WEDNESDAY 13 SEPTEMBER 2017 WORLD BUSINESS NEWSPAPER USA $2.50 Canada C$3.

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Buffetts dark side End of the chaebol? Seeding Brexit

How the celebrated investor broke Samsung scandal may finally lead to Fading EU workforce is forcing UK
US capitalism COMMENT, PAGE 9 reform of Korea Inc BIG READ, PAGE 7 farmers to change crops PAGE 4

Fox scandals Job lot Workers take to streets in first

show of opposition to Macron reform
Briefing
i Big names take bond market by storm

risk derailing Apple, Alphabet and Microsoft are among a host of

top-tier US groups that have become a force in the
global market, as they pump hundreds of billions of
dollars into government and company debt. PAGE 11

Murdochs
i US income surge defies decay narrative
Household incomes have forged ahead for a second
year running, defying the narrative of economic
decay that hung over the presidential election
campaign last year. Poverty also declined. PAGE 4

12bn UK deal i Economists say Fed steady after storms

Analysts have predicted that economic damage
from storms Harvey and Irma is likely to be fleeting
and should do little to alter the Federal Reserves
strategy for tightening monetary policy. PAGE 3

3 Sky move set for unexpected probe
3 Broadcasting standards face scrutiny
DAVID BOND AND
MATTHEW GARRAHAN LONDON
Recent scandals at Fox News are threat-
ening to derail Rupert Murdochs pro-
posed 11.7bn takeover of European
pay TV group Sky, after the UK govern-
ment signalled it was likely to widen an
investigation by regulators into the deal.
In a significant shift, Karen Bradley,
the culture secretary, said she was likely
to refer the bid to the Competition and
Markets Authority to decide whether
21st Century Foxs acquisition of the Sky
shares it does not own would comply
with UK broadcasting standards.
This means a succession of scandals at
Fox News, together with its handling of
them, are likely to be considered by the
regulator as it weighs the deal.
The minister had previously ruled out
referring the deal based on broadcasting
standards, saying instead that it would
only be referred to the CMA over
whether it would give Mr Murdoch too
much control of the UK media market.
But Ms Bradley told MPs there were
grounds to widen the probe, pointing to
weaknesses in Foxs corporate govern-
ance arrangements.
Her shift, which followed intensive
campaigning from anti-Murdoch
groups and a cross-party group of MPs,
also overruled a recommendation from
UK media regulator Ofcom, prompting
some analysts to question whether it
was politically motivated.
This was a political decision, said
Claire Enders of Enders Analysis. Its
very peculiar to override Ofcom despite
no change to their advice.
i Bad loan plunge signals hope for Italy
The stock of bad debts held by
the countrys banks has fallen
by a record amount in a sign
Fox said it was disappointed with that the sector is benefiting
the decision to overrule Ofcom, adding: from stronger growth and more
We are surprised that after independ- investor interest. PAGE 2
ent regulatory scrutiny and advice, and
over four months to examine the case, i Norway poised to break Nordic mould
the secretary of state is still unable to The government has won re-election but will need
form an opinion. backing from all four centre-right parties to govern,
It urged Ms Bradley to take a final threatening the dominance of social democratic
decision quickly. parties. PAGE 2; EDITORIAL COMMENT, PAGE 8
Ms Bradley gave all parties 10 days
to respond, after which she is likely to i S Africa central bank accuses watchdog
trigger the CMA investigation, which The bank has accused government watchdog
could take six months. Busisiwe Mkhwebane of meeting President Jacob
An effort by Mr Murdoch to take over Zumas lawyers and state security officials in an
Sky seven years ago collapsed after the attempt to undermine its independence. PAGE 4
mogul was engulfed in a similar back-
lash over corporate standards at his i Green finance grows into the mainstream
media empire. He dropped the 8bn bid A survey has shown that more than two-thirds of
in 2011 after political outrage over reve- big investors plan to increase holdings related to
lations that his UK-based newspapers tackling climate change, suggesting so-called green
had hacked into the voicemail of story finance is moving into the mainstream. PAGE 14
subjects.
A series of letters between Ms Bradley
and Sharon White, the chief executive of Datawatch
Ofcom, revealed a split between the
minister and the regulator over whether
there were sufficient grounds for a CMA In Chinese sights Brussels is looking
probe into Fox broadcasting standards. Top M&A sectors, 2007-17 ($bn) to better protect
Ofcom argued that, while its own Philippe Huguen/AFP/Getty Images its sensitive
No. of industries from
three-month inquiry revealed concerns Frances second-largest union was far below the turnout at tests. Police fired water cannon deals
Chinese and other
over corporate governance at Fox, they led protests across the country protests last year when and dragged several protesters Property 32 foreign takeovers.
were unlikely to cause a breach of yesterday against labour Franois Hollande sought to away. Technology 113 In the past
broadcasting standards in the UK. reforms planned by Emmanuel pass less ambitious reforms. Mr Macron was not in France Auto 73 10 years, the
Fox News has been beset by a series of Macron in the first big show of Paris police said 24,000 pro- during the marches, having Utilities 48 largest number
racial and sexual harassment scandals opposition to the new presi- tested in the capital; the CGT flown to the French territory of Mining 14 and the second
in the US, which have resulted in the dents liberalisation drive. union estimated 60,000. St Martin, which suffered Finance 33 largest amount of
Machinery 110
departure of a string of top executives, Although polls suggest two- In Paris, demonstrators were severe damage from Hurricane Chinese deals in
including the late chairman, Roger thirds of people are sceptical of mostly peaceful, although riot Irma at the weekend. 0 10 20 30 the EU were in the
Ailes, and Fox News anchor Bill OReilly. Mr Macrons proposal, the esti- police clashed with hooded First public test page 2 Source: Dealogic technology sector
Analysis page 12 mated number of protesters youths on the fringe of the pro- Notebook page 8

South Africas anti-Gupta campaigners

Murky shipping network
keeps North Korea afloat
An opaque network of ships, people
and businesses perpetuating trade
flows to North Korea suggests the
international community faces a huge
challenge if the latest sanctions on the
country the toughest yet are to
succeed. The Security Council agrees
that vessels suspected of transporting
proscribed goods should be inspected
but hundreds of them are owned by
companies in Hong Kong, where it is
not illegal to deal with North Korea.
Analysis i PAGE 3
call on businesses to boycott KPMG
JOSEPH COTTERILL
AND MADISON MARRIAGE LONDON
South African businesses have come
under pressure to cut ties with KPMG
over the auditors work for companies
owned by the controversial Gupta fam-
ily, as the fallout deepens from a scan-
dal that has already caused the implo-
sion of British PR firm Bell Pottinger.
Save South Africa, a civil society group
that helped expose Bell Pottingers ethi-
cal lapses in the country, called on blue-
chip names including the Johannesburg
stock exchange and the countrys big-
gest banks to drop the auditor.
KPMG could be the next Bell Pot-
tinger, the group said, accusing the
auditor of playing a central role in facil-
itating state capture by the Guptas.
Activists allege the Guptas used their
friendship with Jacob Zuma, the coun-
trys president, to manipulate ministe-
rial appointments and state contracts in
favour of their businesses. These busi-
nesses were audited by KPMG South
Africa for 15 years until March 2016,
when it resigned the contract.
KPMG International said it had
launched a review of its work for Gupta-
owned companies, and a spokesperson
said it was taking this matter incredi-
bly seriously.
Were determined to rebuild the
publics trust in KPMGs South African
firm, and will stand behind the firm and
will work with it for as long as it takes to
ensure there is a full and ongoing
response to the results of the review,
the spokesperson said.
The call for companies to drop the
auditor reflects how South African
activists have been emboldened by the
fall of Bell Pottinger, which was aban-
doned by clients after its work repre-
senting the Guptas was found to have
been potentially racially divisive.
Yesterday, Bell Pottinger announced
it had been forced to wind up its UK
business, with BDO appointed adminis-
trators for the PR firms British arms.
Several South African organisations
and individuals have distanced them-
selves from KPMG. Iraj Abedian, chief
executive of Pan-African Research,
stepped down as a non-executive direc-
tor at Munich Re last week because the
reinsurer would not fire KPMG.
The controversy surrounding KPMG
erupted after leaked emails showed its
South Africa office approved a Gupta-
owned company, Linkway Trading, to
treat spending on a Gupta family wed-
ding in 2013 as a business expense. Four
KPMG partners attended the wedding.
Bell Pottinger wind-up page 14

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2 FINANCIAL TIMES Wednesday 13 September 2017

INTERNATIONAL

Labour protests Non-performing loans

Thousands march against Macron reforms Italian banks

bad debts hit
Opposition to jobs market largely orderly, although riot police
clashed with hooded youths on the
she marched. This law will further
impoverish the weakest. The CGT has
suggest that more than half of voters are
unhappy with the centrist and that two-
protests. He visited St Martin in the Car-
ibbean, which was hit by Hurricane
3-year low
overhaul falls short of last
years demonstrations
fringe of the protests. Police fired water
cannons and dragged several demonst-
called for further protests on September
21 while France Insoumise, the leftwing
thirds are sceptical of the labour
reforms. He sparked criticism when he
Irma, to show support for relief efforts
to the Dutch-French island.
as economy
HARRIET AGNEW PARIS
rators away, television images showed.
Police said 24,000 joined in the pro-
test while the CGT put it at 60,000.
movement of presidential candidate
Jean-Luc Mlenchon, has also called for
protests on September 23.
described opponents of his reforms as
lazy during a visit to Greece last week.
Philippe Martinez, CGT leader, has
The labour reforms are set to be adop-
ted by parliament this month. Busi-
nesses with fewer than 50 workers 95
rebounds
Tens of thousands of protesters turned The figures are far below the turnout Mr Macrons approval ratings have called the bulk of the labour laws seri- per cent of French companies will be
out across France yesterday in the first last year when President Franois Holl- plummeted since he took office in May ous social regressions that give full able to negotiate specific deals directly VALENTINA ROMEI AND THOMAS HALE
LONDON
big public challenge to President Emm- ande tried to pass less ambitious labour as Frances youngest president. Polls powers to employers. He has vowed to with employees and without union rep-
anuel Macrons labour reform plans. reforms which sparked weeks of violent fight until the end to make sure these resentatives on areas such as working The stock of bad debts held by Italian
But the day of strikes called by the protests led by the CGT, which brought decrees dont pass. hours, pay and overtime. Larger compa- banks fell by a record amount in July in
countrys second-largest labour union hundreds of thousands out at the peak. But other unions have shown them- nies will be able to negotiate ad hoc a sign that the countrys struggling
appeared unlikely to derail attempts by The protests represent an early chal- selves more willing to compromise. Nei- deals with unions instead of having to financial sector is starting to benefit
his government to liberalise the jobs lenge to Mr Macrons determination to ther the CFDT, Frances largest trade abide by more rigid sector-wide rules. from stronger economic growth and
market to try to cut unemployment. liberalise the jobs market, which he says union syndicate, nor Force Ouvrire, As well as the reforms, other protest- more investor interest.
The hardline CGT union announced will help to make France more attrac- another big union, joined the strikes. ers complained about tax breaks for the
180 protests and 4,000 strikes and tive to foreign investors, coax busin- The challenge for the CGT will be to wealthy, including the overhaul of the The total volume of bad debts shrank by
called on civil servants, rail and trans- esses to hire more staff and reduce an keep momentum going among reform wealth tax. 18bn, or nearly 10 per cent, compared
port workers, and students for support. unemployment rate of over 9 per cent. opponents, as Mr Macrons large major- The richest people will pay less, said with the previous month to 173bn
Protests took place in cities including It is a liberal law made for the haves, ity in parliament puts him in a stronger Khemais Saidani, a CGT member who the largest reduction since the Bank of
Paris, Marseille, Lyon and Nantes. said Francoise Pavard, a CGT member Demonstrators against the reforms position than his predecessor. was handing out leaflets for France Italy started to record data in 1998. The
In Paris, protests were noisy but who works at a private health clinic, as clash with riot police in Lyon, France Mr Macron did not see yesterdays Insoumise. There is no more equality. stock of bad loans is at its lowest level
since 2014.
Italys stock of non-performing loans
has weighed on banks in recent years,
making it more difficult for them to
Interview. Benjamin Griveaux extend new credit to customers. That
has held back the countrys economic

Presidents disciple seeks to restore faith in France recovery, prompting concerns from
domestic and European policymakers.
But the recent reduction in volumes
comes alongside evidence of improving
economic conditions in Italy, contribut-
ing to wider confidence in the euro-
Member of En Marche inner zones return to economic health. In the
circle has the job of luring second quarter this year, Italys gross
domestic product grew at its fastest
London bankers to Paris annual pace since 2011.
The drop comes after increased inves-
tor demand to buy bad debts from Ital-
ANNE-SYLVAINE CHASSANY PARIS
ian lenders and greater regulatory pres-
Frances junior economy minister Ben- sure from the European Central Bank
jamin Griveaux is more than just on banks to improve their balance
another envoy sent by President sheets. In July UniCredit finalised the
Emmanuel Macron this week to lure sale of 17.7bn of bad loans to Pimco and
bankers from London. He is part of the Fortress, while smaller banks have
French leaders inner circle. sought to securitise or parcel up for
In Bercy, the economy ministry build- sale portfolios of loans.
ing by the Seine, Mr Griveaux sits in the Italy accounted for the most NPL
office that Mr Macron occupied a year deals globally in the first half of the year,
ago before launching his presidential according to data from Deloitte, which
bid with his new party, En Marche. says Italy is set to be the most active
Youre sitting where I sat when we market for distressed debt in Europe
first talked about En Marche with this year.
Emmanuel, Mr Griveaux says, naming Investors have been reassured by
three others present. But thats all reforms that have helped speed up
youll know. The participants pledged insolvency and enforcement proceed-
never to write about this meeting, he ings, and strengthen bank governance.
says. The year 2015 is the only fact the Banks sale of NPL portfolios will free
minister is willing to confirm. capital to do additional profitable busi-
Mr Griveaux is part of an elite unit the ness, improve their credit standing and
French press has dubbed the Macron thus reduce their cost of capital, said
boys a handful of 30-something loy- Lorenzo Codogno, a former chief econo-
alists on a mission to reform France. mist at Italys treasury and founder of
After Mr Macrons victory in a run-off LC Macro Advisors.
against far-right leader Marine Le Pen in Analysts say the market for NPLs has
May, they see their leaders term as a matured and banks selling loans are
last-ditch attempt to keep France out of Benjamin after Brexit. He says he will not only pro- finance minister and former head of the For 30 does not mean a break from a French achieving higher prices. Luca Olivieri at
the hands of populists. Griveaux is mote the governments tax breaks for International Monetary Fund. statist tradition. Mr Macron is seeking Deloitte said: A bank that is willing to
With Mr Macron, when he was econ- spreading the the wealthy, reduced corporate tax, Mr Griveaux says the group vowed to years, we to promote interventionism in Europe sell an NPL portfolio no longer considers
omy minister under socialist president word of Frances international school places for expatri- end 30 years of inertia that served the have pitted by championing more protective EU these investors as people trying to make
Franois Hollande, they dreamt up the new business- ate families and the capitals quality of interests of a cast of insiders those trade policies and a tougher screening of profit out of them, but as a resource to
cross-party platform that went on to friendly era life, he will also spread the word of a new, born to well-off families as well as the capital foreign investments in the bloc. solve some of their problems.
transform Frances postwar politics. Leo Novel/FT
resolutely business-friendly era. unions and the professions that have against The EU has failed to protect its peo- However, Amelia Colvin, head of
Now, Mr Griveaux is being tasked by Within six months, all the things built barriers to entry. Meanwhile, the ple, Mr Griveaux says. Why should NPLs and distressed at Cadogan Securi-
the French leader to throw his weight weve announced will be implemented, outsiders immigrants and low- labour Europe be so blatantly naive in matters ties in London, said that while investor
behindFrancesaggressiveeffortstowoo he says. Something has changed in the skilled youth are more likely to be in this of trade? appetite had improved, many deals
London bankers to Paris ahead of the kingdom of France. unemployed or on temporary contracts. The French are defiant but they have were still failing to close. If every deal
UKs departure from the EU. Mr Griveauxs role offers a glimpse This battle to break with the old poli- country, become more optimistic, he insists, that came to market closed, the vol-
Whether Mr Griveaux, who has little into Mr Macrons way of governing. tics, I want to lead it in capitalism. Were and weve while opposition parties including the umes would be huge.
experience of government and spent Among those at the Bercy meeting in fighting for fair competition. So that far right and hard left have lost the The drop in bad debts is in line with an
most of his career in local politics as a 2015, two have been appointed to key everyone can play, Mr Griveaux says. managed to magnetic north. incipient recovery in some sectors of the
socialist, will be able to make a differ- ministries: in addition to Mr Griveaux, For 30 years, we have pitted capital get neither We will succeed when parents believe Italian economy.
ence is unclear. Paris has struggled to 39, Julien Denormandie, 36, has been against labour in this country, and weve their children will be better off. I am con- Corporate bad debt linked to the man-
attract the big names of the financial appointed junior minister in charge of managed something extraordinary: to of the two vinced theres a silent majority who is in ufacturing sector has fallen 6bn since
services industry, as banks seem more regional development. Another pillar of get neither of the two . . . Its absurd to wait-and-see mode, he says. My gener- the start of the year: industrial produc-
tempted by Frankfurt and insurers by the group is Ismal Emelien, 30, the see that whenever start-ups need to ation has to take care of the previous and tion rose by an annual 4.4 per cent in
Luxembourg, Dublin and Brussels. presidents discreet strategy guru at the raise funds, after a certain time, they the following ones after 30 years of negli- July, beating expectations. There was a
Mr Griveaux was in London a day after Elyse Palace who like Mr Griveaux move elsewhere. gence. But not by spending more public larger fall in bad debts in the construc-
US insurance group Chubb announced it also worked for Dominique Strauss- While this vision entails more deregu- money, this time by investing. tion sector, which started to benefit
would move its EU head office to Paris Kahn, the former social-democratic lation of the jobs markets at home, it Notebook page 8 from stability in Italys house prices.

Historic re-election
MAKE A SMART INVESTMENT
Subscribe to the FT today at FT.com/subscription Norways centre-right must overcome divisions to exploit win
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK 2.70 Channel Islands 3.00; Republic of Ireland 3.00
RICHARD MILNE OSLO might mean that the reality in the rest of had gone to Progress. We [in Norway] a government with Progress, which the
Trump vs the Valley A Five Star plan? Dear Don...
Europe comes to Scandinavia. have boasted that we are not like other Liberals the other smaller centre-
Tech titans need to minimise
political risk GILLIAN TETT, PAGE 13
Italys populists are trying to woo
the poor BIG READ, PAGE 11
Mays first stab at the break-up
letter ROBERT SHRIMSLEY, PAGE 12
Norways centre-right government has
HMRC warns Lloyds of Brussels Insurance market The centre-right was on course to countries. But there are Labour voters right party is considering.
won its historic re-election bid but it
UK 3.80; Channel Islands 3.80; Republic of Ireland 3.80 SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017
Briefing
to tap new talent pool with EU base
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

hold 88 seats in the new parliament ver- who feel this isnt my party any more The next government will also have to
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the
HOW DRIVERLESS
OF THE TECHNOLOGY IS
Atlantic. PAGE 15; CHINA CURBS HIT DEALS, PAGE 17

being swamped
will find forming a stable administra-
i Report outlines longer NHS waiting times
A report on how the health service can survive CHANGING AN
ROAD
more austerity has said patients will wait longer for
non-urgent operations and for A&E treatment while AMERICAN WAY OF LIFE Censors and sensitivity
by Brexit surge
some surgical procedures will be scrapped. PAGE 4

sus 81 for the centre-left after nearly all and I think some have moved to the rein in its use of money from Norways
i Emerging nations in record debt sales Warning: this article may be
FT WEEKEND MAGAZINE
FEBRUARY 4 2017

Developing countries have sold record levels of

government debt in the first quarter of this year,
upsetting LIFE & ARTS

tion in western Europes biggest oil pro-

taking advantage of a surge in optimism toward
emerging markets as trade booms. PAGE 15

3 Confidence in IT plans has collapsed

3 Fivefold rise in declarations expected
JAMES BLITZ WHITEHALL EDITOR
Credit Suisse Art of persuasion Mystery deepens
i London tower plans break records
How To Spend It
the votes were counted. The Labour Progress party, Mr Bonde said. sovereign wealth fund, the worlds larg-
A survey has revealed that a
adjust its negotiation position with the
record 455 tall buildings are
planned or under construction
in London. Work began on
over disputed painting of Jane Austen
engulfed in
EU, a Whitehall official said. If running almost one tower a week

ducer a tricky feat.

A computer system acquired to collect our own customs system is proving during 2016. PAGE 4
duties and clear imports into the UK much harder than we anticipated, that
may not be able to handle the huge ought to have an impact on how we i Tillerson fails to ease Turkey tensions
surge in workload expected once Britain press for certain options in Brussels. The US secretary of state has failed to reconcile

fresh tax probe

leaves the EU, customs authorities have
admitted to MPs.
HM Revenue & Customs told a parlia-
mentary inquiry that the new system
needed urgent action to be ready by
March 2019, when Brexit is due to be
completed, and the chair of the probe
said confidence it would be operational
in time has collapsed.
party may have kept up its record of Mr Isaksen hinted that the govern- est, in the budget, where it reached the
In a letter to Andrew Tyrie, chairman tensions after talks in Ankara with President Recep
of the Commons treasury select com-
mittee, HMRC said the timetable for
Tayyip Erdogan on issues including Syria and the
extradition of cleric Fethullah Gulen. PAGE 9
Chic new lodgings
delivering CDS was challenging but
achievable. But, it added, CDS was a i Toshiba investors doubt revival plan
in Scotland
complex programme that needed to be In a stormy three-hour meeting, investors accused MAGAZINE
linked to dozens of other computer sys- managers ofhaving an entrenched secrecy culture
tems to work properly. In November, 3 UK, France and Netherlands swoop
and cast doubt on a revival plan after Westinghouse
HMRC assigned a green traffic light to filed for Chapter 11 bankruptcy protection. PAGE 16
3 Blow for bid to clean up Swiss image

Setting up a digital customs system
has been at the heart of Whitehalls
Brexit planning because of the fivefold
increase in declarations expected at
British ports when the UK leaves the EU.
Prime minister Erna Solberg saw her being the best supported party in every ment could seek to play on divisions in equivalent of about 8 per cent of gross
CDS, indicating it would be delivered on
time. But last month, it wrote to the i HSBC woos transgender customers
committee saying the programme had The bank has unveiled a range of gender-neutral
RALPH ATKINS ZURICH it followed a strategy offull client tax
been relegated to amber/red, which DUNCAN
titles such asROBINSON BRUSSELS
Mx, in addition to Mr, Mrs, Misscompliance
or but was still trying to
means there are major risks or issues Ms, in a move to embrace diversity and cater togather the information about the probes.

FINANCIAL TIMES
About 53 per cent of British imports
come from the EU, and do not require
checks because they arrive through the
single market and customs union. But
apparent in a number ofkey areas. Credit
needs Suisse hascustomers.
of transgender been targeted by
PAGE 20 HM Revenue & Customs said it had
HMRC said last night: [CDS] is on sweeping tax investigations in the UK, launched a criminal investigation into
track to be delivered by January 2019, France and the Netherlands, setting suspected tax evasion and money laun-
and it will be able to support frictionless back Switzerlands attempts to clean up dering by a global financial institution
Datawatch

Theresa May announced in January that
Brexit would include departure from
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
customs union, the number is expected
to hit 300m.
The revelations about the system,
parliamentary majority cut. After Mon- election since 1927 but in every other the centre-left, where five parties domestic product this year.
international trade once the UK leaves its image as a tax haven. and certain ofits employees. The UK
the EU . . . Internal ratings are designed
to make sure that each project gets the
focus and resource it requires for suc-
cessful delivery.
HMRCs letters to the select commit-
tee, which will be published today, pro- AFP
Terror attacks inwith
co-operating

were contacted
Highlighted
western

attack byOthers
Europe after
authorities
offices in London, Paris and Amsterdam
Recent

Published daily except Sundays, New Years Day,

called Customs Declaration Service, are
vide no explanation for the rating
Lloyds of London chose Brus-
insurers to follow. Most of the
EU, with Dublin and Luxem-
The Swiss bank said yesterday it was tax authority added: The international
reach
itsattacks
notably the message
2011
of this investigation sends a clear
that there is no hiding place for
massacre bythose seeking to evade tax.
local officials
concerning client tax matters. Anders BreivikDutch
Norway, the
in prosecutors, who initiated the
Dutch authorities said their counter- action, said they seized jewellery, paint-
The lure of the exotic
Robin Lane Fox on the flair
of foreign flora HOUSE & HOME
parts in Germany wereBrussels attacks in Paris
also involved, ings and gold ingots as part of their

330 Hudson Street, Presidents Day, Good Friday, Memorial Day, Labor
while Australias revenue department and Nice, and the while French officials said their
probe;
likely to throw a sharper spotlight on change, but some MPs believe it was sels over five or six other business written in Brussels bourg thought to be more likely Norway Brussels suicide
said it was investigating a Swiss
Nice bank. investigation had revealed several

whether Whitehall can implement a
host of regulatory regimes in areas
ranging from customs and immigration
to agriculture and fisheries by the
time Britain leaves the EU.
Problems with CDS and other projects
caused by Mrs Mays unexpected deci-
sion to leave the EU customs union.
Timetable & Great Repeal Bill page 2
Scheme to import EU laws page 3
Editorial Comment & Notebook page 12
Philip Stephens & Chris Giles page 13
cities in its decision to set up an
EU base to help deal with the
expected loss of passporting
rights after Brexit.
John Nelson, chairman of the
centuries-old insurance mar-
will be reinsured back to the
syndicates at its City of London
headquarters, pictured above.
The Belgian capital had not
been seen as the first choice for
Londons specialist insurance
homes for the industry. But
Mr Nelson said the city won on
its transport links, talent pool
and extremely good regula-
tory reputation.
Sources: Janes Terrorism and Insurgency Centre terror incidents in
Lex page 14
Paris
The inquiries threaten to undermine
efforts by the countrys banking sector
to overhaul business models and ensure
customers meet international tax
requirements following a US-led clamp-
days results she will need the support of regard had a miserable night. Fighting Vidar Helgesen, environment minis-
bombings have
thousand bank accounts opened in
bucked the trend
Switzerland and not declared to French
of generally low
tax authorities.
fatalities from
The Swiss attorney-generals office
western Europesaid it was astonished at the way this

New York, NY 10013 essential to Brexit could force London to JPMorgan eye options page 18 ket, said he expected other groups after the UK leaves the Insurers set to follow page 18
billions of dollars in fines.

Day, Martin Luther King Day, Thanksgiving,

down on evaders, which resulted in operation has been organised with the
deliberate exclusion of Switzerland. It
The probes risk sparking an interna- demanded a written explanation from
tional dispute after the Swiss attorney- Dutch authorities.

City watchdog sends a clear message as

all four centre-right parties to govern, the most rightwing elected administra- ter, said: We have been quite honest in
generals office expressed astonish- In 2014, Credit Suisse pleaded guilty
ment that it had been left out of the in the US to an extensive and wide-
actions co-ordinated by Eurojust, the ranging conspiracy to help clients THE RISE
Escape OF
the taper ECO-GLAM
trap
banker loses job over WhatsApp boast
EUs judicial liaison body.
Credit Suisse, whose shares fell 1.2 per

subject ofinvestigations in the Nether- Christmas Day and the day after Christmas Day.
evade tax. It agreed to fines of $2.6bn.
Additional reporting by Laura Noonan in
cent yesterday, identified itself as the Dublin, Caroline Binham and Vanessa
Houlder in London, and Michael Stothard
How high earners can evade
a pension headache FT MONEY

Subscriptions and Customer Service

Shutdown risk as border
LAURA NOONAN DUBLIN
JENNIFER THOMPSON LONDON

A boastful WhatsApp message has cost

a London investment banker his job
and a 37,000 fine in the first case of
Berrys after discussions with regulators.
Christopher Niehaus, a former Jeffer-
ies banker, passed confidential client
information to a personal acquaint-
ance and a friend using WhatsApp,
according to the FCA. The regulator said
media at work, but banks are unable to
ban people from installing apps on their
private phones.
Andrew Bodnar, a barrister at Matrix
Chambers, said the case set a precedent
in that it shows the FCA sees these mes-
lands, France and the UK. The bank said in Paris

Brussels takes tough stance on Brexit

Austens descendants insist the Rice portrait depicts her as a girl see magazine Bridgeman Art Library

rather than just three as in the previous tion in Norways history, Labour scored Prime minister this campaign that during the difficult
with Spain handed veto over Gibraltar
regulators cracking down on commu- 390_Cover_PRESS.indd 1 19/01/2017 13:57

Tel: +1 800 628 8088

wall bid goes over the top
Congressional Republicans seeking to
nications over Facebooks popular
chat app.
Mr Niehaus had turned over his device
to his employer voluntarily.
The FCA said Mr Niehaus had shared
saging apps as the same as everything
else.
Information shared by Mr Niehaus

US subscription rates, 1 year $406. Periodicals Erna Solberg,

avert a US government shutdown after
April 28 have resisted Donald Trumps
attempt to tack funds to pay for a wall
on the US-Mexico border on to
The fine by the Financial Conduct
Authority highlights the increasing
problem new media pose for companies
that need to monitor and archive their
confidential information on the messag-
ing system on a number of occasions
last year to impress people.
Several banks have banned the use of
four-year term giving the two small- just 27 per cent, its second-worst per- years we have been injecting more
included the identity and details of a
client and information about a rival of ALEX BARKER BRUSSELS ambitious trade and airline access deals. mise. If Britain wants to prolong its
Jefferies. In one instance the banker GEORGE PARKER LONDON Gibraltar yesterday hit back at the status within the single market after
boasted how he might be able to pay off STEFAN WAGSTYL BERLIN clause, saying the territory had shame- Brexit, the guidelines state it would

centre, will find

stopgap spending plans. They fear staffs communication. new media from work-issued devices, his mortgage if a deal was successful. The EU yesterday took a tough opening fully been singled out for unfavourable require existing regulatory, budgetary,
that his planned $33bn increase in Several large investment banks have but the situation has become trickier as Mr Niehaus was suspended from Jef- stance in Brexit negotiations, rejecting treatment by the council at the behest of supervisory and enforcement instru-

uscirculation@ft.com, www.ft.com/subsusa
defence and border spending could
force a federal shutdown for the first
time since 2013, as Democrats refuse
banned employees from sending client
information over messaging services
including WhatsApp, which uses an
banks move towards a bring your own
device policy. Goldman Sachs has
clamped down on its staffs phone bills
feries and resigned before the comple-
tion of a disciplinary process.
Jefferies declined to comment while
Living wage rise to pile
pressure on care services
postage paid at New York, NY and at additional
Britains plea for early trade talks and
explicitly giving Spain a veto over any
arrangements that apply to Gibraltar.
Spain. Madrid defended the draft
clause, pointing out that it only reflected
the traditional Spanish position.
ments and structures to apply.
Mr Tusk wants talks on future trade
to begin only once sufficient progress

est groups substantial power to block formance in the past 90 years. money from the oil fund. Going for-
to accept the proposals. encryption system that cannot be as iPhone-loving staff spurn their work- Facebook did not respond to a request Senior EU diplomats noted that has been made on Britains exit bill and
US budget Q&A and accessed without permission from the issued BlackBerrys. for comment. About 2.3m people will benefit from European Council president Donald Mr Tusks text left room for negotiators citizen rights, which Whitehall officials
Trump attack over health bill i PAGE 8 user. Deutsche Bank last year banned Bankers at two institutions said staff Additional reporting by Chloe Cornish todays increase in the national living Tusks first draft of the guidelines, to work with in coming months. Prime believe means simultaneous talks are

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WhatsApp from work-issued Black- are typically trained in how to use new

World Markets
Lombard page 20 wage to 7.50 per hour. But the rise
will pile pressure on English councils,
which will have to pay care workers a
lot more. Some 43 per cent of care
staff amounting to 341,000 people
aged 25 and over earn less than the
which are an important milestone on

mailing offices; Post-Master. Send address changes

the road to Brexit, sought to damp Brit-
ains expectations by setting out a
phased approach to the divorce proc-
ess that prioritises progress on with-
drawal terms.
minister Theresa Mays allies insisted
that the EU negotiating stance was
largely constructive, with one saying it
was within the parameters of what we
were expecting, perhaps more on the
upside.
possible if certain conditions are met.
Boris Johnson, the foreign secretary,
reassured European colleagues at a
Nato summit in Brussels that Mrs May
had not intended to threaten the EU
when she linked security co-operation
forming a stable
things they disagree with, such as open- Jonas Gahr Store, Labours head, was ward, we wont do that in the same mag-
www.ft.com/subscribenow new living wage and the increase is The decision to add the clause giving British officials admitted that the EUs after Brexit with a trade deal.
STOCK MARKETS CURRENCIES INTEREST RATES
Tel: 0800 298 4708 expected to cost councils care services Spain the right to veto any EU-UK trade insistence on a continuing role for the Reports & analysis page 3

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THE FINANCIAL TIMES LTD 2017
No: 39,435
Printed in London, Liverpool, Glasgow, Dublin,
S&P 500
Nasdaq Composite
Dow Jones Ind
FTSEurofirst 300
Euro Stoxx 50
FTSE 100
Mar 30
2365.93
5902.74
prev %chg
2361.13 0.20 $ per
5897.55 0.09 $ per
20703.38 20659.32 0.21 per
1500.72 1493.75 0.47 per $
3481.67
7369.52
Mar 30
1.074
1.249
0.859
prev
1.075 per $
1.241 per $
0.866 per
Mar 30
0.932
0.801
1.164
prev
0.930 US Gov 10 yr
0.806 UK Gov 10 yr
1.155 Ger Gov 10 yr
111.295 111.035 per 119.476 119.363 Jpn Gov 10 yr
3475.27 0.18 per 139.035 137.822 index 76.705 76.951 US Gov 30 yr
7373.72 -0.06 index 89.046 89.372 $ index 104.636 103.930 Ger Gov 2 yr
price
98.87
100.46
98.68
100.45
100.14
102.58
yield
2.38
1.21
0.39
0.06
2.99
-0.75
chg
0.00
-0.03
-0.01
0.00
0.01
0.00
360m in the coming financial year.
Analysis i PAGE 4

Subscribe In print and online

to F.T. Publications Inc., PO Box 469, Newburgh, NY
deals covering Gibraltar could make the
300-year territorial dispute between
Madrid and London an obstacle to
European Court of Justice in any transi-
tion deal could be problematic.
Brussels sees little room for compro-

World Markets
Jonathan Powell, Tim Harford &
Man in the News: David Davis page 11
Henry Mance page 12
government to
ing up the picturesque Lofoten Islands painted as an elite leader, educated in be a tricky feat nitude so budgets will be tighter. Its
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 4011.01 4011.80 -0.02 SFr per 1.069 1.072 SFr per 1.244 1.238 price prev chg

usads@ft.com Chicago, San Francisco, Washington DC, Orlando,

Tokyo, Hong Kong, Singapore, Seoul, Dubai
CAC 40
Xetra Dax
Nikkei
Hang Seng
FTSE All World $
5089.64 5069.04 0.41 COMMODITIES
12256.43 12203.00 0.44
19063.22 19217.48 -0.80 Oil WTI $
24301.09 24392.05 -0.37 Oil Brent $
297.99 297.73 0.09 Gold $
Mar 30
50.22
52.98
1248.80
prev
49.51
52.54
1251.10
Fed Funds Eff
%chg US 3m Bills
1.43 Euro Libor 3m
0.84 UK 3m
-0.18 Prices are latest for edition
0.66
0.78
-0.36
0.34
0.66
0.78
-0.36
0.34
0.00
0.00
0.00
0.00
Data provided by Morningstar
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STOCK MARKETS

S&P 500
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Dow Jones Ind
Mar 31
2367.10
5918.69
prev %chg
CURRENCIES

2368.06 -0.04 $ per

5914.34 0.07 $ per
20689.64 20728.49 -0.19 per
Mar 31
1.070
1.251
0.855
prev
1.074 per $
1.249 per $
0.859 per
Mar 31
0.935
0.800
1.169
prev
INTEREST RATES

0.932 US Gov 10 yr
0.801 UK Gov 10 yr
1.164 Ger Gov 10 yr
price
98.63
100.35
99.27
yield
2.41
1.22
0.33
chg
-0.01
0.02
-0.01
FTSEurofirst 300 1503.03 1500.72 0.15 per $ 111.430 111.295 per 119.180 119.476 Jpn Gov 10 yr 100.36 0.07 0.00
No: 39,436

Letters to the editor Printed in London, Liverpool, Glasgow, Dublin,

Euro Stoxx 50
FTSE 100
3495.59
7322.92
3481.58 0.40 per
7369.52 -0.63 index
139.338 139.035 index
88.767 89.046 $ index
77.226 76.705 US Gov 30 yr
104.536 104.636 Ger Gov 2 yr
99.27
102.57
3.04
-0.75
0.01
0.00

to oil exploration. Paris and at Harvard, with inherited going to be a demanding few years.
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 3990.00 4011.01 -0.52 SFr per 1.071 1.069 SFr per 1.252 1.244 price prev chg
Chicago, San Francisco, Washington DC, Orlando, CAC 40 5122.51 5089.64 0.65 COMMODITIES Fed Funds Eff 0.66 0.66 0.00
Tokyo, Hong Kong, Singapore, Seoul, Dubai Xetra Dax 12312.87 12256.43 0.46 Mar 31 prev %chg US 3m Bills 0.78 0.78 0.00
Nikkei 18909.26 19063.22 -0.81 Oil WTI $ 50.46 50.35 0.22 Euro Libor 3m -0.36 -0.36 0.00
Hang Seng 24111.59 24301.09 -0.78 Oil Brent $ 53.35 53.13 0.41 UK 3m 0.34 0.34 0.00

