THURSDAY 8 AUGUST 2019 WORLD BUSINESS NEWSPAPER ASIA

Seoul destroying Don’t stop the music Bayer’s remorse

Korean anger runs deep as Japanese Song copyright rulings are killing Can the group recover from botched
boycott widens — ANALYSIS, PAGE 4 creative freedom — JOHN GAPPER, PAGE 9 Monsanto deal? — LEX IN DEPTH, PAGE 7

Bridge of size Briefing

Venice steers i AI unit tests Alphabet’s deep pockets
DeepMind, the AI arm of Google owner Alphabet,
big ships away saw its debts to its parent surpass £1bn as the
world’s big tech companies continue to pour huge
sums into research and development.— PAGE 11
After 13 years of protest, Venetians have
won their battle over the blight of the i German output-drop points to recession
giant cruise ship. Vast liners such as the A bigger-than-expected fall in industrial production
MSC Magnifica, right, will no longer has compounded fears that Germany is heading
dominate the skyline of the picturesque into a recession as the economy reels from a crisis
canals leading into the Italian city’s in carmaking and the US-China trade war.— PAGE 2
lagoon.
Once famed as La Serenissima, or the i UK auditors set to cull risky clients
Serene One, Venice has been sinking The UK’s largest accountancy firms are preparing to
under a tidal wave of tourists as the dis- purge risky or unprofitable clients after a string of
placement of water from the ships dam- corporate collapses and scandals have increased
ages the city’s ancient foundations. regulatory scrutiny of the sector.— PAGE 11
Rome said yesterday that it would
begin rerouting the ships from next i Chat app Kik responds to SEC lawsuit
month, with up to a third docking at The messaging app has accused
ferry ports away from the historic cen- the Securities and Exchange
tre by next year. Longer term the liners Commission of “twisting” the
will be found new berths at a terminal facts of a lawsuit that claims
agreed by public consultation. Kik’s initial coin offering was
Miguel Medina/AFP illegal.— PAGE 13; LEX, PAGE 10

i Beijing warned over currency tactic

Aggressive rate cuts and dismal

Letting the renminbi fall in retaliation to US tariff
threats was a political choice but “weaponising” the
currency would not be in China’s economic
interests, economists have said.— PAGE 4

i Chinese hackers profit from politics

data accelerate dash into bonds A team of hackers has been carrying out espionage
operations for Beijing while attacking video games
for cash in an usual blurring of commercial cyber
crime and state-sponsored activities.— PAGE 4

i Burford slides after Muddy Waters blast

3 Three central banks signal global worries 3 German output slumps 3 Treasuries extend rally
PHILIP GEORGIADIS AND
ADAM SAMSON — LONDON
ALICE WOODHOUSE — HONG KONG
PETER WELLS — NEW YORK
Investors piled further into the safety of
government bonds yesterday as fears
deepened over the state of the global
economy after a trio of central banks cut
interest rates and data in Germany
raised concern that it was heading for
recession.
US Treasuries, which have benefited
from their “haven” appeal, extended
their rally, with the yield on the 10-year
note falling up to 11 basis points to 1.593
per cent — the lowest level in nearly
three years. Bond yields fall when prices
rise.
German 10-year Bund yields, already
well below zero, fell as much as 5bp to
minus 0.588 per cent, while UK 10-year
gilts fell more than 8bp to touch a fresh
record low of 0.440 per cent.
Gold, deemed another safe asset by
investors, topped $1,500 for the first
time in six years after rising 2 per cent.
The market moves came as central
banks in India, New Zealand and Thai-
land signalled worries over a slowing
global economy by cutting interest rates
by more than expected. A steep fall in
German industrial production also
exacerbated fears that the eurozone’s
largest economy could be heading for its
first recession in six years.
US Treasury yields have fallen about
40bp this month as trade tensions
between Washington and Beijing have
escalated.
Joachim Fels, global economic adviser
The litigation financing specialist has lost about half
its market value after US short-seller Muddy Waters
described it as a “poor business masquerading as a
at bond manager Pimco, said Treasuries The price of oil took a battering with great one”.— PAGE 12; LEX, PAGE 10
could go negative when the world econ- brent crude at one point hitting a seven-
omy entered its next prolonged slump: month low of $56 a barrel.
“If trade tensions keep escalating, bond The move into bonds and gold and Datawatch
markets may move in that direction away from riskier assets came amid a
faster than many investors think.” wave of action from central banks. The
The market value of outstanding neg- Gold topped Reserve Bank of India cut rates by 35bp, Catered by Europe The British food
% of total imports to the UK, 2017
ative yielding bonds is now at a record $1,500 per troy a bigger move than forecast; New Zea- industry has
EU Non-EU warned that the
$15tn, according to Barclays. ounce for the land aggressively cut its benchmark
Dairy & eggs UK might face
In another sign of the global shift first time in rate to an all-time low; and Thailand
towards negative rates, Nordea yester- six years as unexpectedly cut rates. Cereals food shortages
in the event of a
day became the first Danish bank to investors fled “These aren’t even terrible econo- Live animals
disorderly no-deal
offer a 20-year mortgage at 0 per cent to safety mies. Not like, say, Germany,” said Kit Meat Brexit. While
interest — days after 10-year loans were Juckes, at Société Générale, in reference Hot beverages half the food
launched at minus 0.5 per cent. to German industrial production data. Sugar eaten in the UK
US equities dropped about 2 per cent Additional reporting by Richard Milne is produced
after the market opened but regained in Oslo Vegetables & fruit domestically,
some losses, with the S&P 500 down German data disappoint page 2 Fish & shellfish 30 per cent comes
0.6 per cent in afternoon trading. Euro- India bank battles slowdown page 3 Source: ONS 0 20 60 100 from the EU
pean equity markets were stable. Markets pages 17 & 18

FedEx calls time on Amazon deliveries

as retailer’s shipping ambitions grow
SHANNON BOND — SAN FRANCISCO Amazon said: “We are constantly ers ever more quickly in the face of ris-
innovating to improve the carrier expe- ing competition.
FedEx will no longer deliver Amazon
rience, and sometimes that means re- The “free and fast delivery” standard
packages in the US, as the ecommerce
evaluating our carrier relationships.” it has set has been widely adopted by
group steps up competition in shipping
Relations between Amazon, which other retailers trying to grab a larger
and logistics with the traditional carri-
India battles slowdown ers it has long relied on.
sends billions of parcels to customers share of online sales. Amazon is spend-
with interest rate cut every year, and its delivery partners ing hundreds of millions of dollars this
The delivery company said yesterday have grown more fraught in recent years year to cut shipment times to one day
Report i PAGE 3 that it would not renew its contract with as the online retailer has expanded its for members of its Prime subscription
Amazon for ground delivery — bringing in-house delivery network. programme. Walmart and Target have
packages to customers’ homes — when It operates a fleet of leased cargo also unveiled faster shipping options,
Australia A$7.00(inc GST) it expires this month. planes as Amazon Air and is building a including same-day and next-day, in an
China RMB30 The decision followed FedEx’s $1.5bn air freight hub. Amazon also escalating delivery war.
Hong Kong HK$33 announcement in June to not renew its owns freight trailers and vans and has Amazon spent $27.7bn on worldwide
India Rup220 Express air service contract to carry created a network of contractors that shipping last year. It sends packages
Indonesia Rp45,000 Amazon packages between warehouses carry items over the so-called last mile through a number of delivery partners,
Japan ¥630(inc JCT) and delivery hubs. FedEx will still to shoppers’ doorsteps. The company including UPS and the US Postal Service
Korea W4,500 deliver packages internationally. said in June it planned to begin drone as well as its own network.
Malaysia RM11.50
Shares in FedEx, which said the shift deliveries in the coming months. FedEx, which has been trying to
Pakistan Rupee 350
Philippines Peso 140
was consistent with its strategy to focus Amazon is moving to take more con- expand its business with other ecom-
Singapore S$5.80(inc GST)
onthe“broaderecommercemarket”,fell trol of shipping as costs have ballooned merce retailers, said Amazon accounted
Taiwan NT$140 as much as 3 per cent in early trading. and it tries to deliver orders to custom- for 1.3 per cent of revenue last year.
Thailand Bht140
Vietnam US$4.50

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2 ★ FINANCIAL TIMES Thursday 8 August 2019

INTERNATIONAL

Recession concerns Five-year war

German industrial output data disappoint Zelensky talks

to Putin after
June figures raise fears the for Germany, characterised the figures
as “devastating, with no silver lining”.
cally the engine of German growth, has
become its main weakness as the car
Solveen, deputy head of economic
research at Commerzbank. “The main
said Andrew Kenningham, chief Europe
economist at Capital Economics. “Busi-
Ukrainian
largest eurozone economy
is heading for contraction
After a brief slowdown last year, the
German economy rebounded in the first
industry continues to grapple with the
shift away from diesel cars to electric
reason for this weakness is now likely to
be significantly weaker foreign demand.
ness surveys uniformly point to a fur-
ther contraction in July, so things look
troops killed
MARTIN ARNOLD — FRANKFURT
SARAH PROVAN — LONDON
three months of 2019. But many econo-
mists, including those at the Bundes-
bank, Germany’s central bank, expect
models and exporters face a slowdown
in orders from China.
The slowdown in industrial output
This all points to the fact that manufac-
turing will remain the weak spot of the
German economy.”
set to get worse rather than better.”
Other data published this week
included a downward revision in serv-
in clashes
next week’s gross domestic product fig- came across the board, from energy to Yesterday’s figures came a day after ices figures that showed the sector grew
Industrial production in Germany ures to show the economy shrank again consumer goods. The only area to grow factory orders rose unexpectedly, at a slower rate in July than previously MAX SEDDON — MOSCOW
ROMAN OLEARCHYK — KIEV
dropped by a larger-than-expected in the three months to June. was construction, by a meagre 0.3 per driven by an increase in demand from thought, fuelling fears that the down-
1.5 per cent month on month in June, “We should prepare for contraction in cent after two months of decline. outside the eurozone. While those fig- turn in Germany’s export-focused man- Russia president Vladimir Putin and
compounding fears that Europe’s larg- the German economy in the second “The crisis in the automotive sector is ures may have offered a glimmer of ufacturing industry is spreading to its his Ukraine counterpart Volodymyr
est economy might be heading for its quarter, unless exports bring an unex- continuing unabated,” said Ralph hope for Europe’s economic power- domestic-focused services sector. Zelensky have held talks a day after
first recession in more than six years. pected surprise on Friday,” Mr Brzeski house, analysts said they were buoyed “The continued plunge in production four Ukrainian soldiers were killed in
Analysts polled by Reuters had esti- said. by a few exceptionally large orders and is scary,” said Alexander Krueger, econ-
mated output would fall 0.4 per cent Pressure on the carmaking industry
Germany has turned from new orders have dropped an average of omist at Bankhaus Lampe. “The longer
fresh clashes with Russia-backed sepa-
ratists in eastern Ukraine.
during the month compared with May. and an intensifying trade war between the powerhouse of the 0.7 per cent every month this year. this continues, the more likely it is that
The fall meant that industrial produc- the US and China have turned Germany June’s industrial production decline other sectors of the economy will be Mr Zelensky yesterday said he had
tion was 5.2 per cent lower than a year from the powerhouse of the eurozone to
eurozone into one of its “kills off any hopes that the strong dragged into this.” called Mr Putin immediately after the
ago, Germany’s statistics office said. one of its weakest performing members. weakest performers orders data published yesterday The German government expects the fighting to tell him: “This does not bring
Carsten Brzeski, ING chief economist The manufacturing sector, histori- marked the beginning of a recovery”, economy to grow 0.5 per cent this year. us closer to peace.” He had asked Mr
Putin “to influence the other side so that
they stop killing our people”.
The five-year war in two eastern
Ukraine provinces is a big test for Mr
Infrastructure. Finance challenger Zelensky after he won an election land-
slide in April. A comedian who came to

Brics lender aims to shift from dollar funding fame playing the president on televi-
sion, Mr Zelensky made a ceasefire one
of the central elements of his election
campaign.
But the Kremlin has continued to
ratchet up pressure on Mr Zelensky
New Development Bank plans since he took office in May. Mr Putin
to emphasise local currencies expanded a plan to give out Russian
passports to residents of the conflict-hit,
and double loan book to $16bn Russian-speaking Donbass area of east-
ern Ukraine, while talks over a possible
prisoner exchange have stalled.
TOM HANCOCK — SHANGHAI
The Kremlin said Mr Putin had told
The New Development Bank, a lender
owned by Brazil, Russia, India, China
and South Africa, is aiming to almost
‘Extremely disappointed
double its lending this year and shift its with ceasefire violations,
loan book from the US dollar to empha-
sise lending in local currencies.
leading to four killed’
The NDB, or Brics bank as it is other- Kurt Volker, US special envoy
wise known, has approved more than
$9bn in loans in its member countries Mr Zelensky that “de-escalating the
after being founded four years ago. It is conflict foremost requires stopping all
seen as a challenger to established lend- further shelling of residential areas in
ers such as the World Bank, Asian the Donbass by Ukrainian troops, which
Development Bank and IMF. is creating civilian casualties”. The
The bank plans to increase its loan phone call yesterday was the second
book to $16bn this year. So far it has between the two leaders since Mr Zelen-
mainly relied on its dollar paid-in capi- sky became president.
tal for funding but, in the future, “50 per Mr Putin pushed Kiev to give the
cent [of projects] should be local cur- breakaway areas — which Russia claims
rency financed”, KV Kamath, the bank’s not to control despite abundant evi-
president, said in an interview. dence to the contrary — special status
The bank, based in Shanghai, issued a under a potential peace deal, although
second Rmb3tn ($426bn) Chinese cur- this would be politically unpalatable in
rency bond this year, and after it re- Ukraine. While the 2015 Minsk agree-
ceived a double A plus rating from Fitch ments aimed at freezing the conflict
and S&P Global last August, but also have broken down, both Russia and
plans to tap bond markets in the US, Ukraine have discussed holding further
according to a person familiar with its peace talks under the so-called Nor-
plans. Forward step: greenhouse gas reduction project in the risks, but have run into difficulties rais- ‘We will “We want to aim at doing a project in mandy format, which includes France
“We will raise dollars, we will raise a couple cross country. The bank expects to account ing funds in local capital markets. 90-180 days. We have demonstrated and Germany.
euros, but at the same time there will be a stream near a for 11 per cent of South African infra- The bank will not be able to move raise dollars, over the past two years that it is possible Speaking alongside Mr Zelensky at
a significant reliance on local curren- defunct power structure funding by 2021. away from dollars entirely. “There’s a we will raise to do that without sacrificing quality,” the briefing, Ruslan Khomchak, armed
cies,” Mr Kamath said. station in But the bank has only disbursed 7 per constraint that you can’t disrupt the US said Mr Kamath. forces chief, said the four Ukrainian
That would allow the bank to move Soweto, South cent of the loans it has approved, dollar system. If you did [the US] would euros, but at The bank’s project approval times are fatalities on Tuesday resulted from a
from loans denominated in dollars. Africa. The according to its latest annual report. find a way to go after you,” said a person the same about one-third of those taken by other rocket-propelled grenade attack.
Lending so far has mostly gone back country’s That is a “warning sign it may be rush- close to the bank. big development lenders, according to a The latest flare-up increases the death
to its founder countries, which have a electricity ing projects to approval without suffi- The bank has fewer than 200 staff and time there staff member. toll in a conflict that has claimed more
collective credit rating of triple B minus, infrastructure is cient preparation”, said Chris Hum- had not appointed a chief economist will be a The five countries have equal shares than 13,000 combatant and civilian
and so can borrow at lower rates though in need of phrey, a development finance resear- until last month, when China’s David in the bank. lives, making it the bloodiest on the
the higher rated bank. investment cher at the Overseas Development Insti- Daokui Li was hired. It has attempted to significant Speed is made possible as the bank European continent since the Balkan
“It’s basically financial engineering,” Siphiwe Sibeko/Reuters
tute in London. distinguish itself from other develop- reliance on works closely with borrower countries’ wars and the longest since the second
pointed out Mr Kamath. However, the move to lend more in ment banks by emphasising “sustaina- own development banks and agencies world war. Moscow denies claims by
Loans approved mainly cover trans- local currencies should be welcomed, as ble development” rather than poverty local and tends to use local standards rather Kiev and its western backers that it
port, energy and water management “too many developing countries borrow alleviation as its main goal. currencies’ than international ones in terms of fomented the conflict after annexing the
projects, such as $620m for the con- excessively in foreign currency, which Its lending is still small relative to social and environmental safeguards, Crimean peninsula in 2014.
struction of an airport in northern leads to dangerous FX risk exposure”, organisations such as the Asian Devel- KV Kamath, said Hongying Wang of Canada’s Uni- Commenting on Tuesday’s killings,
China, $350m for rural roads in India’s he added. opment Bank, which approved $21.6bn president versity of Waterloo, who has studied the Kurt Volker, the US special envoy to
Bihar and $320m for water sanitation Development lenders such as the in loans and grants last year. bank. Ukraine, wrote on Twitter: “Extremely
projects on Russia’s Volga river. World Bank’s International Finance But its loan book is slightly larger than “This model could potentially offer disappointed with new ceasefire viola-
This year the bank announced a Corporation and the European Bank for that of the higher profile China-led greater legitimacy and efficiency. It tions, leading to four Ukrainian soldiers
$180m loan to South African power Reconstruction and Development have Asian Infrastructure Investment Bank, could also increase the social and envi- killed by Russian-led forces — especially
company Eskom to fund renewable also tried to increase local currency which was established around the same ronmental risks of investment,” she at a time when the new Ukrainian presi-
energy projects and a $300m loan for a lending to reduce foreign exchange time. added. dent is making gestures for peace.”

Turin-Lyon line Parliamentary vote

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Five Star fails to halt rail link fight to oust competition chief
Trump vs the Valley A Five Star plan? Dear Don...
Tech titans need to minimise Italy’s populists are trying to woo May’s first stab at the break-up
political risk — GILLIAN TETT, PAGE 13 the poor — BIG READ, PAGE 11 letter — ROBERT SHRIMSLEY, PAGE 12

HMRC warns Lloyd’s of Brussels Insurance market

to tap new talent pool with EU base
UK £3.80; Channel Islands £3.80; Republic of Ireland €3.80
Briefing
SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017

customs risks THE END

i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

But in a U-turn last month Giuseppe leave office with immediate effect. Dur-
dealmaking, as US companies ride a Trump-fuelled HOW DRIVERLESS

being swamped
equity market rally to hunt for bargains across the

OF THE
Atlantic.— PAGE 15; CHINA CURBS HIT DEALS, PAGE 17

i Report outlines longer NHS waiting times

A report on how the health service can survive
TECHNOLOGY IS
CHANGING AN
HANNAH ROBERTS — ROME KERIN HOPE — ATHENS
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

Conte, prime minister, said that ing the election campaign Mr Mitsotakis
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

The Italian Senate has given its Kyriakos Mitsotakis, Greece’s new
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
increased funding from the EU meant promised his government would “depo-
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

approval to a trans-Alpine high-speed centre-right prime minister, faces his

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

that stopping work would cost more liticise” the public administration by
leaves the EU, customs authorities have In a letter to Andrew Tyrie, chairman tensions after talks in Ankara with President Recep
admitted to MPs.
HM Revenue & Customs told a parlia-
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
mentary inquiry that the new system
needed urgent action to be ready by
delivering CDS was “challenging but
achievable”. But, it added, CDS was “a i Toshiba investors doubt revival plan
in Scotland

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”.
rail link with France, amid deepening first political test over his decision to
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

than completing the line. ending a tradition of awarding senior

Setting up a digital customs system
has been at the heart of Whitehall’s
Brexit planning because of the fivefold
increase in declarations expected at
British ports when the UK leaves the EU.
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
divisions between Italy’s fractious coa- replace the head of the independent
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 Switzerland’s attempts to clean up dering by “a global financial institution
Datawatch

After the votes, pressure group No administrative jobs to party loyalists on

Theresa May announced in January that international trade once the UK leaves its image as a tax haven. and certain ofits employees”. The UK
Brexit would include departure from
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
customs union, the number is expected
the EU . . . Internal ratings are designed
to make sure that each project gets the
focus and resource it requires for suc-
cessful delivery.”
Terror attacks inwith
co-operating western Europe after
authorities
offices in London, Paris and Amsterdam
were contacted
Highlighted attack byOthers
Recent

Japan: Nikkei Tokyo Newspaper Printing Center, Inc.,

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
The lure of the exotic
Robin Lane Fox on the flair

lition partners over the project. competition authority.

“concerning client tax matters”. Anders BreivikDutch in prosecutors, who initiated the
to hit 300m.
The revelations about the system,
HMRC’s letters to the select commit-
tee, which will be published today, pro- AFP Norway, the
Dutch authorities said their counter- action, said they seized jewellery, paint- of foreign flora — HOUSE & HOME
parts in Germany wereBrussels attacks in Paris
also involved, ings and gold ingots as part of their

59th Floor, The Center,

called Customs Declaration Service, are vide no explanation for the rating Lloyd’s of London chose Brus- insurers to follow. Most of the EU, with Dublin and Luxem-

1-10-5, Shinonome, Koto-Ku, Tokyo 135-0062

likely to throw a sharper spotlight on
while Australia’s revenue department and Nice, and the while French officials said their
probe;
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

TAV — which opposes the line — said it political criteria.

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.
caused by Mrs May’s 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
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
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
homes for the industry. But
Mr Nelson said the city won on
its transport links, talent pool
and “extremely good regula-
tory reputation”.
Sources: Jane’s Terrorism and Insurgency Centre terror incidents in
Paris bombings — have
The inquiries threaten to undermine thousand” bank accounts opened in
bucked the trend
efforts by the country’s banking sector Switzerland and not declared to French
of generally low
to overhaul business models and ensure tax authorities.
fatalities from
customers meet international tax The Swiss attorney-general’s office
requirements following a US-led clamp- said it was “astonished at the way this

Central, Hong Kong. Problems with CDS and other projects Philip Stephens & Chris Giles page 13 centuries-old insurance mar- London’s specialist insurance Lex page 14 western Europe
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.

Representative; Hiroko Hoshino; ISSN 0915-9460

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

The anti-establishment Five Star move- would continue the battle in “the valley Greek lawmakers will vote today on a The proposal provoked a heated
general’s 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
EU’s judicial liaison body.
Credit Suisse, whose shares fell 1.2 per

South Korea: Maeil Business Newspaper, 30-1, 1-Ga,

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
subject ofinvestigations in the Nether-
lands, France and the UK. The bank said in Paris
Houlder in London, and Michael Stothard
Austen’s descendants insist the Rice portrait depicts her as a girl — see magazine Bridgeman Art Library
How high earners can evade
a pension headache — FT MONEY

ment, which has links to environmental of resistance”. They warned that the legislative package that would lead to debate in parliament, with Syriza law-
LAURA NOONAN — DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to

Subscriptions and
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
Shutdown risk as border
regulators cracking down on commu-
Pil-Dong, Jung-Ku,
stance on Brexit Seoul, 100-728
Christopher Niehaus, a former Jeffer- ban people from installing apps on their
ies banker, passed confidential client private phones.
Brussels takes tough
information to a “personal acquaint- Andrew Bodnar, a barrister at Matrix
ance and a friend” using WhatsApp, Chambers, said the case set “a precedent
according to the FCA. The regulator said in that it shows the FCA sees these mes-
with Spain handed veto over Gibraltar
390_Cover_PRESS.indd 1 19/01/2017 13:57

wall bid goes over the top nications over Facebook’s popular Mr Niehaus had turned over his device saging apps as the same as everything
chat app. to his employer voluntarily. else”.

Customer Service Congressional Republicans seeking to The FCA said Mr Niehaus had shared Information shared by Mr Niehaus

Singapore: Singapore Press Holdings Ltd, 2 Jurong

avert a US government shutdown after
April 28 have resisted Donald Trump’s
attempt to tack funds to pay for a wall
on the US-Mexico border on to
stopgap spending plans. They fear
that his planned $33bn increase in
The fine by the Financial Conduct
Authority highlights the increasing
problem new media pose for companies
that need to monitor and archive their
staff’s communication.
Several large investment banks have
confidential information on the messag-
ing system “on a number of occasions”
last year to “impress” people.
Several banks have banned the use of
new media from work-issued devices,
but the situation has become trickier as
groups, has long opposed the freight rail League’s Matteo Salvini “would learn Vassiliki Thanou’s dismissal. makers questioning whether it was
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
his mortgage if a deal was successful. The EU yesterday took a tough opening fully been singled out for unfavourable require “existing regulatory, budgetary,
Mr Niehaus was suspended from Jef- stance in Brexit negotiations, rejecting treatment by the council at the behest of supervisory and enforcement instru-

Tel: +852 2905 5555, subseasia@ft.com

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 staff’s 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
Port Road, 619088
Britain’s 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”

to accept the proposals. encryption system that cannot be
US budget Q&A and accessed without permission from the
Trump attack over health bill i PAGE 8 user. Deutsche Bank last year banned
WhatsApp from work-issued Black-
as iPhone-loving staff spurn their work-
issued BlackBerrys.
Bankers at two institutions said staff
are typically trained in how to use new
line, which would run for 270km what happens if he tried to turn a hostile The legislation bans former minis- legally acceptable for such a decision to
Facebook did not respond to a request Senior EU diplomats noted that has been made on Britain’s exit bill and
for comment. About 2.3m people will benefit from European Council president Donald Mr Tusk’s text left room for negotiators citizen rights, which Whitehall officials
Additional reporting by Chloe Cornish today’s increase in the national living Tusk’s first draft of the guidelines, to work with in coming months. Prime believe means simultaneous talks are
Lombard page 20 wage to £7.50 per hour. But the rise which are an important milestone on minister Theresa May’s allies insisted possible if certain conditions are met.

Subscribe In print and online World Markets

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
Representative, Anjali Mahindroo
the road to Brexit, sought to damp Brit-
ain’s expectations by setting out a
“phased approach” to the divorce proc-
ess that prioritises progress on with-
drawal terms.
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”.
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

between Turin and Lyon, while coali- territory into a building site”. ters, senior civil servants and govern- be applied retroactively.
www.ft.com/subscribenow new living wage and the increase is The decision to add the clause giving British officials admitted that the EU’s after Brexit with a trade deal.
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tion partners the League support it. The coalition parties have been ment advisers from being appointed to Ms Thanou served briefly as Greece’s
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Yesterday, a motion in the Senate by increasingly at odds in recent weeks regulatory positions for five years after first woman prime minister in 2015,
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Letters to the editor in any manner is not permitted without the Five Star to block the project, known as over tax cuts proposed by the League, leaving office. Ms Thanou is the only one heading a caretaker government before
letters.editor@ft.com publisher’s prior consent. ‘Financial Times’ and the TAV, failed when the League voted greater regional autonomy and Five among 22 heads of Greek regulatory a national election. She was appointed
‘FT’ are registered trade marks of The Financial
Published by Times Limited.
with the opposition in favour of comple- Star’s decision to back a mainstream bodies who faces dismissal. to run the competition authority in
The Financial Times (HK) Limited, Unit 5905-5912, tion of the line. German candidate, Ursula von der The government argued yesterday January and gave up her position as the
59th Floor, The Center, No.99 Queen’s Road, Central, The Financial Times and its journalism are subject to Reopening negotiations on the rail Leyen, to become president of the Euro- that the retired senior judge and legal premier’s legal adviser to serve a five-
Hong Kong. a self-regulation regime under the FT Editorial Code
Editor: Lionel Barber of Practice: www.ft.com/editorialcode
project, which was started almost two pean Commission. Mr Salvini warned adviser to Alexis Tsipras, the former year term. Her appointment was
decades ago, was part of the coalition before the vote that if TAV were blocked prime minister, could not run an inde- announced by Mr Tsipras’s office and
Printed by Reprints are available of any FT article with your contract agreed between Five Star and he would consider early elections. pendent regulatory body because of her ratified by parliament.
Australia: Spotpress Pty Ltd, 24-26 Lillian Fowler company logo or contact details inserted if required the populist League last year. Opposition MPs claimed that the ten- close ties to his administration. Ms Thanou insisted she would not
Place, Marrickville, NSW 2204 (minimum order 100 copies). One-off copyright
Hong Kong: Kin Ming Printing Co Ltd, licences for reproduction of FT articles are also A cost-benefit analysis of the project sions showed the coalition’s days were Mr Mitsotakis, whose New Democ- quit. “I’m a technocrat and I have never
15/F BLK A, 18 Ka Yip Street, Ming Pao Industrial available. led by a ministry of transport panel in numbered. “The government’s majority racy party won a sweeping election been a member of a political party,” she
Centre, Chai Wan; Representative; Angela Mackay; For both services phone +44 20 7873 4816, February found that the costs out- no longer exists,” said Andrea Marcucci, victory over Mr Tsipras’s Syriza last said. “I consider this process illegal . . . I
ISSN 1025-918X or alternatively, email syndication@ft.com
weighed the gains by €7bn. a senator for the Democratic party. month, said that Ms Thanou should have been personally targeted.”
Thursday 8 August 2019
Stimulus measures
Indian central
bank battles
global slowdown
with rate cut
Other Asian nations ease
monetary policy as RBI
lowers growth forecast
BENJAMIN PARKIN — MUMBAI
The Reserve Bank of India has cut
interest rates for the fourth time this
year, joining other central banks across
the region in easing policy to battle an
intensifying global slowdown.
India broke with international con-
vention by cutting interest rates by 35
basis points instead of the usual incre-
ment of 25bp, bringing its benchmark
repo rate to 5.4 per cent, the lowest in
almost a decade.
Central bankers in New Zealand and
Thailand also slashed rates yesterday as
monetary authorities scrambled to
respond to concerns that the US-China
trade war will drag down their own
economies, particularly in the light of
China’s decision this week to let its cur-
rency weaken.
“Domestic economic activity contin-
ues to be weak, with the global slow-
down and escalating trade tensions pos-
ing downside risks,” the RBI said in a
statement.
The Reserve Bank of New Zealand
slashed its benchmark rate by 50bp to
1 per cent, against a forecast cut of 25bp.
Thailand’s central bank trimmed rates
by 25bp, its first cut since 2015. Aus-
tralia’s central bank embarked on back-
to-back cuts in June and July, taking its
cash rate to a record low of 1 per cent.
In India, the effects of a slowdown are
already being felt in everything from the
stock market, which suffered its worst
July in 17 years, to a drop in car and
motorcycle sales.
The country’s claim to be the world’s
fastest growing large economy was
recently undermined after gross
domestic product growth fell to 5.8 per
cent in the first quarter of 2019, the
lowest in five years. Yesterday, the RBI
Security lockdown
Modi vows ‘better tomorrow’
for Kashmir under New Delhi
AMY KAZMIN — NEW DELHI
Kashmir endured its third day of secu-
rity lockdown yesterday with Indian
prime minister Narendra Modi prom-
ising a “better tomorrow awaits”, after
his government ended the territory’s
special autonomy and stepped up New
Delhi’s control.
All communication links within Kash-
mir and to the outside world remained
cut off, while schools and colleges have
been suspended indefinitely.
“We are like prisoners there,” a Kash-
miri businessman, who flew out of the
state yesterday afternoon, told the
Financial Times. “We cannot communi-
cate with anyone except our neigh-
bours . . . It was very difficult to reach
the airport. Everywhere the army stops
you and you have to argue with them.”
While the prime minister hailed the
“courage and resilience” of the state’s
residents in a series of tweets, tens of
thousands of heavily armed security
personnel used barricades and barbed
wire to restrict public movement.
The businessman, who works in the
tourism industry, said that local anger —
now repressed by the security clamp-
down — could erupt at any time.
“As soon as they lift the siege, people
will come out on the streets,” he said.
“Every Kashmiri thinks, ‘We have to
resist. We have to come out and fight
for our rights’. They could have done
this process democratically. What they
Narendra Modi: says territory is now
free of vested interests’ shackles
★ FINANCIAL TIMES 3
INTERNATIONAL
measures as well as further tariffs. Sepa-
rately, the central bank yesterday
announced stimulus measures designed
to boost lending to consumers and trou-
bled shadow banks.
RBI governor Shaktikanta Das,
appointed last year after a spat with the
Modi administration over central bank
independence, has embarked on rate-
cutting. But some economists question
the wisdom of the RBI’s willingness to
keep cutting rates, particularly amid
concerns about its independence. While
the RBI has signalled that further rate
cuts are ahead, banks have not reduced
their own interest rates as swiftly.
Shilan Shah of Capital Economics
warned inflation might pick up later this
year or early next.
“A little bit of support for the econ-
cut its growth forecast for this year to omy would have been perfectly reason-
6.9 per cent from 7 per cent, while the able,” he said. “The risk is that it goes too
World Bank said India fell behind far, which is essentially what we think is
France as the world’s seventh largest going to happen.”
economy in 2018. Vivek Dehejia, an economist at Carle-
“Six per cent growth is seen as a disas- ton University in Canada, argues that
ter,” said Sachchidanand Shukla, chief deeper measures, such as labour law
economist of India’s multinational con- reform and privatisation of some state
glomerate Mahindra Group. “India is assets, would better help India achieve
dependent on the rest of the world for its growth targets.
capital . . . When there is a global trade “Looser monetary policy is being used
spat, liquidity becomes a challenge.” as a substitute for unfinished macroeco-
For Prime Minister Narendra Modi, nomic reforms,” he said.
who wants to double the size of India’s Additional reporting by Siddarth Shri-
economy to $5tn by 2025, accelerating kanth
growth has emerged as perhaps the Rough ride: a steel plant in Odisha, India. The country is a target of US efforts to rebalance trade — Dhiraj Singh/Bloomberg Notebook page 8
biggest test of his second term after
winning re-election in May.
But economists say the widening
global trade dispute will threaten India’s
ability to grow at the 8 per cent a year
that the government targets.
China’s decision to allow its currency
to slide below Rmb7 to the dollar in
response to new US tariffs threatens
India’s competitiveness as an exporter,
Mr Shukla said.
“If you have a neighbour which is one
of the world’s largest traders and econo-
mies, and they decide to drop their cur-
rency 5 to 10 per cent over the next six
months, you will be outpriced in the glo-
bal market,” he said. “The way that
China navigates its currency going for-
ward will have a huge bearing.”
India’s currency has also weakened in
recent weeks, and foreign investors
have taken money out of the country,
with a net $5.5bn leaving foreign portfo-
lios in July.
Uncomfortably for Mr Modi, India is
also now a target of US president Donald
Trump’s efforts to rebalance global
trade along more favourable terms for
the US. In June, Mr Trump announced
the US was scrapping duty exemptions
on about $6bn worth of Indian goods.
In response India raised tariffs on a
range of US goods, and last month intro-
duced a budget that included stimulus
have done is more like a dictatorship.”
In his tweets Mr Modi hailed the nulli-
fication of a longstanding constitutional
provision that had allowed the state of
Jammu and Kashmir to make its own
laws, which included a restriction on
outsiders buying property in the state.
Pakistan, which claims Kashmir as its
own, announced yesterday it was down-
grading its diplomatic relations with
India, recalling its high commissioner to
New Delhi and expelling India’s high
commissioner.
Mr Modi accused Kashmir’s main-
stream political parties — whose leaders
were arrested on Monday — for failing to
deliver prosperity and development to a
region still scarred from two decades of
violent separatist insurgency that has
claimed more than 45,000 lives.
New Delhi has also demoted the
region from a fully fledged state to a
union territory, which will give the cen-
tral government direct control over
policing and land policy. “For years,
vested interest groups who believed in
emotional blackmail never cared for
people’s empowerment,” Mr Modi
tweeted. “[Jammu and Kashmir] is now
free from their shackles.”
The changes in Kashmir would “bring
the youth into the mainstream and
give them innumerable opportunities to
showcase their skills and talents.
Local infrastructure will significantly
improve.”
New Delhi has given no indication of
how long it will maintain the lockdown.
Mr Modi’s Hindu nationalist
Bharatiya Janata party has long called
for an end to Muslim-majority Kash-
mir’s legal autonomy and its restrictions
on outsiders acquiring property there.
His majority in the lower house of par-
liament, following his landslide re-elec-
tion in May, empowered him to act.
In a special session in Pakistan’s par-
liament, Prime Minister Imran Khan
warned the changes in Kashmir could
lead to renewed violence and suffering
for Kashmiris, and that Pakistan would
raise the issue in international forums
including the UN Security Council.
Additional reporting by Stephanie Findlay
and Farhan Bokhari
4 ★ FINANCIAL TIMES Thursday 8 August 2019

