TALENT and marketing agency IMG

Worldwide has been sold to

William Morris Endeavour
Entertainment in a deal believed to
be worth $2.3bn (1.39bn).
The deal creates a global talent
management agency representing
top athletes including Roger
Federer, Rafael Nadal and Maria
Sharapova, and Hollywood clients
such as Christian Bale and Matt
Damon.
IMGs sale was driven by the
trustee managing the estate of
Teddy Forstmann, whose private
equity firm Forstmann Little & Co
bought IMG for $750m in 2004.
Yesterdays deal represents more
than a doubling of this original
investment in less than a decade.
In October WPP chief executive
Sir Martin Sorrell ruled out a bid
for IMG calling valuations of $2.5bn
too expensive.
IMG is home to stars including Taylor Swift (above) and Justin Timberlake
BY OLIVER SMITH
FTSE 1006,492.08 +5.89 DOW16,167.97+292.71 NASDAQ4,070.06 +46.38 /$ 1.637+0.010 / 1.197 +0.015 /$ 1.367 -0.010
FED SHOCKS
STOCKS INTO
TAPER RALLY
Certified Distribution
from 28/10/2013 till 24/11/2013 is 120,715
BY MICHAEL BIRD
AND JULIAN HARRIS
WHAT THE FED SAID: Page 2

BUSINESS WITH PERSONALITY

www.cityam.com FREE
THE BETTER SWEATERS OF CHRISTMAS 2013
ISSUE 2,035 THURSDAY 19 DECEMBER 2013
MARK
KLEINMAN
See Page 13
See Page 19
THE US Federal Reserve shocked
markets last night by announcing a
tapering of its enormous monthly
stimulus programme yet stocks
jumped thanks to the modest size
of the cut and a notably dovish accom-
panying statement.
From January, the Fed will purchase
$75bn of mortgage and Treasury
bonds each month, down from the
current rate of $85bn. It will reduce
the amount it spends on both types of
asset by $5bn each.
In a poll conducted by Reuters last
week, only 12 of 60 economists expect-
ed the Fed to scale back its
purchases this week. Most believed
the move would come next year.
Chairman Ben Bernanke, who is due
to step down from the role next
month, said he consulted closely
with his expected successor Janet
Yellen over the move. Yellen fully
supports the reduction (known as
tapering), Bernanke added.
As news of the tapering broke, the
Dow Jones instinctively fell 0.4 per
cent, but almost immediately surged
back, breaking through the 16,000
mark to close up 1.8 per cent at an all-
time high of 16,167.97.
Despite the tapering of quantitative
easing, the Fed also made dovish
moves, including an adjustment to its
forward guidance. The Federal Open
Market Committee (FOMC) says rates
will now be kept at extremely low
levels until well past the time that
the unemployment rate declines
below 6.5 per cent.
Interest rates will be anchored to
their historic lows especially if the
Fed believes that inflation will be at
two per cent or below in the long-run.
Tapering is not tightening, said
Berenbergs Christian Schulz, who
described the move as Bernankes
baby step due to its modest size.
The Fed is keeping its interest rates
near zero and reinforcing its forward
guidance, Schulz added.
All members of the committee voted
for the taper, except for Eric
Rosengren, the president of the
Federal Reserve Bank of Boston.
Rosengren voiced opposition to the
move, stressing that inflation is still
below the two per cent target, calling
the change premature until
economic growth is secure.
The Feds announcement followed
publication, earlier in the day, of some
positive US economic data. Housing
starts jumped 22.7 per cent in
November compared to the previous
month the sharpest increase since
January 1990.
And Markits flash
purchasing managers index for US
services came in at 56, up from 55.9 in
November. The US Senate also passed
a two-year budget deal to ease auto-
matic spending cuts and reduce the
risk of a government shutdown
Entertainers and sporting stars
brought together in agency deal
JUMPER FOR JOY
THURSDAY 19 DECEMBER 2013
2
NEWS
To contact the newsdesk email news@cityam.com
Unemployment drops to
its lowest rate since 2009
FOR THE first time ever more than
30m people are employed in the UK,
with statistics published yesterday also
showing unemployment at its lowest
rate for four and a half years.
The official rate of unemployment
fell to 7.4 per cent in the August to
October period, according to the Office
for National Statistics 0.3 percentage
points lower than during May to July.
There were 2.39m unemployed people
during the period, down 99,000 com-
pared to the previous three months.
And some economists believe that
unemployment may have already
dropped as low as seven per cent.
The Bank of England has said it will
consider lifting interest rates when
unemployment sinks to seven per cent
or lower. Despite its senior officials
being at pains to explain that it may
keep rates anchored even if this condi-
tion is met, falling unemployment is
raising expectations that monetary
policy could finally be tightened.
The single-month [unemployment]
estimate for October was 6.98 per
cent, Henderson economist Simon
Ward said yesterday. The headline
three-month rate, therefore, could hit
the Banks threshold in November or
December at least three years earlier
than suggested by its projections in the
August Inflation Report.
UK losing courageous instinct
The UK is losing its courageous instinct on the
international stage in what threatens to become
the most damaging threat to armed forces in
the future, according to the countrys most
senior military officer. The chief of the defence
staff, Sir Nicholas Houghton, warned on
Wednesday evening in a hard-hitting lecture to
the Royal United Services Institute that he feared
the UK was at risk of stepping back from its
responsibilities and needs on the global
stage.
NSA panel: surveillence overhaul
A panel appointed by Barack Obama to review
electronic intelligence collection has
recommended the government continue to have
access to phone records of US citizens suspected
of terrorism but that the data be held by private,
not government, entities.
JPMorgan shoots instant messanger
JPMorgan Chases investment banking co-heads
banned their staff from using multi-bank instant
messaging services on Wednesday, the latest
sign of banks clamping down on a tool
blemished by its use in market manipulation.
In a memo to staff, Mike Cavanagh and Daniel
Pinto said that effective immediately all
staff were prohibited from participating in
electronic chats or instant messaging groups
with two or more other banks/dealers.
Bupa buys stake in US travel insurer
Britains largest non-NHS insurer has acquired 49
per cent of Highway to Health, a Pennsylvania-
based company that develops online health tools,
including smartphone software for booking
appointments, as well as providing coverage for
patients.
EU could ban refillable electric cigs
Refillable electronic cigarettes could be banned in
the European Union under an agreement to
regulate the devices for the first time. Despite
intensive lobbying from the e-cigarette industry,
an EU-wide ban could be imposed if at least three
member states prohibit refillable e-cigarettes.
William Hill to keep Gibralta base
William Hill plans to maintain its online betting
base in Gibraltar despite a tax clampdown that
will cost it tens of millions of pounds.
The company is one of many bookmakers that
has set up internet operations in Gibraltar,
allowing it to sign up British gamblers while
benefiting from a benign local tax regime.
Humber wind turbines approved
Work on a 450m plant to build offshore wind
turbines on the south bank of the Humber
Estuary that will create thousand of jobs will start
early next year after the plans won government
approval. The developer is Able UK.
Fidelity plants flag in hedge turf
Fidelity Investments launched two "event-
driven" mutual funds, the latest foray by the firm
into a sector traditionally dominated by hedge
funds. The launch of the Fidelity Event Driven
Opportunities Fund and Fidelity Advisor Event
Driven Opportunities Fund comes as alternative
funds continue to pull in a record amount of
investor cash.
AMC shares climb on debut
AMCs shares rose 5 per cent in their trading
debut, about one year after the second largest
movie theater-chain in the US was acquired by a
China-based entertainment company.
THE BANK of Englands interest
rate-setting committee is worried
that a strengthening pound could
disrupt the UKs recovery.
Sterling has climbed from
around $1.585 just over a month
ago to $1.638, partly fuelled by an
improving economic outlook and
expectations that the Bank will
come under pressure to lift rates.
The minutes of the December
meeting of the Banks monetary
policy committee, released
yesterday, said: Any further
substantial appreciation of sterling
would pose additional risks to the
balance of demand growth and to
the recovery.
The minutes also confirmed that
all nine members of the committee
voted to keep interest rates at 0.5
per cent and the stock of asset
purchases at 375bn.
AN IMPROVING PICTURE, YET WAGE RISES WERE STILL SUBDUED
OVER 30M
PEOPLE ARE EMPLOYED
THE HIGHEST NUMBER EVER
22.1%
LOWEST RATE OF
ECONOMICALLY INACTIVE
PEOPLE SINCE 1991
BRITS WORKED
THAN A YEAR EARLIER (AUG-OCT)
EXTRA HOURS PER WEEK
17.6m
ON A YEAR
EARLIER
WAGES ROSE
(AUG-OCT)
FAR BELOW INFLATION
0.8%
EMPLOYMENT RATES STILL VARY ACROSS DIFFERENT
REGIONS AND COUNTRIES
60% 70% 80%
NORTHEAST
NORTHWEST
YORKS &HUMBER
EAST MIDLANDS
WEST MIDLANDS
EAST
LONDON
SOUTHEAST
SOUTHWEST
WALES
SCOTLAND
UK
TOTAL WEEKLY HOURS WORKED
970
950
930
910
2013 2012 2011 2010 2009 2008
AUG-OCT
Millions, seasonally adjusted
Strong sterling
worries dovish
Bank officials
BY JULIAN HARRIS
BY JULIAN HARRIS
Markits Chris Williamson added:
While the prospect of a repeat of such
a steep drop requires a large degree of
optimism, it certainly means that, tech-
nically speaking, a seven per cent
unemployment rate by the end of the
year is looking feasible all of a sudden.
Britains employment rate reached
72 per cent in August to October, up 0.4
percentage points from May to July.
From October to November, mean-
while, the number of people claiming
Jobseekers Allowance fell 36,700 to
1.27m, the lowest since January 2009.
However, regular pay from August to
October was up only 0.8 per cent
compared to a year earlier, considerably
below the rate of inflation.
WHAT THE OTHER PAPERS SAY THIS MORNING
david.hellier@cityam.com
Follow me on Twitter: @hellierd
Allister Heath is away
A
s the year comes to an end
theres definitely cause for
celebration in Londons new
issues or Initial Public Offering
(IPO) market.
According to figures out today from
EY, the advisory firm, there were 14
main market share listings this year,
raising 5.2bn. Thats not exactly an
avalanche of deals but the total repre-
sents a significant increase in activity
compared to four IPOs during 2012
and seven in 2011.
In addition AIM, the junior market,
had a strong year, with 45 IPOs, up
from 32 in 2012, as the market contin-
ued to attract deals from overseas as
well as with domestic businesses.
EYs chief economist David Vaughan
argues that investor confidence has
returned, boosted no doubt by the
average share price growth to date of
33 per cent since the newly floated
groups initial placing price.
EDITORS
LETTER
DAVID HELLIER
New issues make a strong comeback in the London market
Vaughan believes the healthy
pipeline of activity suggests that 2014
will be the strongest market weve
experienced in a long time.
So we go into the New Year in a
much more confident frame of mind
than we entered 2013, when we only
really had the success of RBSs sale of
shares in Direct Line as a base to build
on.
2013 saw the flotation of a number
of companies from different sectors,
from estate agency to insurance to
African finance.
If there is a grumble, it is that tech
companies are still not drawn to the
London capital markets. Just look at
the decision by King, creator of Candy
Crush Saga, to head for the US as evi-
dence of that.
The London Stock Exchange has
changed its rules to make it easier for
tech firms to list here, so it would be
good to have these tested in 2014.
Perhaps Zoopla, the house-buying web-
site, or JustEat, the takeaway food web-
site, might be tempted.
And theres an important proviso to
the optimism. So far the IPO market as
a whole appears to have shrugged off
poor price performance post flotation
for annuity providers Partnership and
Just Retirement, given the success of
so many of the other floats.
But realistic pricing of new issues is
key to retaining momentum and its
worth remembering that confidence
is still probably only wafer thin.
is staying on. I derive a lot of pleasure
from being part of the team, he told
me yesterday after announcing the
deal. Hes got no intention of
replacing Inga Beale, who earlier this
week left Canopius as chief executive
to become the first CEO of Lloyds of
London in its 325-year history. Instead
Watson will effectively lead the
groups transition.
GRAHAM MACKAY
Graham Mackay, former chairman of
SAB Miller, the worlds second largest
brewer, has died at the age of 64. The
business world was united in paying
its tributes to him yesterday, with
many describing him as inspirational.
Our thoughts are with his family.
INSURANCE DEAL
Bids and deals, on the other hand,
have been relatively quiet in 2013,
with UK mergers and acquisitions at
their lowest level for eight years and
still below levels seen during the dot
com era 13 years ago.
Having said that, the year has closed
with at least one large deal being
agreed, the 594m acquisition of the
Lloyds broker Canopius by Sompo
Japan.
Canopius is 95 per cent owned by the
private equity group Bregal so essen-
tially the deal involves switching from
one dominant outside shareholder to
another.
Theres little overlap between Sompo
Japans business with Canopius so in
theory it will be able continue its
underwriting business much as it is.
Michael Watson, who led the man-
agement buyout of the group in 2003,
Sterling has gained against the dollar
Dec
1.65
1.64
1.63
1.62
1.61
1.60
1.59

n The Feds board members now think

that unemployment will drop slightly
more in 2014, to as low as 6.3 per cent.
n Bernanke expects that tapering will
continue in moderate steps through
most of next year.
n The rate-setting Federal Open Market
Committee (FOMC) now expects that low
rates will remain in place until
unemployment falls well past 6.5 per
cent. Bernanke raised the prospect that
the committee would focus more on
other labour market indicators, adding
the potential for more discretion.
n The Federal Reserve has
contemplated a programme along the
lines of the Bank of Englands Funding
for Lending, but Bernanke believes that
US banks are flush with liquidity,
unlike their counterparts in the UK and
the Eurozone.
n Bernanke insisted that the Fed was
not doing less by tapering, reiterating
his long-argued point that a reduction in
asset purchases did not necessarily mean
tighter policy.
n The statement also stressed that both
employment and inflation, the two wings
of the Feds dual mandate, are below
levels which the central bank is
comfortable with.
n The outgoing chairman was not
glowing about recoveries in the worlds
other advanced economies: The US
recovery has been better than most. Its
not been good, its not been
satisfactory but given all the things
that weve faced, in retrospect its not
shocking that the recovery has been
somewhat tepid.
MICHAEL BIRD
BENS LAST RALLY
THURSDAY 19 DECEMBER 2013
3
NEWS
cityam.com
HOUSEBUILDERS PLEDGE: Page 7