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Wednesday 13 September 2017
North Koreas opaque trading
networks prop up economy
Rusty ships and shell companies help sustain flows despite tighter sanctions
DON WEINLAND HONG KONG
YUAN YANG DALIAN
small fleet of cargo ships, Union Link
International hoists an exotic array of
flags from China and Tanzania to the
Pacific island nations of Niue and Palau.
But one stands out: a five-pointed red
star on broad horizontal stripes of red
and dark blue. It is North Koreas
national banner and the vessel that flies
it, the Dolphin 26, is just one in a vast
network helping Pyongyang survive the
international sanctions targeting its
weapons programme.
The UN Security Council on Monday
agreed fresh measures against North
Korea and reiterated an agreement to
identify and inspect vessels suspected of
transporting proscribed goods from the
country. But the opacity of the web of
ships, people and businesses perpetuat-
ing such trade flows suggests the inter-
national community faces a huge chal-
lenge if its clampdown is to succeed.
Hundreds of the vessels involved are
owned and managed by companies
based in Hong Kong, where it is not ille-
gal to do business with North Korea.
Some of them are operated by North
Koreans, corporate records show, but
most are backed by Chinese nationals.
These networks have to be impor-
tant to North Korea because the North
Korean economy has been able to do
something no Soviet economy was ever
able to do before, and thats stabilise the
balance of trade and the currency, says
Nicholas Eberstadt of the American
Enterprise Institute, a conservative
think-tank.
Washington-based research group
C4ADS has detailed the characteristics
of shipping networks important to
North Korea. Of a sample of the 248
companies it identifies as managing or
operating businesses connected to the
country, 160 are Hong Kong-registered.
One C4ADS report notes that the
companies employ a variety of
schemes to disguise beneficial owner-
ship, including using flags of conven-
ience for ships, establishing shell and
front companies to register their hold-
ings . . . and using multiple layers of
intermediaries to conduct business.
The Dolphin 26s rusty hull has seen
better days. Its decks were corroded
enough to draw the attention of inspec-
tors in February, according to a Chinese
ports disciplinary report. The vessel
was last spotted in mid-May in Chinas
northern port of Tianjin, ship-tracking
service MarineTraffic shows.
There is no evidence to suggest it has
been used to break any laws. But it
shares many of the characteristics of
ships that have.
The Dolphin 26 has changed its regis-
tered owner and manager six times and
its name three times in the past eight
years, while its flag has been switched
four times in five years, according to
maritime database Equasis.
By swapping flags and shifting owner-
ship between shell companies, experts
say it is much more difficult to identify
patterns and track the activities of peo-
ple behind the shipping companies.
Many of the businesses share Hong
Fed policy expected to stay on course despite storms
Harvey and Irma not likely to
divert central bank from
tightening, experts predict
SAM FLEMING WASHINGTON
LAUREN LEATHERBY NEW YORK
While the physical damage from storms
as ferocious as Harvey and Irma can last
for months and years, the overall eco-
nomic damage is likely to be fleeting and
should do little to alter the Federal
Reserves broader strategy for tighten-
ing monetary policy, economists pre-
dict.
The US central bank lifted short-term
interest rates in 2005, just a month after
Hurricane Katrina battered the Gulf of
Mexico with policymakers at the time
describing the economic ramifications
as significant but essentially tempo-
rary. Chair Janet Yellen may take a sim-
ilar view in the wake of the twin storms
that hit Texas and Florida.
Estimates from Moodys Analytics
put the total physical damage from Har-
vey and Irma at $150bn-$200bn com-
parable to that following Katrina. The
hit to annualised gross domestic prod-
uct growth in the third quarter may be
0.5 percentage points, it said. Separate
estimates from Goldman Sachs suggest
FINANCIAL TIMES
INTERNATIONAL
The obscure Kong addresses with the secretarial If you think
nature of the companies paid to represent them, a
ships and set-up commonly used by shell compa- about the
businesses nies with no real assets in the territory. time and
perpetuating The other ships managed by Union
North Korea Link show similar patterns. The Orien- money
trade flows tal Lady has changed flag six times these
presents a big twice to North Koreas since 2003. The
challenge to the Zhi Hui has used a North Korean flag companies
international four times since 2006. take to hide
community If you think about the time, energy
Wong Maye-E/AP
and money these companies take to their true
hide their true identity, you have to identity,
think that this is important, says Wil-
liam Newcomb, former deputy co-ordi- you must
nator of the US state departments think this is
North Korea working group under Pres-
ident George W Bush. important
Xie Qun, the registered owner of
Union Link, says she has cut down on
the stressful work of running a ship-
ping company in order to look after her
National carriers
Flags on sample of 147 ships linked to trade with North Korea
50
40
30
20
10
0 companies, many based in Dandong on
Cambodia Other Sierra North Panama Mongolia
Leone Korea
Source: C4ADS
Economic strategy. US growth
the hurricane-related disruptions will The next realistic chance to adjust
shave as much as 0.8 percentage points the funds rate is not until mid-Decem-
from growth during that period, lower- ber, and at that point we think some of
ing the likely expansion to 2 per cent. the more noticeable disruptions from
Conversely, headline inflation could the data flow should be behind us,
briefly spike in the aftermath of the added Mr Feroli.
storms, driven by factors such as higher None of this is to play down the short-
petrol prices following refinery shut- term impact from two such violent
downs, as well as an uplift in used car storms. Harvey has triggered a surge in
prices after the storms left a trail of claims for unemployment benefits in
ruined vehicles. The impact on core
inflation which strips out food and
fuel prices and is closely watched by the $200 bn 0.8
Fed may be more muted. Upper estimate Estimated hit in
Analysts stress that big disasters can of damage percentage points
lift growth further out as the rebuilding caused by Irma to GDP growth in
effort gets under way, leaving the overall and Harvey Q3, says Goldman
economy on largely the same longer-
term trajectory. That was the message Texas, for instance. Initial claims rose
from Bill Dudley, New York Fed presi- by 62,000 to a seasonally adjusted
dent last week, when he described the 298,000 in the week ended September
national economic effects of epic storms 2, the biggest weekly jump since 2012,
as modest and transitory. Storm- according to the Labor Department. In
related turmoil could make it hard to 2005 there were more than 500,000
read the economic data given the vola- hurricane-related jobless claims over
tility it will insert into numbers, he said. three months following Katrina, accord-
Michael Feroli of JPMorgan Chase ing to High Frequency Economics.
does not expect Fed policy to be heavily Industrial production is likely to be
affected. At next weeks meeting it is still dented by shutdowns in Texass chemi-
likely to announce the start to the proc- cals and petroleum sector. Power out-
ess of reducing its balance sheet; it has ages have affected more than half the
not been making this move contingent homes and businesses in Florida, hitting
on near-term swings in economic data. utilities output and business activity.
child and elderly parents. Speaking at a
McDonalds restaurant in Dalian, she
says she severed ties with her last North
Korean client in February, as the UN was
about to approve fresh sanctions, and
that she has never knowingly helped
North Korean companies break the law.
Ms Xie notes that many small ship-
ping companies were registered under
her name in Hong Kong, a strategy
aimed at spreading risk should one
ship become involved in a dispute, other
ships and companies would not be
affected. Its common practice in the
industry to register many companies,
she says, adding that industry peers had
told her to do so in Hong Kong, where
companies can be registered without an
address or assets in the territory.
Hong Kong company records show
two dissolved shipping companies regis-
tered under Xie Quns name.
The Chinese territorys Commerce
and Economic Development Bureau
says it is aware of reports from the UN
Panel of Experts accusing companies of
facilitating illicit trade with North Korea
and is looking into the cases in which
Hong Kong-registered companies are
said to be involved.
US regulators and research groups
have homed in on several large Chinese
the border with North Korea, which
they believe are aiding Pyongyangs
weapons programme, as well as the peo-
ple behind the companies.
The states tourism sector has been par-
ticularly exposed to the storms effects.
In addition, it may take time for
rebuilding to get under way especially
in two states where there are shortages
of construction labour. This could mean
wages in the sector are boosted.
Goldman predicts the third-quarter
hit from the two storms will be more
than recouped over the subsequent
three quarters as business investment
and construction activity rallies. You
get an initial negative impact that is
made up in subsequent months and
quarters, and it washes out very
quickly, said Mark Zandi of Moodys
Analytics. It should not have any mate-
rial impact on monetary policy.
That does not necessarily mean the
job of interpreting the coming weeks
data will be easy for the Fed. Inflation
readings will probably be hit by the
storms, at a time when the central bank
is sensitive to fluctuations in prices.
Disappointments on inflation read-
ings have left the Feds interest-rate
decisions finely balanced, with many
investors doubting the central bank will
be able to lift rates by another quarter-
point by the end of the year. Greater
clarity will come next Wednesday, when
Ms Yellen gives a press conference after
the central banks latest meeting.
Peninsula crisis
US warns China banks as
Pyongyang tensions rise
DEMETRI SEVASTOPULO AND KATRINA
MANSON WASHINGTON
The Trump administration has warned
China that the US will target Chinese
banks unless Beijing takes much
stronger measures to impose economic
pain on North Korea by reducing trade
and financial transactions with
Pyongyang.
Marshall Billingslea, a top Treasury offi-
cial, told Congress yesterday that the US
had not seen sufficient evidence that
China was willing to curb North Korean
revenue flows and expunge North
Korean illicit actors from its banking
system. He said the Trump administra-
tion would continue to work with China
to maximise pressure on North Korea,
but stressed that the US will not hesi-
tate to act unilaterally.
His remarks followed the move by the
UN Security Council on Monday to
impose another round of sanctions on
Pyongyang. China and Russia backed
the effort after the US agreed to dilute a
proposal to ban all exports of refined
petroleum exports to North Korea.
Donald Trump yesterday described
the latest UN sanctions as a very small
step and the measures were not a big
deal. He added that while it was nice to
get a unanimous vote, those sanctions
are nothing compared to ultimately
what will have to happen.
The US has pushed through two
rounds of tough sanctions on
Pyongyang, but also targeted Chinese
companies, such as Bank of Dandong,
for engaging in actions that help North
Korea further its nuclear weapons pro-
gramme.
If China wishes to avoid future meas-
ures, such as those imposed on Bank of
Dandong or the various companies
sanctioned for illegal trade prac-
tices . . . it urgently needs to take
demonstrable public steps to eliminate
North Koreas trade and financial
access, Mr Billingslea told the House
foreign affairs committee.
While the UN resolution was not as
tough as the US wanted following North
Koreas recent nuclear test, Nikki Haley,
US ambassador to the UN, said 90 per
cent of North Korean exports were now
banned.
Experts were divided over the impact
of the sanctions, with some saying the
cumulative measures were tougher
than anything before, while others
questioned whether they would have
the desired impact of convincing Kim
Jong Un, the North Korean leader, to
UN sanctions
Beijing seeks to hurt but not
destroy regime, say experts
TOM MITCHELL AND YUAN YANG
BEIJING
The tougher UN sanctions against
North Korea that China agreed to on
Monday will cause real economic pain
for its recalcitrant ally, but without
risking regime collapse or greatly dam-
aging the interests of large Chinese
companies in cross-border trade.
Zhao Tong, a regional expert at the
Carnegie-Tsinghua Center in Beijing,
said the Chinese governments objective
was to block the most extreme meas-
ures advocated by the US president
Donald Trump while communicating its
anger to Kim Jong Un about his regimes
sixth nuclear test on September 3.
China prevented a complete cut-off
of oil and fuel supplies to North Korea,
which could have had deadly economic
consequences for the regime, Mr Zhao
said. But the sanctions now in place
will dramatically reduce North Koreas
foreign exchange earnings and have an
irreversible impact on its economy.
An embargo on North Korean textile
exports, coupled with earlier sanctions
targeting coal, minerals and seafood,
will affect more than 90 per cent of the
countrys exports and deprive Mr Kims
regime of $1.3bn in annual earnings.
The sanctions limit the number of
North Koreans allowed to work abroad
at the current level of about 100,000,
who repatriate an estimated $500m
annually. They will also reduce oil and
fuel exports to North Korea by about a
third, from 8.5m barrels to 6m a year.
The sanctions effectively cap North
Koreas development potential and
open the door for further tightening
now that oil and fuel are on the table,
said Michael Kovrig at the International
Crisis Group.
While the squeeze on energy supplies
will be keenly felt by Mr Kim, the am-
ounts are inconsequential for state-
owned Chinese energy groups that do
business with North Korea.
The effect on any large [Chinese] oil
company will negligible, said Lin Boq-
iang, dean of the China Institute for
3
rein in his nuclear programme. Bruce
Klingner, a former CIA North Korea
analyst, said the UN and US actions this
year showed that Washington was mov-
ing away from measures that punished
violators and moving towards eco-
nomic warfare in the way Washington
had targeted Iran.
US officials have said such a path is
critical to warding off any future pre-
emptive strike to knock out a North
Korean ICBM, or a broader preventive
war that would aim to destroy all of
North Koreas nuclear capabilities.
Evans Revere, a North Korea expert
and former US diplomat, welcomed the
fact that the UN voted unanimously
and included new measures, such as
a cap on oil exports, but said they were
insufficient.
It is yet another attempt to rely on an
incremental approach on sanctions that
It is an attempt to rely on
an incremental approach
to sanctions that has been
shown to be inadequate
has been shown over the years to be
inadequate, he said.
Diplomats and experts said the US
push for tougher sanctions was blocked
by China and Russia. One diplomat said
the discussions were primarily a Chi-
na-America negotiation because China
accounts for 90 per cent of trade with
North Korea.
While the US circulated the first draft
publicly to put pressure on other coun-
tries, it ultimately watered down some
proposals, such as a ban on all oil
exports, a ban on hiring North Korean
workers and calls for forced maritime
inspections. The first draft designated
nine vessels for breaking sanctions but
later dropped them in favour of consen-
sual inspections of any vessel suspected
of being in breach.
Mr Billingslea said Pyongyang had
lessened the impact of sanctions
because of weak implementation in the
past. The US has become concerned,
for example, that North Korean trade
with Russia has risen this year, helping
to ease the pain from falling trade
with China.
Russian companies continue to pro-
vide support to North Korea, he said,
adding that North Korean bank repre-
sentatives operate in Russia in flagrant
disregard of the very resolutions
adopted by Russia at the UN.
Energy Studies at Xiamen University.
Exports to North Korea are a drop in
the ocean when it comes to the Chinese
oil industry. There may be small compa-
nies focused on North Korea that would
be affected, but they are not worth wat-
ching in terms of the overall industry.
Small Chinese traders in Dandong,
Hunchun and other border towns hit by
earlier sanctions are bracing for more
pain. Last month, traders in Hunchun
protested against the ban on seafood
exports.
Yesterday, a Hunchun seafood imp-
orter was ruing the new sanctions
impact on a North Korean textile fac-
tory that she has invested in. The sea-
An embargo on
textile exports,
coupled with
earlier sanctions,
will cost North
Korea $1.3bn a year
food business is already hopeless, the
trader said. They call them sanctions
against North Korea but they are mak-
ing Chinese people suffer as well.
Shinzo Abe, Japans prime minister,
said yesterday the new sanctions show-
ed the international communitys
shared determination that the pressure
against North Korea should be raised to
an unprecedented new level.
In Beijing, the foreign ministry reiter-
ated that the sanctions should accom-
pany diplomatic solutions and a
resumption of the six-party talks.
The government thinks this is a pro-
blem between the US and North Korea,
said one Beijing-based foreign policy
expert who advises Chinese officials.
China views its agreement with the
new sanctions as a favour to the US and
will now expect something in return,
Mr Kovrig said.
North Korea was never an ideal
neighbour, but China was willing to tol-
erate it provided it didnt create too
much of a fuss.
Additional reporting by Xinning Liu, Emily
Feng and Robin Harding
4 FINANCIAL TIMES Wednesday 13 September 2017

INTERNATIONAL

Wage data Legal challenge

US incomes hit high while poverty declines South Africas

Figures show big rise in
household wealth in last
two years under Obama
SAM FLEMING WASHINGTON
Household incomes in the US surged for
a second year running in 2016 and pov-
erty declined, defying the narrative of
unrelenting economic decay that hung
over the presidential election campaign
last year.
Median income rose by an inflation-
adjusted 3.2 per cent from 2015 to 2016
to $59,039, surpassing the previous peak
in 1999, according to Census Bureau
numbers. Non-Hispanic white, black
and Hispanic-origin households all
experienced income gains. Meanwhile,
the number of people in poverty fell by
2.5m over the same period.
In his January inauguration speech,
Donald Trump said he was taking over
the presidency following a period of
American carnage, as he vowed to
restore the fortunes of the countrys
middle class.
Yesterdays data suggest, however,
that while the longer-term story of stag-
nation is a genuine one for large swaths
of the population, there was a sharp
turnround in post-inflation income
growth in the final years of Barack
Obamas presidency.
If you look at 2015 and 2016, things
are looking reasonably healthy, said
Michael Strain of the American Enter-
prise Institute. That is not to say that if
you look at the arc of the last 20 years we
dont have some pretty serious longer-
term structural challenges to deal with.
Methodological changes by the Cen-
sus Bureau make it harder to draw
direct comparisons with figures before
2013, but the numbers suggest many
$59,039 2.5m
Median income in Number of people
2016, an increase taken out of
of 3.2 per cent on poverty between
the previous year 2015 and 2016
households have been able to claw back
the losses sustained during the reces-
sion thanks to a jobs recovery that
pushed unemployment below 5 per cent
last year. Since 2014, median household
income has increased 8.5 per cent in real
Brexit. UK agriculture
terms, or $4,600. That means the typi-
cal households income rose more from
2014 to 2016 than in any other two-year
period going back to the 1960s, accord-
ing to the Center on Budget and Policy
Priorities.
Median incomes grew 2 per cent
among non-Hispanic whites, 5.7 per
cent among blacks and 4.3 per cent
among Hispanics between 2015 and
2016. Asian households had the highest
median income in 2016, and saw growth
of 4.2 per cent on the previous year.
Separate figures yesterday showed
job openings were at a record high in
July, suggesting the labour market con-
tinues to strengthen. The overall eco-
nomic recovery is now the third-longest
on record, although growth has
remained relatively tepid.
Justin Wolfers, a professor at the Uni-
versity of Michigan, cautioned that the
broader picture remained a skewed one,
in which the rich have continued to
enjoy outsize gains. So much of the
action is what is going on at the top end,
he said. The Census Bureau reported no
statistically significant changes in
income inequality across a range of
measures.
That said, the figures revealed the
poverty rate fell to 12.7 per cent, only a
little above the level of 12.5 per cent just
before the financial crisis struck. That
left 40.6m in poverty last year. And the
percentage of people without health
insurance coverage fell to 8.8 per cent
from 9.1 per cent in 2015. That still
means there were 28.1m people without
health insurance over the period.
central bank
says watchdog
threatened its
independence
JOSEPH COTTERILL
SOUTHERN AFRICA CORRESPONDENT
South Africas central bank has accused
a government watchdog of meeting
President Jacob Zumas lawyers and
state security officials in an attempt to
undermine its independence.
Public protector Busisiwe Mkhwebane,
whose job is similar to a state ombuds-
man, met Mr Zumas legal advisers and
security officials before she released a
report in June that called for changes to
the South African Reserve Banks man-
date, according to a filing by the bank in
the Pretoria High Court yesterday.
The public protector triggered con-
troversy after she used the report into

Worker shortage saps farms growth potential
Thriving English business
says falling headcount will
force it to rein in production
JOSHUA CHAFFIN PAGHAM, WEST
SUSSEX
As he watched workers slash at stalks of
sweetcorn beneath a late August sun,
Nathan Dellicott pondered an odd ques-
tion for a farmer at the height of the har-
vest: which crop would he not grow next
year?
Demand is brisk at Barfoots of Botley,
the produce company on the English
south coast where Mr Dellicott is farm
manager. But Barfoots simply cannot
find enough workers to pull its crops out
of the ground and package them for
supermarket shelves.
Headcount has been running about 15
per cent short all this year, said Mr Delli-
cott, a deficit of 50 to 60 workers. He
blamed this problem on Brexit Bar-
foots relies heavily on eastern European
workers, and some no longer feel wel-
come following Britains vote last year to
leave the EU. The fall in the value of ster-
ling since then has also cut the value of
remittances that the companys over-
seas workers send home.
Unless things change, Barfoots is
planning next year to abandon labour-
intensive crops such as broad beans that
do not offer high enough profit margins.
Ive been in the horticultural busi-
ness for 30 years, and this is the first
time Ive had to confront this, said Mr
Dellicott, driving through one of the
companys farms near Pagham in West
Sussex. They are just not coming.
The companys recruitment issues are
threatening to put the brakes on what
has been a remarkable homegrown suc-
cess story. Peter Barfoot began with a
small holding in the 1970s and now
farms more than 7,500 acres, generating
160m in annual sales.
The land is blessed by an unusual
amount of sunlight, thanks to its prox-
imity to the Isle of Wight, which buff-
ers passing clouds. Mr Barfoot
thrived by planting vegetables
like courgettes that were pre-
viously considered exotic in
Britain.
The companys biggest
crop these days is sweet-
corn. Supplying the crop
year-round to British shop-
pers is as Julian Marks, Bar-
A worker picks foots managing director, described it
corn on a a kind of sun-chasing relay race: when
Barfoots farm. the growing season ends in the UK in
Below, Nathan September the companys production
Dellicott said his shifts briefly to Germany, then Spain,
farm was short Morocco and finally Senegal. In May, the
of 50-60 staff baton begins the trip back to the UK.
Tolga Akmen
That arrangement means the impact
of new UK and EU trading relations after
Brexit including customs duties for
imported produce and health and safety
rules could be absolutely enormous
to Barfoots, said Mr Marks.
But the more immediate concern is
finding workers. The challenge was par-
ticularly acute in the days leading up to
the UKs August bank holiday, when
Barfoots picks and packages 1m ears
of sweetcorn a day. Sweetcorn
Christmas, as Mr Marks called
it.
The work is repetitive and
physical and it must be
done quickly. The corn is so
sweet it can be eaten right
off the cob but it begins to
degrade almost as soon as it is
picked. Barfoots aims to get
cobs from the field to a refrigerated
facility and then on to supermarkets
within hours.
On a recent afternoon, pickers topped
with orange caps to make them visible
among the stalks made near-instant
decisions about which ears to remove
and which to leave. A large harvester
trundled along behind them picking off
the ears. On a platform atop it, about
half a dozen men and women scrambled
to line plastic crates with corn then
stack them 10 high.
Meanwhile, at a nearby packing plant
a stream of cobs rolled along under the
gaze of workers searching for imperfec-
tions. Further down the line, a woman
drilled holes on either end of the cobs to
accommodate wooden skewers. The
building was chilled, and the 12-hour
shifts went on wordlessly, beneath a
mechanised thrum.
British labourers and students once
manned these jobs. They dropped away
in the 1990s, replaced by workers from
Portugal and Spain, and then non-EU
labourers from Russia, Brazil and the
Baltics who came on special visas.
The big shift happened in 2004 when
Poland and other eastern European
countries joined the EU, opening a new,
readily available supply of workers.
Many who came to Barfoots returned
year after year until the uncertainty
unleashed by last years Brexit vote.
Polish people will decide to go some-
where else, I already see this, said Dan-
iel Sokolowski, who came to Barfoots
seven years ago from Poland, and has
since risen to the rank of buyer.
Mr Sokolowski does not expect to
leave but he suspects other Polish work-
Polish ers are inclined to seek opportunities in
Germany or France, instead.
people will To forestall this, Barfoots has been
decide to go raising wages. Most workers earn about
8 to 10 per hour more than the UK
somewhere minimum wage. It has also tried to
else, I improve accommodation.
Surely there must be some benefit
already from Brexit to offset the challenges, Mr
see this Marks was asked as he made his way
from the fields to his office. I think we
Daniel are worried about the downsides, to be
Sokolowski, honest, he replied. We are not really
Barfoots buyer flush with enthusiasm.
an apartheid-era bank bailout to inst-
ruct parliamentarians to alter the cons-
titution to force the bank to focus on the
socio-economic wellbeing of the citi-
zens rather than inflation. Such rheto-
ric is linked with Mr Zuma and his allies
as the president is blighted by scandals.
The Pretoria court set aside the public
protectors instruction last month after
ruling it unconstitutional. But the rep-
ort raised concerns that the reserve
banks independence was under threat
as factional battles split Mr Zumas rul-
ing African National Congress.
The central bank is widely regarded
as one of South Africas most credible
institutions at a time when critics accuse
Mr Zuma of weakening and politicising
state entities.
The bank filed its affidavit yesterday
as part of its legal challenge to the public
protectors report. Ms Mkhwebanes
records reveal she met the state security
agency officials to discuss the central
bank at which she asked how are they
vulnerable?, according to the affidavit.
The fact that this topic was even dis-
cussed with the state security agency
indicates that the public protectors
investigation was aimed at undermin-
ing the reserve bank, Johannes de Jager,
central bank lawyer, said in the filing.
Ms Mkhwebane also failed to disclose
a meeting with Mr Zumas office days
before the reports release, Mr de Jager
said. There is no legitimate basis on
which this ought to have been discussed
with the presidency, he added.
Ms Mkhwebane told eNCA, a South
Africa television channel, yesterday
that there was nothing wrong with her
meeting the state security officials or Mr
Zumas legal representatives. She also
denied telling the presidents lawyers
that she would seek to change the cen-
tral banks mandate.
Mr Zuma appointed Ms Mkhwebane
last year after Thuli Madonsela, her
predecessor completed her term. Under
Ms Madonselas leadership, the public
protectors office earned plaudits for
tackling state corruption. In one high-
profile investigation, Ms Madonsela
found that Mr Zuma unduly benefited
from millions of dollars of taxpayer
funds that were used to upgrade his pri-
vate home in Nkandla. He was later
required to repay the money after a
court ruling that he had violated the
constitution.
Analysts say Ms Mkhwebane is far
closer to the president than her combat-
ive predecessor.
Lesetja Kganyago, the central bank
governor, has defended its use of infla-
tion targets against the changes pro-
posed by the public protector.

