal
prices. Sales last year rose 22.5 per cent
to €6.18bn (£5.2bn), with organic growth
at 0.4 per cent. At constant non-ferrous
metal prices sales were up seven per cent
at €4.31bn. The operating margin was 4.8
per cent, ahead of the company’s target of
around 4.5 per cent but down from six
per cent in 2009. Net income amounted
to €82m.
Isbank earnings up for 2010
Isbank, Turkey’s biggest listed lender, said
2010 unconsolidated net profit rose 26
per cent to 2.98bn lira ($1.9bn) as lending
grew. Fourth-quarter net income rose six
per cent to 603m lira.
LEIGHTON PROFITS HIT BY FLOODS
LEIGHTON Holdings, Australia’s biggest contractor, reported a 25 per cent fall in first-
half profit and cut its full-year forecast by six per cent due to recent Australian floods,
which affected its work on the Brisbane Airport Link
Credibility low as
UK dents IAG profit
INSURANCE
▲
BY HARRY BANKS
INSURANCE Australia Group
(IAG), the nation’s top home and
car insurer, warned its first-half
net profit will more than halve
and cut its full-year insurance
margin outlook as its UK opera-
tions struggled and weather
claims mounted.
The warning caused IAG shares
to fall as much as 5.3 per cent to
A$3.58 in early trading, the
stock’s lowest level in over four
months. They closed 3.97 per cent
down at A$3.60.
“Last time around it appeared
the UK losses were contained,
now it appears not and leads to a
credibility issue,” Paul Xiradis,
EFG-Hermes plays down stake in its
subsidiary held by Gamal Mubarak
▲
BANKING
EGYPTIAN investment bank EFG-
Hermes has said that Gamal
Mubarak’s stake in the bank was
limited to an 18 per cent holding
in a subsidiary, EFG Private Equity.
Last week opposition Wafd
newspaper said Gamal, son of
ousted President Hosni Mubarak,
had extensive holdings in the
investment bank through foreign
investment funds.
“EFG-Hermes Financial Group
Holding stresses that its relation-
ship with Mr Gamal Mubarak is
Rusal predicts 2011
growth in China
and rebound in US
INDUSTRIALS
▲
BY HARRY BANKS
RUSSIA’S United Company Rusal,
the world’s largest aluminium pro-
ducer, said yesterday it sees steady
output growth in 2011, driven by
strong demand from China and a
rebound in North America.
Hong Kong and Paris-listed Rusal
said aluminium production was
expected to grow two per cent in
2011, roughly steady with last year’s
three per cent rise to 4.08m tonnes,
with higher output seen at its
Siberian smelters.
“Growth in aluminium demand
in regions other than China is
expected to be strong, indicating
that Western markets appear to
have rebounded positively from the
financial crisis,” Rusal said in a
statement to the Hong Kong stock
chief executive at fund manager
Ausbil Dexia said.
“Notwithstanding that, (the UK
unit) is a poor business, a drag on
earnings and a real problem for
IAG,” Xiradis said.
IAG said it expected a net profit
of A$161m ($162.8m) for the six
months to December, down from
A$329m a year ago and also well
below analyst expectations for
around A$290m.
It also cut its full-year net
insurance margin guidance to a
range of nine-11 per cent from
10.5-12.5 per cent as the UK busi-
ness struggled and costs from
some of Australia’s worst natural
disasters on record mounted.
In the first half, IAG was
weighed down by a greater-than-
limited only to ownership of
around 18 per cent (which is the
announced matter) in one of its
subsidiary companies, EFG Private
Equity,” the bank said in a state-
ment released by the stock
exchange.
EFG-Hermes Private Equity con-
tributes no more than seven per
cent to the group’s total revenue,
the statement said, adding that
the bank’s relationship with
Gamal dated to 1997, before he
became involved in politics.
EFG-Hermes revenue in 2009
totalled 1bn Egyptian pounds
CITYA.M. 15 FEBRUARY 2011
exchange.
Global demand for aluminium,
used in everything from soft drink
cans to building construction,
would increase eight per cent to
43.8m tonnes in 2011, with prices
expected to remain above $2,500
per tonne, said Rusal, which
accounted for 10 per cent of pri-
mary aluminium production in
2009.
The increase with higher output
seen at its Siberian smelters was
roughly steady with last year’s three
per cent rise to 4.08m tonnes.
Rusal chief executive
Oleg Deripaska sees
demand in China driving
strong output growth
expected A$121m insurance loss
from its UK operations while sec-
ond half figures will be impacted
by storms and floods in Australia,
which could push full-year natu-
ral peril claim cost to A$500m
versus a budgeted allowance of
A$435m.
ANALYSIS l Insurance Australia Group
4.05 A$
3.96 3.630
14 Feb
3.85
3.75
3.65
2 Dec 22 Dec 11 Jan 31 Jan
(£106.3m).
Gamal Mubarak quit his posi-
tion as head of the policy secre-
tariat of Egypt’s ruling National
Democratic Party on 5 February.
He previously worked as an
investment banker for Bank of
America in Cairo and London.
Gamal Mubarak, son
of the ousted Egyptian
President, holds 18 per
cent in one of EFG
Hermes’ subsidiaries
CITYA.M. 15 FEBRUARY 2011 News 19

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

Mazars
The law firm has appointed a national head of
tax in the UK: Tim Davies (pictured). He has
been at the firm for four years, advising on a
range of clients. He will now head up a prac-
tice of more than 200 professionals in tax.
Previously, he worked at advisory firms
PricewaterhouseCoopers, Ernst & Young and
at HMRC. His appointment relieves Mazars’
senior partner David Evans, who had been act-
ing head of tax.
asset financier to managing director of
Lombard corporate asset finance. Leitch has
Gary Leitch has been promoted at the previously headed up specialised rela-
tionships at the firm. He will now be in
charge of leading regional teams to
develop existing customers.
Travelex
Travelex Global Business Payments has
added two senior appointments:
Andrew Wiseman and Nick Masterson-
Jones.
Wiseman will head up global prod-
ucts and marketing. He was previously
in financial services at Australia Post,
one of Australia’s largest payments
providers, and has also worked at John
Lewis and American Express.
Masterson-Jones will join as chief
information officer. He has worked
across a range of roles in banking and
risk management including roles at
Vocalink, JP Morgan, UBS, Reuters and
several other banks.
Trilantic Capital Partners
The private equity firm has appointed
John Danilovich to its European adviso-
ry council. He was previously US
ambassador to Brazil 2004-2005 and
has extensive experience in Latin
American economies and Africa.
His role on the council will involve
assisting the firm in sourcing European
deal flow. The council is chaired by
Kenneth Baker, former home secretary.
Previously, Danilovich has also
worked at the US Millennium
Challenge Corporation.
ICMA
The International Capital Market
Association has appointed David
Senior as head of business develop-
ment for ICMA’s executive education
business. He will be in charge of run-
ning the business in conjunction with
the ICMA Centre at Henley Business
School, University of Reading, and will
coordinate the roll-out of two new
diploma qualifications.

