BUSINESS WITH PERSONALITY

Senior Tory
hits back at
Boris claims
BORIS Johnson was last night on
the receiving end of a rebuke from
a top minister after the Mayor
called on the government to stop
pussyfooting around and invest in
Londons infrastructure.
Iain Duncan Smith, the work
and pensions secretary, said Boris
is wrong to say the government
was not doing enough to stimulate
growth. The Prime Minister and
the chancellor do not sit there
twiddling their thumbs, he told
BBCs Newsnight.
Johnson had used an interview
with the Evening Standard to call
on the government to back his
plans for airport expansion,
blaming inertia for the lack of
progress on this and other
economic growth measures.
Its alright for Boris and others
to say get on and do it, Duncan
Smith said of forthcoming reforms
to jobs market. But this has to be
done in the context of whats good
for the economy and still allow us
to develop people in work rather
than harming them.
Johnsons contrary stance
revived speculation that he is
positioning himself for a future
run for the Conservative party
leadership. His cause was
boosted by yesterdays
Ipsos Mori poll that
revealed two-thirds of
British adults have
adopted a more
positive view of
the Mayor
following the
Olympics.
Virgins Sir Richard Branson (left) said Virgin did not outbid First Group, led by Tim OToole (right), as it did not want to risk certain bankruptcy
RAIL group FirstGroup yesterday reas-
sured investors that potential losses on
the hotly-contested West Coast main
line could not exceed 265m, as shares
in the firm slumped on news it had
won the contract.
The rail operator yesterday beat
off a bid from incumbent operator
Virgin Rail Group to land the
Scotland to London route, with
promises it will pay the government
5.5bn over 13 years. Virgins Sir
Richard Branson branded the bid
insane.
But the company will cap the
amount it could potentially lose on
the franchise by using a ring-fenced
subsidiary to secure the deal, which
only has 265m of upfront capital at
risk. The deal is a similar
arrangement to that used by
National Express to secure the East
Coast mainline.
Controversially, the government
had to pick up the tab for the
botched East Coast deal which lost
20m in its first half year after the
firm sought to renegotiate its
contract.
National Express walked away but
was able to insulate itself from
potential losses and further
government action by using the
ring-fenced franchise arrangement.
The FirstGroup franchise has a
190m fixed-rate loan without
www.cityam.com FREE
indexation and 10m of ordinary
share capital.
The franchise also includes a
promise to pay a 45m inflation
linked performance bond, a 5m
season ticket bond and to make
15m in station repairs.
An equity analyst who did not
want to be named, said: This is
asymmetric risk. If it all goes
wrong, FirstGroup can walk away.
The governments decision to
award the contract to FirstGroup
drew a flurry of criticism from
Virgin founder Sir Richard and
caused shares in FirstGroup to fall
eight per cent yesterday. Sir Richard
said that Virgin did not outbid
FirstGroup because it did not want
to risk letting everybody down with
almost certain bankruptcy at some
time during the franchise.
He also blasted as insanity, the
Department for Transports
decision to award the contract to a
bidder promising higher revenues.
FirstGroup shares opened at 264p
but ended the day at 243p as the
markets digested the news.
A spokesman for FirstGroup said
the structure used was a standard
one in rail franchises.
The DfT said the bid was
deliverable and financially
robust.
HODGSONS ENGLAND BEAT EURO 2012 FINALISTS ITALY
BY JAMES WATERSON
FTSE 100 5,833.04 -31.74 DOW 13,164.78 -7.36 NASDAQ3,030.93 +13.95 /$ 1.57 unc / 1.27 unc /$ 1.23 unc
BY MICHAEL BOW
FIRSTGROUP CAPS
RAIL BID LIABILITY
THREE LIONS ROAR
ISSUE 1,697 THURSDAY 16 AUGUST 2012
EXAMINING
OUR A-LEVELS
See Pages 5, 14
See Page 20
DAVID HELLIER: Page 2