Parliament Judicial reforms

British MPs propose 136 changes to Brexit bill Brussels and Poland edge closer to legal face-off
GEORGE PARKER, ROBERT WRIGHT
AND HENRY MANCE
Theresa May is facing a concerted
attempt by Conservative rebels and
Labour to tie her hands on Brexit, after
MPs tabled 59 pages of amendments to
her key EU withdrawal bill.
The prime minister won a key vote on
the bill which shifts some 12,000 EU
regulations on to the British statute
book by a comfortable majority of 36
on Monday night.
But the scale of the task ahead became
apparent as MPs put down 136 amend-
ments, including an attempt to prolong
Britains stay in the customs union and
single market. They will be debated
when the bill returns to the House of
Commons next month for eight days of
line-by-line scrutiny.
One of the most significant proposals
would require the final Brexit deal to be
approved by a parliamentary statute,
thereby giving MPs the right to propose
changes.
Nine Conservative MPs, including the
former attorney-general Dominic
Grieve, have backed the amendment,
threatening Mrs Mays parliamentary
majority of 13. So far the government
has promised that MPs will have a vote
on the final Brexit deal, but it could be a
simple yes/no.
The government also faces serious
challenges over its attempt to secure
sweeping Henry VIII powers, giving
Amendments included an
attempt to prolong the
UKs stay in the customs
union and single market
ministers the right to make legislative
changes to enact Brexit without full par-
liamentary scrutiny.
Mr Grieve and other pro-European
Tories including former ministers Ken
Clarke, Nicky Morgan and Anna Soubry
have sought to limit the context in
which such powers could be used.
David Davis, Brexit secretary, has
already said that he is open to amend-
ments to curtail the proposed Henry
VIII powers. But further concessions
may be needed if he and Mrs May are to
avoid the EU withdrawal bill becoming a
Christmas tree adorned with amend-
ments that limit room for manoeuvre.
Pro-European Tories and Labour MPs
have also proposed amendments that
would transfer the EU charter of funda-
mental rights into British law, poten-
tially expanding the ability of individu-
als to sue the government.
Amendments to the bill were pub-
lished within hours of the government
winning a second reading by 326 votes
to 290, in which seven Labour MPs
rebelled against their leader Jeremy
Corbyn to vote with the government.
But while all Conservative MPs voted
for the bill in principle it is widely seen
as essential to ensure that Brexit does
not lead to legislative chaos several
Tories want to see significant changes.
Ministers want as much free rein as
possible in order to navigate the com-
plexities of leaving the EU; there may be
only a few months between the agree-
ment of a Brexit deal and exit day itself.
Mr Corbyn also listed a series of
amendments, including one preventing
ministers using the executive powers to
alter workplace protections.
JAMES SHOTTER WARSAW
The EU and Poland moved closer to a
legal showdown yesterday after Brus-
sels gave Warsaw one month to
respond to concerns about its overhaul
of the countrys judiciary or face a court
challenge.
The European Commission opened
legal proceedings against Poland in July
after the ruling Law and Justice party
(PiS), led by Jaroslaw Kaczynski,
pushed through a law it fears will under-
mine the independence of Polish courts.
Poland responded to the commis-
sions concerns at the end of August, but
Brussels said yesterday it maintains its
position that the Polish law is incompat-
ible with EU law. If Warsaw did not rec-
tify the situation within a month, the
commission could refer the case to the
European Court of Justice, it said.
Since sweeping to power in 2015, PiS
has made a major overhaul of Polands
judicial system one of its key objectives.
It says it is necessary to change an ineffi-
cient system that has not been purged
since the country emerged from com-
munism almost three decades ago.
PiS put forward three laws to imple-
ment its agenda but two were blocked
by Andrzej Duda, the Polish president,
in July. The bills could have forced all
members of the Supreme Court to step
down except those kept on by the justice
minister, and given parliament greater
control over the body that appoints
Polands president
Andrzej Duda
blocked two out of
the three laws that
were put forward
by the ruling PiS
judges. The move followed criticism
from the EU and US and a week of pro-
tests by tens of thousands of people.
However, Mr Duda said he agreed
Polands judicial system needed reform
and that he would put forward his own
legislative proposals. He is expected to
unveil his plans next week.
The president also allowed the third
bill put forward by PiS, which deals with
ordinary courts, to come into force. The
commission reiterated yesterday that it
considered this bill to be incompatible
with EU law as it discriminates against
individuals on the basis of gender by
introducing different retirement ages
for male and female judges.
The commission also raises legal
concerns that by giving the minister of
justice the discretionary power to pro-
long the mandate of judges who have
reached retirement age, as well as to dis-
miss and appoint court presidents, the
independence of Polish courts will be
undermined, the commission said in a
statement.
It added: The new rules allow the
minister of justice to exert influence on
individual judges through, in particular,
the vague criteria for the prolongation
of their mandates and the lack of a time-
frame to take a decision on the prolon-
gation, thereby undermining the princi-
ple of irremovability of judges.
Polands government did not immedi-
ately respond to the commissions state-
ment.
PiS retains broad support in Poland.
An opinion poll by Kantar Public yester-
day put PiS on 38 per cent and Civic
Platform, the biggest opposition party,
on 16 per cent.
Wednesday 13 September 2017 FINANCIAL TIMES 5
6 FINANCIAL TIMES
Pappano flies the
flag for Puccini
OPERA
La bohme
Royal Opera House, London
aaaee
Richard Fairman
The operas of Puccini are generally best
left to play themselves, so most direc-
tors do not find them congenial terri-
tory. Whoever was going to replace the
Royal Operas much-loved production
of La bohme, now 43 years old, faced a
doubly difficult task.
In tackling this challenge Richard
Jones has taken the path of caution. His
new production, which opens the sea-
son, is in no way extreme and will send
audiences away relieved, mildly
diverted, but most probably dry-eyed.
That box of tissues can be left at home.
Joness main contribution has been to
tilt the opera a few degrees away from
real-life naturalism. In its most imagi-
native scene the production wheels on
stage a succession of 19th-century Paris-
ian galleries, thronged with crowds jos-
tling among the elegant shops. The
Bohemians garret is a spartan place
constantly under brilliant spotlights.
Apparently, these penny-poor young
people do not have any trouble paying
the electricity bill. Their horseplay is
choreographed in detail and rehearsed
to a T. A slightly distancing air of artifice
hangs over the proceedings.
The one who most successfully breaks
through is Michael Fabianos Rodolfo.
Not the usual romantic poet, he comes
across as a highly strung, modern young
man, lively and quick-witted, and Fabi-
ano sings with intensity, as long as one
does not think back for comparisons to
the Three Tenors, each of whom sang
Rodolfo here.
Alongside him, Nicole Car also sings
nicely enough, but her Mim has no per-
sonality. Simona Mihais Musetta, a
touch on the vulgar side, makes up for
that with an entertaining routine that
leaves her without her knickers.
Mariusz Kwiecie is strong casting for
Marcello. Florian Sempey makes much
of Schaunard and Luca Tittoto is a
youthful, mellow Colline.
In this cast there was one outstanding
performer. Over his 15 years as the
Royal Operas music director, Antonio
Pappano has attained complete mastery
of Puccinis music. Every note of this
performance felt newly considered and
pulsated with feeling. Whatever the
shortcomings of this new La bohme,
Puccini is alive and well and flourishing
at the Royal Opera. It is just that he is to
be found down in the orchestra pit.
To October 10, roh.org.uk
T H E AT R E
Kingdom Come
The Other Place, Stratford-upon-Avon
aaeee
Ian Shuttleworth
The latest new piece to be presented in
the Royal Shakespeare Companys reac-
tivated Other Place falls into the cate-
gory of honourable failure. Its unfor-
tunate that this way of looking at work
has gone out of fashion, although in the
current case Im slightly mystified as to
why the attempt was made in the first
place. Its absurd to consider anything to
be the last word on a given subject;
however, as regards dramatic treat-
ments of the turmoil and radicalism in
England just after the civil war of the
1640s, following Caryl Churchills Light
Shining In Buckinghamshire (revived a
couple of years ago at the National
Theatre), Gemma Brockis and Wendy
Hubbard here are effectively trying to
reinvent the wheel.
Brockis, Hubbard and their half-
dozen actors and co-devisers begin ear-
ARTS
lier than Churchill, with a reimagining
of the final masque to be performed at
the court of King Charles I. They treat its
disintegration as kind of lead-in to the
civil war . . . which is, itself, squan-
dered as a series of captions projected
on to the stage. This productions claim
to originality is its promenade compo-
nent; after the first half-hour we are
walked into the venues scene dock for
the kings execution and a collage of
world turned upside down scenes fea-
turing the likes of a Leveller preacher
(Lucy Ellinson briefly avoiding grievous
underuse throughout the rest of the
evening); however, the principal moti-
vator is surely ordering us out of the the-
atre as an analogue of, well, the Puritan
closure of the theatres.
As anachronistically as that ban
appeared, we return to the theatre for
the third and final phase, in which occa-
sional scenes emerge from a series of to-
me-inexplicable tableaux, and the ten-
sion between flux and mutability on the
one hand, and increasing Puritan
authoritarianism on the other, seems to
be emblematised in the juxtaposition of
a group of underground actors and the
preparations for Cromwells butchering
Irish expedition.
In the end, the piece suffers from the
besetting affliction of so much devised
work: it begins with a nebulous vapour
of ideas and/or images it would like to
develop, but ends up simply enacting
the nebula rather than coalescing it into
theatrical matter.
To September 30, rsc.org.uk
Thrilling speed, serene partnering
DA N C E
Le Temps dAimer dance festival
Biarritz, France
Laura Cappelle
The French resort of Biarritz is known
for its surf-ready beaches in summer,
but when September rolls around its
attention turns to a less weather-
dependent pursuit: dance. While rain
battered the city earlier this week, Le
Temps dAimer, a festival created in
1991, brought French and international
companies together.
For this edition, artistic director and
choreographer Thierry Malandain
brought a local talent back to the Basque
coast: Martin Harriague, who was born
in nearby Bayonne. Currently a dancer
with Israels Kibbutz Contemporary
Dance Company, the 31-year-old has
started to build a promising choreo-
graphic career. Kibbutz performed his
evening-length Pitch, new last year, at
the Biarritz Casino, a lovely venue over-
looking the sea.
A tribute to Pyotr Ilyich Tchaikovsky,
whose Russian initials form the title,
Pitch was a risky proposition. Tchaiko-
vskys ballet scores have been choreo-
graphed to the point of exhaustion, and
their lush melodies are tantalising but
require rare musicality.
Harriague rises to the challenge with
just six dancers. He finds depths of
articulation in Tchaikovskys changes of
pace, with legs stabbing like spears and
lively upper bodies. Unlike many ballet
companies today, Kibbutz doesnt fiddle
with Tchaikovskys tempi: the complex
choreography operates at a thrilling
speed that owes much to Israels influ-
ential contemporary dance scene.
Harriague adds a singular eye for
theatre. He plays with the images that
the name Tchaikovsky conjures in the
Intensity: Michael
Fabiano and Nicole Car
in La bohme
Catherine Ashmore
SIR PETER HALL
The life and work of the
British theatre director, who
died on Monday, is celebrated
in an obituary by FT theatre
critic Sarah Hemming
ft.com/arts
minds of dance-goers. At the beginning,
a man crawls out from under a queens
white dress. Then, as she walks away,
she drops the costume, and he tries it
on, clutching its skirt with an expres-
sion of longing. Harriagues take on
Tchaikovsky is sympathetic yet wistful.
He will be back to create a work for
Malandains Ballet Biarritz in 2018.
The Ballet Nice Mditerrane arrived
with a quadruple bill. This company of
26 dancers, directed by former Paris
Opera Ballet star Eric Vu-An, doesnt
lack ambition: in addition to excerpts
from Copplia, it brought works by Oscar
Araiz, Nacho Duato and Liam Scarlett.
The effort was laudable, but the
results proved mixed. The dancers
boast strong footwork, a hallmark of the
French style, but lack the projection
and polish to shine in some of the chore-
ography. Pure classical works, espe-
cially, are unforgiving, and while Vu-An
opted to re-choreograph the Copplia
divertissement from scratch, it lacked
the spark and virtuosity necessary to
make an impression without sets
or context.
Oscar Araizs pas de deux Adagietto,
once frequently seen in French galas,
Wednesday 13 September 2017
T H E AT R E
On the Shore of the Wide World
Linda Gross Theater, New York
aaeee
Max McGuinness
This 2005 Olivier-winning family drama
is like an extended episode of Coronation
Street. Playwright Simon Stephens
paints a closely observed portrait of
lower-middle-class life in Stockport, his
Northern English hometown. As in the
never-ending TV soap opera, also set in
Greater Manchester, the earthy charac-
ters variously fall in love, (nearly) have
affairs, fight with their parents, beat
their spouse, die suddenly, talk about
football, go to the pub, struggle with
alcoholism, get sick (then miraculously
recover), move to London (which they
hate), and patch it all up.
Half an hour of such melodrama can
be an agreeably un-taxing way of passing
a weekday evening in front of the TV.
But, at two and half hours with an inter-
val, On the Shore of the Wide World soon
begins to feel rudderless.
Whats missing is any attempt to
weave the story of one troubled family
into a broader social tapestry, like Peter
Flannerys epic Newcastle-set 1996 TV
series Our Friends in the North or Richard
Nelsons parable of American decline,
The Gabriels, staged last year at the Pub-
lic Theater. Aside from one allusion to
terrorism, the primary point of histori-
cal reference here surely lost on a New
York audience is Manchester Uniteds
erstwhile midfield general Roy Keane
(predictably loved by some and loathed
by others). That lack of context is sur-
prising given that Stephenss title comes
from a Keats poem about the smallness
and ephemerality of individual lives.
The pacing here is also anything but
swift under Neil Pepes direction, which
loses focus as the saga wears on. And
Scott Pasks drab set looks too literal to
accommodate a story that jumps awk-
wardly between multiple locations.
Among the 10-strong cast, Ben Rosen-
field and a puckish Sarah Black show
realchemistryasapairofteenagelovers,
while C.J. Wilson puts in a solid shift as
Bens home-renovator father Peter. Oth-
ers have difficulty getting their tongues
around the flat Northern vowels, and
their accents frequently drift back
across the Atlantic. The dialogue itself
reads authentically. But theres nowt so
queer as Mancs who sound like Yanks.
To October 8, atlantictheater.org
From left, Tedra Millan, Odiseas
Georgiadis and Ben Rosenfield
fared better. Set to Mahler, it is an exer-
cise in control and serene partnering;
dressed in blue unitards, Mava Cotton
and Alessio Passaquindici seemed to
swim quietly through space.
British choreographer Liam Scarlett
made a rare French appearance with
Vespertine, a work he created for the
Norwegian National Ballet in 2013. With
its interplay of decorum and intimacy,
the work is heavily indebted to Ji
Kylin. Its an interesting departure for
Scarlett, with a few twists: at one point,
a woman sets the stage for a standard
pas de deux with a flare of her skirt, only
to leave her place to a man. The Nice
dancers performance was somewhat
contrived, however. Scarletts signature
upper-body pliancy is foreign to them,
and they showed little dramatic pur-
pose as a group.
Nacho Duatos modern Gnawa proved
a better showcase. French ballet outside
Paris has been in decline for some time,
and Vu-An is presenting valuable reper-
toire: the Nice Ballet just needs to make
a stronger case for it onstage.
Festival to September 17
letempsdaimer.com
Theatrical:
Martin
Harriagues
Pitch
Caroline de Otero
Boissakre
Wednesday 13 September 2017
They are global household names and account for a large chunk of the national economy, but amid
allegations of cronyism President Moon Jae-in is under pressure to rein in the leading chaebol.
T
he five nightclub workers
cowered in the shadows as
they were set upon by two
dozen thugs. Abducted
from their workplace in the
heart of central Seoul, the South Korean
capital, they had been taken to an aban-
doned warehouse, where they were
beaten with steel pipes and stun batons.
Overseeing the brutal attack was Kim
Seung-youn, who later told police he
intervened to deliver several hooks.
Mr Kim was convicted in 2007 for his
role in the attack, but received a sus-
pended sentence. In 2012, he was con-
victed again, this time of embezzlement
and sentenced to four years in prison,
but was released shortly after on health
grounds.
Mr Kim is head of one of South Koreas
largest and most prominent conglomer-
ates, Hanwha, as he was at the time of
both convictions. For critics, his case
exemplifies the longstanding belief that
South Koreas corporate bosses are
above the law and too close to the coun-
trys political leaders.
But following a corruption scandal
that has engulfed the country for much
of the past 10 months and laid bare ram-
pant cronyism in Asias fourth-largest
economy, there is growing demand for
change to the unchecked power of the
family-run conglomerates, known as
the chaebol. Few are seeking to break up
the groups but reformers want greater
oversight and enforcement of existing
rules and regulations.
I believe that this is the time for fun-
damental chaebol reform, says Park
Sang-in, a professor of economics at
Seoul National University. The Korean
peoples understanding of the problems
caused by the chaebol, as well as citi-
zens desire for fundamental change to
the political and economic structure, is
higher than ever.
Public anger that brought hundreds of
thousands on to the streets in 2016 and
again earlier this year has begun to feed
through to government policy. Even as it
grapples with the North Korea crisis the
The Lee decision gives a
signal to businesses not
to go back to the old
practices of colluding
with corrupt politicians
administration under President Moon
Jae-in, who was elected in May, has
taken tentative steps towards diluting
the dominance of the handful of power-
ful conglomerates.
The issue is crucial not only for gov-
ernance and corporate accountability,
but also the long-term prospects for the
countrys economy, vast swaths of
which have been choked off by the hulk-
ing presence of the likes of Samsung,
Hyundai and Lotte. The combined mar-
ket capitalisation of the five biggest
groups accounts for more than half of
the Kospi, the main Korean stock index.
However, doubts remain over
whether the flag-bearers of corporate
and economic reform will be able to see
the fight through and whether the alter-
native will satisfy the aspirations of
South Korean citizens.
It is a matter of balance, says Bruce
Lee, chief executive of Zebra Invest-
ment Management, a Seoul-based
hedge fund. If chaebol reform causes
the economy to deteriorate, then the
government will end it. But if the econ-
omy can sustain growth, reform will be
reinforced.
Colluding with politicians
Corporate reform in South Korea has
often proven ephemeral. But last month
the nation witnessed what many believe
could be a watershed moment when a
court sentenced Lee Jae-yong, the heir
and de facto head of Samsung, to five
years in prison for bribing the former
president, Park Geun-hye.
A sprawling conglomerate composed
of 62 affiliates covering everything from
electronics to pharmaceuticals and
heavy industry; Samsung is a bulwark of
the South Korean economy. Its 16 listed
entities alone account for almost 30 per
cent of the Kospi, making Mr Lee argua-
bly the nations most powerful individ-
ual. Now, many experts hope his convic-
tion if not overturned on appeal will
prove an opening shot in the battle to
pull apart the deep-set ties between big
business, politics and the judiciary.
This is a very significant moment for
South Korea, says Kim Woo-chan, a
professor at Korea University and an
expert on corporate governance. It is
an important signal to businesses not to
go back to the old practices of colluding
with corrupt politicians.
In the past, top executives might have
expected a suspended sentence or a
presidential pardon. But the Moon
administration has vowed to abolish
such practices.
FT BIG READ. CORPORATE GOVERNANCE
By Bryan Harris
Taking on Korea Inc
Regulation Known as the chaebol sniper, Kim
Chaebol Sang-jo has for years railed against
the excesses of South Koreas
sniper has conglomerates, once being thrown out
Hyundai of a Samsung shareholder meeting for
in his
raising allegations of illegal political
crosshairs donations.
Now as chairman of the Fair Trade
Commission he is taking aim at the
countrys big four conglomerates
Samsung, Hyundai Motor, SK Group
and LG Corp again. And has vowed
to begin enforcing laws that for many
years have taken second place to
political considerations. On the eve of
taking up his new job in May as the
countrys top antitrust official, Mr Kim
had a simple warning for corporate
Korea: Do not break the law.
Chaebol reform has two objectives,
he said. One is to block the
concentration of economic power and
the other is to improve governance
structures.
While Mr Kim, below, has said he will
focus on using his agencys
investigative powers to prevent unfair
trade practices, governance
activists are seeking broader
measures. They want
companies to appoint
independent directors and
auditors to ensure these
groups are run in the
interest of the business,
not the founding families
who often have power that
exceeds their shareholding.
Another proposal is the mandatory
implementation of electronic proxy
voting. The chaebol regularly schedule
shareholder meetings at the same
time, in effect preventing minority
shareholders with stakes in more than
one of the groups, from participating.
The most intractable issue, however,
relates to the use of cross-
shareholdings that allow the founding
families to control conglomerates
without holding a majority stake.
Some companies, such as LG and more
recently Lotte, have switched to
holding company structures that
provide greater transparency. But the
two largest groups, Samsung and
Hyundai Motor, have ignored calls to
streamline their organisations.
The chaebol sniper responded by
telling Reuters last month that
Hyundai would be stupid if it didnt
know the expectations of the market
and the government.
FINANCIAL TIMES
If the sentence is upheld after appeal,
it will be a good opportunity for the
chaebol system to be upgraded but also
an opportunity for Samsung to reform,
says Prof Kim.
Postwar role
The history of South Koreas family-run
conglomerates is closely entwined with
that of the state. Following the devasta-
tion of the Korean war in the early
1950s, South Koreas leader, Park
Chung-hee, turned to the conglomer-
ates to help rebuild the country in the
1960s and 1970s.
As the nation grew, so too did the rela-
tionship between politics and big busi-
ness, with each side profiting from insti-
tutionalised influence-peddling and
special treatment. The chaebol could be
counted on to provide jobs and in return
they received easy access to govern-
ment contracts and an economy fenced
off from foreign players.
As the conglomerates became richer,
their influence expanded to the courts
and media. Newspapers are financially
underpinned by chaebol advertising,
making editors hesitant to investigate
or criticise corporate malfeasance.
Meanwhile, the companies ingratiated
themselves with the judiciary by dan-
gling future employment opportunities
in front of judges or fledgling lawyers.
In recent years, however, this busi-
ness model largely responsible for
South Koreas transformation from a
poor backwater to one of the worlds
most technologically advanced econo-
mies has begun to fray. During the
mass protests citizens poured scorn on
the cronyism and backroom dealings of
Mr Lee, who was convicted of bribing
Ms Park to secure support for a contro-
versial merger that cemented his grip on
Samsung.
This wave of unrest happened against
a background of growing unemploy-
ment with 9 per cent of young adults
jobless and stuttering economic
growth, prompting questions of
whether these immensely wealthy
groups still warrant special treatment.
Small and medium-sized enterprises
have also complained bitterly that the
chaebols control over supply chains and
prices chokes their businesses.
The fundamental problem of the
chaebol, especially Samsung, is the con-
centration of economic power, says
Prof Park. Since it controls so many
economic resources, it can thus influ-
ence politics, media and the legal sys-
tem for the private interests of the
Samsung, Lotte, SK Group,
Hyundai Motor and LG Corp
The top five chaebol dominate the
South Korean stock index
Weightings (%) in the Kospi index of listed companies
belonging to the five biggest conglomerates
SK LG
Hyundai
Samsung
0 20 40
Chaebol are holding South Korea's
performance back
Price/earnings ratio
MSCI Japan index
MSCI Korea index
2011 12 13 14
FT graphic Source: Bloomberg
owner families. And it hinders the econ-
omy from moving into an innovation-
based model.
Much of the public anger stems from
openly egregious practices, such as tax
avoidance or the use of presidential par-
dons to free executives convicted of cor-
ruption. There are other aspects of
chaebol reform that are more complex
and focus on unravelling the web of
cross-shareholdings that allow the
founding families to exert control, and
prosper, at the expense of minority
shareholders.
Activists also complain about the lack
of oversight, pointing to a dearth of
independent directors and auditors.
This lack of transparency is
believed to be at least partly
responsible for the Korea dis-
count phenomenon, where local
companies trade at lower price-
to-earnings multiples than their
global peers. The practice of
intra-group trading where
contracts from publicly listed
chaebol entities are handed to
privately held affiliates without
a bidding process has also drawn
the ire of activists.
For most experts, the success of
7
Seoul ties Anger at rampant cronyism
contributed to the downfall of former
president Park Geun-hye
Breaking up is hard to do New leader
Moon Jae-in has taken steps towards
diluting the dominance of the chaebol
Not just big business Officials want to
boost the role of smaller companies,
which are seen as poorly run
chaebol reform depends on Mr Moons
determination to reorganise the South
Korean economy. The president, who
has vowed to end the use of presidential
pardons for corrupt executives will
come under severe pressure to release
Mr Lee, the Samsung heir.
It is going to be a very difficult job
[reforming the chaebol]. I dont think
this government can do it in a few
years, says one businessman at a large
multinational company in Seoul. It will
take great leadership to convince the
chaebol this is not about retribution but
transparency.
Mr Moon has appointed two corpo-
rate governance crusaders to take on
the chaebol: Kim Sang-jo and Jang Ha-
sung. As head of the Fair Trade Commis-
sion, the countrys top antitrust body,
Mr Kim had already made his intentions
clear, recently telling local media: If the
chaebol dont show positive change or a
willingness to reform by December, we
[the FTC] will have no choice but to step
in to impose structural prescriptions.
Retailer Lotte has heeded the signs,
announcing plans to simplify its group
structure. Samsung will outline and
explain its governance issues in a report
later this month, but has already said it
Clockwise from top: will not adopt a holding company struc-
ture that could, in theory, provide more
transparency over affiliate ownership.
employ almost 600,000 It is now just a matter of enforce-
ment, says Chang Sea-jin, a professor at
South Koreans. President
Moon Jae-in, left, is likely the National University of Singapore.
We already have all the rules and regu-
to face pressure to free
lations.
Lee Jae-yong, below,
the jailed Samsung heir Broken promises
FT montage
Under previous presidents, including
Ms Park, who won the 2012 election on a
commitment to overhaul the chaebol,
and her predecessor Lee Myung-bak,
the excesses of the family businesses
were subject to light-touch regulation
amid fears that attempts at governance
reform would damage the economy.
Mr Moon has publicly shifted from
Lotte
the notion that the chaebols success
Others trickles down through society. He is
instead focusing on support for SMEs
60 80 100 and a policy of income-led growth, seek-
ing to create higher wages, consump-
tion, investment and employment.
South Korea is home to almost 3m
SMEs, which employ more than 85 per
cent of the adult population. However,
many are poorly run and average sala-
30
ries are only about 70 per cent those of
25
large conglomerates. In July, the Moon
MSCI World index administration launched a ministry to
20 support SMEs, which have languished in
OECD rankings for their lack of entre-
15 preneurial spirit. The chaebol squeeze
SMEs to a level where they cant invest,
10 says Prof Chang.
Analysts believe that while the
5 administrations new approach may
ease the pressure over unemployment,
0 it is unclear whether the policies can
15 16 17 translate into long-term growth.
It is also likely the chaebol will begin
to push back if, and when, Mr Moons
popularity dips. The chaebols best
weapon against reform is the propa-
ganda of fear. They will argue that
chaebol reform may endanger the
Korean economy, says Prof Park.
Others say the writing is already on
the wall for Koreas corporate titans.
They will try to do everything [to keep
power], says Prof Kim. But in my
view, the chaebol system will only last
one generation more, adding that it
would be impossible for dynastic suc-
cession to continue past the current
crop of leaders.
It is a notion that reverberates around
the business community. Many believe
the upheaval of the past year will force a
gradual shift from family-oriented
control to professional manage-
ment.
The chaebol have contrib-
uted greatly to South Korea,
but society has changed and
the chaebol should change
too, says Mike Cho, presi-
dent of the Korea Corporate
Governance Service. In the
longer term, we will have a
healthier economy as a
result.
Additional reporting by Kang
Buseong
8 FINANCIAL TIMES
WEDNESDAY 13 SEPTEMBER 2017
Norway successfully
co-opts its populists
Giving angry voters a share in power worked for the government
Norways polls on Monday were given
far less international attention than the
imminent elections in Germany. Their
outcome, however, merits a closer
look. Prime Minister Erna Solberg has
retained power, only the second Con-
servative leader ever to do so.
Although the alliance of right-of-cen-
tre parties supporting her government
all saw their vote share shrink, they did
enough to contain voters fatigue with a
four-year-old government.
The elections biggest loser was
Labour, which suffered its second-
worst result in nearly a century (but
remained the largest party). While
other left-of-centre parties did well
and in raw votes outnumbered the gov-
ernment side the smallest two failed
to breach the threshold for full propor-
tional representation. That leaves the
governing alliance with a renewed, if
narrowed, parliamentary majority.
What is most unusual about Ms Sol-
bergs government is not its re-election
but the parliamentary platform on
which it won.
Four years ago, the Conservatives
made history by forming a coalition
government with the Progress party, an
anti-immigrant group on the populist
right. It was a gamble that Progress, if
offered the rewards of power, would
also learn to accept the responsibility
that comes with it. This would either
tame the wilder tendencies of a party of
eternal opposition or, as many observ-
ers predicted, bury it under the contra-
dictions of a protest party in power.
The election result partly vindicates
the former thesis. Unlike in Finland,
where participation in government has
broken the True Finns party into splin-
ter groups, Progress kept all of its par-
liamentary seats save one. The party
and Siv Jensen, its leader and the
finance minister, come out strength-
ened from four years of governing.
The reason is that Progress has
Trade unions have a role
to play in Brexit Britain
Organised labour should avoid returning to a more militant age
Trade unions remain a potent political
force in the UK. The governments
decision yesterday to scrap the public
sector pay cap which had limited the
overall pay bill for national and local
government employees to one per
cent annually is a testament to their
influence.
Along with the opposition Labour
party, the unions have argued that pub-
lic sector workers deserve a pay
increase exceeding the rate of inflation.
Political pressure has brought Theresa
May, the prime minister, to a similar
conclusion.
The unions have also flexed their
political muscle in the Brexit process.
The Trades Union Congress was one of
the most vocal campaigners for the UK
to remain in the EU, primarily on the
basis of retaining the EUs social pro-
tections for workers. It has since
become the most consistent voice for a
softer approach to leaving the bloc.
Labours welcome decision to
endorse continued membership of the
single market and customs union dur-
ing a transition period followed cam-
paigning by Frances OGrady, general
secretary of the TUC. The alliance
between Jeremy Corbyn, opposition
leader, and Len McCluskey of the pow-
erful Unite union has ensured that tra-
ditional links between Labour and the
unions remain strong.
The unions retain this political
power despite declining influence in
the workplace. From a peak of 13m
members in 1979, just over 6m British
workers are currently unionised. The
unions are struggling to attract
younger recruits; 40 per cent of mem-
bers are over 50, while under-35s rep-
resent barely a quarter of membership.
They are also challenged by the
changing nature of the British econ-
omy. Their traditional stronghold
industries of manufacturing and trans-
port have been transformed by auto-
cleverly combined responsibility
inside government with populist pro-
test from outside.
In practical policy terms, the
Conservative-Progress coalition has
steered a standard centre-right course
eased with generous fiscal stimulus
from Norways huge oil fund. By point-
ing to the coalition partnership and a
parliamentary support deal with two
centrist parties, Progress has recon-
ciled activists with compromise.
At the same time, its leaders have not
stopped feeding rhetorical satisfaction
to its grass root supporters. The Euro-
pean refugee crisis played straight into
Progresss hands. In the election cam-
paign, its tone on immigration and
Muslims crossed far beyond the line of
decency.
And yet, this is better than what most
other western polities have achieved.
Norway has managed to give its angri-
est voters a voice within normal demo-
cratic procedures. The result is less
polarisation and more effective gov-
ernance than in many other countries.
In contrast, in neighbouring Sweden
the far-right Sweden Democrats are
shunned by all other parties, making
for difficult parliamentary arithmetic.
If Norways choice is unusual, it was
also made in unique conditions. The
Progress party has made a long journey
from the rabid xenophobia it repre-
sented in the 1980s and 1990s, and can-
not be compared with most of Europes
far-right parties. Norways healthy
economy ensures that popular griev-
ances are milder than elsewhere.
But even Progresss self-taming owes
much to an inclusive politics in which it
could realistically hold a long-term
goal of becoming a governing party. A
tradition of multi-party coalition rule
helps. Norways co-optation may be
democracys ideal answer to populism,
bit it will be a much harder ideal to real-
ise elsewhere.
mation and technology, undermining
their collective bargaining power. To
maintain influence in the workplace,
unions will need to devote greater
energy to new parts of the economy.
Politically, however, enhancing their
power requires moderation. Their
campaign against austerity has influ-
enced both Labour and the Conserva-
tives. The risk they face in a post-Brexit
Britain is a return to a more militant
attitude of the past, on trade and gov-
ernment intervention in business.
Britains departure from the EU sin-
gle market and customs union leaves
the economy vulnerable. To remain
competitive the UK will need to strike
new trade deals for the first time in four
decades. There will be a heated domes-
tic debate about the benefits and costs
of free trade. While Conservative poli-
ticians and big businesses are the
strongest advocates of liberalisation,
the unions could be drawn towards
protectionism despite current calls for
barrier-free trade with the EU.
At the same time, if European
worker protections fall away, British
workers will need a voice. Protecting
rights and wages with tariffs and other
trade barriers will not be the answer.
Nor will returning to the era of mass
strikes and state aid to select
industries.
Unions can remain relevant if they
use their power wisely. The success of
the GMB unions employment tribunal
against Uber (demanding basic rights
for drivers) is an example of how
unions can fight for better conditions
with a more flexible workforce.
Britains unions have an opportunity:
their role is likely to become more
important after the UK leaves the EU.
They should deploy their influence by
advocating for worker protections that
fit an open economy and by fighting for
workers in 21st-century industries that
are driving economic growth.
Vote to leave highlighted UKs financial fragility
Sir, Graham Hacche (Letters,
September 9) expresses the commonly
held view that the recent weakness of
sterling (FT View, August 26) against
the euro is a result of the referendum
to leave the EU and there are reasons
to fear that Brexit will damage the UKs
international trading and investment
position.
The UK has had a massive
international trade deficit for many
years, in particular with the rest of the
EU, and it shows no sign of
improvement last year the overall
Water companies have
improved their service
Sir, The picture of the water industry
painted by Jonathan Ford (Water
privatisation looks little more than an
organised rip-off, Inside Business,
September 11) ignores the many
positive changes achieved over the best
part of three decades.
Leakage is down by a third since the
mid-1990s, two-thirds of our beaches
are now classed as excellent compared
with a quarter 25 years ago, and the UK
has excellent-quality drinking water.
Bills are 120 a year lower than they
would have been without privatisation
and on average will be 5 per cent
lower in real terms in 2020 than they
were in 2015. These are not our claims
they are from Ofwat, the industrys
independent economic regulator.
Underpinning these achievements is
the 144bn invested by the industry
since privatisation. The inability of past
governments to fund vital
environmental and service
improvements was a key factor behind
privatisation in the first place, and the
pressures on the public purse that
drove that, far from abating, if
anything have intensified.
That is not to say that the efficiency
of funding in the sector is unimportant
or that water companies cannot do
more to improve services. The answer
to these issues is not nationalisation,
but continued engagement with
customers and effective, independent
regulation and the opportunity is
now in the shape of the latest price
review being led by Ofwat.
Michael Roberts
Chief Executive, Water UK
London SW1, UK
The value of extensive
renewables research
Sir, For those of us working in energy
policy research the FT Letters page has
become like one of those TV channels
that endlessly reruns TV shows from
the previous decade(s). It is Groundhog
Day again. Transmission and other
network costs appear to been
discovered for the first time (Antonis
Angelopoulos, August 25) and now we
have just invented the practice of
lifecycle environmental assessment
(Janet Barber, August 24; Prof Peter
Edwards, September 5). Ignorance of
well-established evidence is perhaps
unsurprising, given that a belief in peer
review has become quaint (Gordon
Hughes, August 29). Let us be clear
then that academics, policymakers and
regulators have been working on this
stuff not just since the Big Bang Theory
started running on a loop.
We really do already have a pretty
good handle on the system costs and
Macrons reform
Odyssey moves
on to disrupting
the EU
Notebook
by Anne-Sylvaine Chassany
Letters
trade deficit (for goods and services)
was 37bn.
The rest of the EU has
unquestionably been more successful
in exporting to the UK than vice versa.
Perhaps that is a reason why there is
some resistance to the UKs departure.
Mark Carney, Bank of England
governor, has publicly said that the UK
is dependent on foreign capital flows to
offset its current account deficit and
that sterling is crucially influenced by
foreign sentiment.
It is not surprising that overseas
Its looking good for a comeback While Chinas overall economic
lifecycle environmental impacts of
renewable energy. It is also important
to avoid muddling different impacts
lifecycle carbon dioxide emissions from
renewables remain low irrespective of
whether various metals may (or in fact
may not) be scarce.
It is right that we try to tackle local
and environmental and health
concerns. But however shocking local
pollution or workers rights abuses in
various mines or refineries may be
they cannot undercut the climate
change benefits associated with low
carbon technologies because they are
completely separate and unrelated
concerns.
Dr Robert Gross
Imperial College
London SW7, UK
Raising a universitys
game on a modest salary
Sir, Andrew Oswald (Letters,
September 8) states that cuts in UK
vice-chancellors pay would reduce the
quality of people willing to do the job.
He then identifies a one-in-a-thousand
set of skills and implies that the correct
level of remuneration should be
around 600,000 a year.
Late last year, KTH Royal Institute of
Technology in Stockholm said farewell
to its vice-chancellor, Peter
Gudmundson. During his tenure from
2007 to 2016, KTH increased its
position in the QS World University
Rankings from 192 to 97. For his final
10 months of service he was paid about
130,000. His successor, chosen from
58 Swedish and international
applicants, will receive a similar salary.
During the same period, the QS
ranking of the University of Bath,
which was criticised over the pay of its
vice-chancellor, declined from position
145 to 159.
It might be worth taking the risk
with salary cuts.
Andrew Greenwood
Stockholm, Sweden
How will Emmanuel Macrons call for
an overhaul of the EU in Athens last
week go down in history? Will it be
remembered as a turning point for the
institution after a decade of turmoil?
Or will historians shrug it off as yet
more fruitless rhetoric?
I watched, torn between the jaw-
dropping scene and my sceptical self.
This grandiloquent president seems
always to oscillate between the
sublime and the ridiculous; Napoleon
once remarked there was just one step
between the two. In the background,
amid the sound of cicadas, the
Parthenons columns turned pink
under the warm setting sun. Then a
dark blue sky enveloped the Pnyx
hilltop, where ancient Athenians
would adopt laws and where, more
than 2,000 years later, Mr Macron,
halfway through a two-day state visit
to Greece, was waxing lyrical on
Europes lost soul.
Because it was here that the risk of
democracy was taken, the risk that
puts the government of the people
into the hands of the people in the
belief that respectable law is better
decided by as many as possible and
not as few, declaimed Mr Macron.
We should ask ourselves: what have
we done with our democracy?
EU countries, he said, had lost
confidence in one another, were
mired in a civil war, busy quarrelling
over little differences and betrayals
while other powers such as the US and
China were threatening the blocs
values and economic model. The EU
needed to restore the primary force
investors have been hesitant since the
Brexit vote, although it could be argued
that capital flows have held up rather
better than many Remain supporters
predicted.
The Brexit vote highlighted the harsh
reality of the UKs financial position,
but it was not the cause. I doubt that
sterling would have reacted in the way
it did if the country had been running
persistent current account surpluses
over the years.
Stephen Swift
Ticehurst, E Sussex, UK
China growth comes with
distinct characteristics
Sir, James Hiltons Shangri-La seems to
have been realised in Michael Moritzs
gusher on China (Comment,
September 11). However, that requires
the willing suspension of disbelief. His
reference to the expansion of
immigrant visas for foreigners makes a
mockery of the plight of millions of
Chinese children who are unable to
accompany their migrant worker
parents from the countryside. The
spate of new schools in provincial areas
does not begin to address the needs of
these children left behind.
showed that 40 per cent of GPs plan to
growth is to be admired it is far from
clear that the countrys socio-economic
model offers a template for other
countries. It is not accidental that it
goes by the moniker middle kingdom
suggestive of a distinctly ethno-
centric culture.
Vijay Dandapani
President and Chief Executive Officer,
Hotel Association of New York, NY, US
Diagnosing the dangers of
the Conservative mission
Sir, Janan Ganeshs picture of an under-
fuelled plane in his column (Comment,
September 5) is rather vivid; one
wonders whether he got the idea on an
aeroplane himself. As a pilot, it
interests me even more greatly that the
metaphor has a deeper meaning:
under-fuelling often results from
several mistakes, one of which is gross
negligence before departing. It might
also be a consequence of bad planning,
as the pilot miscalculates the wind or
the fuel consumption of the aircraft.
Also, if the plane has to crash-land, it
means the pilot forgot to include a
back-up aerodrome to land. The UKs
captain, David Cameron, long ago
abandoned the aircraft and parachuted
himself back into his shed in Witney.
But what guidance will Air Traffic
Control Ganesh give? What will the
new Pilot-in-Command May (provided
the current PM is still there) do?
Zhao Xiaoou
Aberdeen, Aberdeenshire, UK
A test of supremacy
Sir, I was heartened by Kenneth
Armstrongs letter (Bill puts
supremacy of EU law on a statutory
footing, September 5). Lets hope that
immediately after the EU withdrawal
bill has passed, that some bright spark
in the EU brings out a new law,
underpinned by this supremacy
saying its illegal for the UK to leave.
Tony Barcroft
Director, BTech Ventures
Chester, Cheshire, UK
of hope that led Europeans, despite
the divisions of the postwar period, to
desire a bigger story, more beautiful
than themselves.
Mr Macron, who studied
philosophy, ended his speech with a
convoluted reference to Friedrich
Hegel and the owl of Minerva that
prompted some laughter in the
audience. His solution to the EUs
woes six-month-long democratic
conventions in every country, during
which EU citizens would debate
common goals sounded adolescent
and impractical. Elyse advisers insist
it would end the era of referendums
that, as shown by the UKs vote on EU
membership, oversimplify the debate
over complex subjects. The common
goals would be summarised by EU
leaders and enshrined during,
presumably, a pompous ceremony.
Other, more fundamental reforms,
more fiscal transfers among eurozone
members, would have to ensue.
At home, newspapers pounced on
another speech the following day to
French expatriates, in which Mr
Macron described opponents to his
jobs market reform as slackers. On
the eve of street protests, the
comment galvanised the CGT union.
There was also a little diplomatic
friction. Chinas president, Xi Jinping,
made it known during a call on Friday
with Mr Macron over the North
Korean nuclear threat that he did not
appreciate the French presidents plan
to screen foreign investment in
Europe. The Elyse declined to
comment. Christine Lagarde, head of
Wednesday 13 September 2017
Email: letters.editor@ft.com
Fax: +44 (0) 20 7979 7790
Include daytime telephone number and full address
Corrections: corrections@ft.com
Demands put GP service
in a perilous position
Sir, The average income of 101K for a
full-time GP quoted by Gill Plimmer in
your article on the GP crisis (GPs quit
NHS in England at rate of 400 a
month, August 31) is disingenuous
because, for most general practitioners,
working full-time is untenable.
Dedicated GPs may work 50 per cent
more than their contracted hours in
unpaid hours. This leaves no capacity
to work full-time.
Here is a more realistic example of
GP income: a typical salaried GP may
get 68,000 per year for being
contracted 37 hours (four days) per
week. Her actual work hours may be
55-60 hours per week. Indemnity,
licensing, professional development
and pension contributions will cost her
18,500 a year, plus any student loan
repayments.
Our GP will therefore have a
workable gross income 49,500. This is
a bring-home equivalent of
approximately 11 an hour a more
sober figure than that quoted.
Demand on GPs is rising intolerably.
Furthermore, the governments seven-
day service agenda would increase GP
opening times from 52.5 hours per
week to 84 hours per week. For every
two hours spent seeing patients, one
hour of paperwork is generated.
A recent survey in the south-west
quit in the next five years, and GP
training places are unfilled. Most newly
qualified GPs elect to become self-
employed locums, and bill partners for
lighter work at rates more akin to your
quoted figure (but arguably more
fitting of a highly trained professional).
Many partners consequently face the
prospect of drawing less than the
salaried GPs they employ, and the
locums they contract.
Recent changes to the discount rate
applied to personal injury claims are
set to see indemnity premiums soar
above the 10-25 per cent yearly
increases already suffered by GPs.
The causes of death recorded on the
death certificate for General Practice
will read: 1a) Indemnity fees; 2)
Workforce crisis, increasing demand.
Dr Richard Wood
Wheatley, Oxon, UK
Burmese treatment of
minorities must improve
Sir, I do not agree with the letter by Lex
Rieffel (September 11) that Aung San
Suu Kyi was justified in not supporting
the Rohingya because to do so would
diminish her chances of backing by
voters and the junta. To me that is like
saying Hitler was right to annihilate
Jewish people because otherwise his
support from Germans would have
fallen. These people are Burmese but
are not accepted by Buddhists as equal
citizens. The world is disappointed that
someone who was awarded a Nobel
Prize for standing up to the military
junta and for democracy has not
condemned the treatment of a
minority as second rate with hardly
any rights.
If the Buddhists really do not want
these people, an ideal solution would
be to give them the land that they live
on and independence or an
autonomous provincial status. Killing
innocent people or exporting them to
another country is wrong and
inhuman.
Sharif Lone
Nidderau. Germany
the International Monetary Fund, was
said to have privately expressed
surprise at Mr Macrons unexpectedly
vehement criticism of the institutions
role during the Greek sovereign debt
crisis. The IMF said its work in Greece
had always been undertaken at the
request of the Greek authorities and in
close collaboration with the European
institutions.
But Mr Macrons trip was also full of
puzzles heralding possible miracles.
Greek premier Alexis Tsipras, leader
of the anti-capitalist Syriza party, was
seen pitching his country as an
investment destination to French
executives. An awkward moment
occurred when an emotional Bruno Le
Maire, the rightwing French economy
minister, embraced Mr Tsipras,
caught off guard, after saluting his
political courage for carrying out
unpopular reforms.
What a world we live in, what a
world, Denis Zervudacki, a French
entrepreneur of Greek origins,
remarked, showing me his selfie with
the Greek premier. The French
businessman, a Macron fan, flew back
to Paris thrilled. These democratic
conventions do sound crazy, Mr
Zervudacki added, but given Macrons
record of becoming president and
disrupting Frances sclerotic politics in
less than a year, people think
perhaps it could work. He added: He
turned everything upside down in
France. Perhaps he can turn
everything upside down in Europe?
anne-sylvaine.chassany@ft.com
Wednesday 13 September 2017
Time is running out for a Catalan compromise
WORLD AFFAIRS
David
Gardner
I
n 1977, about a million people
marched in Barcelona demanding
the restoration of Catalonias home
rule, which the recently ended dic-
tatorship of Francisco Franco
crushed after Spains 1936-39 civil war.
It was a festive display of cross-party
unity, showcasing the lead role Catalo-
nia was to play in forging the consensus
that drove the Spanish transition to
democracy. How different things look
four decades on.
At this years Diada, the Catalan
national day on September 11, it was
separatists seeking Catalonias inde-
pendence from Spain that filled Barce-
lona, as they have every year since 2012.
These choreographed rallies have not
broken a pane of glass. But they threaten
Spains post-Franco democratic order.
How Buffett
broke American
capitalism
ECONOMICS
Robin
Harding
G
rowing up, I admired
nobody more than Warren
Buffett, the greatest inves-
tor ever. His achievement is
towering. The market is an
implacable opponent but here was a
man who beat it year after year, making
$75bn out of nothing but wisdom and
charm. There was moral purity in his
modesty, his ethics and his quiet attach-
ment to home in Omaha, Nebraska.
What footballer, politician or thinker
could compare?
Now 87, Mr Buffett wields huge influ-
ence over US business and finance, usu-
ally positive. He pushed companies to
expense stock options, warned of dan-
ger in derivatives and taught the public
to invest long term in low-cost index
funds.
But how ever much you admire the
man, his influence has a dark side
because the beating heart of Buffettism,
celebrated in a thousand investment
books, is to avoid competition and mini-
mise capital investment in the real
economy.
A torrent of recent studies show how
exactly those forces diminished com-
petition, rising profits and lower invest-
ment afflict the US. Economists Jan de
Australia can profit from Brexit, provided Britain stays open
OPINION
Alexander
Downer
A
ustralia may have been
watching from afar as Brit-
ain joined the European
Economic Community in
1973, but we still reacted
with anger and disappointment. Now, as
we watch Britain preparing to walk back
out, our emotions may be less febrile,
but we remain deeply concerned about
the eventual outcome.
When the UK went European four-
and-a-half decades ago, Australians
with their memories of fighting for the
British in two world wars still fresh
saw a country turning its back on its
friends and allies in the old Common-
wealth. At the practical level, Austral-
ians were angered by the loss of markets
especially in agriculture in the UK.
Adding to the pain was the common
agricultural policy which, at that time,
The now-ended terrorist campaign by
the Basque separatists of ETA was long
thought a greater threat to the Spanish
state. But Catalonia vaunted as a
model by scholars of minority national-
ism has slipped from Spains once
plurinational embrace. Secessionist
radicals have supplanted Catalan home-
rulers, reigniting Castilian Spanish
nationalism, and splitting the left in
Catalonia and across the country.
The narrow separatist majority in the
Catalan parliament, that controls the
autonomous government, is pledged to
press ahead with a referendum on inde-
pendence on October 1. A Yes result will
be binding, it says, whatever the turn-
out. Spains Constitutional Tribunal, at
the request of the centre-right govern-
ment of prime minister Mariano Rajoy,
says the plebiscite is illegal under the
1978 constitution. It has banned the ref-
erendum and threatens to prosecute all
who collude in it. This has divided Cata-
lonia, as well as Spain.
With their distinct language and cul-
ture, Catalans feel themselves a nation.
Yet even if polls show most believe they
have the right to vote on their future as,
Loecker and Jan Eeckhout chart a rise
in corporate mark-ups, a measure
linked to profit margins, from 18 per
cent in 1980 to 67 per cent today. In
a paper presented at the Brookings
Institution last week, Germn Gutirrez
and Thomas Philippon show how
investment has fallen relative to profita-
bility. Mr Buffett did not cause these
trends. However, they are central to his
fortune. When you celebrate him, you
celebrate them.
Mr Buffett is completely honest about
his desire to reduce competition. He just
calls it by a folksy name widening the
moat. I dont want a business thats prices. So strong was its brand that
easy for competitors. I want a business
with a moat around it with a very valua-
ble castle in the middle, he said in 2007.
He tells Berkshire Hathaway manag-
ers to widen their moat every year. The
Buffett definition of good management
is therefore clear. If you have effective
competitors, you are doing it wrong.
As with many aspects of his career, Mr
Buffett used to act more visibly. An
example is his 1977 purchase of the
Buffalo Evening News. He bought this
newspaper for $32.5m, a high multiple
of its $1.7m operating profit, then
launched a Sunday edition and drove
the competing Buffalo Courier-Express
out of business. By 1986, the
renamed Buffalo News was a local
monopoly making $35m in pre-tax
profit. At the time, it was Mr Buffetts
largest single investment.
His concept of a moat is linked to his
views on capital investment: the beauty
of one is you do not need the other. One
supported European farmers by setting
target prices usually way above those in
the rest of the world, stimulating sur-
plus production that was then dumped
on to global markets at artificially low
prices.
But it also felt personal, particularly
as the UK cracked down on immigrants
from Australia while giving preferential
access to those whom older Australians
still regarded as European wartime foes.
That sense of disappointment has dis-
sipated. Long forgotten are the fiery
exchanges between the Australian High
Commissioner of the day my father
and Britains Europe negotiator, Geof-
frey Rippon. But Brexit has sparked
curiosity and concern Down Under.
Australians ask themselves two ques-
tions: will it affect us economically? And
will there be geopolitical consequences?
There is no easy answer to the eco-
nomic question. Australia has much at
stake in an open global trading system.
At a time when free trade is threatened,
we need the UK and the EU to show
leadership and resist rising anti-trade
rhetoric. The shape of a future UK-EU
trading relationship will tell us much
FINANCIAL TIMES
Comment
for example, Scotland did in 2014, the
bestresult for supporters of independ-
ence was 47.7 per cent in local elections
two years ago hardly the sort of
majority needed to legitimise a rupture
with Spain, not least to the many Span-
ish immigrants who live in Catalonia.
Still, compared to the pageantry of
civic protest this week, the spectacle of
Spanish security forces trying to hunt
Polls suggest most would
accept a middle way with
greater fiscal autonomy
and more devolved power
down illicit ballot boxes and voting slips
is unedifying. That is less inflammatory
than, say, forcibly dissolving the
regional government or rounding up
separatist leaders would be. Leaders
who, conscious they may have reached a
ceiling of support, would surely wel-
come a heavy-handed response in
Madrid to lift them higher. The hitherto
inflexible Mr Rajoy has hinted at a new
of his most celebrated purchases is Sees
Candies, a company he bought for $25m
in 1972. Every year, Mr Buffett raised
would be no issue. But acolytes are tak-
despite sales growing little, profits grew
mightily, with barely any need for capi-
tal investment. The ideal business is
one that takes no capital, and yet
grows, he said last year.
His statement is unquestionably true
for an investor. For an economy, it pro-
duces the pattern above: low invest-
ment relative to higher profits. A line
attributed to business partner Charlie
Munger in Alice Schroeders biography
of Mr Buffett, The Snowball, is revealing:
Munger had always kidded Buffett that
his management technique was to take
out all the cash from a company and
raise prices. That does sum it up.
He instructs Berkshire
Hathaway managers to
reduce competition or
widen their moat
about both parties commitment to a
liberal global trading system.
Once Britain leaves the EU it will have
to calibrate its own economic policies to
try to make the best of new circum-
stances. If it retains competitive mar-
kets for goods and services, successfully
manages fiscal policies, ensures the
labour market is fair but flexible, and
has an open approach to trade and
Optimism is tempered
by uncertainty about the
long-term direction of the
UK economy
investment, the UK will do perfectly
well. After all, many countries, includ-
ing Australia, prosper outside the EU.
Their prosperity is largely a function of
their domestic economic settings, not
membership of clubs. Equally, while
many countries within the EU do well
economically, some dont. in on itself and appears a less attractive
For Australia, Britain outside the EU
will continue to be an excellent eco-
dialogue with Catalonia, but it is far
from clear he sees this as a political
problem to resolve rather than sedition
to be crushed.
Mr Rajoy and his Partido Popular
helped make Catalan separatism main-
stream by, in opposition, inciting the
Constitutional Tribunal in 2010 to evis-
cerate an upgrade to Catalonias statute
of autonomy, although it had been
voted into law by the Spanish and Cata-
lan parliaments and endorsed by refer-
endum. (The legal reasoning looked
even more specious when articles
deemed unconstitutional in Catalonias
statute survived unchallenged in PP-
ruled regions such as Valencia).
Once in power, Mr Rajoy refused to
discuss a middle way between the status
quo and separation that polls suggest a
majority of Catalans would accept: with
greater fiscal autonomy more like the
Basques, who collect their own taxes
and pay an agreed portion into the
Spanish treasury and more devolved
power. Now, a showdown over a vote is
just over two weeks away.
Professed separatist optimism may be
misplaced. The leftwing anti-establish-
If Mr Buffett in his brilliance had
found a few truly unusual companies
and bought them on the cheap there
for declining investment and higher
ing his methods economy-wide.
These days, Mr Buffett has two main
ways of putting his money to work. On
one hand, he is finally investing in phys-
ical assets, although only in regulated
industries such as electricity and rail-
roads where returns are largely guaran-
teed. On the other, he is working with
Brazilian private equity firm 3G as it
slashes costs to the bone and drives up
margins at Burger King and food com-
pany Kraft Heinz.
Kraft now makes a 23 per cent operat-
ing margin and an enormous return on
tangible capital. In a competitive mar-
ket, those high margins ought to present
an opportunity for rivals to invest and
steal market share. Instead, Kraft com-
petitors such as Unilever and Nestl
are under pressure from their owners
a mixture of index funds and Buffett-
like activists to match those sky-high
margins. If rivals also cut, rather than
invest and compete, Kraft can cut even
nomic partner if it retains its commit-
ment to the liberal market economy. A
free-trade agreement would enhance
that relationship. We would expect both
Australian and British companies to use
the new arrangement to expand trading
opportunities. The UKs decision to
leave the EU also presents Australia
with an opportunity to push for favour-
able terms for Australians wanting to
live and work in the UK.
But this optimism is, for us, tempered
by uncertainty about the long-term
direction of Britains economy. Impor-
tant as trade is, it is the investment rela-
tionship between our two countries that
is of primary importance. Our banks,
retailers, developers and even our min-
ers will continue to invest in an open,
liberal British economy, regardless of
EU membership.
Most Australian investment in the UK
is not contingent on its trade relation-
ship with the EU. But it is contingent on
the profitability of investing in Britain.
If, after Brexit, the UK economy closes
destination for investment, then
our companies will invest elsewhere.
ment movement Podemos, whose allies
run Barcelona and which defends the
right to decide, has split, like the avow-
edly federalist Socialist opposition
before it. Barcelonas town hall says it
will not involve its staff in the vote
because of the legal risks. In any case,
the Catalan capital still has a majority
against secession.
A sterile debate about legitimacy and
legal niceties will not resolve this. One
place to start would be to address the
Catalan belief that Madrid takes an abu-
sive amount of their taxes much more
than the Basques put into the state kitty.
Jordi Alberich, director-general of the
Cercle dEconomia, a non-partisan Cat-
alan think-tank, suggests a new institu-
tion with shared responsibility for col-
lecting and apportioning taxes which is,
above all, transparent and fair.
But if Madrid continues to treat
Spains constitution as a tablet of stone,
rather than a living document to serve
an evolving, dynamic modern state,
albeit a fractious one, the time for such
common sense will soon pass.
david.gardner@ft.com
more. A kind of Buffett equilibrium is
taking hold.
To be clear, this is not the only reason
attention of investors away from long-
profits in the US. Nor is there a simple
solution. Better antitrust enforcement
would help, but recent proposals for a
complete revamp of competition policy
are not well founded. Although research
linking lack of competition to cross-
ownership by institutional funds is
interesting, it does not capture the real-
ity of private equity operators such as
3G.
We can decide who to admire. Mr Buf-
fett is brilliant at buying into monopoly
profits, but he does not start companies
or gamble on new ideas. America is full
of entrepreneurs who do. Elon Musk is
investing in two wildly risky and com-
petitive sectors: automobiles and space.
Even the much-reviled Koch brothers
built most of their fortune on invest-
ment in the real economy. Celebrate
that kind of business. It is the kind
America needs.
robin.harding@ft.com
It is the geopolitics of Brexit that is of
greater long-term concern than the
short-term economic impact. The EU
project is not just about economics. It is
also about welding Europe together in
an eternal bond of co-operation.
Losing the UK has the potential to be a
huge setback for the EU. Britain is not
only the blocs second-largest economy
and net budgetary contributor, it has
great global reach and influence. With-
out Britain, there is a risk that the EU
becomes introverted, less global and
less transatlantic in outlook. If that hap-
pens, then the west as a whole will be
weakened even if Britain becomes
more global than it already is.
This is not a prediction. It is a risk.
And it is one that the EU and the UK
must work to avoid. That is why coun-
tries outside Europe believe that the UK
and the EU share equal responsibility
for concluding a successful Brexit nego-
tiation over the next 19 months. This is
not just an economic question. The
unity of the western world is at stake.
reality.
The writer is Australian High Commis-
sioner to the UK
9
Cultish
long-termism
can hobble
investors
FINANCE
Izabella
Kaminska
I
n the aftermath of the global finan-
cial crisis, in 2010 Andrew Hal-
dane, then the executive director of
financial stability at the Bank of
England, wrote a seminal paper
espousing the virtues of patience in
financial markets.
According to Mr Haldane, now the
banks chief economist, many studies
had drawn a link between patience and
growth and, conversely, between impa-
tience and under-saving. The latter was
thought to have adverse implications
for long-run investment and growth.
Unfortunately, he noted, impatience in
the market was mounting.
Some of this, Mr Haldane suggested,
was connected to financial innovation
that encouraged short-term investing
styles. High-frequency trading in partic-
ular, he argued, was leading to increased
market volatility. For growth to really
take off, more patience was needed.
Looking at the market today, how-
ever, it is hard to believe things are as
simple as that. Take the growing
number of established but lossmaking
(or just-about break-even) businesses
that have emerged from the tech sector
Uber, Tesla or Snap, for exam-
ple. Companies like these exist largely
because investors attitudes in recent
years have become uniquely forgiving
and long-termist in nature.
Of course, many authoritative inves-
tors and academics share Mr Haldanes
view of the deleterious effects of exces-
sive short-termism. Many point to the
requirement for public companies to
Keeping companies private
for longer is now held up
as a logical strategy for
high-tech businesses
update investors on their financials on a
quarterly rather than yearly basis.
The practice, it is argued, draws the
term productivity-enhancing invest-
ment and towards activities that drive
short-term returns and profits stock-
purchase programmes, financial arbi-
trage or predatory mergers and acquisi-
tions focused on asset-stripping or
monopolisation. The result is that low-
value-added businesses are financed,
while those with the capacity to inno-
vate are not. And the implications for
growth are negative.
Understandably, keeping companies
private for longer (protected from the
pressures and scrutiny of short-termist
shareholders and investors) is now held
up as a logical strategy for high-tech
businesses with transformative ambi-
tions.
Unfortunately this thinking has had
two unintended, negative conse-
quences. The first is the rise of the overly
patient, and so potentially gullible,
investor. The second is the rise of the
sort of idealistic long-term thinking that
can detach financial markets from real-
ity entirely.
While there is little doubt that too
much short-termism has negative
effects, one should not assume that it
follows that extreme long-termism is
always for the best. The latter can be
dangerous when long-term thinkers fall
for fanciful narratives or investor cults.
In such cases, investment decisions
are driven not by a realistic evaluation
of what is or is not possible, but rather
by the grandeur of the futuristic visions
being touted. If the tale is bold enough
especially if it appeals to entrenched
biases, belief systems or desires the
more likely an excessively patient inves-
tor is to forgive failure on the grounds
that the end justifies the means.
Whether the venture being invested in
has scant chance of operating without
losing money matters little at this point.
The investment is now a religion.
Nowhere is this mindset more clearly
displayed today than in the realm of
cryptocurrencies, where narrative
trumps reality on a daily basis. Whether
cryptocurrency schemes are cultivating
value for future generations, or are in
fact systems whose growth depends on
an elaborate bluff or deception, is
impossible to evaluate. When the end-
less deferral of gratification becomes an
end in itself, settling that question is
more a matter of faith than quantifiable
izabella.kaminska@ft.com
10 FINANCIAL TIMES Wednesday 13 September 2017

Renminbi: a party invite

After spending $1tn to intervene, China has seen its foreign reserves recover this year alongside the value of
its currency. Waning demand to hedge dollar positions by companies suggests that the renminbi could
strengthen further, even as Beijing moves to head off gains.