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Celebrate your
Christmas moments
THE PUBLIC accounts committee has
accused HM Revenue and Customs of
failing to pursue big businesses for tax
payments, resulting in a 35bn tax gap
between what is expected to be collect-
ed and what actually comes in to gov-
ernment coffers.
Chair of the committee Margaret
Hodge MP highlighted further flaws in
the way this figure is generated, as it
does not include money that is lost
through aggressive tax-avoidance
schemes. HMRC holds back from
using the full range of sanctions at its
disposal. It pursues tax owed by the
smaller businesses but seems to lose its
nerve when it comes to mounting pros-
ecutions against multinational corpo-
rations, she said. Hodge raised
concerns about the amount of tax
taken in real terms, which was less in
2012/13 than it was in the year before.
The report also questions the govern-
HMRC not doing
enough to tax
big businesses
BY KATE McCANN
ments estimates for how much it can
claw back from money held in tax
havens. Ministers had expected to col-
lect 3.12bn in unpaid tax from UK
holders of Swiss bank accounts, but so
far has achieved just 440m. Hodge
added: We were astonished that HMRC
could not give any reasons for such a
shortfall. A spokesman for HMRC
accused the committee of selective
and misleading use of figures, adding
that it strongly disputes the findings.
But Fiona Hotston Moore, tax and
business advisory partner at City
accountants Reeves, said the govern-
ment is not treating small and large
businesses equally. HMRC certainly
does appear to pick on smaller compa-
nies and to be soft on multinationals,
which are rarely prosecuted and gener-
ally merely invited to make a tax contri-
bution. What HMRC seems to rely on is
public outcry rather than legal leg
work to make its case. This is not good
enough, she said.
THE CHRONIC lack of supply in
Britains housing system will drive
the market again in the year ahead,
pushing property prices even
further ahead of wage increases.
The Royal Institution of
Chartered Surveyors (RICS) today
reveals their forecasts for the
housing market in 2014, projecting
prices to climb by another eight per
cent. In comparison, the Office for
Budget Responsibility expects
average earnings to rise by only 2.6
per cent next year.
RICS suggest that house prices
rose by around five per cent in total
this year, with just over a million
transactions, expecting another
House prices to jump eight per
cent in 2014 as supply stays low
BY MICHAEL BIRD
1.5m in the new year. But this is still
below pre-crisis levels. London will
take the lead again, with prices
forecast to soar by11 per cent.
Housing starts are expected to
rise to 155,000, a 30,000 increase on
this year, but the figure is still far
below the 300,000 level suggested by
the Future Homes Commission.
While the number of new homes
being built is now on the rise, it still
wont be anywhere near enough to
meet demand and we expect the
problem of insufficient housing
stock to be the main driver behind
price increases over the next twelve
months, concluded Peter Bolton
King, RICS global residential
director.
Eurozone promises UK will not
pay for failed banks in the bloc
BANK failures in the Eurozone will
only be paid for by banking union
governments and not by the UK,
leaders promised in talks late last
night.
The resolution mechanism being
established for the Eurozone and
other participating states should
mean that bank collapses are paid
for by lenders shareholders and
creditors.
BY TIM WALLACE
But if there are any extra costs
beyond creditors ability to pay,
governments will have to cough up
because they have guaranteed savers
deposits up to 100,000 or 85,000.
For a transitional period
expected to be around a decade the
banks home governments will be on
the hook.
After that the cost will be borne by
the EU, with non-banking union
members like the UK getting a
rebate.
It is understood that countries like
Greece and Italy are pushing for a
short transitional period.
But stronger states like Germany
do not want to shoulder the burden
for other countries bank problems
and argued for a longer transitional
period.
Britains exemption should also
cover any legal bills, for instance if
shareholders and creditors try to
make claims against the banking
union after any bank collapse.
CAR PRODUCTION in the UK was 3.6 per cent lower in November than a year ago, yet the
Society of Motor Manufacturers and Traders said yesterday that this was due to one-off
factors and that it expects output to hit 1.5m cars this year for the first time in six years.
UK CAR PRODUCTION NEARS SIX-YEAR HIGH
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Eve
THURSDAY 19 DECEMBER 2013
5
NEWS
cityam.com
THE FORUM: Page 16

DEBATE: Page 17

THE RETAIL sector regained momen-

tum at the beginning of December
after a disappointing performance in
the two previous months, according to
new data, giving hope of a last-minute
sales push ahead of Christmas.
Grocers, department stores and cloth-
ing shops, which had seen sales fall in
the year to November, saw sales
rebound strongly in the year to
December, the Confederation of British
Industry (CBI) said yesterday.
Nearly half (48 per cent) of 106 firms
surveyed by the CBI up to 11 December
said that sales volumes were higher
than a year earlier, while 14 per cent
said they were down, giving a balance
of plus 34 per cent.
After a disappointing couple of
months, sales volumes in December
recovered their sparkle, beating retail-
ers expectations, said Barry Williams,
chairman the CBI survey panel.
The figures come after disappointing
data from advisory firm BDO on
Tuesday, revealed that like-for-like retail
sales fell by 2.6 per cent year-on-year
during the first two weeks of
British retailers
rebound ahead
of festive rush
BY KASMIRA JEFFORD December, driven primarily by a 4.5 per
cent drop in fashion sales.
The latest data from the British Retail
Consortium for November, showing
footfall fell 4.2 per cent, also pointed to
a subdued mood this year among
Christmas shoppers.
However retail industry experts
believe that footfall numbers will pick
up this week as consumers, who have
delayed shopping, make a last minute
dash to the stores.
Data out yesterday by Visa Europe pre-
dicts that Monday 23 December will be
the busiest shopping day of the year,
with some 1.2bn spent on high streets.
Visa Europe director Jeremy Nicholds,
said: The rush to shop online at the
beginning of the month will be mir-
rored on our high streets on 23
December, which we predict will be the
busiest day of the year.
IHS Global Insights Howard Archer
added: Given the squeeze on purchas-
ing power, it is highly likely that many
consumers have delayed much of their
Christmas shopping until late on in the
hope of getting late bargains.
THE EUROPEAN
Commission
yesterday said it
has launched a
probe into whether
the UKs plan to
subsidise the
Hinkley Point
nuclear plant in
Somerset is in line
with EU state aid
rules. EDF Energy,
which is leading a
consortium
building the 16bn
plant, said it would
engage fully with
the ECs review.
EUROPE OPENS HINKLEY POINT SUBSIDY PROBE
BRITISH banknotes will get a
tough new makeover from 2016
when plastic replaces the
traditional paper, enabling them
to survive accidental spins in the
washing machine, the Bank of
England said yesterday.
The UK will be the
largest economy
so far to adopt
the more durable
polymer material
Plastic bank notes get a thumbs up
BY CITY A.M. REPORTER
SHADOW chancellor Ed Balls will
today launch a review into areas of
government spending that could
be cut back to reduce the deficit, if
Labour wins the election in 2015.
In an interview in the Financial
Times, Balls positioned himself as
pro-business but didnt give any
detail on how Labour would
achieve a budget surplus, leading
to suggestions that he would raise
taxes. The shadow chancellor has
come in for criticism recently,
leading some Labour MPs to call
for him to be replaced.
Ballss plan to save
cash, and himself
BY KATE McCANN
MARKS & SPENCER and a raft of
other major high street names were
hit by downgrades from analysts
yesterday amid fears that
discounting and low wage growth
will take its toll on spending this
Christmas.
HSBC and Oriel both slashed their
forecasts for M&S yesterday,
warning that weak consumer
confidence and further
promotional activity was likely put
pressure on margins.
Mothercare, Debenhams, Next
and Sports Direct also suffered
downgrades by Oriel, sending shares
in all the companies except the
latter tumbling into the red.
...but analysts cut forecasts amid
fears discounts will hurt profits
BY KASMIRA JEFFORD
Life is clearly very tough at
present for the clothiers. The
weather has been decidedly
unhelpful and already most high
street stores are discounting heavily
(and more than last year). We expect
that ultimately the disappointments
will come on gross margins rather
than sales, Oriels Jonathan
Pritchard said.
UBS added to the gloom by
removing Debenhams from its
preferred list of stock, adding that
Christmas raises some questions as
to whether the department store
model can operate without
resorting to heavy discounting.
The retailer has since come under
fire for demanding a 2.5 per cent
discount off goods from suppliers.
for general banknotes, after 87 per
cent of respondents approved the
change in a public consultation.
The move will bring estimated
savings of 100m over a decade. It
will begin with five-pound notes in
2016 at the earliest, with 10 notes
arriving the following year.
Polymer notes were first adopted
by Australia in
1988 and are now
in use in more than
20 countries
including Canada,
the homeland of
new BoE governor
Mark Carney.
Plastic banknotes
will be introduced
from 2016
MARKETS: Page 14