Certified Distribution
28/05/2012 till 01/07/2012 is 132,857
Virgins Sir Richard Branson calls the winning bid for the west coast line insane
Johnson wants
a new airport
IN BRIEF
HSBC reveals names in tax probe
nGlobal bank HSBC has handed over
details of current and former
employees to the US authorities, it
confirmed yesterday, as part of a tax
probe that almost sank rival bank UBS
in 2009. As a result the bank could
now face legal action from individuals
whose details have been revealed,
lawyers representing them said. In a
letter, the bank said it had passed on
documents, in which their names
appear, on the request of US
authorities looking to hunt down US
citizens with untaxed money held in
Swiss accounts. After passing on a first
set of documents earlier this year,
HSBC has sent the new batch to the US
Department of Justice and the
Securities and Exchange Commission
in an effort to reach a settlement over
the investigation.
Santander eyes $4bn Mexico IPO
nSpanish bank Santander hopes to
raise as much as $4bn (2.55bn) in an
initial public offering of a portion of its
Mexican unit, Bloomberg reported last
night. The bank will probably sell the
shares after the first week of
September, with one source saying
the bank may sell a 25 to 30 per cent
stake. The unit produced a profit of
5.3bn pesos (257m) in the second
quarter and is well placed to benefit
from the countrys continued
economic growth. Chairman Emilio
Botin confirmed at the end of June
that his company was looking to float
part of the Mexican business. Last
month the banks suffered a
substantial drop in profits after
removing bad loans from its books.
Brazil lures private sector
in bid to boost economy
BRAZILS President yesterday
announced that up to 133bn real
(42bn) will be put into boosting
infrastructure work across the coun-
try, in a bid to kick-start the suppos-
edly emerging economy back to life.
President Dilma Rousseffs plan
will utilise the private sector in
building roads and railways, while
delivering other supply side reforms.
The reforms include liberalising
labour laws and privatising some
areas of infrastructure, while
Rousseff will also aim to slash taxes
on electricity and mitigate the gov-
ernments pension costs.
Further measures are expected to
be revealed in the coming weeks.
Rousseffs stance signals a change in
direction from Brazilian govern-
ments previous attempts to bolster
demand through more typical stim-
ulus packages.
This would mark a welcome
change to the governments inter-
ventionist bent to its approach to
economic policy, commented Nick
Chamie, an emerging markets
researcher at RBC Capital Market.
Brazil makes up the B in the so
called BRICS group of emerging
economies, along with Russia, India,
China and South Africa.
Its economy boomed by over 7.5 per
cent in 2010, yet growth slowed to
Barrick Gold explores Africa sale
Canadian miner Barrick Gold has been
exploring a sale of its 74 per cent stake in
African Barrick, the London-listed gold
producer, in a move that could prompt a
full takeover. Barrick has been working
with UBS to consider its options for
African Barrick, which the Canadian
miner, the largest gold producer globally,
partially floated in 2010.
US retailers to create mobile wallet
A group of the largest US retailers,
including Walmart, Target and Best Buy,
on Wednesday announced plans to create
a joint mobile wallet service called
Merchant Customer Exchange, adding yet
another competitor to the already
crowded market for mobile phone
payment services.
Holcim shakes up top management
Holcim is to reshuffle its senior
management as its new chief executive
Bernard Fontana continues his drive to
improve profitability at the worlds largest
cement maker by sales. Cement
manufacturers have struggled with rising
energy and raw materials prices over the
past 18 months.
HMRC names worst tax fraudsters
The taxman will today name Britains 20
most wanted tax fraudsters, who it claims
have collectively cheated the Exchequer
out of more than 700m. Photographs of
the tax evaders will be posted to the
Flickr photo website this morning.
Broadband speeds third higher
Upgrades to the nations broadband
network has boosted average broadband
speeds to 9Mbps from 7.8Mbps six
months ago. The average speed is a third
higher than at the same time last year.
Soros has $10m Facebook investment
George Soros, the legendary investor, has
revealed he spent around $10.6m (6.7m)
buying 341,000 shares in the social
networking site Facebook in the second
quarter. This is contrary to move of other
investors who have been defriending
Facebook ever since it listed in May.
S&P cuts Nokia further into junk
Standard & Poor's has cut phone maker
Nokias credit rating further into junk
territory as it expects profits to fall in the
second half of the year.
Samsung and Apple urged to talk
The judge overseeing the patent trial
between Apple and Samsung has asked
the chief executives of both companies to
talk one more time to try to settle the
case before it is handed to a jury.
Union split on Caterpillar offer
Union leaders are split on the merits of a
pay offer made by American machinery
giant Caterpillar in an effort to end a
strike that began May 1 at the company's
plant in Joliet, Illinois. Some workers
would receive a three per cent rise.
ITALIAN banks are struggling
under the growing weight of non-
performing loans as the economy
continues to perform poorly,
according to a report out today
from Deloitte, and are increasingly
looking to sell off the bad assets.
The survey of senior managers
found 70 per cent expect the
volume of non-performing loans to
rise this year, and 75 per cent
expect to sell bad assets next year.
Of a total combined asset base of
1.7 trillion, the banks studied have
100bn in non-performing loans.
Rising unemployment was seen
as the driver of rising bad debt by
41 per cent of respondents, while
falling property prices and the
global crisis were also blamed.
However the banking sector did
show unexpected strength
yesterday as UniCredit raised
750m in a covered bond issue
the first Italian to do so this year.
The five-year bonds yield came
in at roughly 100 basis points below
the rate on the governments debt,
surprising analysts.
There was huge demand for this
despite it being mid-August, but it
seems like it is because of the lack
of supply in recent months, said
RBS Jan King. It will be interesting
to see whether other large Italian
and Spanish banks try to jump in
this in the coming weeks.
Bad bank debts
hit 100bn and
rising in Italy
Brazilian President Dilma Rousseff wants to revitalise the countrys sluggish growth
2
NEWS
BY TIM WALLACE
BY JULIAN HARRIS
To contact the newsdesk email news@cityam.com
I
have always had a soft spot for Sir
Richard Branson, ever since he
took me on a press trip to Tokyo. He
was warm and friendly and held
great parties in his hotel room until
the early hours of the morning.
It was Virgins inaugural flight to
Tokyo, and to mark the occasion Sir
Richard invited celebrities such as
Patsy Kensit and Swing Out Sister, a
British pop band who had just record-
ed a hit called Breakout. His mother
was there too. The few days were very
jolly and there was no shortage of par-
tying and bonhomie.
Sadly there didnt seem to be a lot of
bonhomie around yesterday as Sir
Richard reacted with venom to Virgin
Rail losing out in its franchise bid for
the west coast route to Glasgow to
First Group.
Sir Richard, who has lost three other
bids, branded the decision insane and
Sir Richard Branson should be more gracious in rail defeat
THURSDAY 16 AUGUST 2012
threatened to pull out of the railway
business altogether.
The new deal sees First Group bid-
ding 5.5bn for the right to operate
the routes from London to destina-
tions including Glasgow, Manchester
and Liverpool, until 2026.
Branson, who bid 4.8bn, said his
company refused to match
FirstGroups bid because of the risk of
almost certain bankruptcy.
In the past Virgin has been outbid
on a couple of other routes, only to
see the winning bidder, on one occa-
sion National Express, and on the
other GNER, fail to complete the con-
tract.
However, there are good reasons to
believe that First Group has a decent
chance of making a success of its new
business. It is looking for growth in
revenues of 10.4 per cent a year,
through a mixture of increasing pas-
senger numbers, price rises, and a
more flexible fare structure aimed at
better utilising capacity during non-
peak hours.
Although the trains are currently
jammed during peak hours, current
capacity levels are only around 35 per
cent. There is bags and bags of
underutilised capacity, says a First
Group spokesman.
First Group says it has managed to
increase passenger revenues by
around 20 per cent a year on its trans-
PENSION WOES FLOOR DAWSON
After weeks of negotiations with the
Pension Fund Body the Pension Fund
Regulator (PPF), the cashmere group
Dawson International was yesterday
forced to call in administrators. The
group was hopeful it could secure a
deal with the PPF that would have
seen the body take an equity stake in
Dawson, and suppliers and sharehold-
ers take some pain but reach a conclu-
sion that could have led to the
survival of the 140 year-old group that
once owned brands like Pringle and
Bannatyne.
Chairman David Bolton is con-
vinced the PPF could have been more
flexible in its approach and could
have reached a deal. What a shame.
Pennine routes and sees little reason
why a similarly healthy increase can
not be achieved on its new route.
Could it be that Sir Richard made a
tactical mistake in bidding so far
below First Group? If he had bid closer
to his rival, he might have stood a
chance.
As an incumbent who could argue
had done a reasonably good job on
the line already, he may have got
away with a slightly lower bid and
still been allowed to keep the fran-
chise. But the difference between the
two bids is too large for any tightly
squeezed government to ignore.
Only time will tell whether First
Group has overpaid or not but in
behaving so petulantly Sir Richard is
winning himself no favours and is
looking like a bad loser. It would have
been better to accept the decision
gracefully.
just over 2.7 per cent last year. And it
will expand by just 2.1 per cent in
2012, the Centre for Economics and
Business Research predicted this week.
These set of measures, if they mate-
rialise, would be a very positive effort
on the part of the government to
address constraints on Brazils long-
term growth potential by addressing
some of its supply-side weaknesses,
Chamie added.
The cost of electricity and labour as
well as poor infrastructure have ham-
pered the south American giants
growth, Chamie said.
Yet economists warned that most of
the measures would be prone to time-
lag, with the benefits potentially not
realised for several years.
Yesterdays announcement suggests
that the government has finally
acknowledged that the economys
problems are not just cyclical in
nature, added Neil Shearing of
Capital Economics.
Yet while the measures are a step in
the right direction... it is equally obvi-
ous that these represent only a small
fraction of what needs to be done,
Shearing warned.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
EDITORS
LETTER
DAVID HELLIER
david.helllier@cityam.com
follow me on twitter: @hellierd
SEVEN banks have been subpoenaed
by US authorities as part of an
investigation into possible
manipulation of the Libor interest
rate, it was revealed last night.
JP Morgan Chase, Deutsche Bank
and Barclays will have to face
questions from a joint probe by New
York and Connecticut investigators
after receiving subpoenas in recent
weeks.
Britains RBS and HSBC have also
been called to provide evidence,
while UBS and Citigroup received
similar demands earlier in the year.
The subpoenas request copies of
communication between executives
related to possible collusion and
other conduct that may have played
a role in alleged rate manipulation,
a person familiar with the matter
said.
Spokesmen for the US
prosecutors declined to comment
on the report.
The scandal shows no sign of
going away with multiple
investigations on both sides of the
Atlantic. Martin Wheatley, the head
of the Financial Services Authority,
is carrying out an urgent review of
Libor for the government and will
report back next month.
In June Barclays, the first bank to
admit it manipulated the
benchmark interest rate, was fined
290m by US and UK authorities.
Seven lenders
subpoenaed in
Libor probe
BY JAMES WATERSON
BRITISH banks may now think twice
about expanding their US operations
because of the newly unpredictable
regulatory environment, bankers,
lawyers and analysts have warned.
The unexpected high-profile accusa-
tions levelled at Standard Chartered
by the New York state Department of
Financial Services (DFS), and subse-
quent $340m (217m) settlement, are
seen by some as bullying tactics, and
could make the US less appealing.
The row has also turned the spot-
light on the complex system of over-
lapping regulators in the US
Standard Chartered is still negotiat-
ing with four other authorities.
The DFS breached all the rules of
regulatory process, said Simon
Morris from law firm CMS Cameron
McKenna, as the regulator broke
cover during settlement negotiations,
cut across four more senior US regula-
tors, and failed to advise the Bank of
England or the Financial Services
Authority what was going on.
By shooting from the hip its leader
Mr Lawsky has single-handedly made
New York a less attractive place to do
StanChart row
hits UK banks
faith in the US
BY TIM WALLACE
business, Morris explained.
And banks are already concerned
that the turmoil could hit any plans to
extend their US operations.
We need a stable platform on which
to build the business, but now there is
a question over how confident we can
be in this regulatory environment,
one top UK bank told City A.M.