INTERNATIONAL

Security research Latin America

Beijing hackers work for profit, finds report Brazil pension

Lines blurred between
state-sponsored and
commercial cyber crime
HANNAH MURPHY — LAS VEGAS
MADHUMITA MURGIA — LONDON
A newly identified team of Chinese
hackers is carrying out political espio-
nage for Beijing while simultaneously
attacking businesses for personal finan-
cial gain, research has found, in an
example of how the lines are blurring
between state-sponsored and commer-
cial cyber criminals.
Advanced Persistent Threat 41
(APT41), the hybrid group identified
yesterday by US cyber security group
FireEye, is described as a “creative and
well-resourced” outfit that has been
operating since 2012, moving into state-
backed espionage operations against
the healthcare and high-tech sectors
and political dissidents in 2014.
“This is remarkable because explicit,
financially motivated targeting is unu-
sual among Chinese state-sponsored
threat groups, and evidence suggests
these two motivations were balanced
concurrently from 2014 onward,” a
FireEye report said.
“[This] may indicate the group enjoys
protections that enable it to conduct its
own for-profit activities, or authorities
are willing to overlook them.”
The group’s activities, which have
taken place in 14 countries including the
US, UK, Singapore, Japan and France,
were aimed at industries “aligned with
China’s five-year economic develop-
ment plans”, FireEye said.
For instance, the hackers repeatedly
targeted global telecoms companies for
call record information, as well as tech
groups developing machine learning,
autonomous vehicles, medical imaging,
semiconductors, processors and enter-
prise cloud computing software.
In the healthcare sector the hackers
allegedly stole intellectual property
from medical device and pharmaceuti-
‘[This] may indicate the
group enjoys protections
that enable it to conduct
its own for-profit activities’
Asia. Trade conflict
cal companies, including clinical trial
data, and detailed business information
ahead of mergers and acquisitions
transactions.
China and the US agreed to stop com-
mercial espionage in 2015 and FireEye
said it had not seen intellectual property
theft by the group since then.
FireEye said APT41 had also “gath-
ered intelligence on pro-democracy dis-
sidents in Hong Kong” in 2016 and 2017.
According to Fred Plan, a senior
threat intelligence analyst at FireEye,
the timing suggested the group had
been tasked with gathering intelligence
on the pro-democracy Umbrella Move-
ment candidates who at the time were
running for election in Hong Kong.
In 2017, shortly after an APT41 hack,
the group of pro-democracy activists
reform wins
was banned for five years from holding
public office in Hong Kong, in effect
go-ahead from
putting an end to their political careers.
APT41’s cyber crime career started in
lower house
the video games industry.
“Learning to access video game pro-
duction environments enabled APT41
of Congress
to develop the tactics, techniques and
procedures that were later leveraged ANDRES SCHIPANI — BELEM
against software companies to inject
Brazil’s lower house of the National
malicious code into software updates,”
Congress passed a much-vaunted pen-
the report said.
sion reform yesterday in what is seen as
The revelations shed light on little-
a big step towards shoring up govern-
known Chinese cyber operations and
come amid escalating trade tension
ment finances and restoring growth in
Latin America’s largest economy.
between Washington and Beijing and
rising suspicion among lawmakers and The reform, various forms of which
US intelligence that Chinese companies, have been in the pipeline for 20 years, is
such as technology group Huawei, closer than ever to being approved,
present a risk to US national security. passing its second and final vote in the
usually fractious lower house by 370
votes to 124, comfortably above the
threshold of the 308 votes it needed.
Analysts saw the two rounds of votes
as the most critical in the congressional
approval process for the reform. The

South Korea public backlash unravels Japan ties
Relations sour between US
allies as dispute over wartime
forced labour reignites
SONG JUNG-A AND EDWARD WHITE
SEOUL
KANA INAGAKI — TOKYO
Son Yong-jin was not thinking about the
consequences when he raised a steel
pipe above his head and smashed it on
to the roof of his most prized possession:
a silver Toyota Lexus worth $45,000.
Even now, the South Korean, who as a
result of destroying his car has to ride
the bus to work while braving the fury of
his incensed spouse, said he had “no
regrets” about the act, part of a growing
Korean boycott of Japanese goods.
“I was too ashamed to drive a Japan-
ese car after what Japan did to our coun-
try,” said Mr Son, 47, who runs a small
shop in Incheon, near Seoul.
The patriotic sacrifice of his vehicle —
images of which went viral last month —
captured anger over Tokyo’s colonial era
rule of Korea that is escalating into a
trade war between the neighbours.
Tokyo and Seoul are perennially at
loggerheads over historical and territo-
rial disputes, but the latest flare-up,
which stems from a South Korean court
ruling last year that allowed individuals
to make compensation claims for war-
time servitude against Japanese compa-
nies, is among the most severe in years.
Japanese premier Shinzo Abe’s gov-
ernment believes the issue was resolved
through a 1965 treaty, and $500m paid
to South Korea in aid and loans at the
time, and has called for arbitration, in
line with the terms of the pact.
The administration of Moon Jae-in,
the South Korean president, however,
has resisted such calls and has refused to
overrule the courts, leading Japan to
declare a breakdown in trust and im-
pose a series of export controls on prod-
ucts critical to South Korea’s technology
groups, a move that is hurting the South
Korean economy and threatening to
upset global supply chains.
Despite Tokyo’s insistence that the
export controls are not related to the
dispute, South Korea regards them as
retaliation. This has raised fears among
some experts that Mr Abe has adopted a
similar stance to US president Donald
Trump, who has been criticised for
using punitive trade measures against
China for political reasons.
Pascal Lamy, former director-general
of the WTO, said he was “very worried”
Street fury: Japan was using trade to address an
South Koreans essentially “political problem” of colo-
denounce nial reparation.
Tokyo’s trade “What is now happening between Jap-
restrictions on an and Korea, it is like a cancer metasta-
their country sising of Trump’s weaponisation of
outside the trade,” Mr Lamy said.
Japanese “People don’t even pretend it is about
embassy in something else [and] use trade for a
Seoul on totally political reason.”
Saturday In South Korea, a campaign to boycott
Ahn Young-joon/AP
Japan-made goods and services has
snowballed since July, when Tokyo im-
posed restrictions on shipments of three
chemicals essential for making memory
chips and display panels, which are
among South Korea’s top exports.
Tens of thousands of retailers have
stopped selling Japanese beer and ciga-
rettes in recent weeks, while petrol sta-
tions and garages are refusing to fill up
or service Japanese cars. Sales of Japa-
nese vehicles have fallen. Korean air-
lines are reducing flights between the
two countries and some politicians are
calling for an outright travel ban.
In the most extreme protests, two
men in their 70s, separately attempted
self-immolation outside the Japanese
embassy in Seoul. Both later died.
“I am so angry because Abe does not
show any remorse about the past,” said
Yang Geum-duk, 91, who was forced to
make aircraft parts at a Mitsubishi fac-
tory in Nagoya when she was 12. “I
haven’t heard a word of apology for my
suffering for the past 70 years, let alone
compensation.”
The public backlash is expected to
only intensify after Tokyo on Friday
removed South Korea from a “white
list” of trusted trade partners, a move
that risks further slowing supplies of
equipment, components and materials
critical to manufacturing groups such as
Samsung, SK and LG, which underpin
the South Korean economy.
The unravelling of diplomatic ties
between Japan and South Korea, two
cornerstone US allies in Asia, has also
worried Washington, coming against an
upturn in missile tests by North Korea
and moves by China and Russia to
expand military activities in the region.
“China and Russia can see there is a
gap between Korea and Japan, and that
‘People don’t is something they can exploit against
American interests,” said Go Myong-
even hyun, a research fellow at the Asan
pretend it is Institute for Policy Studies in Seoul.
Despite these worries and concerns
about within Japan’s business community,
something analysts said Mr Abe was unlikely to
alter his stance against Seoul, with polls
else [and] in Japan showing support for the export
use trade for controls as high as 71 per cent. Mr Moon
also might be tempted to take a harder
a totally line ahead of a legislative election next
political year.
Seoul, to try to reduce its reliance on
reason’ Japan for electronics components, has
already announced plans to invest
$6.5bn to shore up its tech industry.
Officials are eyeing whether to scrap a
military intelligence sharing pact, in a
potential blow to the security alliance
among the US allies. And South Korean
tech companies are testing potential
substitutes for the Japanese products,
including from China.
“This is not good for both sides. They
will all suffer if the trade spat drags on,”
said Eom Chi-sung, a director at the
Federation of Korean Industries.
base text of the bill will undergo a review
in the lower house, then a senatorial
commission, and two votes before full
sessions of the Senate for final approval.
Senior lawmakers have said they
expect final approval of the legislation
next month, but analysts said it could
stretch into October. By raising the
retirement age of many Brazilians and
reining in pensions payment obliga-
tions, the legislation seeks to tackle the
Members of the rightwing
administration of
President Jair Bolsonaro
have championed reform
state’s precarious fiscal position with
savings of about $230bn over the next
decade.
Rodrigo Maia, Speaker of the lower
house, who has been critical in building
support for the bill, has said that with-
out the reform pension spending would
balloon to 17 per cent of gross domestic
product in the next 40 years, leading to
a “social collapse”.
Members of the new rightwing admi-
nistration of President Jair Bolsonaro
have championed the reform, mainly
Paulo Guedes, finance minister,
and Rogério Marinho, social security
secretary.
“Victory for Brazil,” tweeted Onyx
Lorenzoni, Mr Bolsonaro’s cabinet chief
after the voting session in Congress.
The pension reform proposal was ini-
tiated under Michel Temer, Mr Bol-
sonaro’s predecessor, but stalled after
the former president was implicated in
graft claims. Since Mr Bolsonaro’s elec-
tion last year, however, most lawmakers
have come round to the idea of reining
in Brazil’s vast system of social welfare
payments, which has undermined the
state’s ability to invest and led to ever
higher taxes.
International businesses say they
are holding off investing in Brazil until
the reform passes, describing it as a lit-
mus test of whether Mr Guedes and his
team will be able to pass a broader eco-
nomic agenda, including deregulation,
an overhaul of the unwieldy tax system,
and privatisations.
Many hope the passage of the bill will
restore confidence in the Brazilian econ-
omy, which is facing the prospect of a
technical recession in the second quar-
ter after suffering a first-quarter con-
traction.
Economist Marcos Lisboa, president
of Insper business school, has warned
that, although critical, the pension
reform alone would not “mean
the economy will start growing
automatically”.