Twitter: @FTLex Email: lex@ft.com
Ashtead:
harvesting the hurricane
It is an ill wind that blows no one in
business any good. Ashtead, which
hires out construction equipment, is
expecting a boost from rebuilding work
in the wake of Hurricane Irma. The UK
group, named after a Surrey village, is
already much bigger in the US than
back home. Its shares have quadrupled
over five years and rose another 5 per
cent yesterday. Time for contrarians to
check whether this cyclical business
can withstand economic storms.
In the immediate aftermath of any
natural disaster, human costs matter
much more than the financial kind.
The duty of business is to assist the
authorities and ensure employees are
safe. Besides, the post-Irma clean-up
should only modestly benefit Ashtead,
whose US business, Sunbelt, expanded
from a Florida base.
The group should get a bigger lift
from heavier duty repairs in years to
come. These are expected to cost a
baggy $75bn-$180bn, a range whose
width hints at its likely accuracy.
New business from this source
should support a secular growth story.
Ashtead has spread across the US by
buying smaller rivals and opening new
depots. The success of this expansion
strategy is reflected in a 19 per cent
jump in profits before tax in the first
quarter, to 289m.
The company has beaten a couple of
jinxes to rival US market leader United
Rentals. First, it has overcome a
tendency for UK groups to bungle
stateside expansions. Brits do not
always speak American. But pneumatic
drills and jackhammers do the same
jobs, whatever you call them. Second,
Ashtead has bucked the propensity of
equipment-hire groups to over-
estimate future demand, buy too many
picks and compressors, then struggle to
service debts.
Is Ashtead doomed to the same fate?
Construction always turns down
sooner or later. But that reversal would
have to be cataclysmic to hurt the
company gravely. Corporate leverage is
steep when net debt exceeds three
times earnings before interest, tax,
depreciation and amortisation.
Ashteads forecast profits could drop
almost 50 per cent without pushing its
ratio that high. They fell just 30 per
cent following the financial crisis.
The shares are fully valued at 14
times earnings. But the group offers
attractive exposure to economies of
scale in a fragmented market. The
stock should be worth a look when the
storm surge abates.
Japan Post:
second delivery
Bankers are busy banging the drum for
the flotation of Best Logistics, the
Chinese distribution group. Following
swiftly behind will be an offering of
shares in a Japanese market leader,
priced at less than half their accounting
book value. That pitch is unlikely to
generate as much enthusiasm.
Japan Post Holdings confirmed
yesterday that it would offer another
$12bn of stock to the market, two years
after its initial offering. The discount is
partly explained by investor scepticism
about growth prospects in Japan.
The outlook is scarcely more exciting
in the groups banking unit, which is
separately listed. Measured by deposits
it too is a market leader but is
struggling under the Bank of Japans
negative interest rate policy. Like
European peers, it is emphasising fee
income from sales of investment
products. Its shares trade at a slightly
smaller discount to book.
Of its three privatised entities, only
Japan Posts insurance unit trades
above its flotation price, and then only
just. Revenues at the division have
declined 3.9 per cent in each of the past
two years.
However, it does have commanding
market share; one-fifth of Japanese
people are clients and new-policy
income is almost twice that of
competitors, according to Citigroup.
The business is supported by the
trend towards increasing individual
responsibility for healthcare costs. Its
target customers, the over-50s, are in
plentiful supply in Japan.
A shame, then, that only the shares
of Japan Posts holding company are on
offer. As with the original IPO, they will
be targeted mostly at retail investors,
who tend to be risk-averse. A carrot is
the groups dividend; its shares yield
roughly 1.5 times the broader market
level. Reports suggest parcel prices
might rise next year, boosting profit.
Expanding equity ownership in
Japan would be a good thing. But that
Foreign reserves and the renminbi
Reserves excluding gold ($tn)
3.6
3.5
3.4
3.3
3.2
3.1
3.0
2.9
2015 16
FT graphic Sources: Thomson Reuters Datastream; CEIC, Nomura
Most official invitations are easily
interpreted. A request to attend an
embassy party is flattering, a
summons to help the authorities with
inquiries is threatening. Chinas
invitation to attack its currency is
more ambiguous. How should
investors react?
The message, written in the code of
regulation, requires translation. The
Peoples Bank of China this week said
it would drop a 20 per cent reserve
requirement for banks selling
products such as onshore currency
options. The capital charge was
introduced during market chaos in
late 2015. Banks passed the cost on to
investors hedging or betting against
the value of the renminbi. Analysts at
Citigroup estimate it added as much
aim would be easier to achieve if small
shareholders could be tempted with a
more attractive proposition.
Redrow:
nailing it
Markets love a risk-taker, particularly a
successful one. Founders who maintain
big stakes in their companies give
comfort to those who might not care to
risk so much. The moment those
entrepreneurs dare to cash in on their
holdings, investors start fretting.
Steve Morgan, chairman of UK
housebuilder Redrow, caused eyebrows
to arch this week by announcing the
sale of nearly a fifth of his shares, and
those of his related charitable trust.
Onshore corporate long forward positions
Rmb per $ Outstanding balance of FX forwards settlement and sales
by Bank of China on behalf of corporates ($bn)
6.3 80
6.4
30
6.5
6.6
-30
6.7
6.8
-80
6.9
Outflows, ie buy dollars
7.0 -130
17 2014
as 3.5 percentage points to the price of
borrowing dollars onshore for a year.
The central bank has also removed a
requirement for banks to hold reserves
onshore against offshore renminbi
deposits. That measure was originally
designed to reduce money outside
Chinas direct control that might be
used for short selling.
In the context of Chinas relationship
with currency markets, the shift is
telling. The government had spent
most of the past two years supporting
the renminbi, through direct market
intervention and tight controls on how
money leaves the country. But foreign
exchange reserves have been rising
again, as has the renminbi: onshore on
Friday it hit Rmb6.449 against the
dollar, its highest since December 2015.
That knocked 8 per cent off the price of
the company he started in 1974 and
caused other housebuilders to wobble.
Worry less about any bearish signals
from Mr Morgan, who came out of
retirement to lead Redrow after the
financial crisis. Instead query why the
valuation of the company remains so
doggedly low.
The notion that trading by directors
reflects something good or bad about a
company is a long-held truism. Various
studies in the US and UK back up the
hunch. Research done at University of
Exeters Business School in 2009
revealed better performance following
purchases and vice versa after sales.
However, if Mr Morgan senses
something is wrong it is not obvious
what that problem could be. Last week
the builder reported good full-year
Inflows, ie sell dollars
15 16 17
The new measures remind currency
bulls not to get carried away and the
renminbi has slipped accordingly.
Is the Chinese Communist party
acting in the interests of free
markets? Or does it hope free
markets will act in the interests of the
party? Surely the latter? But shorting
the renminbi would be unwise when
many Chinese businesses, worried
about its weakness, appear to be
hoarding dollars.
As fears evaporate, their dollar
sales may push up the renminbi.
Nomura notes demand is weakening
among corporate clients to buy
dollars in future. Investors should
beware: they may be nudged into
shorting the currency more easily
than it may be nudged into falling.
results, with a record order backlog.
His sale only reduces the value of his
personal holding back to the level of
two months ago. No big deal.
What should concern the market
more is the fact that despite all the
good news over the past year, Redrow
still trades cheaply. Yes, its price to
forward earnings valuation has come
up from the lows that followed the
Brexit vote. Yet with business likely to
remain brisk for at least another year, a
multiple below 8 times, under its five-
year average, stands out. That is true
for all FTSE-listed housebuilders.
Whether they are housebuilders or
carmakers, cyclicals trading cheaply on
record earnings do warrant caution.
Even so, ask not why Mr Morgan
sells. Wonder instead why the market
does not bid up his groups shares.
SoFi:
Cagney and racy
SoFi is a consumer bank that has
positioned itself as a lifestyle brand.
The US fintech start-up, recently
valued at more than $4bn, began in
2011 as a provider of MBA loan
refinancing. Today its products include
everything from mortgages to term life
insurance. It also offers career
workshops, happy hours and speakers
such as Dan Loeb, the hedge fund
tycoon who backs the business.
That aura is threatened by
allegations of sexual harassment and
tough working conditions. Inimitable
founder and chief executive Mike
Cagney has resigned. SoFis cultural
problems are shared with many tech
groups, its strategic challenges with
other lenders. The mighty Goldman
Sachs is jumping into consumer
lending and the end of the credit cycle
is in sight. It will take more than
artisanal cocktail classes for SoFi
to thrive.
In the second quarter of this year, US
household debt reached an all-time
high of nearly $13tn. The conceit of
SoFi and competitors such as Lending
Club is that their loan rates are cheaper
than bank credit and they offer a more
pleasant shopping experience (or in
SoFis case, an opportunity for
self-improvement).
But Lending Club is off 60 per cent
from its initial public offering as it has
struggled to keep up new loan
origination. The challenge for it and
SoFi is to keep the spigot of their own
financing open so volumes do not dip.
SoFi acquired Zenbanx, an upstart
internet bank, this year. Marketplace
lenders such as SoFi might ultimately
need a base of deposits to survive
rather than riskier, costlier short-term
funding, such as securitisations.
In the second quarter, SoFi said it
funded $3.7bn in loans. Revenue for the
quarter was up 67 per cent to $134m.
However, its operating profit did not
soar as high, increasing just 60 per cent
to $62m. SoFis cultural troubles show
that its workplace environment must
become more conventional. The same
applies to its business model.
Lex on the web
For notes on todays breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
1 Possibly the best part of
4 Rule in operation without a
monarch ascending, previously?
No. 15,653 Set by ALBERICH Rheingold? Note, Wagner wrote it (7)
(9) 5 Chap turns up with another writer
        6 Lizard Points 100 kilometres into (7)
journey (5) 6 Attack a lecherous person (4)
9 Remove skin from mottled fruit 7 Henrys popular, cracking officer
(5) material (5)
 
10 Gut clenching one gets close to 8 More than others, avoids suburbs?
terror its a mad axeman! (9) (9)
11 Chance to receive Oscar for a 13 Let off a ballet dancer breaking
  Western (10) lampholders (10)
12 Choice of extremes for drunk idiot 14 Racecourse favourite gets VIP
 (4) treatment (3,6)
14 Revile women having vacated 16 Head accepts new job? I havent
   assembly line (7) the foggiest! (4,3,2)
15 Heros beloved captain conceals 18 Figure suffering not unknown
name (7) after Christmas period (7)
  
17 Owed a couple of pounds, 19 Artist stuffs dirty pictures under
journalist fought for honour (7) small pouch (7)
19 Does the vocals for around 501 21 Setters gone for adult version of
short tracks (7) cricket? (5)
    20 Surrounded by bedlam, I distract 23 Rather large mushroom (5)
guards (4) 24 Alfred regularly follows Saint Peter
 22 Prim woman is indifferent about (4)
 
husband wearing fawn (10)
25 Australian native in rage after
very hot curry (9) Solution 15,652
26 With Charlie gone, angel cakes are 6 7 5 , 3 / , * + 7 % $ & +
  made by him (5) ( ' $ , 2 / $
27 Heading off, endeavoured to find 5 $ & ( & 2 9 ( 5 3 2 , 1 7
some treasure (5) & $ 5 ( 5 2 9
& + , / / < 7 + , 5 ' 0 $ 1
28 Confectionery thats modelled on , 0 + ' 6 6
JOTTER PAD praline (9) , 1 & 5 ( $ 6 ( + $ 6 3
DOWN ( / * % 2
1 Upset about everything, thats 3 ( ( 3 $ ' $ 3 7 , 9 (
5 5 % 0 / ,
plain (5) ) 2 5 ( * 2 1 ( 0 $ / , & (
2 False piety or holiness common 7 6 7 $ 2 $ ,
primarily for him? (9) ( , 6 ( 1 + 2 : ( 5 3 / 2 7
3 Holding pin, Ren repaired left & 1 ( $ $ ( 8
) $ 6 7 5 2 < $ / ) / 8 6 +
loafer (4-2-4)
Wednesday 13 September 2017 11

Redrow Dollar / yen 10-year gilt Brent crude Glencore FTSE 100 Smurfit Kappa Euro/sterling
In the line of fire Boeing at risk
from any US-China trade war 8.3% 0.6% 10bp 0.8% 0.9% 0.2% 2.4% 0.7%
INSIDE BUSINESS, PAGE 12
580p 110.05 1.14% $54.28 372.5p 7,400.69 23.86 0.9011

Blue-chips alter US bond landscape Short

View
3 Top-tier groups hold $800bn in debt 3 Corporate and government paper snapped up
ties, means they collectively have more express concern about a bond-market bank account or an investment in short-
Katie
ERIC PLATT, NICOLE BULLOCK AND
ALEXANDRA SCAGGS NEW YORK firepower in debt and credit markets bubble that could be vulnerable to They [Ford, term money market funds and time Martin
than high-profile asset managers bursting should inflation and economic Alphabet, deposits, they are increasingly extend-
Apple, Alphabet and Microsoft are including AllianceBernstein, Invesco growth accelerate. Microsoft, ing beyond that sector as interest rates
among a host of top-tier US companies and Franklin Templeton. Corporate treasurers who have piled have remained near zero for much of Arguably the most hated US equities market rally in
that have become a force in the global They are asset managers in their own into debt are adding momentum to the Boeing, etc] the past decade. history continues with barely a hiccup. Like children
bond market, as they pump hundreds of right, Ramaswamy Variankaval, head bond market rally, further lowering bor- are asset The 30 companies have amassed caught pinching sweets, investors have been forced to eat
billions of dollars into government and of JPMorgans corporate finance advi- rowing costs. That trend could reverse more than $400bn of US corporate the whole jar. The nausea is deepening.
corporate debt. sory group, said of the companies. should inflation return, exacerbating a managers in bonds, representing nearly 5 per cent of Not even a hurricane the size of France could knock the
Thirty US companies together have A reluctance by multinationals to sell-off that would send yields higher. their own the outstanding market. rally off course. US stocks, led by insurers, fired back to life
more than $800bn of fixed-income repatriate profits generated overseas In total, the 30 companies, which Yields on high-quality corporate at the start of this week, hitting a record closing level after
investments, according to a Financial has pushed the size of US corporate cash include household names such as Ford,
right bonds have tumbled in 2017 to less than the storm eventually caused disaster rather than total
Times analysis of their most recent piles to more than $2tn, a rise of 50 per Coca-Cola and Boeing, have more than 3.1 per cent, the lowest level since last catastrophe in Florida. Another apparent reason to be
filings with the US Securities and cent over the past decade, according to $1.2tn in cash, cash equivalents, mar- Novembers US presidential election. cheerful (and this is scraping the barrel) was the lack of
Exchange Commission. the Federal Reserve. ketable securities and investments, The willingness to invest in a wider further sabre-rattling from North Korea. These are weak
Their holdings of Treasuries, corpo- The emergence of US companies as a according to the FT analysis. array of fixed-income instruments drivers for new highs but the market cannot be held back.
rate, agency and municipal debt, as well leading investor in corporate debt While corporate treasurers typically is also partly a legacy of the financial It was just another melt-up Monday, as Peter Tchir at
as asset and mortgage-backed securi- comes at a time that many in the market first turn to a deposit in a commercial crisis. Brean Capital put it one of several this year.
So, champagne all round? Again, typically, no. As
Mr Tchir notes: The problem with the bull case is that
there is a but for virtually every argument the bull case
relies on that is quite compelling. Yes, Donald Trump
might try to get his tax agenda back on track, for example.
Ill wind No, that still will not be easy.
Air Berlin pilots Banks continue to report being inundated with ques-
tions about when the wheels will finally come off major
warned on protest markets. Clients keep asking about an impending equity
downturn, said analysts at Goldman Sachs, with a some-
what weary tone. Investors are spooked by the notion that
Air Berlin warned its staff that they were high valuations, poisonous politics and a potentially
playing with fire and undermining synchronous rush to the exits by quant funds could reach
plans for a sale of the carrier after a the boil at the same time. Dont sweat, at least not yet, the
co-ordinated protest by pilots forced the bank said, again. It has previously warned that war and
cancellation of more than 100 flights recession are the two most likely triggers for the end of a
yesterday, writes Tobias Buck in Berlin. bull run a cheerful thought and it broadly sticks by
The German carrier filed for that. But there is little suggestion of either for now.
insolvency last month after Etihad, the Similarly, Bank of America Merrill Lynchs latest
Abu Dhabi-based airline and the main monthly survey of 214 fund managers, between them
shareholder in Air Berlin, said it would managing $629bn in assets, points to the biggest jump
no longer fund the lossmaking company. in 14 months in hedging activity against a sharp drop in
Its assets are now up for sale, with bids the equity market.
due by Friday. It is just that though a hedge. Markets can remain in
But plans for an orderly sale and the an Icarus upside mode for risk assets, said Michael Hart-
continuation of operations until then nett, chief investment strategist at the bank. Irrational
are now at risk, Air Berlins management exuberance is still absent, he wrote. Enjoy the sugar.
warned. The staff of Air Berlin have
until now dealt very professionally with US equities
the difficult situation of the company, S&P 500 index
Thomas Winkelmann, chief executive, 2,500
said. But what we saw today from parts
of the staff is playing with fire.
He added: We are currently in final 2,400
talks with possible investors. These
negotiations can only succeed if we have US stocks, led by
a stable operation. 2,300 insurers, have fired
The airline said about 200 of its 1,500 back to life this
pilots had called in sick at short notice, 2,200
week. Not even a
Vereinigung Cockpit, the German pilots hurricane the size
union, said it was surprised by the Jan 2017 Sep of France was able
events, adding that it had not called on Source: Thomson Reuters Datastream to halt its rise
its members to call in sick.
katie.martin@ft.com
Pawel Kopczynski/Reuters

Shortcomings in Teslas self-driving

tech cited among factors in fatal crash
RICHARD WATERS SAN FRANCISCO technology, leaving the driver unpre- on the road where the crash occurred.
pared to react in time to avoid the crash. According to the NTSB, data recorded
US regulators have pointed to short-
Joshua Brown, a Tesla owner, was by the Model S showed that Brown had
comings in Teslas application of its
killed last year when his car ran into the his hands on the steering wheel for only
self-driving car technology as one of
side of a truck that was turning across 25 seconds during the 37 minutes lead-
the main causes of the first fatal crash
the roadway in front of it. The cars cam- ing up to the crash. The car displayed
involving a car that was operating
eras failed to notice the white side of the seven warnings during that period, with
largely under its own control.
Atlas Copco sheds mines truck in bright sunlight. Data recovered Brown touching the wheel after each
and looks to digitalisation Elon Musk, Tesla chief executive, has from the Tesla Model S showed that the one for long enough for the warning to
boasted that his companys so-called drivers hands were not on the steering disengage.
Atlas Copco, Swedens biggest Autopilot system is capable of driving wheel at the time and he had not tried to Since the accident, Tesla has imple-
industrial group, is sticking to its long distances without human interven- apply the brakes. mented extra controls so that its cars
growth path even after splitting off its tion. The company claims that its most The truck drivers actions were one of stop automatically if drivers do not
mining operations. Mats Rahmstrom, advanced technology is twice as safe as a three causes of the accident highlighted show a higher level of engagement.
who took over as chief executive in human driver. by Robert Sumwalt, NTSB chairman. Tesla pointed out that the NTSBs
April, says it aims to boost growth However, a public hearing into the He said Brown had put a higher level of remit did not allow it to assign fault or
through digitalisation and innovation. fatal accident by the National Transpor- trust in the Autopilot system than was blame for an accident and its findings
Analysis i PAGE 14 tation Safety Board yesterday high- intended and that the driverless tech- could not be used as evidence in dam-
lighted operational limitations in the nology had not been designed to operate ages claims or other civil lawsuits.

Companies / Sectors / People

Companies
21st Century Fox...................................1,12
Air Berlin.......................................................11
Alibaba...........................................................18
AllianceBernstein......................................11
Alphabet........................................................11
Apple..........................................................11,13
Ashtead.........................................................10
Atlas Copco................................................14
BDO.................................................................14
Bell Pottinger..........................................1,14
Berkeley........................................................19
Best Logistics............................................10
Boeing........................................................11,12
Brevan Howard........................................18
Bunge.............................................................19
Burger King..................................................9
CME Group.................................................20
Carmignac....................................................19
Caterpillar....................................................19
China National Petroleum Corp.......3
Chubb...............................................................2
Coca-Cola......................................................11
Condor............................................................11
DowDuPont.................................................14
EasyJet...........................................................11
Equifax...........................................................13
Experian........................................................13
Ford..................................................................11
Fortress...........................................................2
Fox News...................................................1,12
Franklin Templeton................................11
Glencore........................................................19
Glenview Capital......................................18
Goldman Sachs...................................10,12
Hanwha...........................................................7
Hyundai...........................................................7
IOI Corporation.........................................19
Invesco............................................................11
Japan Post..................................................10
KPMG................................................................1
Kraft Heinz....................................................9
LG Corp...........................................................7
Lansdowne..................................................18
Lending Club.............................................10
LexisNexis Risk Solutions..................13
Light Street Capital...............................18
Linkway Trading........................................1
Loders............................................................19
Lotte..............................................................7,7
Lufthansa......................................................11
Lundbeck......................................................12
Luxor Capital.............................................18
Marshall Wace...........................................18
Microsoft........................................................11
Munich Re.......................................................1
Nestl...............................................................9
Och-Ziff.........................................................18
Pimco................................................................2
Redrow.....................................................10,19
Rio Tinto.......................................................19
SK Group........................................................7
SSP...................................................................19
Safran.............................................................18
Samsung....................................................7,13
Sky.................................................................1,12
Smurfit Kappa...........................................19
Snap..................................................................9
SoFi..................................................................10
SoftBank.......................................................18
Sunbelt..........................................................10
TCI....................................................................18
Tencent.........................................................12
Tesla.......................................................9,11,18
Teva.................................................................12
Third Point..................................................14
TransUnion..................................................13
Trian................................................................14
Uber...................................................................9
UniCredit.........................................................2
Unilever...........................................................9
Union Link.....................................................3
United Rentals..........................................10
Whitbread....................................................19
Sectors
Aerospace & Defence...........................12
Airlines............................................................11
Automobiles................................................11
Banks.....................................................2,10,12
Basic Resources.........................................4
Chemicals.....................................................14
Construction...............................................10
Energy............................................................14
Financial Services....................1,18,19,20
Financials...................................10,14,18,20
Industrials....................................................14
Insurance........................................................2
Media......................................................1,12,14
Mining............................................................19
Pharmaceuticals.......................................12
Murdoch, Rupert...................................1,12
Shipping..........................................................3
Support Services.....................................10
Technology......................................12,13,18
Telecoms.................................................13,18
People
Abedian, Iraj..................................................1
Ailes, Roger..............................................1,12
Barer, Sol......................................................12
Breen, Ed......................................................14
Buffett, Warren...........................................9
Cagney, Mike.............................................10
Chang, Steven...........................................12
Duffy, Terry...............................................20
Kim, Seung-youn.......................................7
Koh, DJ...........................................................13
Lee, Jae-yong..............................................7
Leten, Ronnie............................................14
Liveris, Andrew.........................................14
Loeb, Dan....................................................10
McNerney, James....................................12
Morgan, Steve...........................................10
Musk, Elon................................................9,11
Rahmstrom, Mats....................................14
Saint-Georges, Didier............................19
Schultz, Kre..............................................12
Schwartz, Harvey....................................12
Smith, Richard F.......................................13
Tinseth, Randy..........................................12
Winkelmann, Thomas............................11
Xie, Qun...........................................................3

The Financial Times Limited 2017 Week 37

12 FINANCIAL TIMES Wednesday 13 September 2017

COMPANIES
INSIDE BUSINESS
Banks
ASIA

Goldman lines up $2.5bn profits boost Tom

Mitchell
Long-term growth plan after two sets of disappointing quarterly nue annually, an extra $2bn from $5bn was looking for a more broad-based
results, which included the worst ever financing and lending (including its expansion by product and client.
cheers investors despite Targeted annual lift

challenging conditions
LAURA NOONAN
INVESTMENT BANKING CORRESPONDENT
Goldman Sachs sought to take the sting
out of a new warning on fixed income
trading woes by laying out a $5bn reve-
nue growth plan that it says would add
for its commodities business.
Mr Schwartz said yesterday that the
market environment since the end of
June feels like the first and second
quarter. Referring to fixed income, cur-
rencies and commodities trading, he
said, FICC is still a pretty challenging
environment at the moment.
The comments echoed warnings from
Citi chief financial officer John Gerspach
expanding consumer lending business
Marcus), an extra $1bn from invest-
ment management and $500m extra
each from investment banking and
equities client coverage.
If the bank hits the revenue aspira-
tions, which Mr Schwartz insisted were
not targets, the pre-tax profit line
would be boosted by $2.5bn.
Goldmans pre-tax profits were $7.4bn
to revenues from
activities including
FICC trading
Goldman had admitted at its second-
quarter earnings that its trading results
had been hurt by its reliance on hedge
Boeing will be in the
$7.4bn
fund and other financial institution cli-
ents, while rivals catered more to corpo-
line of fire if a US-China
Pre-tax profits last
year, depressed by
a $5bn settlement
rates. It promised to address that.
Mr Schwartz said Goldman had
already begun hiring to support the
trade war breaks out
with the DoJ growth plans, including doubling lateral
hires in its FICC business this year.

$2.5bn to the banks bottom line in the
next three years.
Shares rose more than 2 per cent yes-
terday after the plan was unveiled by
the banks chief operating officer Har-
vey Schwartz at a financial conference
in New York.
Wall Streets purest investment bank
has been in the crosshairs of sharehold-
ers and analysts for most of the year
who spoke at the same conference, last year, but that was depressed by a
organised by Barclays, on Monday and $5bn settlement with the Department of
predicted that his banks trading reve- Justice over mortgage-backed securities
nue would be down around 15 per cent sales in the run-up to the financial crisis.
year on year for the third quarter. We have a long-term plan. Were in
But Goldmans Mr Schwartz followed execution mode, said Mr Schwartz,
his gloomy news by dangling the pros- adding that the results could be even
pect of much better things to come. better if market conditions improved.
He said the bank believes it can gener- Mike Mayo, banks analyst at Wells
ate an extra $1bn of FICC trading reve- Fargo, said the plan suggested Goldman
Media. Pay TV
The proof of the pudding will be in
the execution, and some aspects of it
may be aggressive relative to what they
can achieve, said Guy Moszkowski,
analyst at Autonomous in New York. I
think you could call it sensibly aspira-
tional. The US banks begin reporting
third-quarter results on October 12. Mr
Moszkowski said markets had taken the
warnings about trading in their stride.
A
t the second and last meeting of Donald
Trumps much-hyped business advisory
council in the spring, the US president asked
more than a dozen US chief executives if
the Treasury department should formally
declare China a currency manipulator and impose
punitive tariffs on Chinese imports.
None of them thought it was a good idea, said one
person who attended the meeting on April 11. Within
24 hours, Mr Trump had publicly backed away from his
threat to start a trade war between the worlds two
largest economies.
No US company breathed a bigger sigh of relief after Mr
Trumps currency manipulator bluff than Boeing, which
was represented on the presidents council by its former
chairman and chief executive James McNerney.

Fox scandals loom over Murdochs bid for Sky
Minister raises concerns
about corporate governance
failures at the US business
MATTHEW GARRAHAN AND DAVID BOND
For the past two decades, Rupert Mur-
dochs Fox News Channel has been a
cash machine, generating billions of
dollars in profits and outraging liberals
with its punchy blend of news and con-
servative comment from rightwing
pundits.
But while the channel has been a run-
away commercial success, a succession
of scandals and the way these were
handled by 21st Century Fox, which
owns Fox News are looming over Mr
Murdochs plans to take full control of
Sky, the European pay television group
he founded in 1990.
The announcement by Karen Bradley,
the UK culture secretary, that she was
minded to widen a referral to regulators
about the 11.7bn deal, to include scru-
tiny of corporate governance controls at
Fox News, is a setback for Mr Murdoch
and his sons, James and Lachlan, who
together run 21st Century Fox.
Ms Bradley raised new concerns
about the transaction, overruling a rec-
ommendation from Ofcom, the media
watchdog, that regulators consider only
the deals impact on the UK media mar-
ket. In a statement in the House of Com-
mons Ms Bradley pointed to corporate
governance failures at Fox News, say-
ing it would be appropriate for these
concerns to be considered further by
the Competition and Markets Author-
ity, which will rule on the transaction.
Corporate governance at Fox News
was thrust into the spotlight last sum-
mer when Gretchen Carlson, a former
presenter on the network, alleged that
she had been sexually harassed by
Roger Ailes, Fox News chairman, who
died several months later.
Her allegations were the catalyst for a
series of claims from other women
about the behaviour of Mr Ailes. Allega-
tions about Bill OReilly, formerly Fox
News biggest star, would follow, with
claims that he sexually harassed several
women at the company.
The allegations were dealt with
swiftly by 21st Century Fox: Mr Ailes
was pushed out following an internal
investigation led by a law firm, while Mr
OReilly followed him out of the door
this spring, in similar circumstances.
But the scale of the allegations has
raised questions about how such behav-
iour, which is alleged to have gone on for
several years, went undetected by exec-
utives at 21st Century Fox. New corpo-
rate governance systems were intro-
Rupert Murdoch duced across Mr Murdochs companies
is planning to in the aftermath of the phone-hacking
take full control scandal that rocked his empire in 2011.
of Sky which The aim was to raise standards and
he founded in ensure that a similar scandal did not
1990 via an happen again, but the systems do not
11.7bn deal appear to have detected any suggestion
Leon Neal/Getty
of bad behaviour at Fox News Channel
until Ms Carlsons allegations in 2016.
In correspondence this summer with
Sharon White, Ofcoms chief executive,
Ms Bradley wrote that effective corpo-
rate governance requires robust proc-
esses to be in place to prevent miscon-
duct from arising and to ensure that any
misconduct is quickly escalated to sen-
ior management where appropriate.
She added that opponents of the deal
had contended that these objectives
have not been achieved by the new cor-
porate governance arrangements put in
place by 21st Century Fox in the after-
math of the phone-hacking scandal.
Corporate governance at Fox News
was not Ms Bradleys only concern. In
her first letter to Ms White on August 7,
requesting further clarification from
Ofcom, Ms Bradley highlighted three
new areas of evidence brought to her
attention since her June announcement
that she was minded to refer the bid.
These included submissions contain-
ing analysis of recent output by Fox
News in the US which raised new accu-
sations about Fox Newss commitment
to accuracy and fairness, and submis-
sions relating to corporate governance
failures at News Marketing America,
another business controlled by Mr Mur-
doch.
A third area cited further evidence
submitted to Ofcom in relation to claims
against 21CF. This related to accusa-
tions of false reporting at Fox News, an
apparent reference to the Seth Rich fake
news controversy which emerged in the
US this summer.
Ms Bradleys comments to parliament
revealed a split with Ms White. Accord-
ing to the exchange of letters between
the two, Ofcom took the view that it had
to identify clear risks of corporate gov-
ernance failure. But Ms Bradley disa-
greed, saying any significant concerns
justified a referral to the CMA.
21st Century Fox said in a statement
that it was disappointed Ms Bradley
had chosen not to follow the unequivo-
cal advice of the independent regula-
tor. It added that published corre-
spondence between Ms Bradley and Ms
White made clear why we do not
believe that there are grounds for the
secretary of state to change her previous
position.
Ofcom hasnt changed its mind, said
Claire Enders of Enders Analysis.
There is no new news, but the secretary
of state has decided to go for the safest
option to protect her from a judicial
review. This shows the government just
needs a quiet time.
Ed Miliband, the former Labour
leader who has led the charge against
the deal, said: This is a real opportunity
for the CMA to look at the Murdochs
broadcasting and print records and
their corporate governance I think
this is a significant problem for them.
Damian Collins, the Conservative
chair of the culture select committee,
said: It does beg the question: why
didnt Ofcom consider this first time
around?
Last week, the US aeroplane maker released its latest
market forecast for China. The forecast reveals just how
big a bullet Boeing dodged in April and also just how hol-
low Mr Trumps China trade-war threats are likely to prove
if he considers Americas broader economic interests.
Four of the worlds nine biggest narrow-body aeroplane
fleets are operated by Chinese carriers. Boeing predicts
that over the next 20 years China-based airlines will spend
$1.1tn on more than 7,200 new aeroplanes, accounting for
one-fifth of global demand.
For Boeing, the China market looms even larger. Since
2013, one out of every four Boeing deliveries has gone
to a Chinese carrier, a bigger share than any other country
or region.
When you think of growth you think of China, Randy
Tinseth, the Boeing vice-president who oversees its global
sales strategies, said at a briefing last week in Beijing.
We havent seen anything like the rate of expansion [of
Chinas aviation industry] before. The growth here over
such a long period of time is unprecedented.
Many of the statistics underpinning Boeings bullish
China forecast are remarkable.
For all the warranted concern about the countrys rising
debt levels and ever slower annual economic growth rates,
it is easy to forget just how big the pay-off will be for a range
of industries if the ruling
Chinese Communist party
can navigate some admit-
Since 2013, one
tedly daunting financial and out of every four
economic challenges.
The real prize is not
Boeing deliveries
Chinas economy overtaking has gone to a
that of the US economy in
size, but ultimately becom-
Chinese carrier
ing four times larger assum-
ing that 1.4bn Chinese eventually enjoy individual wealth
levels equal to 325m people in the US. That is the ultimate
goal of President Xi Jinpings Chinese dream.
In the aviation sector there are just 250 commercial air-
ports in China and 750 in the US. Only 10 per cent of all Chi-
nese people have a passport, compared with roughly 40
per cent in the US. And Boeing predicts that by 2020 there
will be more middle-class consumers in China than there
are people in the US.
For many observers, Boeings booming China business
makes it a likely casualty in any Sino-US trade war just as
bilateral tensions are on the rise. In July, Mr Trump
rejected an offer by Beijing to reduce the capacity of its
steel industry, telling his advisers that he preferred to
impose punitive tariffs on Chinese steel exports.
As one aviation executive puts it, in the event of a
Sino-US trade war Boeing would be the meat in the
sandwich.
There are, however, some good reasons to believe that
Mr Xis administration would not automatically target
Boeing for retribution.
As Mr Tinseth observed: If youre going to be in this
market youre going to have partners here.
All of Boeings planes have China-made parts in them.
Chinese aviation executives also crave US technology and
know-how.
That comes from joint ventures such as Boeings only
overseas finishing facility for its 737 narrow-body planes,
which will begin operations next year in Zhejiang
province.
It would be far better for Chinas larger economic inter-
ests if Mr Xi diverted orders of, say, US agricultural com-
modities to other countries rather than wounding a com-
mercial partner as valuable as Boeing.
It would also be consistent with the Chinese presidents
reputation as a man who thinks through the consequences
of his actions.
tom.mitchell@ft.com

Technology Pharmaceuticals

Tencent eyes AI to boost trailing ads business Teva chairman says new chief faces tough calls
TOM HANCOCK SHANGHAI
Chinese internet giant Tencent aims to
increase advertising income by using
artificial intelligence and branded vir-
tual costumes in video games, but is
reluctant to put more advertising on its
flagship WeChat social network,
according to the groups executive in
charge of digital advertising.
Ad revenues drive earnings for most of
the tech world, but not in China. Ten-
cents WeChat network is approaching
half Facebooks 2bn users, but digital ad
revenues this year are forecast at under
$7bn, compared with the US social
media groups $36bn-plus, according to
eMarketer.
Tencent, the worlds eighth biggest
company by market capitalisation, gen-
erates most of its revenues from video
games such as the smash hit Honour of
Kings the worlds top grossing title
but hopes to shift towards advertising,
now less than 20 per cent of revenue.
For internet companies, the most
popular model all over the world is
advertising . . . so we are working on
that, Steven Chang, a Tencent vice-
president, told the Financial Times.
He cited data showing Chinas overall
advertising market will grow about 4
per cent this year, while digital ad
growth will be about 30 per cent, sug-
gesting that as in other parts of the
world digital platforms are drawing
spending away from traditional media.
Digital is getting bigger and we are
one of the big players in digital. So obvi-
ously we will be getting more [advertis-
ing] budget, from TV budgets or what-
ever, Mr Chang said. With its top
mobile games attracting tens of millions
of players each day, lots of marketers
would like to work with games. We are
looking at different angles of developing
game-related solutions, he added.
He cited the example of a BMW-
branded skin that is worn by virtual
characters in Honour of Kings, which
Tencent says was adopted by profes-
sional gamers and, as a result, seen by
about 500m viewers of live-streamed
tournaments.
The companys online content serv-
ices, such as a video-streaming site simi-
lar to YouTube and news feeds accessi-
ble via the WeChat platform, account
for most of Tencents advertising reve-
nues, said Mr Chang.
DAVID CROW NEW YORK
Tevas new chief executive should not
avoid tough decisions such as domes-
tic job cuts as he seeks to revive the
flagging Israeli drugmaker, the com-
panys chairman said.
The Israeli pharmaceuticals group on
Monday ended a seven-month search
for a chief executive with the appoint-
ment of Kre Schultz, who holds the
same role at Lundbeck, the Danish
drugmaker.
Mr Schultz, who is to receive a signing
bonus of $20m in cash, must navigate
tricky terrain in Israel, where efforts to
cut jobs have been aborted following a
political backlash that has at times
found support in Tevas boardroom.
He understands the economic sensi-
tivities, the pride, that its a big home
company and there is great sensitivity
there but you have to do what you
have to do, said Sol Barer, chairman.
Avoiding tough decisions is always
the wrong decision and that is part of
being a professional CEO.
Teva has almost 7,000 full-time
employees in Israel while thousands
more such as suppliers rely on the
company for their livelihoods.
The impact on the local economy
will be devastating, said one former
Teva executive, who estimated that
close to 17,000 families rely on the drug-
maker for at least part of their income.
Politically, you have a very thorny issue
to deal with in Israel.
Mr Barer said Mr Schultzs experience
at Novo Nordisk, where he spent almost
three decades before joining Lundbeck,
would be helpful as he seeks to restruc-
ture Teva because the Danish drug-
maker is something of a national cham-
pion in its home country.
Teva investors responded to the
appointment of Mr Schultz positively,
sending shares in the drugmaker up by
almost 20 per cent, although the com-
panys stock has still lost almost half its
value since the start of the year.
Dealing with any outcry over job cuts
is one item in a long list of challenges
facing Mr Schultz as he takes the helm at
Teva, according to analysts. They
pointed to the companys high debts, its
exposure to the falling price of generic
drugs and the imminent loss of patent
protection on its top-selling multiple
sclerosis injection.
Wednesday 13 September 2017
Equifax on the rack over data hacking disaster
Growing anger at credit agencys pathetic response to security breach amid questions over state of its cyber defences
BEN MCLANNAHAN NEW YORK
US senator Richard Blumenthal did not
mince his words. The cyber attack at
Equifax that compromised personal
records for about half the US adult pop-
ulation was a historic data disaster,
the Connecticut senator wrote in a letter
to the companys chief executive.
Equifaxs pathetic remedies were
no compensation, he said, for the loss of
a treasure trove of information for any
given user.
Mondays letter is a measure of the
anger that has greeted the incident, dis-
closed last Thursday, in which hackers
stole names, Social Security numbers,
dates of birth and other identifying
information for 143m Americans over a
period of about two and half months.
That loss and the theft of the credit-
card numbers of about 209,000 people
prompted New York attorney-general
Eric Schneiderman to warn people to
remain vigilant against possible fraud
attempts as he started an investigation.
Equifax is the latest US company to be
hit by a devastating cyber attack. In
terms of accounts hit, the breach was
not as big as Yahoos record data loss dis-
closed in 2016 affecting more than 1bn
users, but worries have been magnified
by the fact that Equifax is a company
supposedly expert at protecting infor-
mation. Chief executive Richard F
Smith described it as striking at the
heart of who we are and what we do.
Yahoo users also lost no sensitive
information; just usernames and pass-
words. Equifaxs admission that up to
143m sets of records could have been
accessed, makes the incident almost
twice as serious as a 2015 hack at
Anthem, a health insurer, which
involved the social security numbers of
more than 78m people.
This one is a different animal in the
sense of the nature of the information
that was breached, said Richard Fair-
bank, chief executive of Capital One, at a
This is cyber securitys
Roswell incident. How do
you have this major event,
and we hear nothing?
conference in New York on Monday.
We have not been through the equiva-
lent of this one.
Even now, many Americans will not
know if they have had their details sto-
len. The fact that Equifax, one of the
three big credit scoring agencies, even
had their details will have been a shock.
Shares in Equifax fell another 8 per
cent on Monday, following a 14 per cent
plunge on Friday, wiping more than
$3.5bn from its market value.
Analysts warned of the threat of hear-
ings in both chambers of Congress, regu-
latory probes, state-level investigations,
and a slew of private legal actions.
At the Securities and Exchange Com-
mission, analysts expect regulators to
focus on the five-week gap between dis-
covery and disclosure and the insider
stock sales in between. The SEC
declined to comment on whether it had
begun a probe, but one former enforce-
ment official told the Financial Times
the regulator was likely to take action.
People will be fighting to open this,
the former official said.
Isaac Boltansky, analyst at Compass
Point in Washington, said: The public
flogging of Equifax has just begun.
Equifax has not been explicit about
how the breach happened, or who might
be behind it, but security experts criti-
cised the company for apparent flaws in
its defences. The only comment from
Equifax has been that the breach related
to a web app in the US, leading to sugges-
tions the company had not been doing
Technology
Samsung says Note 8 pre-orders beat forecasts
SONG JUNG-A SEOUL
Samsung Electronics said pre-orders of
its latest flagship smartphone Galaxy
Note 8 were exceeding its expectations,
as the South Korean company seeks to
move beyond last years safety debacle
and braces itself for the debut of the
latest iPhone.
DJ Koh, president of Samsungs mobile
business, said the Note 8 phones had
recorded the highest pre-orders among
the Note series, which would help
Samsung better compete with Apple in
the high-end smartphone segment.
The 395,000 units sold on the first
day of pre-orders is a higher than
expected figure, he told a media event
yesterday. The figures for the first five
days show that pre-orders are about 2.5
times those of the Note 7 last year.
That is encouraging news for Sam-
sung, which has worried that last years
Out of credit
Data theft: recent attacks
Number of accounts compromised (m)
Financials Retail, Entertainment
Sony, PlayStation Network,
Epsilon 250
Sony Online Entertainment 101.6
2010 2011
Source: FT research
Clean-up costs
Shares and bonds set to
remain under pressure
Equifax is one of three companies
in the US the other two are
Experian and TransUnion
which dominate the business of
gathering information on
borrowing habits from banks and
other sources.
They then organise and analyse
that information to come up with
scores that are used by lenders and
other financial institutions to price
credit.
Revenues last year came to
$3.1bn, up 18 per cent on the year
earlier.
Analysts warn that the
companys shares and bonds may
remain under pressure.
On Monday afternoon, Standard
& Poors revised its outlook on
Equifaxs debt to negative, saying
that its rating three notches
above junk was threatened by
the costs of the clean-up.
Negative headlines will weigh on
[the Equifax] brand for the
foreseeable future, said Manav
Patnaik, equity analyst at Barclays
in New York.
fiasco over fire-prone Note 7 phones
would discourage consumers from buy-
ing the devices successor. The Note 8
will go on sale on Friday in several coun-
tries, including the US and South Korea.
The Note 8 can bring symbolic clo-
sure to the Note 7 debacle. The success
of the [Galaxy] S8 this year already
showed that Samsung had gotten past
the Note 7 incident, but a successful
Note 8 product would just further
drive the point home, said Bryan Ma,
analyst at IDC.
Mr Koh said Samsung had received
positive feedback on the Note 8 follow-
ing pre-orders from about 40 countries.
Since the August 23 New York unpack,
many buyers and partners said the ini-
tial response was very encouraging, he
said. But Samsung added that the pre-
order figures given by Mr Koh were for
the domestic market only.
The Note 8, priced at $930-$960 in the
FINANCIAL TIMES 13
COMPANIES
The company said it went public after
engaging an independent cyber security
firm to conduct a forensic assessment
and provide recommendations to
toughen electronic security safeguards.
Those affected have been disappointed
by Equifaxs offer of a year of free credit
monitoring with its TrustedID product.
This is cyber securitys Roswell inci-
dent, said Mark Sangster, a vice-presi-
dent at eSentire, a threat detection com-
pany from Kitchener, near Toronto.
How do you have this major event, and
we hear nothing about it?
One head of an asset management
firm said he was incensed both by the
massive loss of data and the companys
presentation of it.
One thing that is quixotic to me, is
that Equifax kept saying that the core
part of the database was not breached.
But what the f**k is that, if not my social
security number, my driving licence
and so on?
A video message from the chief execu-
tive was no help either, says Elad Ben-
Meir, vice-president of marketing at
CyberInt, a Tel Aviv-based firm. They
should have had a proper response plan,
all the way to an executive owner that
will be able to handle the situation.
Class-action lawsuits are piling up.
About two dozen proposals have
already been filed.
Eric Johnson, dean of the Owen Grad-
uate School of Management at Vander-
bilt University in Nashville, Tennessee,
drew a parallel with the ChoicePoint
incident in 2005, when it emerged that
Justin Lane/EPA
the data warehouser spun off from
Equifax eight years earlier had been
duped into selling insurance-related
information on 163,000 consumers to
MySpace 427 Yahoo 500 an alleged crime ring.
Tech and other
Friend Finder In 2006, the Federal Trade Commis-
LinkedIn 164 sion demanded a record $15m fine for
Network 412
failure to protect consumers data, and
River City Media 1,370 within a couple of years the company
Equifax was sold to Reed Elsevier, re-emerging
as LexisNexis Risk Solutions.
143
A similar fate could await Equifax,
said Professor Johnson, noting that one
of Equifaxs business lines is identity
theft protection. This is the great irony:
it is like going to the hospital and getting
beaten up, he said. It is whats driving
2012 2013 2014 2015 2016 2017
a lot of the outrage.
Additional reporting by David J Lynch
enough to protect vulnerable website
access points. Contracts & Tenders
Alex Heid, New York-based chief
research officer at Security Scorecard, a
cyber security monitoring platform,
said that even a cursory analysis of the
companys online footprint showed sev-
eral potential weaknesses, including
applications written in relatively old
and vulnerable languages.
In particular, he said, hackers may
have exploited vulnerabilities in
Apache Struts, a popular open-source
framework for developing web applica-
tions in the Java programming language.
A spate of attacks earlier this year
highlighted the risks. Equifax, which
used Struts heavily, should have been on
high alert, said Mr Heid.
Apache Software Foundation, which
makes the Struts software, said that it
is not clear which Struts vulnerability
would have been utilised, if any. Equi-
fax did not respond to requests for com-
ment about the nature of the attack.
Other analysts queried Equifaxs han-
dling of the incident, wondering why the
company waited almost six weeks after
discovering the breach, before alerting
investors and the broader public.
Unlike many other types of financial
service providers, the cyber security
practices of credit reporting bureaus fall
outside of direct industry and regula-
tory authority purview. Even so, said
analysts, a breach of this scale should
have been disclosed earlier.
US, will intensify competition for pricier
components in the premium segment.
Apple was set to reveal its much antici-
pated 10th anniversary iPhone late
yesterday in the US the first iPhone
to cost as much as $1,000, and expected
to offer significant upgrades to the
smartphones display, camera and over-
all design.
The Note line accounts for less than 10
per cent of Samsungs mobile shipments
but the Korean company uses the model
to test new cutting-edge features,
Businesses For Sale
according to Mr Ma. The Note line is an
early-adopter play where the company
could introduce some new features
before they make their way into the
more significant S series later, he said. FT BUSINESS
Kim Young-woo, analyst at SK Securi- Tuesday, Friday & Saturday: Business for Sale, Business Opportunities, Business Services,
ties, expects Samsung to sell about 10m Business Wanted, Franchises
.....................................................................................................................................................................................................................................................................................................................................................................................................................
Note 8s this year, helping the smart- Classified Business Advertising
phone maker maintain its mobile UK: +44 20 7873 3920 | Email: jenny.fazakerley@ft.com
momentum in the fourth quarter.
14
Media
Bell Pottinger UK appoints administrators
PR firm suffered client
exodus after report found
it incited racial discord
JOSEPH COTTERILL AND
MADHUMITA MURGIA
Bell Pottinger, the London public rela-
tions firm, has appointed administra-
tors, after suffering a financial collapse
after two reports that found it had
stoked racial tensions in South Africa.
ThePRoutfit,whichwasexpelledfrom
the Public Relations and Communica-
tions Association, sought administrators
Financials
Institutional
investors show
heightened
awareness of
green issues
ANDREW WARD ENERGY EDITOR
More than two-thirds of institutional
investors plan to increase investments
related to tackling climate change,
according to a survey that suggests
green finance is moving from the
margins to the mainstream of markets.
But more than half of the 497 institu-
tional investors surveyed said they were
receiving highly inadequate informa-
tion from companies about their risk of
disruption from climate change and
their ability to benefit from the shift to
low-carbon technologies.
The findings, in a study commis-
sioned by HSBC, will add weight to calls
from Mark Carney, governor of the
Bank of England, and others for greater
disclosure of climate risks in the cor-
porate and financial sectors.
Mr Carney has warned that investors
risk potentially huge losses from the
impact of climate change on industries
ranging from insurers, which face
increased losses from extreme weather,
to producers of the fossil fuels blamed
for rising temperatures.
The survey by East & Partners, a
financial market research firm, found
that fund managers increasingly
focused on opportunities as well as
threats related to action against global
warming.
Appetite for green investments, such
as renewable energy, was strongest in
Europe, where 97 per cent of respond-
ents planned to increase capital alloca-
tions in low-carbon technology or other
assets that stand to benefit from climate
policies.
In the Americas the figure was 85 per
cent and in Asia 68 per cent. The Middle
East was an outlier, with 19 per cent.
The survey questioned 507 compa-
nies about their green strategy and
found a mismatch between investors
growing focus on climate issues and
companies slower progress towards
disclosing environmental risks.
Just over half of companies said they
had an environmental strategy in place,
but only 43 per cent voluntarily dis-
closed it.
Asian groups lagged with only 28 per
cent, but this was up from under a fifth
in the same survey last year.
Meryam Omi, head of responsible
investment at Legal & General, the UK
life insurer, said sustainable investing
was firmly on investors agenda.
However, investors needed more reli-
able disclosures from companies upon
which to assess risks and opportunities
from climate policies, such as tougher
regulation of fossil fuels and energy-in-
tensive industries, she said.
Ms Omi said companies that failed to
meet minimum standards of climate
disclosure would be divested out of
some funds and voted against in our
entire equity holdings.
for its London arms at business advisory
firm BDO on Friday and their appoint-
mentbecameeffectiveyesterday.
Bell Pottinger entities outside the UK
will operate as normal. Its Middle East
and Asian arms are in the process of
splitting off from the London unit.
Following an immediate assessment
of the financial position, the administra-
tors have made a number of redundan-
cies, BDO said. The administrators are
now working with the remaining part-
ners and employees to seek an orderly
transfer of Bell Pottingers clients to
other firms in order to protect and real-
ise value for creditors.
Atlas Copco eyes growth after spin-off
Atlas Copco, Swedens biggest industrial group by market value, will focus on products such as air compressors when mining and civil engineering are spun off
Rahmstrom says split will
allow stronger focus on
digitalisation and innovation
RICHARD MILNE STOCKHOLM
The new chief executive of Atlas Copco
has committed Swedens biggest indus-
trial group by market capitalisation to
stick to its growth path even after
splitting off its mining operations.
Mats Rahmstrom, who has been at
the company for 29 years and took over
the top job in April, said the split would
allow Atlas to focus more on industrial
customers and aim to boost growth
through digitalisation and innovation.
I dont want to lose speed at all. Its
about top line growth, and to stay on top
with new technologies, he told the
Financial Times in his first interview
since becoming chief executive.
Atlas, which has the Wallenberg fam-
ily investment vehicle as its main
shareholder, surprised investors in
January by announcing a break-up
of the company into two and the
naming of Mr Rahmstrom to replace
the well-respected Ronnie Leten.
A new independent company, to be
called Epiroc, will focus on its mining
and civil engineering business while
Atlas will focus on air compressors,
vacuums used in the manufacture of
semiconductors and smartphones, and
industrial power tools.
FINANCIAL TIMES
COMPANIES
The administration makes Bell Pot-
tinger the highest-profile international
casualty so far of a political storm in
South Africa over the Gupta business
family who have been accused of the
capture of state institutions to benefit
their companies through a friendship
with President Jacob Zuma. The family
and Mr Zuma have always denied the
allegations.
Lastweek,thePRCAcensuredBellPot-
tinger for fomenting racial discord in
its work representing the Guptas. The PR
firmsoughttodivertcriticismoftheGup-
tas ties to Mr Zuma with a campaign that
highlighted economic apartheid and
Industrial goods. Machinery
Mr Rahmstrom said of the split: The
main reason for me is really the focus.
When we are growing so much, mining
is a bit different: there are different cus-
tomers, its more volatile.
Analysts said the move was a rare case
of a simultaneous break-up and chief
executive change being announced
from a position of strength rather than
weakness. There are no negative pres-
sures behind the split of the company.
Its more a focus on growth, said Johan
Sjoberg, analyst at Danske Bank.
Atlas has become one of the biggest
companies in Sweden due to the resil-
ience of its business model. At its
worst, during the 2008-09 financial
crisis, its operating profit margin fell
only to 13 per cent. It is known for
Atlas Copco
Share price (SKr)
400
300
200
100
0 vacuums that had a higher margin
2009 11 13 15 17
Source: Thomson Reuters Datastream
Wednesday 13 September 2017
Chemicals
Rethink on
DowDuPont
white monopoly capital in the country,
the industry body said in its report,
to defend the Guptas caused outrage
given the depth of anger over the allega-
break-up in
brought after a complaint by South
AfricasoppositionDemocraticAlliance.
tions of state capture.
This month Herbert Smith, the law
response to
The terms are deeply emotive in
South Africa, which is still struggling
with the legacy of the white minority
firm, also said the messages were
potentially racially divisive in a report
commissioned by Bell Pottinger.
size concerns
rule that ended in 1994, while their use The PR firm apologised for work done
on the year-long contract with the Gup- ED CROOKS NEW YORK
tas, which it ended in April this year.
The administrators are The PRCA ruling sparked an exodus
DowDuPont, the chemicals group cre-
ated in the $156bn merger of Dow
now working . . . to seek of clients from Bell Pottingers roster,
Chemical and DuPont at the beginning
including HSBC, and the departure of
an orderly transfer of Bell several employees forcing the firm to
of the month, has revised its plan to
break up into three separate compa-
Pottingers clients bring in BDO to consider strategic
nies in response to shareholder con-
options for the business.
cerns about the size and focus of the
proposed new businesses.
It has also promised further details of
plans for future share buybacks and div-
idend payments following a board
review over the next couple of months.
The groups new demerger plans were
welcomed by activist investment funds
that had been pressing for the board to
review its proposed structure. Trian,
which had been demanding changes at
DuPont since taking a stake in 2014, said
it fully supports the portfolio adjust-
ments announced today.
Third Point, which had similarly been
pushing for change at Dow and then at
the merged group, said it was pleased
to be part of a dialogue that created such
a positive outcome for all of Dow/
DuPonts shareholders.
In May Third Point proposed a more
radical break-up that would have split
DowDuPont into six companies, saying
the original three-way break-up plan
failed to maximise shareholder value.
The new demerger plan was agreed by
the DowDuPont board after what it
called a comprehensive review,
advised by McKinsey, the consultancy.
The structure is broadly the same as
before: DowDuPont will break into
A crucial factor for the new
speciality chemicals group
would be the breadth of
products it would offer
three companies, one making plastics
and materials, one in agricultural chem-
icals and seeds, and one making a range
of specialised products.
What has changed is the allocation of
the groups operations between those
companies. More than half a dozen busi-
nesses that had previously been
intended for the plastics and materials
company, which is being referred to as
materials science, will instead be allo-
cated to the specialised products group.
In total, the businesses that are to be
reallocated are expected to account for
being highly decentralised with Mr Atlas is known in Sweden as a finish- more than $8bn in sales and $2.4bn in
Rahmstrom describing its headquarters ing school for industrialists with many earnings before interest, tax, deprecia-
just outside Stockholm as extremely of the countrys leading chief executives tion and amortisation in 2017.
lean. drawn from its ranks, such as Bjorn The moves are intended to ease con-
The more focused Atlas will have a Rosengren at Sandvik and Johan Molin cerns that the materials science busi-
higher operating margin than Epiroc at Assa Abloy. ness, which will maintain the Dow
about 21 per cent versus 20 per cent as Mr Rahmstrom said he would divide brand, would not be sufficiently focused
of the end of the second quarter. It has his time equally between the industrial on plastics and petrochemicals because
boosted profits by moving beyond man- and mining sides before the split was it would also have a broad portfolio of
ufacturing into industrial services. finalised, after the annual meeting next specialty chemicals operations.
Mr Sjoberg said another positive year. He said Epiroc would continue to Andrew Liveris, who had been chief
would be that the cyclicality in the new benefit from the recent rebound in min- executive of Dow and is now executive
Atlas would be reduced once the mining ing spending as companies recover from chairman of DowDuPont, told the FT
assets were spun off. What they are rec- the collapse in commodity prices over that when the initial merger had been
ognised for is the high quality of their the past few years. agreed in 2015, the focus had been on
earnings and their free cash flow gener- One of the biggest opportunities for the benefits of combining the two
ation, he added. us is autonomous driving and autono- groups agriculture businesses. The allo-
Mr Rahmstrom has worked primarily mous drill rigs. If you talk to the Anglo cation of operations between the mate-
in the industrial technique division, Americans, they are very keen to rials science and specialised products
which he was head of until earlier this increase their productivity, he added. businesses had always been subject to
year and which focuses on power tools He played down expectations that change, he said, and the new plans
as well as assembly systems for the auto- Epiroc could be a takeover target, offered a better structure for the succes-
motive and aerospace industries. instead saying it could look at acquisi- sor companies to serve their markets.
He said one area of growth for Atlas tions and partnerships itself. Ed Breen, who is now chief executive
was in new ways of joining together One of Mr Rahmstroms main tasks of DowDuPont having previously had
materials such as aluminium for electric will be to help Atlas respond to the same role at DuPont, said a crucial
vehicles, as traditional welding would digitalisation. For instance, it already factor for the new speciality chemicals
not work. There is potential to acquire has 80,000 compressors connected to group would be the breadth of prod-
businesses with an automotive applica- its systems compiling performance ucts that it would offer, allowing it to
tion, especially for different joining data. support twice as much research and
techniques, he added. Mr Rahmstrom wants to increase the development spending as would have
Analysts said Mr Rahmstrom had big running time of machines. If you stop been possible under the original plan.
shoes to fill after the Belgian Mr Leten your factory due to a fault with a small He added that the DowDuPont board
had taken Atlas into a new business area tool, that is incredibly inconvenient. would be working over the next couple
But he added that any approach to of months on plans for the capital
than its main compressors unit. Every digitalisation had to be very focused. structures of the demerged companies,
CEO at Atlas Copco has tough comps Just collecting data has no value to share buybacks and dividend policies.
[comparisons], said Mr Sjoberg. Atlas Copco. Additional reporting by Lindsay Fortado
Businesses For Sale
FT BUSINESS
Tuesday, Friday & Saturday: Business for Sale, Business Opportunities, Business Services,
Business Wanted, Franchises
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Wednesday 13 September 2017 FINANCIAL TIMES 15
16 FINANCIAL TIMES Wednesday 13 September 2017