THURSDAY 19 DECEMBER 2013

6
NEWS
cityam.com
JAPANESE insurance group NKSJ yes-
terday confirmed its 594m deal to
buy Lloyds of London underwriter
Canopius, becoming the latest firm to
make inroads into the Citys historic
insurance market.
NKSJ will buy Canopius, its biggest
ever acquisition, through its Sompo
Japan subsidiary.
The purchase means a windfall for
Bregal Capital, whose funds own just
over 95 per cent of the company. The
private equity group has invested
around 188.5m in the firm since it
started building its stake in 2003.
The remaining 4.6 per cent is owned
by 93 members of Canopius staff,
including chairman Michael Watson.
The employees will share 27.3m from
the sale.
We have a long-standing business
relationship with the NKSJ Group and
are very proud to become the specialty
insurance platform of the one of the
largest insurance groups in Japan,
said Watson yesterday.
Japanese firm
buys Canopius
in 594m deal
BY MARION DAKERS
Watson was this week given the
extra title of chief executive, after Inga
Beale announced she was leaving to
become boss of the wider Lloyds of
London market.
NKSJ said the deal, at 1.5 times net
asset value, will give it a foothold in
Lloyds as it hunts for more interna-
tional business.
Canopius specialises in property,
retail and global specialty insurance. It
follows a growing number of Lloyds
insurers to attract takeover interest.
Tokio Marine will merge its
European insurance unit with Kiln at
the start of 2014, having taken over the
firm in 2008.
Cathedral Capital was snapped up by
Lancashire Holdings this year for
266m, while Brit Group was bought
by Apollo and CVC in 2010 before sell-
ing some of its UK units to QBE last
year.
Equity Red Star, a Lloyds
underwriter specialising in motor
insurance, was taken over by New York
private equity firm Aquiline Capital
Partners in April.
Inga Beale (left) has departed Canopius to lead Lloyds, leaving Michael Watson in charge
NKSJ hired Macquarie to advise it on the
594m acquisition of Canopius, while Magic
Circle law firm Freshfields worked on the legal
aspects of the deal.
Bregal Capital, which is selling its 95 per
cent stake in Canopius, hired GC Securities and
lawyers at Clyde & Co as advisers.
Macquarie Capital fielded teams in London
and Tokyo, led respectively by financial
institutions group head Jonny Allison and
Arthur Ozeki, head of the Japan office.
Allison joined the bank as part of its
takeover of Fox-Pitt Kelton in 2009. He
previously worked on financial services M&A
for Dresdner Kleinwort. His financial
institutions team advised on $8.8bn-worth of
transactions in the last financial year,
including insurance group Tokio Marines
$2.7bn purchase of Delphi.
Ozeki joined Macquarie in 2007 from UBS,
where he ran the Japan M&A department.
GC Securities is a unit within reinsurance
group Guy Carpenter that specialises in deal-
making and corporate finance. It employs
around 20 staff in London and New York.
ADVISERS NKSJS PURCHASE OF CANOPIUS
JONNY ALLISON
ARTHUR OZEKI
MACQUARIE
DWP pensions cap plan in doubt
nThe governments plans to cap pension
management fees by next April have been
dealt a blow, after The Regulatory Policy
Committee deemed the impact assesment
not fit for purpose. The cap, which would
apply to those who are auto-enrolled into a
scheme, was expected to be set at 0.75 per
cent. The RPC said the government had not
properly calculated the costs involved and
had failed to demonstrate why the cap
would have no impact on the industry.
Zero hours contract consultation
nThe government has launched a 12-week
public consultation into zero hours contracts,
in a bid to make them more transparent.
Business secretary Vince Cable recognised the
need for contracts that allow employers
flexibility and added: People should have
the choice in how they work. But this
shouldnt be at the expense of fairness and
transparency. The consultation will look at
ending exclusivity clauses which prevent
people from working for other employers.
Facebook faces lawsuit over float
nFacebook chief executive Mark
Zuckerberg and dozens of banks involved in
the social networks public offering in 2012
will face a lawsuit accusing them of
misleading investors about the companys
health prior to its $16bn float. A US federal
judge said that investors would be able to
pursue claims that Facebook should have
disclosed internal projections relating to
mobile usage of the service that could
reduce future revenues.
IN BRIEF
THURSDAY 19 DECEMBER 2013
7
NEWS
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JOIN THE
DEBATE
SEE PAGES
16-17
A FORMER BP senior engineer found
guilty of destroying evidence in rela-
tion to the Gulf of Mexico oil spill is
planning to appeal the conviction, it
emerged yesterday.
The engineer, Kurt Mix, was found
guilty of one of two counts of obstruc-
tion of justice at a federal court in
New Orleans, after he was accused of
deleting mobile phone text messages
and voice mails where he estimated
the size of the spill to be larger than
oil major BP had said.
Today in New Orleans, Kurt Mix
was rightly acquitted of one of the
two counts he faced and we will
continue to fight until we receive the
full vindication that Kurt deserves,
said Mixs legal team, Ropes & Gray.
Rest assured we will use every
avenue to appeal this case until Kurt
is fully exonerated.
Former BP engineer to
appeal oil spill charge
BY SUZIE NEUWIRTH
The infamous Deepwater Horizon
disaster in 2010, which left 11 people
dead and sent millions of gallons of
oil into the Gulf of Mexico, has cost
BP billions of dollars in payouts so far.
BP declined to comment on Mixs
conviction. Yesterdays court verdict
followed an announcement by BP ear-
lier in the day that it had made a sig-
nificant discovery in the US Gulf of
Mexico in the fourth quarter, but also
took a $1.08bn (660m) hit from an
unsuccessful well off Brazil.
The firm said that 2013 had been its
most successful year for new field
exploration for almost a decade, with
new exploration wells having a suc-
cess rate of over 40 per cent. We are
very pleased that both these frontier
and core portfolios are starting to
deliver and anticipate leaving the
year with nine further wells opera-
tional, sustaining our recent momen-
tum into 2014, said Mike Daly, execu-
tive vice president for exploration.
In a separate statement, BP said that
it has completed its Whiting oil refin-
ery upgrade in the US. The new
102,000 barrel per day coker was start-
ed up in mid-November and BP
expects it to ramp up processing from
the start of 2014. Shares closed down
0.02 per cent yesterday.
ODEY Asset Management, the
hedge fund managed by seasoned
stock picker Crispin Odey, doubled
profits last year after performance
fees soared.
The 18 partners at the company,
including Odey, shared the spoils of
a 55m profit for the year ending 5
April 2013 according to its latest
accounts, up from 27.2m in the
same period last year.
The top earner, thought to be
Odey, was awarded 14.2m for the
year, up from 9.4m in 2012.
Good year for Odey after fund
turnover drives handsome profit
BY MICHAEL BOW
Company profits were boosted by
stellar investment performance and
an increase in the number of
products being sold to investors.
Three new funds the Odey Swan
fund, Odey Naver fund, and Odey
Orion fund launched over the
period and the companys funds
outperformed.
Overall turnover rose to 72.7m
from 40m. Performance fees alone
rose by 18 times to 36.7m. This
followed a dismal 2012 when
performance fees came in at 2.5m.
Assets under management also
rose to $8.3bn from $6.8bn.
THE BAIL-IN of Co-op Bank investors
was approved by the High Court
yesterday, the final stage in pushing
through the banks recapitalisation
without needing taxpayer support.
Under the deal hedge funds will
take around 70 per cent of the equity
with the Co-op Group holding the
remaining 30 per cent.
Meanwhile retail investors will be
given bonds in the group, paying an
annual income in line with the
shares they are swapping.
Mark Taber, an investor who led a
group of 15,000 investors to push for
a better deal, said retail investors
should be given a more formal say in
restructurings in future.
The reaction of bondholders to
the Co-ops original plan for
recapitalisation without bondholder
consultation showed that voluntary
bail-ins need to be structured
consensually with all stakeholders,
said Taber in a letter to MPs.
Co-op Banks
deal gets High
Court go ahead
BY TIM WALLACE
BP PLC
18Dec 12Dec 13Dec 16Dec 17Dec
470
466
468
474
472
476
480
478
464.90
18Dec
p
WILL THE PLEDGE MAKE A DIFFERENCE?
The Home Builders Federation pledge to mar-
ket UK properties here rst, before advertis-
ing them abroad (or at least doing it at the
same time), may not make that much of a dif-
ference in practice. After all, HBFs own statis-
tics show that overseas property sales help
boost development in the capital, where buy-
ers are often reliant on mortgage offers which
expire too quickly to take advantage of buy-
ing off-plan. Overseas investors can afford to
stump up the cash required to secure a home,
which gives developers the capital they need
to start work. According to statistics from the
HBF, which surveyed the eight companies
responsible for 44 per cent of new homes
built in London last year, nearly 2bn was
invested from abroad. As a result, around
14,000 affordable homes were built, cross-
funded by private sales, 129m went to the
Treasury in stamp duty payments (around
39,000 per transaction), and 16,000 jobs
were created. Perhaps then its little wonder
that the pledge has received generous sup-
port, despite it being voluntary and com-
pletely unpoliced. Nevertheless, it will likely
do little to reassure those who are concerned
about gures for overseas sales in some parts
of London, which were as high as 85 per cent
last year according to estate agent London
Property Partners.
Housebuilders pledge
to end advance sales
of homes overseas
A TOTAL of 11 housing developers
have signed a pledge to market their
properties to UK buyers first, or at
the same time, as marketing abroad.
Concerns about properties being
sold to foreign investors who then
choose not to live in them have led to
claims that many London streets are
unoccupied while demand in the
market remains high.
Taylor Wimpey, Barratt
Developments and Redrow have all
signed up to the voluntary pledge.
Stewart Baseley, executive
chairman of the Home Builders
Federation, the body behind the
pledge, said: London has an acute
housing crisis and foreign buyers are
playing a vital part in helping
increase the number of homes being
built in the capital. However, the
industry wants to ensure that UK
BY KATE McCANN buyers have every possible
opportunity to buy the homes being
built. He added that without upfront
investment from abroad, many
affordable homes would not get built.
The pledge comes after chancellor
George Osborne said in his Autumn
Statement that a capital gains tax
would apply to overseas property
owners who buy and sell in the UK.
Mayor of London Boris Johnson
welcomed the news and repeated his
pleas for mortgage lenders to extend
the length of their offer to nine
months, to make it easier to buy
homes off-plan. Whilst overseas
investment is a long-standing and
necessary part of any global cities
housing market, it is important that
homes are not exclusively marketed
abroad before the UK, he said.
The governments housing
minister Kris Hopkins also welcomed
the announcement.
Odeys outfit had a good 2012/13
There are concerns that UK buyers are missing out on opportunities to buy off plan
THURSDAY 19 DECEMBER 2013
8
NEWS
cityam.com
SABMILLER chairman Graham
Mackay, one of the most respected
figures in the consumer goods
industry, died yesterday morning
from cancer.
Mackay, who was 64, worked at
SABMiller for 35 years, growing the
beer maker from its South African
conglomerate roots to become the
worlds second largest brewer. Today
SABMiller boasts over 200 brands,
such as Peroni and Grolsch,
with sales of $34.5bn (21bn)
a year.
SABMiller said John
Manser has been appointed
acting chairman by the board
until a successor is chosen.
Graham was one of the
most inspirational and
successful leaders in
international business
by any measure, said
Manser yesterday.
After joining the
business in 1978 Mackay rose up the
companys ranks to become chairman
in 1992.
He helped steer the consolidation of
the brewing industry through a string
of deals, including South African
Breweries acquisition of US-based
Miller Brewing in 2002 for $5.6bn
(3.4bn) in cash and stock to form
SABMiller. Mackay became chief exec-
utive in 1999 when the company listed
on the London Stock Exchange, until
April this year when he took a medical
leave of absence following surgery
on a brain tumour.
Mackay resumed his duties as
chairman in September but his
condition worsened in November,
and he took a further leave.
He died peacefully on
Wednesday morning
surrounded by his fam-
ily.
BITCOIN fell to its lowest price
since October yesterday after China
took steps to block its citizens from
making investments in the digital
currency.
Chinas central bank extended its
Bitcoin ban to payment providers
that service BTC China, Chinas
largest Bitcoin exchange, stopping
the countrys citizens from buying
the currency.
Prices on Bitcoin exchanges
Bitcoin falls under $500 as China
closes its doors to digital traders
Bitcoin peaked at $1,200 on 5 December before declining to its current low
BY OLIVER SMITH around the world fell from $700 to
below $500 on the news, with the
MtGox exchange seeing prices
recover to around $570 last night.
We essentially got notice from
our third-party payment provider
today that they will discontinue
accepting payments for us and new
deposits, said Bobby Lee, chief
executive of BTC China.
Authorities in the country are
concerned that people use Bitcoin
to bypass Chinas strict capital
controls.
ENERGY firm Centrica hit the top of
the FTSE 100 yesterday morning, after
it agreed to sell its Texas gas-fired
power stations to asset manager
Blackstone for $685m (420m) and
return the proceeds to shareholders
via a share buyback next year.
Residential retail supply is key to
our North American business, and
with sufficient generation capacity in
Texas, we can support our
downstream business through
contractual arrangements, rather
than asset ownership, said Badar
Khan, president and chief executive
of Direct Energy, Centricas North
American subsidiary.
Shares in the firm, which owns big
six supplier British Gas, pared gains
to close up 1.7 per cent.
Centrica sells
power plants in
US for 420m
BY SUZIE NEUWIRTH
Centrica PLC
18Dec 12Dec 13Dec 16Dec 17Dec
326
322
324
330
328
332
336
334
328.70
18Dec
p
Chairman Graham
Mackay, aged 64
BY OLIVER SMITH
SABMiller chair
Graham Mackay
dies aged 64
Life, intensified.
The Macan is a new expression of a spirit 65 years in development, engineered to
deliver an experience like no other. A sports car that defies convention to take the
everyday out of every day. A sports car thats uniquely yours, and uniquely Porsche.
The new Porsche Macan.
Discover more at porsche.co.uk/macan
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g/km. The mpg and CO2 figures quoted are sourced from official EU-regulated test results, are provided for comparability purposes and may not reflect your
actual driving experience.
THURSDAY 19 DECEMBER 2013
10
cityam.com
cityam.com/the-capitalist
THECAPITALIST
Got A Story? Email
thecapitalist@cityam.com
NO ONE could deny Christmas is in full
swing drunken revellers are falling
out of pubs in festive onesies, the Tube
has a whiff of Baileys, and Boots has
all but sold out of Alka-Seltzer. But for
the City, Christmas isnt the same as it
used to be extravagance is outlawed
and the parties, downsized.
There is a hangover from the reces-
sion its like there has been a refor-
mation in the City and a puritan equiv-
alent has emerged, Ranald Macdonald,
owner of City hangout Boisdale, told
The Capitalist.
While were as full as ever,
big spending is taboo and
were not selling as much of
the most expensive wine and
champagne.
The Capitalist has heard that
banks and other large City
firms feel that the exorbitant
spending of the past is not
acceptable. Where there
used to be company-wide
Christmas bashes, now the banks are
scaling back and asking staff
Citys Christmas parties
have lost their sparkle
to celebrate in small groups.
Christmas parties are being viewed
as a reputational risk, a source at one
of Londons foreign banks told The Cap-
italist. There were once large, divisional
parties with no budgets, but this year
we were given 40 per head and told
to celebrate with our teams generally
five people or less.
Theres a fear among firms, especially
banks, that the media will catch wind
of their party plans and use them
against them. According to
our source, one of the big
The
heady days are
over
EDITED BY GABRIELLA GRIFFITH
four banks insisted all festive parties
went through compliance to ensure
their locations could not be deemed
flashy.
But its not the same the world over.
Ive heard from international bankers
you can spend far more in New York
five to 10 times more without it being
a problem on expenses, said Macdon-
ald.
So whats the answer for our party-
loving City slickers? Well, the old guard
are sticking together and enjoying pri-
vate Christmas dos.
I used to work at BZW [formerly Bar-
clays investment arm], which hosted
brilliant staff parties, Mervyn Metcalf,
managing director at Dean Street Ad-
visers, told The Capitalist.
We still have an annual BZW Christ-
mas party even though it was sold 15
years ago. Despite being hosted at the
rather grand Savile Club, everyone
there keeps the BZW fun spirit alive.
So fear not dear City-ites, fun is still
to be had; you just need to know where
to find it.
Most Enterpising Award
Dragon Associates card not
only spreads good cheer but
could drum up business too.
Most Frightening
The Which? press
office has been
taken over by elves.
And theyve sent
this card.