Currency devaluation

Weaponising renminbi will do little to boost China, warn economists

DELPHINE STRAUSS — LONDON
Beijing’s decision to let the renminbi
fall below the symbolic level of seven to
the dollar was a political choice — but it
would not be in China’s economic inter-
est to “weaponise” its currency, econo-
mists say.
Monday’s move to increase the ren-
minbi’s trading band came as a retalia-
tion against the latest US threat of fresh
tariffs. And although China’s central
bank took steps to stabilise the currency
on Tuesday, investors worry that the
authorities could seek to put pressure
on Washington by allowing a bigger
devaluation.
While political calculations might dic-
tate that decision, concerns over the
impact on China’s economy could act as
a restraint, according to economists.
“I don’t see any upside for China,” said
George Magnus, an associate at Oxford
university’s China Centre.
A depreciation would boost trade at
the margin, he said, but stability in the
currency was far more important to Chi-
nese policymakers, whose main con-
cerns are to contain capital flight, avoid
a domestic debt crisis and pursue a
rebalancing of the economy from
exports to consumption.
Using the exchange rate as a tool “is a
double-edged sword, potentially hurt-
ing both the US and China”, said Alan
Ruskin, a strategist at Deutsche Bank.
Has China been manipulating its
currency?
No. The renminbi lost about 10 per cent
of its value against the dollar last year, as
the first rounds of US tariffs took effect.
But given the scale of the penalties the
US has imposed, a bigger adjustment
could have been expected.
The IMF said last month that the
exchange rate was in line with economic
fundamentals.
Economists dismissed the idea that
China had intervened to drive the cur-
rency below its fair value, saying that if
anything, Beijing had recently been
keeping the renminbi artificially high.
Would a much weaker renminbi
boost the economy?
It would help Chinese exporters com-
pete overseas, and it might prop up
growth to an extent.
Bo Zhuang, at the consultancy TS
Lombard, said a worsening economic
outlook had made the Chinese leader-
ship more open to a market-driven
depreciation; and Jian Chang, an econo-
mist at Barclays, said policymakers
might consider it as an alternative to
cutting interest rates as a tool to stabilise
growth.
Mr Magnus said a much larger, sus-
tained devaluation — in the order of a
20 per cent fall against the dollar since
the onset of the trade war — would
“bestow some competitive advantage”,
although it could also spark tit-for-tat
action in the region.
But a weaker exchange rate does not
make as much difference to trade pat-
terns as it did in the past.
Global supply chains mean exporters’
gains are offset by the higher price they
pay for imported components. The
widespread use of the dollar in global
trade invoicing may also limit the gains,
at least initially.
The IMF argued in its latest external
sector report that when a country’s cur-
rency weakened, there would often be a
rapid hit to imports, but only a tepid
boost to exports at first — because other
trading partners also saw their curren-
cies fall against the dollar.
“Exchange rate changes have muted
effects on the trade balance in the short-
term,” the IMF concluded.
“Currency movements may not be
passed through to final prices and may
well be more than offset by higher tar-
iffs . . . at least for exports to the United
States,” said Stephanie Segal at the
Center for Strategic and International
Studies.
Economists at Morgan Stanley said
that if Chinese policymakers wanted to
do more to support growth, the most
likely response would be a fiscal stimu-
lus, focused on infrastructure projects.
What are the downsides for China?
One risk of a renminbi devaluation is
that it could trigger defaults on domes-
tic dollar-denominated debt, especially
in the property sector.
Analysts at the consultancy Pantheon
Macroeconomics noted that while these
debts were not a high proportion of total
Chinese debt, they were “non-negligible
and will put the screws on developers”.
However the government has already
taken action to rein in excesses in the
real estate sector, where bankruptcies
have risen recently.
A bigger concern is capital flight.
When the renminbi last came under
sustained pressure in 2016, net capital
outflows over the year reached $725bn,
and although China held foreign
exchange reserves of more than $3tn, it
depleted them at an alarming rate.
“The danger now, for China, the
United States and the rest of the world,
is that market forces overwhelm the
official sector’s ability to respond,” Ms
Segal said.
However, Bo Zhuang argued, outflows
would be more manageable now,
because of China’s tighter capital con-
trols, less “panicky” households and
companies, and a lower level of specula-
tive pressure from markets.
The main problem is that a weaker
renminbi would hurt Chinese consum-
ers — who would pay higher prices for
imported goods — more than it could
help exporters.
The UK’s experience since the EU ref-
erendum in 2016 helps to illustrate this:
the resulting fall in the pound drove up
inflation, leading to a two-year squeeze
on living standards, but made very little
difference to the volume of exports.
The recent thrust of Chinese policy
had been to move away from export-led
growth and orient the economy towards
consumption, Mr Magnus noted, add-
ing: “If you make imports more expen-
sive, you’re frustrating that process.”
Thursday 8 August 2019 FINANCIAL TIMES 5
6 ★
When a Luton boy finds his inner Boss
FILM
Nigel
Andrews
P
lace your bets now. Blinded
by the Light is surely set to be
a stage musical. Gurinder
Chadha’s new film is Billy
Elliot with racial tweaking
and Bruce Springsteen songs. Once
again a British boy (Viveik Kalra) rebels
against an overbearing parent to
embrace his music and his muse. Once
more the big set-piece is a dance
through the hero’s native streets —
Luton replacing County Durham —
while joy abounds and extras gawp.
Hard to believe a twinkle-toes version
for Theatreland doesn’t beckon.
This movie’s other godparent is
Chadha’s Bend It Like Beckham. She por-
trays immigrant families with warmth
and idiosyncrasy. They don’t seem like
figures in a feel-good panto, or not often;
nor peons of morality storytelling work-
ing the political correctness fields. (This
story’s original teller was Sarfraz Man-
zoor, here co-adapting his memoir
Greetings from Bury Park: Race, Religion,
Rock ’n’ Roll).
Javed, played by Kalra with instant
likeability, is an Anglo-Pakistani 16-
year-old. Sprung from the family nest by
Spingsteen-mania, instilled by a school-
pal, he defies an authoritarian father
(Kulvinder Ghir) preaching filial obedi-
ence and conformist careerism. “Do
what the Jews do, they’re successful,”
orates dad, though he doesn’t think any
better of The Boss when insistently
misattributing Jewishness to him.
Javed goes on to find love, though in
this film that comes perilously close to
lurve. The romance plot is perfunctory;
the real love interest is Bruce. And you’d
better like his music because you’ll
be battered by it. “Born to Run” is
played on the soundtrack to the point
of meltdown.
The film keeps threatening to
FINANCIAL TIMES
ARTS
Above: Viveik Kalra as the overcook its fairytale optimism and
Springsteen-obsessed hero undercook its characters’ nourishing
of ‘Blinded By the Light’ reality. But fidelity of time and place
Below right: Cary Grant just about hold out. Time: the late 1980s
and Ingrid Bergman in and the long haul of the austerity
Hitchcock’s ‘Notorious’; Thatcher years. Place: that Britain of
Milo Ventimiglia and Enzo combustive but sporadic and scattered
in ‘The Art of Racing in racial tensions.
the Rain’ Eyeless in Gaza. The Miltonic phrase
sums up one of documentary movie-
making’s longest sightless interludes.
Where has the long, unflinching gaze
been — till now — at the Middle East’s
most infamous piece of land? At that cli-
ent penitentiary of Israel, squashed
between it and Egypt?
Andrew McConnell and Garry Keane’s
Gaza tries to make amends; even over-
tries. So many stories are bundled in,
pregnant with woe or poignancy, that we
begin to feel worked over. Everything is
true, we’re sure: except perhaps for
those shots of the teenage girl from
wealthier Gaza playing her cello on a
promontory overlooking the sea. She
really does this? Really sits like a lament-
ing angel sounding her earthly harp?
Anything could be true, of course, in
this 27-miles-by-seven strip of land
containing 2m Palestinians. We know
from the daily news the stories of
death or injury by the border fence.
We watch here the young rebels
sling-shotting their rocks. We meet the
paramedic working 16-hour shifts
and the patriarch (three wives, 40 chil-
dren) who lives with regular bereave-
ment bulletins.
In the alphabet of demonisation, H for
Hamas stands next to I for Israel. Some-
one says: “If we didn’t have Hamas, the
entire Palestinian problem would be
solved.” The rocket-holed apartment
blocks testify to the plague visited by
both houses. One block has been
impaled by a keeled-over minaret, as if
religion itself has been brought tum-
bling, Samson-style. The film’s dynamo
is in its details. The wheelchaired Pales-
tinian rapper; the beach guards taking
their serried bow to Mecca; the fishing
boat owner telling us the price for stray-
ing beyond the three-mile fishing limit:
gunboats. And — again it’s the detail,
human and inhuman, that turns the
knife of truth — “sometimes they spray
you with sewage.”
Today’s world is full of colonists’
descendants rushing to ex-colonies to
make amends. Stones Have Laws is a
documentary by three Dutchmen set in
ex-Dutch Suriname. This bewitching
movie enacts a handover of history-
creating power. The directors — Lonnie
van Brummelen, Siebren de Haan and
Tolin Erwin Alexander — spoke with
Mozart remixed and ready to party
OPERA
Don Juan
Copenhagen Opera Festival
aaaee
Andrew Mellor
“10 Years of Opera for All” is embla-
zoned on staff T-shirts at this year’s
Copenhagen Opera Festival. The dec-
ade-old jamboree divides its loyalties
between popular entertainment and
avant-garde experimentation, with
boutique recitals woven discreetly in
between. Entire operas with chorus and
orchestra are presented ticketless on
city piazzas. Things happen on boats,
bicycles and in fringe theatres but
Copenhagen’s two opera houses are stu-
diously avoided. There’s hardly a glass
of champagne to be seen.
Unless you participate in Don Juan — a
“Requiem for Don Giovanni” dreamt-up
in cahoots with theatre company SORT/
HVID and ritualised in its warehouse at
the back of the city’s meatpacking dis-
trict. Mads Brauer of cult band Efterk-
lang takes care of the music, filleting
Mozart’s opera for its best bits while fil-
tering four singers and three instrumen-
talists through his familiar box of
electroacoustic tricks.
Those tricks work a treat initially as
Nicolai Elsberg’s basso profundo under-
pins an uncanny hybrid of plainsong,
polyphony and echt-Mozart. From the
darkness of an imagined basilica, the
native islanders whose slave forebears
haled from Africa. They drew out their
stories, proverbs and wisdoms; then
transformed them into scenes of drama-
recitative set like tableaux vivants in
scenic exteriors. Riversides; forests;
craggy vales.
One foundation myth is a Flood vari-
ant. Others feature jungle gods and spir-
its. The archetype of the white-man
slaver is here, now remade into a
destroyer of forests. If the movie sounds
like a chastisement exercise, it is; but
more too. It celebrates a people’s animist
creeds and dreams: “The way we are
here, things speak to us.” It depicts their
nature-based art, craft and fables. (In
audience files into an auditorium for
the Requiem proper. Arias are sung as
eulogies, intertwined with ranting
monologues from an individual (actor
Olaf Højgaard) consumed with jealousy
for the Don.
Next we are led into a club populated
by circus artists and seducers, who walk
chosen punters to the bar for bubbly,
gratis. Drowned in reverb until now, at
last the music takes on the pace and
excitability that powers Mozart’s opera;
counter-tenor Morten Grove Frandsen
romps gregariously through “Fin ch’han
dal vino”, microphone in hand, before
a thumping remix of Michael Nyman’s
“In Re Don Giovanni” gets muscles
twitching. Liberate yourselves,
Højgaard’s character hollers from a
Thursday 8 August 2019
Blinded by the Light
Gurinder Chadha
AAAEE
Gaza
Garry Keane, Andrew McConnell
AAAAE
Stones Have Laws
Tolin Alexander, Lonnie van Brummelen,
Siebren de Haan
AAAAE
The Art of Racing in the Rain
Simon Curtis
AAAEE
Notorious
Alfred Hitchcock
AAAAA
loving detail a man is observed fraying a
palm branch into an ornate mini-arch.)
And it renders truth and history into a
vernacular at once free and formalised,
jubilant and ironic. In the almost-last
scene, characters discuss the documen-
tary itself: its genesis, its agenda, and the
possibility, even faint, that it is just a
Trojan horse heralding more invasion
by the white man and his spirit.
Kevin Costner voices a dog’s thoughts
for the duration of The Art of Racing in
the Rain. The brain cowers; the soul
screams; it’s too much to contemplate.
But we critics have to sit through
these things. And the film is not really
that bad.
Garage mechanic and wannabe racing
driver Denny Swift buys Enzo as a pup
and watches him grow. He becomes a
lolloping, full-grown Labrador, his inner
soliloquies delivered in that slow,
cowlick monotone Costner has made a
speciality, sometimes even a thing of
grace. Milo acquires a wife (Amanda
Seyfried), a daughter, a mum-in-law
(Kathy Baker) and a delectably nasty
dad-in-law (Martin Donovan). But
never mind them. The dog tells the
story, and for sentimentalists he will be
the story.
Some things are so succulently tasty
you think they must be bad for you. But
not Hitchcock’s thrillers. Like all the
master’s greats, Notorious, his 1946 tale
of love, spying and murder conspiracy,
is a glorious maze of motive and emo-
tion, enriching the mind and imagina-
tion. The casting is yummy beyond
belief: Ingrid Bergman as the good-time
girl turned espionage pawn and nearly
martyr; Cary Grant as her spymaster
and lover-for-appearances (and eventu-
ally, we’ll be sure, for real); Claude
Rains, dapper and scintillating as a Nazi
fifth columnist in a South America of
high-society expats.
It’s completely hypnotic: from the
twisting strands of a plot defying us fully
to trust anyone, to those Hitchcock spe-
cials, the shots and scenes where the
camera too is a lethal conspiracist.
Watch the crane shot, slow and swoop-
ing, that traverses a room to close in on a
vital room key half-concealed in a hand.
Watch the famous Ingrid-Cary kiss,
extended through time and space,
dragged out teasingly, mischievously
across rooms and across what seems
minutes of screen time.
balcony. Performance becomes party.
Despite the odd satirical barb, the
show is apparently untroubled by the
Don’s antics; an episode in which a vic-
tim of his abuse stuffs her mouth with so
many crisps she can no longer sing is
borderline offensive. Where others have
aligned the libertine’s behaviour with
the modern cult of lifestyle by way of a
critique, director Christian Lollike does
so apparently in celebration. Brauer’s
treatment of the music is by turns
empowering and castrating, but in no
opera house will you feel the character’s
motivations and impulses so closely.
Dangerous, morally bankrupt but
undeniably thrilling — that’s Don Juan.
To August 17, operafestival.dk
Thrilling:
Nicolai
Elsberg as
Don Juan —
Emilia Therese
Thursday 8 August 2019
It was a deal struck to guarantee Bayer’s future but the disastrous $63bn purchase of Monsanto now
threatens it. With its share price halving, some question whether it is time to break up the German group.
A
spirin, cancer medicines,
products to boost crops:
healthcare and agriculture
group Bayer is integral to
German society and indus-
try. It even lends its name to the local
Bundesliga football club, Bayer
Leverkusen. The huge illuminated logo
above the 156-year-old group’s head-
quarters is visible for kilometres across
Germany’s north-western manufactur-
ing heartlands.
Bayer, however, has also come to
symbolise something less wholesome:
large-scale shareholder value destruc-
tion. Last year, Bayer completed the
purchase of US agrochemicals group
Monsanto for $63bn. Measured by the
share price fall since the deal was first
mooted three years ago, the deal ranks
among the worst in corporate history.
US courts have linked Roundup, a
widely used herbicide made by Mon-
santo, to cancer. With more than 18,000
legal cases pending — three have already
been heard — Bayer faces the possibility
of paying billions in compensation. Its
share price has fallen more than 50 per
cent since mid-2017, wiping €50bn off a
market value that now stands at €55bn
— less than it spent on Monsanto. In
April, investors’ anger erupted at its
annual meeting. Werner Baumann, who
has worked at Bayer for more than 30
years, became the first serving chief
executive of a Dax-listed company to
lose a vote of no confidence.
That dramatic share price fall raises
the question of whether Bayer has made
a terrible blunder. An analysis by Lex
shows Bayer’s shares could have com-
fortably generated double-digit per-
centage returns since early 2016 if Bayer
had instead exited its crop science busi-
ness by selling it to Monsanto. The
enlarged Monsanto would have become
the world’s largest agricultural group by
sales. But Bayer’s shareholders would
not now be nursing heavy losses.
Instead, shareholders are asking
whether it would now make sense to
split the group up. “I personally think
that they are going to have to break it
up,” says one. Monsanto’s woes would be
separated from the healthcare busi-
nesses, which have little to do with agro-
chemicals. But if that happened Bayer
might itself become a takeover target.
Making Bayer ‘unacquirable’
In 2016, such thoughts were far from the
minds of Mr Baumann and Werner
Wenning, Bayer’s chairman. There was
a wave of merger activity in agriculture.
Monsanto had sought to buy rival Syn-
genta the previous year, but the Swiss
company successfully argued that Mon-
santo was undervaluing its business.
By December 2015, Dow Chemical
and DuPont, the two largest US chemi-
cals groups, were announcing plans for a
$130bn merger which would combine
seed and crop protection businesses.
Then in February 2016, ChemChina, the
Chinese state-owned chemicals com-
pany, unveiled an ultimately successful
$43bn bid for Syngenta.
Mr Baumann and Mr Wenning did not
want to sit on the sidelines. Combining
Monsanto’s strength in seeds with
Bayer’s expertise in herbicides made
sense, they believed. Herbicides clear
farmland but seeds have to be resistant
to the treatments used. The growth
opportunity was clear, the Bayer bosses
later told investors. Agricultural land is
limited so farm productivity would have
to rise by 60 per cent by 2050 to feed the
planet and a global population expected
to swell by 2bn over the next 30 years.
“If they had kept crop sciences with-
out reinforcement in seeds, they would
not have remained competitive in this
sector,” says Markus Manns, a portfolio
manager at Union Investment in Frank-
furt, which has a small stake in Bayer.
Bayer, however, did not have to buy
Monsanto to create a combined agricul-
tural business. It could have instead sold
its crop sciences unit, harvested a wind-
fall and avoided the Roundup pitfall.
Applying a similar enterprise value-
to-earnings multiple to ChemChina’s
By Ralph Atkins
Bayer’s €50bn blunder
Syngenta deal, Bayer’s crop sciences
business could have been sold for as
much as €40bn in early 2016. If so, on
conservative assumptions about how
Bayer’s share price would have per-
formed, Lex calculates that Bayer
shares held at the start of 2016 would
comfortably have generated total
returns of 17 per cent by now. On less
onerous assumptions, returns could
have been as high as 50 per cent.
As a result of the Monsanto deal, total
returns to Bayer shareholders were neg-
ative 40 per cent, even though global
pharmaceutical companies generated
around 10 per cent returns over the
same period.
Selling Bayer’s agricultural business
was not on the company’s agenda, how-
ever. It operates as a conglomerate, run-
ning a changing portfolio of businesses.
The idea behind the concept is that
managers can spot growth opportuni-
ties. Bayer saw agriculture, a regulated
sector, as an area it could apply, and
benefit from, the knowledge it had
gained in healthcare.
At least that was the official explana-
tion. An alternative view is that the
Monsanto takeover was a defensive
move. Selling crop sciences would have
left the remaining healthcare businesses
vulnerable to a takeover. In 2000, Man-
nesmann, an industrial company
located in nearby Düsseldorf that had
expanded into telecoms, was taken over
by the UK’s Vodafone in a £112bn deal.
The loss of an industrial icon was a
defining moment for corporate Ger-
many. Mr Wenning “thought that Mon-
santo would make Bayer unacquirable”,
says one banker. “The irony is that it has
made it more vulnerable — except that
the US lawsuits are now a potential ‘poi-
son pill’.”
The deal, which was not put to a
shareholders’ meeting, was controver-
‘If Bayer settles [legal claims]
for $5bn to $10bn, you can
still make the acquisition
workable. If it is much more
then it was a bad acquisition’
sial from the start. Analysts argued the
price of $128 in cash per Monsanto share
— 44 per cent above the share price
before Bayer’s first written proposal in
2016 — was too high. Moreover, they
said, investors had bought Bayer shares
because it was a healthcare company.
Monsanto was a pioneer of genetically
modified crops — dubbed “Franken-
stein foods” by opponents. Historically,
it was linked with controversial prod-
ucts such as Agent Orange, a herbicide
used by the US military in the Vietnam
war. Regulatory approval for Bayer’s
takeover also took longer than
expected. “The company has never
been able to get on the front foot and
extol the virtues of the deal,” says Peter
Verdult, an analyst at Citi.
Risk analysis
Should Bayer’s managers have foreseen
the US crisis? In 2015, the World Health
Organization’s International Agency for
Research on Cancer had found evidence
that Roundup ingredient glyphosate
was carcinogenic.
A legal opinion by Linklaters, com-
missioned by Bayer in September, con-
cluded that possible risks from glypho-
sate-related lawsuits were assessed “on
the basis of the scientific findings availa-
ble”. It added that the management had
come to “the permissible conclusion
that the chances created by the acquisi-
tion clearly outweighed the risks”.
What was clear was European con-
sumer resistance to genetically modi-
fied crops and Monsanto’s lobbying tac-
tics. Yet Bayer believed the public mood
was shifting. In June 2016 more than
100 Nobel Prize-winners wrote an open
letter to Greenpeace, urging it to drop its
opposition to biotechnological advances
which, they said, prevented disease and
helped the environment. Bayer thought
★ FINANCIAL TIMES 7
FT BIG READ. LEX IN DEPTH
Bayer’s managers. “In a normal com-
Recovery mission How Monsanto deal rocked the German conglomerate pany, the CEO and chairman of the
supervisory board would have long
Share prices gone,” says one shareholder. Pressure
Rebased could also build for a reorganisation of
Bayer MSCI All World Pharma and Biotech index Bayer’s portfolio of businesses.
120 Bayer was created in the 19th century
June 2018 August 2018 to make dyes. In 2005, lower margin
The $63bn Monsanto hit with $289m of damages chemicals and polymers production
Monsanto deal in US court case, triggering fears was spun off to create Lanxess, a sepa-
110
is completed of billions in penalties rately listed company with €7bn of
annual revenues. A decade after that it
spun off its plastics division as Covestro.
100 One option could be to spin off agro-
chemicals or healthcare. The businesses
have little crossover and such a move
90 would ringfence any legal or reputa-
tional risks surrounding the Monsanto
part of the agricultural business. It could
July 26 2019 also change investors’ perceptions of
80
September 2016 US court reduces $2bn Bayer, bringing gains for shareholders.
February 2016 Bayer signs takeover penalty against Bayer’s share price relative to forecast
ChemChina announces agreement with Monsanto Monsanto to $87m earnings is at an eight-year low. Some
70 investors will see that as a buying oppor-
$43bn acquisition of
Switzerland’s Syngenta tunity. Bayer values the whole company
significantly below the intrinsic worth
April 2019 of its individual businesses — based on
60
Shareholders pass so-called “sum of the parts” calcula-
vote of no-confidence
in Bayer management
50 There are hints of a
2016 2017 2018 2019 settlement over the
Roundup litigation,
allowing Bayer to fix
A lower valuation Total returns if Crop Science had been sold other issues arising
Price as a multiple of forward earnings 2016 to date (%) from the takeover
22 50 tions. These look at comparable busi-
nesses to judge where the shares should
20 trade. An analysis by Citi implies Bayer’s
40 shares should trade at around €100,
18 compared with about €59 currently.
The largest part of the discount is
30
16 explained by potential US legal bills. Yet
investors also expect a “conglomerate
14 20 discount” — valuing the company at a
lower price because of the perceived
12 inefficiencies of combining diverse busi-
10 nesses. If the former Monsanto divisions
10 were separated, the shares might also
benefit for another reason. The US
8 Higher Lower Higher Lower
0 group’s reputation has prevented the
purchase of Bayer’s shares by “sustaina-
6
multiple multiple multiple multiple
ble” investment funds.
and flat and flat and shares and shares
1995 2000 2005 2010 2015 2019 market market fall 25% fall 25%
Among those hinting it would favour
a break-up is activist investor Elliott
Management, which has a 2 per cent
Implied share prices Global agricultural land and population projections stake. “Bayer’s discounted share
Bayer and various units (€) Agricultural land (bn hectares) Population (bn) price today does not reflect the signifi-
cant underlying value of its constituent
150 6.0 9
businesses,” the hedge fund said in June.
Consumer
8 Such a break-up may require a change
of leadership. “Mr Wenning never
5.5 7 wanted a pure healthcare company,”
Crop Science 100 says UBS analyst Michael Leuchten. “He
Trend line 6 has always seen crops as pure Bayer.”
5.0 There is another snag. Bayer’s US legal
5 woes have distracted from weaknesses
50 in its pharma business. Two best-selling
4
Pharma 4.5 drugs — Xarelto and Eylea, an eye medi-
3 cine — will lose patent protection in sev-
eral markets from 2023 and 2025. That
Reconciliation 0 2 threatens a “patent cliff” of steep falls in
4.0
Implied by Current revenues and lower profits. “The big
Net debt 1
‘sum of share challenge is how to revive pharma
Pension deficit parts’ price ahead of the cliff edge. It needs to do that
-50 valuation 3.5 0 before even considering something like
1962 70 80 90 2000 10 20 30 a spin-off,” says Mr Leuchten.
Sources: Refinitiv; FAO; UN; Citi; FT research
Bayer argues it has strong products in
the pipeline and could also make small
Bayer CEO it could avoid reputational damage by “If they settle for $5bn to $10bn, you acquisitions. But its capacity for a big
Werner withdrawing the Monsanto brand as can still make the [Monsanto] acquisi- takeover is limited. Its low share price
Baumann, top planned. But the US court cases have tion workable,” says Mr Manns at Union would make it harder to raise additional
right, and kept the name very much alive. Investment. “If it is much more than capital from shareholders.
chairman The fall in Bayer’s value implies inves- $10bn, then it was a bad acquisition.” It is also heavily indebted after paying
Werner Wenning tors have priced in the cost of the US liti- for the Monsanto deal. Net debt was last
did not want to gation as running into tens of billions of Finding value year five times ebitda, an earnings
sit on the dollars. But precedents suggest the final Yet ending the Roundup litigation, measure — a level which could discour-
sidelines when bill could be much lower. In 2007, US whatever the price, will not undo all the age banks or bond investors from lend-
there was a wave drug group Merck settled, for $4.85bn, damage. Worries will remain over the ing more. The risk is that an independ-
of M&A activity lawsuits claiming its Vioxx painkiller widely used glyphosate. Critics argue its ent Bayer healthcare unit would be
in the drug caused heart attacks and strokes. use is environmentally unsustainable. swallowed up by a larger rival. “I would
agricultural This year Bayer and Johnson & Johnson Bayer has committed to spend €5bn rather think that it is an acquisition tar-
sector settled more than 25,000 US claims that over 10 years — roughly a tenth of its get,” says Mr Manns.
their blood thinner Xarelto caused dan- research budget — on research into That is a fate Bayer would fiercely
gerous bleeding, for $775m. alternatives. For now, sales of glypho- resist. Its managers want to focus atten-
Bayer was initially defensive. But sate seem unlikely to tumble. Alterna- tion on completing the integration of
since the April shareholders’ meeting, it tive methods of weed control, such as Monsanto. Their strategic rationale for
has struck a more pragmatic tone. Its tilling, are also environmentally damag- the purchase — the need to feed an
chances of a swift settlement could rise ing. Bayer could withstand the hit even expanding global population — remains
as appeals in the US are heard. Last if Roundup was withdrawn, as it intact. But with one big, questionable
month a Californian judge cut the dam- accounts for about 7 per cent of sales. deal, Bayer’s managers have jeopard-
ages awarded in the most costly case so Harder to overcome will be the ised its status as an integral part of
far from $2bn to $87m. broader damage to the reputation of Germany’s industrial landscape.
8 ★
THURSDAY 8 AUGUST 2019
HSBC shows the need for
succession planning
Fate of former chief executive provides a cautionary tale for bosses
Succession planning is rarely easy,
always essential. The abrupt exit of
HSBC chief executive John Flint,
removed by the board after just 18
months in the job, shows what happens
when it goes wrong. The company now
has the opportunity to correct course,
break with tradition and look for a can-
didate who can change the bank’s cul-
ture and articulate a new strategy for
the Chinese mainland.
Mr Flint’s departure on Monday
came after the breakdown of relations
with the board, dominated by chair
Mark Tucker, a former insurance exec-
utive. Mr Flint was the preferred candi-
date of the previous chief executive
Stuart Gulliver, who left in 2018 after a
tenure that focused on fixing legacy
issues related to the subprime mort-
gage crisis and money-laundering
scandals. Mr Flint, who had spent 32
years at the bank, was a loyal ally of Mr
Gulliver, another “lifer”.
Outgoing bosses should ask whether
the company needs a radical break
with the past. So-called insiders with
experience at the company tend to
excel at keeping an already thriving
company ticking over. Outsiders, how-
ever, can bring a new perspective and
challenge corporate orthodoxy.
Mr Gulliver’s departure offered an
opening but the recently appointed Mr
Tucker opted for the known quantity
instead. That risk-averse choice has not
paid off: colleagues pay tribute to Mr
Flint’s intelligence but say he lacked
vision. The board complained he was to
slow to make decisions. An introvert,
he found it difficult to get along with
the forthright Mr Tucker and lacked
other strong allies within the bank to
speak up on his behalf.
Many of the problems, however,
reflect the position he found himself in.
Mr Flint had to be an effective captain
not just for a single ship but for an
entire fleet spread across Britain, the
A long overdue review
of pension taper policy
Complex arrangement has contributed to staffing crisis in the NHS
Three years after its introduction by
then chancellor George Osborne, the
government has announced it will
review the so-called pension taper
and its impact on the public sector.
The decision is a most welcome one. An
investigation by the Financial Times
and other media reports have found
that the Byzantine tax arrangement
was leading to senior doctors avoiding
taking on extra shifts. The impact has
not been restricted to the medical pro-
fession, however. Across all industries,
those on higher incomes have found
themselves facing nasty surprises.
The rationale behind the taper was
that much of the £25bn annual net cost
of pensions tax relief goes to top earn-
ers. To counter this, the taper reduces
workers’ tax free annual allowance
throughout the year as their earnings
rise. For those on the highest rate, with
a yearly income of more than £110,000,
the allowance falls to just £10,000.
Exceeding these limits can be costly,
with some doctors facing marginal tax
rates of more than 100 per cent.
The taper has proven to be poor pub-
lic policy. Those with incomes close to
the limit, which is based on pension
contributions, salary and other factors,
have to predict how much they will
earn at the beginning of the year to see
if they are within the arbitrary bounda-
ries — creating a tax system which only
really works for clairvoyants. Scrap-
ping the system would both incentivise
earners to put money into their pen-
sion savings, and ensure a smoother
running of both public and private pro-
visions.
The most vocal anger at the effects
of the taper has come from the public
sector, where the government sets
rigid pension contribution levels. The
National Health Service has been par-
ticularly badly hit, with many consult-
ants and GPs choosing to either reduce
their working hours or take early
US, Hong Kong and Asia. With a strong
presence in China as well as a London
headquarters, he faced not only a man-
agement challenge but a physical one
as well. Reportedly, Mr Flint found the
travel schedule and working hours
punishing. He complained he was hav-
ing trouble sleeping.
All four of the bank’s major markets
face storm clouds. As the biggest retail
bank in Hong Kong it is exposed to the
political turmoil raging in the territory;
its business lines are mature and
unlikely to deliver anything other than
marginal growth. Its other home mar-
ket, Britain, faces a possible downturn
in the event of a disorderly Brexit. The
US operation, which it acquired in
2003, has never turned a profit, while
in China itself the bank risks being
caught in the middle of the trade war. It
faces accusations of aiding the US gov-
ernment in its investigation of tele-
coms company Huawei, which is sus-
pected of having close links with the
Chinese military establishment.
The next chief executive needs vision
and operational excellence. They must
either fix the US operations or leave the
market completely. In Hong Kong, the
bank needs a better digital offering. It is
the dominant retail bank in the former
colony but faces competition from new,
nimbler online outfits. Whoever takes
over will need to prioritise their rela-
tionship with the hands-on Mr Tucker
and form an effective team.
Critically, however, the next chief
executive faces two key challenges.
First, they must change the culture at
the bank, which can be old-fashioned
and comes with a bloated hierarchy.
Second, they must respond to the
changing climate in China, ensuring
they have the right people to make the
most of their status as a bridge between
east and west. Most importantly, the
new chief executive will have, at some
point, to consider their own successor.
retirement in order to avoid hefty tax
bills. In July, NHS Providers, which rep-