Meanwhile Standard Chartered still
has to negotiate a settlement with
four other regulators, although the
fines are expected to be far smaller
than the $340m levied by the DFS.
Typically fines from bodies like the
Department of Justice are in the tens
of millions the US authorities have a
formula to work through, said
Pinsent Masons Tom Stocker.
Chief executive Peter Sands flew to New York to make sure the bank kept its licence
Standard Chartered PLC
9Aug 10Aug 13Aug 14Aug 15Aug
1,440
1,420
1,400
1,380
1,340
1,360
p
1,426.50
15Aug
Nobody at the top of Standard Chartered
has resigned over the Iranian sanction-
breaching charges a stark contrast with
the outcome of Barclays LIBOR scandal.
Peter Sands initially responded slowly to last
weeks allegations. The chief executive was
on holiday and taken by surprise. But since
then he has impressed analysts and
investors by flying to New York and pushing
hard to reach a
settlement, making
sure the bank keeps
its licence, and
avoiding an
embarrassing
public hearing.
Chairman Sir John
Peace (left) has
steered clear of the
public glare through
much of the
episode, more
widely being
perceived as a
driving force behind
efforts to settle
quickly and stop the
firms reputation
taking any further
beating. However, investors are less certain
about group finance director Richard
Meddings (above). He has held senior,
relevant roles since 2002 covering much of
the 2001 to 2007 period focused on by
regulators. Meddings has not been accused
of personal wrongdoing, but analysts fear
any increase in pressure on the bank could
focus on him.
HOW HAVE THE BANKS TOP BRASS BEEN HIT?
THURSDAY 16 AUGUST 2012
3
NEWS
cityam.com
DAWSON Internationals chairman
blasted the UKs emergency pension
fund and the pension regulator yes-
terday as the Scottish cashmere firm
called in administrators.
David Bolton told City A.M. that the
pension protection fund (PPF) was
not fit for purpose after it rejected
Dawsons offer for a rescue package.
The company has been unable to
maintain its enormous pension
fund deficit, many times its
annual revenue.
Bolton said that the PPF had
repeatedly rejected offers of
cash and a stake in Dawson,
without making clear what
the company would need to
offer. Dawsons pension
fund will now receive pro-
tection from the PPF as
the textile firm enters
administration.
Our proposal, which
was all we could possibly
afford, would have deliv-
Dawsons chair
blames pension
as calls in KPMG
BY JAMES TITCOMB
ered significantly more to the PPF
than it is likely to receive from
administration, Bolton said yester-
day. We literally emptied our pockets
and thats what frustrated us, he
added.
The PPFs executive director for
financial risk, Martin Clarke,
responded by saying that companies
can continue to operate while being
covered by the PPF, but that Dawsons
offers were inadequate.
Dawson International, which
runs Barrie Knitwear in Hawick,
manufactures cashmere clothing
for fashion houses and depart-
ment stores around the world.
The mill has been trading
profitably and generated a pre-
tax profit of 1.1m in the
financial year ended 31 March
2012, KPMG said.
KPMG said the Barrie business
will continue to trade whilst it
seeks a buyer.
Employment surges yet again
confounding gloomy GDP data
EMPLOYMENT shot up in the three
months to June, highlighting the
juxtaposition between labour
market and GDP data, according
to Office for National Statistics
(ONS) figures released yesterday.
Some 201,000 more people had
jobs in the second quarter than in
the first, while 46,000 fewer were
unemployed, the data showed.
London led the pack, accounting
for 91 per cent of the fall in
joblessness, and close to half of
the growth in employment
Public sector pay consolidated
its lead over packets in the private
BY BEN SOUTHWOOD sector, with weakly earnings 15
higher on average, but this was
mainly down to around 200,000
lower paid public sector workers
shifting sector.
Bonuses in the financial sector
performed particularly poorly,
falling more than a fifth compared
to June last year though bonuses
in finance were still more than
double those in any other sector.
The data included a number of
record highs, as the labour market
continues to recover solidly despite
the double dip downturn.
Self-employment and part-time
employment hit their highest ever
levels but the job growth was
broad-based, as 74,000 worked full-
time for others. Hours worked shot
up by 20.5m, reinforcing the
robustness of the positive picture.
THE DUKE of Edinburgh has been taken to hospital as a precautionary measure after a
recurrence of a bladder infection, Buckingham Palace said yesterday. Prince Philip, who
is 91, was driven by ambulance to Aberdeen Royal Infirmary while staying at Balmoral
with the Queen, a spokesperson said.
DUKE OF EDINBURGH BACK IN HOSPITAL
Agents reports signal economy-wide slowdown
2005 06 07 08 09 10 11 12
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4
3
2
1
0
-1
-2
-3
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-5
Threemonthsonthesameperiodayearearlier
S
c
o
re
s
Manufacturingoutput
Construction
output
Servicesturnover
Dawson makes cashmere for
global fashion houses
CISCO Systems last night offered
little hope that dire economic
conditions in Europe would come to
an end any time soon but pleased
investors with a 75 per cent dividend
hike as the company posted
quarterly results that beat estimates.
The worlds largest network
equipment maker had spooked
investors three months ago, when
chief executive John Chambers
cautioned that macroeconomic
conditions in Europe could hurt
technology spending.
Ciscos fourth-quarter results beat
estimates, thanks to cost savings
and a continuing restructuring
programme.
Quarterly net income, excluding
items, was $2.5bn (1.6bn) or 47
cents per share, compared with
analysts average estimate of 45
cents a share. Revenue rose four per
cent from the year-ago quarter to
$11.7bn, compared with
expectations of $11.61bn.
The San Jose, California-based
company also said its dividend will
rise to 14 cents per share in the first
quarter of fiscal 2013 and that it
plans to return a minimum of 50
per cent of free cash flow annually
through dividends and share
repurchases.
Solid quarter
sees Cisco hike
dividend 75pc
BY CITY A.M. REPORTER
THE UK economy is suffering a
drubbing across the board, said the
Bank of England in its latest
economic survey yesterday, raising
the prospect of more monetary
intervention, despite the Banks
wait and see attitude revealed by
minutes also released yesterday.
Construction decline worsened,
manufacturing export growth
slowed, investment intentions were
reined in, and labour market
tightening suffered its sharpest
slowdown for over two years, said
the agents survey of conditions.
The monetary policy committee
(MPC) which sets interest rates
and decides on quantitative easing
(QE) rejected further money
Minutes from Banks meeting
suggest further QE is likely
BY BEN SOUTHWOOD
printing and further rate cuts
unanimously, citing existing
interventions. But some members
thought that this decision was
finely balanced, and that a good
case could be madefor more asset
purchases, suggesting further QE
may be on the horizon.
THURSDAY 16 AUGUST 2012
4
NEWS cityam.com
RUPERT Murdochs News
Corporation has opened a review
into anti-corruption practices at
operations including its UK newspa-
pers, the media mogul announced
yesterday.
In an internal email, Murdoch
said the purpose of the review was
to test our current internal
controls and identify ways in
which we can enhance them but
that the probe is not based on any
suspicion of wrongdoing by any
particular business unit or its
personnel.
He added: As you are all aware,
our company has been under
intense scrutiny in the United
News Corp opens official review
into anti-corruption practices
BY JAMES TITCOMB
Kingdom. I assured parliament and
the Leveson inquiry that we would
move quickly and aggressively to
redress wrongdoing, co-operate
with law enforcement officials and
strengthen our compliance and
ethics programme company-wide.
The probe is the latest aspect of a
wider review of governance at
Murdochs UK publishing arm
News International that was
instigated after the publishers
chief executive Tom Mockridge
took over from Rebekah Brooks last
year.
So far, 14 current or former News
International journalists have been
arrested as part of Scotland Yards
investigation into corrupt
payments.
Employment climbs, defying GDP gloom
2006 07 08 09 10 11 12
29.6
29.5
29.4
29.3
29.2
29.1
29.0
28.9
28.8
Recessions UKLFStotal inemployment-millions
SHARES IN JJB Sports dived by
almost a quarter yesterday after a
major US investor wrote off an
investment it made in the
struggling sporting goods retailer
just five months ago.
Dicks Sporting Goods which
came to JJBs rescue in April with a
20m investment, disclosed a pre-
tax impairment charge of $32.4m
in its second-quarter results on
Tuesday. In a statement Edward
Stack, the US retailers chief
executive of Dicks Sporting
Goods, said JJBs performance has
materially deteriorated from its
expectations, partly due to
economic woes in Europe.
JJB hit as Dicks
writes off 20m
BY KASMIRA JEFFORD
G
E
T
T
Y
THE home secretary is opposing plans by her cabinet colleagues to make it easier for
Chinese tourists to get visas amid fears it will lead to a rise in organised crime, according
to a leaked letter. In the letter, Theresa May said that relaxing checks on Chinese visitors
would pose a threat to national security and bring Chinese criminals to Britain.
MAY OPPOSES RELAXING CHINESE VISA RULES
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Alistair Brownlee
2012 Olympic Champion
AS students across the country wake
up today to collect their A-level
results, several City firms have
announced initiatives to encourage
school leavers into finance and
business roles.
In an attempt to lure pupils away
from the conventional route of a
university degree, accountancy firm
KPMG said yesterday it has doubled
the number of training places
available to A-level students, after
receiving 1,500 applications for the
schemes existing 75 places.
Fellow big four player PwC said
applications to its own entry scheme
had risen by 34 per cent by last year,
with 2,352 applicants for the 100
places available from this autumn.
Theres a generation of students
weighing up their career and
training options differently, whether
because of university fees, economic
forecasts or graduate
unemployment, and employers have
to adapt, said PwCs Gaynor Bagley.
Ernst & Young, meanwhile, is
encouraging school leavers to apply
early to its summer internships 90
per cent of which it aims to convert
to graduate jobs.
About 84,000 students are
expected to get top AAB+ grades this
year, and for the first time there is
no limit on the number of places
universities can offer that demand
these results.
School leavers
scramble for
finance roles
BY ELIZABETH FOURNIER
LIFE insurance takeover firm
Resolution yesterday shelved its
ambitious acquisition and flotation
plans as it said it would become a
more conventional business.
The group, which was set up by
Clive Cowdery to take over
struggling firms and sell them on
for a profit, said poor market
conditions meant its original plan
to buy firms and exit through an
IPO would have to be canned.
Cowdery said there was
disappointment Resolution
couldnt push on with plans to buy
more firms.
Weve come to a view that its
not in the best interest of
shareholders to target an exit event
in 2013 or 2014, he said.
I wish we could have a benign
market and have the possibility of
pulling off creative mergers where
corporate activity is rewarded. But
this is not a period when corporate
activity is rewarded.
The management shake-up will
see Cowdery appointed to the
Resolution calls
time on further
takeover plans
BY MICHAEL BOW
board, with former FSA chief
executive John Tiner stepping down
over the next few months. It makes
sense to focus on other things I
want to do in life, Tiner said.
Resolution yesterday posted a pre-
tax operating profit of 163m in the
first six months of the year, down
from 390m pounds a year earlier.
Markets backed the move
yesterday, as its share price soared
8.7 per cent in the first 45 minutes
of trading, eventually closing 2.9
per cent higher.
BarCap analysts said in a note: It
has, in effect, decided to behave like
a normal UK Life company.
T
IME for a new direction: that
is the conclusion of insurance
M&A specialist Resolution,
which announced plans
yesterday to give up on its strategy
of aggressive acquisitions and
focus on becoming an entirely
conventional company.
In Silicon Valley, they call this a
pivot. Its something of a badge of
pride among the Californian tech
start-up set, where strategic
flexibility is seen as the hallmark
of firms that listen to their
customers and follow where the
numbers lead them.
In the case of Resolution, it seems
more the product of having tried
every other option first. After the
market for insurance acquisitions
dried up, Resolution has faced
shareholder resentment over the
cancellation of a planned 250m
payback in July, the looming threat
of regulators running its
unconventional structure out of the
FTSE 100 and sceptical reactions to
previous tentative plans to split part
of its business. As a result, there
were few places left to turn.
Still, the true test of a pivot isnt
how gracefully it is executed but
whether a company can adjust itself
to the new approach. The market
was initially hopeful, or at least
grateful for a settled direction, but
as the day wore on and the share
price fell back somewhat, it seemed
that not everyone was convinced of
the profit to be made as Resolution
sees the journey through.
BOTTOM
LINE
MARC SIDWELL
Resolution ltd
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p
226.30
15Aug
220
215
FORUM: Page 14