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

Change during previous days trading (%)
S&P 500 Nasdaq Composite Dow Jones Ind FTSE 100 FTSE Eurofirst 300 Nikkei Hang Seng FTSE All World $ $ per $ per per $ per Oil Brent $ Sep Gold $

-0.17% -0.250% -0.880% -0.58%

0.21% 0.09% 0.28% 0.54% 1.18% 0.06% 0.23% 0.607% 0.937% 0.58%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Aug 13 - - Index All World Aug 13 - Sep 12 Index All World Aug 13 - Sep 12 Index All World Aug 13 - Sep 12 Index All World Aug 13 - Sep 12 Index All World Aug 13 - Sep 12 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
2,493.35 12,524.77
19,776.62 2,365.47
15,129.34 7,389.94 7,413.59 12,165.12 19,537.10 2,334.22
2,441.32 15,033.38
Day 0.21% Month 2.14% Year 17.19% Day 0.59% Month 0.63% Year 3.64% Day -0.17% Month 1.32% Year 10.53% Day 0.40% Month 3.31% Year NaN% Day 1.18% Month 0.24% Year 16.57% Day 0.27% Month 1.97% Year 16.08%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
6,438.37 27,972.24
1,499.27
51,167.47 1,477.62 10,461.20
6,256.56 10,336.20 3,279.72
50,597.42 26,883.51 3,235.69
Day 0.09% Month 2.90% Year 25.60% Day 0.47% Month -0.11% Year 8.28% Day 0.54% Month 2.54% Year 11.34% Day 0.13% Month 0.52% Year 14.52% Day 0.06% Month 4.05% Year 16.07% Day 0.22% Month -1.34% Year 12.61%

Dow Jones Industrial New York Bovespa So Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
75,096.24 5,209.01 22,233.40 3,538.94
32,158.66
22,119.36 5,121.67
21,858.32 3,390.35 31,531.33
67,358.59 21,354.02
Day 0.28% Month 1.19% Year 22.30% Day 1.05% Month 11.46% Year 28.15% Day 0.62% Month 2.93% Year 15.98% Day 0.45% Month 4.12% Year 32.03% Day 0.09% Month 5.33% Year 9.76% Day 0.87% Month 3.03% Year 11.67%

Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous
Argentina Merval 23760.30 24066.49 Cyprus CSE M&P Gen 75.21 76.06 Italy FTSE Italia All-Share 24536.70 24427.01 Philippines Manila Comp 8049.31 8022.75 Taiwan Weighted Pr 10610.35 10572.16 Cross-Border DJ Global Titans ($) 282.37 281.65
Australia All Ordinaries 5806.40 5775.10 Czech RepublicPX 1036.08 1023.43 FTSE Italia Mid Cap 41839.08 41685.83 Poland Wig 64715.66 64876.56 Thailand Bangkok SET 1643.55 1637.54 Euro Stoxx 50 (Eur) 3512.40 3495.19
S&P/ASX 200 5746.40 5713.10 Denmark OMXC Copenahgen 20 1021.98 1023.06 FTSE MIB 22233.40 22134.11 Portugal PSI 20 5138.27 5107.21 Turkey BIST 100 109458.01 108451.70 Euronext 100 ID 1016.08 1010.92
S&P/ASX 200 Res 3656.20 3630.30 Egypt EGX 30 13533.24 13455.19 Japan 2nd Section 6663.19 6600.89 PSI General 2889.16 2882.30 UAE Abu Dhabi General Index 4438.46 4445.72 FTSE 4Good Global ($) 6284.54 6263.78
Austria ATX 3282.95 3260.54 Estonia OMX Tallinn 1258.67 1267.33 Nikkei 225 19776.62 19545.77 Romania BET Index 8015.14 8058.72 UK FT 30 3183.00 3184.10 FTSE All World 320.32 319.57
Belgium BEL 20 3995.20 3977.53 Finland OMX Helsinki General 9622.93 9553.01 S&P Topix 150 1312.04 1299.05 Russia Micex Index 2055.07 2044.13 FTSE 100 7400.69 7413.59 FTSE E300 1499.27 1491.19
BEL Mid 6493.86 6504.09 France CAC 40 5209.01 5176.71 Topix 1627.45 1612.26 RTX 1123.71 1126.74 FTSE 4Good UK 6609.28 6614.42 FTSE Eurotop 100 2923.50 2906.61
Brazil Bovespa 75096.24 74319.22 SBF 120 4168.63 4144.27 Jordan Amman SE 2156.37 2145.18 Saudi-Arabia TADAWUL All Share Index 7411.30 7377.95 FTSE All Share 4054.83 4061.86 FTSE Global 100 ($) 1571.62 1570.12
Canada S&P/TSX 60 888.56 883.26 Germany M-DAX 25310.57 25230.26 Kenya NSE 20 3815.71 3839.99 Singapore FTSE Straits Times 3235.69 3228.51 FTSE techMARK 100 4529.53 4524.09 FTSE Gold Min ($) 1621.33 1665.37
S&P/TSX Comp 15129.34 15040.30 TecDAX 2362.69 2365.20 Kuwait KSX Market Index 6927.03 6926.32 Slovakia SAX 332.56 332.55 USA DJ Composite 7607.03 7602.33 FTSE Latibex Top (Eur) 4392.60 4392.80
S&P/TSX Div Met & Min 798.07 769.54 XETRA Dax 12524.77 12475.24 Latvia OMX Riga 987.19 992.09 Slovenia SBI TOP 809.53 811.98 DJ Industrial 22119.36 22057.37 FTSE Multinationals ($) 1835.71 1817.40
Chile IGPA Gen 25861.14 25777.30 Greece Athens Gen 810.75 806.06 Lithuania OMX Vilnius 648.50 646.97 South Africa FTSE/JSE All Share 56366.16 56008.77 DJ Transport 9523.41 9483.69 FTSE World ($) 565.89 564.62
China FTSE A200 9924.93 9885.62 FTSE/ASE 20 2134.96 2121.24 Luxembourg LuxX 1684.01 1681.13 FTSE/JSE Res 20 35890.21 35354.07 DJ Utilities 745.32 754.80 FTSEurofirst 100 (Eur) 4221.69 4196.74
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 27972.24 27955.13 Malaysia FTSE Bursa KLCI 1789.86 1782.74 FTSE/JSE Top 40 49970.85 49627.54 Nasdaq 100 5979.89 5980.53 FTSEurofirst 80 (Eur) 4874.64 4849.47
Shanghai A 3538.94 3535.66 HS China Enterprise 11242.06 11221.13 Mexico IPC 50597.42 50359.32 South Korea Kospi 2365.47 2359.08 Nasdaq Cmp 6438.37 6432.26 MSCI ACWI Fr ($) 483.79 479.61
Shanghai B 357.91 359.71 HSCC Red Chip 4349.61 4329.46 Morocco MASI 12699.51 12602.20 Kospi 200 310.42 309.83 NYSE Comp 12054.15 12010.27 MSCI All World ($) 1981.97 1964.52
Shanghai Comp 3379.49 3376.42 Hungary Bux 38076.88 37895.85 Netherlands AEX 526.58 523.95 Spain IBEX 35 10336.20 10322.60 S&P 500 2493.35 2488.11 MSCI Europe (Eur) 1577.52 1561.85
Shenzhen A 2077.54 2083.34 India BSE Sensex 32158.66 31882.16 AEX All Share 797.91 794.05 Sri Lanka CSE All Share 6377.38 6372.24 Wilshire 5000 25874.34 25810.11 MSCI Pacific ($) 2666.01 2657.12
Shenzhen B 1170.92 1169.60 Nifty 500 8890.65 8810.95 New Zealand NZX 50 7840.41 7851.75 Sweden OMX Stockholm 30 1578.43 1572.16 Venezuela IBC 279357.84 273334.25 S&P Euro (Eur) 1620.89 1612.73
Colombia COLCAP 1505.09 1499.58 Indonesia Jakarta Comp 5872.38 5871.88 Nigeria SE All Share 35957.24 36116.19 OMX Stockholm AS 565.49 563.57 Vietnam VNI 799.94 797.47 S&P Europe 350 (Eur) 1542.56 1534.82
Croatia CROBEX 1869.40 1881.44 Ireland ISEQ Overall 6724.84 6699.25 Norway Oslo All Share 830.60 825.43 Switzerland SMI Index 9053.62 8982.23 S&P Global 1200 ($) 2220.09 2212.05
Israel Tel Aviv 100 12.59 12.60 Pakistan KSE 100 41279.30 41126.83 Stoxx 50 (Eur) 3105.07 3089.67
(c) Closed. (u) Unavaliable. Correction. Subject to official recalculation. For more index coverage please see www.ft.com/worldindices. A fuller version of this table is available on the ft.com research data archive.

STOCK MARKET: BIGGEST MOVERS UK MARKET WINNERS AND LOSERS

AMERICA LONDON EURO MARKETS TOKYO Sep 12 %Chg %Chg Sep 12 %Chg %Chg Sep 12 %Chg %Chg Sep 12 %Chg %Chg
ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's FTSE 100 price(p) week ytd FTSE 250 price(p) week ytd FTSE SmallCap price(p) week ytd Industry Sectors price(p) week ytd
traded m's price change traded m's price change traded m's price change traded m's price change Winners Winners Winners Winners
Apple 26.8 161.03 -0.47 Glencore 257.0 372.50 1.29 Nestle N 323.3 70.96 0.00 Mitsubishi Ufj Fin,. 393.1 672.50 11.30 Micro Focus Int 2398.00 9.0 10.4 Jd Sports Fashion 373.40 10.0 13.1 Xaar 422.00 14.9 5.5 Pharmaceuticals & Biotech. 13286.67 3.1 -1.3
Tesla 12.0 365.63 1.94 British American Tobacco 235.1 4798.50 -91.84 Roche Gs 310.1 211.23 0.70 Softbank . 390.6 8609.00 101.00 Astrazeneca 4925.00 7.4 10.7 Dechra Pharmaceuticals 2128.00 9.5 59.0 Circassia Pharmaceuticals 88.75 8.7 -5.7 Oil Equipment & Services 11626.47 2.9 -28.7
Amazon.com 11.8 980.86 2.90 Rio Tinto 215.7 3690.50 16.54 Unicredit 305.1 17.72 0.54 Toyota Motor 386.3 6361.00 65.00 Ashtead 1759.00 5.6 13.2 Indivior 304.90 8.4 2.9 Sthree 333.25 7.8 6.9 Software & Computer Services 2180.08 2.8 15.1
Bank Of America 11.2 23.93 0.57 Bhp Billiton 178.4 1438.00 22.71 Novartis N 282.2 71.88 0.92 Sony 322.0 4418.00 -52.00 Provident Fin 832.00 4.0 - Renishaw 4990.00 7.0 96.0 Ncc 205.75 7.4 13.4 Automobiles & Parts 7717.96 2.6 -0.5
Mcdonald's 8.6 156.05 -5.48 Crh 176.2 2654.00 -11.00 Intesa Sanpaolo 270.7 2.88 0.03 Fast Retailing Co., 314.4 32000.00 1390.00 Imperial Brands 3322.50 3.8 -6.2 Petrofac 441.10 7.0 - Oxford Instruments 1100.00 7.2 53.4 General Industrials 6415.86 2.5 16.2
Facebook 8.3 172.54 -0.97 Astrazeneca 166.8 4925.00 22.61 Deutsche Bank Ag Na O.n. 264.5 14.20 0.49 Sumitomo Mitsui Fin,. 281.8 4104.00 76.00 Easyjet 1194.00 3.3 18.8 Equiniti 298.00 5.4 52.1 Morgan Sindall 1319.00 7.0 76.6 Electronic & Electrical Equip. 5942.77 1.8 21.1
Nvidia 8.1 167.60 -1.40 Hsbc Holdings 158.3 736.20 -0.73 Daimler Ag Na O.n. 263.8 65.26 0.61 Mizuho Fin,. 225.3 189.30 2.10 Lloyds Banking 64.84 2.8 3.8 Sanne 800.50 5.3 36.8 Communisis 61.00 7.0 40.6 Tobacco 53169.04 1.4 0.8
Comcast 7.0 37.97 0.14 Unilever 135.7 4441.00 -50.33 Bnp Paribas Act.a 255.6 65.84 1.54 Fanuc 207.3 21720.00 500.00 Shire 4074.50 2.8 - Rank 236.50 4.6 20.5 Mcbride 205.00 6.8 12.2 Chemicals 13110.78 1.0 6.7
Pfizer 6.6 35.65 1.33 Glaxosmithkline 120.5 1496.50 -0.85 Santander 241.7 5.57 0.05 Panasonic 201.6 1538.00 56.50 Smiths 1602.00 2.7 13.1 Aa 168.40 4.5 - Photo-me Int 175.00 6.6 6.1 Banks 4403.24 0.9 6.5
Dowdupont 5.6 68.02 1.17 Sky 118.9 937.00 -0.39 Siemens Ag Na 225.4 115.55 0.60 Sumitomo Metal Mining Co., 201.0 1923.00 90.50 Gkn 330.10 2.6 -0.4 Nmc Health 2843.00 4.3 85.4 Laird 151.00 5.9 -1.7 Real Estate Investment Trusts 2968.44 0.8 2.1
Paddy Power Betfair 7235.00 2.5 - Genus 1979.00 4.2 10.1 Imagination 143.00 4.7 - Life Insurance 8513.10 0.7 7.6
BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's
Itv 161.10 2.5 - Sophos 565.00 4.1 - Tr Eur Growth Trust 1226.50 4.6 57.5 Food & Drug Retailers 3014.05 0.6 -2.0
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Range Resources 18.24 1.27 7.48 Ashtead 1759.00 103.78 6.16 Seadrill 0.19 0.03 20.00 Thb Japan Steel Works, 2638.00 374.00 16.52 Barratt Developments 596.00 -4.7 28.6 Greene King 548.00 -17.5 - Up Global Sourcing Holdings 98.00 -52.5 - Food Producers 8601.69 -3.0 7.0
Gap 27.75 1.81 6.98 Jd Sports Fashion 373.40 16.97 4.95 Deutsche Bank Ag Na O.n. 14.20 0.49 3.57 Gs Yuasa 573.00 30.00 5.52 Persimmon 2503.00 -4.6 40.9 Go-ahead 1545.00 -13.5 - Severfield 61.13 -11.8 -20.0 Household Goods 17980.92 -2.1 12.3
Perrigo 89.69 4.62 5.43 Brown (n) 345.90 12.27 3.74 Aegon 4.95 0.17 3.52 Okuma 1097.00 55.00 5.28 Associated British Foods 3142.00 -4.6 14.4 Redrow 580.00 -10.4 35.2 Carclo 136.13 -10.6 2.4 Construction & Materials 6440.73 -1.5 -5.4
Frontier Communications 14.02 0.70 5.26 Ferrexpo 323.20 11.52 3.70 Cs N 12.88 0.41 3.28 Sumitomo Metal Mining Co., 1923.00 90.50 4.94 Fresnillo 1570.00 -3.6 28.6 Petra Diamonds 85.10 -9.5 - Hss Hire 38.75 -10.2 - Aerospace & Defense 5152.98 -1.4 11.2
L Brands 39.76 1.86 4.91 Carillion 44.95 1.56 3.63 Erste Bank Ag 36.54 1.15 3.23 Toho Z Co., 533.00 24.00 4.72 Antofagasta 1008.00 -3.5 49.8 Vectura 100.30 -8.5 - Servelec 246.38 -10.1 -5.9 Industrial Metals 3792.17 -1.3 69.3
Whitbread 3761.00 -3.1 -3.2 Marston's 104.80 -8.3 - Trinity Mirror 86.00 -9.0 - Fixed Line Telecommunication 3294.65 -1.1 -
Downs Downs Downs Downs
Taylor Wimpey 193.10 -3.1 25.6 Ashmore 340.00 -7.5 20.4 Dialight 740.00 -6.7 -8.0 Gas Water & Multiutilities 5854.49 -1.0 -3.1
yte 120.40 -4.55 -3.64 Redrow 580.00 -52.50 -8.30 Rwe Ag St O.n. 20.92 -0.60 -2.79 Haseko 1391.00 -39.00 -2.73
Randgold Resources Ld 7765.00 -3.0 22.2 Daejan Holdings 5835.00 -7.3 -5.7 Lonmin 81.00 -6.7 - Mobile Telecommunications 4795.95 -0.8 6.3
Mcdonald's 156.05 -5.48 -3.39 Whitbread 3761.00 -121.33 -3.21 J.martins,sgps 16.27 -0.37 -2.22 Yahoo Japan 509.00 -9.00 -1.74
Admiral 1831.00 -2.8 0.6 Carillion 44.95 -6.7 - Foxtons 79.75 -6.2 - Industrial Transportation 2952.40 -0.7 -3.2
Anthem 189.63 -6.33 -3.23 Daejan Holdings 5835.00 -180.00 -2.99 E.on Se Na O.n. 9.45 -0.20 -2.06 Kajima 1026.00 -16.00 -1.54
Bhp Billiton 1438.00 -2.7 10.4 Berkeley Holdings (the) 3547.00 -6.4 25.1 Headlam 580.50 -6.1 19.0 Personal Goods 38378.00 -0.6 30.8
Mckesson 155.12 -4.12 -2.59 Clarkson 2732.00 -82.09 -2.89 Colruyt 46.65 -0.97 -2.04 Obayashi 1287.00 -20.00 -1.53
Convatec 267.60 -2.6 15.1 Kaz Minerals 815.50 -5.6 - Helical 316.25 -5.7 7.3 Mining 17754.04 -0.6 20.1
Interpublic Of Companies 19.81 -0.51 -2.51 Ascential 365.70 -9.97 -2.65 Ferrovial 19.00 -0.38 -1.96 Rakuten . 1268.00 -18.50 -1.44
Bae Systems 595.00 -2.4 0.7 Inmarsat 651.00 -5.5 - Mckay Securities 216.50 -5.7 24.1 Media 7200.51 -0.6 -8.2
Based on the constituents of the S&P500 and the Nasdaq 100 index Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index
Based on last week's performance. Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Sep 12 Currency Mid Change Mid Change Mid Change Sep 12 Currency Mid Change Mid Change Mid Change Sep 12 Currency Mid Change Mid Change Mid Change Sep 12 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 17.0848 -0.1265 20.4222 -0.2029 22.6664 -0.0266 Indonesia Indonesian Rupiah 13197.5000 35.0000 15775.5580 2.2395 17509.1485 154.4249 Poland Polish Zloty 3.5651 0.0168 4.2615 0.0094 4.7298 0.0514 ..Three Month 0.7541 -0.0047 0.9008 -0.0079 - -
Australia Australian Dollar 1.2446 -0.0009 1.4878 -0.0049 1.6513 0.0090 Israel Israeli Shekel 3.5353 0.0087 4.2258 -0.0002 4.6902 0.0405 Romania Romanian Leu 3.8493 0.0120 4.6012 0.0027 5.1069 0.0473 ..One Year 0.7552 -0.0048 0.9001 -0.0079 - -
Bahrain Bahrainin Dinar 0.3771 -0.0001 0.4507 -0.0013 0.5002 0.0030 Japan Japanese Yen 109.9150 1.0200 131.3861 0.8917 145.8242 2.2466 Russia Russian Ruble 57.6157 0.4550 68.8705 0.3719 76.4387 1.0726 United States United States Dollar - - 1.1953 -0.0030 1.3267 0.0082
Bolivia Bolivian Boliviano 6.9100 - 8.2598 -0.0208 9.1675 0.0567 ..One Month 109.9148 1.0197 131.3862 0.8917 145.8242 2.2465 Saudi Arabia Saudi Riyal 3.7501 -0.0002 4.4827 -0.0115 4.9753 0.0306 ..One Month - - 1.1951 -0.1232 1.3268 0.0082
Brazil Brazilian Real 3.1073 0.0244 3.7143 0.0199 4.1225 0.0577 ..Three Month 109.9146 1.0191 131.3862 0.8919 145.8240 2.2462 Singapore Singapore Dollar 1.3471 0.0024 1.6102 -0.0012 1.7872 0.0142 ..Three Month - - 1.1948 -0.1232 1.3271 0.0082
Canada Canadian Dollar 1.2144 0.0006 1.4516 -0.0030 1.6111 0.0107 ..One Year 109.9129 1.0158 131.3863 0.8921 145.8242 2.2455 South Africa South African Rand 13.0238 0.0863 15.5678 0.0642 17.2786 0.2206 ..One Year - - 1.1928 -0.1232 1.3282 0.0081
Chile Chilean Peso 624.0000 1.3950 745.8940 -0.2054 827.8608 6.9586 Kenya Kenyan Shilling 102.9000 0.3000 123.0008 0.0500 136.5174 1.2397 South Korea South Korean Won 1128.5000 -3.3000 1348.9446 -7.3492 1497.1808 4.9070 Venezuela Venezuelan Bolivar Fuerte 10.1501 0.1801 12.1328 0.1852 13.4661 0.3207
China Chinese Yuan 6.5329 0.0091 7.8091 -0.0087 8.6672 0.0656 Kuwait Kuwaiti Dinar 0.3015 0.0001 0.3603 -0.0008 0.3999 0.0026 Sweden Swedish Krona 7.9745 -0.0295 9.5323 -0.0593 10.5798 0.0265 Vietnam Vietnamese Dong 22725.5000 0.5000 27164.8335 -67.7628 30149.9962 187.0903
Colombia Colombian Peso 2924.2350 10.0900 3495.4646 3.2958 3879.5824 37.2930 Malaysia Malaysian Ringgit 4.2075 0.0095 5.0294 -0.0013 5.5821 0.0470 Switzerland Swiss Franc 0.9597 0.0076 1.1471 0.0062 1.2732 0.0179 European Union Euro 0.8366 0.0021 - - 1.1099 0.0096
Costa Rica Costa Rican Colon 577.5200 -0.0050 690.3345 -1.7433 766.1957 4.7313 Mexico Mexican Peson 17.7678 0.1205 21.2386 0.0910 23.5725 0.3046 Taiwan New Taiwan Dollar 30.0220 0.0120 35.8866 -0.0759 39.8302 0.2621 ..One Month 0.8364 0.0021 - - 1.1098 0.0096
Czech Republic Czech Koruna 21.8388 0.0667 26.1049 0.0143 28.9735 0.2672 New Zealand New Zealand Dollar 1.3701 -0.0081 1.6378 -0.0139 1.8178 0.0005 Thailand Thai Baht 33.1140 -0.0160 39.5826 -0.1188 43.9323 0.2506 ..Three Month 0.8360 0.0021 - - 1.1097 0.0096
Denmark Danish Krone 6.2244 0.0160 7.4403 0.0005 8.2579 0.0722 Nigeria Nigerian Naira 359.6600 0.1600 429.9171 -0.8902 477.1609 3.1616 Tunisia Tunisian Dinar 2.4474 0.0211 2.9254 0.0179 3.2469 0.0479 ..One Year 0.8341 0.0021 - - 1.1090 0.0096
Egypt Egyptian Pound 17.6450 0.0285 21.0918 -0.0189 23.4096 0.1823 Norway Norwegian Krone 7.8318 -0.0148 9.3617 -0.0413 10.3905 0.0447 Turkey Turkish Lira 3.4367 0.0299 4.1080 0.0255 4.5595 0.0676
Hong Kong Hong Kong Dollar 7.8109 -0.0008 9.3366 -0.0245 10.3627 0.0630 Pakistan Pakistani Rupee 105.3750 - 125.9593 -0.3170 139.8010 0.8645 United Arab Emirates UAE Dirham 3.6730 - 4.3905 -0.0110 4.8730 0.0301
Hungary Hungarian Forint 257.0168 1.0357 307.2232 0.4679 340.9842 3.4741 Peru Peruvian Nuevo Sol 3.2324 0.0009 3.8638 -0.0086 4.2884 0.0277 United Kingdom Pound Sterling 0.7538 -0.0047 0.9010 -0.0079 - -
India Indian Rupee 64.0348 0.1198 76.5435 -0.0491 84.9549 0.6832 Philippines Philippine Peso 50.9000 - 60.8430 -0.1531 67.5290 0.4176 ..One Month 0.7539 -0.0047 0.9009 -0.0079 - -
Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata
UK SERIES
FTSE ACTUARIES SHARE INDICES www.ft.com/equities FT 30 INDEX FTSE SECTORS: LEADERS & LAGGARDS FTSE 100 SUMMARY
Produced in conjunction with the Institute and Faculty of Actuaries Sep 12 Sep 11 Sep 08 Sep 07 Sep 06 Yr Ago High Low Year to date percentage changes Closing Day's Closing Day's
Strlg Day's Euro Strlg Strlg Year Div P/E X/D Total FT 30 3183.00 3184.10 3178.40 3183.20 3171.70 0.00 3391.10 3060.90 Industrial Metals & 62.62 FTSE SmallCap Index 11.14 Industrial Transport -0.32 FTSE 100 Price Change FTSE 100 Price Change
Sep 12 chge% Index Sep 11 Sep 08 ago yield% Cover ratio adj Return FT 30 Div Yield 1.81 1.80 1.81 1.80 1.81 0.00 3.93 2.74 Leisure Goods 33.94 Aerospace & Defense 10.92 Health Care -0.60 3I Group PLC 936.00 -7.00 London Stock Exchange Group PLC 3893 -1.00
FTSE 100 (100) 7400.69 -0.17 6402.04 7413.59 7377.60 6665.63 3.91 1.02 25.01 235.80 6230.02 P/E Ratio net 24.61 24.77 24.72 24.76 24.62 0.00 19.44 14.26 Personal Goods 32.45 Industrials 9.62 Consumer Services -0.60 Admiral Group PLC 1831 -8.00 Marks And Spencer Group PLC 322.80 1.80
FTSE 250 (250) 19665.87 -0.14 17012.14 19694.26 19610.40 17661.04 2.70 1.69 21.93 381.02 14354.92 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Beverages 24.94 Food Producers 9.34 Automobiles & Parts -0.81 Anglo American PLC 1393.5 0.50 Mediclinic International PLC 748.50 -2.50
FTSE 250 ex Inv Co (206) 21043.11 -0.11 18203.54 21067.10 20974.34 19001.26 2.77 1.72 20.97 418.96 15674.98 FT 30 hourly changes Forestry & Paper 21.43 Nonlife Insurance 9.11 Food & Drug Retailer -1.13 Antofagasta PLC 1008 -18.00 Merlin Entertainments PLC 456.40 -3.30
FTSE 350 Higher Yield (117) 3756.64 -0.30 3249.72 3768.05 3747.64 3462.14 5.20 0.88 21.76 150.59 6666.82 8 9 10 11 12 13 14 15 16 High Low Electronic & Elec Eq 20.51 FTSE 250 Index 8.48 Gas Water & Multi -1.92 Ashtead Group PLC 1759 75.00 Micro Focus International PLC 2398 4.00
FTSE 350 (350) 4107.23 -0.17 3553.00 4114.18 4094.62 3697.26 3.71 1.10 24.43 122.06 6940.38 3184.1 3189.3 3183.3 3182.8 3180.5 3181.4 3177.6 3180.7 3186.7 3195 3176.9 Mining 17.78 Travel & Leisure 7.85 Pharmace & Biotech -2.44 Associated British Foods PLC 3142 39.00 Mondi PLC 2080 30.00
FTSE 350 Lower Yield (233) 4075.13 -0.02 3525.23 4076.12 4059.66 3570.71 2.10 1.70 28.14 73.38 4491.11 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Basic Materials 17.35 Chemicals 7.21 Construct & Material -2.56 Astrazeneca PLC 4925 35.00 Morrison (Wm) Supermarkets PLC 243.70 -3.20
FTSE 350 ex Investment Trusts (305) 4070.97 -0.17 3521.63 4077.72 4058.24 3669.23 3.75 1.10 24.26 122.60 3544.32 Software & Comp Serv 15.63 Financials 6.91 Utilities -3.21 Aviva PLC 511.50 2.00 National Grid PLC 958.60 -13.30
FTSE AIM All-Share (794) 1008.88 -0.14 872.74 1010.33 1010.58 801.65 1.63 0.95 64.96 8.60 1112.75 Health Care Eq & Srv 15.00 Real Est Invest & Se 6.78 Telecommunications -3.93
FTSE All-Share (635) 4054.83 -0.17 3507.67 4061.86 4043.28 3643.41 3.67 1.12 24.40 118.88 6926.74 FX: EFFECTIVE INDICES Household Goods & Ho 13.69 Life Insurance 5.86 General Retailers -5.50
Babcock International Group PLC 815.00 4.50 Next PLC 4400 58.00
Bae Systems PLC 595.00 -2.50 Old Mutual PLC 200.60 0.50
FTSE All-Share - Aerospace & Defense (9) 5337.35 -0.16 4617.12 5345.85 5341.04 4724.01 2.27 0.91 48.43 72.57 5741.54 Consumer Goods 13.38 Mobile Telecomms 5.78 Media -7.50
Sep 11 Sep 08 Mnth Ago Sep 12 Sep 11 Mnth Ago Barclays PLC 191.35 4.70 Paddy Power Betfair PLC 7235 10.00
FTSE All-Share - Automobiles & Parts (1) 7757.50 -0.06 6710.70 7762.20 7731.65 7343.90 2.73 3.52 10.42 211.50 7550.31 Industrial Eng 13.15 Banks 5.08 Electricity -8.01 Barratt Developments PLC 596.00 -10.00 Pearson PLC 587.00 -1.00
FTSE All-Share - Banks (11) 4348.52 0.82 3761.73 4313.21 4293.03 3491.13 4.09 0.84 29.24 148.38 3263.00 Australia 96.97 97.02 96.01 Sweden 79.57 79.82 79.33 Technology 13.04 FTSE All{HY-}Share Index 4.39 Tech Hardware & Eq -8.58 Bhp Billiton PLC 1438 18.50 Persimmon PLC 2503 -52.00
FTSE All-Share - Basic Materials (30) 6019.19 0.40 5206.96 5995.41 5928.43 3881.00 3.15 1.78 17.82 186.86 6253.12 Canada 95.81 95.64 91.78 Switzerland 155.43 155.65 156.08 Financial Services 11.77 NON FINANCIALS Index 3.51 Oil & Gas Producers -8.72 BP PLC 448.90 -0.20 Provident Financial PLC 832.00 7.00
FTSE All-Share - Beverages (5) 20850.70 -0.22 18037.09 20896.06 20949.22 16976.02 2.37 1.65 25.67 479.22 14911.80 Denmark 109.92 109.84 109.60 UK 75.95 75.74 75.98 Equity Invest Instr 11.62 FTSE 100 Index 3.29 Oil & Gas -9.21 British American Tobacco PLC 4798.5 -99.00 Prudential PLC 1805 15.00
FTSE All-Share - Chemicals (8) 13984.69 0.31 12097.59 13941.29 14037.12 12487.88 2.25 2.29 19.42 269.62 12608.03 Japan 137.48 138.55 138.20 USA 97.33 96.97 99.36 Support Services 11.32 Tobacco 2.55 Fixed Line Telecomms -20.65 British Land Company PLC 609.00 - Randgold Resources LD 7765 -235.00
FTSE All-Small Index (381) 3970.04 -0.28 3434.32 3981.04 3981.62 3387.59 2.81 1.49 23.93 75.18 7337.78 New Zealand 116.56 116.17 118.09 Euro 95.06 95.08 94.15 Real Est Invest & Tr 2.03 Oil Equipment & Serv -25.64 Bt Group PLC 283.25 -0.70 Reckitt Benckiser Group PLC 7033 -67.00
FTSE All-Small ex Inv Co Index (198) 3754.12 -0.34 3247.54 3766.75 3778.56 3260.30 2.98 1.77 18.92 73.22 7197.63 Norway 88.63 89.53 88.98
Bunzl PLC 2286 7.00 Relx PLC 1679 -8.00
FTSE Fledgling Index (96) 10436.69 -0.21 9028.36 10458.82 10464.89 8289.03 2.90 0.98 34.99 193.84 19665.82 Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Burberry Group PLC 1772 -18.00 Rentokil Initial PLC 305.40 -1.40
FTSE Fledgling ex Inv Co Index (46) 15105.71 -0.56 13067.33 15190.46 15247.69 11008.60 3.69 0.98 27.52 286.79 27774.31 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Carnival PLC 5140 -40.00 Rio Tinto PLC 3690.5 12.50
FTSE SmallCap Index (285) 5699.54 -0.28 4930.44 5715.54 5716.23 4881.72 2.80 1.52 23.54 108.05 8206.34
Centrica PLC 193.80 -0.60 Rolls-Royce Holdings PLC 900.00 -2.00
FTSE SmallCap ex Inv Co Index (152) 4995.45 -0.33 4321.36 5011.82 5027.40 4368.80 2.95 1.81 18.69 97.51 7559.66
FTSE GLOBAL EQUITY INDEX SERIES Coca-Cola Hbc AG 2657 -8.00 Royal Bank Of Scotland Group PLC 249.70 5.90
FTSE Sector Indices Compass Group PLC 1636 -10.00 Royal Dutch Shell PLC 2178 -9.00
Construction & Materials (16) 6715.33 -0.54 5809.16 6751.72 6729.37 6182.80 2.27 0.57 77.90 145.90 7180.91 Sep 11 No of US $ Day Mth YTD Total
YTD Gr Div Sep 11 No of US $ Day Mth YTD Total YTD Gr Div Convatec Group PLC 267.60 -4.20 Royal Dutch Shell PLC 2135.5 -9.00
Consumer Goods (42) 22020.30 -1.15 19048.86 22276.40 22318.08 20223.67 3.15 1.35 23.52 602.27 16439.75 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Crh PLC 2654 -11.00 Royal Mail PLC 377.10 -3.00
Consumer Services (93) 4876.18 -0.38 4218.18 4894.89 4873.62 4695.27 2.82 1.96 18.10 100.90 4610.34 FTSE Global All Cap 7716 547.38 0.8 2.7 14.3 782.20
16.3 2.4 Oil & Gas Producers 109 332.32 0.6 0.6 -5.4 551.86 -2.8 3.9 Croda International PLC 3860 -7.00 Rsa Insurance Group PLC 644.00 0.50
Electricity (2) 8412.07 -0.67 7276.94 8468.51 8476.49 8913.18 5.93 1.81 9.32 494.42 12522.99 FTSE Global Large Cap 1442 482.30 0.9 2.6 14.6 707.17
16.8 2.5 Oil Equipment & Services 28 307.68 1.1 1.1 -12.0 448.19 -10.9 3.5 Dcc PLC 7290 -65.00 Sage Group PLC 698.00 1.50
Electronic & Electrical Equipment (10) 7545.36 0.66 6527.18 7495.81 7456.91 6150.08 1.70 2.22 26.55 75.36 6898.82 FTSE Global Mid Cap 1647 735.42 0.8 2.7 14.2 996.29
15.9 2.1 Basic Materials 258 507.25 0.8 0.8 20.2 779.40 22.8 2.6 Diageo PLC 2580.5 -6.00 Sainsbury (J) PLC 239.10 3.00
Equity Investment Instruments (178) 9767.36 -0.27 8449.35 9793.54 9758.74 8302.00 2.36 1.30 32.73 160.61 5370.35 FTSE Global Small Cap 4627 771.13 0.8 3.4 12.2 1011.27
13.7 1.9 Chemicals 121 746.59 1.3 1.3 18.4 1151.34 20.8 2.5 Direct Line Insurance Group PLC 382.90 -2.60 Schroders PLC 3325 25.00
FTSE All-World 3089 319.57 0.8 2.6 14.6 482.43
16.7 2.4 Forestry & Paper 16 284.95 1.5 1.5 19.7 486.94 22.9 3.2 Easyjet PLC 1194 -1.00 Scottish Mortgage Investment Trust PLC 433.80 -
Financials (292) 5159.73 0.29 4463.47 5144.77 5109.02 4310.68 3.53 1.25 22.70 149.63 4837.63
Fixed Line Telecommunications (4) 3363.97 -0.24 2910.03 3372.05 3371.03 4410.49 5.40 1.01 18.25 122.44 3137.63 FTSE World 2542 564.62 0.8 2.4 14.1 1144.10
16.2 2.4 Industrial Metals & Mining 70 446.33 0.4 0.4 23.3 681.19 25.3 2.3 Experian PLC 1521 - Segro PLC 540.00 -3.00
Food & Drug Retailers (7) 3152.10 -0.38 2726.75 3164.14 3178.94 2728.58 1.36 2.14 34.28 32.59 3696.44 FTSE Global All Cap ex UNITED KINGDOM In 7393 568.06 0.9 2.7 14.5 799.15
16.4 2.3 Mining 51 628.69 -0.5 -0.5 22.5 967.95 26.2 2.8 Ferguson PLC 4650 94.00 Severn Trent PLC 2240 -30.00
Food Producers (10) 8645.48 0.76 7478.85 8580.65 8832.55 8235.53 1.95 2.16 23.65 94.93 7475.64 FTSE Global All Cap ex USA 5835 502.36 0.6 3.3 18.3 769.52
21.0 2.9 Industrials 546 389.01 0.8 0.8 17.4 562.02 19.2 2.0 Fresnillo PLC 1570 -37.00 Shire PLC 4074.5 -5.50
Forestry & Paper (1) 24447.34 1.46 21148.40 24094.74 23777.39 18511.81 2.38 3.15 13.30 582.72 26894.48 FTSE Global All Cap ex JAPAN 6431 560.00 0.9 2.9 14.4 808.01
16.5 2.4 Construction & Materials 114 532.94 0.3 0.3 15.7 805.08 17.6 2.0 G4S PLC 283.60 -1.90 Sky PLC 937.00 -15.50
Gas Water & Multiutilities (5) 7737.30 -1.17 6693.23 7828.86 7842.71 8521.12 4.85 1.28 16.10 249.14 8918.26 FTSE Global All Cap ex Eurozone 7067 562.26 0.8 2.5 13.2 788.05
15.1 2.3 Aerospace & Defense 26 700.07 0.6 0.6 23.9 1002.93 25.8 2.0 Gkn PLC 330.10 -0.20 Smith & Nephew PLC 1394 -2.00
General Financial (31) 8977.90 0.04 7766.42 8974.46 8888.01 7880.69 3.45 1.89 15.37 222.69 10396.77 FTSE Developed 2097 511.27 0.9 2.3 13.7 736.30
15.7 2.4 General Industrials 57 242.52 0.8 0.8 3.0 378.34 4.8 2.6 Glaxosmithkline PLC 1496.5 -1.50 Smiths Group PLC 1602 6.00
General Industrials (6) 5225.13 1.17 4520.05 5164.50 5138.90 4228.67 2.58 1.30 29.74 75.29 5960.76 FTSE Developed All Cap 5651 537.33 0.9 2.4 13.4 764.42
15.3 2.3 Electronic & Electrical Equipment 71 444.36 1.2 1.2 29.3 588.99 31.0 1.6 Glencore PLC 372.50 3.20 Smurfit Kappa Group PLC 2386 55.00
General Retailers (28) 2412.20 0.42 2086.69 2402.13 2397.84 2581.99 3.26 2.09 14.67 53.82 2781.48 FTSE Developed Large Cap 912 471.95 0.9 2.3 13.7 690.17
15.8 2.5 Industrial Engineering 101 768.20 0.7 0.7 21.9 1093.30 23.7 2.0 Hammerson PLC 552.00 -7.00 Sse PLC 1428 -10.00
FTSE Developed Europe Large Cap 225 375.98 0.7 3.6 17.8 633.47
21.3 3.4 Industrial Transportation 99 667.97 0.8 0.8 18.6 966.03 20.6 2.2 Hargreaves Lansdown PLC 1402 2.00 St. James's Place PLC 1135 -15.00
Health Care (22) 9915.53 0.12 8577.52 9903.17 9817.75 10325.43 3.53 0.84 33.63 298.76 7728.53
FTSE Developed Europe Mid Cap 315 610.11 0.7 3.7 23.9 919.57
26.7 2.6 Support Services 78 347.46 0.9 0.9 17.7 479.55 19.2 1.8 HSBC Holdings PLC 736.20 0.60 Standard Chartered PLC 753.90 4.30
Health Care Equipment & Services (10) 8506.61 -0.35 7358.73 8536.69 8571.57 7641.08 1.26 2.47 32.09 76.24 7391.52
FTSE Dev Europe Small Cap 705 871.63 0.6 4.3 25.6 1271.37
28.2 2.4 Consumer Goods 428 489.17 0.6 0.6 17.0 726.37 19.0 2.4 Imperial Brands PLC 3322.5 -4.50 Standard Life Aberdeen PLC 422.00 1.90
Household Goods & Home Construction (16)15051.45 -1.29 13020.39 15247.71 15246.39 13604.24 3.27 2.10 14.59 425.49 10768.18
FTSE North America Large Cap 290 534.92 1.1 2.0 11.9 731.10
13.5 2.1 Automobiles & Parts 105 410.81 0.7 0.7 11.7 589.89 13.9 2.7 Informa PLC 679.50 -3.50 Taylor Wimpey PLC 193.10 -2.70
Industrial Engineering (12) 12696.61 -0.07 10983.32 12705.98 12669.38 10233.00 2.12 1.63 29.02 218.92 15563.42
FTSE North America Mid Cap 385 779.96 1.0 2.6 8.6 991.57
9.9 1.7 Beverages 46 656.48 0.3 0.3 19.0 988.54 21.0 2.5 Intercontinental Hotels Group PLC 3781 -12.00 Tesco PLC 185.05 -1.10
Industrial Metals & Mining (2) 4084.77 3.22 3533.57 3957.49 3937.36 1349.07 5.14 2.22 8.76 211.81 3801.92
FTSE North America Small Cap 1424 797.20 1.0 3.0 6.8 984.12
7.9 1.6 Food Producers 107 614.99 0.4 0.4 8.1 938.02 10.1 2.3 International Consolidated Airlines Group S.A. 598.50 -9.00 Tui AG 1334 -4.00
Industrial Transportation (7) 4692.87 -0.46 4059.61 4714.45 4709.31 4641.49 4.26 1.24 18.85 139.56 4240.24
FTSE North America 675 356.68 1.1 2.1 11.3 498.89
12.9 2.0 Household Goods & Home Construction 49 467.41 0.8 0.8 15.6 689.48 17.8 2.4 Intertek Group PLC 5015 -75.00 Unilever PLC 4441 -85.00
Industrials (110) 5431.96 0.18 4698.97 5422.18 5403.24 4806.77 2.30 1.48 29.35 86.51 5630.07
FTSE Developed ex North America 1422 262.87 0.6 2.6 17.5 432.74
20.2 2.9 Leisure Goods 31 228.62 1.2 1.2 42.9 301.03 44.2 1.3 Itv PLC 161.10 0.50 United Utilities Group PLC 904.50 -14.50
Leisure Goods (2) 7687.01 1.80 6649.72 7551.30 7460.62 5387.63 4.81 1.10 18.86 158.08 6998.14
FTSE Japan Large Cap 180 363.70 0.3 -0.2 11.6 470.89
12.9 2.1 Personal Goods 79 723.49 0.6 0.6 25.1 1016.51 27.0 1.9 Johnson Matthey PLC 2908 44.00 Vodafone Group PLC 214.55 -1.65
Life Insurance/Assurance (9) 8636.29 0.51 7470.90 8592.73 8501.71 6897.04 3.61 1.71 16.23 279.49 8550.72
FTSE Japan Mid Cap 313 600.03 0.3 0.0 16.2 745.62
17.2 1.6 Tobacco 11 1394.17 0.2 0.2 10.0 2891.32 12.5 3.7 Kingfisher PLC 290.90 0.30 Whitbread PLC 3761 -15.00
Media (22) 7313.12 -0.65 6326.28 7360.82 7339.60 7570.45 3.24 1.89 16.31 169.12 4546.22
FTSE Global wi JAPAN Small Cap 792 677.60 0.1 0.8 21.4 871.96
22.8 1.8 Health Care 184 501.05 0.6 0.6 18.4 724.01 20.3 2.0 Land Securities Group PLC 1001 -5.00 Worldpay Group PLC 417.70 -1.50
Mining (19) 16991.55 0.31 14698.70 16938.97 16719.84 10530.91 3.24 1.69 18.28 547.40 9247.73
FTSE Japan 493 154.45 0.3 -0.1 12.6 224.38
13.8 2.0 Health Care Equipment & Services 68 846.12 0.6 0.6 23.0 987.92 23.9 1.0 Legal & General Group PLC 258.20 1.10 Wpp PLC 1385 -10.00
Mobile Telecommunications (2) 4788.69 -0.78 4142.50 4826.23 4773.69 4944.09 5.96 -0.48 -34.63 194.42 4914.51
FTSE Asia Pacific Large Cap ex Japan 552 700.57 0.4 3.9 23.6 1109.46
26.6 2.9 Pharmaceuticals & Biotechnology 116 357.05 0.6 0.6 16.7 539.79 18.9 2.3 Lloyds Banking Group PLC 64.84 1.21
Nonlife Insurance (10) 3499.23 -0.17 3027.04 3505.07 3436.31 3052.41 2.99 1.67 20.02 102.50 6250.12
FTSE Asia Pacific Mid Cap ex Japan 414 919.95 0.2 3.5 20.9 1394.19
23.5 2.7 Consumer Services 383 437.21 0.5 0.5 10.8 585.66 12.2 1.7
Oil & Gas (17) 8118.02 -0.26 7022.57 8139.39 8109.45 7303.75 6.39 0.48 32.28 385.30 7630.90 FTSE Asia Pacific Small Cap ex Japan 1450 569.99 -0.1 4.5 17.2 850.70
19.7 2.6 Food & Drug Retailers 55 290.03 0.5 0.5 2.6 406.06 4.3 2.1
Oil & Gas Producers (10) 7810.49 -0.27 6756.54 7831.94 7802.49 6970.30 6.42 0.50 31.29 374.08 7602.33
Oil Equipment Services & Distribution (7)12417.50 0.21 10741.87 12391.00 12388.69 14896.22 5.11 -0.20 -98.89 368.09 9744.92
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
966 553.06
2065 773.36
0.4
0.5
3.8
5.4
23.3 930.12
26.3
23.5 1164.29
26.5
2.9 General Retailers
2.7 Media
122 607.71
79 325.48
0.5
0.0
0.5
0.0
11.6 792.29
7.0 436.84
12.9
8.2
1.6
1.7
UK STOCK MARKET TRADING DATA
Personal Goods (6) 33456.51 -1.70 28941.87 34035.34 33872.39 26438.69 2.58 0.27 141.83 655.11 22757.16 Sep 12 Sep 11 Sep 08 Sep 07 Sep 06 Yr Ago
FTSE Emerging Large Cap 530 733.14 0.6 5.3 23.9 1111.95
27.0 2.8 Travel & Leisure 127 452.36 1.0 1.0 18.8 612.99 20.4 1.7
Pharmaceuticals & Biotechnology (12)13198.09 0.19 11417.13 13172.97 13036.22 13996.33 3.84 0.77 33.86 434.30 9181.93 SEAQ Bargains 6566.00 6219.00 6219.00 6219.00 7836.00 5777.00
FTSE Emerging Mid Cap 462 966.32 0.3 5.8 21.5 1441.10
24.3 2.8 Telecommunication 94 162.08 0.3 0.3 0.6 305.73 3.7 4.2
Real Estate Investment Trusts (34) 2705.35 -0.91 2340.29 2730.16 2704.66 2620.30 3.50 1.55 18.46 78.49 3413.41 Order Book Turnover (m) 837.61 231.71 231.71 231.71 281.30 220.07
FTSE Emerging Small Cap 1073 796.76 0.2 6.1 22.9 1151.95
25.8 2.6 Fixed Line Telecommuniations 43 130.15 0.4 0.4 -7.4 270.21 -4.3 4.8
Software & Computer Services (12) 2419.53 0.27 2093.04 2413.07 2422.49 2248.20 2.28 0.99 44.39 49.45 3315.19 Order Book Bargains 950295.00 897055.00 897055.00 897055.00 912603.00 966039.00
FTSE Emerging Europe 116 384.39 0.6 7.6 14.3 607.60
18.2 3.9 Mobile Telecommunications 51 180.41 0.3 0.3 12.9 305.63 15.7 3.5
Support Services (50) 7792.78 0.37 6741.21 7764.29 7730.56 6987.83 2.19 1.97 23.08 116.47 8136.38 Order Book Shares Traded (m) 1526.00 1326.00 1326.00 1326.00 1364.00 1376.00
FTSE Latin America All Cap 236 982.48 1.5 8.5 27.9 1519.88
30.4 2.6 Utilities 167 288.65 0.6 0.6 17.1 564.59 20.2 3.5
Technology (16) 2105.22 0.36 1821.14 2097.68 2106.84 2023.09 2.34 1.00 42.79 41.43 2729.30 FTSE Middle East and Africa All Cap 241 709.32 0.5 3.6 7.8 1112.37
10.3 3.1 Electricity 109 316.16 0.7 0.7 16.2 611.36 19.3 3.4 Total Equity Turnover (m) 9369.17 8133.57 8133.57 8133.57 8321.07 8825.80
Technology Hardware & Equipment (4) 1840.34 1.68 1592.01 1809.88 1829.99 2407.78 3.08 1.15 28.27 20.22 2166.86 FTSE Global wi UNITED KINGDOM All Cap In 323 346.70 0.5 2.9 11.4 586.69
14.8 3.8 Gas Water & Multiutilities 58 304.29 0.4 0.4 18.6 611.16 21.8 3.6 Total Mkt Bargains 1086694.00 1023514.00 1023514.00 1023514.00 1052431.00 1094046.00
Telecommunications (6) 3251.81 -0.62 2813.01 3271.98 3246.76 3631.32 5.79 -0.06 -274.13 127.81 3710.93 FTSE Global wi USA All Cap 1881 612.27 1.1 2.1 10.8 811.94
12.3 1.9 Financials 702 240.38 1.2 1.2 12.7 394.93 15.3 3.0 Total Shares Traded (m) 4774.00 4171.00 4171.00 4171.00 4776.00 3896.00
Tobacco (2) 53169.13 -1.60 45994.45 54036.26 54160.82 55260.41 3.90 1.11 23.12 1883.35 34774.96 FTSE Europe All Cap 1439 442.71 0.7 3.8 19.4 720.01
22.7 3.2 Banks 247 213.89 1.2 1.2 11.1 377.92 14.0 3.5 Excluding intra-market and overseas turnover. *UK only total at 6pm. UK plus intra-market turnover. (u) Unavaliable.
Travel & Leisure (36) 9240.19 -0.51 7993.32 9287.72 9203.87 8255.89 2.74 1.93 18.90 195.60 8822.58 FTSE Eurozone All Cap 649 440.13 1.0 4.3 24.3 720.93
27.4 2.9 Nonlife Insurance 69 258.62 1.5 1.5 11.5 376.74 13.7 2.3 (c) Market closed.
Utilities (7) 8233.73 -1.06 7122.66 8322.20 8335.47 8996.10 5.08 1.41 13.94 310.94 9525.17 FTSE RAFI All World 3000 3027 6662.12 0.8 2.5 11.6 8848.67
14.0 2.9 Life Insurance 52 227.84 0.9 0.9 13.7 367.02 16.7 3.0
Index- Real Estate Investment & Services (19) 2643.09 -0.88 2286.43 2666.50 2664.77 2458.48 2.66 1.90 19.79 51.07 7113.17 FTSE RAFI US 1000 993 10650.21 1.1 1.4 5.0 14025.06
6.7 2.4 Financial Services 151 279.53 1.4 1.4 16.0 386.22 17.7 1.9
ex Inv Co Index (457) 3995.92 -0.17 3456.71 4002.67 3984.17 3599.36 3.73 1.11 24.11 119.50 3535.32 FTSE EDHEC-Risk Efficient All-World 3089 383.13 0.7 2.6 14.5 535.40
16.3 2.2 Technology 181 245.27 1.3 1.3 26.3 301.51 27.8 1.5 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
ex Multinationals Index (574) 1219.70 -0.05 874.49 1220.30 1215.62 1122.13 3.20 1.35 23.07 29.75 2199.21 FTSE EDHEC-Risk Efficient Developed Europe 540 326.96 0.5 3.6 22.2 501.18
24.8 2.6 Software & Computer Services 87 425.10 1.1 1.1 27.7 497.00 28.7 0.9 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Non Financials (343) 4752.22 -0.34 4110.95 4768.31 4750.51 4378.58 3.72 1.07 25.07 139.86 7108.02 Oil & Gas 146 351.76 0.7 2.7 -6.3 571.59
-4.0 3.8 Technology Hardware & Equipment 94 183.63 1.5 1.5 24.7 235.33 26.9 2.1 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Alternative Energy 9 106.08 1.7 1.7 15.5 143.83 16.5 1.8 liable for any loss arising from the reliance on or use of the listed information.
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Real Estate Investment & Services 107 352.62 0.6 0.6 27.7 590.56 30.4 2.4 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 7419.82 7429.44 7404.47 7399.89 7392.76 7396.74 7387.25 7397.36 7404.09 7435.84 7386.99 The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/
FTSE 250 19723.88 19678.82 19694.91 19667.99 19650.27 19653.52 19660.09 19662.03 19679.98 19731.59 19643.74 mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index and RAFI are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC
(US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,
Data provided by Morningstar | www.morningstar.co.uk
FTSE SmallCap 5728.13 5727.87 5724.71 5721.41 5709.70 5702.10 5705.22 5705.83 5705.84 5729.41 5695.88
FTSE All-Share 4065.92 4068.61 4058.12 4055.13 4051.10 4052.75 4048.89 4053.41 4056.96 4072.32 4048.56 WO 2008/118372, EPN 1733352, and HK1099110). EDHEC is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
Time of FTSE 100 Day's high:08:20:45 Day's Low10:53:15 FTSE 100 2010/11 High: 7547.63(29/05/2017) Low: 7099.15(31/01/2017) www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. FTSE International Limited. 2013. All Rights reserved. FTSE is a trade mark of the London Stock Exchange
Time of FTSE All-Share Day's high:08:21:00 Day's Low13:15:00 FTSE 100 2010/11 High: 4130.15(29/05/2017) Low: 3858.26(31/01/2017) Group companies and is used by FTSE International Limited under licence.
Further information is available on http://www.ftse.com FTSE International Limited. 2013. All Rights reserved. FTSE is a trade mark of the
London Stock Exchange Group companies and is used by FTSE International Limited under licence. Sector P/E ratios greater than 80 are not shown.
For changes to FTSE Fledgling Index constituents please refer to www.ftse.com/indexchanges. Values are negative.