Top 3 corporate Christmas cards:

and the awards go to....
Most Corporate
Deloittes festive card
includes a graph and a
message about CFO
confidence. Yawn.

THURSDAY 19 DECEMBER 2013

12
NEWS
cityam.com
CONSTRUCTION in the Eurozone
bucked the regions modest growth
trend in October, with production con-
tracting 1.2 per cent from the previous
month.
The troubled sector is not following
the Eurozone economies return to
feeble expansion, and has now
declined 2.4 per cent since the same
month last year.
Construction production is still
below levels seen in 2011 and most of
2012, and has declined by almost a
quarter since its peak level before the
financial crisis. In addition, poor pro-
duction figures indicate that con-
struction is less likely to contribute
positively to GDP figures in the
fourth quarter.
The figures show a clear divergence
between different countries in the
euro area: while production dropped
by 3.9 per cent in Spain and 1.1 per
cent in France during the year to
date, Germanys more buoyant con-
struction sector held flat.
The IFO index of economic confi-
dence also recorded robust sentiment
Building slump
rolls on for euro
area economies
BY MICHAEL BIRD
this month, with the headline figure
for Germanys business climate rising
to 109.5, up by 0.2 points from
November.
Any number over 100 indicates a
stronger business climate than in
2005. The index for expectations also
rose to a higher level than expected,
reaching 107.4.
The IFO index points to a further
acceleration in investment momen-
tum. Strengthening German domes-
tic demand should also help the
Eurozone crisis countries pursue
their export-led growth strategies suc-
cessfully, added Berenbergs
Christian Schulz.
Capital Economics own assessment
of the French economy suggested
that a third recession may be narrow-
ly avoided in the fourth quarter.
James Howat, of Capital Economics
added: The economys underlying
problems mean that GDP growth in
2014 will probably fall short... As
Spain and Italys first and second
largest export market respectively,
Frances sluggish recovery will under-
mine these countries abilities to
grow out of their debt problems.
INDIAS central bank unexpectedly
kept its policy interest rate on hold
yesterday, yet maintained its tough
rhetoric against surging inflation,
warning it would act any time
needed even if the economy
continues to struggle.
The Reserve Bank of Indias
decision to keep the repo rate at
7.75 per cent surprised investors.
I want to emphasise that we are
not being soft on inflation, said
governor Raghuram Rajan.
It shouldnt be taken that were
on hold. We are waiting for data.
Hence as the data come in, we will
react appropriately.
Indias central
bank holds rate
BY CITY A.M. REPORTER
THE COST to insurers of
catastrophes almost halved to
about $44bn (27bn) this year,
despite a doubling in deaths caused
by events such as Typhoon Haiyan,
Swiss Re said yesterday.
Haiyan was the event causing the
highest loss of life this year,
resulting in the death of more than
7,000 from some of the strongest
winds ever recorded when it struck
the Philippines in November.
But Swiss Re noted the bill for
insurers was likely to be low
because few of those affected had
cover.
Catastrophe bill
halves in 2013
BY CITY A.M. REPORTER
THE SCOTTISH governments plan
for independence includes a 1.3bn
hole, the Treasury claimed
yesterday, ramping up Londons
campaign for a no vote in next
years referendum.
A plan published last month by
Holyrood argues an independent
Scotland would have a lower
national debt and lower budget
deficit as a proportion of GDP than
the remainder of the UK.
As a result Scottish politicians
want to use some of that financial
space to spend more, giving more
childcare to parents, cutting the air
Westminster attacks Scotlands
independence finance claims
Alex Salmond laid out his plans for independence last month, including some tax cuts
BY TIM WALLACE
passenger duty tax and cutting
corporation tax by three
percentage points to make the
country more attractive to
businesses.
These would be partially funded
by cutting defence spending.
The Treasury in London
yesterday argued the spending
promises more than outweigh the
money saved on defence, leaving a
1bn hole to finance each year in
the first parliament after a yes vote.
However, the Treasury numbers
do not take note of Scotlands
lower borrowing figures and so
greater room to be flexible with
the finances.
Tullow to plug and abandon well
nFTSE 100-listed energy explorer Tullow
Oil yesterday said it plans to plug and
abandon a Cote dIvoire well after hitting
water below the oil accumulation
discovered at a nearby well, reducing the
size of the find. Thewell has efficiently
identified the likely depth of the oil water
contact and we are reviewing the resource
range and our future monetisation
options, said Tullows exploration
director Angus McCoss.
Pallet maker RM2 to float on Aim
nPallet manufacturer RM2 yesterday said it
plans to launch an initial public offering on
Aim, which will raise 137.2m to finance the
expansion of its production capacity. The
company expects to start trading on 6
January 2014 with an initial market
capitalisation of 278.3m and is the largest
float on Aim in a year. RM2 designs, makes
and supplies pallets that are used in the
supply chain of sectors, such as packaging.
Cenkos Securities is adviser and broker.
Darty shares boosted as sales rise
nDartys recent turnaround have boosted
the French electrical manufacturer as
operating profits for its first half rose 25.6
per cent to 15.2m, the company said
yesterday. Revenue rose 1.8 per cent on a
like-for-like basis sending its shares up 3.5
per cent. The company also announced
plans to sell it Turkish unit to concentrate
on its core businesses in mainland Europe.
It is in exclusive talks to buy French retail
website Mistergooddeal to boost online
expansion.
IN BRIEF
THE TROUBLED Spanish banking
system recorded an increase in its
proportion of bad loans during
October, rising 0.3 percentage points
to 13 per cent.
The proportion of non-
performing loans in the financial
system has now reached another
record high, raising further
questions about the health of the
countrys banks.
During October, total aggregate
lending in Spain fell to 1.469
trillion (1.23 trillion), but the share
categorised as doubtful debtors
increased to 190.97bn, a 3bn
increase from September.
Spanish banking system posts
record proportion of bad debt
BY MICHAEL BIRD
In a recent assessment of the
Eurozones recovery, Capital
Economics Ben May noted that
such debtors are likely to be an
ongoing hindrance to economic
growth: Non-performing loans
which have risen sharply are
unlikely to have peaked, especially
given the pressure is growing on
some banks to declare hidden losses
in advance of next years European
Central Bank asset quality review
and stress tests.
According to the Bank of Spain,
doubtful debtors are classed as any
credit for which an interest
payment or some portion of the
principal owed has been overdue for
three months.
BWIN.PARTY yesterday reported a
positive outlook for 2014 with
growth expected in the US.
The gambling company also said
that trading in the 11 weeks since
the end of September 2013 was in-
line with its expectations. Its share
price rose 8.4 per cent to 125.4p on
the news.
In 2014 Bwin expects the FIFA
World Cup will see increased betting
volumes along with the companys
expansion in areas of the United
States where gambling rules have
been relaxed.
After becoming the online poker
Shares in Bwin.Party jump 8pc
after bullish growth forecast
BY LUKE JARMYN and casino market leader in New
Jersey last month, Bwin said it is
focused on producing a much
improved mobile offering for 2014.
Mobile currently accounts for 25 per
cent of daily revenue.
It also announced its US
marketing and launch-related costs
were between 7m (5.8m) and 10m
from its online poker and casino
applications.
Gross profit margins in 2013 for
the group are set to be between 16
and 17 per cent.
Non-executive chairman, Simon
Duffy, is to stand down in Mays
annual meeting after three years in
the post.
GERMAN travel group Tui AG,
which owns a majority stake in Tui
Travel, yesterday vowed to pay its
first dividend since 2007 after
posting a surprise profit.
The firm said it made a 4.3m
(3.6m) profit in the year to the end
of September, beating forecasts of a
small loss, while underlying
earnings rose two per cent to
762m. Turnover rose from 18.3bn
to 18.5bn.
Boss Friedrich Joussen said his
cost-cutting measures were starting
to deliver, though writedowns and
job cuts had cost 57m in the year.
The German firms hotels arm
Tuis German parent restores its
dividend as cost cutting pays off
BY MARION DAKERS
posted flat turnover of 826m,
while its cruises business enjoyed a
13 per cent jump in revenues to
261m.
Tui AG held merger talks with Tui
Travel earlier this year but decided
against a deal. It holds a 54.5 per
cent stake in the London-listed firm,
which last week said profits were up
13 per cent.
Our good operating results and
virtually debt-free balance sheet
enable us to pay a dividend to our
shareholders earlier than
promised, said Joussen in a
statement.
The dividend announcement
helped push Tui AGs shares up 3.82
per cent to 11.68.
INDIA-FOCUSED energy company
Essar Energy yesterday reiterated
its positive outlook for the
business, after a recent fall in the
share price.
The FTSE 250-listed firms shares
went up four per cent yesterday
morning in response to the news.
Energy demand in India will
continue to be strong for many
years to come and I believe that
Essar Energy is well placed to meet
that demand, said chairman
Prashant Ruia.
Although our recent share price
performance has been
Essar Energy rises as it reaffirms
positive outlook for business
BY SUZIE NEUWIRTH disappointing, our underlying
business is strong and our future
prospects remain positive.
The company, which owns the
Stanlow oil refinery in Cheshire
alongside its Indian assets, said
that it is currently trading in line
with expectations and its outlook
remains unchanged.
Essar Energy has invested over
$8bn (4.9bn) in the business over
the past three years and is now
focusing on improving its
operational and financial
performance, through asset
optimisation and refinancing
programmes. Shares closed up 1.2
per cent yesterday.
THURSDAY 19 DECEMBER 2013
13
NEWS
cityam.com
Ford warns new car launches will
dent its profit growth next year
FORD warned yesterday that the
cost of launching new vehicles and
a deteriorating Venezuelan
economy would dent its profit next
year, news that sent the US second-
largest automakers shares to their
biggest one-day percentage drop in
more than two years.
The Detroit-based company said
its mid-decade target for a global
BY CITY A.M. REPORTER automotive profit margin of eight
to nine per cent was also at risk.
Ford expects a global pre-tax profit
next year of between $7bn to $8bn.
That is lower than the projected
$8.5bn expected in 2013, which is
set to be one of the most profitable
in the companys 110-year history,
Ford said. Much of that amount -
about $8.34bn is estimated to
come from North America. It was
the first time Ford has provided its
forecast for 2014 results.
Todays announcement is Ford's
attempt to keep expectations in
check, Stifel Nicolaus analyst James
Albertine said, calling 2014 a
transition year.
In Europe, Ford expects the
overall market to improve. Once it
gets beyond its restructuring
expenses of $400m in 2013 and
2014, the company expects to be
profitable on the continent.
LONDONS west end has unseated
Hong Kong Central as the worlds
most expensive office market, regain-
ing the top spot it lost three years ago.
The cost of renting an office in the
west end has shot up by 14.3 per cent
in the past year to $259.36 per square
feet, driven by a squeeze in supply of
new space, research by CBRE out
yesterday showed.
The property advisory firm said a
renewed appetite from financial
firms such as hedge funds willing to
pay a premium for space in the most
prestigious areas also helped push
prices upwards.
Meanwhile the City held onto its
place as the ninth most costly office
market at $142.71 per sq ft.
However Asia continued to
dominate as the worlds most
expensive office market. It occupied
six of the top ten slots with Hong
Kong Central in second place with
rental space costing $234.30 per
Londons west
end tops list of
pricey offices
BY KASMIRA JEFFORD square foot. Beijings Finance Street,
Beijings Central Business District
and Hong Kongs West Kowloon
made up the final top five of the
worlds most expensive markets.
Overall occupancy around the
world rose 2.2 per cent during the
year, as the global economy
continued to recover.
The growth of occupancy costs for
prime office space in the past year
underscores that even in a slowly
recovering economy, demand for the
best space in the best locations
continues to be strong, said Dr
Raymond Torto, global chairman of
CBRE Research
The study also found that rents
were rising at the fastest pace in the
Americas driven by strong demand.
Boston (Downtown) saw a 15.4 per
cent annual increase in occupancy
costs, largely due to high demand
from technology firms. CBRE said
this high demand, combined with
low vacancy rates, had given
landlords leeway to up rents.
Low vacancy rates and demand from financial firms have pushed up costs in the West End
FedEx bullish for the full year
nFedEx raised its full-year earnings
forecast yesterday but its quarterly results
missed forecasts. It sees full-year earnings
per share growth between eight and 14 per
cent above last year, up from its previous
forecast of between seven and 13 per cent.
FedEx earned $500m, or $1.57 a share, in the
second quarter ended 30 November, versus
$438m, or $1.39, in the same quarter last
year. Revenue at its express delivery unit
fell to $6.84bn from $6.86bn last year.
SACs Steinberg found guilty
nMichael Steinberg, a top portfolio
manager at Steven A. Cohens SAC Capital
Advisors hedge fund, was found guilty
yesterday of charges that he traded on
insider information. A federal jury found
Steinberg, 41, guilty on all five counts of
conspiracy and securities fraud he faced.
Prosecutors said he traded on confidential
information that was passed to him by an
employee, who later admitted to swapping
illegal tips with friends at other firms.
Complaints bodies beefed up
nThe government has announced four
bodies that have been given the power to
report problems in the financial services
sector to the Financial Conduct Authority.
Which?, the Consumer Council Northern
Ireland, Citizens Advice and the Federation
of Small Businesses can make complaints to
the FCA which it must respond to within 90
days. Sajid Javid, financial secretary to the
Treasury, said it is vital consumers and
businesses have a stronger voice.
IN BRIEF
DAME Patricia Hodgson was
yesterday officially confirmed as the
next chairman of Ofcom.
Hodgson, who started her career
as a producer and journalist, will
replace current Ofcom chairman
Colette Bowe when she steps down at
the end of March 2014 after serving
her full term. Hodgson, who project
managed the BBCs switch to digital,
joined the Ofcom board in July 2011
and became deputy chairman in
January 2012.
Hodgson picked
as Ofcom chair
BY KATIE HOPE
I
T wouldnt be the final column of
a calendar year without some
predictions for the next 12
months. Here are my top three:
Royal Mail will complete a
journey from being wholly-owned
by the UK state to wholly-owned by a
German enterprise within little more
than 12 months.
Deutsche Post wont get it delivered
cheap, mind you. Royal Mails shares
have close to doubled since being sold
by the government in a deal valuing it
at 3.3bn, and any buyer will have to
pay a significant premium to the pre-
vailing share price.
That might mean a windfall for tax-
payers remaining 30 per cent stake in
Royal Mail, but it could also trigger a
pre-election controversy about the for-
eign takeover of one of the UKs best-
known companies.
Next year will be one of change
for Britains biggest retailers.
Justin King will finally hand over the
reins at Sainsburys having delivered
a decade of growth and a turn-
around in fortunes.
But at Marks & Spencer, Tesco and
Wm Morrison, the chief executives
will be nervously watching over
their shoulders for any sign of a
shareholder revolt over sluggish per-
formance.
By the end of 2014, at least one of
them will be gone.
It barely qualifies in the catego-
ry of forecasting to say that
2014 will be another torrid year for
banks, but the escalation of a global
probe into foreign exchange manip-
ulation will herald a new nadir for
the industrys reputation.
That, and other ongoing probes,
will herald the denouement of
Jamie Dimons long reign at JP
Morgan.
TROUBLES AT STANCHART
It hasnt been the best week for
directors of Standard Chartered, the
emerging markets lender.
For the last decade, it has
generated enviable returns for
investors, provoking resentful
glances from some of its UK-focused
peers.
So a recent profit warning
provided an unwelcome jolt to share-