To appear in CITYMOVES please email your career

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updates and pictures to citymoves@cityam.com morganmckinley.com

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ANALYSIS l Hargreaves Lansdown ANALYSIS l Aquarius Platinum 419.00 ANALYSIS l British Land
600 580.00 420 14 Feb 550
546.50
p
14 Feb p p 14 Feb
560 540
380
530
520
340
520
480
300 510
15 Nov 3 Dec 28 Dec 17 Jan 4 Feb 15 Nov 3 Dec 28 Dec 17 Jan 4 Feb 15 Nov 3 Dec 28 Dec 17 Jan 4 Feb

HARGREAVES LANSDOWN AQUARIUS PLATINUM BRITISH LAND

Morgan Stanley rates the financial services firm “overweight” with an
increased target price of 703p. The broker thinks that the firm still has
potential for positive earnings surprises and has raised its target by 15 per
cent following the firm’s half-year results. It also expects further margin
expansion driven by operating leverage and a positive outlook for cash
flows helped by the pension tax changes in April.
Goldman Sachs has started covering the miner with a “neutral” rating and
a 12-month target price of 480p. GS is bullish on platinum prices, buoyed
by Chinese industrialisation, and expects Aquarius to grow through the
expansion of its mines. Aquarius currently trades at a discount to its
peers, likely owing to the shorter average life of its mines that presents
greater risk, the broker adds.
JP Morgan Cazenove rates the property developer “overweight” with a
625p target price. The broker sees BL as one of the best picks in the UK
retail property market, alongside Land Securities and Metric. British Land
has the highest increase in development supply and has some of the best
property valuations along with a strong balance sheet, protecting it from
headwinds in the real estate market, the broker believes.

FTSE drops as mining rally US sees small gains

fails to counter bank jitters on slow trading day
the reporting season with full-year fresh from blockbuster results last high after Chinese import figures sug-

THELONDON results this morning, shed 0.1 per

cent.
week, closed 2.0 and 1.3 per cent high-
er respectively. THENEW YORK gested strong demand for basic mate-
rials. Freeport McMoRan Copper &

REPORT
Data suggested Portugal headed
back into recession in the last quarter
of 2010.
“The yield on Portugal’s 10-year
REPORT
Traders also cited talk that Chinese Gold jumped 4.9 per cent to $56.14
inflation could come in lower than and the PHLX Gold/Silver index rose
expected, easing fears of more inter- 2.2 per cent.
est rate rises in the world's biggest Wal-Mart Stores was one of the

B
RITAIN’S leading share index government bond reached a new consumer of commodities. worst performers on the Dow after

closed marginally lower yester-
day as weaker financials pre-
vailed over a mining rally
inspired by upbeat economic data
from China.
Chip designer ARM Holdings was
the top riser, up 6.6 per cent, with
traders citing favourable broker com-
ment as the mobile world met in
Barcelona.
Goldman Sachs said ARM’s man-
agement underscored its bullish view
of the company’s long-term opportu-
nities, adding “there’s clearly room
for ARM’s royalty rate [from licence
agreements] to increase over the next
five years”.
Morgan Stanley, meanwhile, said
“tablet demand is still underappreci-
ated” by the market. Nearly all the
world’s mobile phones and tablets
use ARM’s low-power technology.
The FTSE 100 closed down 2.81
points, or 0.1 per cent, at 6,060.09,
having hit a two and half year high
earlier.
Banks and insurers were weaker as
concerns over Europe’s debt situation
and the precariousness of global
recovery remained in focus.
Lloyds Banking Group fell 1.6 per
cent, while Barclays, which kicks off
high above seven per cent, and
Spain’s yield ticked higher, remind-
ing the market the European debt cri-
sis is by no means over,” said Angus
Campbell, head of sales at Capital
Spreads.
US President Barack Obama pro-
posed a budget yesterday that would
cut the US deficit by $1.1 trillion
(£686bn) over 10 years, setting the
stage for a bitter fight with
Republicans who want even tougher
spending controls.
Traders also cited technical factors
for holding back the FTSE 100, after
gaining some three per cent in
February.
“After the big run-up we have seen
since the end of January a phase of
consolidation is arguably overdue,”
said Yusuf Heusen, senior sales trader
at IG Index.
International Consolidated
Airlines Group shed 1.6 per cent as
brokers cut target prices for the air-
line after last week’s warning from
European peer Air France-KLM.
Miners rose as Chinese economic
data showed a smaller-than- expected
trade surplus in January.
African Barrick Gold was up 2.9 per
cent while Xstrata and Rio Tinto,
India-focused Essar Energy gained
2.7 per cent as Bank of America
Merrill Lynch started coverage of the
stock with “buy”.
Oil services blue-chip Petrofac, up
2.5 per cent, got a boost from acquisi-
tion moves in the sector.
Invensys and Weir Group rose 3.4
and 4.0 per cent respectively, with
traders citing an interview in the
Financial Times quoting Siemens’
chief financial officer, which said the
German conglomerate was interested
in making acquisitions - as helping
lift engineering blue-chips.
Mid-cap energy services firm John
Wood Group jumped 13.9 per cent as
General Electric bought one of its
units.
ANALYSIS l FTSE 6,060.09
6,100 14 Feb
5,900
5,700
5,500
15 Nov 3 Nov 23 Dec 17 Jan 4 Feb
E
NERGY and commodity shares
lifted Wall Street to modest
gains yesterday, but the lowest
volume so far this year indicated
the equity rally may be near a top.
The Dow Jones industrial average
dipped 5.07 points, or 0.04 per cent, to
12,268.19. The Standard & Poor’s 500
Index rose 3.17 points, or 0.24 per
cent, to 1,332.32. The Nasdaq
Composite Index gained 7.74 points,
or 0.28 per cent, to 2,817.18.
The S&P 500 rose to trade near its
highest since June 2008, though the
index was stuck in the 1,325 to 1,333
area without enough buyers to get
through this technical hurdle.
A mere 6.6bn shares traded on the
New York Stock Exchange, the
American Stock Exchange and
Nasdaq, the lowest volume so far this
year and far below the 8bn daily aver-
age for 2011.
Shawn Hackett, president at
Hackett Advisors, said rising index
levels on falling volume sets the stage
for a pullback.
“Everything I see suggests the driv-
er now is a last bit of greed and
momentum before the market runs
out of buyers,” he said.
Three-month copper hit a record
JPMorgan downgraded the stock.
Shares fell 1.6 per cent to $54.80.
The S&P 500 has gained nearly 27
per cent since the start of September.
It now stands near the 50 per cent
extension of last year’s slide from
April to July and also near 100 per
cent advance from the low hit in
March 2009.
Advancing stocks outnumbered
declining ones on the NYSE by a ratio
of about five to four, while on the
Nasdaq, about seven stocks rose for
every six that fell.
Obama’s budget, announced yes-
terday, would provide $8bn for invest-
ment in clean energy, but big
drugmakers might take a hit from
generic competition under two pro-
posals in the plan.
Among alternative energy compa-
nies, Trina Solar gained 5.2 per cent
to $28.79 while GT Solar
International climbed 2.7 per cent to
$11.50. Drugmaker Merck & Co, a
Dow component, slid 0.8 per cent to
$32.82.
Green Mountain Coffee Roasters
shares jumped 6.7 per cent to $46.35
after reports that the company has
been in partnership negotiations
with Starbucks.
 20 CITYA.M. 15 FEBRUARY 2011