UK RIGHTS OFFERS UK COMPANY RESULTS UK RECENT EQUITY ISSUES

Amount Latest Company Turnover Pre-tax EPS(p) Div(p) Pay day Total Issue Issue Stock Close Mkt
Issue paid renun. closing 1pm Pre 16.944 12.554 4.08 3.346 6.09 5.87 - 0.5 - - 0.5 date price(p) Sector code Stock price(p) +/- High Low Cap (m)
price up date High Low Stock Price p +or- Albion Technology & General VCT Int 0.493 0.881 0.144 0.559 0.1 0.5 1 1.25 Jun 30 2.25 2.493 08/29 0.10 CHF Chesterfield Resources PLC 5.50 0.00 5.35 5.00 157.3
There are currently no rights offers by any companies listed on the LSE. Ashtead Group 1st 880.1 707.1 228.9 177.9 30.2 23.4 - - - - - 08/22 10.00 SHWE Myanmar Strategic Holdings Ltd 10.00 - 0.00 0.00 22.7
Cronin Group Int - - 0.573L 0.343L 0.1L 0.06L - - - - - 08/17 120.00 AIM WCH Wilmcote Holdings PLC 132.50 0.00 135.47 130.00 2760.4
Empiric Student Property Int 24.459 - 14.477 - 2.89 - 1.525 - Aug 1 - - 08/11 24.00 AIM XPD Xpediator PLC 27.50 0.00 28.90 24.00 2772.9
Futura Medical Int 0.363 0.067 1.998L 2.26L 1.32L 1.91L - - - - - 08/10 10.00 AIM ALS Altus Strategies PLC 10.13 -0.38 10.50 9.75 1090.3
Goals Soccer Centres Int 17.366 16.987 2.6 3.501 2.7 4.5 - - - - - 08/10 9.00 AIM VDTK Verditek PLC 8.63 -1.63 9.25 7.00 1618.7
Good Energy Group Int 52.038 44.781 0.73 1.16 3.1 7.9 1 1 Nov 2 3.3 3.288 08/04 0.15 AIM GETB GetBusy PLC 32.50 -1.75 42.00 28.30 1573.0
Hilton Food Group Int 690.737 631.863 18.407 16.673 19.2 16.9 5 4.6 Dec 1 17.5 5.893
Hydrogen Group Int 56.8 59.347 0.611L 0.967 2.61L 3.97 - - - - -
InnovaDerma Pre 8.858 - 1.029 - 6 - - - - - -
JD Sports Fashion Int 1367.2 970.6 102.7 77.4 8.09 5.97 0.26 0.25 Jan 5 1.56 1.483
Midwich Group Int 211.564 158.349 8.033 3.825 7.04 3.47 4.17 1.53 Oct 27 11.26 1.53
Mountfield Group Int 5.684 4.915 0.305 0.316 0.086 0.097 - - - - -

Figures in m. Earnings shown basic. Figures in light text are for corresponding period year earlier. Placing price. *Intoduction. When issued. Annual report/prospectus available at www.ft.com/ir
For more information on dividend payments visit www.ft.com/marketsdata For a full explanation of all the other symbols please refer to London Share Service notes.
Wednesday 13 September 2017 FINANCIAL TIMES 17