resents English hospitals, said this
would create far longer waiting times
for treatment — one more burden in a
badly stretched service. They warned
the government that it only had a mat-
ter of weeks to act. Judges and other
high-earning public servants have also
been feeling the pinch.
A generous government pension,
with no risk of defaulting, was once an
incentive to stay in the public sector.
The introduction of the taper has
turned it into a liability. This risks driv-
ing talented high-earners to the private
sector, where more flexible arrange-
ments are possible. Some employers
have reduced pension contributions
while increasing salaries, encouraging
their workers to invest in ISAs and
other measures. Nevertheless, high-
earners in the private sector have also
faced problems as a result of the taper.
Annual earnings can vary far more
than in government employment. The
taper cannot account for large bonuses,
for example, treating them as sudden
salary rises and reducing the annual
allowance accordingly.
Beyond the taper, the UK’s tax sys-
tem is not a poor one. There are argu-
ments around the current level of the
current pension savings lifetime allow-
ance, set at £1.055m as of this April.
The general mechanism works well to
incentivise worker contributions into
the pension pot. Tax is deferred until
retirees begin drawing on their pen-
sions. Earners on higher incomes will
receive between 40 and 45 per cent tax
relief.
Predictability, rather than radical
experimentation, should be a central
pillar of the tax system. As such,
reversing Mr Osborne’s reforms is a pri-
ority. This is no time for tinkering.
When it comes to fairer taxation, half-
measures will not do.
FINANCIAL TIMES
Letters
Stranded shale assets send a warning to Argentina and others
Your article on Argentina and shale gas
(August 7) rests on a faulty premise.
The shale revolution is not a boom, but
a big bust of epic proportions.
There is no denying that there has
been a production boom in both
fracked oil and fracked natural gas in
the US but it has been a financial
disaster for producers and investors.
Cash flows from fracking-focused oil
and gas companies across the country
have been negative for decades — even
when oil and gas prices were higher
than they are now.
Frackers, in fact, have spilled billions
of dollars in red ink. A recent analysis
Liberalising trade will
power Asian economies
Gideon Rachman observes that Asia’s
economic miracle depended on peace
and stability (“The Asian strategic
order is dying”, August 6). It also relied
on trade surpluses with the US. The
American locomotive could pull the
Asian train until China hitched its car
to it. To sustain prosperity, Asia needs
to become its own engine of growth. It
can do this by liberalising trade.
Ratifying the Regional Comprehensive
Economic Partnership and eventually
including China and Korea in the
Comprehensive and Progressive Trans-
Pacific Partnership would multiply
trade in the region.
Politicians in Asia should pursue this
agenda rather than following president
Trump into a protectionist morass.
Willem Thorbecke,
Senior Fellow, Research Institute of
Economy, Trade and Industry,
Tokyo, Japan
Limit the backstop to
Northern Ireland alone
Your editorial (“Britain needs an
agenda beyond the Brexit trap”, August
6) caused me to re-read the piece in the
Irish Times on July 31 from Professor
James Anderson of Queen’s University
in Belfast. The Irish backstop can easily
be resolved by following the guidance
of the affected people — those in
Northern Ireland — who voted in June
2016 to remain aligned to the EU single
market. Is it beyond Westminster to
correct the strategic error made by Mrs
May of broadening the backstop to
apply to the entire UK?
The union of Northern Ireland with
Great Britain would more likely endure
if the backstop was narrowed to
Northern Ireland as originally sought
by Dublin and Brussels.
Conor McCoole
Singapore
Take the Brexit deal
back to the EU
As the FT says (“The week that
Johnson’s Brexit plan met reality”,
August 3) Mr Johnson could emerge
from his short honeymoon period less
optimistic but more pragmatic. And he
may draw the same lesson you drew
from last week’s difficulties: that before
charging ahead with a no-deal Brexit,
he must take the issue back to the
country.
But before doing so, he should first
take the issue back to the EU. The EU
has made it clear, on many occasions,
that while the withdrawal agreement
can’t be renegotiated, it’s willing to
India’s rich party
under a growing
cloud of gloom
New Delhi
Notebook
by Amy Kazmin
of 29 fracking-focused companies
produced by the Sightline Institute and
the Institute for Energy Economics and
Financial Analysis showed aggregate
negative cash flows of $184bn between
2010 and early 2019.
This red ink has spilled from
companies fracking for natural gas in
Appalachia, and for oil in the Permian
Basin. Bankruptcies have mounted.
Since 2015, 174 North American oil and
gas producers have filed for
bankruptcy protection, according to
law firm Haynes & Boone,
restructuring nearly $100bn in debt
largely through write-offs.
‘We stockpiled snacks and ate them’
discuss and possibly modify the
political declaration on the future
relationship between the EU and the
UK. A renegotiated declaration,
accompanied by a legal codicil
pertaining to the applicability of the
provisions in the withdrawal
agreement in regard to the Irish
backstop and conveying the
commitment of both parties to ensure
the Irish border remains open in all
future circumstances, could make it
possible for the House of Commons to
approve the deal by October 31.
And if that happened, Mr Johnson
could go back to the country, and in all
likelihood win a sweeping victory.
Professor David R Cameron
Department of Political Science, Yale
University New Haven, CT, US
Is the UK ‘just crazy
enough’ to do it?
Just as Voltaire’s Candide offers insights
into the value of unfounded optimism,
so too Mel Brooks’ classic Blazing
Saddles illustrates the government’s
tactics in talking up its readiness to
leave with no deal (August 1). In the
film, Sheriff Bart, facing a lynching by
the hostile citizens of Rock Ridge, holds
a gun to his own head and threatens to
kill himself. The townsfolk recoil.
“Hold it men. He’s not bluffing!” shouts
one. “He’s just crazy enough to do it!”
interjects a second. The credulous
citizens lower their guns, and Bart
smuggles himself to safety. “They are
so dumb!” he says in amazement,
congratulating himself on his unlikely
escape.
But the question posed is this. Does
the prime minister believe that the
leaders of the EU are as gullible as the
good people of Rock Ridge?
Alec Burnside
London W1, UK
On a recent summer evening, New
Delhi’s socialites gathered at Bikaner
House — the erstwhile pied à terre of
Rajasthani royalty — for a fashion
show of Tarun Tahiliani, a feted
Indian designer, whose lavish
bridalwear ranges from $17,000 to
$21,000 for a single outfit.
Guests were served flutes of pink
champagne sprinkled with jasmine
petals, lychee wantons, pulled pork
tacos and tuna squares. They clapped
appreciatively as models strutted past
in glittering saris and full-skirted
lehengas, embellished with elaborate
embroidery and Swarovski crystals.
Mr Tahiliani’s outfits are beloved by
India’s super-wealthy business elites
who, since the end of socialist
austerity in the 1990s, have revelled in
displays of their riches, boosting an
indigenous luxury industry once
believed to be recession proof.
Yet as the designer unveiled his
collection, top Indian industrialists,
entrepreneurs and executives were
enveloped in a cloud of gloom,
worried about the faltering economy
— and the government’s adversarial
attitude towards private enterprise.
India’s gross domestic product
growth has slowed for four quarters in
a row and shows little sign of picking
up. At the same time, Narendra
Modi’s government appears to view
the business community with deep
suspicion, if not outright hostility.
“I’ve been working for 35 years,
most of it in the financial industry,
and I’ve never seen so much gloom
and despair,” one Mumbai-based
If you are not satisfied with the FT’s response to your complaint, you can appeal
to the FT Editorial Complaints Commissioner: complaints.commissioner@ft.com
Bankruptcies will continue as oil and
gas borrowers must repay or refinance
several hundred billion dollars of debt
over the next six months. Meanwhile,
natural gas production has boomed,
creating a glut, and deepening the
financial distress for oil and gas
producers around the world.
There is also a glut in natural gas
produced in the Permian fields that
frackers either burn off (flaring) or pay
to have transported. Gas producers
throughout the world are desperately
seeking to export their product
overseas, primarily to Asia. Part of the
glut has been blamed on infrastructure
Bioethanol can fuel shift
to a greener economy
Professor Bauquis (“BP’s bioethanol
ambitions are sadly misguided”,
Letters, August 5) criticises bioethanol
for being energy intensive to produce,
grown on land that might otherwise be
used for the production of food and
contributing to deforestation in Brazil.
This is incorrect.
Bioethanol has full cycle emissions
around 70 per cent lower than
traditional transportation fuels,
including the use of the sugar cane
waste to generate biopower — over
two-thirds of which is exported to the
Brazilian power grid.
The cane is grown on degraded
pasture land that has limited
alternative agricultural use and is
located a significant distance from
ecologically sensitive areas.
Furthermore, sugar cane feedstock,
combined with the expertise developed
in the Brazilian industry, delivers
higher ethanol yields than any other
form of biofuels.
We are proud of our recently
announced plans to form BP Bunge
Bioenergia, which will lead to a 50 per
cent increase in BP’s biofuel
production.
We believe it is an important step in
progressing the decarbonisation of
transportation and is an example of
growth in a genuinely low carbon
business.
Mario Lindenhayn
Chief executive, BP Biofuels,
São Paulo, Brazil
Only navy orders can buoy
shipbuilding strategy
The collapse of the Harland and
Wolff shipyard is the inevitable
outcome of a toothless and confused
“shipbuilding strategy” (“Belfast
Shipyard set to file for insolvency”,
August 6).
I have pointed out on numerous
occasions in the House of Lords that a
shipbuilding strategy needs ship
orders. Without them it is as pointless
as ferry companies without ferries.
For example, the three new Fleet
Solid Support Ships should be ordered
now and built in the UK. They are
clearly military vessels.
The desperate shortage of surface
ships in our navy should be addressed
by speeding up the Type 26 frigate
build programme and ordering all eight
planned.
The Type 31e frigates need to be
ordered as soon as possible.
Admiral Lord West of Spithead
House of Lords,
London SW1, UK
executive says. Few top industrialists
are willing to express their unease
openly, fearing retribution from a
government that is notoriously
sensitive to criticism.
But Kiran Mazumdar-Shaw,
founder of the Bangalore-based
biotech company, Biocon, says Mr
Modi’s public promises to eliminate
the ills of “crony capitalism” seem to
have left him wary of engagement
with the corporate world.
“They want to distance themselves
from crony capitalism, with the result
that they don’t talk to business
people,” she says. “As far as the
common man is concerned, every
businessperson is a crook and stealing
taxpayers’ money. That is how
sentiment is being inflamed.”
The recent suicide of India’s “coffee
king”, VG Siddhartha, was seen by the
business world as symptomatic of a
wider malaise. “If you look at India
Inc, they are not in an ebullient mood.
They are concerned. Alarm bells are
ringing. We need to hear them,” Mrs
Shaw says.
After Mr Modi’s landslide re-
election victory in May, some Indian
industrialists were cautiously
optimistic that the prime minister
would turn his attention to reviving an
economy showing signs of trouble.
That hope was not realised. Instead
of new stimulus measures or a fresh
wave of bold structural reforms, the
new government’s first budget in July
set an aggressive target of increasing
tax collections by 20 per cent.
Businesses fear the ambitious goal will
Thursday 8 August 2019
Email: letters.editor@ft.com
Include daytime telephone number and full address
Corrections: corrections@ft.com
issues in the Permian basin. But, as the
article notes, Argentina’s infrastructure
problems are far greater.
Given the failure of frackers to create
a viable business model, Argentina
should not seek to replicate the shale
boom. It should instead look towards
innovative new models of sustainable
energy and economic growth such as
those being pursued in neighbouring
Chile and Uruguay.
Kathy Hipple
Professor, Bard MBA in Sustainability;
Financial Analyst, IEEFA.org; Partner,
Noosphere Marketing,
New York, NY, US
A levy to lower frequent
flyers’ carbon footprint
Your correspondent, Niall Macdonald
(“Radical climate action will curtail
personal mobility”, Letters, August 8)
prompts the observation that air flight
taxes should be radically overhauled.
Here’s a way for the UK to lead:
charge individuals at an increasing rate
for each trip in any calendar year taken
from a UK airport. A modest levy for
the first flight would be, say, 5 per cent
of the fare. That would ensure social
justice. But this percentage would
double for every successive journey.
Taxpayers would have a duty to
declare their flights to HM Revenue &
Customs which would be tasked to
make random checks. Frequent flyers
would think carefully about taking
multiple flights.
Steven Fogel
London NW11, UK
German law is not
subordinate to the EU’s
While Paul Horne is right in pointing
out that, in principle, EU law takes
precedence over national legislation,
even national constitutional law, he is
wrong to state (Letters, August 5):
“even Germany’s basic law”. EU law is
not above Germany’s Basic Law
(Grundgesetz).
This is a much more complex
question which has not been finally
settled. Simply put, there is no
subordination or superiority between
the German constitutional system and
the EU legal order, which is sui generis.
both bodies of law stand side by side
and both (highest) courts co-operate
on issues of legal and or constitutional
importance, neither claims to be above
the other, no cause for concern here.
Ingeborg Kühling-Garfield
Managing Director, Europa-
Wirtschaftsschulen,
Vienna, Austria
How to boost care
in ageing societies
There are many ingredients in fixing
the social care agenda with radical
intervention; you identify one, of David
Prowse giving up his employment in
order to care for his mother with
dementia (August 1). Instead, perhaps
the tax system should enable Mr
Prowse, aged 57, to remain in his
employment and deduct as an expense
against his income tax the cost of
employing carers? Better economics
and better for Mr Prowse’s longer-term
financial position.
Michael Wade
London SW1, UK
exacerbate what some call “tax
terrorism” by officials under pressure
to meet unrealistic targets.
The budget also levied a steep new
tax surcharge on the super-rich,
raising the effective tax rate for those
earning more than $285,000 to 39 per
cent, and nearly 43 per cent for those
earning around $700,000. Nirmala
Sitharaman, the finance minister, said
no more than 5,000 individuals would
be affected and that they should be
willing to contribute to the nation.
“The signal she sends is that rich
Indians deserve to be penalised,”
wrote the columnist Tavleen
Singh. Ms Singh believes the latest tax
rise will encourage more rich Indians
to follow in the footsteps of the more
than 23,000 dollar-millionaires that
Morgan Stanley estimates have left
India since 2014. The new taxes have
had other unforeseen consequences,
hitting foreign portfolio investors, who
pulled about $5.5bn from the stock
markets in July.
As the mood sours, the luxury
industry is feeling the pinch. Footfalls
in Delhi’s most upmarket shopping
mall are said to have fallen 11 per cent
last year, as the rich feared they would
be under surveillance there. Once
blistering sales for designer wear have
tapered off. “The feelgood factor is
extremely low — the lowest I’ve seen
in decades,” Mr Tahiliani told me after
his show. “There is such unease.
Nobody is investing. People are just
nervous about spending.”
amy.kazmin@ft.com
Thursday 8 August 2019
A MER ICA
Janan
Ganesh
A
t some stage during this
century, perhaps near its
midpoint, white people
might no longer amount to
an absolute majority of the
US population. Whether or not they
should mind, enough do to disturb the
politics of the republic and at times its
very peace.
A feeling of racial dispossession
animated at least the fringes of the
Tea Party movement a decade ago.
There is no accounting for the political
rise of President Donald Trump without
some reference to the same anxieties.
From what we know, and with due
caution in asserting cause and effect,
the “replacement” of his race aggrieved
the man who murdered 22 people
in El Paso, Texas, on Saturday.
Music is more
than the sum
of its parts
BUSINESS
John
Gapper
T
he musical magpie is under
threat. Legal judgments in
both the US and Europe last
week have made it harder
for songwriters and produc-
ers to adopt samples, tunes or even
moods from other people’s music in cre-
ating their own.
Katy Perry and her team of songwrit-
ers were ordered by a US jury to pay
$2.8m in damages for copying part of an
11-year-old Christian rap song in her
2013 hit “Dark Horse”. Meanwhile, the
pioneering German electronic band
Kraftwerk won a long-running case in
the European Court of Justice over the
sampling of a two-second rhythm from
their 1977 track “Metall auf Metall”.
The balance of freedom of artistic
expression versus copyright protection
has swung heavily to the latter, after the
free-for-all era of musical copying and
sampling in the early 2000s. The old
philosophy was that creative property is
theft; today’s is that composers control
each note they write.
Singers and writers deserve protec-
tion but the trajectory of legal cases,
particularly in the US, is worrying. It is
turning into open season for entertain-
Jonathan
Powell
T
heresa May made a classic
negotiating mistake by
engaging in Brexit talks
with the EU before agreeing
a position with her own
side. Her successor as UK prime minis-
ter, Boris Johnson, is now making the
opposite mistake by refusing to talk to
the Europeans until they concede on his
major demand — dropping the North-
ern Ireland “backstop” to prevent a
hard border in Ireland. He is likely to
incur a similarly disastrous outcome.
Setting preconditions to a negotiation
in this way is almost always an error. Mr
Johnson will either face a humiliating
climbdown or the prospect of no negoti-
ations taking place at all before the
deadline of October 31.
He should learn from the experience
of his predecessor John Major, who
was forced to drop his demand that
the IRA decommission its weapons
A plural society need not be a fractious one
How the US deals with its diversifica-
tion is of weight to the rest of the west,
because other countries, if not to the
same extent, nor at the same pace, will
follow. It matters, then, if Americans
succumb to despondency — to a sense
that turmoil is the way of the future.
The balance to be struck here is pre-
carious. The US has to avoid the com-
forting pretence that El Paso was an iso-
lated atrocity. It has to take white
nationalism more seriously than it has
done. But it has to do so without grant-
ing its core pessimism: that a plural soci-
ety is by definition a fractious one. To
the contrary, the transition to “majori-
ty-minority” status need not be such a
defining event, nor one attended by ter-
rible social rupture.
What it means to be white is liable to
change. It has changed before. During
and immediately after the mass migra-
tions from Catholic and Orthodox
Europe in the 19th century, the Irish,
Italians and Slavs were held by nativists
to be so alien as to constitute a separate
ethnic, if not racial, group.
As far back as 1751, in his Observations
Concerning the Increase of Mankind,
ment lawyers on even tiny snatches of
melody or beats in hit songs, with writ-
ers trying to nab a share of what they
inspired more profitably in others.
If that were how classical music
worked, Dvorak would have been in
trouble for so admiring Wagner that he
followed the “great little man” around
Prague in 1863 and wrote works influ-
enced by him and other composers.
Richard Strauss might also have heard
from Verdi’s estate for throwing a per-
fect pastiche of an Italian tenor aria into
Der Rosenkavalier.
In some ways, courts are responding
to the way that many pop hits are now
created, with teams of writers and pro-
ducers taking components of melody,
harmony and hooks and assembling
them into products for singers including
Ms Perry. The modern incarnation of
Tin Pan Alley was pioneered by the
Swedish musician Max Martin, who co-
produced and co-wrote “Dark Horse”.
The assembly method of songwriting
has some similarities to sampling,
which literally involves copying parts.
The ECJ ruled in the Kraftwerk case that
permission is required for any sample,
although it does not count as a repro-
duction if it is modified so much that
it is unrecognisable. This fits with a
US ruling in 2016 on a horn fragment
in Madonna’s 1990 song “Vogue”.
No one should be surprised that a lot
of hits constructed in this manner
sound rather similar. Like any company
that calls in a management consultancy
to mimic what it has done for others,
Johnson has set himself a trap on the Irish border
before entering negotiations. The 1994
IRA ceasefire was not “permanent”, as
the government had hoped, and the
British did not want to find themselves
negotiating in the face of the threat of
renewed violence. They therefore
demanded that the IRA decommission
all its weapons before republicans could
join the negotiations. They were
refused. The government revised the
demand down to the majority of its
weapons, but again they were snubbed.
Patrick Mayhew, the Northern Ire-
land secretary, made a speech in which
he reduced the demand to “the actual
decommissioning of some arms”, which
became known as “Washington Three”,
the third condition for Sinn Féin’s par-
ticipation. This too was rejected and in
1996 the IRA returned to violence.
The issue of the decommissioning of
weapons continued to dog the talks for
more than a decade but, in the end, the
British government had to accept, on
the basis of a formula proposed by US
senator George Mitchell, that Sinn Féin
could have a seat at the table without
giving up a single weapon. The alter-
native was no peace negotiations.
Mr Johnson has set himself a
★ † FINANCIAL TIMES
Opinion
Benjamin Franklin abhorred the arrival
of Germans (“Palatine boors”), whom
he contrasted with English descendants
not just in custom but also in “complex-
ion”. It was only over time, often in
response to yet other immigrant groups,
that these variegated Europeans
“became” white. Consider how some
who now fear for “Judeo-Christian”
culture once regarded the people
The US has to take
white nationalism more
seriously but without
granting its core pessimism
described in the first half of that term.
Just as the definition of a “real” Amer-
ican widened from those of English
descent to those of European descent,
it has the potential to widen again. The
new test of whether someone is In or Out
might be whether they speak English
as a first language, or identify with
some kind of Christian denomination.
That people fracture along the lines of
a singer who employs (or is employed
by) Mr Martin or Lukasz Gottwald, the
US co-producer and co-writer of “Dark
Horse” also known as Dr Luke, is not
seeking pure originality.
But it also means that such songs can
be reverse engineered into their compo-
nents, and each compared with all that
went before. So it proved with “Dark
Horse”, which is little like “Joyful Noise”,
the song on which it infringed, except
for one element — an eight note ostinato
beat. This led the jury to hand the writ-
ers of “Joyful Noise” 22.5 per cent of the
“Dark Horse” profits.
The most egregious example of a song
getting into expensive trouble over a
single element was Robin Thicke and
Pharrell Williams’ 2013 hit “Blurred
The assembly method of
songwriting has similarities
to sampling, which literally
involves copying sections
similar trap, even if with a very different
sort of negotiating partner. There is no
chance of the EU dropping the backstop
as a precondition for meeting him, even
if they were prepared to discuss it face
to face. And, as long as the British
government does not put forward a
convincing alternative to deal with the
threat posed to the Good Friday Agree-
ment by Britain leaving the single mar-
ket and the customs union and thereby
There is no chance
of the EU dropping the
backstop as a condition
for meeting him
recreating a hard border, the EU cannot
back down.
The Brexiter refrain of “technology”
does not address the question, let alone
answer it. It is true that when, and if, the
technology is invented, it could speed
the passage of a lorry across the border,
but that is not the problem. The prob-
lem is that a hard border again raises the
issue of identity which was resolved by
language and religion rather than of
colour is no great cause for joy. It would
certainly not meet the republican ideal
of one’s citizenship being the only iden-
tity that matters. But what it would do is
confirm how plastic is our understand-
ing of who belongs and who does not.
Demographic projections, in which a
line marked White and a line marked
Non-White cross over at some point, do
not capture this. The idea of one inter-
nally coherent group up against some
equally monolithic “other” does not
describe the history of the US. The ten-
sions of the future are likely to be com-
plex and cross-cutting.
Even the projections themselves rely
on a certain crudity. In the Census
Bureau data of 2018, it is “non-Hispanic
whites” who fall below 50 per cent of the
US population by mid-century. Scholars
worry about the difficulty of categoris-
ing a person who has one white and one
Hispanic parent, to say nothing of other
permutations. Compare George P Bush,
nephew of a president, son of a Mexican-
American mother, with a non-English-
speaking new arrival from, say, Russia.
Who is “white” here? At some point, the
Lines”, which a US appeals court agreed
last year had taken its feel (although dif-
fering in melody, harmony and rhythm)
from Marvin Gaye’s 1977 “Got To Give
it Up”. The Gaye family was awarded
$5m and half of future royalties.
This is a terrible precedent that
allowed the family, as Judge Jacqueline
Nguyen wrote in her dissenting opinion,
“to accomplish what no one has before:
copyright a musical style”. One profes-
sor observed that “if you’re not influ-
enced by Marvin Gaye, there must be
something wrong with you”, and that
there is nothing wrong in learning from
genius and building on it.
At a minimum, the writers are being
overcharged for their debts to history.
Half of the “Blurred Lines” royalties is
absurdly inflated and even a 22.5 per
cent levy on “Dark Horse” for one ele-
ment defies common sense — at such
valuations, the songs are worth less than
the sum of their parts.
The broader principle is that, taken as
a whole, both are substantially different
from the songs of which they fell foul.
the Good Friday Agreement. Putting
cameras and gates at or near the border
makes that worse. The installations will
become targets for attack by dissident
republicans. We will be back where we
started.
But perhaps Mr Johnson’s aim is not to
get into a negotiation at all, even though
he assures us there is only a one in a mil-
lion chance of a no-deal Brexit. Perhaps
he is trying to set up a situation where he
can blame the EU for refusing to negoti-
ate on the backstop, and a Remainer
majority in the House of Commons for
trying to block him from leaving the EU
without a deal, and then call an election.
Mr Johnson’s most influential adviser
and the man who led the Leave cam-
paign, Dominic Cummings, appears to
have given the game away. He says the
prime minister could call an election
before October 31 but hold it after that
date, while in the meantime doing noth-
ing to stop the UK leaving the EU on
Halloween. That would be to tear up
constitutional convention.
The response from the Brexiters is
that convention doesn’t matter. But that
works both ways. The UK does not have
a written constitution, but our system
usefulness of such projections struggles
to keep up with their power to unsettle.
If a person in 1945 were given sight of
the west in 2019, what would strike
them — the social dislocation brought
about by racial variety or, actually, how
little of it there has been given the scale
of the change?
British readers will be familiar with
the “Enoch was right” line of thought.
Enoch Powell, a Tory minister who
warned in the 1960s against postcolo-
nial migration, was not right. Britain
became a multiracial society — not with-
out strife, but certainly without “rivers
of blood”. The same is true in much of
the west. Think of white Australia’s
transformation into what we see in
modern Perth or Sydney.
The US is different in all sorts of
respects. It has a unique history and
offers unique ease of access to the means
of violence. But its challenge is one that
other open democracies will face in
their own ways. It must resist racial
pessimism while raising its vigilance to
those who strive to vindicate it.
janan.ganesh@ft.com
Efi Chalikopoulou
These are creative works that, even if
they borrowed aspects from others,
turned them into something quite new.
Only looked at narrowly, broken into lit-
tle pieces, did they copy.
A striking aspect of these cases is that
no one claims that the first work’s popu-
larity suffered as a result of the second.
Indeed, a recent study of US charts
found that sales of sampled works
tended to rise, especially if the originals
were old and from a different genre. The
impact of sampling or the magpie use of
beats and hooks is unlike that of whole-
sale file-sharing.
All of this suggests that courts should
take a broader view of music copyright
than they recently have. The fair use
exemption for works that are trans-
formative needs to be applied more gen-
erously if the entertainment industry is
not to become a vast tournament of tiny
infringement claims. When lawyers are
becoming more creative than writers,
something is going wrong.
john.gapper@ft.com
depends on political leaders respecting
unwritten rules. If the Tory radicals rip
up the conventions, so can the opposi-
tion. The clear view of the civil service,
as I understand it, is that a caretaker
government, having been defeated in a
confidence vote in parliament and hold-
ing an election, is not permitted to
undertake controversial political acts
during that period. If Mr Johnson were
to press ahead, he would be plunging the
country into a constitutional crisis.
Nor would that be the only crisis. Mr
Johnson’s Europe adviser went to Brus-
sels last week to ask when negotiations
on a new relationship could start again
after a no-deal Brexit. The answer: if the
UK has crashed out and failed to pay its
dues, it could be a very long time indeed.
The country could be in purgatory for as
long as a decade with no new relation-
ship with the EU, having to kowtow to
President Donald Trump’s terms for an
unfavourable trade deal with the US.
What starts as a negotiating mis-step
could result in a crisis on a scale we have
not faced for 80 years.
The writer was chief British negotiator on
Northern Ireland 1997-2007
9
Germany should
lead a European
naval mission
in the Gulf
Constanze
Stelzenmüller
T
he great American satirist
and mathematician Tom
Lehrer introduced a live
recording of his 1965 song
“Send the Marines” with
the remark: “It has been a nervous year,
and people have begun to feel like a
Christian Scientist with appendicitis.”
The same could be said of policymakers
in Berlin in 2019, who are staring at an
exceedingly unpleasant dilemma. It is to
no small degree of their own making.
A nasty spat has erupted over Ger-
many’s refusal to join a US-led naval
mission to protect the Strait of Hormuz,
one of the world’s most important oil
trading waterways. Is Germany being
prudent — or is it an unreliable ally?
Despite their attempts to salvage the
Iran nuclear deal of 2015, from which
President Donald Trump unilaterally
withdrew the US last year, German dip-
lomats are fully aware of Iran’s nefarious
role in destabilising the Middle East and
supporting Islamist terrorism.
Now, Tehran has broken interna-
tional maritime law with acts of state
piracy, seizing a British tanker and har-
assing other ships moving through the
narrow shipping lane that links the Per-
sian Gulf to the Gulf of Oman and Ara-
bian Sea. As a result, the oil price is spik-
ing; so are insurance premiums. Iran is
clearly attempting to multilateralise its
conflict with the US, pulling in Europe.
The Trump administration’s whip-
sawing policies have stoked tensions
in the Gulf: first the withdrawal from
the deal, then a policy of “maximum
pressure” with crippling sanctions and
demands amounting to terms of surren-
Showing Iran that Europe’s
‘good cops’ have red lines
too could have a real
deterrent effect
der. Threats of military action alternate
with offers of talks, yet there is no sign of
a plan for diplomacy. In June, Mr Trump
ordered air strikes and then immedi-
ately reversed. No wonder the Iranians
are unimpressed and the Germans fear
being dragged into a shooting war.
American efforts to shame Germany
into joining the mission in the Gulf
haven’t exactly helped. When the par-
liamentary ombudsman for the German
armed forces said the German navy
might not have enough available ships,
the US Embassy in Berlin wrote on Twit-
ter: “Suggestion: the largest economy
in Europe could buy more ships?” Other
European countries have navies too,
yet it is only Germany that is being
singled out.
So now even the staunchest transat-
lanticists in Berlin are resolutely deaf to
the call from Washington. Foreign min-
ister Heiko Maas says Germany will
seek to rope in other European states
(notably France) for an EU observer
mission that would collect information
about attacks, but not be able to escort
ships or protect them militarily.
A toothless naval mission would be a
terrible idea. At stake for Germany is its
own national interest, and the respect
and solidarity of its neighbours. Ger-
many relies less than France or the UK
on the shipping route through the Strait,
because it gets its own energy imports
mostly from Russia and Norway. Yet, as
the world’s third largest exporting
nation and one of the most globalised
economies, it needs unhindered access
to international shipping lanes. Berlin
might also want to call on its neighbours
for help in the future; a German and a
Norwegian tanker were shot at off the
Iranian coast in June.
Germany’s posturing as a self-right-
eous pacifist is unconvincing. It has
been participating in the robust EU
naval antipiracy mission, Atalanta, off
the Horn of Africa for years. The Iranian
navy is a tougher adversary than Somali
pirates. But a European show of calm
determination, co-ordinated with the
US-led effort, to prevent Tehran from
playing one against the other could have
a real deterrent effect.
It would show Iran that Europe’s
“good cops” have red lines too. That, in
turn, might make offers of diplomatic
de-escalation more effective than they
are now. And it would bolster Europe’s
credibility in the attempt to stand up to
the Trump administration’s bullying.
That is the prudent course of action.
The writer is the Robert Bosch Senior
Fellow at the Brookings Institution
10 ★ FINANCIAL TIMES Thursday 8 August 2019