Wealth Management | Contracts for Difference

GEOPOLITICAL
RISK HAS NOT Don’t blame
GONE AWAY
DAVID MORRISON
speculators
CFD MARKET STRATEGIST, GFT

for soaring
T
he major US, European and UK stock indices continue to
grind higher. Geopolitical concerns have been shrugged
aside as investors bet that Mubarak’s departure will

food prices
lead to a calmer period in Egypt and elsewhere.
However, it would be premature to conclude that the intensi-
ty of the civil unrest across North Africa has now passed its
peak. Nor is it safe to assume that such demonstrations won’t
spread to the Middle East and beyond. We saw protests in
both Algeria and Yemen over the weekend and it is possible
that investors are underestimating just how quickly the whole
region could destabilise.
Last week investors were also forced to turn their atten-
tion back on Europe. Rumours circulated that Portugal
would need to tap the European Financial Stability Fund
Finger-pointing by politicians
(EFSF). Portuguese 10-year bonds saw their yields spike
sharply higher, trading up to 7.63 per cent at one stage – the
shouldn’t deter investors from
highest level since Portugal joined the Eurozone and well
above the “danger threshold” of 7 per cent. The ECB inter-
the sector, says John Hughman
vened in the Eurozone bond markets for the first time in
three weeks and bought Portuguese debt to ease the pres-

E
sure. While this has provided some temporary relief, it will xperts often tell us that retail Revolutionary effects
not solve the problem of Portugal’s dangerously-high budget investors should steer well clear from the rocketing of
deficit, dismal growth prospects and debt refinancing needs. of speculating in the soft com- commodity costs
Meanwhile, European leaders have failed to agree to an modities market. It’s too risky,
expansion of the EFSF and any changes will have to wait they warn, with too many variables for Picture: GETTY
until the EU summit at the end of March. the average private investor to make a
Back in the US, around 73 per cent of S&P 500 compa- fully informed choice. Chuck in a
nies have now reported their fourth quarter earnings num- splash of unpredictable weather and a
bers. Of these, 72 per cent have beaten analysts’ estimates. dash of political interference, and it’s
But there has been a disturbing increase in negative forward all too easy to make a wrong call.
guidance with a significant number of companies warning Others believe food speculation is
that their profit margins are getting compressed. With com- just plain wrong. It is blamed for caus-
modity prices soaring and Brent crude oil settling in above ing sharp rises in prices and genuine
$100 per barrel, input costs for corporations are on the rise. hardship in emerging markets, where
Companies are finding it difficult to pass these on to their food accounts for a much higher pro-
customers as high unemployment levels and a depressed portion of household budgets. Tunisia ANALYSIS l Nominal and real food prices
housing market means consumers are already feeling the and Egypt show the destabilising effect 1970 = 100 Price index
pinch. As companies have already cut staffing levels to the that soaring food prices can have. 400 400
bone, their profit margins will come under increasing pres- Of course, anyone who listened to Nominal
350 350
sure. If it turns out that analysts have overestimated future the naysayers’ advice over the past year Real
earnings growth, then we could be set for some drastic and – or couldn’t shake off the moral impli- 300 300
belated downgrades, just as we saw in 2008. cations of food speculation – would 250 250
have missed spectacular gains which
200 200
have made some astute hedge fund
managers and traders very rich indeed. 150 150
After falling back from its 2008 peak 100 100
in the wake of the financial crisis, the 50 50
UN food price index is now approach-
ing these lofty heights once again. 0 0
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Some blame speculation, but higher
demand boosted by excess liquidity Source: Bank of Canada

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CITYA.M. 15 FEBRUARY 2011
pumped into the world economy by
central banks is a more likely culprit.
Certainly, the strength of the global
economic recovery and growth in
global demand for food as a result of
increasing wealth and populations in
emerging markets means the price
spike many not be as temporary as
observers suggested last year.
Price rises in cocoa, sugar, wheat
and cotton are only part of the story,
though – while there is much to sug-
gest that the bull market in food still
has a long way to run, what’s really
appetising to short-term traders is ris-
ing volatility, with prices prone to big
intraday swings as supply worries are
exacerbated by poor harvests or La
Nina-related weather incidents.
That’s why former energy traders
are said to be switching their atten-
tion towards soft commodities –
somewhat ironic, as the rising oil
price is a major determinant of rising
food costs, increasing the price of fer-
tilisers and transportation.
POLITICAL BLAME GAME
Politicians – and in particular
France’s Nicolas Sarkozy, who has
made commodity prices the leading
issue of his presidency of the G20 –
blame speculators for this current
volatility, and want to curb their
activity. But other leading figures like
John Murray, deputy governor of the
Bank of Canada, are not so sure the
link is that strong. “The extent of
destabilising speculation and its
impact on commodity prices remain
open questions,” he said in a recent
speech. “Available evidence suggests
that most of the major swings, as well
as a large proportion of the short-run
volatility that we observe, can be
explained by market fundamentals.”
He believes that volatility is the
commodity market’s natural state –
indeed, the supply and demand
imbalances that are currently caus-
21
THE TIPSTER price has continued this recov- top of the range at 670p and at
We may have ery since the issues towards the
end of 2010, but still seems to
the bottom at 625p. Alpari UK
is offering a spread of 656.50p-
been getting ROLLS ROYCE be struggling to push above the
670p level. Last week, it was
657p.
Miner BHP Billiton reports
food on the CONTINUES TO revealed that financing costs
had been a major cause for a fall
its half-year results tomorrow.
Expectations are set to follow
cheap for the IMPRESS in profits in 2010, with a one off
charge of £56m coming from
the success of fellow miners
Rio Tinto and Xstrata. Analysts
a generation –
A
FTER its troubles over the the engine failure on the Qantas have forecast a profit of $15bn.
last few months it seems flight back in November. This comes off the back of
in real terms, that Rolls Royce is contin-
uing to impress potential
For all the good news, we
may well see the share price
soaring commodity prices. BHP
could see more upside if 2,437p
food now clients. The continuous stream of
servicing contracts is positive
struggle to give us much of a
move above the 660p-670p
remains a support level, and if
it continues to near its 52-week
costs just half enough to keep the company
share price recovering after the
mark. However, this period of
indecision is an ideal time for
high. Capital CFDs quotes
2,542.2p-2,545.8p.
what it cost recent engine issues. The share traders to take positions at the Donata Huggins
40 years ago.
How will China’s
economic growth affect
the financial markets?
If you have an opinion on the impact
of China’s economic might, then
you should consider trading with the
UK’s number one CFD provider.*
CFD trading can result in losses that
exceed your initial deposit.
Discover more at igmarkets.co.uk
or call 0800 195 6300.
ing prices to soar may shift just as
quickly in the opposite direction. In
many cases, soft commodity markets
are ultimately self-balancing, with
high prices leading to increased sup-
ply. Cotton farmers, for example, are
now increasing plantings to capitalise
on the high profit opportunity that a
150-year price-high presents, which
should reverse the current structural
deficit in important markets like
China, bringing prices down.
Of course, rebalancing supply does
not happen instantaneously, and in
the meantime the predictably unpre-
dictable conditions traders crave are
likely to continue. Bunge, one of the
world’s biggest agricultural trading
groups, said alongside better than
expected fourth quarter results that it
expected the favourable environment
in agricultural trading to continue in
2011. “Demand for our products is
growing, and the world needs big har-
vests to meet this rise in consump-
tion”, it said.
And for all the short-term volatility,
the longer-term trend looks like it’s
only going in one direction: up.
According to the United Nations, food
production needs to rise by 70 per
cent over the next 40 years to cope
with population growth, and – con-
trary to the views of politicians like
Sarkozy – only high prices will
encourage the huge levels of invest-
ment needed to hit that target.
As Murray also points out, we may
have been getting food on the cheap
for decades – while nominal food
prices are now three times higher
than they were in 1970, in real, infla-
tion-adjusted terms food costs half
what it did 40 years ago.
If that’s the case, then the riskiest
approach any investor can take to soft
commodities is to sit on the sidelines.
It could be the only way to hedge
against some hefty inflation still to
come. * Investment Trends 2010 UK Spread Betting/CFD Report. The Empire State Building image® is a registered trademark of ESBC and is used with permission.
 22 Wealth Management CITYA.M. 15 FEBRUARY 2011