holders who have also been alarmed
by unsubstantiated talk of ten-
sions between Sir John Peace, chair-
man, and chief executive Peter Sands
over the need for a rights issue.
The wobbles do not end there. This
week, it emerged that Standard
Chartered had shifted responsibility
for its risk function from Richard
Meddings, finance director, to Mr
Sands at the request of the
Prudential Regulation Authority
(PRA).
That should provide no personal
reflection on Meddings but it does
raise the question of why regulators
perceive there to be a less pressing
potential conflict when risk manage-
ment functions are overseen by the
chief executive.
People close to Standard Chartered
say that frustrations with regulators
do not end there.
Its board, they say, wants more clar-
ity from the PRA about the level of
top-quality capital that it is required
to hold.
It also wants that guidance to be
more explicit in order to provide
investors with greater certainty.
That would be welcomed by Sir
John, who said he would relinquish
one of his trio of FTSE-100 chairman-
ships by stepping down at Experian.
There is still no successor in place
but that, Im told, will change early
in the new year. Giving Peace a
chance will be easier at Standard
Chartered once that happens.
RACING POST IN PLAY
And theyre off. Bidders vying to buy
about 180m of loans to the Racing
Post are heading for the finish line
this week, but they may not get the
result they were looking for.
People close to the situation say
that a lofty valuation of the loans by
UBS means they may end up under
the aegis of National Asset
Management Agency (NAMA), the
Irish government agency.
Expect that to spark a tussle for the
ownership of the newspaper itself.
Mark Kleinman is the City editor of Sky
News @MarkKleinmanSky
INSIDE
TRACK
MARK KLEINMAN
My top tip for 2014: Deutsche Post will buy Royal Mail
L
ONDON has always had its sector
specific hotspots. Broadly
speaking, those looking for
underwriting advice should use
the Gherkin as their marker, while tech
geeks sat-nav their way to Silicon
Roundabout and hedgies head for
Mayfair.
The grand old townhouses of the St
James and its surrounds are a natural
home for these discreet financiers,
with a subtle gold plaque above the bell
often the only sign that billions of
pounds in assets is being looked after
by those inside. For the last few years
theyve been particularly quiet
keeping their heads down as the
financial sector reasserts itself after the
crisis and shying away from flashy
postcodes.
But now theyre back, and the race is
on to snare the prime locations, with
high occupancy rates and strict
planning laws driving prices ever higher.
But if rising rents are a sign of Londons
burgeoning return to form, spare a
thought for our continental cousins.
Cities in Spain and Italy dominated the
list of biggest fallers, with occupancy
costs down more than 11 per cent in the
worst hit.
Itll be a while before firms over there
are cutting the ribbon on anywhere new.
BOTTOM
LINE
ELIZABETH FOURNIER
Firms are willing to pay again to
be in the middle of the action
ENERGY regulator Ofgem yesterday
said it has hired Dermot Nolan as
its new chief executive, effective
from March 2014.
Noland has been chairman at the
Commission for Energy Regulation
in Ireland since 2011 and a
commissioner since 2008.
The head of Ofgem's market
division, Andrew Wright, has been
acting as temporary chief executive
since Alistair Buchanan stepped
down earlier this year.
Ofgem hires a
new chief exec
BY SUZIE NEUWIRTH
1
2
3
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THURSDAY 19 DECEMBER 2013
15
cityam.com
In association with
YOUR ONE-
STOP SHOP
BROKER VIEWS AND
MARKET REPORTS
LONDONREPORT
T
HE UKs main equity index
steadied in thin trade yesterday,
with investors cautious before
what is seen as a tight policy
decision by the US Federal Reserve, and
with a sell-off in retailers putting a lid
on any gains.
Strong US data, including yesterdays
forecast-beating housing starts, has
fuelled expectations that the Fed
could scale back its equity-friendly
stimulus as soon as this month. That
in turn has weighed on global stocks.
As a result, Britains FTSE 100
whose companies make a quarter of
their sales in the United States has
fallen for six weeks.
The FTSE 100 closed up 5.89 points,
or 0.1 per cent, at 6,492.08 points, its
gains stunted by tough technical
resistance around the 200-day moving
average. Centrica was a top gainer, up
2.8 per cent after the energy company
said it would sell its Texas gas-fired
power stations and use the money to
extend its share buyback.
Sainsbury dropped 3.6 per cent and
Tesco lost 1.7 per cent. Marks &
Spencer fell 2.4 per cent, hit by ana-
lysts at UBS downgrading the stock.
Supermarkets help
to push FTSE down
amid thin trading
Wall St surges
on Fed move
U
S stocks staged an explosive
rally yesterday, driving the
Dow and the S&P 500 to all-
time closing highs after the
Federal Reserve announced it would
start to unwind its historic stimulus.
While the Feds move came as a sur-
prise to many in the market, it con-
firmed that the US economy was on
firmer footing and put to rest the
question of when the Fed would
begin to scale back its bond-buying
programme. This is a vote of confi-
dence in the economy and
represents the first step toward mon-
etary policy normalization, said
David Joy, chief market strategist at
Ameriprise Financial.
The Dow Jones industrial average
surged 292.71 points or 1.84 per cent,
to end at 16,167.97, a record closing
high. The S&P 500 gained 29.65
points or 1.66 per cent, to finish at
1,810.65, also a record closing high.
The Nasdaq Composite climbed
46.384 points or 1.15 per cent, to
close at 4,070.064.
NEW YORK
REPORT
MERLIN ENTERTAINMENTS
Barclays has initiated coverage of the entertainment company with an overweight rating and a
390p price target. Past growth secured by strong brands in an expanding segment convinced the
analysts that the company could deliver long-lasting results.
Merlin Entertainments PLC
p
12Dec 13Dec 16Dec 17Dec 18Dec
360
362
356
354
352
358
1,445.00
18 Dec
PETROPAVLOVSK
Cannacord Genuity reiterates its buy rating on Petropavlovsk but lowers its target price to 90p
from 190p. It expects large cuts to earnings and lower cash flow due to its recently announced
significant resource addition from its exploration programme.
Petropavlovsk PLC
p
12Dec 13Dec 16Dec 17Dec 18Dec
75
77.5
70
65
60
62.5
67.5
72.5
75.38
18 Dec
To appear in Best of the Brokers, email your research to notes@cityam.com
BESTof theBROKERS
KPMG
The professional services firm
has hired Stephen Frost as
head of diversity. He was
formerly head of diversity and
inclusion at the London
Organising Committee of the
Olympic and Paralympic
Games from 2008 to 2012.
Prior to that, Frost worked at
Stonewall.
Mizuho
The securities and investment banking arm of the
Mizuho Financial Group has recruited Guy Reid as
managing director and head of European debt
syndicate. He has over 15 years experience in capital
markets. Reid previously spent 11 years at UBS, where
he ran public sector debt capital markets (DCM) and
sat on its DCM executive committee.
Berwin Leighton Paisner
The law firm has announced the appointment of Lisa
Mayhew to head its employment, pensions and
incentives practice. She specialises in complex
employment litigation, with particular expertise in
financial services. Mayhew joined BLP in 2010 from
Jones Day.
The Co-operative
Mark Rogers has joined the Co-operative Group as
regional acquisitions manager. He has over 12 years
experience in the property industry. Rogers was most
recently at Tesco Stores, where he was property
development manager. Prior to that, he worked for
AFB Spar.
Eversheds
The law firm has named Paul Smith as chairman from
1 May 2014. Smith is currently a partner at the firm,
specialising in commercial dispute resolution,
litigation and environment. He was formerly a client
partner for DuPont.
Redefine International
The property investment company has recruited
Stephen Oakenfull as deputy chief executive. He was
formerly an analyst at DTZ Corporate Finance. Prior
to that, Oakenfull was a management consultant at
Turner & Townsend.
Threadneedle Investments
The investment management firm has announced the
appointment of Noel Luchena as a sales director for
institutional clients in its Zurich team. He previously
spent 15 years at Credit Suisse, where he was a
relationship manager working with institutional
clients.
WHOS SWITCHING JOBS Edited by Annabel Palmer CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
FTSE
18Dec 12Dec 13Dec 16Dec 17Dec
6,520
6,500
6,480
6,440
6,460
6,540
6,492.08
18 Dec
DASHBOARD CITY
F
EW would find it hard to spot
the difference between Stoke
Newington and Salford. Its
certainly more than 200 miles
that divides the North London
district and the regenerating
Manchester borough, now home to
the BBCs MediaCityUK. But earlier
this week, banks published figures
showing that both these places are
hotspots for small and medium-sized
enterprise (SMEs) borrowing.
The Salford postcode sector M7 4
houses SMEs with more than 125m
in loans and overdrafts the second
highest in the country. Down south,
the postcode sector N16 6 is the third
highest, having secured 122m in SME
finance at the end of June this year.
The city of Salford is not the only
part of the regions not finding it hard
W
HATEVER the chances of a
last-minute Christmas
shopping spree, the retail
climate remains difficult.
To assist troubled high
streets, the chancellors Autumn
Statement appeared to make a valiant
effort to address complaints about
business rates, long resented as an
excessive tax burden on retailers. For
the first time ever, the uniform
business rate rise will be capped at 2 per
cent beneath inflation. But all is not
as it seems. Given the disastrous
decision to postpone the revaluation of
business rates (where they are adjusted
to reflect property values), the changes
overall are more of a sticking plaster
than a fix.
A number of measures were intro-
duced to support ailing high streets.
First, for retail premises with rateable
values (RV) of up to 50,000, the rates
bill will be cut by 1,000 in each of the
next two years. This is welcome on the
surface. Pubs, cafes and restaurants will
be included, but betting offices, payday
loan shops and banks excluded. Some
cityam.com/forum
THEFORUM
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Agree? Disagree? Got a sharpcomment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
16
THURSDAY 19 DECEMBER 2013
nJERRY SCHURDER &
GRAHAM CHASE
may say there is nothing wrong with
that. However, EU rules bar companies
from receiving more than 200,000 in
state aid across a rolling three year peri-
od equivalent to 56,000 per annum.
There will therefore be a cap on relief
available for multi-site retailers, espe-
cially if their business already receives
other forms of state aid, such as
property in an enterprise zone.
Secondly, a 50 per cent discount from
business rates will be granted to those
occupying shops with a RV below
50,000 that have been vacant for at
least 12 months. The relief will last for
18 months for those moving into such
properties between 1 April 2014 and 31
March 2016. But this overlooks the
potential adverse impact on the take-up
of shops between now and next April. It
also seems to create unfair competition
for established tenants, who have to pay
unsustainable rates on their existing
premises, and face business being taken
away from them by new entrants with
lower overheads due to this concession.
But the real problem comes from the
governments decision to postpone the
2015 rating revaluation by two years,
billed as offering more certainty for
business. This is a hollow claim, as the
two following examples demonstrate.
Menswear retailer Hackett has just
opened at the former Ferrari store at
193/197 Regent Street, having signed a
new 15 year lease at a street-record Zone
A rent of 645 per square foot. The deal
reflects significant competition in an
area where property rarely becomes
available, and expenditure has been ris-
ing rapidly fuelled by tourism and
overseas investment.
However, Hacketts annual business
rates bill will continue to be based on
rental levels from 2008 when Zone A
rents on the same property were just
278.50 per square foot. Hackett will
face a rates bill on the ground floor
alone of 285,000 per year, compared to
767,000 if the revaluation had gone
ahead. With two further floors included
in the lease, Hacketts total savings on
business rates due to the delayed revalu-
ation will be well over 500,000 a year.
Now consider the fortunes of a shop in
High Street Canterbury, in the suppos-
edly affluent South East. In 2007, the
rates payable were 45,154 per annum,
which has risen to 51,744 in 2013. But
the difficult retail climate has resulted
in the rent falling by 44 per cent from
116,000 in 2007 to 65,000 by the
beginning of 2013. In 2007, rates payable
represented 39 per cent of the shops
rental value. By early 2013, they repre-
sented over 80 per cent. In many north-
ern towns, the position is far bleaker.
Given that most prime retail property
is owned by pension funds or publicly-
owned property companies, this effec-
tively means that pensioners and savers
are subsidising the tax take of govern-
ment through the rating system.
Importantly, the weak are subsidising
the strong, as Central London benefits
substantially, while elsewhere the retail
industry is on its knees because of the
cancellation of the rates revaluation.
This is why leading industry groups
have called for the rating revaluation
not to be postponed. This has fallen on
deaf ears. The governments last chance
to reconsider its disastrous decision
passed with the Autumn Statement.
Shop vacancy rates currently stand at
a record 14.2 per cent. The penalty of
empty property rates was brought in to
force owners not to hold property
vacant for long periods. It is scandalous
that this regime has remained in place,
even though the original rationale has
long since passed. Unfortunately, this is
now reflective of the governments
approach to supporting a creaking and
unfair rating system to ensure that the
tax take does not diminish.
Jerry Schurder is head of rating at Gerald
Eve. Graham Chase is chairman of Chase &
Partners, past president of RICS, and president
of the Association of Town and City
Management.
to secure bank funding, according to
this landmark release of lending data
for more than 9,000 postcodes,
published by the banks for the first
time this week. Locations in Cardiff,
Birmingham, Glasgow, Yorkshire,
Exeter, Milton Keynes, Shrewsbury,
Aberdeen, Hereford and Newcastle-
upon-Tyne all made their way into the
top 50 postcode sectors with the most
reported SME lending.
If you believed everything you read,
you might think banks dont lend to
businesses outside London. This vast
stock of evidence shows that this is
just not the case. In fact, when you
compare the distribution of SMEs
across the country with this data, you
find that London and the South East
receive a lower percentage of bank
borrowing than their percentage of
SME turnover. London has 29 per cent
of the countrys small and medium-
sized business turnover, according to
the Department for Business. And yet
our aggregate postcode lending
figures show that the capital secured
21 per cent of the published SME
borrowing.
Its been a mammoth exercise
pooling this data which covers not
just business lending, but also
mortgages and personal loans. Lenders
have worked hard not to compromise
customers confidentiality and to
protect the privacy of businesses as
well as individuals.
But is such incredibly granular
detail about who borrows what in
England, Wales and Scotland actually
of any use other than as brain fodder
for statistic junkies like me?
Well, more transparent markets
function more effectively. Some
lenders have told me that they will
interrogate this data to see if there are
parts of the country that are not
receiving the access to finance they
should be. Imagine how useful it
could also be in helping government
policy, or in supporting challenger
banks or other new lenders that are
thinking about where to focus their
resources.
So Im optimistic that this
landmark move to greater
transparency by lenders could allow
anomalies to be spotted and, in time,
lead to better-functioning markets.
However, I should add a note of
caution these figures must be seen
in context. A northern postcode sector
with low mortgage lending is not
necessarily evidence of a North/South
divide. It may simply be because it
relates to a rural area with few
properties. Similarly, a sector with
little SME borrowing may be largely
residential.
Postcode lending data could prove
really useful to banks, businesses and
society at large but it must be used
sensibly.
Anthony Browne is chief executive of the
British Bankers Association.
nANTHONY BROWNE
Why bank data transparency could lead to a better functioning market
U
p
d
a
t
e
y
o
u
r
s
e
lf
a
t
C
I
T
Y
A
M
.
c
o
m
Government is making high streets
suffer and the situation may worsen
17