THURSDAY 16 AUGUST 2012
6
NEWS
cityam.com
Resolutions CEO John Tiner will leave the firm as part of the shake-up
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IN BRIEF
KAZAKH mining group ENRC yester-
day blamed falling commodity prices
and a challenging economic envi-
ronment for declining revenues
over the first half of the year.
The FTSE 100-listed miner reported
lower underlying earnings of
$1.14bn, down 41 per cent over the
first half of the year. Earnings per
share also fell 60 per cent to $0.36.
Revenues fell by 19 per cent to
$3,246m (2,070m), lower than the
forecast $3.4bn.
It cut spending plans from $2.7bn
to $2.4bn in 2012, primarily due to
unallocated licences for a Brazilian
iron ore project, which has pushed
production back to 2016. Chief execu-
tive officer Felix Vulis said that ENRC
had completed all required public
hearings and was waiting for a
ENRC rocked
as commodity
prices tumble
BY CATHY ADAMS response from the authorities as to
whether the project could go ahead.
It is understood ENRC, which mines
metals such as copper and iron ore
predominantly out of Kazakhstan,
could spin-off its African assets into a
new London-listed vehicle but a deci-
sion is currently under review.
The shares closed 8.46 per cent
down at 379.6p.
Felix Vulis expects demand will remain robust for its core commodities this year
The firms co-founder Mark Getty
Eurasian Natural Resources Corp
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440
430
420
410
p
379.60
15Aug
400
390
380
370
Eurasians results came in below expectations on the earnings level.
Cost ination was better than we expected, but the results showed that cash
ows are under pressure, but this is true across the sector.
ANALYST VIEWS

WHAT ARE YOUR

THOUGHTS ABOUT ENRCS
QUARTERLY RESULTS? Interviews by Cathy Adams
ROBERT CLIFFORD DEUTSCHE BANK
PRIVATE equity veteran Jon Moulton
yesterday said low lending rates were
strangling the flow of buyout deals
as banks propped up distressed
companies with cheap capital.
Moulton, who is chairman of
turnaround specialist Better
Capital, said banks were content to
lend money to bad businesses
rather than crystalise their losses
and sell to a private equity firm
drying up the pool of firms to buy.
What you have is good people
and good assets but bad
performance. Its zombie style, and
its starting to stack up.
Better Capital yesterday issued an
interim management statement
showing its first investment fund
had 80.1m committed to ventures.
In April its second fund
committed 40m to Jaeger but
Moulton said the potential for deals
had been patchy.
Anything near a consumer is a
problem and anything outside of
London.
It could be better but its not a
strong market at the moment.
Better Capitals
Moulton slams
banks attitude
BY MICHAEL BOW
GETTY Images, the worlds
biggest photo agency, has been
taken over by Carlyle Group after
the American private equity firm
won the bidding for a majority
share in the company.
The deal sees Carlyle take just
over 50 per cent of Getty from
another private equity outfit,
Hellman and Friedman. The
remainder of the agency will be
controlled by Gettys
management, with the total deal
valuing the company at $3.3bn
(2.1bn).
Carlyle is betting on growing
demand for online images as the
media industry moves away from
print. We will harness Carlyles
financial resources and global
network to help take Getty
Images to the next stage of
Getty Images bought out by
Carlyle Group in $3.3bn deal
BY JAMES TITCOMB
product innovation and global
growth, Carlyles managing
director Eliot Merrill said
yesterday.
Getty has moved to adapt to
the growing market for digital
pictures, but prices commanded
online still pale to those in print.
Carlyle, which was advised by
Goldman Sachs and JP Morgan
on the deal, beat other private
equity firms including CVC
Capital to the deal. Mark Getty
and chief executive Jonathan
Klein, who founded Getty Images
together in 1995, will invest their
own equity in the deal.
Klein said the agency was
seeing an explosion of demand
for rich media and visual
content. Getty has expanded
into video distribution in recent
years as demand for interactive
online material grows.
THURSDAY 16 AUGUST 2012
8
NEWS
cityam.com
The balance sheet looks more constrained than we anticipated. Cost
pressures experienced are slightly lower than previous guidance. Shares remain
fully priced and we maintain our hold recommendation.

ASH LAZENBY LIBERUM CAPITAL

Neutral overall. It sustained good demand for key products and cost
control is helping keep costs below expectations, despite the sharp rises. Overall,
it was an in-line statement with caution to the outlook.