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 Lifestyle
CITY DAD
When two
worlds collide
I
T’s like this Noel. Daddy, well, daddy’s
friends, at work, they think they can
make something better than the peo-
ple who are making it already. And
so…”
I look down at my son, six next month,
wriggling expectantly in the half-light, his
Spiderman duvet pulled up beneath his
chin. He’ll repeat all of this tomorrow
morning, during show-and-tell. While the
media kids bring in Oscars and BAFTAs
and tell of premieres and red carpets,
Noel will struggle through an explanation
of annuity factors whilst brandishing a
bond calculator.
“And so…” I’m stuck.
“You mean, like me and Billy at school
today daddy?” Noel beams.
“Yes, yes, just like that darling.” I’m
playing for time. I’ve never met Billy and
have only the slenderest notion of what
goes on at school.
And my feeble attempt to explain lever-
aged finance suggests I’m not too hot on
my specialist subject either. The subject, I
realise as I look around Noel’s room,
which keeps us in Spiderman duvets and
well, just about everything else… Then I
realise that such expertise is not what
matters to Noel. Unless all of this were to
disappear.
“ I loosen my tie and
undo my top button.
Suddenly it’s very hot in
Noel’s bedroom”
” other four – sour, sweet, salty and bitter.
Bedtime’s a lot more complex than
when I was six. My dad loved Jim Reeves.
Still does. I remember ol’ Jim singing
sweetly at bedtime: “Your world was so
different from mine don’t you see… That's
what happens when two worlds collide.”
Jim’s worlds were merely those of star-
crossed lovers. He had it easy. I’m perched
on the edge of my son’s bed. Might as well
be the edge of a cliff. In a gale.
Treacherous rocks and churning seas far
below.
I loosen my tie and undo my top button.
Suddenly it’s very hot in Noel’s bedroom.
Noel picks his nose, thoughtfully.
“So when you go away” he says, contem-
plating a bogey whose magnificence sug-
gests it must have been lurking up his
nose all day, “that’s when you do due dili-
gence, isn’t it daddy?”
Due diligence. I turn the phrase over in
my head.
A few minutes later Noel is asleep. The
middle lines of Jim’s first verse come back
to me. “We just couldn’t be close though
we tried. We both reached for heavens
but ours weren’t the same.” What was my
dad thinking of? It’s hardly a lullaby. I
resolve to make it home for Noel’s bed-
time more than just a couple of times a
week.
The Codfather on life, fish
and Nobu’s enduring success
Japanese-fusion king and famous friend of Robert DeNiro speaks to Zoe Strimpel
I
F it weren’t for Nobu, it’s hard to
know where Victoria Beckham,
Madonna and Kate Moss would eat
out when in London. Synonymous
with tip-top Japanese fusion cuisine and
celebrity glamour, nobody has ever syn-
thesised food with “scene” in quite the
dynamite way that Nobu has. With restau-
rants in LA, New York, London, Mykonos,
Dubai, Moscow and more, it’s an empire
whose cache never wanes and has
spawned a thousand imitators.
Nobu the man, Nobu Matsuhisa, was
in town for three days (he returned
home to LA this morning) to put in a
personal appearance at a series of sake
dinners at Nobu Park Lane. Famously
the close friend and business associate of
Bob DeNiro, as well as being the most
famous man in celebrity dining culture, it
could have been daunting to meet him.
But on Friday night, when I
joined the 60-plus crowd of
avid Nobu munchers for the
first of the dinners – and
again yesterday morning
when we met for the
interview – he proved
himself to be a charmer.
I must blushingly
report that he said, in
reference to yours
truly, that he “never
forgets a beautiful –
no, gorgeous face”
in the flattering
light of Friday’s
dinner. On
Monday morn-
ing in the
stark light of
day, he
Picture:
Micha Theiner
/City A.M.
Review: super long-lasting manicure
T
HE problem with manicures is that
they don’t last. Until now. Welcome
to the ingenious world of EzFlow, an
American company that uses the
range of modern nail technology includ-
ing fibreglass, silk, acrylic, gel and a won-
derful polish called Gelez. I can’t say I
understand the other ones, but I do under-
stand Gelez thanks to a recent manicure
at Harrods’ cutting edge day spa, Urban
Retreat.
Gelez contains something that leaves
your nails chip-free for two-three weeks. I
had a French manicure one week ago and
CITROËN C4
E-HDI
REVIEWED
TOMORROW
appeared to have forgotten that comment
but was still frank and engaging.
Nobu is still very much a restaurant
man – his eyes kept darting from me to
the preparations for lunch service and
when a surly waiter dropped something,
Nobu became agitated and told him to
quieten down.
He was most keen to promote the con-
cept of umami – the lynchpin of the sake
dinners. To help him, he had a sidekick, a
woman known as the Umami Mummy, to
clarify the meaning of the “fifth taste”.
In my experience, umami mostly
means “deliciousness”. But, as the umami
mummy explained, this tastiness has a
specific origin and comes from the amino
acid glutamate and the nucleotides
guanylate and isoinate. Dried shitake
mushrooms are one food that is heavy in
guanylate and consequently, in umami.
Dinner was indeed a festival of divine,
moreish flavours; from lobster salad to
wagyu beef all lifted with umami-tas-
tic flourishes such as bonito flakes
and miso. But why the feverish
interest in umami – which has
been “known about” for a centu-
ry? We put a few questions to
the Nobu himself about this
and more.
Why has umami’s moment
arrived now?
People are always inter-
ested in the next big
thing, and they’re fasci-
nated by the idea of
the fifth taste. Umami
is normally over-
shadowed by the
It’s like the basement of the orchestra.
Other chefs too are interested in umami
–Heston [Blumenthal] is very interested.
How did you come up with the idea for
your iconic black cod in miso?
I didn’t know about umami back when I
started selling this dish 30 years ago. Black
cod in the States was cheap then – nobody
used it. I marinated the fish in a local
there’s no hint of disturbance. I tap a key-
board incessantly, garden occasionally
and am constantly rooting around in my
bag. I have never made it past three days
chip-free before.
EzFlow boasts that the new formula
gives you the high gloss colour of a polish
but with the chip-resistant quality of a gel.
I’d have to agree. The range of Gelez
colours is far from spectacular but for
your basic reds, pinks, gothic darks and Chipped
nudes, it’s fine. manicures are a thing
My therapist was expert and shaped my of the past.
nails just as I wanted. Nails are carefully
23
miso for three days – the sugar, miso and
fish combined to make a texture and
flavour that people loved. I had no idea it
would become what it did. Now I’m
known as the Codfather!
You’ve spawned thousands of imitators.
How do you feel about them?
I feel proud! You started writing because
you were inspired by other writers; same
with artists and chefs. When I see black
cod done in “Nobu style” in Spain, Italy
and so on I feel proud of myself. It’s good
to inspire.
How did you know you wanted to be a
chef?
My brother took sushi lessons. I was 11 or
12 and went to a sushi bar with him. We
sat at the counter and he ordered a variety
of raw fish. I’d never eaten sushi before –
my generation didn’t because it was con-
sidered very high-end food. There were so
many energies in this sushi restaurant. I
continued to go to an architecture high
school but didn’t forget my dream of
being a chef.
Was your chef training gruelling?
Well, I left my family at 18 and moved to
Tokyo. I spent three years washing dishes,
cleaning fish and going to the market
with fish masters. But a dream is stronger
than working hard.
What is the secret to your success?
Patience, never giving up and passion. It’s
very difficult to become a success. You
must learn from your mistakes – not make
the same mistake twice or three times.
What’s it like working with Robert
DeNiro? Is he a good business partner?
Bob doesn’t know anything about busi-
ness, but maybe he likes me a lot. He loves
raw fish!
What do you think about the London
restaurant scene?
When I opened Nobu here 17 years ago I
wasn’t very interested in London.
Everyone said: Nobu, why are you opening