Glencore: the barons’ long goodbye

Glencore has had operational issues at its African copper mines this year, which have elevated its mining
costs for the red metal well above expectations. Africa was where most fatalities occurred in the first half, a
source of angst for this FTSE 100 company. No wonder its share price has trailed peers.

Twitter: @FTLex
Burford/Muddy Waters:
court short
Muddy Waters’ attack on Burford
Capital may rank as the most
devastating so far by a short seller
against a large UK-listed company.
Shares in the litigation funder had
collapsed about 50 per cent yesterday.
That left Neil Woodford, the fund
manager with the reverse Midas touch,
nursing a £119m loss he could not
afford. Former protégé Mark Barnett at
Invesco took a £237m hit, according to
S&P data.
Muddy Waters — as US hedgie
Carson Block is known — is not the first
to flourish a red flag over Burford’s
aggressive accounting. Lex and broker
Canaccord have separately pointed out
that soaring paper profits were riskily
dependent on Burford’s upward
revaluation of ongoing legal cases. It
was Mr Block’s formidable reputation
and the thoroughness of his critique
that pulled the rug on a business once
valued at more than £4bn.
The share slump lends weight to the
theory that a speculative bubble had
inflated, and may now be popping, in
the UK and US litigation businesses.
Investors fleeing depressed bond and
share yields have been pumping cash
into alternative assets. Litigation funds
have been a hot new theme.
The big risk is that weight of money
will force fund managers to invest in
cases that are hard to win. The
problem was illustrated by a disastrous
foray into industrial injury cases by
Quindell, another star of the Aim
market, whose stock collapsed in 2015.
Burford is a much fancier operation
than Quindell — it is, for example,
chaired by former Barclays boss Peter
Middleton and audited by EY. Its
accounting methods appear perfectly
permissible. But Burford’s numbers
should make investors feel queasy for
the same reason Quindell’s did. Profits
rose 41 per cent to $231.4m in the first
half. But $33m flowed out of the
business. Burford has not produced
positive operational cash flow since
2013, according to S&P data.
The company has made up for this
by borrowing. Net debts stood at
$400m at the last record date. That
would be a lot more comfortable if
forecast 2019 ebitda of $352m did not
assume a big slug of paper profits.
Burford has briefly rebutted Mr
Block’s claim it is “an accounting
fiasco”. A more detailed riposte is
needed. Investors in other litigation
funds should ask whether they face a
hit as bad as the one just taken by
Mr Woodford.
Cryptocurrencies/SEC:
Kik-start
Are digital coins such as Facebook’s
Libra securities that should be subject
to Washington’s supervision or
currencies that should be left alone?
The Canadian messaging app Kik
wants to drag the question into the
open via its token. It may illuminate
the US regulator’s position but it is
unlikely to be popular.
Kik has the sort of fraught
relationship with regulators that
Facebook executives are desperate to
avoid, but it has far less to lose. The US
Securities and Exchange Commission
sued Kik for conducting a $100m
initial coin offering in 2017 without
registering with the regulator, declaring
that the tokens were marketed as an
investment opportunity and were
securities. Kik’s response, published
yesterday, rejects this. Its founder and
boss Ted Livingston has claimed he is
excited to take on the SEC in court.
In the early 2010s Kik was seen as
one of the cooler ways for teenagers to
find their friends. Then Facebook
bought the rival messaging service
WhatsApp and the app’s growth
withered and losses rose. In 2017 Kik
raised$100m through the sale of digital
tokens called kin, just as ICOs hit their
peak. Kik said it imagined kin would be
incorporated into the messaging app
and used to make purchases and that
its value would rise as it was used.
Ten years after bitcoin arrived, the
SEC’s approach to cryptocurrencies is
hazy. Some worry the US will lose its
place as the centre of finance if it takes
a hard line against innovation, others
that it will allow scams to flourish.
Complicating matters, the definition of
a security rests on a 1946 case linked to
oranges. Chairman Jay Clayton said last
year that all ICOs he had seen were
securities yet enforcement action has
been taken against relatively few.
A court may come up with a
definition of tokens that clarifies which
are considered securities. But it is clear
the SEC is still deciding its position.
Glencore’s African copper mines are the problem
Mine costs (cents per lb)
All mines
Excluding Africa
125
104
101
2018 2019
(guide)
FT graphic Sources: Glencore, Bloomberg
Societies typically progress from
feudalism, where a king rules
through powerful barons, to
centralised government. Swiss
commodities group Glencore is
halfway there. Peter Freyberg,
newish head of the industrial
division, popped up on a half-year
earnings call to defend mining
practices. Copper boss Telis
Mistakidis retired in December.
In-house oil baron Alex Beard went
in June.
The old king — chief executive and
9 per cent shareholder Ivan
Glasenberg — still occupies his
throne. But he is becoming less
reliant on the dwindling band of
billionaire commodity traders he led
through a 2011 initial public offering.
Facebook is likely to prefer quiet talks
to a brawl. For crypto advocates, Kik’s
battle could be counterproductive.
European banks:
the low down
“Lower for longer” sums up the
interest rate outlook for Europe’s
struggling economy. The buzzwords
also capture prospects for European
bank shares. Second-quarter results
from Italy’s UniCredit, Germany’s
Commerzbank and ABN Amro in the
Netherlands revealed scars from loose
eurozone monetary policy. European
bank stocks, already a third lower than
a year earlier, lurched down again.
Earlier this year, the case for buying
Glencore has not been able
to reduce fatalities
Number of fatalities at Glencore’s
managed operations
158 156
2015
Glencore versus the sector
% FTSE All World Mining Index
80
72
2019 (H1) 2019
(revised) 2017
Mr Freyberg was promoted to give
mining proper managerial oversight.
That may comfort some shareholders.
Others will ask why problems persisted
so long. US authorities are probing
Glencore’s alleged connections with
corruption in Africa and Latin
America. The group has meanwhile
reported a worrying number of
workplace fatalities, 11 in six months.
According to Reuters, 43 illegal miners
unaffiliated with Glencore also died at
one of its facilities in June.
It is important for the industrial
division to behave well and perform
well. It accounts for 80 per cent of
earnings.
A host of operational issues at its
African copper mines got the blame for
first-half ebitda dropping almost a
European banks was that profitability
would rebound. Lower interest rates
and burdensome regulation had put
them at a disadvantage to US rivals.
European banks trade at fractions of
their tangible book value.
Commerzbank is at only a third. But
optimists believed higher rates would
boost margins on lending and deposit
taking. Commerzbank’s presentation
helpfully included a chart showing the
impact of rates rising a percentage
point (net interest income up €500m,
or a 10th, in the first year). How quaint.
Banks’ finance directors rush to
explain they long knew borrowing costs
would head in the opposite direction.
Effects vary by bank and by how well
finance directors hedged. Mortgages
are on flexible rates in southern
Europe, inflicting pain on banks faster.
15
10
5
0
2016 2017 2018 2019
(H1)
30
20
10
0
-10
-20
Glencore
-30
2018 2019
third. Most of the 11 deaths occurred
at Mopani, a deep underground mine
in Zambia.
If high returns were a main reason
to mine in Zambia and the
Democratic Republic of Congo, it has
not worked. Mutanda, a cobalt mine
in the lawless DRC, will be suspended
partly due to low prices.
A boost to the output of copper and
nickel in the second half might well
salvage full-year results. Analyst
estimates of over $5bn of annual free
cash flow in years to come should
more than cover the dividend. But
with Glencore still dependent on coal
earnings, and a US investigation
pending, pressure remains on
longstanding bosses, including Mr
Glasenberg, to retire.
Dutch and German home loans tend to
have fixed rates, so the agony is drawn
out. But lower rates erode margins on
their client deposits. Ordinary clients
cannot be charged negative rates, so
are in effect subsidised.
Whatever the mechanics,
profitability will fall. ABN Amro still
managed 13.6 per cent returns on
equity. Beating 10 per cent is tougher.
Consolidation would be an escape
route. Commerzbank’s talks with
Deutsche Bank collapsed in April. But
depressed share prices make
shareholders warier and increase the
cost of raising capital for acquisitions.
In banking’s version of Darwinism,
stronger banks will pick off weaker
rivals. Shareholders hoping for a
bounceback should lower their
expectations for longer.
The New York Times:
headline risk
The New York Times relies on the trust
of its readers. That has taken a minor
hit. Some subscribers objected to the
headline “Trump Urges Unity Vs
Racism” following mass shootings.
They said the famous US newspaper
had been too soft on a president with a
coarse line of rhetoric on race.
In the past two years, shares of the
New York Times Company have
doubled as investors backed the
expensive transformation of the
publication into a digital media
powerhouse. That article of faith took a
hit yesterday when the stock dropped
more than a tenth. The group reported
a second-quarter revenue increase of
5 per cent year on year. Direct
production costs have jumped by more
than twice that.
The number that the New York
Times Company would like
shareholders to focus on is digital-only
subscriptions. These now total nearly
4m and are a third higher than a year
ago. Digital subscription revenue in
that timeframe is, however, up by only
14 per cent. Digital advertising, while
growing, remains modest.
What spooked shareholders the most
yesterday was an admission that third-
quarter ad revenue growth will turn
sharply negative.
Weak advertising has killed off many
well-known titles in recent years. The
bulwark for the likes of the New York
Times has been digital subscription
revenue. Growth has been driven by
promotional activity.
The game is to retain new
subscribers on full-freight terms but
also to achieve mass franchise scale in
other areas too, such as events. In this
way, fixed costs are distributed across a
wide base.
The New York Times wants to reach
10m subscribers by 2025. It currently
has 4.7m. That goal is still reasonable.
However, the profitability of the
underlying business may be shakier
than expected. Investors who pay
20 times forward ebitda are showing
greater trust in the newspaper than
some readers currently have.
Lex on the web
For notes on today’s breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
1 Switches bottle, needing no
4 Duck slime? Smoother! (9)
5 Help in mass, for example (7)
No. 16,240 Set by ORENSE answer in case of shingles (8) 6 Reject incentive, and without
6 Son has no trousers (6) cover (5)
       
9 Student coming in almost last, 7 Amazed when lorry gets both
drunk (6) of us on board (9)
10 Rent during course is a risky 8 Equipment best uncovered for
 
game (8) so-called planes (5)
11 Planning a near orbit must be 14 Gamble supporting company
an anomaly (10) fight showing lack of courage
  12 Put back time trial (4) (9)
13 Off colour initially in fixing 16 Customs may see a bit of
drain (6) drama cutting costs (9)
     15 Illustrates old stamps (8) 17 Mad English composer touring
18 Cooks must cross a road for carnival venue (9)
high-flying workers (8) 19 Person who looks small –
   20 Talk a little about a remedy tinker? (7)
for acid (6) 22 Subject of note crossing
21 Lead shot originally used with border (5)
   
pitch (4) 23 What’s left of building after
23 Such vehicles bear the marks the end of this inferno? (5)
of battle (6,4) 24 Antique copper ring in Orkney,
25 Architectural feature may be originally (5)
 
obstacle having ignored first
two letters (8) Solution 16,239
26 Taxi working to load right & $ 0 3 , 1 * % , & < & / (
 
element (6) 2 $ &
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27 Withdraw toll applied to % 5 ' ' * 2 , &
soldiers (6) 2 5 2 < $ ) ( 9 ( 5 ( 6 $ 8
< 1 1 . 6 , 7
JOTTER PAD 28 Reaction of revolutionary & 2 1 9 ( 1 , ( 1 & (
press on right of choice (8) 6 $ , $ ( ' * 6
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5 % * * * $ %
DOWN * , 5 / 7 + ( + 2 / < 6 ( (
2 B-lister’s harangue at person ( 2 $ 7 ( $ 7 +
$ 6 6 ( 5 7 , 2 1 1 8 5 6 (
performing priestly duties? (9) 1 , & ( 5 & , $
3 Express’s topless spread (5) 7 ( $ & + ( 5 < , ( / ' ( '
Thursday 8 August 2019 ★ 11

Red line Glencore hands mining veteran Stockholm syndrome Can Klarna avoid
challenge of reviving fortunes — ANALYSIS, PAGE 14 falling captive to Big Tech? — INSIDE EUROPE, PAGE 12

Big Four purge risky audit clients Tail

Risk
3 Scandals spur more scrutiny 3 Regulation and costs rise 3 Firms accused of stalling reform
trols and governance were the most KPMG has already shed a number of accounting firms begin to quit tricky
Robert
TABBY KINDER — LONDON
likely to be dropped. building society audit contracts because
Stability in audits. Andrew Tyrie, chairman of the Smith
The UK’s largest accountancy firms are PwC started a review of its audit book of comparatively low fees and the high financial Competition and Markets Authority,
set to purge risky or unprofitable audit in June. Hemione Hudson, its head of cost of compliance. markets said in December: “If a company’s books
clients after a string of corporate col- audit, said it would “ensure we achieve a Grant Thornton is expected to quit as aren’t properly examined, people’s jobs, What should a company do when its traditional funding
lapses and scandals sparked increased return that allows continual investment auditor of Sports Direct, one of its larg- might be at pensions or savings can be at risk.” channel is either closed or too expensive?
regulatory scrutiny of the sector. in and focus on quality”. The process est listed clients, next month, following risk if firms The auditors claimed the reassess- One of the oldest tricks in capital markets is to tailor your
Big Four firms EY, KPMG, Deloitte would lead to an increase in fees and criticism of the retailer’s corporate gov- ment was triggered by higher costs from pitch to an entirely different audience.
and PwC, and mid-tier accountants there would “undoubtedly” be some ernance and concerns over the non-dis- quit tricky increased regulation and the potential When taken to extremes it can appear akin to preying on
Grant Thornton and BDO, have instances in which PwC walked away closure of a €674m tax bill. audits, say risk of large fines for poor quality work. the less financially sophisticated. But this technique can
launched sweeping reviews of clients to from audit clients, she added. The firm has started a “line by line” But critics say the largest firms are try- also benefit all involved, as institutions that are better
weed out those they consider poten- EY wrote to its large listed clients to review of its audit book, which includes observers ing to subvert far-reaching reform. suited to taking on the risk get access to a new investment
tially problematic. warn them it would be increasing audit Neil Woodford’s quoted Woodford Atul Shah, professor of accounting at opportunity.
Auditors warned that companies in fees because of “unprecedented market Patient Capital Trust, in recent weeks, City University, said it was “an attempt Sirius Minerals, developer of an ambitious mining
volatile sectors, such as retail or out- forces”. Hywel Ball, head of audit at EY, according to a senior partner. by the Big Four to use their power to project on Britain’s North York Moors, recently adopted
sourcing, and businesses that have said the firm expected to part ways with Some observers have flagged the risk object to the serious audit reforms being this strategy. After early funding ideas fell through, it
faced criticism over their financial con- some clients as part of the process. to the stability of financial markets if consulted on by government”. wrapped a risky project finance deal in the clothing of a
corporate high-yield bond, pitching the deal to investors
who typically invest in the debt of companies with less than
stellar credit ratings.
Yet Sirius fell at the first hurdle. The high-yield
community did not bite, even though the deal offered the
Softly, softly highest yields seen outside China this year.
Diageo buys into To understand why, it is
worth looking at the high-
gin alternative yield history books, particu-
One thing has
larly as the enduring popu- remained
larity of riskier corporate
Diageo, the world’s largest spirits maker, bonds actually stems from
constant for
has taken a majority stake in “game- one of the greatest examples high-yield
changing” non-alcoholic spirit brand of this capital markets ploy.
Seedlip as it seeks to cater to the growing So-called “junk bonds” at
investors:
number of teetotallers. one time only existed when cash flow is king
The move builds on a 20 per cent investment grade companies
investment in Seedlip by Diageo’s were downgraded and then shunned by fund managers.
accelerator unit for small businesses In the 1970s, a young Los Angeles-born bond trader
Distill Ventures in 2016. The financial called Michael Milken demonstrated the hidden value in
details of the deal were not disclosed. these previously taboo bonds. “Junk” was out — “high-
Seedlip is a premium-priced non- yield” was in. As the seventies turned to the eighties,
alcoholic spirit often sold as an Mr Milken realised he could take this one stage further.
alternative to gin. It was launched in While a mergers and acquisitions boom was in full swing,
2015 by Ben Branson, then a teetotal the early progenitors of private equity could only raise lim-
marketing executive, who created the ited debt from traditionally conservative banks.
bitter-tasting drink from distilled Mr Milken filled the void, marshalling his devoted high-
produce on his farm in England. yield disciples into funding heavily indebted new acquisi-
Seedlip has since launched in more tions. This minted the fortunes of so-called “junk bond
than 25 countries and is served in more raiders” such as Carl Icahn and Nelson Peltz, as immortal-
than 300 Michelin-starred restaurants. ised in Connie Bruck’s 1988 book The Predators’ Ball.
In February, it reported year-on-year One thing has remained constant for high-yield inves-
volume growth of 270 per cent. tors since the Milken-era: cash flow is king. Companies
John Kennedy, president of Diageo’s need to generate enough money to service their debts.
European, Turkish and Indian Sirius is still building its mine so does not yet have any
operations, said Seedlip was a cash flow. If it defaulted today, bondholders would be left
“game-changing brand in one of the with a giant hole in the ground, into which they would need
most exciting categories in our to pour more funding.
industry”. Sirius’s chief blames the failed deal on temporary mar-
Research firm Nielsen calculates that ket jitters and plans to relaunch it next month. The fate of
sales of low- and non-alcoholic the largest new mining project in UK for a generation now
alternative drinks in the UK rose 25 per hinges on whether he has correctly read the psychology of
cent to £116.6m in the year to June. high-yield bond investors.
Alice Hancock
robert.smith@ft.com
Charlie Bibby

Alphabet’s DeepMind racks up £1bn

debt as tech group pours cash into AI
MADHUMITA MURGIA — LONDON other expenses rose to £568m, up from research we’re doing,” Demis Hassabis,
£334m the year before. DeepMind’s DeepMind’s chief executive, told Wired
DeepMind, the artificial intelligence
staff costs also doubled in 2017. UK in an interview this week.
arm of Alphabet, saw its losses rise
The heavy spending reflects the rising Since Google bought DeepMind in
55 per cent last year to £470.2m and its
cost of talent as big tech companies race 2014 for £400m, the latter’s leadership
debts surpass £1bn as the world’s big-
to develop AI technology. Tenured uni- has maintained that it operates autono-
gest technology companies continue to
versity professors are being offered up mously as a research unit.
pour huge sums into AI research and
Germany gains appetite to 10 times their academic salaries to But as its costs and losses mount, and
development.
for ‘locust’ buyout firms work for the likes of Google, Facebook, it lacks a saleable product, some have
DeepMind now has a cumulative debt to Amazon, and Microsoft. questioned the commercial value of its
A decade ago, private equity groups in its parent company, which also owns DeepMind’s sales are exclusively to ultimate aim of creating “artificial gen-
Germany were likened to ‘locusts’ amid Google, of £1.04bn that is due for repay- Alphabet and are described as technical eral intelligence”.
outrage over asset stripping and job ment by October. DeepMind said there service fees. The DeepMind for Google “Google paid half a billion dollars for
losses. But, with changing attitudes was no risk of default and the debt had team, which embeds its AI technology DeepMind five years ago and now they
and hungry investors, buyout groups been guaranteed by Google. into other Alphabet products, is split spend that much every year just run-
are dominating Europe’s largest The London-based company saw its between London and California and ning the company,” said Pedro Domin-
market and deals are set to hit $25bn. revenues nearly double to £102.8m in now consists of about 100 employees. gos, author of The Master Algorithm, and
Analysis i PAGE 13 2018, according to its latest accounts at “We want Google and Alphabet to be a computer scientist who leads the AI
Companies House, but staff costs and successful and to get benefit out of the unit at hedge fund DE Shaw.