CAILEY BARKER NUMIS SECURITIES

FACEBOOK is braced for
further falls in its value today
as shareholders who invested in
the company before it went
public become able to sell
shares for the first time.
Analysts are not predicting a
firesale, with most of the
unlocked shares owned by
venture capital funds rather
than Facebook staff, who are
deemed more likely to sell over
the next nine months when
more shares can go on sale.
Facebook shares are trading
at just over half the value of
Mays initial public offering.
Facebook fall
could worsen
as stock freed
BY JAMES TITCOMB
TOBACCO firms saw share prices
dip yesterday after the Australian
high court upheld a law enforcing
plain cigarette packaging, the first
of its kind in the world.
Shares in FTSE 100 companies
British American Tobacco (BAT) and
Imperial Tobacco both closed
almost two per cent lower as
suggestions spread that the UK and
other markets could follow suit.
The department of health is
keeping a close eye on how
Australia implements the laws and
potential legal challenges from
tobacco firms, having closed a
consultation on plain packaging
last week.
The Australian bill was passed
last year but challenged by global
tobacco companies on the basis
Tobacco giants hit as Australia
set for first plain packets law
BY JAMES TITCOMB
that it was unconstitutional. They
could now dispute the ruling by
claiming it violates international
trade agreements. Anyone
thinking that the tobacco
companies will accept that the
fight is over would be clearly
mistaken, said Rupert Casey of law
firm Macfarlanes. BAT said: In the
UK, plain packaging would
constitute a wholesale
expropriation of our valuable
intellectual property, requiring
payment by the government of
very significant compensation.
Australias law will force
cigarettes to be sold in olive-
coloured packets without logos
from December. Tobaccos global
giants argue the move will not
discourage smoking, but simply
drive down prices and increase
trafficking.
ANY City workers terrified of
public embarrassment, look
away now.
As part of the ongoing
cultural celebrations to tie in
with the London 2012 Games,
incognito Shakespearean
actors have been tasked with
entertaining the visiting
masses with impromptu
ON your marks, get set...BID!
Time is quickly running out to
secure your very own piece of
Olympic history, with memorabilia
on offer in the official London 2012
auction selling faster than you can
say and Usain Bolt takes the gold.
Raising money for the Mayors
Fund for London, the auction
is currently offering a vast
array of official Wenlock
and Mandeville statues
and competition to
secure one of the snazzily
dressed mascots is fierce.
The Ritzs resident
Queens Guard Wenlock is
currently fetching close to
6,000 with just hours to
go, while Mandeville the Pearly
King resident in Bishops
Square is attracting bids of
more than 4,000.
The Mayors Fund for
London partners and funds
projects across the capital
that help in three core
areas education, engage-
ment and employment, with
Act fast to grab
your own slice
of 2012 history
the ultimate goal of helping disad-
vantaged youngsters all the way to a
decent job opportunity.
Sixty pence of every single pound
raised by the auction (after logisti-
cal and Locog fees) will go to help-
ing the charitys project work in
both east and south London suc-
ceed.
This is a once in a life-
time chance to bid for
truly iconic Olympic
Games memorabilia and
help out our young people in
need, said Mayor of London
Boris Johnson, the charitys
patron.
But if you think youve
missed your chance, dont
fret check back with
The Capitalist tomorrow
for an exclusive opportu-
nity to be in with a chance
of securing your very own
two-metre high souvenir.
LONDONS free outdoor jazz festival returns to Canary Wharf this weekend with a line
up of jazz heavyweights, including Courtney Pine (above) headlining on Saturday
evening. Its going to be a heatwave so bring a picnic, grab a drink and enjoy the music.
JAZZ FESTIVAL RETURNS TO CANARY WHARF
Wenlock is one of the Games
most enduring symbols
Mark Rylance has organised
the pop-up Shakespeare event
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Got A Story? Email
thecapitalist@cityam.com
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THECAPITALIST
THURSDAY 16 AUGUST 2012
IF you pick up a dictionary today you
might be in for a bit of a shock
words that sprung from the financial crisis
have finally been given the ultimate
accolade and received a slot in the new
edition of Merriam-Websters literary
lexicon.
Both systemic risk and toxic as in
asset have been included in the 200-
year old dictionary for the first time, after
the popular emergence of the zinging
neologisms following the 2007-2008
financial crisis.
This is all good news for office pedants.
For one, it finally puts pay to the
boardroom debate about whether
systemic risk can be used as a synonym
for systematic risk (it cant).
Secondly, it rids the word toxic of those
awkward biological hazard connotations,
replacing it with the slightly more
perilous-to-mankind inference that
springs to mind when discussing bad bank
loans or, indeed, Greek sovereign bonds.
Also making the cut are cloud
computing, to reflect external computer
data storage and underwater, as in
underwater mortgage, which have been
given entries. And theres one other less
obvious new entry that might just have
been included as a result of the crisis
energy drink. As in: get me another
energy drink please, the markets tanking
and Im going to be here until dawn.
They doth desire we be better strangers
street performances during the
upcoming Paralympics.
Hidden at tourist hotspots,
performers will pop-up on
unassuming crowds and
launch into a variety of
personalised one-to-one
performances and flash mob
moments using the bards
most famous words.
Created by actor Mark
Rylance, who calls the initiative
a random act of senseless
beauty and an artistic
ambush, London Mayor
Boris Johnson called the
performances a delightful
way to break down those
self-imposed barriers that
keep Londoners apart.
So next time you sit
down on a bench near St
Pauls for your lunchtime
sandwich take a very good
look at whos next to you
any minute you could find
yourself re-enacting Romeo
and Juliets Balcony scene.
IN BRIEF
Glaxo sells Australian drug brands
nGlaxoSmithKline advanced its clear-
out of non-core drugs yesterday with
a deal to sell 25 older brands
marketed in Australia to South Africa's
Aspen Pharmacare for 172m. The old
brands being bought by Aspen include
herpes treatment Valtrex, epilepsy
drug Lamictal and the antibiotic
Amoxil. In total, the 25 products
generated sales of around 83m
pounds in 2011 and 31m in the first
half of 2012.
Carlsberg dampened by weather
nCarlsberg said a boost provided by
sponsoring the Euro 2012 football tour-
nament did not make up for unseason-
ably wet weather as the brewer
reported a five per cent fall in sales in
northern and western Europe. However,
the firms pre-tax profit rose 47 per
cent to 2.6bn Danish kroner (273m) as
it sold off breweries. The firm said the
sales fall was more than expected
but said investments in Russia had paid
off, with sales rising in the country for
the first time in several quarters.
H&Ms July sales defy gloom
nHennes & Mauritz (H&M), the
Swedish clothing giant, said sales grew
for a third consecutive month in July.
The upbeat results came despite gloom
in its biggest market Germany, in a sign
of robust demand for cheap fashion
from cash-strapped shoppers. Sales at
stores open a year or more rose two per
cent in local currencies in the period,
compared with a forecast for 2.7 per
cent. The worlds second largest cloth-
ing chain said total sales, including new
stores, were up 11 per cent.
CLS HOLDINGS set the example
yesterday on how to profit from
the secondary office market, after
the property investment company
posted strong half-year figures.
The family-run firm said net
asset value jumped 5.6 per cent to
1,038p a share in the first half of
the year despite a fall in profit to
27.1m from 37.1m.
During the period, the group
secured planning permission for
Spring Mews in Vauxhall, which it
plans to turn into a large mixed-use
scheme including a 399 student
bedrooms and a 120-room hotel.
CLS posts lift in
net asset value
BY KASMIRA JEFFORD
STRATFORD City, Europes biggest
shopping mall, attracted 5.5m visi-
tors during the Olympic Games, its
Australian developer Westfield said
as it reported a 31 per cent increase
in its first-half profits.
Stratfords bustling shops contrast
with retailers in west London that
lamented a lack of visitors, particu-
larly in the first week of the Games,
after warnings about traffic kept
people away.
The company, which owns 119
shopping centres in Australia, the
US, New Zealand and the UK, report-
ed a net profit of A$800.1m (534m)
in the six months to the end of June.
Funds from operations a meas-
ure of earnings that strips out fluctu-
ations from property revaluations
rose 3.1 per cent to A$751.2m, boost-
ed by a strong rise in income from its
US and Australian malls.
The group said income from its five
UK centres was steady, with over 99
per cent of its portfolio leased
despite the tough retail environment
and high number of shop failures
this year.
Olympics boom
sees 5.5m flock
to Stratford City
BY KASMIRA JEFFORD
It expects its two London centres
Stratford City and Westfield London
in Shepherds Bush to attract a total
of 60m customer visits spending an
estimated 1.8bn this year.
Steve Lowey, Westfields co-chief
executive, said its strong perform-
ance in the half year was a result of
its change in strategy in 2010, when it
decided to focus on the development
of large urban sites to generate high-
er returns.
It sold its Nottingham shopping
mall Broadmarsh last year as part of
its change in strategy and is currently
vying with Anglo-French rival
Hammerson to redevelop the 1960s
Whitgift centre in Croydon.
Westeld Group
9Aug 10Aug 13Aug 14Aug 15Aug
10.10
10.00
9.90
9.80
AUD
9.70
9.60
9.63
15Aug
9.50
SHAREHOLDERS in HMV yesterday
voted in favour of changing the
struggling music entertainment
chains stock market listing in a
move that will help speed up the
sale of its Live music arm.
Some 99 per cent of investors
approved the change in listing
category from premium to
standard, at an extraordinary
general meeting held yesterday.
In a circular sent to shareholders
in July, HMV said the move would
allow the group to sell off parts of
its Live arm in a shorter timescale
and at lower expense, and without
HMV changes its stock market
listing to speed up sale of Live
BY KASMIRA JEFFORD the need to seek shareholder
approval in respect of such
disposals.
HMV put its Live arm, which
runs 13 venues and a number of
festivals including Lovebox in
London, up for sale at the
beginning of the year to help pay
down its 180m debt pile.
Last week, the group completed
the sale of the Hammersmith
Apollo to American-German joint
venture Stage C for 32m.
A standard listing means HMV
will only have to comply with EU
requirements without the more
onerous corporate governance stan-
dards of a premium listing.
THURSDAY 16 AUGUST 2012
11
NEWS
cityam.com
The high street chain is struggling to adapt to modern market changes
Strong first half puts Interserve
back on track for the full year
SUPPORT services and construction
group Interserve yesterday reported
half-year profit of eight per cent
driven by strong performance in its
British support services business.
Pre-tax profit for the firm, whose
services range from cleaning
Sainsburys supermarkets to
building Jaguar a new site in
Coventry, came in at 32.6m in the
six months to 30 June, up from
30.1m the year before.
The support services division,
which includes building
maintenance and security, reported
BY CATHY ADAMS
revenue growth of 11.5 per cent to
588m.
It pointed to some recent support
services contract wins, with
companies such as National Grid
and Alliance Boots, for the increase
in profits. Future workload rose to
4.7bn in the first half of this year,
an increase of 200m year on year.
Interserve shouldered a 27 per
cent slide in UK construction profits
to 7.3m from 10m in the first half
of 2011. Management admitted that
the UK construction sector still
faces several challenges due to lack
of confidence and a lack of
liquidity.
The interim dividend was up 6.7
per cent to 6.4p a share.
The stock closed up 2.47 per cent
at 335.2p.
CLUFF Gold yesterday reported a
17 per cent increase in earnings
for the second half of the year,
driven by increased production at
its Kalsaka gold mine.
The Aim-listed West African
gold producer increased
production by 21 per cent in the
three months to 30 June, following
positive updates at its other
African sites.
The Kalsaka mine, in Burkina
Faso in West Africa, upped gold
production to 15,191 ounces
compared to 12,504 ounces in the
first quarter of 2012. Cluff added
that it was responsible for $9m
(5.7m) of earnings in the first
Gold production helps 17pc rise
in second-half earnings at Cluff
BY CATHY ADAMS
quarter. Production is set to
strengthen at the site in the
second half, Cluff said.
Cluff is due to update on its
Baomahun gold project in Sierra
Leone in October, but it is
understood that the site which is
Cluffs flagship asset, and
accounts for 3m ounces of its 4.5m
ounces of gold will continue to
deliver robust performance.
Additionally, Cluff is looking at
expanding the Baomahun site due
to its strong gold grade quality.
Despite the strong results,
financial director Peter Gardner
warned of decreasing margins in
the gold production sector due to
the volatile gold price and high
costs associated with production.
Interserve PLC
9Aug 10Aug 13Aug 14Aug 15Aug
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335
330
325
320
p
335.20
15Aug
Balfour Beatty wary over UK as
emerging markets drive revenue
BALFOUR BEATTY, the UKs largest
construction company, yesterday
said it could not foresee when there
would be a pick-up in its home
market where its own order book
was down three per cent,
outperforming a 10 per cent fall
across the industry.
It said its focus in recent months
on winning contracts in industries
such as transport and mining,
particularly in emerging markets,
meant it should meet its own full-
BY A CITY A.M. REPORTER
year expectations.
The company, which operates in
more than 80 countries and built
the Aquatics Centre for the London
Olympics, posted a 12 per cent rise
in underlying first-half pre-tax
profit to 154m, lifted by a one-time
gain from the sale of infrastructure
investment assets.
Sales rose six per cent to 5.5bn.
We do not anticipate any
significant further reduction [in
Britain] ... But in terms of recovery
of volumes, it is difficult to see, in
the very short term, where recovery
is coming from, deputy chief
executive Andrew McNaughton
said. The interim dividend was
raised six per cent to 5.6p.
Balfour Beatty PLC
9Aug 10Aug 13Aug 14Aug 15Aug
302
300
298
296
p
294
292
290
296.10
15Aug
CAPITAL & REGIONAL, the retail and
leisure asset manager, yesterday
posted a five per cent rise in
recurring pre-tax profits to 9.2m in
the first half of the year.
But the property specialist
suffered a 4.8 per cent drop in its net
asset value, primarily due to a sharp
devaluation of its German portfolio.
Cap&Regs largest asset is its 20
per cent interest in The Mall fund,
which comprises nine UK shopping
centres including Luton and
Maidstone. These dropped in value
by 3.8 per cent, as net income fell as
a result of retail failures.
Profit at Capital
& Regional up
BY KASMIRA JEFFORD
THURSDAY 16 AUGUST 2012
12
cityam.com
LONDONREPORT
S&P maintains
upward shifts
on low trading
U
S stocks spent another session
in a tight range yesterday,
with the S&P 500 ending a few
points higher and extending a
rally that seems to be happening in
slow motion.
The benchmark S&P 500 index fin-
ished just a hair away from its highest
close in three months, but with earn-
ings season winding down and many
traders away, volume was light.
For the next couple of days the
greatest influence may be the options
market, which is seeing heavy volume
in August call and put options clus-
tered around the 1,400 level for the
S&P 500.
If the index closes at or very close to
1,400, those options expire worthless
on Friday. That means market-makers
have an incentive to try to make that
happen, or pin the index at 1,400.
The Dow Jones industrial average
was down 7.36 points, or 0.06 per
cent, at 13,164.78. The Standard &
Poors 500 Index was up 1.60 points,
or 0.11 per cent, at 1,405.53. The
Nasdaq Composite Index was up 13.95
points, or 0.46 per cent, at 3,030.93.
Shares of Deere & Co lost 6.3 per
cent to $75.10 after the worlds largest
agricultural equipment maker report-
ed a lower-than-expected quarterly
profit. Rival Caterpillar slipped 0.3
per cent to $87.61 as the biggest drag
on the Dow.
Staples slumped 14.6 per cent to
$11.49 as the worst performer on the
index after the office supply chain
reported lower-than-expected quarter-
ly revenue on weak demand in North
America, Europe and Australia, and
forecast flat sales for the fiscal year.
In economic data, US industrial out-
put expanded 0.6 per cent last
month, the fastest pace since April.
T
OP shares fell yesterday in sluggish
volumes as weakness in index
heavyweights such as miners,
tobaccos and Vodafone outstripped
gains in financials.
Londons benchmark FTSE 100 index
closed down 31.74 points or 0.5 per cent
at 5,833.04, erasing the previous sessions
gains and fluctuating in a tight range
between 5,800 and 5,900 in volumes just
66 per cent of their 90-day average.
The FTSE 100 has flattened out with the
summer rally waning as investors await
cautiously for announcements from cen-
tral banks regarding further stimulus
measures.
Miners, which have spearheaded recent
gains up six per cent in the last
month were among the top fallers as
ENRC became the latest commodity-
linked stock to raise donuts over the out-
look for global demand. ENRC shed 8.5
per cent, topping the list of FTSE 100 fall-
ers, after the Kazakh miner reported
first-half profit plunged 41 per cent and
announced it was cutting spending and
its dividend.
Index heavyweight Vodafone shed 0.9
per cent, accounting for around 3.5
points, or nearly 11 per cent of the FTSE
100 indexs retreat. BofA Merrill Lynch
downgraded its rating for the mobile
telecoms group to neutral from buy,
on concerns its recent rally has left its
valuation stretched.
British American Tobacco (BAT) and
Imperial Tobacco, down 1.7 per cent and
1.9 per cent respectively, were hit after
Australias highest court yesterday dis-
missed a challenge from international
cigarette companies over tough new anti-
tobacco marketing laws.
FTSE 100 slips lower as investors wait
for fresh stimulus from central banks
BESTof theBROKERS
HSBC Holdings PLC
9Aug 10Aug 13Aug 14Aug 15Aug
575
565
560
550
555
540
545
570
562.20
15 Aug
p
HSBC
Investec has moved the
bank from buy to
hold, saying an
assortment of
headwinds means stock
is unlikely to rise from
current highs. Target
price reduced to 590p.
DASHBOARD CITY
NEW YORK
REPORT
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
FTSE
9Aug 10Aug 13Aug 14Aug 15Aug
5,880
5,860
5,850
5,870
5,830
5,840
5,820
5,833.04
15 Aug
Essar Energy PLC
9Aug 10Aug 13Aug 14Aug 15Aug
114
112
111
109
110
113
110.70
15 Aug
p
ESSAR ENERGY
JP Morgan Cazenove has
downgraded Essar from
overweight to
neutral and reduced
the price target from
175p to 150p, saying
regulatory hurdles in
India may stifle the firm.
Pearson PLC
9Aug 10Aug 13Aug 14Aug 15Aug
1,260
1,240
1,230
1,210
1,220
1,250
1,209.00
15 Aug
p
PEARSON
Liberum Capital has cut
the publishers target
price to 1,050p and
repeated its sell
recommendation, saying
the cracks are starting
to appear in the
publishers US business.
Troika Dialog
The investment banking division
of Sberbank has appointed Dean
Tyler as managing director, head
of international fixed income
sales. He joins its London office
from VTB Capital, where he was
head of its fixed income sales
team. Tyler has also held senior
roles at ING Bank and F&C Asset
Management.
Scottish Widows Investment Partnership
William Low has been appointed director of equities at the
fund management firm. He succeeds Andrew November,
who is taking up the newly-created role of investment
propositions director. Low joined the firm in April 2011, and
has since headed its global equities team.
Vectura
The medical technology firm has appointed Dr Karl Keegan
as director of corporate development. He has more than 20
years experience in pharmaceuticals, and most recently
worked in biotech analysis at UBS and Bank of America.
Paddy Power
The bookmaker has announced two senior appointments
to its marketing team. Danny Russell joins as insight
director from BskyB, where he was marketing strategy
director. He has also held business development roles at
British Airways and Boots Healthcare International. Robin
Auld joins as brand director from Dominos, where was
sales and marketing director for the firms German
division.
Capco
The business and technology consultancy has appointed
Armin Schmitt as partner in charge of its continental
European operations. He was previously head of Capco
operations in Germany. Prior to joining the firm in 2007,
Schmitt spent more than 10 years in senior leadership roles
at consulting firms, including KPMG and BearingPoint. He
also previously served as co-head of IT at DZ Bank.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
in association with
US corporate results round-up
TEEN clothing retailer Abercrombie & Fitch
earned $15.5m, or 19 cents per share, in the
second quarter ended 28 July, down from $32m, or
35 cents per share, a year ago. Overall sales rose
four per cent to $951.4m. Sales at stores open a
year fell 11 per cent at Abercrombie & Fitch and 10
per cent at both Abercrombie kids and Hollister.
Abercrombie hit by fall in profit
but sales slowdown stabilises
DEERE & Co, the worlds largest agricultural
equipment maker, reported lower-than-expected
profit yesterday. For the third quarter ended 31
July, the company posted net income of $788m,
or $1.98 per share, compared with $712.3m, or
$1.69 per share, a year earlier. Revenue rose 15
per cent to $9.59bn.
Deere sees net income jump but
increase is lower-than-expected
US discount chain Targets profit was
unchanged at $704m in the second quarter, while
earnings per share rose to $1.06 from $1.03 a year
earlier. The profit topped analysts average
forecast of $1.01 per share. For the year, Target
now expects to earn $4.20 to $4.40 per share, up
from its May forecast of $4.10 to $4.30.
Target bullish for third quarter
as it trumps analyst forecasts
STAPLES reported lower-than-expected
quarterly results yesterday prompting the largest
US office supply chain to cut its profit forecasts
for the year. Staples net income fell to $120.4m,
or 18 cents a share in the second quarter, from
$176.4m, or 25 cents a share, a year ago. Sales fell
5.5 per cent to $5.50bn in the quarter to 28 July.
Staples forced to cut forecasts
as quarterly results disappoint NEW YORK manufacturers came
in for a walloping during July, in a
month where consumer prices
edged up, and industrial
production as a whole crept up,
according to a tranche of data
released yesterday by various US
official bodies.
The headline index for
manufacturing in the Empire State
collapsed 13 percentage points to
-5.9, diving below zero for the
first time in 10 months, a survey
from the New York Fed showed.
Though the index for shipments
remained positive, it fell six points
to 4.1, while new orders shrunk for
the second month in a row.
This went against the trend for
the USA as a whole, whose
industrial production grew 0.6 per
cent in July, which compared well
with the 0.1 per cent it inched up
New York manufacturing hit as
overall US production expands
BY BEN SOUTHWOOD
in both May and June. Despite this
increase, industrial production
remained two per cent lower than
the average for 2007, a testament to
the length of the current slump,
said the data from the Federal
Reserve.
These reports came as consumer
prices grew 1.4 per cent over the 12
months to July, no change over the
previous two months, according to
the Bureau of Labor Statistics.
US Industrial Production
2008 2010 2012
2007output=100
Total
Manufacturing
106
102
98
94
90
86
82
78
I
N PICKING congressman Paul
Ryan as his running mate for the
presidency, Mitt Romney
shunned safety. Instead, he
selected a figure popular with
the Republican base, but also a policy
advocate with an unmatched grasp
of conservative solutions to fix
Americas $90 trillion (57 trillion) of
unfunded entitlements. This fact,
however, will delight Democrats as
much as it will endear the Ryan pick
to Republicans.
As his partys intellectual leader,
Democrats have been running
against Ryan longer than the
Republican nominee himself.
Democrats, and some Republicans,
deem Ryan an overwhelming
liability due to his proposals to
I
TS A-level results day. Across the
country, 18 year olds will be
nervously waiting to find out
their results, with thousands of
university places dependent on
the right grades. We shouldnt
hesitate to celebrate these young
people for their months of hard
work and dedication, as well as
praising the teachers who have
played such a crucial role in their
pupils success.
But a debate has raged on this day
for each of the past few decades
about grade inflation and whether
A-levels have been getting easier in
particular whether its becoming eas-
ier to get an A or A* grade. This
debate shouldnt distract from the
celebrations, but it is crucial that we
take it seriously to ensure that we are
able to compete in an increasingly
competitive global market for skills.
The real test of whether A-levels are
credible enough shouldnt, of course,
be based on the opinion of politi-
cians, commentators and think
tankers. Ultimately, the most impor-
tant test for the qualifications should
Spread betting, CFDs and
Trade today at www.cityindex.co.uk
FACT OF
THE DAY
June marked the biggest quarter drop in
UK retail sales volumes since March 2010.
cityam.com/forum
In 1982, 8.9 per cent
of A-levels were given
A grades, while it stood
at 27 per cent in 2010
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