in London? The food sucks. But now peo-
ple get it and it’s very stylish.
Where do you see yourself in ten years?
I am very happy right now. I am not
greedy and don’t have a big ego. But I
would like to pass the dream onto others.
www.noburestaurants.com.
dried under a lamp –
thumbs separately – so that
when you walk away you
can tie shoes and do every-
thing else instantly.
I am thrilled with the
results and keep showing
people my advert-quality nails.
The only downside, as far as I can
see, will be the ten-minute soak in
acetone required to take the colour off.
But it’s two weeks from now, so I won’t
worry about it yet. 45 minutes for £50. At
Harrods, www.urbanretreat.co.uk.
Zoe Strimpel
 24 Lifestyle | Restaurant Review
Battersea
gets a slice
of seafood
heaven
London is underserved by fish
restaurants, so catch this one out
The Fish Place
Vincentia Court Building, Bridges Wharf,
Bridges Court Rd, SW11 3GY
FOOD hhhhh
SERVICE hhhhI
ATMOSPHERE hhIII
Cost per person without wine: £40
F
OR the capital city of an island nation,
London is shorter on first-rate fish
restaurants than it should be. Sure,
there are plenty of fishy dishes on
some of the best menus, and more
than enough sushi joints. But for
dedicated specialists in good, old-
fashioned, European – by which I
suppose I mean French – fish cui-
sine, there are only a handful
that are the real deal. The names
of this club are well known –
Scott’s, J Sheekey, Bentley’s, One-
O-One – and most of them have
been going for a long time. So dis-
covering new names to add to the list
can feel like something of a triumph.
I’ve found two. As it happens the first of
them, Catch, which lurks in an inner sanc-
tum of the Andaz hotel by Liverpool St
Station, isn’t that new, but not many peo-
ple know it’s there. Ironically – and possibly
crucially – the chef is German, hardly a
nation known for its seafood cuisine, but
there’s a freshness in the approach here.
You can choose to have the catch of the
day steamed, fried, roasted or grilled, and
dishes like Norwegian cod with salsify fon-
due and sesame are sophisticated without
being busy. My cod en papillote (baked in
stock in a parchment parcel) oozed citric,
buttery vibrancy. If the room’s slightly awk-
ward – a converted inner lobby of the grand
old hotel – there’s a picturesque seafood
FISHY FAVOURITES IN THE CITY
TIMOTHY BARBER
CATCH AT ANDAZ
The Andaz hotel’s grand 1901 restaurant tends to get
the attention, but Catch is worth a visit for its fresh,
expertly-cooked seafood. Menu highlights include confit
of Arctic salmon with duck egg and spinach gnocchi,
and pan roasted brill cutlet with octopus, fennel and
sepia ink risotto. 40 Liverpool St, EC2M 7QN.
www.andazdining.com
WORDS BY
TIMOTHY BARBER
counter to look at, piled high with crab and My dining companion had skate wing for
langoustines. As you’d expect in the City, her main, pan roasted to soft, mouth-water-
there’s a generous oyster provision. (See ing perfection with spinach, capers, crou-
“fishy favourites in the City” below for tons and roast potatoes, and doused in a
more info). silky, herby citric sauce.
My “pot au feu” of seafood was spectacu-
SIMPLE IDEA lar – I expected a fish stew of some order,
My other discovery opened in but what I got was a combination of
Battersea late last year, and it does seafood elements brought together with
rather take some discovering. risotto and a magisterial, chive-laden
Strange things have been rising beurre blanc. Sea bream nudged against
along the banks of the river around salmon, surrounded by prawns and mus-
Battersea and Wandsworth for years sels, the risotto oozing out beneath. Every
now – high rise apartment blocks, element was cooked accurately, expertly
glassy hotels, helipads. It’s all rather and lovingly. This was an absolute celebra-
architecturally impersonal and hard tion of seafood.
to reach. The puddings were as impressive –
But it’s worth reaching, and not just if chocolate fondant delivered as chocolate
you’re taking a trip in a chopper. Nip past fondant should, accompanied by a smooth
the helipad, turn a corner or four and you hazlenut ice cream, while a blood orange
find the Fish Place. cheese cake was a much subtler, more
Simple name, simple idea: cook fish bril- refined affair than it could have been.
liantly. And it does. A trio of Dorset crab Now, here’s the thing. The building in
tortellini with roasted cauliflower puree which the Fish Place sits is one of those
and basil was exemplary – as satisfying a dull, concrete-and-glass riverside high-rises
mixture of textures as it was of taste, and – blandness personified. The owners have
presented beautifully. Similarly stunning done what they can with the room (it’s
was my starter of grilled scallops sitting on pleasant, if unmemorable – I’d say table
little cushions of truffle mashed potatoes, cloths would add a some warmth) and the
artichoke and chicken jus. Scallops are all floor-to-ceiling windows give splendid
very well, but scallops cooked with this del- views of the Thames. It’s not ideal, and it’s
icacy and complexity of flavour – the tart- not easy to find. But if you live in Battersea,
ness of the fennel, the succulent joy of the or Wandsworth, or Clapham, or – quite
scallops, the earthy richness of the jus, the, frankly – Guildford or Penzance or
er, truffliness of the spuds – was divine. Shanghai, hunt this place out. It’s worth it.
CHAMBERLAIN’S SWEETINGS
Restaurants, like houses, are all about location, and A true piece of Square Mile history, Sweeting’s hasn’t
Chamberlain’s is a humdinger, right in the middle of changed much since it opened in 1889. It’s a lunch place
Leadenhall market. The seafood cuisine lives up to the only – it’s only open from 11.30am to 3pm – and spe-
scenery, and the cod and chips with mushy peas is a cialises in simple, old-fashioned seafood dishes. You’ll find
must. There’s a rather cosy basement bar with its own City grandees crammed in munching down potted
menu too, and the place is excellent for functions. 23-25 shrimps, fried haddock and sponge pudding. 39 Queen
Leadenhall Market, EC3V 1LR. www.chamberlains.org Victoria St, EC4N 4SA. Tel: 020 7248 3062
CITYA.M. 15 FEBRUARY 2010
FOOD & BOOZE
NEWS
TIMOTHY BARBER
A TASTE OF ITALY IN LONDON
Lovers of all things Italian will be able to indulge
their passion next month with La Dolce Vita
2011, an event aimed at celebrating Italian cul-
ture – and that means, particularly, its food and
wine. Taking place at the Business Design
Centre in Islington, the four-day event includes
an Italian food producers’ market, gastro wine
walks (every hour experts give guided walks
visiting the stalls of hand-picked suppliers), a
drinks academy showcasing everything from
wines to aperol and grappa, and the “Teatro del
Gusto cooking theatre” – chefs including Giorgio
Locatelli, Theo Randall and Ristorante
Semplice’s Marco Torri showing how it’s done.
There are also style, travel and property-hunting
sections of the exhibition. 10-13 March, the
Business Design Centre, 52 Upper St, N1 0QH.
Tickets £5 in advance or £7 on door.
www.ladolcevitaevent.co.uk
CELEBRATE 10 YEARS OF CINNAMON CLUB
Westminster’s famous high-end Indian restau-
rant, the Cinnamon Club, is celebrating its tenth
birthday in March, and is giving away 50 pairs
of tickets for a rather spectacular free meal. The
dinner will feature a 10-course tasting menu of
signature dishes from the past decade, each
paired with special wine. Think tandoori breast
of squab pigeon with cloves, poached egg and
spiced beet; or spice-crusted halibut, masala
Jerusalem artichoke and Keralan lobster bisque.
Tickets are being allocated at random – just reg-
ister your name at www.cinnamonclub.com.
JUDY JOO TO APPEAR IN PLAYBOY
(CLUB)
We’re beginning to get rather excited
about the forthcoming Playboy Club
casino, and not just for bunny girls
and gambling. As well as cocktail leg-
end Salvatore Calabrese, the club will
be employing glamorous chef
and Iron Chef UK star Judy
Joo. Joo – a former
Morgan Stanley banker –
has previously worked at
restaurants including
Restaurant Gordon
Ramsay and French
Laundry, and will be pro-
ducing a broadly international
menu. www.playboyclublon-
don.com
CITYA.M. 15 FEBRUARY 2011 Lifestyle | TV& Games 25