Companies / Sectors / People

Companies
ABN Amro.............................................10,14
AT&T..............................................................12
ATU..................................................................13
Anadarko......................................................17
Apax Partners...........................................13
Axel Springer.............................................13
BASF................................................................13
BC Partners.................................................13
BDO..................................................................11
Bayer......................................................7,13,18
Berkshire Hathaway..............................17
Bosch...............................................................13
Bridgewater.................................................17
Bundesdruckerei......................................13
Burford Capital...................................10,12
CBS...................................................................12
Canyon...........................................................13
Carlyle.............................................................13
Carson Block..............................................10
Charles Schwab........................................18
ChemChina....................................................7
Chevron.........................................................17
Commerzbank...............................10,14,18
Continental..................................................12
Covestro..........................................................7
Currenta........................................................18
Deloitte...........................................................11
Diageo.............................................................11
Discovery Communications...............12
Disney ...........................................................12
Dow Chemical..............................................7
DuPont.............................................................7
E*Trade.........................................................18
EY...........................................................10,11,12
Elliott...............................................................13
Evonik.............................................................13
Facebook................................................10,13
FireEye.............................................................4
GlaxoSmithKline.......................................18
Glencore..................................................10,14
Grant Thornton.........................................11
Grohe..............................................................13
HSBC.................................................................8
Huawei.........................................................4,8
IAC....................................................................18
Imagination Entertainment ..............12
Jack Wolfskin.............................................13
Johnson & Johnson.................................7
KKR..................................................................13
KPMG...............................................................11
Kik...............................................................10,13
Klarna..............................................................12
Lanxess.........................................................18
Lions Gate....................................................12
Macquarie Infra. and Real Assets.18
Mannesmann................................................7
Match..............................................................18
Monsanto........................................................7
MorphoSys..................................................18
Muddy Waters.....................................10,12
NBCUniversal.............................................12
Netflix.............................................................12
New York Times Company...............10
NextEra Energy........................................18
Occidental Petroleum...........................17
Osram.............................................................13
Paramount...................................................12
Pemex.............................................................17
PwC...................................................................11
Quindell.........................................................10
Royal Bank of Scotland........................11
Scout24..........................................................13
Seedlip............................................................11
Sony.................................................................12
Sports Direct...............................................11
Stada...............................................................13
Standard Chartered................................11
Syngenta.........................................................7
TPG..................................................................13
TSG Consumer Partners.....................13
Teva.................................................................12
Time Warner..............................................12
UniCredit..........................................10,14,18
Viacom...........................................................12
Vodafone...................................................7,11
Walt Disney.................................................18
WarnerMedia..............................................12
Weight Watchers.....................................18
WhatsApp....................................................10
Woodford Patient Capital Trust.....11
Sectors
Automobiles............................................2,12
Banks..............................................8,10,14,18
Chemicals..................................................7,18
Energy............................................................18
Financial Services........................10,12,12
Financials..........................................10,17,18
Industrial Goods.........................................2
Industrials.......................................................2
Media..................................................10,12,18
Mining............................................................14
Oil & Gas.......................................................17
Pharmaceuticals.................................12,18
Technology............................4,10,12,13,18
Travel & Leisure......................................18
People
Bakish, Bob..................................................12
Ball, Hywel....................................................11
Barnett, Mark............................................10
Baumann, Werner......................................7
Block, Carson.............................................12
Branson, Ben...............................................11
Buffett, Warren.........................................17
Dalio, Ray.....................................................17
Degenhart, Elmar....................................12
Dijkhuizen, Kees van.............................14
Feltheimer, Jon.........................................12
Flint, John......................................................8
Freyberg, Peter..................................10,14
Glasenberg, Ivan................................10,14
Hudson, Hemione....................................11
Icahn, Carl....................................................17
Kennedy, John...........................................11
Livingston, Ted...................................10,13
McClellan, Michael...................................12
Middleton, Peter......................................10
Mistakidis, Telis..................................10,14
Murdoch, Rupert......................................12
Mustier, Jean Pierre..............................14
Redstone, Sumner...................................12
Schultz, Kare..............................................12
Siemiatkowski, Sebastian....................12
Wenning, Werner.......................................7
Woodford, Neil....................................10,12

© The Financial Times Limited 2019 Week 32

12 ★ † FINANCIAL TIMES Thursday 8 August 2019

COMPANIES
INSIDE BUSINESS
Financial services
EUROPE

Muddy attack wipes £1.7bn off Burford Richard

Criticism from short seller
halves lawsuit funder’s
market value in two days
ROBERT SMITH — LONDON
LINDSAY FORTADO — NEW YORK
Litigation financing specialist Burford
Capital lost almost half its market value
yesterday after prominent US short-
of any proceeds. The litigation finance
industry has been turbocharged by the
era of low interest rates, as investors
search for juicier returns.
The report criticised the accounting
Burford uses to value its cases, which it
says it is “aggressively marking” and
argues the company is “actively mis-
leading investors” further with some of
the metrics it reports. “We view it as a
lottery ticket model in that it relies on
The steep declines in Burford’s shares
yesterday follow a near-20 per cent drop
on Tuesday, when Muddy Waters
tweeted that it would be announcing a
new short position. The company’s
value has fallen £1.7bn in two days.
Burford said it was “strongly suspi-
cious” of Tuesday’s share price fall and
that it would “take appropriate legal
action” if misconduct was discovered.
“There is a clear line between appropri-
Milne
‘It’s rare for Burford Capital is the second-largest
holding in troubled stock picker Mr
us to come
across
Woodford’s now-suspended Equity
Income fund. Mr Woodford has backed
the company for a decade, having first
Sweden needs unicorns
such a
dichotomy
invested in its shares in its 2009 initial
public offering when at Invesco, the
like Klarna to keep
between
then-star fund manager’s longtime
home before he set up his own firm.
Muddy Waters is not the first to ques-
their magic at home
what we see tion Burford’s reporting practices. Some

seller Muddy Waters took aim at a
favourite of London’s stock market.
The US hedge fund, headed by Carson
Block, described Burford as a “poor
business masquerading as a great one”
in a report that sent shares in the com-
pany crashing 46 per cent.
Burford, which counts troubled
stockpicker Neil Woodford among its
largest shareholders, makes money by
funding lawsuits and then taking a share
huge, but rare, successes, rather than ate commentary and market manipula-
consistently producing solid returns,” tion,” the company said.
Mr Block said. “It’s rare for us to come Until this week, Burford’s market
across such a dichotomy between what value was more than £3bn, making it
we see and what the market sees.” the largest stock listed on Aim, the Lon-
Burford said in a statement that it don Stock Exchange’s market for
employed IFRS accounting standards smaller growth companies. It has also
and cited years of “clean” audit opinions been one of Aim’s strongest performers,
from EY. The company also said that it with its share price having previously
reported on its investments in “extraor- surged more than 1,000 per cent over
dinary detail”. the past five years.
Media. Consolidation
A
and what analysts have noted that much of its rev-
the market enue comes from writing up the value of
court cases that have not finished.
sees’ “We think accounting standards were
abused,” Mr Block told the FT. “We defi-
nitely think the authorities should look
at this. I believe it comes close to the line
and possibly crosses it.”
Woodford Investment Management
and EY declined to comment.
See Lex
lmost nobody makes unicorns quite like Swe-
den. Spotify, Mojang, King, iZettle — all are
examples of billion-dollar companies born in
Sweden that have made Stockholm the
world’s biggest unicorn factory per capita
behind Silicon Valley. But, today all four are largely con-
trolled from outside the Nordic country. Spotify’s main
centre of gravity is in New York, while the makers of games
Minecraft and Candy Crush as well as payments company
iZettle were sold off to deep-pocketed US companies:
Microsoft, Activision Blizzard and PayPal respectively.
Enter Klarna. The buy-now, pay-later start-up founded
in Stockholm became Europe’s largest unlisted fintech this
week, valued at $5.5bn — more than double its estimated
worth at the start of this year.
The path Klarna and its 37-year-old chief executive and

CBS-Viacom talks point to wave of mergers
Rise of Netflix, Disney-Fox
and AT&T-Warner megadeals
leaves rivals racing for scale
ANNA NICOLAOU — NEW YORK
When Sumner Redstone decided to split
Viacom and CBS in 2006, Netflix was a
DVD-by-mail business. Now the sister
companies are dwarfed by the $135bn
streaming group, and are looking to
reunite to better compete in an industry
it has upended.
US media and telecoms groups have
hurtled towards consolidation in recent
years, with the biggest players huddling
together to defend against Netflix.
Rupert Murdoch cashed out, selling his
treasured television and film studios to
Disney for $71bn, while America’s big-
gest phone company paid $80bn to buy
Time Warner’s Hollywood empire.
In the dust of these megadeals other
media groups look like minnows, and
analysts and executives are forecasting
a second wave of consolidation.
Mr Redstone, 96, has passed control
of the family business to his daughter
Shari, who is driving for scale. Her first
goal is the reunification of CBS and
Viacom, bringing together programmes
such as 60 Minutes, Stephen Colbert’s Late
Show and The Big Bang Theory with a
portfolio of cable channels and the Para-
mount Pictures Hollywood studio.
The companies’ boards have been in
talks for weeks, having hoped to iron out
a deal today, when they report quarterly
results. But while they have agreed to
make Bob Bakish, the Viacom veteran,
chief executive of the combined com-
pany, say people familiar with the situa-
tion, they have yet to agree on a price.
One person close to the boards said
there were many reasons to pursue a
deal. “In an environment where Disney
is putting stuff behind the walled gar-
den, WarnerMedia is putting stuff
behind the walled garden . . . the com-
bined company would be pretty well
positioned.”
Ms Redstone has hinted that the
Viacom-CBS tie-up may be only the
start. “We would probably want to look
at something after that and to develop
scale and be transformative as we move
forward,” she said in June.
The likes of Viacom and CBS face a
Hollywood landscape dominated by a
few large companies. Disney makes up
38 per cent of the US box office take,
according to BoxofficeMojo, which
tracks the film industry. Adding in Fox,
the number rises to almost 42 per cent.
Ben Swinburne, head of media
research at Morgan Stanley, estimates
that Disney, after the Fox acquisition,
will produce about 30 per cent of all
primetime scripted broadcast TV series
this season.
A CBS-Viacom Warner Bros has been swallowed up
tie-up offers to by AT&T, while Comcast owns Univer-
bring together sal Pictures. Viacom’s Paramount, Sony
shows such as and Lions Gate, the remaining studios,
‘The Big Bang “are barely surviving”, said Jeffrey Bock,
Theory’, analyst at Exhibitor Relations, the
pictured, and entertainment research group.
‘60 Minutes’ Mr Swinburne is among observers
Sonja Flemming/CBS/Getty
who believe further M&A activity is
inevitable. “This business is getting
harder, requiring more capital, more
global distribution and ultimately more
consolidation,” he said. “We think the
race for scale will lead to lower near-
term profits, and we continue to see only
a handful of platforms emerging on the
other side.”
The question now is who is on the
Disney dominates the film industry
Studio market share, years to Aug (%)
Paramount Fox
Sony/Columbia Universal
Warner Bros Disney*
2008 09 10 11 12
* Buena Vista subsidiary
Source: Box Office Mojo
block. Sony Pictures Entertainment, the past year to fall below $3bn, and has
studio behind shows such as Breaking held talks to sell its Starz cable channel
Bad, has long been viewed as a target, to CBS, according to multiple reports.
but its parent in Japan has resisted it. Discovery, the $15bn company behind
“Who is left? Sony does not seem like the documentary cable channel, as well
it wants to sell, which leaves very few as TLC and the Food Network, this year
options,” said an adviser to companies responded to rumours with a statement
including Disney and Fox. The adviser that it was not for sale.
listed Discovery Communications, Even if there are deals between sec-
Lions Gate and Imagination Entertain- ond-tier groups, competing with the
ment as potential targets but warned leaders will be tough. A combination of
that “cable cowboy” John Malone’s CBS, with a market value of $19bn, and
stakes in Lions Gate and Discovery Viacom at $12bn would still be small
could complicate any approach. compared with Netflix and Disney,
Lions Gate, the studio behind the The worth $135bn and $250bn respectively.
Hunger Games and Mad Men, has had a Disney, AT&T, Apple and NBCUniver-
tough run. It has struggled to produce sal are preparing to release streaming
big hits, lost half its market value in the services to make a success of the assets
they have bought. Lions Gate is trying to
follow suit through the expansion to
more countries of Starz Play, a stream-
ing service tied to the cable channel.
Jon Feltheimer, chief executive,
100 hailed an “investment into our future”
but Wall Street showed less enthusiasm.
80 Lions Gate shares have fallen more than
20 per cent since the announcement.
60 Todd Juenger, media analyst at Bern-
stein, predicts that the “table stakes of
40 content spend to attract and retain sub-
scribers . . . will overwhelm niche serv-
20 ices like Starz”.
“Lions Gate is mimicking the Disney
0 playbook,” he said. “But not everyone is
13 14 15 16 17 18 19 Disney.”
Additional reporting by Eric Platt
co-founder Sebastian Siemiatkowski now take is doubly
interesting. Firstly, it has the chance to be one of the main
global players seeking to disrupt the traditional retail
banking industry. The $460m it raised this week from ven-
ture capitalists, an Australian bank and pension funds will
be used to speed up its longstanding attempts to crack the
US market, where after some years of struggling it is finally
showing signs of success.
The second aspect may be even more crucial for Sweden
and Europe: can they hold on to their leading technology
groups or simply watch them get swallowed up by US or
Asian rivals? Mr Siemiatkowski is certainly aware of the
issue. The decision of iZettle a year ago to pull its planned
stock market listing and instead agree to be bought for
$2.2bn by PayPal reignited anxiety around promising
European tech companies often selling out rather than
taking the longer and tougher route of trying to rival some
of the biggest US groups.
The spotlight is on what Klarna plans to do next. Mr
Siemiatkowski says the company — founded by him and
two friends at business school in 2005 — is as close as it has
ever been to an initial public offering today, but that for
now pursuing growth is the priority.
Asked about iZettle and the temptations to sell out, he
replied: “We are very humbled to be in this city that has
given rise to companies like
Spotify and King and others.
The most important thing is,
‘There is this
as Ingvar Kamprad [the massive industry
founder of Ikea], said: most
things are still not done.
— retail banking
There is this massive indus- — that hasn’t put
try — retail banking — that
hasn’t put customers first.
customers first’
This is almost an unlimited
addressable market.”
A person close to some of Klarna’s backers said: “It’s
down to the founder’s mentality. Does Sebastian have the
appetite to do another 10 years? And I think he does.”
Klarna still has plenty of challenges. Unlike many fin-
techs, it is profitable and has been for some time. But last
year its operating profit dropped 70 per cent to $19m on
revenues up a third to $627m.
Klarna earns money from online stores such as Asos,
Hennes & Mauritz and Adidas, as well as consumers, by
offering a deceptively simple solution that it claims boosts
sales substantially as fewer shoppers abandon their bas-
kets over difficulties paying. In return for a fee from mer-
chants, it offers the customers the chance to buy now and
pay later, while assuming their credit risk and the burden
of collecting the money from the seller. The service is free
for most customers but if they pay late or decide to pay in
instalments, Klarna collects the interest.
That has put it in the sights of the Swedish government
and some debt counsellors, who worry about whether and
how it aids young and vulnerable people in getting into
debt. Mr Siemiatkowski said Klarna was keen to stay
“humble and transparent” as well as learn from its mis-
takes but that its basic aim was merely to make online
shopping as easy as buying in a shop. He highlighted how
Klarna had become one of the 10 companies Swedes
trusted the most, scoring better than any bank.
Mr Siemiatkowski argued that now was the time for “a
huge disruption” of the retail banking and payment card
industry by putting customers first. An IPO seems to be
the next logical step, with Klarna’s founder saying it had
“most of the things in place that we need”, even if this
week’s fundraising showed it could access large sums of
money away from public markets.
Whatever it does next will be closely scrutinised at home
and abroad. Only a handful of Sweden’s 100 largest compa-
nies were started in the past 50 years, an extraordinary sit-
uation mirrored across much of Europe. The continent’s
future vitality may depend on how many Klarnas it can
develop and cling on to.
richard.milne@ft.com

Automobiles Pharmaceuticals

Continental flicks switch to electric vehicles
MYLES MCCORMICK — LONDON
Continental, the German auto parts
group, is pivoting towards electric vehi-
cles as it looks to position itself for
rapid growth in cleaner transportation.
Europe’s largest listed auto technology
supplier said yesterday it would stop
investing in making injectors and
pumps for petrol and diesel engines
amid a “fundamental, dramatically
accelerating” transformation.
The shift comes as the company,
which issued two profit warnings in
2018 and another last month, reacts to
tumbling global car production that is
knocking demand for its products.
“The current market environment is
highly challenging. The key automotive
markets of Europe, North America and
particularly China are declining,” said
Elmar Degenhart, chief executive. “We
are responding to the declining market
by ensuring rigorous cost discipline and
enhancing our competitiveness.”
Continental last month slashed its
full-year forecast as automotive produc-
tion, to which its sales are closely
aligned, contracted across the world.
Having expected roughly flat produc-
tion of cars and light commercial vehi-
cles, the group expects this to decline
by 5 per cent this year, as global trade
tensions drain confidence and leave
consumers less willing to buy new cars.
Vehicle production is set to fall 10 per
cent in China, 3 per cent in Europe and
2 per cent in the US compared with last
year.
Arndt Ellinghorst, an analyst at Ever-
core ISI, said Continental may be “late to
the party” on electrification. One inves-
tor, he said, “had to triple-check the
date of the press release to make sure it
wasn’t a 2015 release, re-sent”.
Net income in the second quarter, in
line with its indications last month, slid
41 per cent to €485m. Sales fell 1 per
cent to €11.3bn. The shares rose about
1 per cent yesterday but are down 36 per
cent over the past year.
Opioid litigation fears drag down Teva shares
HANNAH KUCHLER — NEW YORK
Teva’s better than expected earnings
failed to allay investor concerns about
potential legal liabilities and the depar-
ture of the chief financial officer, send-
ing shares in the Israeli pharmaceutical
company down more than 5 per cent.
The drugmaker put aside $646m for
liabilities related to litigation over the
opioid epidemic, which it said is likely to
be at the low end of the range, after it
agreed earlier in the quarter to pay
$85m to the US state of Oklahoma on the
eve of a court case.
Kare Schultz, Teva president and
chief executive, said the mounting
lawsuits aimed at opioid makers and
distributors were “political” rather than
a “classical legal situation”.
He told the Financial Times: “Pre-
scription drug misuse has existed for a
hundred of years but now they have
made a claim that it was created by the
manufacturers.”
Shares in Teva have fallen 77 per cent
in the past year as Mr Schultz tries to
turn the company’s core business round
with a restructuring, while under pres-
sure from litigation.
Lawsuits include the opioid cases and
a US Department of Justice investigation
into price-fixing at generics makers,
which accuses Teva of artificially
inflating prices on more than 110
generic drugs.
Teva, which has denied wrongdoing
in both cases, said it expected the cost of
refinancing its debt to go up because of a
lower credit rating, partly because of the
pending litigation.
On the earnings call, Mr Schultz said
the company had decided to settle in
Oklahoma despite being responsible for
only 247 prescriptions during the rele-
vant 10-year period.
Investors were further shaken by
Teva’s announcement yesterday that
Michael McClellan, its chief financial
officer, was planning to step down
because of a serious illness in his family.
Thursday 8 August 2019 ★ FINANCIAL TIMES 13

COMPANIES

Elliott’s rebuke reflects big change in Germany

The activist investor’s admonition signals a departure from the days when private equity firms were likened to locusts
JAVIER ESPINOZA AND ARASH MASSOUDI
LONDON
OLAF STORBECK — FRANKFURT
When the board of Scout24, the owner
of Germany’s largest property website,
was criticised this week for accepting a
takeover from private equity firms, the
only surprise was who delivered the
scolding.
Instead of politicians who have regu-
larly taken aim at the private equity
industry, accusing them of being asset
strippers, the rebuke came from Elliott,
the US activist investor and one of
Scout24’s largest shareholders. Its com-
plaint was that the bid was too low.
There are few better illustrations of
how buyout firms and activist investors
have become powerful forces in corpo-
rate Germany. A historic hostility to pri-
vate equity that prompted a senior
Social Democrat politician in 2005 to
liken the industry to a “plague of
locusts”, has been eroded as Germany’s
conglomerates shed businesses and
buyout firms raise record sums for deals
in Europe.
So far this year, Germany is rivalling
the UK as the biggest market for buyout
deals in Europe, new figures from Bain
& Co show. At the current pace, the total
value of deals in Europe’s biggest econ-
omy will come close to $25bn in 2019, up
from just over $14bn last year, accord-
ing to Dealogic.
“The dark history of the locusts and
the reputation that private equity had in
the country has changed,” said Rolf-
Magnus Weddigen, partner at Bain’s
German private equity practice. “Pri-
vate equity groups have been successful
‘The dark history of the
locusts and the reputation
that private equity had in
the country has changed’
in growing businesses and creating jobs
rather than cutting them.”
German companies have been at the
centre of some of the industry’s largest
European deals this year, from KKR’s
acquisition of a minority stake in Axel
Springer that will help the publisher of
the tabloid Bild to delist to Carlyle and
Bain’s €3.4bn offer to buy Osram, the
lighting company.
The willingness of such companies to
accept private equity investments, say
analysts, suggests how far things have
changed since the chequered experi-
ence of Grohe, one of the world’s biggest
makers of taps and showers, under pri-
vate equity ownership in the mid-
2000s.
And there have been difficult epi-
sodes since Grohe, which was owned
both by BC Partners and then by TPG.
Five years ago, a group of private equity
investors, including Apax Partners,
wrote down their investment in Bun-
desdruckerei, the German group that
prints banknotes and passports, which
was overloaded with debt.
More recently, Blackstone, the US
buyout group, handed over the keys to
lenders in Jack Wolfskin after the debt-
laden German outdoor clothing group
saw business decline. ATU, a lossmak-
ing car repair chain bought by KKR, had
to undergo a restructuring that led to
multiple job losses.
However, the pick-up in activity sug-
gests the damage from such incidents
has not been lasting.
The slow shift in attitudes is helping
Lightbulb moment
Buyout activity in Germany this year includes Bain’s €3.4bn offer to buy Osram, the lighting company — Daniel Kopatsch/EPA-EFE
Selected PE deals in Germany
Deal value
Bain; Cinven/Stada
Arzneimittel (65%)
€3.8bn
2017
Bain; Advent Intl/Concardis
€0.7bn
Source Dealogic
some German founders who may have
been traditionally reluctant sellers to
rethink. KKR’s acquisition of a minority
stake in Axel Springer, which also owns
Business Insider, was symbolic because
it received the backing of Friede
Springer, the widow of the company’s
founder.
More recent entrepreneurs are also
opening to private equity. In 2016, for
example, TSG Consumer Partners, the
buyout firm, invested in Canyon, the
German bicycle company, as part of the
group’s expansion effort in the US.
“We have been waiting for succession
planning to come to fruition within the
typical German Mittelstand businesses
and it looks like some owners consider-
ing private equity as an alternative to
manage transition,” said Alex Dibelius,
head of Germany for CVC, which
recently bought a packaging unit off
Bosch, the German conglomerate.
If private equity firms are beginning
to make small inroads into the Mittel-
stand — family-owned small and medi-
um-sized companies — a different
dynamic is to prise open bigger German
businesses. As the outlook for global
economic growth darkens, German con-
glomerates are facing more pressure to
sharpen their focus.
In March, Evonik, the German chemi-
Consortium led by
Partners Group/Techem
€4.6bn
2018
Consortium led by
Partners Group/CeramTec Advent Intl/Evonik Industries’
€2.6bn
cals company, sold its acrylic sheet unit
to Advent International in a €3bn deal.
Germany is also expected to be home to
some of the biggest so-called carve-outs
in the second half of the year, including
Bayer’s sale of its animal medicines
business and BASF’s disposal of its con-
struction chemicals division. Both have
drawn strong interest from private
equity buyers.
“We are approaching the end of the
cycle and corporate Germany is starting
to realise that this will impact its earn-
ings power,” argued Mr Dibelius.
“Besides a heavier focus on costs, port-
folio management will become more
important. This leads to more divesti-
tures of businesses that do not fit the
corporate strategy any more.”
However, Germany still has consider-
able hurdles for the industry.
Dirk Albersmeier, co-head of M&A at
JPMorgan in Europe, said that unique
features of the German market still
make it less hospitable to private equity
bidders. In particular, he said that buy-
ers often look to put in place a so-called
domination agreement, a feature
that does not exist elsewhere in Europe
and which makes completing a deal
tougher.
The agreement allows buyers to issue
legally binding instructions to a target’s
management and gain direct control of
the company’s cash flows. In return,
however, it confers rights to remaining
minority investors that allow them to
push for a better deal than the original
offer.
Hedge funds, including Elliott have
frequently targeted situations where
they can profit from such a scenario as
when Bain and Cinven agreed to buy
Stada, the generic drugmaker in 2017,
only to have to raise their offer to win
over minorities.
“That’s why people say German take
privates are a nightmare because of the
domination agreement,” said Mr Alber-
smeier. But as there aren’t a lot of oppor-
As the global outlook
darkens, German groups
are under greater pressure
to sharpen their focus
tunities, private equity firms are now
looking at the deals again. If you notice,
all the offers that are happening now are
pursuing a delisting, but not all are seek-
ing a domination agreement.”
And another positive factor for the
private equity industry — cheap money
— is gathering yet more momentum as
central banks from around the world
cut interest rates. It is a benign back-
European buyout volumes drop that has allowed buyout firms to
Bain; Carlyle/Osram Licht Estimated deal value, 2019 ($bn) raise record amounts
Germany’s growing dealmaking
€3.4bn
comes amid extraordinarily benign
Total $157bn
times for the buyout sector as execu-
KKR/Axel Springer SE (54.6% stake)
€6.7bn Germany will account tives raise their biggest funds. CVC, for
for about one-third of example, has raised $16bn for its largest
European fund as investors hunt higher
buyout volumes
returns.
Germany* Ultra-low interest rates have pushed
large institutional investors to seek risk-
ier investments, including private
2019
$46bn equity, and this has led to a jump in
activity in German dealmaking, accord-
ing to multiple industry observers.
methacrylates business For now there are no imminent signs
€3.0bn Source: Bain & Co * Includes Switzerland
of activity abating. “We see no signs of a
slowdown,” said Mr Weddigen.

Technology

Kik challenges SEC’s crypto lawsuit

HANNAH MURPHY — SAN FRANCISCO
Kik, the Canada-based messaging app,
has filed a rebuttal to a Securities and
Exchange Commission lawsuit that
claims its $100m initial coin offering
was illegal, accusing the US regulator of
“repeatedly twisting” the facts.
The SEC announced in June that it was
suing Kik for allegedly violating securi-
ties law by failing to formally register its
2017 token offering with the regulator,
in what is likely to be a test case for how
crypto offerings are defined in future.
According to the SEC, Kik managers
believed the company would run out of
money after it posted revenues of $1.5m
compared with $32.3m in expenses
between mid-2016 and mid-2017.
To counter this, Kik pivoted to a busi-
ness model financed by the sale of 1tn
“Kin” digital tokens marketed as an
investment opportunity, the SEC said.
But Kik said Kin, which users can earn
from watching adverts or completing
surveys, for instance, and then spend on
the platform, does not fit the definition
of a security, and as such did not have
to adhere to US securities regulations.
In a 131-page response, Kik said the
SEC had made a “consistent effort to
twist the facts” by taking quotes out of
context and “misrepresenting the docu-
ments and testimony that the commis-
sion gathered in its investigation”.
For example, the SEC alleged that a
consultant warned Kik that Kin needed
to be a registered offering. But Kik said
Kik says its Kin token does not fall
within the definition of a security
the consultant then immediately went
on to say that in the case of a “commu-
nity currency”, this would not be the
case. “You’re just selling units of prop-
erty that you created that are used for a
particular purpose in your app,” the
consultant allegedly said.
Kik said the SEC quoted Ted Living-
ston, its chief executive, selectively, fail-
ing to include instances in which he
emphasised that Kin was a community
currency and his warnings that Kik
could not guarantee Kin’s value.
The case is set to be a test for whether
certain digital tokens count as securi-
ties, at a time when crypto companies
say the SEC is failing to offer greater
clarity on the matter. In May Goldman
Sachs-backed Circle, a payments and
digital asset platform, fired 10 per cent
of its employees, citing regulatory
uncertainty.
It also comes as Facebook, a Kik rival
and the world’s largest social media net-
work, is pursuing plans to launch its
Libra cryptocurrency amid doubts the
token will be deemed a security by
watchdogs, which could demand it is
regulated as such.
See Lex
14 ★ FINANCIAL TIMES Thursday 8 August 2019

COMPANIES

Banks

Low interest rates weigh on trio of European lenders

UniCredit, Commerzbank
and ABN Amro flag up
weaker earnings outlook
DAVID CROW — BANKING EDITOR
Large European banks lined up yester-
day to warn that the low interest rate
environment would hurt their earnings,
wiping hundreds of millions of euros off
their market valuations.
UniCredit, Italy’s second-largest bank
by market capitalisation, cut its revenue
forecast for this year to €18.7bn from
€19bn due to what chief executive Jean
Pierre Mustier described as the “pre-
vailing environment, with rates
expected to be lower for much longer”.
Commerzbank, the German lender,
warned that its profit target for 2019
was now looking “significantly more
ambitious”, noting that leading central
banks had “tempered their interest
rate . . . expectations” because of a
darkening economic outlook.
Meanwhile, ABN Amro, the Dutch
bank, said that low interest rates would
hit its net interest income, the amount it
earns on lending minus its financing
costs, owing to lower deposit margins.
“The second-quarter earnings season
for European banks has been largely
disappointing,” said Ronit Ghose, an
analyst at Citi. “Many banks have
undershot revenue forecasts. Bearish
outlook guidance, especially on net
interest income, has reflected an
increasingly negative interest rate
environment.”
The warnings underscored how glo-
bal banks are scrambling to position
their businesses for a “lower for longer”
interest rate environment.
Central banks in Europe, the US and
the UK have either cut or are poised to
cut interest rates to support the global
economy at a time of escalating geopo-
litical turmoil, including trade tensions
between China and the West and the
growing prospect of a hard Brexit.
Central bankers in India, Thailand
and New Zealand also cut interest rates
by more than markets had expected
yesterday in a bid to boost growth in
their economies.
‘As client rates are
close to zero, it will be
increasingly difficult to
offset the decline’
Shares in the trio of European lenders
— which all reported first-half results
yesterday — were hit, with UniCredit
and Commerzbank closing 5 per cent
and 6 per cent lower respectively, while minus 0.5 per cent next month — with
ABN regained ground to close up 0.3 per some economists predicting that the
cent. central bank will go further in loosening
Record-low interest rates are already monetary policy.
weighing on banks’ profits as they have “As client rates are close to zero, it will
been forced to lower borrowing charges be increasingly difficult to offset the
and in some cases pay to store money at decline and over time margin pressure
central banks, without a similar reduc- will increase further,” warned Kees van
tion in the rates they pay to savers. Dijkhuizen, the outgoing chief executive
Until recently, many eurozone lend- of ABN.
ers had been hoping that the European The warnings from some of Europe’s
Central Bank would increase rates for largest lenders echoed similar concerns
the first time in half a decade, leading at banks in the US, where the Federal
to a recovery in the income they gener- Reserve cut interest rates last month. In
ate by lending. the UK, the Bank of England is expected
But now the ECB is expected to cut its to do the same.
deposit rate from minus 0.4 per cent to See Lex