14
THURSDAY 16 AUGUST 2012
DAVID SKELTON
Raise a glass to students success
but we need to talk about A-levels
be the esteem in which they are held
by universities and businesses. A
major question that must be asked is
whether A-levels are rigorous
enough in comparison with similar
qualifications from other countries.
Set against these standards, A-levels
dont seem to be passing the test.
There has undoubtedly been grade
inflation over recent decades. From
the early 1980s, the proportion of A
grades being awarded has increased
year on year. In 1982, 8.9 per cent of
A-levels awarded were in A grades,
while in 2010 that figure stood at 27
per cent. Indeed, the A* grade, intro-
duced after complaints about grade
inflation, accounted for 8.2 per cent
of all grades in 2011 almost the
level of the original A grade thirty
years ago. This is evidence that A-lev-
els arent as rigorous as they could
be, particularly when compared with
similar qualifications overseas.
Theres a pretty straightforward
solution to many of the concerns
about grade inflation. Exam boards
could provide pupils with richer
information about their perform-
ance in relation to others. This could
easily be done by giving pupils a per-
centile score, alongside their grade,
which would make their relative per-
formance to other pupils much clear-
er. Percentiles would also benefit
employers and universities, by intro-
ducing much more transparency
into the system, as well as providing
a straightforward comparison across
subjects and exam boards.
Consideration also needs to be
given to ensuring that the curricu-
lum is rigorous and testing. Research
by the University of Durham has
shown that Film Studies students are
likely to do a grade and a half better
than students studying science.
Issues with the rigour of certain sub-
jects in the curriculum have forced
some employers and businesses to
take defensive action. Some universi-
ties dont accept certain A-levels,
which they regard as less rigorous.
Top universities allegedly maintain a
banned list of certain subjects,
while employers have also become
more selective about which A-level
subjects they value in a potential
employee.
Its lazy to mindlessly criticise so-
called Mickey mouse subjects,
many of which have a crucial role to
play in our economy. But we should
ensure that different A-levels have
similar levels of rigour and credibili-
ty and arent viewed by employers,
universities and students as a rela-
tively easy route to a good grade.
The government is right to devolve
more power and autonomy to
schools and colleges over the curricu-
lum. But schools shouldnt see this
as an excuse to shop around for less
rigorous subjects, which could
improve their league table perform-
ance. The reputation of a school with
parents, businesses and universities
will be affected by what they decide
to teach.
Rather than seeking a short-cut to
improved academic performance,
schools should use autonomy over
their curriculum to teach subjects
that are academically rigorous, with
real world application. And this
might involve working with local
universities and local businesses in
the design of courses.
Today, we should raise a glass to
students success. But once the cele-
brating is done we need ensure that
A-levels remain credible to parents,
universities and employers.
David Skelton is deputy director of
Policy Exchange. You can follow David on
Twitter @djskelton
reform Medicare, a health care plan
for pensioners, and social security.
The strategy for Democrats will be to
remind voters that Republicans are
committed to overhauling this
third rail of American politics and
ensure that they get burned. Polls
conducted by PPP in Florida and
North Carolina found that voters
opposed Ryans plan by 16 and 23 per
cent respectively. Losing North
Carolina would wound Romney, but
defeat in Florida would be mortal.
But Barack Obama is vulnerable
on Medicare too. As Democrats
double down and go on the offensive
about what Republicans might do,
Romney can merely highlight what
Obama has already done: redirected
over $720bn in Medicare funds to
finance his deeply unpopular health
care reforms. The fact that Ryans
own mother is a Medicare senior
in Florida will hardly deflect attacks,
but its a humanised riposte. Obama
is Ryans protection. As one of the
main progressive calling cards, it
would be outrageous for a
Democratic President to be
outmanoeuvred on Medicare. But its
not impossible.
And yet for conservatives, a debate
about policy is not necessarily seen
as a bad thing, but as an opportunity
to bait Democrats, wait for their
incendiary language, and highlight
not just their lack of ideas, but
Obamas failure of leadership.
Whats more, Ryan has wide appeal
representing a Wisconsin district
that voted for Bill Clinton, Al Gore,
and Obama. And, although theres
plenty of time to define Ryan, polls
suggest that in the crucial swing
state of Ohio, the congressman
makes 42 per cent of independent
voters more likely to back the
Republican ticket, with just 18 per
cent saying otherwise. Most
surprising of all, Ryan receives his
most positive numbers from senior
citizens.
Ryans role now is to complement,
not conquer, the ticket. Its his job to
lucidly convey the urgency of a
Romney presidency, as the
Republican nominee focuses on his
own business experience and the
need to elevate the tone of this ugly
contest. Right now, Romney is
keeping his head, as Democrats are
losing theirs. For all the noise about
Ryan, this election is still very much
a choice between Romney and
Obama. But although Republicans
got their nominee a few months
back, only now do conservatives have
a ticket to fight for.
Ewan Watt is a Washington, DC-based
consultant. You can follow him on Twitter
@ewancwatt
THE WHITE
HOUSE RACE
EWAN WATT
Romneys vice presidential pick puts policy at the heart of the US election
In association with
FX trading can result in losses greater than your initial deposit.
POINT SPREAD
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15
Not short changed
[Re: Why Boris owes me 90,000 for
Olympic damage, yesterday]
I couldnt afford to travel from Florida to go
to the Olympics and enjoy all that London
and Britain had to offer during that
fortnight. The Games are expensive, and
London isnt cheap. However, now the big
show is over, Im inspired to see London
without the distraction of the sports. I saw
Neleen Strausss frustration at the lack of
tourism during London 2012. To reassure
her, I would think there are many who are
similarly inspired to visit in the near future.
Her losses from the Games cant be good,
but I bet the longer-term return will be
excellent. I, for one, will make sure to dine at
High Timber restaurant.
Thomas Wade
Guided growth
[Re: Should the government design an
industrial strategy for UK growth, yesterday]
The main problem with Kevin Dowds com-
plaints about an industrial strategy is that
they dont apply to most major infrastructure
projects. Theres no way the private sector
could build Boris Island airport without gov-
ernment support. The private sector can fund
it, but the green light for development must
come from the government.
NickReid
Kevin Dowd is right. I dont want Vince Cable
deciding which businesses he judges should
succeed. Where will we go next? Limits on
successful firms to assuage the bad experi-
ences of the failures?
SamWilson
T
HE top rank of HMRC is
changing. Edward Troup has
taken up his new post as tax
assurance commissioner,
responsible for advising
Treasury ministers on shaping UK
tax policy. He has considerable tax
experience, both in the public and
private sectors. But the job has never
been more challenging.
The UK faces pressure to improve its
fiscal position. As a result, therell be
few opportunities to implement tax
reforms to allow much-needed rate
reductions, and simplifications that
are not matched by the withdrawal
of other reliefs. And taxation has
never been so high profile. Complex
issues are too often compressed into
misleading sound bites.
If I were Troup, top of my agenda
would be establishing the right lan-
guage for government departments
and ministers to use when discussing
what is meant by tax avoidance and
abuse. Tax abuse will become better
understood, as general anti-abuse
rule (GAAR) proposals are enacted in
2013. The same cant, unfortunately,
be said about avoidance.
What counts as tax avoidance often
depends upon personal and political
perspectives. Therell inevitably be a
grey line between legislation that
provides necessary tax reliefs, and
the need to collect the revenues that
Parliament thinks should be paid. On
top of this, in an increasingly com-
plex business world, nearly everyone
wants tax legislation to be as simple
as it can be.
Ministers should also expect Troup
to recommend a framework that sets
out clear language underpinning the
difference between tax avoidance,
which HMRC will seek to prevent,
and tax planning, which businesses
must be allowed to undertake to
build the attractiveness of the UK to
investors.
TOP TWEETS
Ive seen Virgin Trains improve the London
commute so that its no longer gruelling. I
dread losing Sir Richard Branson.
@AnnaLouiseLucia
The big fact from yesterdays job numbers:
half the 201,000 increase in UK employment
was in London.
@demotfinch
UK unemployment: its good that its failing,
claims are down, private sector hiring is up.
But record number of part-timers is not good.
@AlbertoNardelli
So the Australians are going to put cigarettes
in plain packaging to deter smoking. Im fairly
sure people dont smoke for the art work.
@mannixbrian
As Australia confirms a law banning branded
tobacco packages, should the UK follow suit?
YES
Branded packs are the last form of tobacco marketing. They act as
mobile billboards that are visible every time a smoker reaches for a
cigarette. Research shows that children are especially vulnerable and
find colourful and glitzy packaging appealing, tempting them to
smoke. Removing the promotional aspects of tobacco from packs
would make the health warnings more prominent, stop people
thinking that certain brands are less hazardous than others, and
dissuade children from starting to smoke. The Australian High Court
ruling establishes an important principle that governments can,
and should, implement measures to protect the health of citizens by
removing all forms of tobacco promotion, including on the packs.
Where Australia leads, other countries will follow. Now the UK
governments consultation on plain packaging has closed, the UK is
well placed to be next.
AmandaSandfordisresearchmanager at ActiononSmokingandHealth.
Amanda Sandford
NO
Simon Clark
Plain packaging is based on the fallacy that children find so-called
glitzy packaging appealing and, with cigarettes in dull, drab packs
fewer young people will be tempted to start smoking. Yet there is no
credible evidence to support this suggestion. Instead, the removal of
branding could affect thousands of retailers, who may lose business
to the uncontrolled black market. It could cost jobs in graphic
design, paper production and packaging. Over 235,000 people have
signed the Hands Off Our Packs petition against plain packaging.
There is also opposition from retailers, shop workers and police
officers who are concerned about counterfeiting and the sale of illicit
tobacco that standard packs will undoubtedly encourage. Any
sensible government would wait and assess the impact of plain
packaging in Australia before adopting the same, potentially
reckless, policy in the UK. Hopefully common sense will prevail.
Simon Clark is director of the smokers group Forest.
RAPIDresponses
The new top brass
at HMs Revenue
has a taxing task
Drawing the line in the wrong
place will drive away the business
activities needed to generate the tax
revenues required to finance broader-
based tax cuts. There is a risk that less
business-friendly HMRC officials will
seek to treat most tax planning as tax
avoidance, and most tax avoidance as
tax abuse. It is imperative that Troup
cascades the message through HMRC
that neither he nor the Treasury min-
isters will allow this to happen.
This top priority does not mean,
however, that there is only one issue
to be addressed. Other concerns will
likely include the proposed taxation
of child benefit. This will collect sig-
nificant revenue but may provoke
hostility towards HMRC from the
media and wider public.
Troup will also face demands for
improvements in speed and efficien-
cy. He must address the perception
that HMRC fails to respond to taxpay-
ers promptly, and fix the backlog of
tax cases due to be heard by the tax
tribunals. On top of this, there is a
need to improve the quality of the
technical guidance provided through
HMRCs website. Its a sorry state of
affairs that users find it so complex
that the majority now resort to
Google for answers.
Finally, and perhaps most impor-
tantly, Troup must play a key role in
identifying for ministers any poten-
tial Budget 2013 proposals which are
likely to lead to embarrassing U-turns
next Spring.
Stephen Herring is a senior tax partner
at BDO LLP.
THURSDAY 16 AUGUST 2012
STEPHEN HERRING
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one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
If youre fashion-mad, these
apps will make sure you dont
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THURSDAY 16 AUGUST 2012
cityam.com
16
LIFE&STYLE
WORDS BY
ALBANY BELL
TECHNOLOGY
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This is the social networking app for the
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STRIKE
APPOSE
MR PORTER STYLE HELP
This app provides style help for men on the go. It
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The graphics are
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creating a classic
look. Available at
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Dior, Zlie Black
Crafted from 147 cut
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Vertu phones are beautiful as
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Or visit the store at 38 Old Bond
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1
TBR Report "IBM System x