THURSDAY 19 DECEMBER 2013
Airport debate
[Re: Its time to kick politicians out of the crucial
debate on airport expansion, Tuesday]
The CBI recently noted that direct flights open doors
to new trade. We must act on airports, and
Heathrow is the best option. It would be quicker to
build, and be cheaper than a new Thames Estuary
hub. It would be more convenient, particularly with
the completion of Crossrail. But the airport debate is
a political minefield, and Heathrow expansion is
politically toxic. Opponents like Zac Goldsmith, for
example, have threatened by-elections. The author
is right: we must move forward. And to do so, we
must depoliticise the debate.
Paul Wheeler
Would the author like to come round to my house
and spend a few nights here? Hed love it being
woken up at 4.40am by incoming flights, unable to
hear what youre saying outside on the pavement,
no respite from the noise. I cant recommend it
highly enough.
Elizabeth Balsom
International business people do not want to fly
into Gatwick, and the two Heathrow schemes are
merely sticking plasters. The only option for
serious consideration is Boris Johnsons farsighted
and exciting option.
Phil Hicks
With plastic banknotes set to arrive in 2016,
will cash soon disappear entirely anyway?
YES
While there is a lot of merit in introducing plastic banknotes, they may not
actually be relevant in 10 to 15 years. We are moving in the direction of
becoming a cashless society, with non-cash payments predicted to overtake
cash ones in 2015. We havent yet reached the tipping point for a cashless
existence to be considered a social norm, but 10 years ago mobile banking
seemed a far off innovation; today it is commonplace. Retina scans, and
finger and hand print identification are now a reality in Spain and Brazil, and
will continue to become more mainstream. The next generation of banking
customers are sophisticated users of technology from birth, and will have a
completely different banking experience from the one their grandparents
enjoyed. The challenge for banks will be to ensure their systems are secure
and customers have uninterrupted access to funding. If not, their customers
might start demanding access to old-fashioned cash again!
David Sayer is global head of banking at KPMG.
David Sayer
NO
Adrian Kamellard
The announcement by the Bank of England yesterday reconfirms the vital role
cash plays in our day-to-day lives, as well the industrys commitment to
ensure payments are fit for the future. Last year, just over half of payments in
the UK were made in cash, demonstrating how important it still is. During the
economic downturn, for example, we believe people returned to cash to help
them budget. And our forecasts predict that cash will be around for some
time to come. Although its usage will drop by around a third by 2022, it will
still play a significant role. Ultimately, our future payments landscape will be
decided by consumer choice. Increasingly, well choose to use a wider range
of payment methods alongside cash, like mobile payments, cards or internet
payments. Which method we choose will depend on the situation were faced
with and whats appropriate at that time. But claims that we are headed
towards a cashless future are premature.
Adrian Kamellard is chief executive at the Payments Council.
nSTEVE WEBB
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Over the past year, 52,000 jobs have been lost in the
public sector. 537,000 created in the private sector.
@anthonybmasters
Fall in unemployment rate accelerating as economy
picks up. Could be down to 7 per cent by mid-2014.
@asentance
Miliband says hed rather the rich paid less tax if they
earned less income. Economics of envy, not reality.
@OliverCooper
2013 was a great year for Parliament. Speaker John
Bercow deserves some of the credit.
@DouglasCarswell
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T
HIS week, the Institute for
Fiscal Studies told people born
in the 1960s and 1970s that
they will be worse off than
their parents when they retire.
This was mainly down to falls in
income due to the financial crash, and
lower savings rates. But another
reason is the long-term decline of
defined benefit (DB) pensions.
Since 2007, the percentage of final
salary pension schemes open to new or
existing members has more than
halved. The latest figures show that
just 16 per cent of schemes remain
open to new entrants, with the total
number of schemes down to around
6,400 from around 8,000 just eight
years ago.
With figures like these, some argue
we should simply throw in the towel. I
disagree. I want to build a fairer society
and thats why I am working to make
sure people get better pensions. If we
do nothing, good quality, salary-linked
pension schemes could disappear alto-
gether.
Today is the final day of the govern-
ments consultation on reshaping
workplace pensions. I accept that some
employers will still close their DB
schemes due to cost and volatility, but
I also know many will want to
continue to offer their staff quality
pensions.
We want to create a legal framework
that enables employers to choose more
flexible DB schemes. This will share
investment risks more equally, and
help employers to keep offering the
best possible workplace pensions,
including new forms of salary-linked
schemes.
For employees, these flexible
schemes will provide the certainty of a
pension where the benefits are
defined such as being linked to salary
and the security that the promise is
backed by their employer. For employ-
ers, the cost of these schemes will be
less volatile, and they will have much
more flexibility over the type of bene-
fits they can provide. Importantly, peo-
ple will keep all the rights they have
already built up, and any new flexibili-
ty would only apply to future accruals.
We propose removing statutory
requirements for the indexation of
pensions in payment. Employers
would continue to bear the risks asso-
ciated with providing a DB promise,
but future inflation risk of pensions in
payment would be borne by the
scheme member. The statutory
requirement to index pensions is cur-
rently capped at 2.5 per cent, so mem-
bers already bear some inflation risk.
Making it easier to change scheme
pension age would help employers
take account of changing assumptions
on longevity to limit their exposure to
increased costs. Let me reiterate these
changes would not affect the pension
rights people have already built up.
But they will help stem the decline in
defined benefit schemes.
Further, we will give employers the
flexibility to pay additional, discre-
tionary benefits above the DB element
to employees when the funding posi-
tion allowed. We expect many employ-
ers will continue, as now, to go beyond
the statutory minimum on indexation
of pensions in payment and survivors
benefits.
After decades of decline in quality
schemes, we can simply sit by and do
nothing, or we can save what is best
about British salary-related pensions,
for the sake of future generations.
Steve Webb is minister of state for pensions.
We should not accept a
long-term decline in
salary-linked pensions
C
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THURSDAY 19 DECEMBER 2013
Heres our pick of the classiest
Christmas jumpers this winter
AGENT PROVOCATEUR BOODLES BREMONT BVLGARI CASTLE FINE ART
CHURCHS CROCKETT & JONES GUCCI GRAND CAF HARRYS OF LONDON
HERMS I MPERI AL CI TY JONES LANG LASALLE JO MALONE LONDON
KIEHLS SINCE 1851 KOJIS LINKS OF LONDON LORO PIANA LULU GUINNESS
LOCCITANE MOLTONBROWN MONTBLANC OMEGA PAULA. YOUNGFINECHOCOLATES
PAUL SMITH PENHALIGONS PRETTY BALLERINAS ROYAL EXCHANGE JEWELLERS
SAGE BROWNFINE LEATHER SEARLE & CO JEWELLERS SAUTERELLE RESTAURANT
SMOKER S PARADI SE SMYTHSON TATEOSSI AN THEO FENNELL
TI FFANY & CO. WATCHFI NDER & CO. WATCHES OF SWI TZERL AND
THE ROYAL EXCHANGE, BANK, CITY OF LONDON, EC3V 3LR
STORE TRADING HOURS 10AM - 6PM RESTAURANTS & BARS 8AM - 11PM
WITH SPECIAL EXTENDED SHOPPING HOURS THROUGHOUT DECEMBER
FOR FURTHER I NFORMATI ON VI SI T WWW. THEROYALEXCHANGE. CO. UK
Tiffany Legacy Diamond
Drop
Earrings
set
in
P
latinum
,T
iffa
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&
C
o
.
@
cityam.com
LIFE&STYLEFASHION
@cityamlife
Knits
the season
to be jolly
For Her: Lucille snowflake
intarsia jumper
390, harveynichols.com
US womens brand Alice & Olivia is
behind this Scandinavian design, made
in a silver and cream viscose blend.
For Him: Denim Grimshaw
Fair Isle jumper
120, website.com
Woven from a premium cotton,
this Tommy Hilfiger jumper is
made all the warmer by a
shawl collar.
For Her: Rampant sporting
ski jumper
79, johnlewis.com
Designed with a crew neck and
ribbing, this wool blend ski
jumper is perfect for those who
hit the slopes as soon as they feel
the chill.
For Him: Onchan Fair Isle crew
neck jumper by Tom Morris
195, tommorris.com
Made with 100 per cent lambs wool,
this classic design is tasteful enough
to keep you warm throughout the
winter months.
For Her: Ted Baker Alexia Fair
Isle jumper
99, johnlewis.com
The three-quarter length sleeves on this
bright yellow jumper keeps it feminine as
well as festive.
For Him: Maison Martin
Margiela jumper
535, mrporter.com
Based on a traditional
fishermans jumper, this chunky
cable knit is made from pure
cream wool.
For Her: Polar bear knitted
jumper
75, frenchconnection.com
A knitted polar bear is the main
attraction on this knit,
surrounded by spots of snow.
Festive in a subtle way, wintry in
every way.
For Him: Polo Ralph Lauren
reindeer jumper
255, ralphlauren.co.uk
This cosy cotton blend should ward
off chilly breezes. It also features a
Nordic-inspired intarsia-knit design.
20
THURSDAY 12 DECEMBER 2013
cityam.com
PLAYSTATION 4
Sony | 349.99
hhhhi
SOME GAMES TO GET YOU THROUGH CHRISTMAS
Assassins Creed IV: Black Flag
The Assassins Creed franchise has been
rumbling on for years but the latest
iteration promises something a bit
different this time you take the role of a
swashbuckling pirate pillaging his way
through the lush Caribbean. The graphics
alone make this worth a look.
Knack
This on-rails adventure isnt one for
hardcore gamers but it will keep the kids
happy on Christmas Day. You control a robot
made of bits of floating metal that can grow
or shrink depending on the available
resources. It looks like a Pixar movie,
although its nowhere near as fun.
Lego Marvel Super Heroes
Lego has been more successful than any
other toy manufacturer in rebranding itself
for the modern age. Its top-selling roster of
child-oriented video games now includes
Marvel Super Heroes and its great fun.
Play as all your favourite heroes as you crash
through lots of blocky levels.
FIFA 14
This is without doubt the most realistic
looking football sim ever created. The
players likenesses are better than ever and
the sense of weight and gravity is second to
none. There are moments when it really is
like watching a match on the telly, but
youre controlling it.
Killzone: Shadowfall
Killzone isnt exactly a classic of its genre
but if you crave a next-gen shoot em up,
this will stop you getting the shakes over
the festive period. Its more of the same in
respect of its story alien, space, war,
blah, blah, blah. You get to shoot stuff and
its quite fun. Simple.
Hands-on review: the new PS4
Its the most powerful console in the world but
is it the one you should buy this Christmas?
EARLY reports that Sonys next gen
console is out-selling Microsofts
Xbox One now seem premature the
latest figures have them locked in a
dead heat. While Microsoft has
pinned its hopes on superior multi-
media options and its
mot i on- s ens i ng
Kinect, Sony has
delivered a
cheaper, slick-
er product
with more
f i r e - p o we r
under the
hood. Heres our
hands-on review.
If console sales were based on looks
alone, we could declare the war over
today. The compact design is a gen-
uine innovation, just the right blend
of futuristic and discreet. The
power and eject buttons are so
small I couldnt actually find them
when I tried to switch the thing on
(they are nestled in the tiny gap next
to the polished Sony panel). The
USB controller ports are also out of
sight in the horizontal central canal.
When you switch the console on, a
blue light flashes across the top of
the unit. The rhomboid design does
mean you lose around an inch and a
half of shelf space, but its a slip of a
thing compared to the Xbox One so
it seems churlish to complain (its
still bigger than the ultra-slim Wii U,
though).
Its a breeze; as close to plug-and-play
as you can get in a unit that needs an
internet connection. The setup proce-
dure is simple and you can seamlessly
sync your PlayStation account with
Facebook to import profile informa-
tion. The inevitable system upgrade is
also significantly quicker than the
Xbox equivalent. From box to home-
screen took ten minutes.
Given Microsoft is best known for
building operating systems, it should
really have the edge over Sony in the
interface stakes. It does. The PS4
home-screen just doesnt have the
intuitive feel or visual clout of its
Windows 8-based rival. It takes a few
minutes to work your way around
the tiered options menus and the
blue, swirly lava-lamp effect in the
background may date badly. Having
said that, its by no means a
disaster its certainly streaks ahead
of the bonkers, messy expanse of
Nintendos Wii U interface.
Xbox controllers have tended to be
better than PlayStation ones and,
while the DualShock 4 is a marked
improvement on the last generation,
it still isnt as good. The main differ-
ence is the addition of a touch-pad
above the analog sticks, which is a
neat idea for
menu navigation,
but isnt really utilised
by any of the crop of launch
games. It also comes with a built-
in speaker that can deliver audio
independently of the main console,
and coloured lights that make it eas-
ier to distinguish between different
players. The sticks are slightly fur-
ther apart, removing the possibility
of your thumbs hitting each other
mid-game. However, after several
hours of continuous use, it still
fatigues the muscles at the base of
your thumbs, which the Xbox con-
troller doesnt.
Part of the reason the PS4 is 80 cheap-
er than the Xbox One is that its not
sold with the camera accessory as stan-
dard (you can buy one for 54.99). The
PlayStation camera is more limited in
its capabilities than the Xbox Kinect
but its programmed to respond to
basic voice commands and the facial
recognition feature works fine.
STEVE DINNEEN
GEEK
SPEAK
@steve_dinneen
APPEARANCE
hhhhh
SETUP
hhhhh
CONTROLLER
hhhii
CAMERA
hhhii
POWER
hhhhh
INTERFACE
hhhii
Sony says the PS4 is the most power-
ful console ever built. As ever, its
hard to judge just how good it is until
game developers catch up with the
hardware. If the graphics in the new
Assassins Creed are a sign of things
to come, its going to be awesome.
LIFE&STYLE TECHNOLOGY
Virtualisation and cloud computing made simple.
IBM System x servers and solutions.
When moving to a virtualised or private cloud environment, taking the first step is usually
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visit: http://www.ibm.com/financing/uk/lifecycle/acquire/xsolutionfinancing.html Rates and offerings are subject to change, extension or withdrawal without notice. Prices include VAT at a rate of 20%.
IBM hardware products are manufactured from new parts or new and serviceable used parts. Regardless, our warranty terms apply. For a copy of applicable product warranties, visit
http://www.ibm.com/servers/support/machine_warranties. IBM makes no representation or warranty regarding third-party products or services. IBM, the IBM logo, Storwize, System x and Express are registered
trademarks of International Business Machines Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. For a current list of IBM
trademarks, see www.ibm.com/legal/copytrade.shtml. Intel, the Intel logo, Xeon and Xeon Inside are trademarks or registered trademarks of Intel Corporation in the U.S. and/or other countries. All prices and savings
estimates are subject to change without notice, may vary according to configuration, are based upon IBMs estimated retail selling prices as of 10/10/13 and may not include storage, hard drive, operating system or
other features. Reseller prices and savings to end users may vary. Products are subject to availability. This document was developed for offerings in the United Kingdom. IBM may not offer the products, features, or
services discussed in this document in other countries. Contact your IBM representative or IBM Business Partner for the most current pricing in your geographic area. 2013 IBM Corporation. All rights reserved.
Read the TBR white paper
See how IBM's approach to Virtual Desktop Infrastructure delivers simplicity.
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Contact the IBM Team to help you connect to the right IBM Business Partner.
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2U form factor capable of 24 x 2.5" drives (up to 120 drives with expansion units)
Virtualisation of internal storage and thin provisioning for improved storage
utilisation
Optimised costs for mixed workloads by using IBM System Storage