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES

52 Week 52 Week 52 Week 52 Week 52 Week 52 Week
Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m
Australia (A$) Finland () Japan () Sweden (SKr) AutomData 108.06 0.56 121.77 85.48 2.16 26.32 48019.14 Lockheed 304.01 -0.47 308.48 228.50 2.39 23.47 87552.1
ANZ 29.90 0.42 32.95 25.75 7.70 15.12 70566.12 Nokia 5.11 0.02 5.96 3.66 2.97 -53.83 35649.4 AstellasPh 1409.5 7.50 1688 1331.5 2.41 15.21 26529.66 AtlasCpcoB 296.90 1.90 309.30 218.90 2.13 23.87 14528.22 Avago Tech 247.30 -0.45 259.36 158.75 1.45 187.59 100891.25 Lowes 78.15 0.65 86.25 64.87 1.88 21.88 65084.27
BHPBilltn 27.12 0.32 27.95 19.73 2.13 43.64 69981.5 SampoA 44.48 0.33 47.46 38.51 5.04 15.79 29710.75 Bridgestne 4875 52.00 4936 3534 3.01 13.63 36063.08 Ericsson 46.37 0.01 64.95 43.19 2.08 -11.43 17865.21 BakerHu 57.68 3.17 68.59 43.09 1.17 -21.23 24541.87 Lyondell 94.42 0.76 97.64 74.02 3.82 10.14 37369.83
CmwBkAu 75.92 1.66 87.74 69.22 7.27 15.59 105645.92 France () Canon 3766 27.00 3967 2850 3.98 21.25 45698.52 H&M 209.60 1.70 276.90 195.70 2.21 19.23 38391.73 BankAm 23.93 0.57 25.80 14.81 1.22 13.83 235675.13 Marathon Ptl 53.83 0.08 56.81 39.29 2.73 31.37 27251.65
CSL 132.61 0.10 145.00 91.62 1.27 35.69 48209.87 Airbus Grpe 70.67 -0.15 77.25 51.00 - - - CntJpRwy 19155 200.00 19835 16540 0.70 9.32 35899.83 Investor 378.80 4.50 425.60 298.50 2.50 4.14 21636 Baxter 64.01 -0.27 64.56 43.13 0.86 17.85 34877.19 Marsh&M 81.45 0.25 82.86 62.33 1.77 21.56 41745.15
NatAusBk 30.76 0.24 34.09 25.14 8.95 13.04 66369.1 AirLiquide 107.10 1.40 115.25 90.02 - - - Denso 5356 -30.00 5452 3886 2.24 14.65 38693.82 Nordea Bk 104.00 0.10 115.70 81.75 5.81 12.72 52817.41 BB & T 44.90 0.22 49.88 36.80 2.73 16.40 36283.35 MasterCard 141.95 -0.04 143.52 97.49 0.61 34.93 148931.02
Telstra 3.69 -0.03 5.29 3.51 11.70 11.64 35260.54 AXA 24.64 0.29 25.80 17.98 - - - EastJpRwy 10185 30.00 11290 8701 1.34 13.63 35735.81 SEB 102.40 0.70 109.00 82.95 5.19 13.44 27864.89 BectonDick 202.55 -1.33 206.63 161.29 1.44 57.65 46092.15 McDonald's 156.05 -5.48 161.72 110.33 2.43 25.05 126399.97
Wesfarmers 42.49 0.05 46.06 39.52 6.49 17.14 38707.79 BNP Parib 65.84 1.54 68.89 43.24 - - - Fanuc 21720 500.00 23670 16620 1.90 31.51 40323.54 SvnskaHn 118.30 1.30 136.30 113.50 4.08 14.85 28318.27 BerkshHat 267320 450.00 272885 213030 - 19.74 201943.42 McKesson 155.12 -4.12 181.53 114.53 0.74 6.95 32615.61
Westpc 31.65 0.32 35.39 28.56 8.55 14.13 86316.1 ChristianDior 268.00 3.75 268.60 151.05 - - - FastRetail 32000 1390 44370 30000 1.09 32.93 30881.65 Swedbank 217.90 1.70 234.00 192.60 5.74 12.62 30931.41 Biogen 326.83 0.29 329.95 244.28 - 21.00 69102.24 Medtronic 81.65 0.09 89.72 69.35 2.16 27.32 110595.62
Woolworths 25.21 -0.15 27.75 22.23 3.70 23.41 26218.43 Cred Agr 15.25 0.23 15.68 8.26 - - - Fuji Hvy Ind 3878 14.00 5016 3500 3.89 10.13 27137.92 Telia Co 38.15 -0.15 40.33 33.93 9.94 10.94 20715 BkNYMeln 51.89 0.36 54.59 38.68 1.50 15.08 53610.48 Merck 65.60 0.47 66.80 58.29 2.91 34.72 178914.44
Belgium () Danone 68.05 -0.35 69.52 57.66 - - - Hitachi 755.30 9.50 765.00 461.40 1.80 14.69 33213.97 Volvo 148.20 0.70 152.00 89.25 2.12 17.28 30489.11 BlackRock 426.71 2.67 442.84 336.84 2.29 20.06 68691.01 Metlife 48.23 0.64 51.77 38.17 3.52 -74.93 51259.93
AnBshInBv 101.70 0.30 119.60 92.13 - - - EDF 9.88 -0.16 11.75 7.33 - - - HondaMtr 3188 69.00 3675 2693.5 3.02 8.90 52539.09 Switzerland (SFr) Boeing 239.73 -0.86 246.49 126.31 2.08 27.83 141700.42 Microsoft 74.59 -0.17 75.24 55.61 2.13 30.97 574510.38
KBC Grp 70.04 0.93 71.34 49.02 - - - Engie SA 14.83 -0.10 15.03 10.77 - - - JapanTob 3696 27.00 4243 3607 3.68 16.56 67251.96 ABB 23.35 0.27 24.89 19.72 6.38 23.13 52754.93 BrisMySq 62.82 0.10 63.47 46.01 2.52 22.45 103020.18 Mnstr Bvrg 56.36 -0.30 57.25 40.64 - 41.80 32020.59
Esslr Intl 109.30 -0.50 122.15 93.41 - - - KDDI 2960.5 -2.50 3229 2745.5 3.00 12.77 69685.17 CredSuisse 14.78 0.47 15.74 11.49 4.68 -17.53 39366.29 CapOne 79.52 0.46 96.92 69.49 2.06 11.32 38463.24 MondelezInt 40.94 -0.26 47.23 40.22 1.90 35.16 61715.24
Brazil (R$)
Hermes Intl 439.00 -2.05 468.30 349.00 - - - Keyence 59380 580.00 59620 35375 0.10 - 65694.73 Nestle 81.40 - 86.00 71.45 2.89 26.60 263981.47 CardinalHlth 69.14 -0.59 84.88 62.70 2.67 16.80 21879.61 Monsanto 117.23 - 118.97 97.35 1.89 24.74 51501.84
Ambev 21.10 0.84 21.11 15.79 3.36 28.98 106729.84
LOreal 179.90 -0.80 197.15 156.50 - - - MitsbCp 2564.5 7.50 2705.5 2056 3.26 8.84 37099.15 Novartis 82.45 1.05 84.35 67.40 3.24 30.70 224830.78 Carnival 67.84 0.19 69.89 44.11 2.20 17.65 36406.76 MorganStly 45.74 0.58 48.90 30.62 1.79 12.80 84005.2
Bradesco 34.17 0.17 34.40 24.01 1.68 12.95 33589.18
LVMH 228.15 2.85 239.65 145.75 - - - MitsubEst 1854.5 13.50 2443 1806 1.08 27.64 23467.58 Richemont 88.90 0.95 88.90 65.60 1.92 38.13 48357 Caterpillar 120.96 2.09 121.23 79.93 2.70-456.03 71484.07 MylanNV 33.64 0.60 45.87 29.39 - 26.56 18040.48
Cielo 23.22 0.21 28.19 20.36 2.38 16.39 20302.03
Orange 13.94 -0.01 15.80 13.04 - - - MitsubishiEle 1694.5 20.50 1802 1228.5 1.67 16.51 33102.25 Roche 242.30 0.80 273.00 218.30 3.39 21.47 177388.57 CBS 58.77 0.77 70.10 48.88 1.25 15.39 21395.51 Netflix 184.45 2.71 191.50 93.26 - 220.23 79636.24
ItauHldFin 38.03 0.37 38.19 27.28 3.58 10.88 41021.73
PernodRic 115.75 -0.95 124.45 95.73 - - - MitsuiFud 2335 50.00 2863.5 2059 1.45 17.58 21061.52 Swiss Re 87.80 0.90 98.50 81.65 5.58 8.68 31971.98 Celgene 141.12 0.20 142.64 96.93 - 42.91 110405.33 NextEraE 149.01 -2.40 151.60 110.49 2.54 16.71 69918.26
Petrobras 15.64 0.12 19.72 12.47 - -21.43 37460.18
Renault 78.60 1.40 90.76 69.12 - - - MitUFJFin 672.50 11.30 778.80 492.00 2.80 43.77 85826.49 Swisscom 480.60 -0.80 485.00 426.80 9.31 15.18 25942.81 CharlesSch 39.80 0.49 44.10 29.86 0.77 26.60 53296.96 Nike 53.51 0.48 60.53 49.01 1.34 20.74 70213.04
Vale 35.67 0.58 37.28 16.16 0.44 9.25 57368.91
Safran 83.65 0.57 84.27 59.42 - - - Mizuho Fin 189.30 2.10 225.30 163.50 3.96 13.83 43727.06 Syngent 463.00 -6.70 471.20 360.50 - 41.32 42748.26 Charter Comms 375.96 -5.06 408.83 241.50 - 19.29 96952.68 NorfolkS 126.64 0.22 126.98 89.92 1.99 20.54 36493.91
Canada (C$) Murata Mfg 16750 160.00 17910 12210 1.31 23.54 34329.22 Chevron Corp 112.27 -0.25 119.00 97.53 4.06 69.16 212751.95 Northrop 269.21 -0.10 274.61 206.69 1.40 20.14 46867.06
Sanofi 82.04 0.64 92.97 66.72 - - - UBS 16.07 0.29 17.49 15.11 - 15.24 64506.02
BCE 58.62 0.44 63.00 56.80 4.56 18.44 43462.49 NipponTT 5174 -34.00 5500 4156 2.43 12.65 98683.03 Chubb 146.21 0.33 150.28 121.48 2.00 13.50 68049.42 NXP 112.71 0.16 113.39 80.13 - 19.21 38997.98
Sant Gbn 48.68 0.82 52.40 37.04 - - - Zurich Fin 291.30 4.30 299.70 243.60 6.23 13.24 45937.43
BkMontrl 91.54 0.65 104.15 83.44 3.46 12.64 48899.13 Nissan Mt 1115 15.50 1220 957.20 4.30 6.67 42815.78 Cigna 185.44 -0.88 186.93 115.03 0.02 23.34 46689.73 Occid Pet 60.74 0.33 76.15 57.20 5.29 -82.97 46440.17
Schneider 71.60 0.31 74.50 58.05 - - - Taiwan (NT$)
BkNvaS 77.05 0.42 82.30 68.27 3.80 12.28 76025.84 Nomura 593.30 13.40 784.00 438.90 3.37 8.64 20633.47 Cisco 32.37 0.18 34.60 29.12 3.42 16.93 160294.81 Oracle 52.54 0.05 52.89 37.62 1.25 23.13 217341.27
SFR Group 34.40 0.02 34.55 21.87 - - - Chunghwa Telecom 104.50 - 113.00 99.50 5.29 21.33 27001.97
Brookfield 48.30 0.31 53.08 42.71 1.39 30.19 39323.95 Nppn Stl 2657 55.00 2912 1941 2.26 10.84 22972.33 Citigroup 68.93 1.22 69.86 45.16 0.82 13.02 187803.65 Pepsico 114.97 -0.72 119.39 98.50 2.72 23.80 163892.36
SocGen 48.58 1.25 52.26 29.23 - - - Formosa PetChem 107.00 1.00 119.00 89.70 - 13.64 33951
CanadPcR 196.67 2.03 218.78 186.21 0.98 20.26 23735.9 NTTDCMo 2523.5 4.00 2804 2361 3.17 14.75 89528.7 CME Grp 129.48 0.68 130.15 98.95 2.02 26.42 44011.42 Perrigo 89.69 4.62 99.14 63.68 0.70 -3.55 12790.79
Total 44.51 0.14 49.50 40.53 - - - HonHaiPrc 117.00 1.00 122.50 76.80 2.85 13.58 67532.52
CanImp 106.65 0.61 120.83 97.52 4.57 9.93 38479.15 Panasonic 1538 56.50 1578 931.50 1.62 21.19 34324.67 Coca-Cola 46.62 0.10 46.75 39.88 3.23 30.94 198848.48 Pfizer 35.65 1.33 35.75 29.83 3.63 28.23 211993.26
UnibailR 212.60 -0.45 244.70 203.10 - - - MediaTek 275.50 -3.50 303.00 203.00 6.95 19.56 14516.28
CanNatRs 39.05 0.05 46.74 35.90 2.52 29.63 39069.47 Seven & I 4295 18.00 4902 4148 2.14 42.67 34638.3 Cognizant 72.18 - 72.52 45.44 0.21 22.65 42631.15 Phillips66 85.57 0.38 88.87 75.14 3.09 25.08 43769.98
Vinci 79.30 -0.96 80.60 49.93 - - - TaiwanSem 219.00 2.00 219.50 173.50 3.22 16.17 189153.05
CanNatRy 99.75 0.48 108.64 80.63 1.49 21.38 61645.55 ShnEtsuCh 9810 25.00 10855 6872 1.22 22.71 38565.86 ColgtPlm 71.89 -0.14 77.27 63.43 2.30 24.46 63319.33 PhilMorris 116.69 -1.24 123.55 86.78 3.64 25.28 181241.52
Vivendi 20.66 0.24 20.82 15.96 - - -
Enbridge 49.77 0.22 59.18 48.98 4.22 47.26 67456.83 Softbank 8609 101.00 9521 5953 0.53 10.53 86208.3 Thailand (THB) Comcast 37.97 0.14 42.18 30.02 1.59 18.73 178608.15 PNCFin 125.76 1.99 133.26 87.04 1.79 15.66 60262.62
GtWesLif 34.20 0.03 37.79 31.35 3.97 13.42 27874.62 Germany () PTT Explor 406.00 2.00 430.00 311.00 3.92 9.57 35020.18
Sony 4418 -52.00 4616 2930 0.45 42.87 50821.77 ConocPhil 45.19 0.26 53.17 39.00 2.33 -13.96 54993.94 PPG Inds 106.23 0.33 113.67 89.64 1.54 36.49 27244.56
ImpOil 37.94 0.42 48.72 35.15 1.53 12.83 26378.91 Allianz 183.40 -0.55 187.30 126.60 3.82 13.41 98547.97
SumitomoF 4104 76.00 4768 3293 3.65 8.30 52812.4 United Arab Emirates (Dhs) Corning 29.04 0.12 32.17 22.14 2.04 12.92 26223.94 Praxair 134.32 -0.70 138.69 114.43 2.40 23.80 38417.36
Manulife 24.22 0.28 26.11 17.67 3.03 16.07 39444.26 BASF 86.04 0.44 94.32 70.09 3.20 19.04 94463.06
Takeda Ph 6140 11.00 6150 4321 2.93 69.34 44176.09 Emirtestele 17.70 -0.05 20.00 17.10 4.82 16.26 41909.22 Costco 159.31 1.95 183.18 142.11 1.19 26.91 69870.59 Priceline 1867.01 -1.85 2067.99 1402.67 - 38.83 91593.68
Potash 22.16 -0.01 26.62 20.67 4.65 36.60 15330.28 Bayer 111.30 1.00 123.90 86.03 2.13 20.82 110018.52
TokioMarine 4374 139.00 5441 3738 3.35 11.51 29966.15 United Kingdom (p) CrownCstl 105.91 -1.02 108.88 79.38 3.68 85.32 43027.76 ProctGmbl 93.29 -0.70 94.19 81.18 2.95 24.75 237879.86
RylBkC 91.77 0.71 99.90 79.75 3.31 13.71 110177.94 BMW 83.60 0.75 91.76 72.02 3.63 7.84 60157.78
Toyota 6361 65.00 7215 5492 3.46 10.14 188836.16 AscBrFd 3142 39.00 3343 2335 1.17 22.60 33000.87 CSX 52.16 0.09 55.48 27.91 1.45 26.74 47638.41 Prudntl 102.12 1.19 115.26 77.68 2.96 9.75 43605.24
Suncor En 40.38 0.30 44.90 34.01 2.89 25.63 55170.14 Continental 200.75 0.25 210.35 158.20 1.77 15.01 47994.46
Mexico (Mex$) AstraZen 4925 35.00 5520 3996 4.32 20.97 82703.88 CVS 81.35 1.63 92.26 69.30 2.32 15.93 82698.56 PublStor 208.29 -3.11 232.21 192.15 3.82 29.09 36243.03
ThmReut 55.86 0.55 62.83 52.01 3.04 33.12 32876.34 Daimler 65.26 0.61 73.23 59.01 4.85 7.25 83455.97
AmerMvl 16.41 0.03 16.83 10.87 1.71 23.32 41431.62 Aviva 511.50 2.00 570.50 411.30 4.20 33.87 27450.08 Danaher 87.01 -0.07 88.01 75.71 0.62 27.30 60441.49 Qualcomm 50.82 0.25 71.62 48.92 4.34 19.07 75018.59
TntoDom 66.74 0.34 71.31 56.93 3.07 14.48 101613.37 Deut Bank 14.20 0.49 19.97 9.90 - -18.36 35081.14
FEMSA UBD 175.66 1.27 184.10 150.11 1.42 164.57 21366.38 Barclays 191.35 4.70 267.32 155.95 1.57 14.61 43246.31 Deere 118.96 1.03 132.50 80.35 2.03 19.67 38052.14 Raytheon 182.82 0.10 184.17 132.89 1.71 24.76 53063.55
TrnCan 62.86 0.32 65.24 57.36 3.62 63.90 45253.77 Deut Tlkm 15.11 -0.04 18.15 14.06 3.46 265.28 85999.7
WalMrtMex 42.75 0.03 44.85 34.70 1.31 25.68 42012.83 BP 448.90 -0.20 521.20 411.60 7.15 50.39 117202.73 Delphi 97.71 0.22 98.27 60.50 1.26 21.42 26073.34 Regen Pharm 442.19 -2.93 543.55 325.35 - 50.40 46535.89
ValeantPh 17.75 0.54 37.70 11.20 - -4.34 5076.88 DeutsPost 36.07 0.27 36.11 26.96 - 17.13 52319.03
BrAmTob 4798.5 -99.00 5643.6 2879.89 3.25 19.26 118694.06 Delta 48.56 -0.26 55.75 36.59 1.70 9.40 35158.91 ReynoldsAm 65.40 -1.49 - - - - -
E.ON 9.45 -0.20 9.74 5.99 2.17 48.46 24850.43 Netherlands ()
China (HK$) BSkyB 937.00 -15.50 1050 747.50 3.58 25.67 21369.41 Devon Energy 32.51 0.70 50.69 28.79 0.78 30.95 17087.26 S&P Global 152.71 -0.06 158.35 107.21 1.04 17.20 39246.47
Fresenius Med 80.90 0.51 89.22 70.69 1.16 19.95 29709.34 Altice 18.75 0.45 23.43 14.77 - - -
AgricBkCh 3.62 -0.01 3.80 3.10 5.54 5.47 14246.21 BT 283.25 -0.70 400.70 277.44 5.10 17.59 37430.6 DiscFinServ 57.83 -0.36 74.33 53.91 2.12 9.78 21533.11 Salesforce 96.34 -1.37 98.22 66.43 - 494.46 69239.56
Fresenius SE 70.30 -0.19 80.07 63.62 0.74 24.12 46511.83 ASML Hld 134.80 -0.55 136.45 89.80 - - -
Bk China 4.06 -0.01 4.18 3.32 5.24 6.25 43466.02 Compass 1636 -10.00 1765.92 1350.96 2.02 23.37 35695.51 Disney 97.49 0.40 116.10 90.32 1.62 16.01 150466.24 Schlmbrg 66.53 0.76 87.84 62.56 3.19 -43.54 92107.69
HenkelKgaA 105.35 -0.40 114.60 92.38 1.48 21.49 32715.93 Heineken 88.48 -0.25 89.71 67.47 - - -
BkofComm 5.81 -0.02 6.44 5.40 5.50 5.61 26043.22 Diageo 2580.5 -6.00 2616 1946 2.34 23.96 86185.98 DominRes 78.60 -1.32 81.65 69.51 3.85 20.75 50507.26 Sempra Energy 119.19 -0.87 120.17 92.95 2.70 17.26 29925.94
Linde 163.40 0.05 179.70 135.65 2.21 26.66 36277.23 ING 15.15 0.28 16.00 10.36 - - -
BOE Tech 1.48 0.07 1.95 1.22 1.38 16.65 37.70 GlaxoSmh 1496.5 -1.50 1745.56 1446.5 5.35 37.98 97639.4 DowChem 66.65 1.75 - - - - 81542.6 Shrwin-Will 350.36 2.84 362.57 239.48 1.02 25.86 32727.19
MuenchRkv 176.70 0.30 189.40 159.20 4.43 10.93 32744.55 Unilever 50.36 -0.43 51.31 36.22 - - -
Ch Coms Cons 10.20 -0.04 11.74 8.09 2.20 - 5781.78 Glencore 372.50 3.20 377.00 176.10 0.72 32.26 71138.23 DukeEner 87.50 -0.84 88.40 72.34 3.99 21.53 61245.66 SimonProp 159.72 -0.60 215.56 150.15 4.35 27.88 49646.53
SAP 91.85 0.07 96.38 75.07 1.19 32.36 134880.24 Norway (Kr)
Ch Evrbrght 3.74 0.03 4.06 3.38 3.08 5.13 3288.89 HSBC 736.20 0.60 772.00 518.17 5.30 95.64 195832.85 DuPont 83.93 0.74 - - - - - SouthCpr 40.16 0.03 42.00 24.90 0.61 32.35 31044.78
Siemens 115.55 0.60 133.50 99.38 3.04 16.61 117403.6 DNB 152.50 2.30 157.40 100.40 3.57 14.61 31715.6
Ch Rail Cons 9.99 -0.03 11.98 8.61 1.83 8.09 2655.56 Imperial Brands 3322.5 -4.50 4128.5 3112.5 4.67 31.29 42259.59 Eaton 74.63 1.28 81.63 59.07 3.20 16.76 33193.51 Starbucks 53.81 -0.21 64.87 50.84 1.77 25.11 77703.19
Volkswgn 139.75 2.55 157.40 122.55 1.39 8.82 49294.51 Statoil 149.50 1.10 163.50 123.90 4.86 -23.37 62741.35
Ch Rail Gp 6.50 -0.05 7.71 5.55 1.58 9.16 3501.31 LlydsBkg 64.84 1.21 73.58 50.84 3.93 30.88 61730.07 eBay 38.17 0.08 38.30 27.28 - 5.71 40853.94 StateSt 95.27 0.94 96.26 68.16 1.65 16.85 35626.73
ChConstBk 6.79 -0.01 7.10 5.42 4.85 6.07 208994.78 Hong Kong (HK$) Telenor 161.90 2.40 162.40 122.50 4.60-130.31 31038.14 Ecolab 129.95 0.12 134.89 110.65 1.15 29.11 37607.53 Stryker 143.34 -0.35 148.84 106.48 1.18 31.33 53618.23
Natl Grid 958.60 -13.30 1220.29 921.20 4.95 18.35 43612.32
China Vanke 26.65 0.40 26.75 17.40 - 10.89 4486.52 AIA 59.65 -0.05 62.15 42.65 1.48 17.69 92208.08 Qatar (QR) Emerson 61.20 0.29 64.37 49.22 3.31 22.53 39169.2 Sychrony Fin 29.34 0.19 38.06 26.01 1.41 10.55 23335.14
Prudential 1805 15.00 1889.5 1290 2.18 24.07 61922.58
ChinaCitic 5.18 0.06 5.50 4.69 4.87 5.12 9869.55 BOC Hold 38.90 - 40.50 25.75 3.40 15.71 52655.09 QatarNtBk 125.50 -2.50 173.00 121.70 2.56 9.28 31830.07 EOG Res 88.67 0.74 109.37 81.99 0.77-177.17 51202.32 Target 58.14 0.85 79.33 48.56 4.16 11.86 31757.92
RBS 249.70 5.90 271.00 168.20 - -5.10 39342.65
ChinaLife 24.40 0.15 26.20 18.46 1.14 28.40 23245.19 Ch OSLnd&Inv 27.40 0.05 28.50 20.15 3.00 6.96 38433.7 EquityResTP 67.38 -1.23 68.83 58.28 3.05 29.45 24749.57 TE Connect 81.23 0.26 85.20 60.38 1.93 13.57 28703.62
Russia (RUB) ReckittB 7033 -67.00 8110.43 6496 2.18 23.58 65589.46
ChinaMBank 28.90 -0.20 30.20 17.52 2.88 9.54 16986.24 ChngKng 67.60 -0.80 70.50 46.50 2.29 12.38 32000.49 Exelon 37.94 -0.54 38.78 29.82 3.48 19.65 36420.93 Tesla Mtrs 365.63 1.94 386.99 178.19 - -75.08 61019.55
Gzprm neft 121.67 0.67 160.62 111.46 7.04 2.70 49992.54 RELX 1679 -8.00 1728 1273 1.94 30.09 -
ChinaMob 82.70 -0.05 98.00 80.00 3.35 12.91 216791.14 Citic Ltd 11.84 -0.04 12.70 10.66 2.85 8.33 44096.18 ExpScripts 62.83 -0.85 77.50 57.80 - 10.81 36284.52 TexasInstr 82.41 0.19 84.65 66.30 2.33 20.17 81589.08
Lukoil 2944.5 35.50 3582 2601 6.89 8.55 43468.81 RioTinto 3690.5 12.50 3784.5 2253.5 3.22 17.86 67456.48
ChinaPcIns 36.00 - 39.10 26.35 3.38 22.43 12791.27 Citic Secs 17.34 0.02 18.46 15.36 2.37 17.54 5057.87 ExxonMb 79.49 0.24 93.22 76.05 4.00 31.22 336807.54 TheTrvelers 122.82 0.26 130.37 103.45 2.27 12.01 33891.81
MmcNrlskNckl 9842 175.00 11199 7677 7.33 17.56 27031.75 RollsRoyce 900.00 -2.00 994.50 635.00 0.51 -24.13 21971.83
ChMinsheng 7.77 -0.01 9.48 7.33 4.23 4.96 6897.32 CK Hutchison 100.40 -0.60 108.90 87.00 2.73 11.15 49586.26 Facebook 172.54 -0.97 175.49 113.55 - 37.79 408971.35 ThrmoFshr 193.46 -0.11 194.30 139.07 0.33 33.21 75472.52
Novatek 602.80 2.70 800.70 590.20 2.29 10.76 31767.17 RylDShlA 2135.5 -9.00 2295.5 1791 6.78 28.31 126832.26
ChMrchSecs RMB 20.70 1.01 21.15 15.57 0.73 23.98 15537.77 CNOOC 9.23 -0.04 10.88 8.45 3.87 14.53 52759.45 Fedex 216.12 3.72 219.99 158.20 0.76 19.00 57976.19 TimeWrnr 100.88 0.31 103.34 74.27 1.69 18.01 78464.76
Rosneft 314.75 0.55 425.70 291.00 1.89 20.87 57897.1 Shire 4074.5 -5.50 5377 3603.5 0.57 81.42 49069.18
Chna Utd Coms RMB 7.58 0.04 9.29 4.06 - 336.37 24593.99 HangSeng 183.50 1.40 183.50 136.20 3.36 20.44 44914.84 FordMtr 11.58 0.17 13.27 10.47 5.29 11.93 9245.79 TJX Cos 73.87 1.03 80.92 66.66 1.49 20.79 46998.4
Sberbank 189.05 -1.45 192.31 136.20 1.06 7.46 70831.74 StandCh 753.90 4.30 860.00 599.10 - 1631.82 32916.6
ChShenEgy 19.40 0.10 21.10 14.06 2.78 8.82 8441.13 HK Exc&Clr 212.80 -0.60 233.20 177.60 2.55 40.15 33553.84 Franklin 42.07 0.34 47.65 33.02 1.89 13.42 23462.5 T-MobileUS 63.24 0.21 68.88 44.35 - 26.35 52555.51
Surgutneftegas 28.04 0.02 32.87 24.09 - 10.04 17386.77 Tesco 185.05 -1.10 219.40 160.65 - 228.46 20101.34
ChShpbldng RMB 6.21 - 8.14 5.87 - 210.11 17454.05 MTR 46.45 -0.05 50.00 37.20 2.47 24.68 35695.3 GenDyn 199.18 -1.15 205.90 148.76 1.66 18.28 59646.8 UnionPac 108.67 0.57 115.15 87.06 2.26 19.58 86979.11
Saudi Arabia (SR) Vodafone 214.55 -1.65 233.90 186.50 5.61 -32.04 75783.16
ChStConEng RMB 9.71 - 11.45 6.06 2.07 9.95 44189.6 SandsCh 37.20 -0.10 39.30 31.25 5.49 27.86 38448.04 GenElectric 23.77 0.05 32.38 23.58 4.20 20.93 205756.09 UPS B 117.10 0.90 120.44 102.12 2.87 28.16 51718.85
AlRajhiBnk 67.80 0.60 71.70 48.60 3.37 12.82 29377.64 WPP 1385 -10.00 1928.07 1375 4.09 10.21 23418.06
ChUncHK 11.28 -0.08 13.24 8.40 - - 34583.18 SHK Props 134.80 -0.80 135.90 96.50 3.09 9.34 49986.05 GenMills 55.41 -0.37 66.53 52.76 3.56 19.46 31767.37 USBancorp 51.78 0.90 56.61 42.17 2.21 15.32 86616.04
Tencent 333.00 2.20 341.00 179.60 0.19 49.97 404955.05 Natnlcombnk 54.40 0.90 58.00 32.00 1.16 11.00 29011.02 United States of America ($)
CNNC Intl RMB 7.61 0.01 8.11 6.59 1.16 26.48 4926.99 GenMotors 37.87 0.52 38.55 30.13 4.10 5.82 54975.17 UtdHlthcre 198.21 -1.37 200.44 132.39 1.34 23.92 191641.31
SaudiBasic 100.00 0.40 105.40 76.00 5.07 17.99 79993.59 21stC Fox A 25.72 -0.34 32.60 23.33 1.49 14.78 27071.25
CSR 7.00 -0.03 7.99 6.66 3.53 17.00 3917.31 India (Rs) GileadSci 84.03 -0.49 86.27 63.76 2.41 8.93 109741.42 UtdTech 110.01 0.37 124.79 97.62 2.55 16.08 87872.99
SaudiTelec 75.30 -0.20 78.90 51.00 5.39 16.78 40156.78 3M 209.85 0.29 214.57 163.85 2.22 23.43 125231.59
Daqin RMB 8.96 0.06 9.45 6.16 2.75 12.30 20390.1 Bhartiartl 405.20 - 438.15 283.05 0.34 51.15 25294.79 GoldmSchs 226.93 5.87 255.15 157.77 1.22 11.69 87793.57 ValeroEngy 70.28 0.47 71.40 51.17 3.77 14.49 31040.14
Singapore (S$) AbbottLb 52.17 -0.28 52.60 37.38 2.13 55.25 90642.42
Gree Elec Apl 0.06 - 0.25 0.04 - -1.88 106.50 HDFC Bk 1835.2 - 1839.9 1158 0.61 31.84 73981.28 Halliburton 41.46 0.83 58.78 38.18 1.77-262.83 36136.35 Verizon 46.79 0.49 54.83 42.80 5.21 14.75 190884.07
DBS 20.49 0.06 22.25 14.80 3.00 12.07 38874.08 Abbvie 87.69 0.69 87.97 55.06 2.84 21.41 139786.16
GuosenSec RMB 14.20 0.06 18.80 12.39 4.25 23.93 4771.2 Hind Unilevr 1249.8 - 1255 781.95 1.38 57.61 42245.26 HCA Hold 78.32 -0.03 91.03 67.00 - 10.31 28293.08 VertexPharm 156.56 -1.25 167.86 71.46 - 210.80 39471.73
JardnMt US$ 66.39 0.36 67.50 52.90 2.31 6.79 48005.52 Accenture 136.34 0.11 136.68 108.83 1.82 23.52 90548.04
HaitongSecs 12.86 0.08 15.24 12.28 4.27 14.45 5613.62 HsngDevFin 1798.1 - 1802 1183.15 0.96 26.20 44744.02 Hew-Pack 19.36 0.17 19.78 13.77 2.71 13.84 32589.37 VF Cp 62.93 -0.43 64.51 48.05 2.65 22.82 24772.13
JardnStr US$ 44.95 0.70 44.95 32.08 0.67 6.61 49745.32 Adobe 155.71 -1.16 157.89 97.87 - 52.79 76828.2
Hngzh HikVDT RMB 32.74 0.14 40.16 22.61 1.20 37.67 36372.15 ICICI Bk 291.20 - 314.45 217.36 1.63 17.56 29174.66 HiltonWwde 65.75 -0.20 67.79 46.09 1.12 70.75 21316.97 Viacom 27.26 0.07 46.72 26.65 3.89 8.51 9615.1
OCBC 11.02 0.10 11.49 8.33 3.26 12.38 34278.45 AEP 73.36 -1.19 74.59 57.89 3.33 48.35 36081.41
Hunng Pwr 5.14 0.02 6.25 4.60 6.64 25.70 3093.13 Infosys 884.05 - 1082.7 860.00 2.95 14.29 31711.46 HomeDep 159.75 1.38 160.86 119.20 1.99 22.81 188314.34 Visa Inc 106.19 0.04 106.64 75.17 0.61 38.65 194260.8
SingTel 3.66 -0.03 4.10 3.59 4.89 14.97 44365.51 Aetna 162.93 -0.28 164.52 104.59 0.65 47.69 54107.86
IM Baotou Stl RMB 2.90 0.06 3.17 1.96 - 157.83 9783.26 ITC 277.65 - 354.80 222.00 1.63 31.40 52812.96 Honywell 138.44 -0.56 140.21 105.25 1.93 20.55 43031.97 Walgreen 83.81 1.53 88.00 75.18 1.84 20.59 89684.79
UOB 23.32 -0.06 24.60 17.98 3.07 12.21 28727.78 Aflac 82.15 -0.32 83.39 66.50 2.11 12.17 32468.47
In&CmBkCh 5.86 -0.01 6.07 4.43 4.83 6.33 65116.36 L&T 1230.25 - 1234 863.40 1.00 27.44 26905.53 HumanaInc 256.03 -1.18 259.76 163.50 0.53 24.42 37000.74 WalMartSto 79.37 0.29 81.99 65.28 2.60 17.59 239245.72
AirProd 149.50 0.32 151.42 129.00 2.47 23.53 32584.63
IndstrlBk RMB 17.44 - 18.52 14.99 3.52 6.13 50861.36 OilNatGas 162.30 - 211.80 155.20 4.78 9.71 32526.6 South Africa (R) IBM 146.10 1.24 182.79 139.13 4.07 11.33 136157.69 WellsFargo 51.56 0.90 59.99 43.55 3.13 12.15 255940.99
Alexion 141.51 -1.42 149.34 96.18 - 59.98 31582.94
Kweichow RMB 484.91 6.59 501.10 287.56 1.38 32.29 93242.35 RelianceIn 823.75 - 832.50 465.00 - 15.10 41836.86 Firstrand 54.75 -0.25 57.60 43.38 4.22 12.52 23581.5 IllinoisTool 142.40 0.88 150.29 111.50 1.86 22.56 49005.16 Williams Cos 30.38 0.13 32.69 27.35 4.68-954.49 25112.83
Allegran 230.83 -1.56 256.80 184.50 0.32 -20.51 77166.23
Midea 1.67 0.02 1.87 1.50 6.48 21.75 45.98 SBI NewA 273.45 - 315.30 235.00 0.99 842.61 36861.79 MTN Grp 122.22 0.86 134.94 104.76 9.04 -83.00 17682.72 Illumina 211.41 -0.83 213.59 119.37 - 40.25 30865.86 Yahoo - - - - - - -
Allstate 91.67 0.44 95.25 66.55 1.57 14.67 33125.83
New Ch Life Ins 47.15 -0.80 56.10 32.20 - 24.20 6242.36 SunPhrmInds 483.40 - 796.20 432.70 0.22 15.93 18112.44 Naspers N 2985 32.35 3036.53 1925.98 0.17 32.24 100452.37 Intcntl Exch 66.04 0.33 67.48 52.27 1.14 24.03 38864.05 Yum!Brnds 76.98 -0.82 78.14 59.57 2.38 26.77 26540.65
Alphabet 943.10 -0.19 1008.61 743.59 - 30.07 281086.17
PetroChina 5.02 0.02 6.38 4.72 1.11 27.82 13560.26 Tata Cons 2488.45 - 2708.95 2051.9 2.20 18.67 74391 South Korea (KRW) Intel 36.16 0.39 38.45 33.23 2.97 13.51 169931.82 Venezuela (VEF)
Altria 62.16 -0.33 77.79 60.01 4.01 8.05 119258.16
PingAnIns 62.00 0.20 64.90 38.00 0.38 - 59116.48 Indonesia (Rp) HyundMobis 219000 2000 293500 212000 1.61 7.79 18890.83 Intuit 140.89 -1.75 143.81 103.22 0.97 37.64 35923.22 Bco de Vnzla 1499.99 249.99 1499.99 95.00 - - 1637.53
Amazon 980.86 2.90 1083.31 710.10 - 174.10 471185.05
PngAnBnk RMB 11.54 0.16 11.94 8.54 1.11 8.96 29884.61 Bk Cent Asia 19025 125.00 19200 13950 0.97 21.18 35186.26 KoreaElePwr 41050 100.00 60500 40050 5.16 4.26 23351.91 John&John 132.44 -0.77 137.08 109.32 2.56 20.98 355468.92 Bco Provncl 61999 1999 61999 2200 - 55.23 2001.07
AmerAir 45.75 -0.11 54.48 33.90 0.93 10.44 22280.67
Pwr Cons Corp RMB 8.16 -0.01 9.00 5.96 0.93 17.28 11990.98 SK Hynix 74700 900.00 74900 37000 0.81 7.94 48189.43 JohnsonCn 39.88 0.48 46.17 36.74 2.66 -21.94 37184.06 Mrcntl Srvcs 102000 - 105000 4880 0.01 257.48 1858.78
Israel (ILS) AmerExpr 86.46 0.77 87.78 59.50 1.51 17.24 28904.11
SaicMtr RMB 29.87 0.46 32.84 21.02 4.58 10.23 50411.54 SmsungEl 2480000-10000.00 2566000 1456000 1.53 13.22 285180.21 JPMrgnCh 90.99 1.20 95.22 65.11 2.26 13.21 320190.57
TevaPha 54.49 -1.11 199.00 54.31 9.25 735.67 15744.65 AmerIntGrp 60.99 0.22 67.47 57.35 2.14 497.63 55098.8
ShenwanHong 0.23 - 0.35 0.17 - -3.71 256.48 Spain () Kimb-Clark 120.09 0.49 136.21 111.30 3.21 19.63 42428.14 Closing prices and highs & lows are in traded currency (with variations for that
Italy () AmerTower 144.44 -1.74 148.71 99.72 1.69 56.57 61990.39
ShgPdgBk RMB 13.04 0.05 14.02 11.16 1.16 7.09 56096.52 KinderM 19.46 0.02 23.36 18.23 2.62 61.46 43458.6 country indicated by stock), market capitalisation is in USD. Highs & lows are
Enel 5.20 -0.05 5.27 3.57 1.69 21.32 63133.15 BBVA 7.40 0.03 7.93 5.10 3.83 13.32 58988.99 Amgen 188.14 1.65 188.85 133.64 2.34 16.84 137281.01
Sinopec Corp 6.05 0.03 6.57 5.18 1.55 11.28 19761.69 Kraft Heinz 82.29 -0.27 97.77 79.69 3.06 27.60 100243.79 based on intraday trading over a rolling 52 week period.
ENI 13.55 0.04 15.92 12.18 5.75 66.21 58862.54 BcoSantdr 5.57 0.05 6.25 3.69 3.61 12.43 106837.44 Anadarko 42.10 1.13 73.33 39.96 0.49 -10.71 23591.08
Sinopec Oil RMB 3.20 - 4.45 3.02 - -3.32 1380.5 Kroger 21.68 0.34 36.44 20.41 2.20 12.74 19454.47 ex-dividend
Generali 15.54 0.11 16.08 10.50 4.39 12.43 29011.57 CaixaBnk 4.27 0.03 4.51 2.09 2.44 22.45 30558.57 Anthem 189.63 -6.33 198.98 114.85 1.45 17.34 49792.62
Denmark (kr) Iberdrola 6.89 -0.04 7.30 5.53 3.98 17.50 52000.29 L Brands 39.76 1.86 75.94 35.00 6.07 11.62 11285.76 ex-capital redistribution
IntSPaolo 2.88 0.03 2.95 1.85 6.02 8.40 54636.65 Aon Cp 142.86 0.20 144.81 107.19 0.97 36.52 36334.63
DanskeBk 243.40 3.80 259.50 186.50 3.51 11.90 36633.87 Inditex 32.05 0.60 36.90 29.83 1.46 33.01 119401.24 LasVegasSd 63.78 -0.50 66.22 51.35 4.81 26.14 50470.57 # price at time of suspension
Luxottica 49.61 -0.32 56.90 39.92 1.70 29.58 28758.8 Apple 161.03 -0.47 164.94 102.53 1.48 17.86 831757.18
MollerMrsk 12470 20.00 14260 8750 1.10 -18.00 20155.23 Repsol 14.86 0.08 15.22 11.51 4.01 13.93 27121.7 LibertyGbl 32.12 0.05 37.69 28.17 - 13.64 7241.54
Unicred 17.72 0.54 30.80 11.93 3.22 -1.86 47143.47 ArcherDan 43.07 0.28 47.88 40.22 3.01 17.20 24228.92
NovoB 300.90 -0.70 311.60 218.20 2.40 20.69 94874.29 Telefonica 9.10 -0.02 10.63 7.61 5.78 19.06 54817.41 Lilly (E) 82.40 -0.23 86.72 64.18 2.64 37.52 90717.42
AT&T 36.21 0.47 43.03 35.10 5.69 16.73 222299.93

FT 500: TOP 20 FT 500: BOTTOM 20 BONDS: HIGH YIELD & EMERGING MARKET BONDS: GLOBAL INVESTMENT GRADE
Close Prev Day Week Month Close Prev Day Week Month Day's Mth's Spread Day's Mth's Spread
price price change change % change change % change % price price change change % change change % change % Red Ratings Bid Bid chge chge vs Red Ratings Bid Bid chge chge vs
Abbvie 87.69 87.00 0.69 0.79 12.44 16.5 23.97 RelianceIn 823.75 823.75 0.00 0.00 -789.60 -48.9 6.55 Sep 12 date Coupon S* M* F* price yield yield yield US Sep 12 date Coupon S* M* F* price yield yield yield US
China Vanke 26.65 26.25 0.40 1.52 3.60 15.6 20.59 Regen Pharm 442.19 445.11 -2.93 -0.66 -52.18 -10.6 -5.06 High Yield US$ US$
Perrigo 89.69 85.07 4.62 5.43 11.63 14.9 13.86 Gree Elec Apl 0.06 0.06 0.00 0.00 -0.01 -9.0 -14.08 Navient Corporation 03/20 8.00 B+ Ba3 BB 110.58 3.62 0.01 -0.25 2.28 FleetBoston Financial Corp. 01/28 6.88 BBB Baa3 A- 121.10 4.37 0.02 -0.03 2.20
SK Hynix 74700.00 73800.00 900.00 1.22 6600.00 9.7 21.66 HyundMobis 219000.00 217000.00 2000.00 0.92 -19500.00 -8.2 -14.12 High Yield Euro SunTrust Banks, Inc. 01/28 6.00 BBB+ Baa1 A- 114.04 4.35 0.00 -0.28 2.18
ValeantPh 17.75 17.21 0.54 3.14 1.50 9.2 1.02 CBS 58.77 58.00 0.77 1.33 -4.87 -7.7 -11.86 Kazkommerts Intl BV 02/17 6.88 B Caa1 B 97.50 - 0.00 0.00 - NationsBank Corp. 03/28 6.80 BBB Baa3 A- 123.43 4.08 0.02 -0.12 1.91
L&T 1230.25 1230.25 0.00 0.00 99.60 8.8 8.68 Comcast 37.97 37.83 0.14 0.37 -2.70 -6.6 -7.58 GTE Corporation 04/28 6.94 BBB+ Baa2 A- 125.70 3.98 0.02 -0.12 1.82
L Brands 39.76 37.90 1.86 4.91 3.08 8.4 -2.72 Chna Utd Coms 7.58 7.54 0.04 0.53 -0.47 -5.8 1.47 Emerging US$ Dover Corporation 06/28 6.65 A- A3 A- 123.82 3.94 0.02 -0.05 1.78
SmsungEl 2480000.00 2490000.00 -10000.00 -0.40 178000.00 7.7 11.16 LibertyGbl 32.12 32.07 0.05 0.14 -1.70 -5.0 -5.54 Mexico 09/16 11.40 BBB+ A3 BBB+ 106.80 1.49 0.03 0.01 0.44 United Utilities PLC 08/28 6.88 BBB+ Baa1 A- 122.96 4.27 0.02 -0.48 2.10
AstraZen 4925.00 4890.00 35.00 0.72 351.50 7.7 12.06 Hngzh HikVDT 32.74 32.60 0.14 0.43 -1.63 -4.7 12.01 Peru 03/19 7.13 BBB+ A3 BBB+ 108.75 1.47 -0.01 -0.01 0.14
Peru 03/19 7.13 BBB+ A3 BBB+ 114.01 2.60 0.00 0.20 0.84 Euro
Deut Bank 14.20 13.71 0.49 3.57 0.99 7.5 7.45 AscBrFd 3142.00 3103.00 39.00 1.26 -147.00 -4.5 -0.50 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 102.80 2.30 0.02 0.12 -
MasterCard 141.95 141.99 -0.04 -0.03 9.29 7.0 10.45 Charter Comms 375.96 381.01 -5.06 -1.33 -17.37 -4.4 -4.73 Brazil 01/20 12.75 BB Ba2 BB 123.35 2.41 -0.01 -0.94 1.07
Brazil 01/22 12.50 BB Ba2 BB 113.00 8.80 0.06 -0.05 7.05 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 103.08 2.31 0.03 0.13 -
Panasonic 1538.00 1481.50 56.50 3.81 100.50 7.0 4.24 Disney 97.49 97.09 0.40 0.41 -4.12 -4.1 -4.36 Citigroup Inc. 02/30 4.25 BBB Baa3 A- 117.22 2.28 0.03 0.01 -
Chubb 146.21 145.88 0.33 0.23 9.36 6.8 -0.10 GenElectric 23.77 23.72 0.05 0.19 -1.00 -4.0 -5.81 Poland 03/22 5.00 BBB+ A2 A- 109.85 2.67 0.00 -0.33 0.93
Turkey 03/23 3.25 - Ba1 BB+ 85.33 6.45 0.01 -0.16 4.70 HBOS plc 03/30 4.50 BBB- Baa2 A- 117.96 2.37 0.03 -0.02 -
MylanNV 33.64 33.04 0.60 1.82 2.05 6.5 8.78 Anthem 189.63 195.95 -6.33 -3.23 -7.56 -3.8 0.08
Colombia 03/23 2.63 BBB Baa2 BBB 98.71 2.90 0.02 -0.16 1.15 Yen
CSX 52.16 52.07 0.09 0.17 3.17 6.5 3.68 New Ch Life Ins 47.15 47.95 -0.80 -1.67 -1.75 -3.6 -4.84
Turkey 03/27 6.00 - Ba1 BB+ 109.59 4.79 0.02 -0.21 2.63 Enagas Transportes, S.A.U. 09/39 3.23 A- Baa2 A- 106.57 2.85 0.00 0.01 -
Ambev 21.10 20.26 0.84 4.15 1.28 6.5 8.09 KoreaElePwr 41050.00 40950.00 100.00 0.24 -1500.00 -3.5 -6.39
Amgen 188.14 186.49 1.65 0.88 11.40 6.5 10.92 SunPhrmInds 483.40 483.40 0.00 0.00 -17.30 -3.5 7.42 Russia 06/28 12.75 BB+ Ba1 BBB- 178.04 3.88 0.02 -0.18 1.71 Sterling
TheTrvelers 122.82 122.56 0.26 0.21 7.39 6.4 -4.13 Kroger 21.68 21.34 0.34 1.59 -0.75 -3.3 -7.73 Emerging Euro Electricite de France (EDF) 05/28 6.25 A- A3 A- 134.79 2.50 0.04 -0.02 0.34
CredSuisse 14.78 14.31 0.47 3.28 0.86 6.2 2.73 21stC Fox A 25.72 26.06 -0.34 -1.30 -0.86 -3.2 -8.79 Brazil 02/15 7.38 BBB- Baa2 BBB 111.75 0.73 0.00 0.00 0.09 HSBC Holdings plc 08/28 2.63 A A1 AA- 101.50 2.41 0.04 0.08 0.25
Engie SA 14.83 14.93 -0.10 -0.67 0.85 6.1 9.33 Ch Rail Cons 9.99 10.02 -0.03 -0.30 -0.33 -3.2 -0.50 Mexico 02/20 5.50 BBB+ A3 BBB+ 112.30 0.40 -0.01 -0.25 -0.94 Data provided by SIX Financial Information. US $ denominated bonds NY close; all other London close. *S - Standard & Poors, M -
Mexico 04/23 2.75 BBB+ A3 BBB+ 109.03 1.08 0.02 -0.16 -0.67 Moodys, F - Fitch.
Based on the FT Global 500 companies in local currency Based on the FT Global 500 companies in local currency
Bulgaria 03/28 3.00 BB+ Baa2 BBB- 111.99 1.74 0.03 -0.10 -0.43
Data provided by SIX Financial Information & Tullett Prebon Information. US $ denominated bonds NY close; all other
London close. *S - Standard & Poors, M - Moodys, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Sep 12 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Sep 12 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 1.00-1.25 15-06-2017 1.00 1.00-1.25 0.25-0.50 Index change change change 1 month 1 year VIX 10.72 -0.01 10.73 23.01 8.84 Sep 12 Price Yield Day Week Month Year High Low m
US Prime 4.25 15-06-2017 3.75 4.25 3.50 Markit IBoxx VXD 9.90 0.27 9.63 23.23 3.59 - - - - - - - - -
US Discount 0.75 15-06-2017 0.75 1.75 1.00 ABF Pan-Asia unhedged 188.16 -0.45 1.31 8.63 2.20 0.08 VXN 13.91 -0.16 14.07 23.35 9.75 Tr 5pc '18 102.32 0.20 33.33 66.67 17.65 33.33 107.18 102.32 35.24
Euro Repo 0.00 16-03-2016 0.05 0.00 0.00 Corporates( ) 346.11 -0.32 -0.01 4.85 0.26 2.48 VDAX - - - - - Tr 4.5pc '19 106.28 0.25 38.89 66.67 31.58 127.27 110.96 106.28 36.35
UK Repo 0.25 04-08-2016 0.25 0.25 0.25 Corporates($) 277.75 -0.08 0.19 5.50 0.19 5.50 CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 111.09 0.27 42.11 107.69 58.82 68.75 116.17 111.09 33.31
Japan O'night Call 0.00-0.00 01-02-2016 0.00 0.00--0.10 0.00--0.10 Corporates() 225.88 0.00 0.13 2.08 0.16 0.90 Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 103.72 0.38 26.67 52.00 26.67 22.58 105.71 103.47 32.46
Switzerland Libor Target 0.00-0.25 15-01-2015 0.00-0.75 -1.25--0.25 -1.25--0.25 Eurozone Sov() 233.10 -0.07 0.17 0.18 0.18 -1.84 Tr 4pc '22 115.74 0.45 28.57 40.63 25.00 32.35 120.65 115.73 37.95
Gilts( ) 325.75 -0.51 0.03 2.73 0.37 -0.71 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 130.15 0.84 15.07 18.31 9.09 15.07 137.09 129.09 35.08
INTEREST RATES: MARKET Global Inflation-Lkd 269.02 0.23 1.90 8.84 3.58 2.40 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 100.48 1.20 9.09 11.11 4.35 25.00 137.34 98.71 13.04
Over Change One Three Six One Markit iBoxx Non-Gilts 340.72 -0.31 0.01 4.40 0.29 2.12 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 136.12 1.51 7.86 7.09 3.42 21.77 146.35 131.34 35.44
Sep 12 (Libor: Sep 11) night Day Week Month month month month year Overall ($) 240.97 -0.03 0.31 4.34 0.31 4.34 Australia 10/19 2.75 101.79 1.88 0.00 0.02 0.05 0.30 Tr 4.25pc '36 140.62 1.68 6.33 5.66 3.07 20.86 152.39 134.98 29.76
US$ Libor 1.17778 0.001 0.001 0.000 1.23611 1.31667 1.44933 1.69900 Overall( ) 327.10 -0.45 0.03 3.21 0.34 0.11 11/28 2.75 100.33 2.72 0.01 0.03 -0.03 0.00 Tr 4.5pc '42 154.63 1.80 6.51 5.88 2.86 20.81 169.72 147.41 26.64
Euro Libor -0.42900 -0.005 0.000 -0.005 -0.40357 -0.37571 -0.30429 -0.21529 Overall() 229.34 -0.05 0.15 0.58 0.20 -1.17 Austria 10/19 0.25 101.79 -0.62 0.00 0.00 0.00 0.00 Tr 3.75pc '52 153.05 1.72 6.17 6.17 2.38 21.13 170.53 143.66 23.59
Libor 0.22375 0.000 0.001 -0.001 0.25106 0.28669 0.40538 0.59963 Treasuries ($) 227.20 -0.01 0.37 3.69 0.37 3.69 04/27 0.50 99.06 0.56 0.03 -0.01 -0.03 0.00 Tr 4pc '60 171.47 1.65 6.45 6.45 2.48 20.44 192.79 160.01 23.21
Swiss Fr Libor 0.001 -0.78500 -0.72600 -0.64940 -0.50560 FTSE Belgium 09/19 3.00 107.32 -0.56 0.00 0.00 0.00 0.00 Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per 100 nominal of stock.
Yen Libor 0.005 -0.04271 -0.02707 0.00429 0.10686 Sterling Corporate () 117.61 -0.51 - - -0.65 -2.73 06/27 0.80 100.89 0.71 0.06 0.06 -0.03 0.00
Euro Euribor
Sterling CDs
-0.001
0.000
-0.37300
0.23000
-0.33100
0.27000
-0.27400
0.41500
-0.16800 Euro Corporate () 107.23 -0.17 - - -0.28 -2.92 Canada 11/19 1.25 99.33 1.57 0.00 0.19 0.00 0.00 GILTS: UK FTSE ACTUARIES INDICES
Euro Emerging Mkts () 766.22 1.18 - - -1.62 -13.04 06/28 2.00 98.94 2.11 0.03 0.18 0.14 0.00
US$ CDs 0.000 1.22000 1.29000 1.40000 Eurozone Govt Bond 111.94 -0.36 - - -0.40 -4.80 Denmark 11/20 0.25 102.35 -0.48 0.00 0.00 0.00 0.00 Price Indices Day's Total Return Return
Euro CDs 0.000 -0.43500 -0.39500 -0.32500 11/27 0.50 99.85 0.51 0.05 0.03 -0.04 0.00 Fixed Coupon Sep 12 chg % Return 1 month 1 year Yield
CREDIT INDICES Day's Week's Month's Series Series 1 Up to 5 Years 95.03 -0.23 2426.57 -0.24 -0.02 0.39
Short 7 Days One Three Six One Index change change change high low Finland 09/19 1.75 100.41 1.54 0.01 0.01 -0.02 0.35
09/27 0.50 99.23 0.53 0.03 0.00 0.00 0.00 2 5 - 10 Years 183.65 -0.70 3498.19 -0.49 -0.09 0.89
Sep 12 term notice month month month year Markit iTraxx 3 10 - 15 Years 216.62 -1.05 4246.54 -0.60 -0.86 1.35
Euro -0.50 -0.35 -0.50 -0.35 -0.51 -0.36 -0.47 -0.32 -0.40 -0.25 -0.39 -0.14 Crossover 5Y 369.26 -12.07 35.21 40.34 390.04 288.69 France 11/20 0.25 102.21 -0.44 0.00 0.00 0.00 0.00
4 5 - 15 Years 191.64 -0.86 3680.49 -0.56 -0.42 1.16
Sterling 0.18 0.28 0.18 0.28 0.22 0.32 0.34 0.49 0.45 0.60 Europe 5Y 85.00 -1.98 7.21 7.01 90.43 67.59 10/22 2.25 112.27 -0.14 0.00 0.00 0.00 0.00
5 Over 15 Years 336.43 -2.02 5127.36 -1.00 -3.93 1.72
Swiss Franc - - - - - - - - - - - - Japan 5Y 70.05 -2.51 2.21 -0.87 93.03 64.22 05/27 1.00 102.83 0.70 0.07 0.05 -0.03 0.00
7 All stocks 180.79 -1.14 3572.84 -0.64 -1.76 1.52
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 111.86 -3.89 10.86 12.50 121.66 80.36 Germany 10/19 0.25 102.08 -0.74 0.00 0.00 0.00 0.00
US Dollar 1.20 1.30 1.17 1.27 1.24 1.34 1.29 1.39 1.45 1.55 1.70 1.80 08/23 2.00 113.14 -0.20 0.00 0.00 0.00 0.00 Day's Month Year's Total Return Return
Markit CDX 08/27 0.50 100.95 0.40 0.06 0.06 -0.03 0.00
Japanese Yen -0.20 0.00 -0.15 0.05 -0.25 0.05 -0.20 0.10 -0.15 0.15 -0.10 0.20 Index Linked Sep 12 chg % chg % chg % Return 1 month 1 year
Emerging Markets 5Y 198.09 -3.26 -11.46 -11.68 218.09 197.56 08/46 2.50 131.34 1.21 0.07 0.09 0.03 0.59
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: 1 Up to 5 Years 315.27 -0.06 0.25 0.52 2475.91 0.25 1.97
Nth Amer High Yld 5Y 328.29 0.17 -17.13 -10.17 353.95 327.35 Greece 04/19 4.75 103.06 2.74 0.00 -0.16 -0.47 -6.26
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 2 Over 5 years 711.77 -2.59 0.48 0.13 5304.06 0.48 0.66
Nth Amer Inv Grade 5Y 63.53 0.28 -4.09 -3.35 69.24 62.53 02/28 3.00 85.34 5.76 -0.04 -0.11 -0.23 -2.50
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 3 5-15 years 482.36 -0.81 0.28 1.10 3737.16 0.28 2.16
Ireland 10/19 5.90 113.47 -0.48 0.00 0.00 0.00 0.00 4 Over 15 years 911.40 -3.17 0.54 -0.20 6643.14 0.54 0.15
05/26 1.00 102.29 0.73 0.07 0.08 -0.03 0.22 5 All stocks 644.10 -2.40 0.46 0.17 4870.67 0.46 0.77
Italy 10/19 0.05 100.27 -0.08 0.00 0.00 0.00 0.00
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED 11/21 0.35 99.41 0.49 0.04 0.04 -0.03 0.00 Yield Indices Sep 12 Sep 11 Yr ago Sep 12 Sep 11 Yr ago
06/27 2.20 101.66 2.02 0.05 0.03 -0.03 0.00 5 Yrs 0.50 0.40 0.28 20 Yrs 1.81 1.71 1.50
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
03/47 2.70 90.61 3.22 0.05 0.05 0.03 0.86 10 Yrs 1.19 1.08 0.89 45 Yrs 1.63 1.53 1.38
Crude Oil Sep 48.33 0.28 Corn Dec 356.50 -1.50 Sep 11 Sep 11 Prev return stock Market stocks
Japan 08/19 0.10 100.46 -0.14 0.00 0.00 0.00 0.00 15 Yrs 1.63 1.53 1.32
Brent Crude Oil 54.16 0.38 Wheat Dec 436.50 1.75 Can 4.25%' 21 116.41 0.330 0.334 -0.48 5.18 72032.05 7
06/22 0.10 101.05 -0.12 0.00 0.00 0.00 0.00
RBOB Gasoline Sep 1.65 0.01 Soybeans Nov 959.25 -2.00 Fr 2.25%' 20 111.59 -1.664 -1.634 0.16 20.31 222122.56 15
06/27 0.10 100.93 0.00 0.00 0.00 -0.04 0.00 inflation 0% inflation 5%
Heating Oil Sep 1.61 0.00 Soybeans Meal Oct 300.40 -0.50 Swe 0.25%' 22 114.82 -1.911 -1.925 0.55 28.18 240734.55 8
06/47 0.80 99.52 0.82 0.01 0.01 -0.03 0.00 Real yield Sep 12 Dur yrs Previous Yr ago Sep 12 Dur yrs Previous Yr ago
Natural Gas Sep 2.98 0.04 Cocoa (ICE Liffe)X Dec 1477.00 1.00 UK 2.5%' 20 370.64 -2.812 -2.853 0.10 6.58 658332.27 27
Netherlands 01/20 0.25 102.14 -0.65 0.00 0.00 0.00 0.00 Up to 5 yrs -2.06 1.68 -2.47 -2.11 -3.06 1.68 -3.24 -2.60
Ethanol - - Cocoa (ICE US) Dec 1935.00 -1.00 UK 2.5%' 24 372.33 -2.241 -2.284 0.28 6.82 658332.27 27
07/27 0.75 102.19 0.52 0.06 0.05 -0.03 0.00 Over 5 yrs -1.61 24.27 -1.74 -1.69 -1.65 24.37 -1.76 -1.71
Uranium Sep 18.10 0.00 Coffee(Robusta)X Sep 1991.00 18.00 UK 2%' 35 274.61 -1.785 -1.828 0.56 9.08 658332.27 27
Carbon Emissions - - Coffee (Arabica) Dec 131.00 2.25 New Zealand 04/20 3.00 102.51 2.00 -0.01 0.02 -0.06 0.01 5-15 yrs -1.85 8.20 -2.03 -1.87 -2.01 8.21 -2.14 -1.98
US 0.625%' 21 103.31 -0.262 -0.262 0.29 35.84 1257983.89 38
White SugarX 370.40 -7.90 04/27 4.50 114.17 2.80 -0.02 -0.01 -0.11 0.34 Over 15 yrs -1.59 29.43 -1.72 -1.67 -1.61 29.48 -1.73 -1.68
Diesel - - US 3.625%' 28 133.21 0.378 -0.262 0.47 16.78 1257983.89 38
Sugar 11 14.22 -0.06 Norway 05/19 4.50 106.59 0.56 0.01 0.00 -0.05 -0.06 All stocks -1.61 22.54 -1.75 -1.69 -1.65 22.67 -1.77 -1.72
Unleaded (95R) - - Representative stocks from each major market Source: Merill Lynch Global Bond Indices Local currencies. Total market
Base Metals ( LME 3 Months) Cotton Oct 73.00 -1.19 02/27 1.75 102.42 1.47 0.02 -0.03 -0.12 0.00 See FTSE website for more details www.ftse.com/products/indices/gilts
value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
Aluminium 2129.00 7.50 Orange Juice Nov 154.40 2.95 Portugal 06/20 4.80 112.53 0.23 0.03 0.05 0.07 -1.29 2017 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSE
amount.
Aluminium Alloy 1785.00 -15.00 Palm Oil - - 04/27 4.13 110.62 2.84 0.05 0.03 0.02 0.00 Gilt Closing Prices information contained herein is proprietary to
Copper 6664.50 -82.50 Live Cattle Oct 107.40 0.00 BONDS: TEN YEAR GOVT SPREADS Spain 01/19 0.25 100.74 -0.29 0.00 0.00 0.00 0.00 Tradeweb; may not be copied or re-distributed; is not warranted to be
Lead 2278.50 0.00 Feeder Cattle Sep 148.70 0.78 10/27 1.45 98.67 1.59 0.03 0.06 0.01 0.00 accurate, complete or timely; and does not constitute investment advice.
Nickel 11725.00 -110.00 Lean Hogs Oct 61.70 0.00 Spread Spread Spread Spread Sweden 07/19 1.50 100.05 1.48 0.01 0.01 -0.03 0.00 Tradeweb is not responsible for any loss or damage that might result from the use of this information.
Tin 20700.00 -50.00 Bid vs vs Bid vs vs 11/26 1.00 103.76 0.58 0.06 -0.03 -0.10 0.27
% Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds Switzerland 07/20 2.25 108.60 -0.75 0.00 0.00 0.00 0.00 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Zinc 3072.00 -16.00
Precious Metals (PM London Fix) Sep 11 Month Year 06/27 3.25 133.25 -0.14 0.00 0.00 0.00 0.00 at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor guarantee
Australia 2.72 2.31 0.55 Italy 2.02 1.62 -0.15
Gold 1326.50 -7.70 S&P GSCI Spt 389.26 1.66 9.74 United Kingdom 07/20 2.00 104.77 0.32 0.06 0.13 0.07 0.07 that the information is reliable or complete. The FT does not accept responsibility and will not be liable for any
Austria 0.56 0.16 -1.61 Japan 0.00 -0.40 -2.16
Silver (US cents) 1775.00 -10.00 DJ UBS Spot 84.90 1.49 1.09 Belgium 0.71 0.30 -1.46 Netherlands 0.52 0.12 -1.65 07/23 0.75 100.30 0.70 0.08 0.12 0.00 0.00 loss arising from the reliance on or use of the listed information. For all queries e-mail
Platinum 994.00 -20.00 R/J CRB TR 184.16 1.39 0.39 Canada 2.11 1.71 -0.06 Norway 1.47 1.07 -0.69 07/27 1.25 100.56 1.19 0.09 0.12 0.06 0.00 ft.reader.enquiries@morningstar.com
Palladium 936.00 -6.00 M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark 0.51 0.11 -1.65 Portugal 2.84 2.44 0.67 07/47 1.50 93.34 1.79 0.09 0.11 0.05 0.00
Bulk Commodities UBS Bberg CMCI TR 14.27 2.64 - Finland 0.53 0.13 -1.64 Spain 1.59 1.19 -0.57 United States 08/19 1.25 99.84 1.33 0.02 0.04 0.00 0.00 Data provided by Morningstar | www.morningstar.co.uk
Iron Ore (Platts) 75.45 1.45 LEBA EUA Carbon 5.04 0.00 -13.55 France 0.70 0.30 -1.47 Switzerland -0.14 -0.54 -2.31 08/22 1.63 99.41 1.75 0.04 0.11 0.00 0.00
Iron Ore (The Steel Index) 74.20 0.60 LEBA CER Carbon 0.20 0.00 -48.72 Germany 0.40 0.00 -1.77 United Kingdom 1.19 0.79 -0.98 08/27 2.25 100.73 2.17 0.04 0.11 -0.11 0.00
GlobalCOAL RB Index 91.25 0.25 LEBA UK Power 1090.00 61.48 -56.69 Greece 5.76 5.36 3.59 United States 2.17 1.77 0.00 08/47 2.75 99.45 2.78 0.04 0.10 -0.07 0.00
Baltic Dry Index 1344.00 -11.00 Ireland 0.73 0.33 -1.44 Data provided by SIX Financial Information
Sources: NYMEX, ECX/ICE, CBOT, X ICE Liffe, ICE Futures, CME, LME/London Metal Exchange.* Latest prices, $ Data provided by SIX Financial Information
unless otherwise stated.
18 FINANCIAL TIMES Wednesday 13 September 2017