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

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9pm Outcasts
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10.35pm The Richard
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11.20pm Nuns Aloud:
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12.15am Sign Zone: See Hear
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6pm Eggheads
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8pm CHOICE A Farmer’s Life
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9pm The Chinese Are Coming:
Part two of two. The wider
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10pm How TV Ruined Your
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10.30pm Newsnight: Weather
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3.35am Close 4am-6am BBC
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10.30pm London News 12.15am UK & Ireland missing daughter is murdered. A FARMER’S LIFE FOR ME
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Las Vegas rally continues. 1.40am 10.55pm CSI: NY
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The Big Fat Truth About Low
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Age 2.15am Total Wipeout
3.15am Young, Jobless and
Living at Home 4.15am Almost
Famous IV 4.30am-5.30am
The World’s Worst Place to Be
Gay
E4
7pm Hollyoaks 7.30pm Friends
9pm 90210 10pm The
Cleveland Show 10.35pm Bob’s
Burgers 11.05pm Shameless
3.50am Dirty Sexy Money HEALTH
7pm A Baby Story 8pm How
4.35am Style Her Famous
4.55am-6am Switched Clean Is Your House? 9pm
Help! I’m a Hoarder 10pm 999
HISTORY Emergency 11pm Your Kid Ate THE BRIT AWARDS 2011
7pm Heir Hunters 8pm What? 12am Help! I’m a ITV1, 8PM
Hoarder 1am 999 Emergency
Warriors 9pm Ancients James Corden hosts this year’s
Behaving Badly 10pm Battles 2am Your Kid Ate What? 3am ceremony from the O2, featuring
BC 12am Ancients Behaving How Clean Is Your House? performances by Take That, Plan B,
Badly 1am Warriors 2am Cities 4am Bringing Home Baby
Rihanna and Tinie Tempah.
of the Underworld 3am 5am-6am A Baby Story
Dinosaur Secrets 4am UFO Files
5am-6am Ancient Discoveries SKY1
8pm Got to Dance 9.30pm The
DISCOVERY Simpsons: The greatest love
8pm How Do They Do It? stories of all time. 10pm FILM
8.30pm How It’s Made 9pm The Scorpion King: Fantasy
Swords: Life on the Line 10pm action adventure, starring
Extreme Engineering 12am Dwayne Johnson and Steven
Aircrash Confidential 1am Brand. 2002. 11.45pm Mental
Deadliest Catch 2am Future 12.45am 99 Most Bizarre GOK’S CLOTHES ROADSHOW
Weapons 3am Hitler’s 1.40am Road Wars 2.30am So CHANNEL4, 8PM
Henchmen 3.50am The First You Think You’re Safe? 3.25am The stylist arrives in Nottingham, where
World War 4.40am Treasure The 4400 4.20am Don’t he helps three racecourse workers to
Quest 5.30am-6am How Does Forget the Lyrics 5.10am-6am abandon their manly work attire in
That Work? Sell Me the Answer favour of a more glamorous look.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
37 3 12 10 13 11 
7 24
19 27 6   
45
Place the numbers from 1 to 9 in each empty cell so that each 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 4 6
26 41 12
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 14 17 10
  
above or to the left of it. 7 10
You can only use the digits 1-9 34 13 
    and you must not use the
12
8 20   
same digit twice in a block. 9 28
    The same digit may occur 5 15  
12
  more than once in a row or
column, but it must be in a
15
9 10
8 3
 