Easy
22
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
7pmLive World PDC Darts
Championship 12amNFL A
Football Life 1amCapital One Cup
Football 2amThe Rugby Club 3am
Football League Gold 3.30am
Ringside 4.30amCapital One Cup
Football 5.30am-6amFootball
League Gold
SKY SPORTS 2
7pmCapital One Cup Football
8pmThe Rugby Club 9pm
Ringside Review of the Season
10pmCapital One Cup Football
11pmRugby Club 12amRingside
Review of the Season 1amSquash
2amFootball League Gold 2.30am
FIFA 3amWatersports World
4am-6amDarts Gold
SKY SPORTS 3
7pmPremier League World
7.30pmLive Greyhound Racing
9.30pmPremier League World
10pmWWE: Late Night Raw
12amWWE: NXT 1am
Thrillseekers 1.30amSingapore
Marathon 2.30amPremier League
World 3amFootballs Greatest
3.30amThrillseekers 4amSquash
5am-6amSingapore Marathon
BRITISH EUROSPORT
6.45pmLive Winter Universiade:
Alpine Skiing 7.45pmTennis: Mats
Point 8.15pmSports Excellence
8.30pmEquestrian 9pmLive
Equestrian 10.05pmStrongest
Man 11pmWorld Series by
Renault 11.45pm-12.30amWinter
Universiade: Cross-Country Skiing
BT SPORT 1
7pmBT Sport Live 7.30pmLive
Conference Football 10pmLifes a
Pitch 11pmUFC Ultimate Insider
11.30pmUFC Unleashed 12.30am
NBA Action 1amLive NBA
3.30am-6amLive NBA
SKY LIVING
7pmCSI: Crime Scene
Investigation 8pmObese: A Year
to Save My Life 9pmDracula
10pmA Moody Christmas: Dan
introduces his new girlfriend to the
family. 10.35pmSpa: Alisons love
life takes a turn for the better.
11.35pmChicago Fire 12.35amA
Moody Christmas 1.10amInside:
Americas Toughest Jail 2.10am
Emergency Abroad 3.05amInside:
Americas Toughest Jail 3.55am
Airline USA 4.20amEmergency
Abroad 5.10am-6amNothing to
Declare
BBC THREE
7pmGreat Movie Mistakes 2013
7.15pmAtlantis 8pmDont Tell the
Bride: Christmas on the Slopes
9pmChristmas on Benefits 10pm
Him & Her: The Wedding 10.30pm
EastEnders 11pmFamily Guy
11.45pmAmerican Dad! 12.30am
Him & Her: The Wedding 1am
Christmas on Benefits 2amDont
Tell the Bride: Christmas on the
Slopes 3amSnog, Marry, Avoid?
Christmas Special 3.30am-4am
Him & Her: The Wedding
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8.30pmBig Bang
Theory 9pmFILMMax Payne
2008. 11pmRude Tube 12amBig
Bang Theory 1amHow I Met Your
Mother 1.30amCleveland Show
2amRude Tube 2.50amGlee
4.15am-6amUgly Betty
HISTORY
7.30pmPawn Stars 8pmBig Rig
Bounty Hunters 9pmStorage
Wars: Texas 10pmAmerican
Pickers 11pmStorage Wars
11.30pmPawn Stars 12am
Storage Wars: Texas 1am
American Pickers 2am-5am
Duck Dynasty
DISCOVERY
7pmPhilly Throttle 8pmJungle
Gold 9pmNaked and Marooned: Ed
Bares All 10pmWheeler Dealers
11pmAuction Hunters 12amNaked
and Marooned: Ed Bares All 1am
You Have Been Warned 2amWhale
Wars 3amNaked and Marooned:
Ed Bares All 3.50amYou Have
Been Warned 4.40amAmerican
Chopper 5.30am-6amThe Gadget
Show: World Tour
DISCOVERY HOME &
HEALTH
7pmDeliver Me 8pmHomes
Under the Hammer 9pmWanted
Down Under 10pmCowboy
Builders 11pmHomes Under the
Hammer 12amHospital Sydney
1amWanted Down Under 2am
Cowboy Builders 3amLottery
Changed My Life 4amFrom Here
to Maternity 5am-6amDeliver Me
SKY1
8pmInside RAF Brize Norton
9pmMoone Boy 9.30pmRoad
Wars 10pmTrollied 11pmRoad
Wars 12amBrit Cops: Frontline
Crime UK 1amBrit Cops 2amCop
Squad 3amBrit Cops 4amDog
the Bounty Hunter 5am-6am
Airline
BBC2 ITV CHANNEL4 CHANNEL5
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6pmBBC News
6.30pmBBC London News
7pmThe One Show: Topical
stories from around the UK.
7.30pmEastEnders; BBC News
8pmThe Great Train Robbery:
The Flying Squad investigates
the robbery. Jim Broadbent
stars in the concluding part.
9.30pmMrs Browns Boys
10pmBBC News
10.25pmRegional News
10.35pmThe Royle Family
Christmas Special
11.35pmThis Week
12.20amSkiing Weatherview
12.25am-6amBBC News
6pmCelebrity Eggheads
6.30pmStrictly Come Dancing
It Takes Two
7pmHairy Bikers Christmas
Party
8pmCHOICE Alex Polizzis
Perfect Christmas
9pmThe 12 Drinks of
Christmas
10pmMock the Week Again
10.30pmNewsnight: Weather
11.20pmTudor Monastery
Farm
12.20amSign Zone: The Romanians
Are Coming? Panorama 12.50am
This Is BBC Two 4am-6amBBC
Learning Zone
6pmITV News London
6.30pmITV News
7pmEmmerdale
7.30pmThe Greatest Gift:
Tonight
8pmEmmerdale
8.30pmNew Youve Been
Framed! at Christmas
9pmLive Celebrity Who
Wants to Be a Millionaire?
10pmITV News at Ten
10.30pmITV News London
10.35pmUtopia
12.35amJackpot247 3amThe
Greatest Gift: Tonight 3.25amITV
Nightscreen 5.05am-6amThe
Jeremy Kyle Show
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmGeorge Clarkes Amazing
Christmas Spaces
9pmCHOICE Educating
Yorkshire at Christmas
10pmWhat Happens in Kavos
11pmGogglebox
11.50pmKaraoke Nights
12.45am24 Hours in A&E
1.45amEmbarrassing Bodies: Back
to the Clinic 2.40amOne Born Every
Minute 3.35amAPlace in the Sun:
Winter Sun 4.30amDeal or No Deal
5.25am-6.10amCountdown
6pmThe Dog Rescuers
6.30pmNewsTalk Live
7pmWorlds Strongest Man
2013: Qualifiers: 5 News
Update
8pmStop! Police Interceptors:
5 News at 9
9pmMobs & Yobs: Caught on
Camera
10pmCHOICE Person of
Interest
11pmExcessive Compulsive
Collectors 12amSuperCasino
3.05amRed Sea Jaws 3.55am
HouseBusters 4.20am
HouseBusters 4.45amGreat
Artists 5.10amNicks Quest
5.35am-6amWildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6 7
8
9 10
11
12 13 14
15 16
17 18 19 20
21
22 23
7 22 16
45
35
12 8 7
6 15
10 14
35 23
24 12 11
38
45
4 8 9
3
6
16
5
33
32
14
22
11
14
13
34
16
11
6
29
39
17
18
17
13
5
15
17
ACROSS
1 Implement used to
sharpen razors (5)
4 With the mouth
wide open (5)
8 Military aircraft that
drops explosive
devices (6)
9 Grip (5)
10 Lady Nancy ___,
rst woman MP (5)
12 Suitable and
tting (11)
15 Culinary ingredient
used to coat food (11)
17 David ___, singer
whose albums include
Ziggy Stardust (5)
20 Bamboo-eating
mammal (5)
21 Large stinging
paper wasp (6)
22 Tine (5)
23 Domestic birds (5)
DOWN
1 18th Greek letter (5)
2 Remark expres-
sing careful
consideration (11)
3 Explode with
a bang (3)
4 Arab garment (3)
5 Express or
direct through
movement (11)
6 Skill (3)
7 Uncanny (5)
11 Substance used to
avour food (5)
13 State of equality (3)
14 Metal ring that
opens a can (3)
15 Early form of
modern jazz (5)
16 Ordered series (5)
18 Which person? (3)
19 Work unit (3)
20 Pin (3)
D
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M U R A L P U R S E
O W U O I
V I S A S O L V E D
I P I L A U I E
E R A T O T E N O R
R L A P G
S H E L L U P E N D
A P E N T R Y U
U G A N D A E E L S
N R G S T
A N T O N U S U R Y
3 1 8 1 2 3 1
4 8 6 9 3 9 8 2
2 4 8 7 5 9 1 6 3
1 2 5 2 1 9 8
7 9 8 4 8 9 7 6
1 7 2 3
5 7 9 8 6 4 9 8
7 9 4 1 2 2 1
2 5 8 9 3 7 1 6 4
1 2 6 2 8 3 7 9
3 8 9 4 9 8 6
4
4
4
4
4
4
4
4
4
The nine-letter word was
DISHWATER
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
THURSDAY 19 DECEMBER 2013
ALEX POLIZZIS PERFECT
CHRISTMAS BBC2, 8PM
The hotelier presents a guide to
entertaining over the festive period,
showing how to transform a home into
the perfect seasonal environment.
EDUCATING YORKSHIRE AT
CHRISTMAS CHANNEL4, 9PM
A return visit to Thornhill Community
Academy to find out how the pupils
lives have changed since they were
first filmed.
PERSON OF INTEREST
CHANNEL5, 10PM
The Machine selects the social security
number of cab driver Fermin Ordonez,
who is trying to raise money to get his
family out of Cuba.
TVPICK
THURSDAY 19 DECEMBER 2013
23
I am proud Novak invited me to
become his head coach. Im sure we
can achieve great things together