MARKETS & INVESTING

Currencies
Currencies

Betting on bitcoin becomes

worlds most crowded trade
Bitcoin, the cryptocurrency
that has exploded higher
this year, has overtaken
the also-buoyant Nasdaq
Composite as the worlds
most crowded trade,
according to a closely
watched survey released
yesterday.
Some 26 per cent of fund
managers polled by Bank
of America Merrill Lynch in
the first week of
September said betting
that bitcoin would rise is
the most crowded trade of
them all.
That puts it ahead of 22
per cent voting for the
Nasdaq and 21 per cent
pointing to an anti-dollar
wager. Nasdaq was pinned
at about 30 per cent in the
August survey.
Bitcoin has been
garnering more
mainstream appeal of late
and has been catching the
eye of risk-loving retail
traders.
It has surged from $968
to the dollar at the end of
2016 to above $5,000 last
month, according to
Coindesk data. It traded at
$4,352.58 yesterday.
Bitcoins price was
rocked towards the end of
the BoAML survey period
as the Chinese government
announced a ban on initial
coin offerings (ICOs) in its
latest attempt to crack
down on unregulated
financial risk.
The digital currency is
down from the $4,646 level
before China announced its
ICO ban last week
capping its worst weekly
losses in two months
confirming suspicions of
many market-watchers
who believe a correction is
long overdue for bitcoin
and other overheated
cryptocurrencies.
The Chinese werent the
first to warn of ICOs
potential problems, the
Securities and Exchange
Commission and
Singapores central bank
issued warnings to
investors but the Chinese
were the first to say they
will take action, wrote Ed
Yardeni, of Yardeni
Research, in his weekly
briefing to investors.
The price of bitcoin and
ethereum fell sharply on
the news because in order
to buy into an ICO,
investors had to first
exchange traditional
currency into bitcoin or
ethereum to make the
purchase, he added.
Without ICOs, a major
source of recent demand
for bitcoin and ethereum
disappears.
Notably, other crowded
trades in the surveys
recent history have not
ended too well.
What's the most crowded trade?
Sept 2017 Aug 2017
Long bitcoin
Long Nasdaq
Short US dollar
Long US/EU
corporate bonds
Long eurozone equities
Short government bonds
Long banks
Other
0 5 10 15 20 25 30 35
Source: BofA Merill Lynch global fund manager survey
The dollar was at the top
for much of the start of this
year, according to BofAML.
The currency has tumbled
10 per cent against six
major trading partners
since December 30.
Net 23 per cent of
investors now believe the
dollar is undervalued, the
highest level since
December 2014, while over
four-fifths say the bond
market is overvalued.
The survey also revealed
that fund managers now
consider the biggest tail
risk by some margin to be
the geopolitical problems
surrounding North Koreas
nuclear ambitions, with 34
per cent citing these fears.
A policy mistake by the
US Federal Reserve or
European Central Bank
(retreating from last
months leading concern
position down to 21 per
cent) and Chinese credit
tightening (15 per cent)
were regarded as the next
major worries.
US equities remain
particularly unloved by the
fund managers surveyed
the number who say
they are underweight
$5,000
Level bitcoin achieved
last month, up from
$968 at the end of
2016. It traded at
$4,352 yesterday
these risk assets relative to
those in emerging markets
and the eurozone hit a
10-year high this month.
Cash levels remain
elevated, suggesting
markets can remain in an
Icarus upside mode for risk
assets, said Michael
Hartnett, chief investment
strategist at BoAML.
Equity allocations to
emerging markets rose this
month but allocations to
Europe fell marginally,
although they remain well
above long-term averages.
Ronan Carr, European
equity strategist, said:
Overall, sentiment on the
eurozone is becoming less
euphoric with headwinds
from a strong euro and
investors earnings per
share expectations
showing less momentum.
The survey was
conducted across 214
panellists, with about
$629bn in total assets
under management. Adam
Samson, Thomas Hale and
Stephen Smith
0 Street Capital, a Palo Alto-based tech-
Sterling jumps as inflation hits 2.9%
Pounds move increases
probability of rate rise
before end of the year
MICHAEL HUNTER AND ROGER BLITZ
The pound jumped to its highest level
against the dollar in 12 months after
inflation data came in ahead of fore-
casts, raising expectations of a hawkish
stance from the Bank of England when
its Monetary Policy Committee meets
tomorrow.
Sterling rose 0.9 per cent to $1.3287
and by 1 per cent against the euro. The
pound was at one point worth 1.1131,
its highest level since August 3.
UK government bonds were sold as
investors priced in the greater likeli-
hood of a rate rise by the BoE. The two-
year gilt yield, which moves opposite to
Stockpickers bolster hedge funds reputation
Strategy shines as shares
break free of pattern that has
favoured passive investors
LINDSAY FORTADO
Stockpickers are showing signs of rescu-
ing the reputation and fortunes of
the hedge fund industry.
Nearly three-quarters of the way
through the year, hedge funds focused
on equities are outperforming nearly
every other strategy, buoying the
returns of the industry even as some
high-profile macro and commodities
funds struggle, according to people with
knowledge of recent performance.
The better showing comes as the US
stock market has broken free of the
tight correlations of recent years in
which sectors have generally moved up
and down together, a pattern that has
favoured passive investors over stock-
pickers.
The realised correlation of companies
that make up the S&P 500 is just under
20 per cent this year, down from 60 per
cent a year ago and one of the lowest
readings in more than a decade, accord-
ing to Morgan Stanley.
The easing in correlation between
both sectors and companies has
rewarded doyens of long/short strate-
gies, in which funds sell the shares of
companies they believe to be weak
while buying those with stronger pros-
pects of outperforming. Equity hedge
funds including Chris Hohns TCI, Luxor
Capital, Glenview Capital and Light
Street Capital are all up double-digits for
2017, making them some of the years
top performers.
Karim Leguel, the head of hedge fund
solutions for Emea at JPMorgan Asset
Management, says they are still bullish
on equity long-short funds given the
improving fundamentals and rising dis-
persion across stocks and sectors.
In broad terms, hedge funds focused
on US equities are up more than 8 per
cent this year. While lagging behind the
S&P 500s total return of 12.7 per cent
and the Nasdaq 100s gain of 24 per cent,
some funds have generated a double-
digit performance for 2017.
Among smaller equity funds, Light
focused fund that goes long and short
stocks and manages around $1.1bn, has
returns of 47 per cent. Another Califor-
nia-based long-short equity fund, the
$500m China-focused Yiheng Capital, is
up 51 per cent.
Many big-name equity shops are also
having strong years. TCI, one of the larg-
est activist funds in Europe with $16bn
under management, is up 25.6 per cent
to the end of August. One of its most
lucrative investments has been in
the bond price, jumped to as high as 0.29 likely to increase the cost of imports,
$1.3287 Beyond the currency effect there
per cent, its highest level in a month. other factors determine whether these seemed to be few underlying inflation-
Market expectations are for the MPC are passed on to consumers, such as Level reached ary pressures, he added, pointing to
by sterling against
to keep rates on hold, but the probabil- increasing commodity prices globally the dollar after a below-average labour costs growth,
ity of a rise before the end of the year and businesses protecting themselves 0.9 per cent rise sluggish productivity growth and sup-
increased to 30 per cent. against exchange rate volatility. pressed wages.
Shilen Shah, bond strategist at Despite the impact of sterling weak- Even so, said Roger Hallam at
Investec, said the BoE had been patient ness on inflation, said Kathleen Brooks 0.29 %
JPMorgan Asset Management, an infla-
with previous data pushing inflation of City Index, there was evidence that Yield on two-year tion rate trending above 2 per cent,
gilts the highest
above target, but added that some the consumer was coming under in a month coupled with falling unemployment,
reduction in the dovish bias and a move increasing pressure. increased the risks of a November hike
towards a more neutral or even a few If the BoE wont step in to ease the in rates.
hawkish comments is currently pressure on the consumer now, then In any normal time, the BoE would
expected by the market. when will it? Ms Brooks said. be hiking rates, said Mr Hallam. The
Inflation, as measured by the con- But Ben Brettell, senior economist at BoE would rather not hike rates because
sumer price index, rose to 2.9 per cent Hargreaves Lansdown, said inflation of uncertainty caused by Brexit it may
year on year in August, up from 2.6 per may now hit a peak. well feel its at risk of making a mistake if
cent the previous month, while core The effect of Brexit-induced sterling the economy slows next year.
inflation also rose from 2.4 per cent to weakness falls out of the year-on-year Robert Wood, UK economist at Bank
2.7 per cent. calculation. Indeed, its possible that 2.9 of America Merrill Lynch, expected the
The Office for National Statistics said per cent will be the highest we see in the balance on the MPC to remain at 7-2 in
although sterling depreciation was current cycle, said Mr Brettell. favour of keeping rates on hold.
Analysis. Equities
Buy signal: Safran, the French aerospace company. year, is down more than 10 per cent this of August. Paul Brewers Rubicon Global
investors are TCI led a fierce campaign to force Safran year. David Einhorns Greenlight Capital Fund, Andrew Laws Caxton Global, and
allocating to revise its offer for Zodiac Aerospace. has dropped about 2 per cent. Louis Bacons Moore Capital also saw
slightly more The largest London-based European As much as some equity and emerg- returns in some of their funds decline.
money to hedge long-short equity funds, Lansdowne ing markets funds have returned hefty For some of the funds that have per-
funds than they and Marshall Wace, are also having numbers, some big-name macro fund formed well, the high returns have given
are redeeming strong years. Lansdownes smaller managers have struggled, while system- them something of a comeback.
Ralph Orlowski/Reuters
funds European Equity, Princay and atic and commodities funds have also Och-Ziff, whose assets have fallen to
Energy Dynamics have all returned been lacklustre. $32bn from a peak of $48bn in July 2015,
close to 15 per cent. Marshall Waces Brevan Howard, one of the largest is still recovering from a $413m charge it
flagship Eureka fund has returned hedge funds in Europe, run by Alan paid last year for violating anti-corrup-
about 8.5 per cent. Howard, was down nearly 4 per cent in tion laws. Its returns will be a rare bright
Hedge funds, which had come under a its flagship fund at the end of July, while spot. The firms flagship Master Fund, a
barrage of criticism in recent years for Paul Tudor Joness Tudor Global was multi-strategy fund, is up 10 per cent to
charging hefty fees while underper- down about 2 per cent through the end the end of August while its smaller Asia
forming, saw investors pull billions of Master Fund is up nearly 20 per cent.
dollars last year, while flocking to pas- Aggregate returns for hedge For the equities fund Luxor Capital,
sive or private equity strategies instead. fund strategies their comeback began last year and has
The chorus of investors demanding continued this year as their investments
Per cent
fee reductions has started to subside as in a handful of food delivery service
performance has improved, and inves- 10 companies have turned a hefty profit.
tors are again trickling back to the strat- Overall, hedge funds across all strate-
egy, allocating slightly more money to 5 gies are up about 5.5 per cent this year,
hedge funds than they are redeeming. according to the data provider eVest-
Yet not all funds have capitalised on Equity 0 ment, just below the 5.7 per cent they
Commodities
the surge in equities that began with US Volatility/Options -5
returned through all of last year.
President Donald Trumps election, as Fixed income/credit While stockpickers have made a start
investors anticipated a business- FX/currency this year, the industrys overall perform-
friendly regime would allow share -10 ance will have to improve further to
prices to flourish. Crispin Odeys Euro- 2015 16 17 quell the criticism and entice investors
pean fund, which fell 50 per cent last Source: eVestment back.

Capital markets

Investors set aside concerns over Vision Fund to snap up SoftBank bonds
ROBERT SMITH
Investors in Europe and Asia yesterday
placed more than $20bn of orders for
SoftBanks latest bond sale, putting
aside concerns over the structure of the
Japanese companys Saudi Arabia-
backed Vision Fund to buy a piece of the
attractively priced debt.
SoftBank last week announced it was
looking to raise seven- and 10-year dol-
lar bonds alongside eight- and 12-year
euro bonds to refinance bank loans. The
company and its subsidiaries have more
than $125bn of interest-bearing debt
according to an investor presentation.
Several bond investors said that Soft-
Banks increasing focus on investments
in technology had made it harder to
analyse, particularly as its $93bn Vision
Fund, which has an unusual structure,
had been on a buying spree this year.
Everyone is asking the same ques-
tion: what am I investing in here? said
Mark Wade, head of industrials and util-
ities credit research at AllianzGI. Am I
investing in a companys operations
or am I providing unsecured financing
to fund equity contributions to the
Vision Fund?
One credit analyst at an asset man-
ager said that SoftBank had become a
bit of a black box because of the Vision
Fund. But its hard to construct a sce-
nario where SoftBank goes bust, partic-
ularly as their $90bn-plus stake in Ali-
baba gives them a get out of jail free
card, he added, noting that the new
bonds also offered a healthy premium to
SoftBanks outstanding notes.
The yield on the 10-year piece of the
new bonds was fixed at 5.125 per cent.
This is only little less than the 5.3 per
cent yield Tesla offered on a $1.8bn debt
raising last month, even though the US
electric carmaker is burning through
billions of dollars of cash a year and has
credit ratings in the single-B bracket.
While SoftBank is still below invest-
ment grade with Moodys and S&P, it
carries healthier Ba1 and BB+ ratings.
The domestic Japan Credit Rating
Agency pegs it far higher still at an
investment-grade A- level.
The scale of demand for yesterdays
bond issue was even more striking given
that US investors were unable to take
part in the debt sale.
The new bond deal fell under Regu-
lation S, a rule that in effect means it
cannot be sold to investors in the US.
It is more onerous for SoftBank to sell
bonds in the US as the size of its stakes in
listed companies such as Alibaba
mean it is classed as an investment com-
pany under US securities law.
SoftBanks Vision Fund is set to make
it even more focused on investments
rather than operations. The fund gets a
first look at any deal SoftBank does that
is more than $100m in size and several
bond investors also noted that the fund
has no concentration limits.
And while SoftBank is providing
$28bn of the funds capital with the
remaining $65bn coming from external
investors such as Saudi Arabia
and Apple the Vision Fund will be
fully consolidated on the companys bal-
ance sheet.
This is because its complex funding
structure means that the external inves-
tors are providing debt and equity to the
fund, whereas SoftBank is providing
only equity. This makes SoftBank the
majority equity holder in the Vision
Fund.
SoftBank declined to comment.
My view is that bond investors are
thoroughly unimpressed, but theyre
being sucked in by the price, said one
high-yield bond fund manager.
I find the whole structure of the
Vision Fund completely perplexing, but
as its my job to make money, we were in
the [order] book.
Wednesday 13 September 2017 FINANCIAL TIMES 19

MARKETS & INVESTING

Global overview
TRADING POST Markets update
Michael
Hunter
US equities hit record as concerns S&P 500 index
Change on day 0.23%

over Irma economic damage ease

Beware equities, especially cyclicals.
Thats the advice from Carmignac, the
French asset manager. The company
which has made the call for its
flagship 21bn Patrimoine fund has
done so because it has doubts on the
outlook for the global economy.
Just when the EU economy is finally
picking up, the US business cycle is
showing clear signs of fatigue, says
Didier Saint-Georges, managing
director and member of Carmignacs
investment committee.
The Markit US Manufacturing
Purchasing Managers Index has been
falling since the beginning of 2017.
While consumers have continued to
spend, they have done so by depleting
household savings and borrowing
money to the point that consumer
credit has hit an all-time high.
At the same time, hopes for support
from pro-growth policies at the White
House have been dashed on the rocks
of gridlock in Washington.
Meanwhile, the European recovery is
looking strong enough to spell the
beginning of the end of the European
Central Banks 60bn monthly
economic stimulus programme.
A return to normal bond yields a
change Mario Draghi wont be able to
postpone for much longer is likely
to spell trouble for those investors who
fail to anticipate the upcoming phase.
It will also necessarily affect the equity
risk premium, adds Mr Saint-Georges.
Specifically, the Patrimoine fund has
cut its holdings in US airlines, closed
its positions in Japanese financial
stocks and taken substantial profits on
its holdings in European banks.
michael.hunter@ft.com
US manufacturing PMI
Above 50 = growth
55
54
53
52
Jan 2017 Aug
Source: Thomson Reuters Datastream; Markit
Financials lead march of
S&P 500, with Treasury
yields rebounding further
and dollar maintaining
upward trend versus yen
DAVE SHELLOCK
Another positive session for global equi-
ties saw the S&P 500 climb to record
highs once again led by the financial
sector as worries over the economic
damage from Hurricane Irma contin-
ued to ease and Treasury yields
rebounded further.
That dollar maintained its upward
trend against the yen pushing back
above the 110 level although it was
sterling that caught the eye as it hit a
one-year high versus the US currency
and a one-month peak against the euro.
By midday in New York, the S&P was
up 0.2 per cent at 2,493, putting it on
track for a second successive record
closing high. The benchmark US equity
index earlier hit an all-time intraday
peak of 2,495.69.
With Hurricane Irma having merely
caused staggering rather than atro-
cious economic damage, US equities
once again whooshed to fresh record
highs, said Michael Every, senior strat-
egist at Rabobank.
Whether that equity reaction is Pan-
glossian complacency or a sign of won-
derful underlying fundamentals
remains open to question.
Note that this was matched by 10-
year Treasury yields popping up a few
basis points, although they are still a far
cry from where the market and surely
the Federal Reserve had expected to
see them at this point in the year.
European and Asian stock indices
generally put in even stronger perform-
ances, with the Euro Stoxx 600 index
rising 0.5 per cent and the Topix in
Tokyo up 0.9 per cent to a one-month
China relaxes currency controls: FT.com/video
The renminbi has had its worst day in three months after Chinas
central bank scrapped rules intended to bolster the currency
high. The Kospi in Seoul rose a further
0.3 per cent.
One exception was the FTSE 100 in
London, which slipped 0.2 per cent as
the pound rose sharply following the
release of stronger than expected UK
inflation data.
Consumer prices rose 2.9 per cent in
the year to August, up from the 2.6 per
cent annual increase recorded in July.
Strategists at Scotiabank noted that
the annual CPI increase was now close to
the 3 per cent point that would require
Bank of England governor Mark Carney
to write a letter to the government
explaining why inflation was running so
far above its 2 per cent target.
That has triggered expectations
SeongJoon Cho/Bloomberg
fix against the dollar was lowered by
already simmering under the market
that Thursdays BoE policy meeting
could see the hawks more in control,
Scotiabank said. A rate hike still looks a
long shot but central banks are perhaps
more willing to surprise as the global
economy strengthens.
Sterling was up 0.8 per cent against
the dollar at $1.3270, while the euro was
down 0.7 per cent at 0.9010. The yield
on the 10-year UK government bond,
which moves in the opposite direction
to its price, jumped 10 basis points to
1.15 per cent.
The yield on the 10-year US Treasury,
meanwhile, was up 4 basis points at a
two-week high of 2.17 per cent, after
falling as low as 2.016 per cent on Friday.
2480
2460
2440
2420
Aug 2017 Sep
The two-year US yield was 2bp higher US equities Big gains for financial and
yesterday at 1.33 per cent. energy stocks helped power the S&P
The rebound in yields over the past 500 to a record intraday high, while
two days helped support the dollar as it the Dow Jones Industrial Average held
rallied off a 10-month low against the above the 22,000 level
yen of 107.31 to stand at 110.04, up
0.6 per cent on the day. FTSE 100 index
Last weeks collapse in bond yields Change on day 0.17%
increasingly seems like a cathartic 7450
cleansing of positions, said Kit Juckes,
strategist at Socit Gnrale. 7400
If the dollar cant stage a short-cover- 7350
ing bounce now, when will it?
7300
FX strategists at Morgan Stanley Aug 2017 Sep
sounded a note of caution regarding the
dollars latest rally. UK equities The FTSE 100 lagged its
The risk for FX investors is that dol- continental European peers as sterling
lar sentiment in the market is at rose following the release of stronger
extreme lows, with surveys suggesting than forecast UK inflation figures.
on Friday that only 7 per cent of traders Housebuilding stocks were big fallers
were bullish on the US currency, Mor-
gan Stanley said. Eurofirst 300 index
In contrast, 93 per cent of traders are
Change on day 0.54%
bullish on euro/dollar currently. 1500
The single currency which on Fri-
day touched a 33-month high against 1480
the dollar of $1.2092 was up 0.1 per 1460
cent yesterday at $1.1963.
Meanwhile, Chinas currency contin- 1440
Aug 2017 Sep
ued to attract attention after its daily
European equities The regions stock
0.4 per cent the most since January markets had another bullish session,
to Rmb6.5277. with the Eurofirst 300 reaching a one-
That follows Fridays move by the month high, as hurricane- and North
Peoples Bank of China removing the Korea-related worries receded further
reserve requirement on forward posi-
tions, effectively making it cheaper to
short the renminbi, said Elsa Lignos, Nikkei 225 index
FX strategist at RBC Capital Markets. (000) Change on day 1.18%
19.8
Brent oil rallied back towards the
four-month intraday high it touched 19.6
last week amid fresh reports that Opec 19.4
was considering further output cuts.
Brent was up 1 per cent at $54.36 a 19.2
barrel. It touched $54.87 on Friday. Cop- Aug 2017 Sep
per, however, retreated further from Japanese equities The Nikkei closed
last weeks three-year high. at a fresh one-month high after Wall
Gold was flat at $1,326 an ounce, after Streets strong overnight performance,
last week hitting a 13-month high of with financials leading the way higher
$1,357.

Bunge which in May disclosed its agricultural

Wall Street
Investors offload
Bunge after $1bn
Loders purchase
Gregory Meyer
Investors punished Bunge, one of the
worlds top food commodities traders,
after it announced its biggest
acquisition in seven years: a nearly $1bn
stake in a palm-oil group.
Bunges main business, buying grains
and oilseeds from farmers and shipping
them around the world, has suffered as
low prices prompt farmers to hoard
grain. So yesterday, the company said it
would expand another area of its
business which sells vegetable oils
derived from crops such as soyabeans
and rapeseed.
It is spending $946m to acquire a 70
per cent stake in IOI Loders Croklaan,
which supplies palm and other tropical
oils for use in products from puff pastry
Share price ($) arm approached the company about a
78 possible consensual business
76 combination.
74 The transaction destroys value, said
72 Heather Jones, analyst at Vertical
70
Aug 2017 Sep
Group, who downgraded Bunge stock
Source: Thomson Reuters Datastream
on the announcement. It also makes a
takeover less likely and we wonder
Indices Close
Day's
change whether that is the true motivation for
S & P 500
DJ Industrials
2493.35
22119.36
5.24
61.99
the acquisition, she said.
Mr Schroder said in an interview that
Nasdaq Comp
Russell 2000
6438.37
1204.70
6.11
-8.35
discussions with Loders, a unit of
Malaysian palm oil producer IOI
VIX 10.72 -0.01
Corporation, began about two years ago
US 10 yr Treas Bd 2.17 0.04
US 2 yr Treas Bd 1.33 0.02
and blocking a takeover was not the
rationale. And he reiterated his belief
that consolidation is necessary in the
grain handling industry as traders are
squeezed between farmers and
to infant formula. But Wall Street customers. Its clearly needed. This
doubted that the deal the biggest deal doesnt change that, he said.
since a 2010 expansion in Brazilian Bunges share price fall stood in stark
sugar milling would quickly boost contrast to the bullish mood across the
profits. Bunges shares sank 5.6 per cent equity market, which sent the S&P 500
to $71.51 at midday in New York. to another intraday record. By
Soren Schroder, chief executive, said lunchtime in New York, the benchmark
the deal would be a game changer by index was up 0.25 per cent from
growing Bunges earnings from edible oil Mondays record close, at 2,494. The
blends, which tend to have higher and tech-heavy Nasdaq Composite was 0.18
steadier profit margins than trading per cent higher at 6,444.
bulk commodities. Among the leading risers was
Bunge last year handled 7m tonnes of Caterpillar, which hosted an investor
edible oil products, while Loders oil day and predicted expanded profit
volumes totalled 1.6m tonnes. margins. The construction equipment
The deal comes as Bunge faces maker sees stronger demand from the
potential takeover interest from Swiss- mining and oil and gas industries. Its
based commodities titan Glencore, shares rose 1.8 per cent to $120.65.

London
Glencore and Rio
rebound on talk
of merger revival
Bryce Elder
Glencore was a talking point yesterday
as analysts speculated that its merger
plan with Rio Tinto might be revived.
Both stocks have rebounded to above
their 2014 market values, when Rio
rejected an informal merger proposal
from Glencore, AlphaValue said in a
note to clients. Its team saw the
combination as still making sense: Rio
gains diversification, Glencores trading
arm gets volumes and there would be no
meaningful operational overlap beyond
copper, it said.
Chinalco, the Chinese state-owned
aluminium group that is Rios biggest
shareholder, would likely be keen on
owning a 110bn-valued mining
behemoth that has sizeable control
over the aluminium, copper, coal, iron
ore and zinc markets, as well as a world-
class trading platform, said AlphaValue.
The recent warming of ties between
China and Russia makes a Chinese-
backed move for Glencore the next
logical step, it told clients.
Rio Tinto ended 0.3 per cent higher to
36.91 and Glencore was 0.9 per cent
higher at 372.5p in a steady wider
market. The FTSE 100 drifted 0.2 per
cent, down 12.90 points to 7,400.69.
Housebuilders slipped after Steve
Morgan, Redrows founder and
chairman, sold a 7 per cent stake in the
group at 590p apiece. Mr Morgans sale
follows Berkeley directors last week
reducing their holdings.
Redrow was down 8.3 per cent to 580p
and Berkeley lost 1.3 per cent to 35.47.
Separately, Merrill Lynch kept sell
recommendations across the UK
housebuilding sector. Stocks look fully
valued given rising interest rates,
weaker consumer confidence and the
debate around the long-term future of
the Help to Buy scheme, which is the
biggest crutch under the sector, said
Merrill. The brokers model also
factored in reduced demand and higher
labour costs from lower immigration,
and higher lending costs once the Term
Funding Scheme is wound up next year.
Smurfit Kappa, the packaging maker,
rose 2.4 per cent to 23.86 on the back of
a Goldman Sachs upgrade to buy.
Smurfit underperformed peers since its
second-quarter results, putting the
shares at a 20 per cent discount to the
sector, which will narrow as margins
recover and box prices are pushed
higher, Goldman said.
Whitbread faded 0.4 per cent to
37.61 after Citigroup downgraded from
buy to sell with a 32 target.
An analysis of Costa, Caff Nero,
Starbucks and Greggs shops in the UK
led Citi to conclude that there are only
four to five years of structural growth
left in the branded UK coffee market.
The broker also saw potential for
oversupply in the UK hotel market.
Citi also turned cautious on SSP,
down 1.5 per cent to 521p. A valuation of
nearly 30 times 2017 earnings does not
allow for any mis-steps, it said.
20 Wednesday 13 September 2017

INSIGHT Analysis. Capital markets

Henny
Sender
Derivatives watchdog eyes swaps trading reform
CFTCs new president also US swaps trading by venue
aims to finalise budget and Year to date ($tn)
China holds key to assess automated programs 0 10 20 30
YTD
change
(%)

currency confidence GREGORY MEYER NEW YORK

ICAP
Tullett Prebon
Tradeweb
trueEX
33
66
1,184
1

around N Korea threat PHILIP STAFFORD LONDON

After months operating short-handed,
the US government watchdog for the
BGC
IGDL
Bloomberg
39
30
8
Tradition 8
derivatives market is getting close to full DW 34
strength. GFI 21
LatAm -26

A
s tensions escalate between North Korea and The Commodity Futures Trading
the US, China has a pivotal role. President Commission now has a permanent
Trump is ratcheting up the pressure on Chi- chairman after Chris Giancarlo was con- US swaps rules shift global
nese president Xi Jinping to strangle the eco- firmed by the Senate last month. Two trading patterns
nomic life out of its neighbour. new commissioners have also come on EU swaps trade away from US (%)
Away from the tense geopolitics, however, China is board, with the second sworn in last Introduction of 60
key to helping explain why markets have appeared week, filling four of the commissions USD SEF* trading
relatively unperturbed as the rhetoric between Mr Trump five seats for the first time since 2015. 40
and Kim Jong Un, the North Korean leader, grows ever The agency has the crucial task of
more bellicose. monitoring derivatives markets that
South Korean equities, for example, remain buoyant could endanger the global economy 20
and have risen 20 per cent since the start of the year. The during periods of financial stress. Con-
Korean won has proved stoic, climbing more than 5 per gress added privately negotiated deriva- EUR 0
cent against an admittedly supine dollar this year. tives, that comprise the vast over-the- Jan 2013 2014 Sep
This disconnect between the politics and the markets is counter market, to the CFTCs remit * Swap execution facility
particularly vivid in the foreign exchange market. As a when it passed the Dodd-Frank reforms Sources: Gartner; TrendForce

broad measure, the dollar has fallen 10 per cent this year, of 2010.
touching its lowest in almost three years, when it should be With President Donald Trump having Chris Giancarlo amend Sefs. He hopes to take up the efits for our business, says Terry Duffy, the CFTC to seize traders secret com-
a beneficiary of the North Korea tensions. outlined a vision of deregulation, prom- believes the issue in 2018. chief executive of CME Group, the big- puter codes without a subpoena.
Even more puzzling is the Japanese yens 6 per cent ising to do a number on Dodd-Frank, swaps execution A push to reform swaps trading next gest US futures market operator. According to a filing in the Federal
appreciation so far this year. Markets seem to have set the views and actions of CFTC commis- rules will be year would likely come only months The chairman was recently joined on Register, the CFTC still intends to prom-
aside the pictures in local papers of school kids in martial sioners and Mr Giancarlo will matter for equivalent after the US had agreed its rules were the commission by Brian Quintenz, ulgate a version of the rule, known as
uniforms cowering under their desks, as the alarms investors and the derivatives industry and suitably equivalent to new incoming rules in former chief investment officer at Sae- Reg AT. Mr Giancarlo says hes open to
sounded in Japan after a missile fired from their pugilistic in the coming months. consistent with Europe. That agreement is crucial: it culum Capital Management and a some form of the rule that helps the
neighbour crossed over the country. As someone who was appointed by European would mean US traders and banks could Republican, and Russ Behnam, for- agency better keep pace with the dra-
The seemingly quixotic reaction in currency markets to both President Trump and President regulations use European swaps venues. merly a Democratic aide to the Senate matic expansion of algorithmic trading
the nuclear threat from North Korea comes alongside sus- Obama, my position on these markets is Reuters
But Mr Giancarlo points out that the Agriculture Committee. in our markets.
tained buoyancy in stock markets, with the S&P 500 hit- not going through sudden change. Its international framework for swaps Mr Giancarlo has two priorities for Another rule that remains unfinished
ting another record close this actually quite consistent, Mr Giancarlo reform, agreed in 2009, doesnt require 2017. The first is securing a $281.5m would impose limits on speculators
week. China offers an expla- tells the FT. identical rulemaking for swaps reform. budget request for the coming fiscal positions in commodity futures such as
nation for the lack of nerves.
Despite capital Having joined the CFTC in 2014 as a It refers to consistent rulemaking. The year, 13 per cent higher than both the wheat or oil. Mr Giancarlo was sceptical
The renminbi has gained controls, the commissioner from the interdealer bro- swaps execution rules he envisions will current year and Mr Trumps request. of earlier versions of the rule, drafted in
almost 7 per cent against the kerage GFI, Mr Giancarlo has long be equivalent and suitably consistent Second, he wants to finish naming sen- reaction to a massive commodity price
dollar this year, and has
renminbi is sought changes to rules for swap execu- with European regulations, he says. ior staff to CFTC divisions. spike in 2008. But he says he intends to
appreciated 3 per cent against becoming more tion facilities, or Sefs, trading platforms Understandably, the derivatives Then theres the issue of automated push a revised version through that
the greenback in the last two mandated by Dodd-Frank. He believes industry will be watching closely. trading. When Mr Giancarlo was still a relies on better data about commodity
weeks alone. Conventional
attractive his agency improperly used futures When this president got elected, I commissioner he raised doubts about supplies and allows sufficient exemp-
thinking suggests that this is exchanges as a template for Sefs, stifling think we had deregulation just by no proposed regulation of automated trad- tions for commercial traders using
really down to dollar weakness. But perhaps the argument markets in the process. more new regulations coming forward. ing programs that now fuel more than futures to hedge risks.
that the renminbis rise reflects the continuing strength of But it would take a new rulemaking Hopefully [Mr Giancarlo] can work 70 per cent of futures volumes. In par- I believe we can get that rule done,
the Chinese economy is actually more compelling. involving a commission vote to with other agencies that will create ben- ticular, he opposed a provision enabling and get it done right, he says.
Although the gains of the renminbi partly reflect Bei-
jings tightening of capital controls, the fundamentals of
the economy are stronger than elsewhere in the world and,
importantly, owe nothing to irresponsible monetary poli- Commodities
cies. The Chinese economy expanded at a 6.9 per cent
annual pace in the second quarter.
Despite those capital controls and massive levels of cor-
porate debt, the renminbi is becoming a more attractive
Nigeria to resist push
currency, given Chinas solid growth, widening interest
rate differentials, and progress on slowing the accumula-
for crude output curb
tion of debt at Chinese companies.
Of course, the sharp reversal in mood towards China
at least compared with the economic gloom that domi- ANJLI RAVAL OIL & GAS duction. Nigerias own out-
nated at the start of the year is not the only factor helping CORRESPONDENT put numbers are lower.
risk appetite overcome North Korea fears, as well as Nigeria will resist attempts Both Nigeria and its con-
explain movements in currencies. to curb oil production when flict-ridden Opec peer Libya
The dollar has been hurt as expectations for further it meets Opec and Russia were made exempt from the
rate increases from the US Federal Reserve recede. Half later this month, posing a initial agreement reached
of all market participants, for example, believe that threat to the cartels efforts late in 2016 as both coun-
the next Fed rate rise wont be until September 2018, to cut supplies and boost tries oil sectors recovered
and others believe the US central bank will hold fire prices towards $60. after years of unrest.
until the end of 2019. But higher than expected
With little sign of an acceleration in US inflation, the gap Emmanuel Kachikwu, min- production from both coun-
between when markets believe the Fed will next raise ister of state for petroleum tries has dulled the impact of
short-term rates and the central banks own projections resources, said the countrys the supply deal, as has resil-
will probably widen. The persistent disappointments in energy sector was still suffer- ient US shale and poor
inflation have brought renewed concern from numerous ing from years of violent dis- adherence to the pact from
Fed speakers in the past few weeks, [which] included a soft ruptions and needed more participating Opec members
labour market report and an undershoot on average recovery time before join- such as Iraq and the UAE.
hourly earnings, said economists at JPMorgan. Investors ing a supply deal agreed last A ministerial committee
understand better than the Fed that technology and the year between some of the monitoring compliance with
sharing economy are deflationary, and that wages are not biggest oil producers. the deal, made up of officials
about to pick up even as unemployment falls. Mr Kachikwu, who repre- from Opec and those outside
Some residents in Seoul are deliberating where best to sents Nigeria at Opec meet- the cartel such as Russia, has
take a break from the city. Not to avoid a potential missile ings, said he would not con- said Nigeria will cap or curb
threat, but to observe 10 days of holidays that begin on sider reducing production its output once production
September 30. Everyone will be hoping that the tensions of until at least March next stabilises at 1.8m b/d.
the last month will begin to unwind and China may yet year, as it had not yet been But a timeline or frame-
play a key role. proved that the countrys work to measure steady pro-
For markets, the steady performance of the Chinese rebound in production duction and the countrys
economy will continue to provide better news for investors would last. entry into any deal has never
from the region. We have a nine-month been specified.
exemption period within Pressure on Nigeria to
henny.sender@ft.com which to come back to the reduce its production is
table, Mr Kachikwu said, expected to increase when it
referring to the decision to attends a meeting in Vienna
extend the near 2m barrel a later this month with delega-
day supply cut deal from tions from Saudi Arabia and
June. You need that time- Russia, which have been
More comment and data on ft.com frame to see if any recovery is leading the cuts effort.
sustainable. Mr Kachikwu said that
His stance puts Nigeria on while militant attacks in the
Y Fast FT Our global economies, headed a potential collision course resource-rich Niger Delta
team gives you market- by Brazil, Russia, India with other Opec members as region had subsided, and
moving news and views, and China. the countrys output has output had rebounded from
24 hours a day, five days ft.com/beyondbrics rebounded in the past last years low, more time
a week. ft.com/fastft 12 months, blunting the was necessary.
Y Podcast The Hard
Y Alphaville Our Currency podcast takes a effectiveness of a deal They should let us
irreverent financial blog. look at what is driving between 24 countries to exhaust those nine months
Join Paul Murphy and the global currency shave almost 2 per cent of and see whether we have
Bryce Elder for the daily market. ft.com/podcasts global oil output. been able to establish stabil-
Markets Live session at Africas largest oil pro- ity, he said.
Y Lex Video Analysis ducer has seen its output rise Alexander Novak, Russias
11am. ft.com/alphaville
and opinion from the from a low of 1.4m b/d a year energy minister, said in July
Y beyondbrics News and team on the hot issues ago to almost 1.9m b/d in that volatile output from
comment from more affecting companies and August, according to consult- Nigeria and Libya was caus-
than 40 emerging markets. ft.com/lexvideo ants and analysts Opec relies ing uncertainty among
on to track members oil pro- participants.