23 17
   separate block.
14 11 7 16
45
   18 11
 

   ACROSS DOWN
1 Assembly of witches (5) 1 Visitor (6)
 
    WORDWHEEL L E
3 Markedly masculine in
appearance or manner (5)
7 Source of illumination (4)
2 Hollow (5)
4 First letter
of the Greek
Using only the letters in the Wordwheel, you have 9 Characteristic of alphabet (5)
    ten minutes to find as many words as possible,
T S wolves (6) 5 Due (4)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters T 10 Smallest particle in
an element (4)
6 Place endowed
for the support
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
U O 11 Being in a tense state (4)
12 Dais (5)
and lodging of
the poor (9)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
D A 15 Engraving or carving 8 Molten rock (5)
in relief (5) 13 Product of
QUICK CROSSWORD 9 2 2 9 7 8 4 17 Capital of the Maldives (4) seabirds, used as
P O P U P S A U C Y
5 1 1 8 6 5 2 SUDOKU          19 Once ___ a time (4) a fertiliser (5)
Y A U V A
8 7 9 6 2 3 4 1
         20 Abominable (6) 14 In a mild, soft
3 6 5 9 8 manner (6)
R E T O R T E A S T
5 2 1 3 9 4
         21 Water bird which is black
A E E R I N T
         with a white beak (4) 16 North American
M A N T R A G E E S 2 4 8 9 3 5 7 6 1
         elk (5)
I
D
R
I V A
M E
M A R
C
I N E
6 8
1
4 2 1
7 8
5
9 4
WORDWHEEL         
22 Covering that protects
an inside surface (5) 17 Coffee-chocolate
N N O E L D N         
O N U S L A R I A T
6 9 7 8 5 8 1 3 The nine-letter word was 23 Forename of the wife drink (5)
E I R O E 1 3 6 1 9 2 8
REMINISCE
        
of former US president 18 Child’s toy (4)
B R O T H M U T E D 2 7 1 2 7 3 9         
Ronald Reagan (5)
 Sport
26
Van Persie missed last years’s tie Pic: GETTY
Van Persie will
make it harder,
insists Pedro
▲
FOOTBALL
BY JAMES GOLDMAN
BARCELONA winger Pedro believes
Arsenal will be a far tougher nut to
crack in the Champions League this
season with Robin van Persie spear-
heading their attack and firing on all
cylinders.
The Dutch international missed
last year’s Lionel Messi inspired 6-3
aggregate quarter-final defeat
through injury, but since his return
to the Arsenal first team in November
he has been in irrepressible form and
has scored 11 goals since the turn of
the year.
“They’re a great team and very dif-
ficult opposition with very good play-
ers, especially up front,” said Pedro.
“It will be a very difficult tie, different
from last year as maybe they are more
dangerous [with Van Persie].”
Meanwhile, Arsene Wenger is to
give Samir Nasri a fitness test today
before deciding whether or not to put
him on the bench for tomorrow’s
crunch meeting at Emirates Stadium.
The France midfielder has missed
the last three games with a ham-
string injury.
Wenger said: “Physically he is
ready. Who is not desperate to play?
Just is there a risk to have a setback. I
will not take a crazy gamble.”
The £120m question: Will
Gold and Sullivan cash in?
FRANK DALLERES
ANALYSIS
IN THEIR first press conference as
majority owners of West Ham on 18
January last year, David Gold and
David Sullivan made clear their
ambition to move the club into the
Olympic Stadium after the London
2012 Games.
They knew it had
the potential to cat-
apult the debt-
laden East End
club into the big
league; to vastly
increase revenues
at a fraction
of the
price it
would
cost to
build a
FORLORN FERNANDO
l Torres subbed again after another limp display
l Ancelotti defends his record purchase
l Title gone for good despite Cech penalty save
FULHAM 0 missed three presentable chances, in
CHELSEA 0 an injury time penalty save from Petr
▲
FOOTBALL
BY JAMES GOLDMAN
CHELSEA manager Carlo Ancelotti
defended another tepid display from
Fernando Torres but admitted his
side’s hopes of retaining their
Premier League crown are over after
frittering away two points against
their west London rivals.
Ancelotti made a bold call in omit-
ting Didier Drogba from his starting
line-up and persevering with Torres,
whose debut against his former club
Liverpool last week ended after 65
minutes.
The Spaniard may have swapped
red for blue, but it looks like it will
take more than a change of shirt
colour for him to rediscover the poise
and swagger which made him the
apple of Roman Abramovich’s eye.
Chelsea were far more dangerous
once Drogba was summoned from
gleaming new venue from scratch.
Now they hold the keys to the
£530m venue, and it shouldn’t hurt
Gold and Sullivan’s bank balances
too much either.
According to City analysts, West
Ham’s successful pitch for the stadi-
um has doubled the club’s value
overnight – and that is before the
Games have taken place, let alone
work begun on its £95m conversion.
The Hammers plan to move in for
the 2014-15 season, by which time it
is expected the move will have
swelled the club’s price tag to around
£300m. If they sold
up, Gold and
Sullivan would
trouser a com-
bined £180m – of
which £120m
would be
profit.
T h e
p a i r
CITYA.M. 15 FEBRUARY 2011
the bench to replace Torres, who had
the 71st minute, but he couldn’t
force a winner and in the end it took
Cech to preserve a point.
Justifying his selection and the per-
formance of £50m striker Torres,
Ancelotti said: “Fernando played well.
He had some opportunities in the
first half and I took him out just to
use Didier fresh and with power.
That’s the only reason I changed him.
“Every striker wants to score. I Torres was taken
don’t think he's frustrated because he off after 71 min-
needs time to play with us and, after utes
one week, he was really better
tonight after that first performance. Picture: GETTY
“I don’t know if Didier was happy,
but every player knows every game is
important. It doesn’t matter. We
wanted to rotate to maintain his con- when the otherwise impressive David to know that fourth place is now the
dition and to give everyone great Luiz felled Clint Dempsey in the 93rd priority as far as the league goes.
motivation.” minute. “The most important thing is to fin-
Torres missed two opportunities in Fortunately for Chelsea, Dempsey ish in the top four,” he said. “I think
the first-half which he made more struck his penalty too close to Cech we will be able to do this if we play like
difficult for himself as a result of and the American’s acrobatic attempt we did tonight.
poor first touches and was off target to convert the rebound was hardly “I’m an optimist and there’s good
with a header in the second-half. Rooney-esque in its accuracy. reason to have confidence. The football
But it was Fulham who missed the Despite an uplifting end to the we showed tonight was good and now
clearest opportunity of the game derby, Ancelotti was realistic enough we have to continue it.”
(below), who made £27.5m each
when they sold Birmingham City in
2009 and ploughed the money into
buying a majority stake in their boy-
hood team, say they do not intend to
Kubica in good condition but still
sell and will be at West Ham “for gen-
erations”.
That may well remain the case, but
in intensive care ahead of final op
a brand new stadium – especially one
situated so close to the hospitality and leg in the smash nine days ago.
▲
FORMULA ONE
and sponsorship hotspots of the City BY FRANK DALLERES He is expected to miss a large
and Canary Wharf – can suddenly chunk of the 2011 F1 season, which
attract wealthy would-be buyers. RENAULT driver Robert Kubica is set starts in March, but his team yester-
Manchester City has been sold twice to undergo a final round of surgery day issued an upbeat bulletin on his
since moving to the City of tomorrow as he recovers from the condition.
Manchester Stadium in 2003. career-threatening crash he suffered “The latest update on Robert is that
The chief threat to West Ham’s earlier this month. his condition remains positive,”
value, however, is relegation. The Doctors will operate on Kubica’s Renault said in a statement.
Hammers are one point off the bot- elbow as the Pole goes under the “He will stay in intensive care for
tom; dropping out of the Premier knife for a third time since ploughing the next couple of days to allow a
League would slash annual broadcast his rally car into a church wall during complete check-up and to avoid
revenues and make their shiny new the Ronde di Andora. another change of department before
home a significantly less glamorous The 26-year-old remains in inten- his final operation. His good general
place to visit. sive care, having sustained a partially condition means that the final sur-
NEWS: PAGE 1 severed hand and fractures to his arm gery is scheduled for Wednesday.”
 CITYA.M. 15 FEBRUARY 2011 27