x86 servers: Meeting the demands of todays enterprises by combining value and support," January 2012.
2
Source: Intel

Performance comparison using SPECfp*_rate_base2006 benchmark. Baseline score of 267 on prior generation 2S Intel

Xeon

processor X5690 (3.46GHz, 6-core, 12MB L3, 6.4 GT/s, 130W)

based platform published at www.spec.org as of 6 Sept 2011. Estimated new score of 486 on 2S Intel

Xeon

processor E5-2690 (2.90GHz, 8-core, 20MB L3, 8.0 GT/s, 135W) is based on Intel

internal
measured estimates as of 6 Sept 2011 using two Intel

Xeon

processor E5-2690, Turbo Enabled, EIST Enabled, Hyper-Threading Enabled, 64GB memory (8x8GB DDR3-1600), Red Hat

Enterprise Linux Server

6.1 beta for x86_6, Intel

Compiler 12.1.
3
x3500 M4 supports up to 768GB of memory using 32GB LRDIMMs in its 24 memory slots. Previous generation x3500 M3 supports up to 192GB of memory.
4
Ships with 4 1Gb Ethernet ports standard and supports integrated slot-less 10Gb Ethernet with Virtual Fabric. Previous generation server includes two 1Gb Ethernet slots and requires use of a PCI Express slot
to support 10Gb Ethernet.
5
x3500 M4 supports up to 32 internal 2.5" HDD. Previous generation x3500 M3 supports up to twenty four 2.5" HDD.
6
Quarterly price quoted is based on IBMs 0% System x Solution Finance offering (FMV lease). Terms & Conditions Apply: Offering availability subject to credit approval; for more details and full Terms and
Conditions please visit: http://www.ibm.com/financing/uk/lifecycle/acquire/xsolutionfinancing.html.
Rates and offerings are subject to change, extension or withdrawal without notice. Prices include VAT at a rate of 20%.
IBM hardware products are manufactured from new parts or new and serviceable used parts. Regardless, our warranty terms apply. For a copy of applicable product warranties, visit
http://www.ibm.com/servers/support/machine_warranties. IBM makes no representation or warranty regarding third-party products or services. IBM, the IBM logo, System Storage and System x are registered
trademarks of International Business Machines Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. For a current list of IBM
trademarks, see www.ibm.com/legal/copytrade.shtml. Intel, the Intel logo, Xeon and Xeon Inside are trademarks of Intel Corporation in the U.S. and other countries. All prices and savings estimates are subject
to change without notice, may vary according to configuration, are based upon IBMs estimated retail selling prices as of 01/04/2012 and may not include storage, hard drive, operating system or other features.
Reseller prices and savings to end users may vary. Products are subject to availability. This document was developed for offerings in the United Kingdom. IBM may not offer the products, features, or services
discussed in this document in other countries. Contact your IBM representative or IBM Business Partner for the most current pricing in your geographic area. 2012 IBM Corporation. All rights reserved.
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Field upgradeable with FC or ISCSI host interface cards
Self encrypting drive options available for secure data at rest
DS3512 also available with 3.5" drive support

18
TV & GAMES
cityam.com
T
E
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BBC1
SKY SPORTS 1
7pmCapital One Cup 8pmThe
Footballers Football Show9.30pm
Test Cricket 11.30pmCapital One
Cup 12.30amThe Footballers
Football Show2amPremier
League World 2.30amSoccer AM:
The Best Bits 3.30amThe
Footballers Football Show
5am-6amCapital One Cup
SKY SPORTS 2
7pmAmericas Cup Discovered
7.30pmLive Premier League
Snooker 11pmRingside 12am
Masters of European Football
12.30amATP Tour Uncovered
1amTest Cricket 3amICC Under-
19s World Cup Cricket 4amNRL
Fulltime 4.30am-5.30amSuper
Leagues Supermen
SKY SPORTS 3
7pmICC Under-19s World Cup
Cricket 8pmLive PGA Tour Golf
11pmRacemax 12amNRL Fulltime
12.30amSuper Leagues
Supermen 1.30am-5amPremier
League Snooker
BRITISH EUROSPORT
4pmLive WTA Tennis 10pm
World Cup World Tour
11pm-12.30amFootball
ESPN
7pmPress Pass 2012 7.30pm
French Ligue 1 Preview8pm
International Football 9.45pm
ESPN Kicks: Extra 10pmDream
On Wembley FC 11pmLegends
of the Premier League 11.30pm
Press Pass 2012 12amLegends of
the Premier League 12.30am
French Ligue 1 Preview1amLive
American Football 4amFIBA
Basketball 4.30amPress Pass
2012 5amFrench Ligue 1 Preview
5.30am-6amESPN Kicks: MLS
SKY LIVING
7pmCriminal Minds 8pmTeen
Wolf 9pmFour Weddings
US 10pmStyled to Rock
11pmFILMPretty Woman 1990.
1.15amGreys Anatomy 2.15am
Criminal Minds 3.05amBones
3.55amSupernatural 4.45am
Americas Next Top Model
5.35am-6amPassport Patrol
BBC THREE
7pmDont Tell the Bride Best
Ever 8pmDont Tell the Bride 9pm
Russell Brand: From Addiction to
Recovery 10pmWilfred 10.20pm
Great Movie Mistakes 10.30pm
EastEnders 11pmFamily Guy
11.45pmAmerican Dad! 12.30am
Russell Brand: From Addiction to
Recovery 1.30amWilfred 1.50am
Bad Education 2.20amDont Tell
the Bride Best Ever 3.20am
Dont Tell the Bride 4.20amLive at
the Electric 4.50am-5.20amBad
Education
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmThe Big
Bang Theory 8.30pmHow I Met
Your Mother 9pm2 Broke Girls
9.30pmNew Girl 10pmFranklin &
Bash 11pmBeaver Falls 12amThe
Big Bang Theory 1amScrubs
1.30amHow I Met Your Mother
2amRules of Engagement 2.20am
Desperate Housewives 3am90210
3.45amGreek 4.25am-6am
Switched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmWorlds Deadliest
Earthquakes 9pmAx Men 11pm
Storage Wars 11.30pmPawn
Stars 12amAmerican Pickers 1am
Ax Men 3amSwamp People 4am
The Last Days of World War Two
5amPawn Stars 5.30am-6am
American Restoration
DISCOVERY
7pmBear Grylls: Born Survivor
8pmGold Rush 9pmHow the
Universe Works 10pmReporters
at War 11pmGold Divers 12am
How the Universe Works 1am
Reporters at War 2amAuction
Kings 3amAmerican Chopper:
Senior Versus Junior 3.50am
Wheeler Dealers 4.40amBear
Grylls: Born Survivor 5.30am-6am
Destroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmBirth Days 8pmHow Clean Is
Your House? 9pmUntold Stories
of the ER 10pmEmbarrassing
Bodies 11pmHoarding: Buried
Alive 12amUntold Stories of the
ER 1amEmbarrassing Bodies 2am
Hoarding: Buried Alive 3amDr G:
Medical Examiner 4amBirth
Stories 5am-6amA Baby Story
SKY1
7pmThe Simpsons 8pmSinbad
9pmAn Idiot Abroad 10pm
Ultimate Road Wars: Highlights
from the series. 11pmBrit Cops:
Frontline Crime UK 12am
Caribbean Cops 1amRoad Wars
2amCaprica 2.50amEmergency
Abroad 4.35amAirline
5.05am-6amSell Me the Answer
BBC2 ITV1 CHANNEL4 CHANNEL5
S
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&
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6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders; BBC News
8pmCHOICE The BBC 999
Awards
9.30pmJohn Bishops Britain
10pmNews 10.25pmRegional
News 10.35pmNeighbourhood
Watched 11.20pmIs Football
Racist? 12.20amHoliday
Weatherview12.25amSign Zone:
Justice Denied: The Greatest
Scandal? Panorama 12.55am
Food Factory 1.25amBritains
Heritage Heroes 1.55amReal
Rescues 2.40amDoorstep Crime
999 3.40am-6amBBC News
6pmEggheads
6.30pmCelebrity MasterChef
7pmEscape to the Country
8pmHairy Dieters: How to
Love Food and Lose Weight: Si
King and Dave Myers come up
with a calorie-conscious pie.
9pmCHOICE The Best of Men
10.30pmNewsnight; Weather
11.20pmThe Rob Brydon
Show
11.50pmEwan McGregor: Cold
Chain Mission
12.50amThe Culture Show at
the Edinburgh Festival
1.20amBBC News 3.15am-6am
Close
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmOnly the Lonely:
Tonight
8pmEmmerdale
8.30pmCoronation Street
9pmJennifer Saunders: Back
in the Saddle
10pmITV News at Ten
10.30pmLondon News
10.35pmThe Talent Show Story
11.35pmPoms in Paradise
12.05amJackpot247; ITV
News Headlines 3amOnly the
Lonely: Tonight 3.25amITV
Nightscreen 4.35am-5.30amThe
Jeremy Kyle Show
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv
8pmThe Restoration Man
9pmPeter Kay Live: The Tour
That Didnt Tour Tour
10.55pmVerry Terry 11.30pm
Brass Eye 12amVic and Bob
Present 12.05amThe Weekenders
12.40amComedy Lab 1.10am
Comedy Live Presents Russell
Brand and Friends 2.05amBritains
Oldest Stand-Up 2.35amA Short
History of Everything Else
3.05amTricks of the Dole Cheats:
Channel 4 Dispatches 3.35am
Apocalypse: The Second World War
4.30amCountdown
5.15am-6.10amDeal or No Deal
6pmMonkey Life
6.30pm5 News at 6.30
7pmCricket on 5: England v
South Africa; 5 News Update
8pmCHOICE 9/11: The
Woman Who Wasnt There:
Documentary about Tania
Head; 5 News at 9
9pmThe Hotel Inspector
10pmCelebrity Big Brother
11pmCelebrity Big Brothers
Bit on the Side
12amSuperCasino
3.55amGreat Artists 4.25am
House Doctor 4.50amMichaelas
Wild Challenge 5.10amWildlife
SOS 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 24
10 28
45
11 15
16 15 7
21 17
13 6
9 39
14 12 3
17 11
45
27 30
18
22
34
33
4
10
23
5
29
7
12
28
21
11
13
18
14
8
18
16
35
32
ACROSS
1 Bone in the leg (5)
4 Tree with rot-
resistant wood (5)
7 Swerves of course
momentarily (4)
8 Puts into a
letterbox (5)
9 Expressed in
words (4)
10 Free from danger (4)
12 Bathroom xtures (4)
15 Birds
construction(4)
17 Hostelries (4)
19 Landscaped complex
of shops (4)
20 Church passage (5)
22 Biblical rst man (4)
23 Thin porridge (5)
24 Become rotten,
as of an egg, for
example (5)
DOWN
1 Inferior (especially
of a countrys
leadership) (6)
2 Heating elements in
an electric re (4)
3 Bottomless gulf (5)
5 Diminish (6)
6 Science of morals in
human conduct (6)
11 Beard found on a
bract of grass (3)
13 Icon representing
a person, used
in internet chat
and games (6)
14 Fodder harvested
while green (6)
16 From that place (6)
18 Latin American
dance (5)
21 Grains on the
beach (4)
H
A
S
E
D I
N
L
M