Mining. Industrial operations

Glencore puts faith Glencore has been hit hard

by the tumbling cobalt price
Standard grade ($/lb)

in coal veteran 35

30

Freyberg to restore 25

its fortunes 20

15

ers’ miner” according to peers, has been 10

Executive is key to the group tasked with overseeing all of the com-
Aug 2018 2019 Aug

benefiting from demand for
metals in shift to electric cars
HENRY SANDERSON AND
DAVID SHEPPARD
As Glencore’s chief executive Ivan
Glasenberg scrambles to reassure inves-
tors that a poor first half set of results
will not be repeated, the spotlight has
fallen on a veteran coal miner to tame
the company’s once swashbuckling cul-
ture and put it back on track.
Peter Freyberg, a 60-year-old execu-
tive from South Africa who has spent
most of his career in coal, will be key to
reversing a drop in earnings to their low-
est level in three years and positioning
the miner to take advantage of growing
demand for metals from the shift to
electric cars.
It will not be an easy task. Glencore’s
prized mines in Africa, which it had
hoped would be a cash cow as the move
towards electrified transport and bat-
teries boost demand for cobalt, nickel
and copper, have stumbled, dragging
down the company’s results.
The miner and trading house posted
adjusted earnings before interest, tax,
depreciation and amortisation — the
measure most closely tracked by ana-
lysts — of $5.6bn in the half year to June,
down almost a third on the same period
last year. Net income, which was hit by a
number of writedowns, fell 92 per cent
to $226m.
Mr Freyberg, who is known as a “min-
pany’s 150 industrial operations since
December, with a mandate to lower
costs and improve performance.
“He makes us all feel comfortable,”
said Mr Glasenberg, who has placed his
faith in Mr Freyberg at a time when
some of the close-knit band of traders,
who once surrounded the chief execu-
tive, have left the company.
Mr Freyberg’s immediate focus will
be turning round Glencore’s two key
copper and cobalt mines in the Demo-
cratic Republic of Congo, which have
struggled with lower metal prices, as
well as higher taxes under a new mining
code brought in by the Congo’s former
president Joseph Kabila, last year.
Analysts said the company would
need to move fast as the mines were
meant to be a key part of the company’s
pitch to investors rather than a drag on
results. “The market may start to lose
patience as the record at these assets has
been poor,” said Christopher LaFemina
at Jefferies.
Glencore said the company would
shut its Mutanda mine for at least two
years from the end of 2019 due to the
impact of lower cobalt prices as well as
the new mining code. At the same time
Glencore hopes to increase production
at its Katanga mine, which has suffered
from maintenance and operational
problems. More than 40 miners who
had invaded the site died in June follow-
ing the collapse of part of a pit they were
working on.
The company’s African copper busi-
ness, which also includes the Mopani
Glencore hopes copper mine in Zambia, reported a loss
to increase of $315m in the first half of the year.
production at its Mr Freyberg said he wanted to turn
Katanga mine, the division from one set to consume
which has more than $1bn in cash this year, to one
suffered from generating over $1.6bn in earnings by
maintenance 2023. He described his job at Glencore
and operational as making sure the company could
problems “deliver what we say we were going to
Simon Dawson/Bloomberg
deliver in a reliable fashion”.
Some analysts believe Mr Freyberg’s
elevation is partly designed to reassure
investors unnerved by regulatory inves-
tigations into the company, which tradi-
tionally has had a reputation for being
for being run by risk-hungry traders
rather than engineers. Last year Cana-
dian regulators accused Glencore’s
Katanga subsidiary of misstating its
First-half performance
$bn
Adjusted Net
ebitda income
8 3.0
2.5
6 2.0
1.5
4
1.0
0.5
2
0
0 -0.5
2013 14 15 16 17 18 19
Sources: Fastmarkets; company
Freyberg results and failing to disclose the full perimeter fence around the sprawling
extent of its relationship with Dan Ger- mine to prevent further intrusions from
says his job tler, a billionaire businessman sanc- local miners. Glencore also wants to
is making tioned by the US. improve its own safety performance
Telis Mistakidis, Glencore’s former after 11 employee deaths at its opera-
sure the head of copper, was fined $1.8m by the tions so far in 2019.
company Ontario Securities Commission for issu- “Our safety performance needs to be
ing misleading financial statements, addressed and addressed very quickly,”
can ‘deliver shortly before he left the company. said Mr Freyberg.
what we say Glencore also faces a US Department Paul Gait, an analyst at Bernstein, said
of Justice investigation into its behav- Mr Freyberg’s performance would now
we were iour in numerous developing countries, be critical in proving Glencore had
going to including the DRC. grown beyond its sharp-elbowed trad-
Mr Freyberg said yesterday Katanga ing roots. “He’s got the experience,” Mr
deliver’ would be restructured and corporate Gait said. “[But] if they don’t get this
governance improved and he had sent right, those who say Glencore is a bunch
some of the company’s top mining spe- of traders who don’t know how to run
cialists to the DRC. mining assets will be in the ascendancy.”
There are also plans to build a secure See Lex

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Thursday 8 August 2019 ★ FINANCIAL TIMES 15

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

Change during previous day’s 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 $

-0.98% -0.61% -1.28% -0.33% -0.42% -0.164% -0.578% -1.69%

No change
0.38% 0.25% 0.08% 0.268% 0.435%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Jul 08 - - Index All World Jul 08 - Aug 07 Index All World Jul 08 - Aug 07 Index All World Jul 08 - Aug 07 Index All World Jul 08 - Aug 07 Index All World Jul 08 - Aug 07 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
2,979.63 16,462.95 12,436.55 21,534.35 2,052.03
16,172.15 7,536.47
2,853.62 7,198.70 11,650.15 1,909.71
20,516.56
Day -0.98% Month -4.56% Year 0.13% Day 0.14% Month -2.25% Year -1.53% Day 0.38% Month -4.74% Year -6.78% Day 0.71% Month -4.42% Year NaN% Day -0.33% Month -5.66% Year -8.84% Day -0.41% Month -9.52% Year -16.48%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
42,818.66 1,528.10 9,273.90 28,116.28
8,141.73 3,329.46
40,158.73
7,785.75 1,449.92 8,746.10 25,997.03 3,184.69
Day -0.61% Month -4.59% Year -0.92% Day 0.94% Month -7.54% Year -19.26% Day 0.25% Month -5.62% Year -5.24% Day NaN% Month NaN% Year NaN% Day 0.08% Month -9.59% Year -6.48% Day 0.45% Month -5.35% Year -3.01%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
26,783.49 104,530.22 5,572.10 21,886.17 2,928.23 38,730.82
25,697.57 101,541.07
5,266.51 20,538.85 2,768.68 36,690.50
Day -1.28% Month -4.50% Year 0.82% Day -0.61% Month -2.50% Year 26.31% Day 0.61% Month -5.85% Year -3.85% Day -0.45% Month -6.59% Year -6.03% Day -0.32% Month -8.05% Year 2.35% Day -0.77% Month -7.14% Year -2.66%

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 40992.03 41317.03 Cyprus CSE M&P Gen 68.46 68.68 Italy FTSE Italia All-Share 22462.20 22539.28 Philippines Manila Comp 7917.39 7766.75 Taiwan Weighted Pr 10386.18 10394.75 Cross-Border DJ Global Titans ($) 320.14 322.45
Australia All Ordinaries 6588.50 6546.50 Czech Republic
PX 1015.70 1022.85 FTSE Italia Mid Cap 36691.67 36507.82 Poland Wig 56618.47 57082.76 Thailand Bangkok SET 1669.44 1671.48 Euro Stoxx 50 (Eur) 3307.10 3291.66
S&P/ASX 200 6519.50 6478.10 Denmark OMXC Copenahgen 20 990.64 984.98 FTSE MIB 20538.85 20631.74 Portugal PSI 20 4839.94 4833.37 Turkey BIST 100 116840.94 116315.98 Euronext 100 ID 1028.99 1022.90
S&P/ASX 200 Res 4679.60 4682.90 Egypt EGX 30 13655.91 13598.66 Japan 2nd Section 6471.11 6447.18 PSI General 3056.83 3040.16 UAE Abu Dhabi General Index 5080.97 5083.15 FTSE 4Good Global ($) 6895.16 6936.43
Austria ATX 2878.41 2890.19 Estonia OMX Tallinn 1269.14 1266.88 Nikkei 225 20516.56 20585.31 Romania BET Index 9064.84 9047.79 UK FT 30 2939.30 2928.30 FTSE All World ($) 330.87 332.27
Belgium BEL 20 3526.05 3505.48 Finland OMX Helsinki General 8995.32 9035.61 S&P Topix 150 1243.14 1242.06 Russia Micex Index 2682.69 2683.35 FTSE 100 7198.70 7171.69 FTSE E300 1449.92 1446.36
BEL Mid 7584.22 7565.44 France CAC 40 5266.51 5234.65 Topix 1499.93 1499.23 RTX 1291.06 1294.50 FTSE 4Good UK 6595.16 6569.05 FTSE Eurotop 100 2817.51 2810.71
Brazil Bovespa 101541.07 102163.69 SBF 120 4168.86 4143.90 Jordan Amman SE 1859.77 1861.85 Saudi-Arabia TADAWUL All Share Index 8394.07 8557.09 FTSE All Share 3935.76 3920.70 FTSE Global 100 ($) 1758.89 1766.85
Canada S&P/TSX 60 963.01 961.31 Germany M-DAX 25125.86 24943.79 Kenya NSE 20 2575.73 2586.68 Singapore FTSE Straits Times 3184.69 3170.47 FTSE techMARK 100 5297.92 5211.15 FTSE Gold Min ($) 1866.71 1819.84
S&P/TSX Comp 16172.15 16149.49 TecDAX 2788.68 2773.16 Kuwait KSX Market Index 6633.44 6603.51 Slovakia SAX 348.41 344.80 USA DJ Composite 8534.63 8632.73 FTSE Latibex Top (Eur) 4440.00 4432.20
S&P/TSX Div Met & Min 682.75 736.56 XETRA Dax 11650.15 11567.96 Latvia OMX Riga 1037.73 1040.93 Slovenia SBI TOP 868.21 866.73 DJ Industrial 25697.57 26029.52 FTSE Multinationals ($) 1978.72 1967.71
Chile S&P/CLX IGPA Gen 24437.98 24326.22 Greece Athens Gen 837.56 844.47 Lithuania OMX Vilnius 693.08 695.29 South Africa FTSE/JSE All Share 55225.32 55062.01 DJ Transport 10031.02 10172.52 FTSE World ($) 589.39 592.02
China FTSE A200 9708.97 9749.99 FTSE/ASE 20 2068.62 2078.92 Luxembourg LuxX 1200.13 1234.29 FTSE/JSE Res 20 43608.55 43397.34 DJ Utilities 811.74 814.22 FTSEurofirst 100 (Eur) 3971.58 3961.73
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 25997.03 25976.24 Malaysia FTSE Bursa KLCI 1604.70 1611.79 FTSE/JSE Top 40 49253.74 49113.36 Nasdaq 100 7472.98 7521.32 FTSEurofirst 80 (Eur) 4558.40 4539.76
Shanghai A 2900.29 2909.61 HS China Enterprise 9993.34 10012.24 Mexico IPC 40158.73 39785.63 South Korea Kospi 1909.71 1917.50 Nasdaq Cmp 7785.75 7833.27 MSCI ACWI Fr ($) 503.97 501.47
Shanghai B 260.22 259.98 HSCC Red Chip 4083.13 4067.66 Morocco MASI 11590.75 11611.55 Kospi 200 252.00 253.41 NYSE Comp 12512.29 12628.14 MSCI All World ($) 2109.20 2097.32
Shanghai Comp 2768.68 2777.55 Hungary Bux 40283.52 40037.39 Netherlands AEX 539.57 537.27 Spain IBEX 35 8746.10 8699.40 S&P 500 2853.61 2881.77 MSCI Europe (Eur) 1529.64 1536.60
Shenzhen A 1551.88 1558.54 India BSE Sensex 36690.50 36976.85 AEX All Share 801.90 798.96 Sri Lanka CSE All Share 5889.68 5846.94 Wilshire 5000 29308.87 29578.64 MSCI Pacific ($) 2580.12 2608.69
Shenzhen B 923.59 923.26 Nifty 500 8854.65 8918.60 New Zealand NZX 50 10786.26 10587.17 Sweden OMX Stockholm 30 1528.19 1523.03 Venezuela IBC 35149.04 30443.16 S&P Euro (Eur) 1513.55 1506.92
Colombia COLCAP 1512.83 1503.00 Indonesia Jakarta Comp 6204.20 6119.47 Nigeria SE All Share 27669.38 27748.46 OMX Stockholm AS 590.23 588.69 Vietnam VNI 965.93 973.15 S&P Europe 350 (Eur) 1485.91 1482.17
Croatia CROBEX 1897.97 1904.28 Ireland ISEQ Overall 5816.16 5781.64 Norway Oslo All Share 920.90 929.68 Switzerland SMI Index 9533.98 9553.88 S&P Global 1200 ($) 2330.86 2341.10
Israel Tel Aviv 125 1485.09 1485.09 Pakistan KSE 100 30277.45 31000.67 Stoxx 50 (Eur) 3027.36 3022.30
(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 Aug 07 %Chg %Chg Aug 07 %Chg %Chg Aug 07 %Chg %Chg Aug 07 %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
Amazon.com 34.2 1768.71 -19.12 Royal Dutch Shell 222.2 2330.50 -2.00 Unicredit 498.5 9.77 -0.51 Softbank . 623.0 5188.00 -12.00 Fresnillo 680.80 13.3 -52.6 Capita 138.00 18.4 -66.3 Thomas Cook 9.49 70.5 -92.4 Index - Technology Hardware & Equipment 1340.82 7.5 43.4
Apple 28.4 196.39 -0.61 Bp 185.7 505.60 -1.40 Total 360.5 43.18 -0.37 Toyota Motor 441.1 6791.00 71.00 Int Consolidated Airlines S.a. 456.80 7.6 -31.7 Convatec 183.30 17.4 -10.0 Kier 76.75 24.5 -92.8 Tobacco 33246.35 1.1 10.8
Walt Disney (the) 23.9 134.17 -7.70 Glencore 156.4 229.30 -2.05 Bayer Ag Na O.n. 355.1 58.84 3.34 Sony 436.5 5911.00 113.00 Just Eat 789.80 3.7 1.6 Pets At Home 227.00 9.1 33.1 Avon Rubber 1572.00 17.3 33.2 Pharmaceuticals & Biotech. 16643.98 -1.0 15.7
Microsoft 18.4 133.88 -0.81 Hsbc Holdings 150.9 627.40 -0.50 Lvmh 325.8 357.65 7.20 Sumco 331.1 1216.00 -124.00 London Stock Exchange 6790.00 2.5 81.5 Acacia Mining 243.00 7.8 19.8 Asa Int 390.00 10.8 - Health Care Equip.& Services 8210.37 -1.6 18.5
Netflix 15.5 298.89 -11.21 Rio Tinto 140.7 4195.00 -32.50 Sap Se O.n. 302.5 106.20 2.20 Fast Retailing Co., 321.7 63310.00 -420.00 British American Tobacco 3006.00 1.8 -39.1 Spirent Communications 170.00 7.6 66.7 Indivior 59.20 8.0 -85.3 Mobile Telecommunications 3337.77 -2.0 -1.6
Facebook 13.1 184.02 -0.49 Royal Dutch Shell 132.2 2318.50 -11.00 Royal Dutch Shella 295.5 25.28 -0.12 Advantest 288.9 4095.00 -205.00 Rentokil Initial 442.90 1.8 44.0 Hochschild Mining 223.00 7.2 -15.2 Morgan Sindall 1200.00 6.8 -16.4 Gas Water & Multiutilities 4544.40 -2.0 -1.3
Bank Of America 10.0 27.39 -1.03 Anglo American 129.9 1791.80 -16.60 Allianz Se Na O.n. 274.7 199.16 -1.24 Tokyo Electron 280.7 18170.00 -30.00 Flutter Entertainment 6600.00 0.9 -25.8 Centamin 137.60 5.9 -13.5 Ricardo 750.00 6.2 -16.5 Beverages 26795.14 -2.1 20.1
Advanced Micro Devices 8.6 29.01 0.15 Unilever 113.1 4863.00 37.00 Intesa Sanpaolo 270.3 1.91 -0.03 Taiyo Yuden Co., 202.7 2029.00 -107.00 Bae Systems 553.40 0.9 -3.8 4imprint 2940.00 5.4 56.0 Renewi 30.90 5.8 -70.0 Electricity 6434.54 -2.2 -2.5
J P Morgan Chase & Co 8.0 106.43 -4.00 Astrazeneca 108.8 7122.00 46.00 Amadeus It 261.6 68.18 0.60 Mitsubishi Ufj Fin,. 198.0 512.60 0.50 Astrazeneca 7122.00 0.9 39.5 Ultra Electronics Holdings 2068.00 5.3 47.8 Aptitude Software 586.00 5.8 25.3 Personal Goods 41666.16 -2.4 18.4
Alphabet 7.2 1167.88 -3.20 Glaxosmithkline 106.2 1658.00 11.00 Unilever 253.4 50.75 0.28 Takeda Pharmaceutical 196.6 3733.00 -49.00 Tui Ag 820.00 0.3 -47.0 Mitchells & Butlers 320.00 5.3 14.0 Reach 89.60 5.4 12.1 Travel & Leisure 9437.74 -2.5 6.4
Experian 2497.00 -0.1 56.1 Polymetal Int 1046.00 5.1 13.4 4imprint 2940.00 5.4 56.0 Automobiles & Parts 4311.55 -2.7 -
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
National Grid 843.10 -0.1 -2.2 Cls Holdings 238.00 4.6 -1.4 Georgia Healthcare 236.00 4.9 -33.5 Support Services 8595.46 -2.7 18.2
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Fleetcor 284.77 15.53 5.77 Ultra Electronics Holdings 2068.00 212.00 11.42 Bayer Ag Na O.n. 58.84 3.34 6.02 Yokogawa Electric 1982.00 92.00 4.87 Nmc Health 2000.00 -19.2 -30.3 Sirius Minerals 9.25 -38.4 -60.0 Just 37.00 -21.5 -77.6 Forestry & Paper 17584.21 -13.6 -4.6
Cvs Health 57.08 2.99 5.53 Hill & Smith Holdings 1131.00 82.00 7.82 Ferrovial 24.59 0.61 2.54 Keio 7010.00 200.00 2.94 Rolls-royce Holdings 730.00 -15.3 -13.3 Intu Properties 38.48 -19.6 -84.7 Nostrum Oil & Gas 35.70 -19.0 -88.9 Oil Equipment & Services 9339.38 -12.1 -
Assurant 114.73 5.10 4.65 Just Eat 789.80 50.40 6.82 Relx 22.59 0.51 2.31 Olympus 1253.00 35.00 2.87 Glencore 229.30 -13.9 -41.8 Premier Oil 68.86 -18.1 -9.9 Luceco 79.20 -18.9 -28.3 Mining 17756.52 -11.3 3.6
Newmont Mining 39.52 1.53 4.03 Iwg 392.70 22.70 6.14 Casino Guichard 33.45 0.72 2.20 Kao 7787.00 207.00 2.73 Mondi 1562.00 -13.4 -19.2 Woodford Patient Capital Trust 40.10 -15.3 -52.4 Petra Diamonds 9.05 -18.8 -82.2 Oil & Gas Producers 8502.20 -9.4 0.9
Kroger (the) 22.91 0.63 2.81 Flutter Entertainment 6600.00 372.00 5.97 Sap Se O.n. 106.20 2.20 2.12 Kyowa Hakko Kirin Co., 1779.00 47.00 2.71 Standard Life Aberdeen 260.60 -12.8 -46.4 Provident Fin 371.20 -14.8 -44.5 Enquest 19.00 -18.5 -24.9 Life Insurance 7088.24 -8.9 5.1
Hargreaves Lansdown 1833.00 -12.7 0.5 Hunting 434.40 -14.8 -28.3 Spire Healthcare 96.25 -15.1 -61.3 Industrial Metals 5559.61 -8.6 23.9
Downs Downs Downs Downs
Antofagasta 825.00 -12.2 -17.6 Riverstone Energy 720.00 -14.3 -42.5 Cmc Markets 85.90 -12.3 -44.3 General Industrials 5557.54 -8.0 10.0
E*trade Fin 41.61 -2.52 -5.71 Nmc Health 2000.00 -258.00 -11.43 Seadrill 2.33 -0.23 -9.02 Sumco 1216.00 -124.00 -9.25
Anglo American 1791.80 -12.1 12.3 Kaz Minerals 496.40 -14.1 -44.4 Topps Tiles 60.80 -12.1 -23.4 Industrial Engineering 11762.58 -7.9 12.0
The Charles Schwab 37.24 -2.17 -5.51 Sirius Minerals 9.25 -1.16 -11.11 Commerzbank Ag 5.34 -0.37 -6.43 Nikon 1282.00 -111.00 -7.97
Bhp 1760.00 -11.3 15.1 Ip 59.20 -13.7 -58.5 Allied Minds 59.10 -11.9 -64.2 Chemicals 12144.62 -7.5 -6.9
Walt Disney (the) 134.17 -7.70 -5.43 Standard Life Aberdeen 260.60 -21.20 -7.52 Unicredit 9.77 -0.51 -4.94 Takara Holdings . 1005.00 -85.00 -7.80
Royal Dutch Shell 2318.50 -10.9 -7.3 Ferrexpo 223.40 -13.3 -26.3 Low & Bonar 6.70 -11.8 -86.2 Construction & Materials 5643.81 -6.6 13.6
Svb Fin 196.51 -10.56 -5.10 Funding Circle Holdings 99.00 -8.00 -7.48 Saipem 4.01 -0.14 -3.44 Unitika 360.00 -23.00 -6.01
Prudential 1513.00 -10.9 -19.6 Metro Bank 312.60 -12.9 -91.3 Tyman 196.40 -9.5 7.3 Household Goods 15488.76 -5.3 4.2
Citizens Fin 33.03 -1.75 -5.03 Spirax-sarco Eng 8060.00 -550.00 -6.39 E.on Se Na O.n. 8.82 -0.28 -3.04 Hino Motors, 818.00 -46.00 -5.32
Rio Tinto 4195.00 -10.7 5.2 Amigo Holdings 144.00 -12.7 - Lamprell 50.00 -9.4 -35.4 Electronic & Electrical Equip. 7533.77 -5.2 19.1
Based on the constituents of the S&P500 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
Aug 7 Currency Mid Change Mid Change Mid Change Aug 7 Currency Mid Change Mid Change Mid Change Aug 7 Currency Mid Change Mid Change Mid Change Aug 7 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 45.6912 0.2962 51.2451 0.4638 55.5286 0.2875 Indonesia Indonesian Rupiah 14222.5000 -42.5000 15951.3039 -6.3382 17284.6505 -74.4414 Poland Polish Zloty 3.8525 -0.0074 4.3208 0.0029 4.6820 -0.0151 ..Three Month 0.8233 0.0011 0.9226 0.0036 - -
Australia Australian Dollar 1.4800 0.0038 1.6598 0.0086 1.7986 0.0023 Israel Israeli Shekel 3.4795 -0.0043 3.9024 0.0053 4.2286 -0.0107 Romania Romanian Leu 4.2168 -0.0114 4.7293 -0.0005 5.1246 -0.0206 ..One Year 0.8242 0.0009 0.9216 0.0036 - -
Bahrain Bahrainin Dinar 0.3770 - 0.4228 0.0011 0.4582 -0.0006 Japan Japanese Yen 105.7700 -0.6150 118.6268 -0.3814 128.5426 -0.9173 Russia Russian Ruble 65.4738 0.1913 73.4324 0.4038 79.5705 0.1282 United States United States Dollar - - 1.1216 0.0029 1.2153 -0.0016
Bolivia Bolivian Boliviano 6.9100 - 7.7499 0.0200 8.3977 -0.0110 ..One Month 105.7698 -0.6155 118.6268 -0.3814 128.5425 -0.9176 Saudi Arabia Saudi Riyal 3.7511 0.0001 4.2071 0.0110 4.5587 -0.0059 ..One Month - - 1.1213 -0.0953 1.2155 -0.0016
Brazil Brazilian Real 3.9749 0.0002 4.4581 0.0117 4.8307 -0.0061 ..Three Month 105.7693 -0.6164 118.6268 -0.3813 128.5423 -0.9180 Singapore Singapore Dollar 1.3836 0.0031 1.5518 0.0074 1.6815 0.0015 ..Three Month - - 1.1208 -0.0954 1.2158 -0.0016
Canada Canadian Dollar 1.3310 0.0085 1.4927 0.0134 1.6175 0.0082 ..One Year 105.7676 -0.6199 118.6270 -0.3810 128.5425 -0.9189 South Africa South African Rand 15.0875 0.1500 16.9214 0.2115 18.3359 0.1584 ..One Year - - 1.1188 -0.0953 1.2167 -0.0017
Chile Chilean Peso 718.0400 1.0000 805.3207 3.1997 872.6363 0.0701 Kenya Kenyan Shilling 103.4000 0.0500 115.9687 0.3556 125.6623 -0.1043 South Korea South Korean Won 1214.9000 -0.4000 1362.5760 3.0735 1476.4718 -2.4272 Venezuela Venezuelan Bolivar Fuerte - - - - - -
China Chinese Yuan 7.0414 0.0085 7.8973 0.0299 8.5574 -0.0009 Kuwait Kuwaiti Dinar 0.3041 -0.0002 0.3410 0.0007 0.3695 -0.0007 Sweden Swedish Krona 9.6340 0.0432 10.8051 0.0762 11.7082 0.0372 Vietnam Vietnamese Dong 23216.0000 -46.5000 26038.0051 15.2456 28214.5548 -93.6079
Colombia Colombian Peso 3428.0000 -5.5650 3844.6884 3.7096 4166.0591 -12.2476 Malaysia Malaysian Ringgit 4.1890 -0.0015 4.6982 0.0105 5.0909 -0.0085 Switzerland Swiss Franc 0.9733 -0.0048 1.0916 -0.0026 1.1828 -0.0075 European Union Euro 0.8916 -0.0023 - - 1.0836 -0.0042
Costa Rica Costa Rican Colon 569.1900 -0.1650 638.3774 1.4651 691.7384 -1.1099 Mexico Mexican Peso 19.6683 0.0202 22.0590 0.0797 23.9029 -0.0068 Taiwan New Taiwan Dollar 31.4830 -0.0270 35.3099 0.0610 38.2614 -0.0831 ..One Month 0.8914 -0.0023 - - 1.0835 -0.0042
Czech Republic Czech Koruna 22.9638 -0.0671 25.7551 -0.0086 27.9079 -0.1184 New Zealand New Zealand Dollar 1.5485 0.0175 1.7367 0.0241 1.8819 0.0189 Thailand Thai Baht 30.8100 0.0425 34.5551 0.1368 37.4435 0.0025 ..Three Month 0.8908 -0.0023 - - 1.0833 -0.0042
Denmark Danish Krone 6.6534 -0.0193 7.4621 -0.0023 8.0858 -0.0341 Nigeria Nigerian Naira 362.7500 0.1500 406.8437 1.2191 440.8512 -0.3968 Tunisia Tunisian Dinar 2.8631 -0.0042 3.2111 0.0036 3.4795 -0.0097 ..One Year 0.8888 -0.0022 - - 1.0823 -0.0043
Egypt Egyptian Pound 16.5650 0.0410 18.5785 0.0939 20.1315 0.0234 Norway Norwegian Krone 8.9695 0.0633 10.0598 0.0969 10.9007 0.0628 Turkey Turkish Lira 5.4835 -0.0459 6.1500 -0.0355 6.6641 -0.0646
Hong Kong Hong Kong Dollar 7.8429 0.0045 8.7963 0.0278 9.5316 -0.0071 Pakistan Pakistani Rupee 158.2000 -0.3500 177.4298 0.0670 192.2610 -0.6786 United Arab Emirates UAE Dirham 3.6732 - 4.1196 0.0106 4.4640 -0.0059
Hungary Hungarian Forint 290.6202 0.0422 325.9462 0.8895 353.1916 -0.4128 Peru Peruvian Nuevo Sol 3.3797 -0.0033 3.7905 0.0061 4.1074 -0.0094 United Kingdom Pound Sterling 0.8228 0.0011 0.9229 0.0036 - -
India Indian Rupee 70.8663 0.0412 79.4803 0.2515 86.1240 -0.0630 Philippines Philippine Peso 52.3290 0.3790 58.6898 0.5756 63.5956 0.3776 ..One Month 0.8230 0.0011 0.9228 0.0036 - -
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 Aug 07 Aug 06 Aug 05 Aug 02 Aug 01 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 2939.30 2928.30 2939.50 3008.70 3074.20 0.00 3135.80 2704.70 Leisure Goods 45.31 Tobacco 14.63 Financials 6.70 FTSE 100 Price Change FTSE 100 Price Change
Aug 07 chge% Index Aug 06 Aug 05 ago yield% Cover ratio adj Return FT 30 Div Yield 1.97 1.98 1.97 1.92 1.88 0.00 3.93 2.74 Industrial Metals & 27.64 Media 14.52 FTSE SmallCap Index 5.82 3I Group PLC 1076 11.00 Land Securities Group PLC 777.80 5.60
FTSE 100 (100) 7198.70 0.38 6074.95 7171.69 7223.85 7776.65 4.48 1.50 14.87 186.27 6531.83 P/E Ratio net 22.70 22.52 22.63 23.24 23.72 0.00 19.44 14.26 Software & Comp Serv 24.90 Food Producers 14.20 Nonlife Insurance 4.88 Admiral Group PLC 2071 -2.00 Legal & General Group PLC 237.70 -7.60
FTSE 250 (250) 18941.00 0.50 15984.25 18846.20 18871.42 20770.64 3.27 1.47 20.83 355.74 14572.02 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Technology 24.63 Aerospace & Defense 13.95 Oil & Gas Producers 4.54 Anglo American PLC 1791.8 -16.60 Lloyds Banking Group PLC 50.24 -
FTSE 250 ex Inv Co (192) 19826.16 0.53 16731.23 19722.01 19732.81 22157.53 3.48 1.43 20.08 395.26 15589.95 FT 30 hourly changes Financial Services 23.42 General Retailers 13.93 Oil & Gas 4.34 Antofagasta PLC 825.00 15.60 London Stock Exchange Group PLC 6790 192.00
FTSE 350 (350) 3989.73 0.40 3366.92 3973.96 3999.05 4320.28 4.29 1.50 15.59 98.69 7239.83 8 9 10 11 12 13 14 15 16 High Low Beverages 22.53 Food & Drug Retailer 13.19 Real Est Invest & Tr 2.93 Ashtead Group PLC 2150 33.00 Marks And Spencer Group PLC 188.95 0.20
FTSE 350 ex Investment Trusts (291) 3941.32 0.39 3326.07 3925.92 3951.00 4277.64 4.37 1.48 15.44 99.20 3688.48 2928.3 2934.7 2938.8 3092 2944.9 2941.2 2933.6 2921.3 2941.3 2947.4 2919.2 Health Care Eq & Srv 21.14 Equity Invest Instr 11.76 Gas Water & Multi 1.62 Associated British Foods PLC 2371 - Melrose Industries PLC 170.15 1.80
FTSE 350 Higher Yield (109) 3471.62 0.08 2929.69 3468.76 3494.83 3938.58 6.14 1.34 12.11 114.97 6782.44 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Personal Goods 20.64 Consumer Services 11.31 Utilities 1.15 Astrazeneca PLC 7122 46.00 Micro Focus International PLC 1649.4 -10.80
FTSE 350 Lower Yield (241) 4184.35 0.72 3531.16 4154.25 4175.29 4300.28 2.37 1.90 22.18 66.12 4817.19 Electronic & Elec Eq 20.33 NON FINANCIALS Index 11.07 Mobile Telecomms 0.55 Auto Trader Group PLC 520.20 9.80 Mondi PLC 1562 8.50
FTSE SmallCap (281) 5418.47 0.03 4572.63 5416.63 5400.21 5912.22 3.79 0.82 32.14 111.56 8290.76 Tech Hardware & Eq 19.63 FTSE 100 Index 10.09 Forestry & Paper -0.21
FTSE SmallCap ex Inv Co (156) 4318.78 -0.33 3644.61 4333.13 4312.34 5025.29 4.32 1.40 16.51 89.25 6948.01 FX: EFFECTIVE INDICES Support Services 18.34 Life Insurance 10.04 Banks -0.29
Aveva Group PLC 3790 16.00 Morrison (Wm) Supermarkets PLC 184.65 -
Aviva PLC 382.00 0.30 National Grid PLC 843.10 12.10
FTSE All-Share (631) 3935.76 0.38 3321.37 3920.70 3944.15 4263.00 4.27 1.47 15.88 96.76 7217.15 Health Care 18.23 FTSE 250 Index 10.01 Electricity -0.56
Aug 06 Aug 05 Mnth Ago Aug 07 Aug 06 Mnth Ago Bae Systems PLC 553.40 17.40 Next PLC 5878 20.00
FTSE All-Share ex Inv Co (447) 3859.51 0.38 3257.03 3844.97 3868.69 4194.81 4.36 1.48 15.46 96.78 3669.56 Pharmace & Biotech 17.86 FTSE All{HY-}Share Index 9.92 Real Est Invest & Se -0.79 Barclays PLC 147.54 0.30 Nmc Health PLC 2000 -258.00
FTSE All-Share ex Multinationals (563) 1109.68 0.49 776.15 1104.22 1107.08 1258.06 4.08 1.38 17.73 27.46 2139.58 Australia - - - Sweden - - - Industrials 16.52 Industrial Transport 9.22 Chemicals -2.68 Barratt Developments PLC 631.60 7.20 Ocado Group PLC 1158 21.50
FTSE Fledgling (102) 9362.77 -0.36 7901.21 9396.92 9407.91 11235.40 5.34 -0.35 -53.52 174.79 18603.52 Canada - - - Switzerland - - - Consumer Goods 15.92 Mining 8.31 Telecommunications -6.17 Berkeley Group Holdings (The) PLC 3783 45.00 Pearson PLC 823.00 13.00
FTSE Fledgling ex Inv Co (46) 11039.09 -1.47 9315.85 11204.10 11219.46 16489.49 14.10 -0.36 -19.56 229.29 21527.04 Denmark - - - UK 74.61 74.47 76.32 Construct & Material 15.66 Travel & Leisure 7.47 Oil Equipment & Serv -6.63 Bhp Group PLC 1760 -18.80 Persimmon PLC 1908.5 12.00
FTSE All-Small (383) 3763.77 0.01 3176.23 3763.36 3752.88 4125.85 3.88 0.73 35.42 77.06 7389.62 Japan - - - USA - - - Industrial Eng 15.26 Basic Materials 7.22 Fixed Line Telecomms -19.42 BP PLC 505.60 -1.40 Phoenix Group Holdings PLC 674.50 18.00
FTSE All-Small ex Inv Co (202) 3225.49 -0.37 2721.98 3237.36 3222.44 3788.44 4.62 1.24 17.50 66.62 6573.65 New Zealand - - - Euro - - - Household Goods & Ho 6.95 Automobiles & Parts -35.59 British American Tobacco PLC 3006 26.00 Prudential PLC 1513 -8.00
FTSE AIM All-Share (770) 876.37 -2.20 739.57 896.11 907.25 1084.68 1.74 1.40 40.96 7.86 991.86 Norway - - -
British Land Company PLC 481.50 1.60 Reckitt Benckiser Group PLC 5961 31.00
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Bt Group PLC 184.40 0.30 Relx PLC 1924 44.50
Oil & Gas (13) 8810.32 -0.32 7435.00 8838.76 8961.41 10078.02 5.84 1.35 12.67 259.75 9094.53 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Bunzl PLC 2074 27.00 Rentokil Initial PLC 442.90 8.00
Oil & Gas Producers (9) 8530.61 -0.30 7198.95 8555.96 8676.35 9702.72 5.85 1.36 12.57 250.52 9122.75 Burberry Group PLC 2155 -5.00 Rightmove PLC 509.50 6.40
Oil Equipment Services & Distribution (4) 9690.19 -1.86 8177.51 9874.34 9895.11 14966.09 5.49 0.76 23.94 355.08 8149.63 FTSE GLOBAL EQUITY INDEX SERIES Carnival PLC 3578 79.00 Rio Tinto PLC 4195 -32.50
Basic Materials (26) 5942.93 -0.52 5015.22 5974.19 6056.38 6277.01 5.18 2.72 7.10 163.69 6639.13 Centrica PLC 68.38 -0.94 Rolls-Royce Holdings PLC 730.00 -29.00
Chemicals (8) 12989.62 -0.10 10961.90 13002.44 13308.29 17907.92 2.57 2.16 18.00 239.14 12170.54 Aug 6 No of US $ Day Mth YTD Total
YTD Gr Div Aug 6 No of US $ Day Mth YTD Total YTD Gr Div Coca-Cola Hbc AG 2830 63.00 Royal Bank Of Scotland Group PLC 204.40 3.60
Forestry & Paper (1) 19187.61 0.55 16192.35 19083.19 19574.55 27393.32 4.24 2.66 8.89 576.00 22297.21 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Compass Group PLC 2030 31.00 Royal Dutch Shell PLC 2318.5 -11.00
Industrial Metals & Mining (2) 5988.59 -0.85 5053.75 6039.79 6095.64 5323.88 13.21 1.75 4.33 273.23 6703.50 FTSE Global All Cap 8889 567.51 0.5 -4.8 10.5 848.97
12.3 2.5 Oil & Gas Producers 108 327.01 -0.4 -0.4 -0.4 581.76 1.9 4.4 Crh PLC 2582 18.00 Royal Dutch Shell PLC 2330.5 -2.00
Mining (15) 16944.28 -0.62 14299.22 17049.94 17256.94 17155.69 5.30 2.82 6.69 473.88 9947.52 FTSE Global Large Cap 1774 504.19 0.5 -4.8 10.4 775.81
12.2 2.6 Oil Equipment & Services 34 244.33 -0.9 -0.9 9.6 383.36 12.6 4.9 Croda International PLC 4636 50.00 Rsa Insurance Group PLC 539.40 4.20
FTSE Global Mid Cap 2148 744.82 0.5 -5.1 10.7 1051.14
12.3 2.3 Basic Materials 354 456.51 -0.4 -0.4 2.0 742.20 4.1 3.5 Dcc PLC 6350 24.00 Sage Group PLC 702.20 -0.80
Industrials (105) 5353.77 0.73 4518.03 5315.04 5337.62 5818.06 2.64 1.00 37.76 81.78 5808.82
Construction & Materials (15) 5874.89 0.75 4957.80 5831.44 5857.90 6694.59 2.91 0.31 111.40 111.85 6585.43 FTSE Global Small Cap 4967 780.68 0.6 -4.7 11.5 1061.90
12.8 2.1 Chemicals 163 677.38 -0.6 -0.6 2.4 1098.89 4.4 2.9 Diageo PLC 3379 25.50 Sainsbury (J) PLC 190.25 1.95
Aerospace & Defense (10) 5037.88 0.88 4251.45 4993.87 5096.74 5947.15 2.70 -0.26 -143.25 79.10 5659.58 FTSE All-World 3922 332.27 0.5 -4.8 10.4 525.73
12.2 2.6 Forestry & Paper 20 223.37 -1.3 -1.3 -9.8 407.20 -7.3 4.5 Direct Line Insurance Group PLC 306.90 -0.40 Schroders PLC 2890 -4.00
General Industrials (6) 4477.24 -0.16 3778.33 4484.41 4526.86 5685.94 3.51 1.06 26.88 67.20 5412.03 FTSE World 2594 592.02 0.5 -4.6 11.0 1257.14
12.8 2.5 Industrial Metals & Mining 94 325.71 -0.1 -0.1 -9.0 529.70 -7.0 5.0 Evraz PLC 600.00 -2.20 Scottish Mortgage Investment Trust PLC 526.00 8.00
Electronic & Electrical Equipment (10) 8838.35 0.00 7458.65 8838.23 8757.33 8436.63 1.61 2.02 30.89 83.75 8359.27 FTSE Global All Cap ex UNITED KINGDOM In 8576 594.20 0.5 -4.7 11.0 873.73
12.7 2.4 Mining 77 646.10 0.0 0.0 10.4 1062.15 12.8 3.8 Experian PLC 2497 50.00 Segro PLC 742.40 12.40
Industrial Engineering (12) 12984.87 -1.84 10957.88 13228.09 13041.86 14560.09 2.53 1.57 25.14 224.42 16594.77 FTSE Global All Cap ex USA 7070 460.33 -0.5 -6.2 5.0 747.14
7.4 3.3 Industrials 750 400.22 0.6 0.6 14.1 601.20 15.7 2.1 Ferguson PLC 5990 66.00 Severn Trent PLC 1966.5 2.50
Industrial Transportation (6) 3647.15 1.72 3077.82 3585.48 3670.35 5051.51 6.03 0.87 19.14 141.07 3627.04 FTSE Global All Cap ex JAPAN 7552 584.61 0.6 -4.9 11.1 883.22
12.9 2.5 Construction & Materials 147 480.71 -0.1 -0.1 8.9 756.90 10.8 2.5 Flutter Entertainment PLC 6600 372.00 Smith & Nephew PLC 1839.5 22.50
Support Services (46) 8279.22 1.26 6986.81 8175.80 8180.15 8253.10 2.34 1.65 25.82 106.67 9014.96 FTSE Global All Cap ex Eurozone 8220 593.68 0.6 -4.7 10.9 869.53
12.6 2.4 Aerospace & Defense 35 841.34 1.4 1.4 19.1 1247.53 20.5 1.9 Fresnillo PLC 680.80 36.00 Smith (Ds) PLC 320.30 0.10
FTSE Developed 2172 539.99 0.5 -4.5 11.3 814.34
13.1 2.5 General Industrials 65 203.74 0.2 0.2 7.6 332.77 9.2 2.4 Glaxosmithkline PLC 1658 11.00 Smiths Group PLC 1536 1.00
Consumer Goods (42) 19731.77 0.69 16651.57 19595.83 19696.27 21386.38 4.18 1.65 14.49 444.77 15812.72
FTSE Developed All Cap 5696 565.84 0.5 -4.5 11.4 841.88
13.1 2.4 Electronic & Electrical Equipment 133 419.92 0.2 0.2 11.9 574.02 13.3 1.8 Glencore PLC 229.30 -2.05 Smurfit Kappa Group PLC 2376 -8.00
Automobiles & Parts (2) 4333.65 0.01 3657.15 4333.38 4277.53 10974.76 1.56 5.11 12.57 71.99 4388.63
FTSE Developed Large Cap 908 501.89 0.5 -4.4 11.3 769.66
13.2 2.6 Industrial Engineering 151 699.76 0.0 0.0 6.0 1042.66 7.9 2.7 Halma PLC 1910.5 14.50 Spirax-Sarco Engineering PLC 8060 -550.00
Beverages (5) 26833.65 0.84 22644.82 26610.13 26823.16 22719.73 2.00 1.77 28.16 230.70 19867.51
FTSE Developed Europe Large Cap 237 340.92 -0.5 -6.1 6.4 615.21
9.5 3.8 Industrial Transportation 129 703.85 0.4 0.4 14.3 1062.38 16.0 2.3 Hargreaves Lansdown PLC 1833 -44.00 Sse PLC 1083.5 9.50
Food Producers (11) 7275.43 -0.72 6139.71 7328.34 7343.11 7515.92 2.50 1.98 20.27 106.06 6591.24
FTSE Developed Europe Mid Cap 347 545.72 -0.2 -6.2 5.2 869.21
7.8 3.2 Support Services 90 465.44 1.2 1.2 25.9 663.45 27.0 1.5 Hiscox LTD 1586 5.00 St. James's Place PLC 933.00 1.40
Household Goods & Home Construction (15)12974.92 0.69 10949.49 12885.62 12941.53 14533.38 4.83 1.86 11.14 415.09 10059.32
FTSE Dev Europe Small Cap 739 757.39 0.0 -6.0 5.9 1164.27
8.3 3.2 Consumer Goods 549 466.16 0.2 0.2 10.1 728.50 12.0 2.8 HSBC Holdings PLC 627.40 -0.50 Standard Chartered PLC 627.00 -3.80
Leisure Goods (2) 13199.93 -0.80 11139.38 13305.93 13046.49 9840.81 3.49 1.37 20.89 217.80 13278.68
FTSE North America Large Cap 268 619.68 1.2 -3.5 14.9 880.29
16.3 2.1 Automobiles & Parts 136 334.50 -0.5 -0.5 -1.2 510.48 1.2 3.7 Imperial Brands PLC 2064 17.50 Standard Life Aberdeen PLC 260.60 -21.20
Personal Goods (5) 36241.54 0.65 30584.10 36006.15 36274.24 34189.58 2.73 2.67 13.73 519.74 26016.55
FTSE North America Mid Cap 407 864.15 1.1 -4.1 16.4 1134.99
17.5 1.8 Beverages 64 684.77 0.5 0.5 14.6 1077.88 16.0 2.4 Informa PLC 835.60 3.80 Taylor Wimpey PLC 148.75 2.25
Tobacco (2) 33246.41 0.87 28056.53 32960.11 33040.84 46880.94 7.21 1.21 11.50 1219.09 24233.09
FTSE North America Small Cap 1349 877.64 1.1 -3.7 16.3 1115.82
17.3 1.6 Food Producers 130 646.15 -0.3 -0.3 15.6 1033.63 17.7 2.3 Intercontinental Hotels Group PLC 5261 80.00 Tesco PLC 216.80 1.90
Health Care (19) 12081.81 0.60 10195.80 12009.43 12091.42 10989.51 3.46 0.90 32.14 244.55 10028.77
FTSE North America 675 409.97 1.2 -3.6 15.1 595.38
16.5 2.0 Household Goods & Home Construction 60 450.02 0.5 0.5 12.4 700.64 14.6 2.7 International Consolidated Airlines Group S.A. 456.80 10.60 Tui AG 820.00 18.40
Health Care Equipment & Services (9) 8230.66 0.26 6945.82 8209.45 8350.31 7887.43 1.66 2.51 24.02 90.60 7396.70
FTSE Developed ex North America 1497 241.69 -0.7 -6.0 5.0 422.42
7.4 3.4 Leisure Goods 44 205.40 0.2 0.2 11.0 278.39 12.0 1.3 Intertek Group PLC 5522 144.00 Unilever PLC 4863 37.00
Pharmaceuticals & Biotechnology (10)16528.94 0.65 13948.71 16422.50 16512.23 14959.80 3.69 0.81 33.64 355.14 12293.05
FTSE Japan Large Cap 189 354.32 -0.8 -3.5 4.8 480.01
6.2 2.6 Personal Goods 102 812.44 0.7 0.7 13.4 1184.45 14.7 1.9 Itv PLC 109.65 3.25 United Utilities Group PLC 759.00 -1.00
Consumer Services (90) 5146.90 1.41 4343.45 5075.17 5099.85 5489.57 3.05 1.82 18.08 110.42 5141.25 FTSE Japan Mid Cap 323 553.06 -0.7 -5.3 0.0 713.66
1.2 2.4 Tobacco 13 929.56 0.1 0.1 4.2 2130.97 7.4 6.3
Food & Drug Retailers (6) 3777.84 0.90 3188.11 3743.98 3782.39 4515.24 2.59 1.97 19.56 69.54 4616.28 Jd Sports Fashion PLC 597.40 8.60 Vodafone Group PLC 147.20 0.82
FTSE Global wi JAPAN Small Cap 825 604.91 -0.8 -5.6 2.4 808.32
3.7 2.3 Health Care 277 532.06 0.6 0.6 4.8 799.05 6.3 2.1 Johnson Matthey PLC 2887 -22.00 Whitbread PLC 4248 24.00
General Retailers (25) 2040.40 1.03 1721.89 2019.66 2019.10 2407.28 3.51 2.02 14.11 43.51 2512.79
FTSE Japan 512 148.85 -0.8 -3.8 3.8 225.93
5.2 2.6 Health Care Equipment & Services 92 1033.85 1.3 1.3 11.1 1230.67 11.8 1.0 Just Eat PLC 789.80 50.40 Wpp PLC 912.20 7.60
Media (20) 8779.57 1.58 7409.05 8642.77 8668.71 8476.95 2.95 1.88 18.08 198.54 5767.93
FTSE Asia Pacific Large Cap ex Japan 900 638.76 -0.8 -8.3 2.3 1067.80
4.3 3.1 Pharmaceuticals & Biotechnology 185 355.25 0.3 0.3 1.8 563.23 3.6 2.6 Kingfisher PLC 211.80 1.90
Travel & Leisure (39) 9218.27 1.58 7779.26 9074.51 9132.72 9858.49 3.12 1.64 19.53 197.82 9301.02
FTSE Asia Pacific Mid Cap ex Japan 825 777.04 -0.9 -10.3 -3.0 1246.07
-1.3 3.3 Consumer Services 453 508.59 0.9 0.9 13.7 701.23 14.8 1.5
Telecommunications (5) 2237.53 0.46 1888.25 2227.37 2239.94 2798.32 5.98 0.34 49.14 39.57 2844.27 FTSE Asia Pacific Small Cap ex Japan 1756 493.50 -0.7 -8.6 -1.1 773.74
0.6 3.1 Food & Drug Retailers 65 257.10 -0.7 -0.7 -1.9 376.72 -0.3 2.6
Fixed Line Telecommunications (3) 2249.39 0.22 1898.25 2244.47 2239.94 2825.25 7.80 1.42 9.01 3.29 2275.79
Mobile Telecommunications (2) 3332.72 0.55 2812.47 3314.45 3343.33 4163.32 5.26 -0.30 -63.22 81.43 3854.65
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
1725 500.28
3193 696.36
-0.8
0.1
-8.5
-7.5
1.8 888.36
3.7
2.8 1107.35
5.1
3.1 General Retailers
3.2 Media
150 807.92
90 361.97
1.3
1.0
1.3
1.0
16.5 1075.54
16.9 502.53
17.2
18.2
1.0
1.8
UK STOCK MARKET TRADING DATA
Utilities (8) 6363.14 0.79 5369.83 6313.00 6400.27 7054.45 6.99 0.58 24.72 339.63 8352.58 FTSE Emerging Large Cap 866 663.97 0.1 -7.7 2.6 1063.21
4.8 3.1 Travel & Leisure 148 492.60 0.4 0.4 12.8 690.94 14.0 1.9 Aug 07 Aug 06 Aug 05 Aug 02 Aug 01 Yr Ago
Electricity (3) 6419.93 0.72 5417.76 6374.35 6422.54 7668.81 8.57 0.32 36.44 538.98 11093.60 FTSE Emerging Mid Cap 884 868.92 0.1 -6.8 4.0 1376.70
6.4 3.5 Telecommunication 92 150.25 0.0 0.0 4.9 308.95 8.0 4.5 - - - - - -
Gas Water & Multiutilities (5) 6005.88 0.82 5068.34 5957.26 6049.99 6515.96 6.55 0.67 22.69 269.37 7797.39 FTSE Emerging Small Cap 1443 689.34 0.4 -6.3 3.8 1049.38
6.0 3.3 Fixed Line Telecommuniations 38 123.05 0.3 0.3 4.0 282.14 7.8 5.3 Order Book Turnover (m) 66.34 109.71 129.38 129.38 129.38 189.56
Financials (306) 4669.32 0.10 3940.43 4664.53 4667.80 5252.76 4.44 1.55 14.51 129.27 4697.48 FTSE Emerging Europe 81 380.70 1.1 -6.2 16.6 671.65
22.5 6.4 Mobile Telecommunications 54 162.83 -0.4 -0.4 6.1 295.50 8.4 3.5 Order Book Bargains 1019550.00 1079421.00 1105241.00 1105241.00 1105241.00 985680.00
Banks (10) 3536.55 0.03 2984.48 3535.50 3533.30 4275.81 5.57 1.75 10.29 122.86 2877.52 FTSE Latin America All Cap 235 892.02 1.0 -6.9 6.0 1465.93
8.1 3.4 Utilities 189 294.83 0.6 0.6 9.8 618.04 12.3 3.5 Order Book Shares Traded (m) 1639.00 2035.00 1874.00 1874.00 1874.00 1524.00
Nonlife Insurance (8) 3604.96 0.45 3042.22 3588.86 3611.90 3664.91 3.93 1.55 16.38 90.34 6831.98 FTSE Middle East and Africa All Cap 334 645.90 0.0 -5.2 1.5 1074.06
3.9 3.6 Electricity 130 330.39 0.8 0.8 10.4 682.45 12.8 3.4 Total Equity Turnover (£m) 4183.61 6266.27 5854.24 5854.24 5854.24 6160.10
Life Insurance/Assurance (7) 7174.37 -0.72 6054.43 7226.66 7205.53 8684.86 5.14 1.71 11.37 248.62 7669.73 FTSE Global wi UNITED KINGDOM All Cap In 313 307.80 -0.4 -7.6 1.9 559.89
4.5 4.4 Gas Water & Multiutilities 59 297.68 0.3 0.3 8.5 644.76 11.3 3.8 Total Mkt Bargains 1162414.00 1244338.00 1283743.00 1283743.00 1283743.00 1125008.00
Real Estate Investment & Services (18) 2307.56 0.13 1947.34 2304.48 2296.06 2685.12 2.52 1.82 21.80 29.04 6481.22 FTSE Global wi USA All Cap 1819 706.35 1.3 -3.7 15.3 970.39
16.6 1.9 Financials 840 237.97 0.4 0.4 8.8 415.20 11.3 3.4 Total Shares Traded (m) 3777.00 4013.00 3912.00 3912.00 3912.00 3778.00
Real Estate Investment Trusts (40) 2441.33 0.57 2060.23 2427.49 2426.65 2815.24 4.74 0.32 66.89 69.52 3328.36 FTSE Europe All Cap 1478 399.83 -0.4 -6.1 6.5 694.73
9.5 3.7 Banks 277 189.14 -0.1 -0.1 2.8 359.43 5.8 4.4 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.
General Financial (39) 9513.97 0.16 8028.81 9498.98 9542.17 9338.84 3.55 1.80 15.61 200.17 11715.95 FTSE Eurozone All Cap 669 385.91 -0.4 -6.3 6.5 672.79
9.6 3.5 Nonlife Insurance 72 282.62 0.8 0.8 10.4 431.19 12.5 2.3 (c) Market closed.
Equity Investment Instruments (184) 10448.64 0.49 8817.57 10397.64 10425.01 10594.13 2.57 1.25 30.97 163.45 6031.64 FTSE RAFI All World 3000 3290 6435.88 0.1 -5.7 5.8 9073.70
8.1 3.4 Life Insurance 60 216.01 -0.1 -0.1 8.0 368.76 10.4 3.4
Non Financials (325) 4728.28 0.48 3990.18 4705.64 4742.36 5053.93 4.21 1.45 16.41 111.24 7592.76 FTSE RAFI US 1000 1063 11532.30 1.1 -4.0 11.6 15903.87
13.3 2.6 Financial Services 203 330.49 1.3 1.3 19.2 473.52 20.6 1.9
Technology (17) 2109.67 0.07 1780.34 2108.13 2100.24 1880.64 3.00 0.75 44.43 40.98 2866.31 FTSE EDHEC-Risk Efficient All-World 3922 391.42 0.5 -4.5 9.2 571.94
10.9 2.6 Technology 265 301.06 1.0 1.0 19.1 380.07 20.1 1.4 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Software & Computer Services (14) 2346.00 -0.06 1979.78 2347.51 2341.70 2099.04 3.07 0.69 46.98 46.65 3371.60 FTSE EDHEC-Risk Efficient Developed Europe 584 298.27 -0.2 -5.7 4.5 483.92
7.1 3.3 Software & Computer Services 134 543.47 1.0 1.0 20.6 644.99 21.1 0.8 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Technology Hardware & Equipment (3) 3121.07 2.77 2633.86 3036.94 2949.86 2565.57 1.73 2.66 21.81 32.78 3783.05 Oil & Gas 153 335.51 -0.5 -8.5 1.1 584.29
3.5 4.4 Technology Hardware & Equipment 131 214.37 1.0 1.0 17.1 286.24 18.8 2.2 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Alternative Energy 11 102.49 0.7 0.7 8.5 143.43 10.0 1.6 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 145 330.59 -0.8 -0.8 3.7 584.59 5.8 3.2 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 7493.68 7500.43 7500.84 7524.03 7534.15 7530.22 7539.56 7534.97 7547.98 7551.60 7487.74 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 19842.65 19840.13 19858.18 19868.64 19881.76 19871.28 19865.93 19836.57 19853.07 19886.46 19817.88 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 5550.33 5553.94 5557.41 5553.30 5553.09 5555.71 5557.23 5555.78 5556.79 5563.15 5550.33
FTSE All-Share 4098.77 4101.77 4102.63 4113.11 4118.00 4115.99 4119.98 4116.97 4123.27 4124.95 4095.84 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:15:08:00 Day's Low07:05:00 FTSE 100 2010/11 High: 7609.32(03/07/2019) Low: 6692.66(03/01/2019) 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:15:08:00 Day's Low07:05:00 FTSE 100 2010/11 High: 4150.07(03/07/2019) Low: 3657.52(03/01/2019) 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 Foresight Solar & Infrastructure VCT Int 3.213 2.099 7.400 6.900 3.00000 3.00000 Apr 26 6.000 6.000 date price(p) Sector code Stock price(p) +/- High Low Cap (£m)
price up date High Low Stock Price p +or- Hill & Smith Holdings Int 339.500 295.400 33.400 28.900 33.900 28.200 0.00000 10.00000 - 21.800 30.600 07/29 10.00 MUST Mustang Energy PLC 11.00 0.00 11.65 10.00 92.4
There are currently no rights offers by any companies listed on the LSE. JPMorgan Claverhouse Investment Trust Int 61.621 12.539 108.390 22.760 6.25000 6.00000 Sep 2 15.750 15.500 07/26 5.00 BSFA BSF Enterprise PLC 5.00 - 0.00 0.00 101.7
Legal & General Group Int 48450.000 2307.000 1020.000 900.000 14.740 13.000 0.00000 4.60000 - 11.820 15.650 07/17 1.15 AIM UPR Uniphar PLC 1.09 -0.03 1.25 1.09 293.4
Morgan Sindall Group Int 1421.400 1422.600 35.500 29.900 62.900 55.200 0.00000 19.00000 - 34.000 48.000
PageGroup Int 820.515 751.580 74.584 67.230 16.800 15.500 0.00000 4.10000 - 9.000 12.700
Pantheon International Pre 194.918 131.947 355.470 211.760 0.00000 0.00000 - 0.000 0.000
Phoenix Group Holdings Int 20364.000 889.000 51.000L 38.000L 3.700 5.500L 0.00000 22.60000 - 23.400 45.171
Secure Trust Bank Int 81.400 72.500 18.100 15.100 79.000 68.700 0.00000 19.00000 - 64.000 80.000
Shield Therapeutics Int 2.615 0.495 2.497L 8.036L 2.000L 7.000L 0.00000 0.00000 - 0.000 0.000
Spirax-Sarco Engineering Int 591.200 547.600 108.100 106.800 102.400 105.100 0.00000 29.00000 - 71.000 91.000
Standard Life Aberdeen Int 1212.000 1065.000 629.000 127.000 27.300 6.300 0.00000 8.34286 - 14.300 24.686
Trident Resources Pre 0.000 - 0.230L - 1.740L - 0.00000 - - 0.000 -
Ultra Electronics Holdings Int 387.126 350.510 37.941 20.008 43.300 20.000 0.00000 14.60000 - 37.000 49.600