CHELSEA BLUES | BIG MONEY FLOPS

Chelsea don’t have a great record when it
comes to spending big on strikers. The
early evidence suggests Fernando Torres
Redknapp ushers in a new era
might be more Fleck than Hasselbaink.
Spurs boss senses an KNOW YOUR ENEMY: AC MILAN
opportunity for his FORM MANAGER HOW THEY LINE UP
side to join European Serie A leaders and unbeaten in nine, Massimiliano Allegri is no big name
elite on regular basis Milan look in good shape, warming up
for Spurs by thrashing Parma 4-0 on
but has taken to the job well since
replacing Leonardo last summer. Abbiati
ROBERT FLECK: Chelsea paid Norwich Saturday. Three of five defeats this Previously with Cagliari, Allegri, 43,
£2.1m in 1992 for the Scot. He lasted season have come at home, however. made his name at minnows Sassuolo.
three years and managed just four goals
before he was sold back for £650,000. AC MILAN DANGER MEN Oddo Nesta Thiago Antonini
Silva
TOTTENHAM
Seedorf Gattuso Merkel
▲

CHRIS SUTTON: The former England inter-
national cost a staggering £10m from
Blackburn, but he failed to settle and
scored just one Premier League goal.
ANDRIY SHEVCHENKO: Chelsea broke
the British transfer record for the AC
Milan legend but he scored only nine
goals in his three years in west London.
TOP SIX
TEAM PLD W D L F A PTS
FOOTBALL
BY JAMES GOLDMAN
TOTTENHAM manager Harry
Redknapp believes his side stand
on the brink of returning to the Pato Ibrahimovic Robinho
big time on a full-time basis One of the deadliest strikers in the world, Zlatan Robinho has settled far better in Milan than he did
ahead of their second San Siro Ibrahimovic has 17 goals this season, and has in Manchester and has netted nine times in his first
showdown in four months. been especially lethal in Europe, with five already. term in Italy, where is deployed on then left wing.
After their epic 4-3 defeat
against Inter back in October,
Spurs return to the arena which and I think that they want to
saw Gareth Bale catapult himself compete. The window came and
to the top of every major we were willing to go and buy a
European club’s summer wish top player but we just couldn’t
list as they take on AC Milan in find a player that we wanted.
the last 16 of the Champions “It was difficult but if the right
League. people came along then I think
The Welsh winger is among a the club would sit down and do
number of headline acts set to it. If Tottenham did that then the
miss out on the latest install- sky is the limit for us for the next
ment of Tottenham’s continental few years.”
adventure, but win, lose or draw Bale, whose hat-trick came tan-
Redknapp is confident the north
Londoners will be dining at
talisingly close to completing one
of the greatest European come-
Europe’s top table for years to backs of all-time against Inter,
come. misses out with a back problem,

"Swing low,
Man United 26 16 9 1 57 25 57
Arsenal 26 16 5 5 56 27 53 When asked if Spurs stood on while Luka Modric, still recover-
the brink of a new successful era, ing from an appendix operation,
Man City 27 14 7 6 43 24 49 Redknapp said: “The opportunity is also a major doubt.
Spurs 26 13 8 5 37 28 47 is there, for sure. If we keep on There is better news for Spurs
Chelsea
Liverpool
26
27
13
11
6
6
7
10
46
35
22
32
45
39
bringing the top players in we
can achieve whatever we want.
“The owners are more impor-
tant than I am as the manager
fans on the availability of Dutch
playmaker, Rafael van der Vaart,
who is expected to start after
missing the win at Sunderland.
sweet Charidee''
Come and swing a club in aid of the Wooden
Spoon and challenge the ‘Tiger’ in you.
Form and fitness SPORT | IN BRIEF Our ‘Pebble Beach’ Golf Competition has tee’d off this week at City Golf.

still a big worry Newbury post-mortem results delay

HORSE RACING: The results of the
Ronaldo the all-time leading World
Cup goalscorer and three-time Fifa It’s only £10 to play 5 virtual holes (Stroke Play) all
post-mortem examinations into the World Player of the Year, has of which goes to this worthy cause; sponsored by
for Collingwood two horses, Fenix Two and
Marching Song, who died at
Newbury on Saturday have been
retired. “The body can’t take much
more,” said the 34-year-old former
Barcelona and Real Madrid star.
Saxo Bank, and hosted at:
City Golf, 40 Coleman Street, EC2R 5EH.
delayed. Paul Struthers, head of
▲

CRICKET
BY JAMES GOLDMAN
ENGLAND all-rounder Paul
Collingwood admits he’s still strug-
gling for form and fitness ahead of
tomorrow’s World Cup warm-up
match against Canada.
The 33-year-old, who celebrated the
birth of his third daughter last week,
has failed to pass 50 in his last 11 one-
day internationals and is currently
struggling with a back problem.
“I had injections into the back last
week. I’m looking forward to getting
back to 100 per cent – at the minute,
I’m probably a bit off that,” he said.
His enforced break, he believes, will
have done him no harm as he bids to
regain his touch with the bat.
“I can’t beat around the bush – the
last few months have been disap-
pointing on my personal form,” he
said. “I’m really looking forward to
this tournament. It is a different set
of conditions altogether. I hope I can
draw on my experience.”
communications for the BHA, said:
“It is only right that we do not
make any announcement until we
have reviewed the results.”
Brazil star Ronaldo retires
FOOTBALL: Brazilian striker
Results
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email sport@cityam.com
Woods apologises for spitting
GOLF: Tiger Woods has said sorry Just email ElliotLake@citygolfclubs.com to book your one hour
after he was caught spitting at the simulator experience.
Dubai Desert Classic. “It was incon-
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