4
B R O T H C H A T S
U H P F T
S E R E R A N G E R
U A V E H A
P I T T E D C A N T
E A R T I S A N A
R I P E C E D I N G
H I A T E E
E X O C E T N O R M
R C E Z Y
O H A R E B A B E L
7 4 2 1 6 9 7 8
9 8 1 7 1 4 2 6
3 8 9 2 1 3
8 6 4 9 7 8 5 9
4 1 2 4 1 6 3
9 3 8 5 2 9 4 1
2 7 3 1 4 8 9
7 8 9 8 9 5 6 7
9 5 2 9 7 3
5 4 2 1 3 2 7 1
8 9 6 4 5 1 8 9
4
4
4
4
4
4
4
4
4
The nine-letter word was
HOUSEMAID
T
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
THURSDAY 16 AUGUST 2012
THE BBC 999 AWARDS
BBC1, 8PM
Ceremony paying tribute to the work
of Britains emergency services, with
awards for those who have gone
beyond the call of duty.
THE BEST OF MEN
BBC2, 9PM
Fact-based drama about the birth of
the Paralympics. Dr Ludwig Guttmann
transforms the lives of paralysed
soldiers at Stoke Mandeville Hospital.
9/11: THE WOMAN WHO WASNT
THERE CHANNEL5, 8PM
Documentary about Tania Head, who
fabricated a story about having
escaped the September 11 terrorist
attacks.
TVPICK
T
WO concepts are essential to
any dressing room in sport:
respect and trust for fellow
players and coaches, and when
those are compromised, there is
nothing worse.
There is no doubt that Kevin
Pietersen is an immensely talented
batsman he has reminded us as
recently as the current series
against South Africa, which
resumes today.
But following the controversy
surrounding his text messages to
opposing players I would be very
surprised, and disappointed, if he
ever played for England again.
For a long time he seems to have
had something of a scrambled mind
and been inconsistent in his actions.
With the advent of social media,
these actions appear to have become
more frequent. This is the last straw.
Im sure there have been times
when he has really got up the noses
of others in that England side.
Clearly Pietersen thinks more about
himself than the team everyone
surely recognises that, even him.
Now he has crossed the line. He is
CRICKET
COMMENT
ANDY LLOYD
Pietersen has apologised for texts he sent
to South Africa players about Strauss
SPORT
19
THURSDAY 16 AUGUST 2012
cityam.com
At Aberdeen, we know teamwork matters.
Thats why we all pull together.
Aberdeen Asset Management Cowes Week
11 18 August 2012.
www.aberdeen-asset.com/cowes

August 2012. 11 18
deen Asset Aber
s wh That
deen, Aber t A

August 2012.
C Management deen Asset
pull all y we
we know deen,
eek W owes C
. together
work matters. team we know

work matters.

deen-asset .aber www
August 2012. 11 18

.com/cowes deen-asset
August 2012.

IN BRIEF
Injured Nadal to miss US Open
nTENNIS: World No3 Rafael Nadal
has withdrawn from the US Open
because of a knee injury. This latest
blow in the decorated Spaniards
career follows his withdrawal from
London 2012 for the same injury. He
said: I am very sad to announce that I
am still not ready to play and have to
withdraw from this years US Open.
Gemili to compete over 200m
nATHLETICS: Teenage sprinter Adam
Gemili will compete in the 200m at
the Aviva Birmingham Grand Prix later
this month. He said: I am keen to
show that I can make that transition
from the 100m and compete against
the best.
Campbell to debate going pro
nBOXING: London 2012 gold
medallist Luke Campbell says he will
take his time before deciding whether
to become a professional boxer or stay
amateur. He said: Theres a decision
to be made and I won't be rash.
Muamba announces retirement
nFOOTBALL: Bolton midfielder
Fabrice Muamba has announced his
immediate retirement from football
following advice based on his March
cardiac arrest in an FA Cup match
between Bolton and Tottenham.
COWES WEEK
DIARY
SARAH GOSLING
T
HE big Wednesday certainly
materialised at Aberdeen
Asset Management Cowes
Week yesterday. Racing was
abandoned for the White Group
smaller boats because of the wind,
so unfortunately there was no
sailing for them. This was not a
popular decision among those who
wanted to take the conditions on.
As a consequence, results have
remained the same after day five
and the current overall winner for
the White Group, Ziva, from the
London 2012 Olympic medallists have joined the sailing party
Victory class keeps a clean score
card of four wins.
The Black Group, the big boats,
started racing yesterday in a wet
wind. While all sailors are used to
Results
getting wet, rain is just an
unpleasant distraction which
comes with unstable winds and big
changes in strength, so it is tough
to get tactics right.
If I was racing in such conditions
I would do my best to ignore the
rain and get on with it; even
though its windy, every second
counts. One bad manoeuvre will
have made the difference between
winning and coming second.
People watch today includes a
number of the successful British
Olympic Team. Silver medallist Zara
Phillips will fire the start gun at
the Royal Yacht Squadron for the
annual Artemis Challenge round
the Island race. Racing on board
the boats for the 50-mile sprint will
be silver and bronze medallist Nick
Dempsey, and the womens Match
Racing team.
Sarah Gosling is a double gold medal-
winning former Olympic sailor.
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ENGLAND captain Andrew Strauss
admits he feels let down and
confused by dropped batsman
Kevin Pietersens disloyalty, but
has left the door open for his
colleague to return to the side.
Strausss 100th Test match,
which begins today at Lords and
represents the climax to a crucial
series, has been overshadowed by
Pietersen, who was axed on
Sunday for sending text messages
disparaging the skipper to their
South African opponents.
I feel a little bit let down by
Kevin, if Im honest, but this isnt
an issue between me and Kevin,
said Strauss.
Its a broader issue than that
and its very important that I act
in the best interests of the
England cricket team. Its not a
personal thing.
Strauss gave a qualified welcome
to Pietersens apology to England
chiefs yesterday for what he
conceded were provocative texts
to friends in the tourists squad.
Its a step forward, a step in the
right direction, he added. But
this issue hasnt just been about
the text messages. Theres been a
bit more of a broader issue about
trust and mutual respect and that
issue Im very keen to resolve. Its
not going to be resolved overnight.
I would like Kevin to play for
England again but only if we
resolve the issues that we need
to resolve.
Strauss down
but prepared
to move on
BY FRANK DALLERES
Pietersen should never
play for England again
32, has scored 7,000 runs, been a
brilliant player and contributed
much to Englands success for that
we thank him. But in sport you
always have to move on, and now
they must.
Yesterday he apologised for
sending provocative texts,
thought to disparage his captain
Andrew Strauss, to South African
players. England chiefs are
considering their next move.
In my view, its just words. Hes
full of them and they have often got
him into trouble. This time there is
nothing he can say to fix it.
Many of the selectors in charge
are the same ones who appointed
Pietersen England captain a few
years ago. He didnt get on with
coach Peter Moores, and it ended
both of their tenures.
That revolved around his
intransigence, so this is far from
new territory. I believe national
selector Geoff Miller has given
Pietersen more than enough
chances over the years.
Clearly, a man of his ability will
be missed. Young Jonny Bairstow,
who takes his place for the third
and final Test, cant be expected to
be as good as Pietersen yet.
But this is an occasion when the
whole can be greater than the sum
of its parts. It is better than the
alternative after all, if you were
Andrew Strauss could you really
respect Pietersen?
All this means it doesnt look
great for England, with South Africa
just needing a draw at Lords to win
the series. But I suspect that if ever
there was a Test these players are
desperate to win, its this one not
to keep their No1 Test ranking, but
to show the world they dont need
Kevin Pietersen.
Andy Lloyd is a former England Test
cricketer who captained, and then later
acted as chairman of, Warwickshire.
ENGLAND manager Roy Hodgson
was full of praise for last nights
debutants after his youthful side
came back from behind to defeat
Italy in Berne.
Jack Butland and Tom Cleverley
played from the start and John
Ruddy, Ryan Bertrand and Jake
Livermore played their first
matches as substitutes as goals
from Phil Jagielka and Jermain
Defoe rendered Daniele De Rossis
header ultimately peripheral.
It was good to blood new
players and give some others who
havent played so much a chance,
said Hodgson in Switzerland.
They answered the challenge in
the best possible way it was a
good victory.
It might have been different if
all the players had been the same
as the ones throughout the Euros.
I have been pleased to see
[Cleverley] in the form he has been
showing this season and it was
terrific for him to play for the
England first team.
It is not about systems, it is
more about players. The three
guys in midfield passed the ball
and controlled the ball well and
the wide players did well too.
It was in the 15th minute that
De Rossi powerfully headed in
from an Italy corner but when Phil
Jagielka dived to head a 27th-
minute equaliser, England were
given a lift that eventually resulted
in Defoes outstanding late winner.
Hodgson: New
boys played
quite Cleverley
ARSENAL last night gave the green
light to one of the most contentious
transfers in Premier League history
when they accepted a 24m bid from
Manchester United for captain Robin
van Persie.
Last seasons top scorer and player
of the year will complete a move to
Old Trafford in the next 48 hours
and could make his United debut in
their opening match of the season
on Monday at Everton.
The Holland forward, who scored
44 in 57 games last season, is set to
earn more than 200,000 a week,
having rejected Arsenals offer of a
new contract with a pay rise to
around 120,000 per week.
Van Persie gave furious Gunners
chiefs little choice but to sell by
declaring last month that, with 12
months left on his deal, he would
not sign new terms because he had
lost faith the clubs direction.
Italian champions Juventus and
Premier League winners
Manchester City also courted
Van Persie, but he is under-
stood to have made it clear
that United, Arsenals one-
time rivals, were his
preferred destination.
Wenger drove a hard
bargain in exchange for
selling to United manager Sir Alex
Ferguson, with whom he has
endured an at times bitter relation-
ship, rejecting lower bids and
demanding 25m for the 29-year-old.
The Frenchman prepared for Van
Persies departure by signing two for-
wards early in the close season, in ver-
satile Germany star Lukas Podolski
and French footballs top scorer last
term, Olivier Giroud.
But the Arsenal boss will come
under pressure to reinvest the pro-
ceeds of Van Persies sale in order to
repair some of the morale damaged
by the loss of the clubs star player to
a club they aspire to challenge.
The deal represents a coup for
United, seeking to recapture their
title from big-spending neighbours
City, although the fee is a gamble
given the Dutchmans history of
injuries before last season.
The Gunners said in a state-
ment: Arsenal can confirm
that terms have been agreed
for the transfer of Robin van
Persie to Manchester United.
Van Persie will travel to
Manchester on Thursday in
order to agree personal
terms and complete a
medical.
THURSDAY 16 AUGUST 2012
20
SPORT
cityam.com/sport
BY FRANK DALLERES
Robin van Persie scored 44 goals
in 57 games last season
I would like Kevin to play for
England again if we resolve the
issues that need to be resolved
England captain Andrew Strauss on Kevin Pietersens
international future, Page 19

ENGLAND...................................2
ITALY...........................................1
BY DECLAN WARRINGTON
INTERNATIONAL FRIENDLY
England substitute Jermain Defoe scored the winning goal in the games 80th minute
@cityam_sport
United land
Van Persie in
24m swoop