SPORT
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INTERIM Tottenham boss Tim
Sherwood admits he is the dark over
his future after his tenure started in
disaster last night with a Capital One
Cup defeat at home to London rivals
West Ham.
Spurs led until 11 minutes from
time, through a ferocious volley from
striker Emmanuel Adebayor, but
Hammers winger Matt Jarvis slammed
an equaliser and substitute Modibo
Maiga headed an 85th minute winner.
The late drama earned West Ham
their second triumph at White Hart
Lane this season and a semi-final
against Manchester City, but put a
major dent in Sherwoods hopes of
landing the job permanently.
I dont know if Ill be Spurs manag-
er, I havent spoken to the chairman.
We have to have a chat and see, said
the Tottenham coach, who stepped in
following the sacking of Andre Villas-
Boas on Monday.
It has to fit me and the club. The
club have to make the right appoint-
ment. As you can imagine the list is as
long as your arm. There are a lot of big
names in the frame. It depends who
the chairman thinks is the right one.
Its new for me. Ive enjoyed it. Im
Maiga inflicts
debut disaster
on Sherwood
trying to get the best out of them. Its
difficult to get the message across of
how I want to play in a few days.
Jubilant West Ham manager Sam
Allardyce said his side sensed
Tottenham were there to be finished
after Jarvis levelled the scores.
We saw the shaken nerve ends of
Tottenham when we scored, he
added. We then went for the jugular.
Our substitutes, who came on with
fresh legs, exploited the spaces.
Tottenham, restored to a 4-4-2 by
Sherwood, bombarded the visitors in
the first 20 minutes, Adebayor, for-
ward Jermain Defoe and winger
Andros Townsend all narrowly
missing the target.
It was not until the 67th minute that
their dominance paid Defoe scurry-
ing down the left before crossing for
Adebayor to crash a flying volley past
goalkeeper Adrian and even then it
proved insufficient.
Midfielder Matt Taylor teed up Jarvis
to equalise and moments later
Mohamed Diame swung in a cross
from the right for Maiga to meet with
a formidable downward header and
plunder his first goal in a year.
TOTTENHAM HOTSPUR...............1
WEST HAM UNITED....................2
BY FRANK DALLERES
CAPITAL ONE CUP
SEMI-FINAL DRAW
Sunderland v Manchester United
Manchester City v West Ham United
Ties to be played over two legs. First
legs 7/8 January, second legs 21/22
West Ham forward Modibo Maigas winning late header was his first goal for a year
A HAILSTORM stopped Manchester
Uniteds Capital One Cup quarter-
final at Stoke last night before goals
from Ashley Young and Patrice Evra
set up a last-four clash against
Sunderland.
Players were called off for 10
minutes when the downpour
prompted referee Mark Clattenburg
to halt play half an hour into the
match, with the score 0-0.
Young scored his first for 18
months when he swapped passes
with Javier Hernandez and clattered
home from the edge of the penalty
area on 62 minutes. He then fed
left-back Evra, who used his less
favoured foot to bend a glorious
shot into the far top corner.
United could face neighbours
Manchester City in the final.
Storm delays
United victory
BY SPORTS DESK STAFF
TENNIS world No2 Novak Djokovic
has joined forces with six-time
grand slam champion Boris Becker
in a bid to reclaim top spot in the
rankings from Rafael Nadal.
Djokovic has hired the German
as his head coach, following the
path taken by Britains Andy
Murray, who has made his major-
winning breakthrough after
teaming up with another former
great, Ivan Lendl.
The Serb won the Australian
Open and season-closing World
Tour Finals in London this year,
but was outstripped by Nadal as
the Spaniard mounted a
spectacular comeback from a
career-threatening knee injury,
claiming the French Open and US
Open titles.
Djokovic hires
Becker as coach
BY FRANK DALLERES
IN BRIEF
Ex-Team Sky rider fails drug test
n CYCLING: Former Team Sky rider
Michael Rogers has been suspended after
the Australian tested positive for banned
substance clenbuterol in October, while
competing for new team Saxo-Tinkoff. It
comes after Team Skys Jonathan
Tiernan-Locke was charged with an anti-
doping violation relating to 2012, before
he joined the British outfit.
Journeyman Sannino succeeds Zola
n FOOTBALL: Watford have named
journeyman Italian manager Giuseppe
Sannino as Gianfranco Zolas
replacement. The 56-year-old, who was
sacked by Serie A side Chievo last month,
has previously coached 12 sides in his
homeland, including Palermo and Siena.
Former Chelsea star Zola resigned from
the Championship club this week.
Results
F00TALL
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FFA CLb W0PL CHAMP0N5HP
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FXTbPE
Skr||| Prem|er
Or|ms|] 1 K|erm|rster ................................................................. (.45pm)
FORMER England cricket coach Peter
Moores admits he is unsure whether
his successor Andy Flower still has
the motivation to continue in his
role beyond the current doomed
Ashes tour.
But Moores insists that Flower,
who has refused to commit beyond
the end of the Test series, is the right
man to inspire a response to losing
the urn this week if he has the
motivation.
If hes hungry, yes, said Moores,
who left the post in January 2009.
Hes the same as the players, youve
got to have the hunger and desire in
this job, youre representing the
country. Andy plays his cards so
close to his chest, its difficult to
know. If hes hungry, hes good
enough, no doubt about it.
Australia have released batsmen
Moores doubts England coach
Flower has hunger to continue
BY FRANK DALLERES
David Warner and George Bailey and
all-rounder Steven Smith to play in
limited-overs Big Bash matches this
week, having taken an unassailable
3-0 series lead over England.
Bowler Ryan Harris has been
forced to apologise, however, after he
posted expletive-laden messages on
Twitter during celebrations
following Tuesdays triumph.
Harris, whose posts railed against
casino doormen who were
preventing him attending a party
laid on by Aussie hero Shane Warne,
said: As Ive heard many times
before, dont tweet when youve had
a drink. I made a silly mistake and I
tweeted something I probably
shouldnt have.
I apologise to Crown [casino], it
was a silly thing to do they let me
in in the end, so they did the right
thing. Obviously they have to do
their job, and they were doing it.
NORTHAMPTON have been fined
60,000 for releasing wing George
North to play in Waless 30-26
defeat to Australia last month.
Premiership Rugby rules forbid
clubs from allowing non-English
players to take part in Test
matches outside the International
Rugby Boards designated window.
Saints have admitted the breach
and will not appeal the fine. They
have previously cited an
agreement with North, made
when he signed earlier this year,
that he would be allowed to
represent Wales when selected.
The issue could reoccur next
year, as Wales have again
scheduled a fourth autumn
international, against South
Africa, which is due to take place
after the IRBs cut-off date.
Northampton
cop North fine
BY FRANK DALLERES
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