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.
16 ★ FINANCIAL TIMES Thursday 8 August 2019

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) AT&T 34.01 0.05 34.64 26.80 5.70 15.16 248209.47 Lockheed 366.86 0.08 373.37 241.18 2.24 18.72 103600.35
ANZ 26.93 0.21 30.39 22.98 5.83 12.74 51579.69 Nokia 4.70 -0.06 5.74 4.17 1.03 -48.52 29737.34 AstellasPh 1457.5 29.50 2056 1356 2.44 13.14 26027.79 AtlasCpcoB 238.40 -1.40 287.50 187.68 1.31 17.30 9656.24 AutomData 162.94 -0.45 172.00 121.40 1.69 45.03 70916.09 Lowes 97.10 -0.82 118.23 84.75 1.84 35.19 76021.19
BHPBilltn 36.75 -0.35 42.33 30.31 4.47 15.68 73151.15 SampoA 38.07 1.35 44.94 36.53 6.38 13.37 23660.93 Bridgestne 3994 17.00 4661 3906 3.57 11.67 28756.51 Ericsson 81.76 1.04 96.74 70.66 1.211374.63 26074.22 Avago Tech 267.04 0.60 323.20 202.77 3.07 34.72 106301.09 Lyondell 75.00 -0.80 116.63 73.94 5.16 8.19 25143.24
CmwBkAu 78.70 -1.10 83.99 65.23 5.43 17.38 94136.86 France (€) Canon♦ 2865.5 -2.00 3679 2790 5.23 17.93 36134.05 H&M 165.30 2.16 174.10 120.50 5.76 23.33 25062.18 BakerHu 23.09 -0.60 35.55 20.09 2.98 65.35 11905.72 Marathon Ptl 47.83 -1.76 88.45 45.47 3.95 10.89 31693.02
CSL 218.88 1.45 233.05 173.00 1.04 38.61 67017.79 Airbus Grpe 122.00 2.08 133.86 77.50 1.31 26.16 106466.66 CntJpRwy 21260 305.00 26255 20400 0.61 10.65 41406.45 Investor 440.20 1.20 467.80 366.10 2.93 12.41 20812.14 BankAm 27.39 -1.03 31.91 22.66 2.09 10.21 260429.69 Marsh&M♦ 96.07 -1.59 103.37 74.30 1.65 34.69 49124.84
NatAusBk 27.69 0.18 29.00 22.52 7.01 13.74 53941.32 AirLiquide 121.10 0.60 127.20 102.05 2.12 25.13 58237.04 Denso 4446 -46.00 6036 4081 2.81 15.28 33120.95 Nordea Bk 60.58 -0.11 99.34 60.10 11.93 10.14 25466.71 Baxter 82.93 -0.48 86.65 61.05 0.91 29.05 42308.27 MasterCard♦ 264.92 0.24 283.33 171.89 0.33 42.75 267532.6
Telstra 3.90 0.07 4.00 2.71 3.82 15.03 31341.46 AXA 21.43 -0.19 23.99 18.43 5.72 22.82 58029.02 EastJpRwy 10025 139.00 10940 9063 1.40 13.20 36189.54 SEB 86.18 -0.40 100.50 78.88 6.90 10.12 19411.69 BB & T 46.09 -1.69 53.08 40.68 3.36 11.95 35297.42 McDonald's 215.55 1.47 218.96 155.84 1.99 29.66 164584.58
Wesfarmers 38.68 0.79 40.43 30.40 5.73 12.70 29634.07 BNP Parib 39.96 -0.32 55.34 38.14 7.33 6.80 56005.59 Fanuc 18020 -285.00 22800 15570 2.36 25.42 34760.84 SvnskaHn 85.90 0.60 113.00 85.04 6.35 9.96 17082.5 BectonDick 240.67 -1.48 264.68 208.62 1.21 89.37 64915.03 McKesson 135.84 -3.16 149.99 106.11 1.10 45.45 25317.3
Westpc 28.03 0.30 30.44 23.30 6.58 14.30 66098.66 ChristianDior 441.00 6.00 498.20 310.20 1.32 30.61 89279.98 FastRetail 63310 -420.00 70230 46450 0.71 41.71 63491.76 Swedbank 127.05 0.50 221.70 125.70 11.08 6.93 14928.52 BerkshHat 297180-5145.00 335900 279410 - 17.62 214895.02 Medtronic 100.59 -0.65 103.95 81.66 1.85 31.64 134906.95
Woolworths 35.50 0.79 35.84 27.03 2.60 28.76 30192.58 Cred Agr 10.11 -0.11 13.12 9.10 6.62 8.23 32502.27 Fuji Hvy Ind 2809 49.00 3498 2208.5 4.57 16.35 20427.49 Telia Co 41.64 0.19 43.96 38.91 5.55 22.10 18194.43 Biogen 235.00 -5.17 357.50 216.12 - 9.17 43345.1 Merck 83.71 -0.64 87.07 65.68 2.43 24.56 215523.23
Belgium (€) Danone 76.14 0.20 79.42 60.20 2.43 21.57 58589.67 Hitachi 3688 29.00 4198 762.20 1.28 17.26 33727.24 Volvo 133.80 -1.10 162.20 112.85 3.62 9.41 22930.49 BkNYMeln♦ 44.01 -1.44 54.27 42.13 2.29 12.16 42140.33 Metlife♦ 45.66 -1.19 51.16 37.76 3.56 7.89 43393.86
AnBshInBv 86.80 0.03 92.71 56.39 1.99 27.48 164838.63 EDF 10.57 0.01 15.73 10.41 2.84 18.48 36168.73 HondaMtr 2536.5 -24.00 3519 2486.5 4.14 8.84 43440.37 BlackRock 424.87 -10.84 494.91 360.79 2.73 17.18 65651.66 Microsoft 133.88 -0.81 141.68 93.96 1.28 27.711025898.06
Switzerland (SFr)
KBC Grp 53.84 -0.68 68.70 53.54 5.20 10.17 25129.34 Engie SA 13.33 0.07 14.39 11.31 5.46 41.65 36394.63 JapanTob 2316 6.00 3159 2270 6.15 11.14 43793.14 Boeing 327.74 -4.71 446.01 292.47 2.19 40.05 184421.79 Mnstr Bvrg 59.99 -0.19 66.38 47.74 - 34.58 32609.14
ABB 17.39 -0.13 23.54 17.25 4.19 42.51 38729.26
Esslr Intl 128.75 1.30 129.55 100.60 1.60 39.69 32686.21 KDDI 2647.5 -30.00 3173 2331.5 3.72 11.12 58956.72 BrisMySq 45.87 0.18 63.69 42.48 3.39 12.67 75032.61 MondelezInt 52.98 0.15 55.85 38.79 1.87 21.76 76314.29
Brazil (R$) CredSuisse 11.05 -0.12 15.88 10.36 2.27 12.73 29007.08
Hermes Intl 611.20 10.40 652.00 462.40 0.65 46.93 72367.18 Keyence 61180 110.00 73870 50780 0.31 36.48 70338.69 CapOne♦ 85.75 -2.55 101.26 69.90 1.78 7.76 40267.9 Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29
Ambev 20.42 -0.06 20.77 14.54 1.55 28.70 80796.06 Nestle 103.90 1.42 106.10 77.74 2.25 34.94 317705.02
LOreal 233.00 4.40 257.80 182.00 1.60 34.28 146745.69 MitsbCp 2670 -40.00 3638 2599.5 4.17 8.06 40139.03 CardinalHlth 42.06 -0.86 58.31 41.03 4.22 237.35 12536.4 MorganStly♦ 39.85 -1.38 50.84 36.74 2.88 9.08 67028.64
Bradesco 31.06 0.20 35.89 19.73 0.99 16.14 31505.51 Novartis 86.10 -2.58 94.40 69.22 3.00 17.76 223587.95
LVMH 357.65 7.20 392.65 243.50 1.63 28.09 202740.52 MitsubEst 1995.5 51.50 2127 1657 1.34 23.09 26246.46 Carnival 45.41 0.35 67.69 44.58 4.25 11.11 23926.51 MylanNV 18.04 -0.16 39.59 16.63 - 314.90 9299.35
Cielo 7.77 -0.16 15.46 6.25 16.53 7.95 5310.75 Richemont 77.26 0.22 89.58 60.44 2.20 15.39 41438.19
Orange 13.29 0.02 15.22 13.08 5.11 19.30 39634.44 MitsubishiEle 1301 -17.00 1600.5 1146 2.74 12.25 26411.16 Caterpillar♦ 119.12 -2.96 159.37 112.06 2.76 11.57 68121.81 Netflix 298.89 -11.21 386.80 231.23 - 123.23 130864.47
ItauHldFin 31.22 0.62 91.08 27.19 4.01 11.81 38943.85 Roche 262.90 0.25 283.30 229.20 3.15 20.15 189780.36
PernodRic 154.40 2.05 165.45 128.35 1.49 29.02 45962.51 MitsuiFud 2313.5 -5.50 2857 2271 1.70 15.16 21685.36 CBS 48.70 -0.86 59.56 41.38 1.38 6.50 17140.18 NextEraE 211.30 -0.10 213.23 164.25 2.13 31.98 101234.37
Petrobras 27.74 -0.73 33.70 20.48 1.08 10.94 51939.32 Swiss Re 94.36 0.78 102.95 85.88 5.41 76.92 31743.04
Renault 50.98 0.37 78.96 48.17 6.77 4.32 16908.46 MitUFJFin 512.60 0.50 740.90 493.00 4.02 8.98 66238.94 Celgene 93.72 0.15 98.97 58.59 - 13.44 66096.92 Nike 81.19 -0.11 90.00 66.53 1.02 33.82 101638.81
Vale 45.75 -0.87 62.42 40.51 3.29 -11.37 32572.71 Swisscom 479.10 3.30 499.40 427.00 4.19 17.79 25500.45
Safran 122.90 1.25 137.20 101.00 1.27 42.98 60066.7 Mizuho Fin 155.50 0.10 205.00 150.10 4.52 48.94 37331.29 CharlesSch 37.24 -2.17 52.70 37.10 1.33 15.42 49715.75 NorfolkS♦ 177.57 -3.79 211.46 138.65 1.79 18.07 46773.14
Canada (C$) Syngent 453.40 0.90 471.20 402.50 - 28.04 43035.76
Sanofi 72.69 0.45 80.28 71.74 4.09 26.21 102071.88 Murata Mfg 4617 -33.00 16430 4328 3.60 48.05 29499.16 Charter Comms 373.01 -8.98 417.13 272.91 - 66.43 83333.45 Northrop 358.44 4.19 359.11 223.63 1.31 19.44 60647.39
BCE 61.21 0.44 62.75 50.72 4.92 19.36 41394.53 UBS 10.41 -0.18 16.11 10.34 6.13 10.27 41257.08
Sant Gbn 32.69 0.10 38.92 28.18 3.87 44.22 20036.73 NipponTT 4840 -66.00 5447 4050 3.31 12.34 89249.41 Chevron Corp 117.72 -1.66 127.60 100.22 3.60 17.46 224225.72 NXP 99.31 -0.96 108.51 67.62 0.96 16.07 32643.47
BkMontrl♦ 94.67 -0.39 109.00 86.25 3.82 10.90 45439.57 Zurich Fin 332.00 0.50 353.00 282.40 5.28 14.40 51035.05
Schneider 72.96 0.16 81.36 57.58 3.12 18.38 47622.83 Nissan Mt 678.90 -5.20 1108.5 638.10 7.87 13.51 27091.25 Chubb 152.20 0.11 154.26 119.54 1.84 19.51 69685.64 Occid Pet 45.42 -2.16 83.35 45.26 6.56 9.42 33989.99
BkNvaS 68.57 0.03 78.60 66.36 4.56 11.10 62954.67 Nomura 381.80 -1.40 565.90 330.70 1.47 -27.26 12610.78 Taiwan (NT$) Cigna 165.03 1.31 226.61 141.95 0.02 16.02 62621.9 Oracle 53.30 -0.66 60.50 42.40 1.47 18.61 177799.15
SFR Group 34.50 - 34.56 21.87 - -23.02 17905.81
Brookfield 64.77 0.26 65.56 49.87 1.17 16.62 48434.5 Nppn Stl 1524 -24.00 2435 1473 4.68 6.07 13692.82 Chunghwa Telecom♦ 106.50 - 117.50 96.30 4.29 23.34 26241.74 Cisco 51.98 -0.62 58.26 40.25 2.40 19.43 222512.07 Pepsico 126.57 0.12 135.24 104.53 2.82 14.71 176959.32
SocGen 22.10 -0.21 38.44 20.81 9.65 6.14 21012.19
CanadPcR 302.95 -2.44 323.71 228.35 0.89 18.97 31831.57 NTTDCMo 2584 15.50 3095 2257.5 3.99 14.92 81480.93 Formosa PetChem 101.00 -1.00 151.00 100.00 5.94 19.78 30560.04 Citigroup♦ 64.26 -1.99 75.24 48.42 2.67 9.35 148599.18 Perrigo 49.61 -0.81 78.97 36.28 1.43 62.58 6746.53
Total 43.18 -0.37 56.82 42.65 5.76 12.62 129153.71
CanImp 99.71 -0.12 125.21 98.13 5.04 9.52 33320.58 Panasonic 833.90 4.60 1459.5 810.50 3.21 7.69 19340.09 HonHaiPrc♦ 72.90 -0.40 107.50 67.00 3.27 9.58 32100.31 CME Grp 208.49 0.11 209.95 161.05 1.27 41.86 74633.56 Pfizer♦ 36.33 -0.62 46.47 35.86 3.54 19.97 201673.2
UnibailR 190.00 0.35 236.45 177.35 5.82 23.36 22215.04
CanNatRs 31.17 -0.31 47.20 30.11 4.43 7.99 27909.9 Seven & I 3715 10.00 5203 3573 2.40 16.50 31134.84 MediaTek 318.00 9.00 328.00 199.50 3.00 24.31 16057.29 Coca-Cola 52.99 0.72 54.82 44.25 2.85 32.45 226061.44 Phillips66 96.11 -1.30 123.97 78.44 3.28 8.77 43590.8
Vinci 91.40 1.40 94.96 70.18 2.83 17.36 61596.22
CanNatRy 121.60 -0.33 127.96 96.46 1.59 20.63 65845.48 ShnEtsuCh 10590 -160.00 11300 7982 1.68 16.37 42813.23 TaiwanSem 248.00 -0.50 286.00 206.50 3.07 20.16 204260.61 Cognizant 61.42 -1.16 78.84 56.73 1.24 17.82 34965.36 PhilMorris 80.56 -0.76 92.74 64.67 5.41 16.77 125335.47
Vivendi 24.97 0.04 26.69 20.81 1.94 67.75 35417.74
Enbridge 44.39 0.85 51.22 39.40 6.17 19.34 67498.35 Softbank 5188 -12.00 6045 3401.5 0.38 9.27 102505.04 Thailand (THB) ColgtPlm♦ 69.58 -0.27 76.41 57.41 2.32 27.71 59735.47 PNCFin 128.40 -5.98 147.00 108.45 2.83 12.17 57964.63
GtWesLif 27.81 -0.13 34.42 26.83 5.61 11.11 19391.45 Germany (€)
Sony 5911 113.00 6973 4507 0.56 9.67 71069.14 PTT Explor 45.00 -0.50 55.25 45.00 4.02 13.11 41717.97 Comcast 41.12 -0.95 45.30 32.61 1.86 16.44 185719.23 PPG Inds 111.37 0.39 121.29 94.37 1.65 23.19 26315.94
ImpOil 32.46 -0.77 44.69 32.44 2.18 13.33 18673.61 Allianz 199.16 -1.24 219.05 170.46 3.75 12.17 94811
SumitomoF 3671 4.00 4775 3483 4.60 10.06 48569.56 United Arab Emirates (Dhs) ConocPhil♦ 52.69 -1.54 79.96 52.33 2.17 8.91 59548.97 Praxair 164.50 -0.99 169.75 140.00 2.03 13.79 47306.22
Manulife 21.76 -0.29 25.18 18.33 4.01 8.55 32046.39 BASF 56.78 0.25 81.77 56.16 5.46 21.09 58490.41
Takeda Ph 3733 -49.00 4943 3498 4.30 37.11 55635.25 Emirtestele♦ 16.10 -0.10 17.80 15.20 4.75 16.19 38119.26 Corning 28.24 -0.29 36.56 27.67 2.57 17.81 22157.54 Priceline 1905.64 -1.38 2067.99 1612.41 - 20.30 92937.2
Nutrien 68.15 -0.31 76.17 59.97 3.15 172.97 29701.24 Bayer 58.84 3.34 97.03 52.02 4.61 141.13 61541.19
TokioMarine 5569 -44.00 5833 4929 2.88 16.33 37382.91 United Kingdom (p) Costco 268.96 -0.35 284.31 189.51 0.85 34.27 118285.7 ProctGmbl♦ 114.69 0.41 121.76 78.49 2.41 83.99 287680.34
RylBkC♦ 100.57 -0.44 107.91 90.10 3.60 12.63 108502.03 BMW 62.11 -0.15 86.74 61.14 5.46 8.78 41934.82
Toyota 6791 71.00 7257 6045 3.04 10.98 209501.9 CrownCstl 136.10 -0.20 137.85 103.21 3.10 82.87 56583.09 Prudntl 83.64 -2.59 106.64 75.61 4.34 8.93 33957.84
Suncor En 36.97 -0.04 54.84 35.53 4.10 10.53 43519.58 Continental 119.70 1.10 190.05 112.46 3.51 9.37 26850.81 AscBrFd 2371 - 2659 2011 1.90 20.47 22811.96
Mexico (Mex$) CSX 65.55 -0.94 80.73 58.47 1.34 16.54 52320.42 PublStor 251.86 1.78 253.26 193.89 3.03 31.47 43927.61
ThmReut 88.62 0.57 93.44 58.55 2.13 136.72 33352.62 Daimler 43.31 0.03 60.00 42.92 7.28 11.88 51966.82 AstraZen 7122 46.00 7349.3 5312 3.14 52.70 109616.07
AmerMvl 13.81 0.43 16.63 12.32 2.27 14.03 31510.16 CVS 57.08 2.99 82.15 51.72 3.27-133.05 74152.18 Qualcomm 68.32 0.15 90.34 49.10 3.47 25.02 83056.55
TntoDom 73.91 -0.63 80.05 65.56 3.43 12.92 101589.46 Deut Bank 6.59 -0.14 10.97 5.80 1.62 -4.02 15266.32 Aviva 382.00 0.30 504.60 361.80 7.40 10.11 18631.31
FEMSA UBD 173.20 3.16 192.50 163.60 1.42 17.57 19031.48 Danaher 136.72 -1.51 145.50 94.59 0.44 43.12 98078.5 Raytheon 183.41 -1.42 210.89 144.27 1.85 17.69 51085.92
TrnCan 63.24 -0.60 67.15 47.90 4.43 14.39 44131.34 Deut Tlkm 14.63 0.03 15.88 13.35 8.62 35.60 78106.25 Barclays 147.54 0.30 193.60 145.00 4.41 8.21 30596.35
WalMrtMex 55.50 -0.68 57.26 47.41 1.50 26.19 49272.76 Deere 149.64 -3.14 171.22 128.32 1.81 15.64 47435.21 Regen Pharm 299.89 -0.37 442.00 287.66 - 17.44 32306.38
ValeantPh 30.80 -1.06 36.02 14.01 - -5.02 8158.48 DeutsPost 28.69 0.18 32.18 23.36 3.89 17.10 39529.71 BP 505.60 -1.40 603.20 481.35 6.38 14.71 122465.31
Delphi♦ 15.18 0.04 44.65 13.18 2.14 6.49 1335.19 S&P Global 245.46 -0.36 262.83 156.68 0.83 32.66 60432.25
E.ON 8.82 -0.28 10.26 8.16 3.17 8.59 21783.37 Netherlands (€) BrAmTob 3006 26.00 4240 2336.5 6.62 11.19 68112.12
China (HK$) Delta♦ 58.38 -0.41 63.44 45.08 2.29 9.14 37960.21 Salesforce 139.76 -3.05 167.56 113.60 - 102.68 108449.88
Fresenius Med 59.46 -0.04 91.74 55.44 1.91 15.22 20531.69 Altice 4.33 -0.02 4.52 1.53 - 2.90 5697.5 BSkyB 1727.5 1.50 1740 893.50 0.76 36.60 38843.72
AgricBkCh 2.98 -0.01 3.91 2.95 6.58 4.64 11679.52 Devon Energy 23.56 -0.66 44.34 20.37 1.27 21.23 9783.37 Schlmbrg 34.00 -1.46 67.31 33.96 5.62 23.90 47022.17
Fresenius SE 42.41 -0.19 70.76 38.28 1.83 13.13 21446.31 ASML Hld 190.60 0.58 211.50 130.12 1.07 36.20 90992.45 BT 184.40 0.30 268.60 180.12 8.23 8.54 22235.18
Bk China 3.02 - 3.84 3.00 6.44 4.62 32199.59 DiscFinServ 82.36 -1.95 92.98 54.36 1.86 10.11 26662.31 Sempra Energy 133.84 -0.09 141.86 104.88 2.66 19.25 36724.12
HenkelKgaA 81.80 1.20 99.35 76.20 2.02 16.56 23834.48 Heineken♦ 94.30 1.16 104.00 74.28 1.57 29.03 60919.5 Compass 2030 31.00 2113 1467.5 1.86 27.51 40573.1
BkofComm 5.37 -0.03 7.06 5.33 5.88 5.09 23972.27 Disney 134.17 -7.70 147.15 100.35 1.25 18.66 241456.97 Shrwin-Will 504.62 5.75 523.26 355.28 0.75 42.41 46554.4
Linde 167.70 1.70 191.25 130.75 1.66 16.82 102085.97 ING♦ 8.74 -0.01 12.70 8.64 7.54 9.11 38212.13 Diageo 3379 25.50 3538 2513 1.97 25.97 103379.12
BOE Tech 0.96 -0.01 1.45 0.83 - -111.91 24.35 DominRes 74.40 -0.82 79.47 67.41 4.50 51.94 59697.03 SimonProp 151.14 -2.32 191.49 150.80 4.94 21.18 46700.08
MuenchRkv 211.40 1.40 228.80 179.95 3.80 15.73 34217.26 Unilever 50.75 0.28 55.35 45.43 3.00 14.81 87924.16 GlaxoSmh 1658 11.00 1749.4 1408.8 4.83 18.66 99093.46
Ch Coms Cons♦ 6.07 -0.05 8.87 6.04 4.56 4.73 3426.62 DowDupont♦ 30.52 -0.65 48.38 30.06 12.46 8.93 68559.76 SouthCpr♦ 31.78 -0.18 47.12 29.01 4.81 17.70 24567.35
SAP 106.20 2.20 125.00 83.95 1.37 41.97 146325.96 Norway (Kr) Glencore 229.30 -2.05 343.60 220.36 6.89 12.17 40197.28
Ch Evrbrght 3.29 - 4.10 3.14 6.14 5.40 5318.6 DukeEner 88.36 -0.56 91.67 78.00 4.01 20.61 64330.23 Starbucks♦ 95.01 -0.33 99.72 51.20 1.45 35.28 115076.11
Siemens 89.36 -0.28 114.12 88.64 4.12 17.16 85188.76 DNB 151.10 -0.95 174.20 135.50 5.48 9.38 26621.73 HSBC 627.40 -0.50 727.90 596.40 6.38 11.57 152878.45
Ch Rail Cons♦ 8.64 -0.03 11.94 8.60 2.41 6.35 2287.31 Eaton♦ 77.38 -1.51 89.46 64.46 3.38 15.77 32740.7 StateSt 51.42 -2.08 90.20 51.36 3.49 9.77 19188.09
Volkswgn 147.30 0.35 167.40 129.60 3.16 6.22 48750.29 Equinor 149.35 -1.75 234.60 148.30 5.46 7.06 55591.61 Imperial Brands 2064 17.50 3009 1821.4 9.10 12.69 23923.4
Ch Rail Gp 5.22 -0.06 8.21 5.19 2.48 6.51 2800.31 eBay 39.40 -0.29 42.00 26.01 0.33 15.53 33047.29 Stryker 208.97 -2.24 222.59 144.75 0.93 23.43 77967.8
Hong Kong (HK$) Telenor 181.75 -2.55 190.80 148.10 4.59 26.65 29228.69 LlydsBkg 50.24 - 66.79 49.52 6.39 9.45 44003.9
ChConstBk 5.71 - 7.21 5.63 5.71 5.19 175033.43 Ecolab 197.78 1.05 209.24 135.77 0.86 40.45 57008.53 Sychrony Fin♦ 33.95 -0.32 36.87 21.78 2.36 7.41 22582.02
AIA 76.80 1.30 88.50 58.20 1.05 21.39 118374.64 Natl Grid♦ 843.10 12.10 892.00 744.50 5.52 19.12 34392.14
China Vanke♦ 27.45 0.35 35.60 21.50 3.66 8.19 5522.75 Qatar (QR) Emerson 58.68 -2.14 79.70 55.39 3.10 17.14 36065.89 T-MobileUS 76.19 -1.09 85.22 59.96 - 20.94 65089.35
BOC Hold 27.65 -0.15 39.95 27.00 4.50 9.56 37273.91 Prudential 1513 -8.00 1843 1325 3.18 12.95 47573.79
ChinaCitic 4.08 0.01 5.41 4.06 7.01 4.21 7741.85 QatarNtBk 18.25 0.23 20.05 16.18 3.14 13.26 46296.31 EOG Res 76.31 -1.98 133.53 74.87 1.06 12.99 44281.67 Target 83.15 0.38 90.39 60.15 2.85 15.65 42600.61
Ch OSLnd&Inv 25.15 0.40 31.30 22.35 3.23 6.42 35133.25 RBS 204.40 3.60 274.20 196.89 2.69 8.95 29724.48
ChinaLife 18.16 -0.28 23.35 15.44 2.48 42.72 17229.74 Russia (RUB) EquityResTP 78.79 -0.35 81.88 62.40 2.68 41.26 29194.5 TE Connect 88.07 -0.54 97.99 69.84 1.93 9.86 29667.8
ChngKng 53.40 0.75 72.50 50.30 3.13 5.15 25147.11 ReckittB 5961 31.00 7174 5559 2.86 18.58 51015.58
ChinaMBank♦ 36.25 -0.65 42.75 27.35 2.57 10.31 21219.1 Gzprm neft 229.91 3.15 256.40 139.50 3.25 3.37 83129.07 Exelon 44.93 -0.28 51.18 42.19 3.01 20.11 43625 Tesla Mtrs 227.93 -2.82 387.46 176.99 - -64.51 39596.18
Citic Ltd 9.66 -0.11 13.28 9.52 3.96 5.84 35829.9 RELX♦ 1924 44.50 1995.13 1466.5 2.19 24.95 45485.62
ChinaMob 63.15 -0.55 87.70 62.05 4.98 10.08 164864.9 Lukoil 5203.5 -31.00 5996 4351.5 4.02 6.07 59605.91 ExpScripts 92.33 -3.47 101.73 66.93 - 11.10 52061.19 TexasInstr♦ 119.31 0.31 130.37 87.70 2.35 22.84 111932.69
Citic Secs 13.36 -0.10 21.20 11.62 3.34 13.64 3881 RioTinto 4195 -32.50 5039 3460.5 5.75 6.77 68377.89
ChinaPcIns 31.60 0.35 34.65 24.20 2.85 13.32 11181.96 MmcNrlskNckl 14724 242.00 15218 10489 8.47 13.66 35586.85 ExxonMb 69.72 -1.24 87.36 64.65 4.39 17.22 294991.87 TheTrvelers 144.64 -1.32 155.09 111.08 2.07 15.13 37662.19
CK Hutchison 67.70 -0.90 92.50 67.05 4.15 7.01 33286.92 RollsRoyce 730.00 -29.00 1098.5 723.40 1.60 -5.81 16499.97
ChMinsheng 5.13 0.02 6.36 5.04 1.63 4.06 5442.22 Novatek 1305.4 2.20 1382.2 908.00 1.98 7.35 60537.11 Facebook 184.02 -0.49 208.66 123.02 - 32.66 442701.17 ThrmoFshr 273.11 -2.85 305.45 208.34 0.25 32.65 109238.85
CNOOC 11.94 -0.12 15.78 11.34 4.63 9.28 67970.84 RylDShlA 2330.5 -2.00 2687 2209.5 6.37 11.96 130203.03
ChMrchSecs RMB 15.68 0.13 19.99 11.13 2.16 23.09 12735.26 Rosneft 407.15 -4.85 522.80 390.75 4.70 8.73 65904.98 Fedex 157.89 -3.30 259.25 150.68 1.59 80.66 41179.04 TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69
HangSeng 173.00 -0.30 216.80 166.00 4.21 14.06 42171.48 Shire# 4690 111.00 4780 2944 0.58 11.63 56567.13
Chna Utd Coms RMB 5.42 -0.03 7.57 4.91 0.36 39.19 16315.66 Sberbank 223.43 -2.58 250.65 166.00 7.10 5.67 73665.68 FordMtr♦ 9.46 -0.02 10.56 7.41 6.06 18.35 37074.05 TJX Cos 51.80 -0.55 57.15 41.49 1.40 22.77 62816.18
HK Exc&Clr 246.60 1.80 286.20 195.60 3.61 35.29 39557.75 StandCh 627.00 -3.80 742.60 514.20 2.63 50.50 25121.31
ChShenEgy♦ 15.00 - 20.40 14.66 6.91 6.12 6499.96 Surgutneftegas 26.08 0.08 29.17 24.06 2.25 1.31 14227.88 Franklin 30.00 -0.72 35.82 27.34 3.21 11.72 15226.79 UnionPac 165.25 -3.08 180.54 128.08 1.81 21.71 116423.54
MTR 48.55 -0.55 55.75 37.50 2.21 19.24 38107.2 Tesco 216.80 1.90 266.80 187.05 1.69 16.00 21572.83
ChShpbldng RMB 5.40 -0.10 7.10 3.86 0.20 138.08 14081.38 GenDyn♦ 178.93 -1.74 207.72 143.87 2.08 16.61 51682.88 UPS B 113.92 -1.08 125.09 89.89 3.02 23.31 79460.66
SandsCh 34.85 -0.20 44.70 29.85 5.46 20.08 35933.07 Saudi Arabia (SR) Vodafone 147.20 0.82 188.30 122.22 8.90 -10.51 47717.57
ChStConEng RMB 5.55 -0.04 6.72 4.91 2.70 6.53 32427.4 GenElectric 9.30 -0.27 13.78 6.66 1.54 -3.94 81103.51 USBancorp 51.85 -1.71 57.81 43.14 2.73 12.75 82548.43
SHK Props 111.80 -1.60 142.00 99.50 3.98 9.06 41305.05 AlRajhiBnk 66.30 -0.30 76.90 50.83 5.12 16.19 44188.23 WPP 912.20 7.60 1323.5 791.00 6.58 10.82 14036.09
ChUncHK 7.13 -0.08 10.70 6.96 0.80 18.61 27816.75 GenMills 52.19 -0.32 54.74 36.42 3.62 18.66 31416.27 UtdHlthcre 243.00 -5.29 287.94 208.07 1.49 19.12 230928.62
Tencent 338.60 1.40 400.40 251.40 0.23 36.02 411044.41 Natnlcombnk♦ 51.50 -1.60 64.40 38.35 3.90 14.71 41189.01 United States of America ($)
CNNC Intl RMB 5.35 -0.01 6.73 5.19 2.05 17.38 11826.46 GenMotors 39.10 0.02 41.90 30.56 3.71 6.52 55459.16 UtdTech 127.73 -1.07 144.40 100.48 2.17 22.00 110142.72
SaudiBasic 102.20 0.20 129.20 100.40 4.12 21.63 81738.21 21stC Fox A 36.32 -0.13 41.70 27.73 - 17.02 12870.04
CSR♦ 5.65 -0.05 8.62 5.62 2.90 12.66 3148.87 India (Rs) GileadSci 63.37 -0.62 79.61 60.32 3.62 14.33 80783.79 ValeroEngy♦ 74.78 -2.06 122.42 68.81 4.34 12.94 31201.32
SaudiTelec♦ 108.40 0.40 117.40 74.50 3.53 19.96 57797.92 3M 158.66 -5.05 219.75 158.04 3.37 20.04 91455.86
Daqin RMB 7.49 0.01 9.14 7.38 6.13 7.90 15813.96 Bhartiartl 366.10 -2.35 375.40 254.15 1.23 -68.23 26507.06 GoldmSchs 202.11 -3.90 245.08 151.70 1.54 8.87 73939.68 Verizon 55.10 0.05 61.58 52.20 4.06 15.27 227876.61
Gree Elec Apl 0.01 0.00 0.05 0.01 - -0.13 24.41 HDFC Bk■ 2184 -5.10 2503.3 1885 0.67 26.52 84266.43 Singapore (S$) AbbottLb♦ 83.78 -1.08 88.76 63.07 1.37 54.16 147803.11 Halliburton 19.36 -0.59 42.57 19.12 3.55 13.43 16920.22 VertexPharm 173.83 -3.11 195.81 151.80 - 21.32 44521.58
GuosenSec RMB 12.09 -0.15 15.13 6.71 1.21 23.79 14079.32 Hind Unilevr 1777.25 33.15 1869.5 1477.2 1.21 62.51 54290.89 DBS♦ 25.08 0.20 28.64 22.65 5.84 5.17 46372.85 Abbvie♦ 64.13 -0.65 100.23 63.31 6.05 23.90 94798.05 HCA Hold 124.47 0.14 147.42 110.31 1.15 12.56 42607 VF Cp 81.05 -0.59 97.00 67.18 2.23 27.68 32189.62
HaitongSecs 7.09 -0.04 11.50 6.31 3.64 10.34 3082.25 HsngDevFin 2175.2 -14.70 2357.85 1644.5 0.90 23.29 52957.31 JardnMt US$ 57.21 0.34 72.05 10.99 2.84 13.43 42235.7 Accenture 186.35 -2.46 197.47 132.63 1.51 26.84 124942.79 Hew-Pack 18.99 -0.26 27.08 18.06 2.94 8.25 28604.48 Viacom 29.28 -0.39 34.44 23.31 2.55 8.03 10352.94
Hngzh HikVDT RMB 28.73 0.03 37.24 22.32 2.04 23.88 32943.16 ICICI Bk♦ 408.40 -1.85 443.90 294.80 0.36 40.25 37187.06 JardnStr US$ 33.48 0.46 40.70 31.55 0.97 12.30 37036.07 Adobe 285.86 -0.35 313.11 204.95 - 55.41 138767.52 HiltonWwde 92.42 -0.14 101.14 65.64 0.62 35.71 26511.1 Visa Inc 172.84 0.36 184.07 121.60 0.53 34.81 300566.68
Hunng Pwr♦ 4.54 0.03 5.68 4.04 2.48 34.69 2720.86 Infosys 776.10 1.65 804.00 599.85 2.15 22.06 47846.88 OCBC 11.07 0.05 12.19 10.36 3.79 10.52 33967.14 AEP 89.04 -0.11 91.99 68.92 2.82 23.31 43916.15 HomeDep 205.43 -3.37 219.30 158.09 2.02 22.21 226031.77 Walgreen 51.19 -0.27 86.31 49.31 3.32 10.43 46227.4
IM Baotou Stl RMB 1.52 0.02 2.11 1.44 0.32 22.29 6838.16 ITC 253.65 -5.25 322.95 253.10 2.22 25.64 43929.81 SingTel♦ 3.29 -0.02 3.56 2.83 5.07 18.24 38828.29 Aetna 212.70 0.70 213.36 166.89 0.92 19.50 69637.98 Honywell 161.66 -2.86 178.47 123.48 1.81 19.24 116315.67 WalMartSto 107.03 -0.25 115.49 85.78 1.82 40.00 305526.64
In&CmBkCh 4.99 -0.02 6.19 4.92 5.34 5.52 55221.84 L&T 1360.05 -17.45 1607 1182.5 1.12 22.48 26925.85 UOB 25.93 0.27 28.48 23.39 3.77 10.41 31428.69 Aflac 51.49 -0.54 57.18 41.45 1.97 13.12 38384.2 HumanaInc 289.46 -2.79 355.88 225.65 0.51 16.54 39087.24 WellsFargo 45.32 -1.62 59.53 43.02 3.71 9.80 203661.15
IndstrlBk RMB 18.29 0.09 20.66 14.50 3.47 6.34 49488.25 OilNatGas 130.50 -0.95 185.40 127.60 5.56 5.74 23166.58 South Africa (R) AirProd 220.31 -1.11 232.47 148.44 1.96 29.85 48546.44 IBM 137.23 -3.50 154.36 105.94 4.40 14.86 121674 Williams Cos 23.26 -0.28 32.22 20.36 5.91-243.54 28179.72
Kweichow RMB 945.00 -1.30 1035.6 509.02 1.51 30.79 168589.65 RelianceIn 1109.4 -18.90 1417.5 1016.4 - 16.67 99236.65 Firstrand 58.45 -1.11 71.95 57.83 4.71 11.09 21731.55 Alexion 108.62 -0.77 141.86 92.56 - 19.18 24355.52 IllinoisTool 147.00 -1.98 160.78 117.75 2.60 20.66 47888.94 Yum!Brnds 115.63 -0.42 119.72 80.81 1.21 29.17 35379.9
Midea 1.33 -0.09 1.69 1.25 7.19 -15.98 36.47 SBI NewA 289.90 -11.50 373.80 247.40 - 117.78 36508.8 MTN Grp 112.17 -0.68 114.43 69.07 5.58 23.45 14008.85 Allergan 159.32 -0.17 197.00 114.27 1.70 -7.94 52225.4 Illumina 289.19 -2.75 380.76 268.62 - 48.07 42510.93 Venezuela (VEF)
New Ch Life Ins♦ 35.15 -0.20 46.95 27.30 1.69 11.62 4634.59 SunPhrmInds 421.05 2.85 679.30 344.55 0.45 39.76 14255.58 Naspers N 3370 32.00 3750.01 2290.85 0.19 25.10 97979.84 Allstate 102.26 -1.61 109.13 77.00 1.79 14.28 34044.93 Intcntl Exch 89.96 -0.61 92.31 69.69 1.09 26.69 50725.3 Bco de Vnzla 800.00 50.00 800.00 0.70 311.94 - 232.61
PetroChina 3.87 - 6.52 3.81 2.61 12.22 10411.04 Tata Cons 2213.45 -1.45 2292.5 1784.35 1.55 26.39 117202.7 Alphabet 1167.88 -3.20 1296.98 977.66 - 24.70 349705.34 Intel♦ 46.38 -0.58 59.59 42.36 2.53 11.32 207643.26
South Korea (KRW) Bco Provncl 53998 8998 53998 150.00 - 7.71 464.17
PingAnIns 88.25 -0.30 98.00 65.95 2.00 11.39 83801.18 Altria 45.73 -0.43 66.04 42.40 6.68 14.30 85557.17 Intuit 265.94 -4.15 284.97 182.61 0.63 52.34 68943.19
Indonesia (Rp) HyundMobis♦ 238000 1000.00 250000 165000 1.68 11.85 18670.67 Mrcntl Srvcs 10400014999.99 104000 14.46 0.00 9.11 504.76
PngAnBnk RMB 13.54 0.17 14.84 8.64 0.98 9.76 33016.84 Amazon 1768.71 -19.12 2050.5 1307 - 76.82 870792.14 John&John 129.56 -1.21 148.99 121.00 2.69 22.50 343989.05
Bk Cent Asia 22300 200.00 24700 16800 - - 38879.26 KoreaElePwr 26400 100.00 36000 23850 - -9.30 13949.99
Pwr Cons Corp RMB 4.66 -0.01 6.25 4.56 1.94 9.80 7375.37 AmerAir♦ 28.16 -0.20 43.89 27.02 1.36 8.70 12538.82 JohnsonCn 41.37 -0.50 42.85 28.30 2.40 19.43 37153.1
Israel (ILS) SK Hynix 73300 1300 84300 56700 2.04 3.78 43923.43 Closing prices and highs & lows are in traded currency (with variations for that
SaicMtr RMB 23.62 -0.20 32.80 22.69 7.57 8.17 38587.69 AmerExpr♦ 122.25 -0.30 129.34 89.05 1.22 15.84 101427.61 JPMrgnCh 106.43 -4.00 119.24 91.11 2.87 11.37 345256.04
TevaPha 26.72 -1.33 94.75 26.40 - -2.36 8370.08 SmsungEl♦ 43200 -300.00 48450 36850 3.27 7.86 212276.39 country indicated by stock), market capitalisation is in USD. Highs & lows are
ShenwanHong 0.06 0.00 0.16 0.06 - -2.19 68.14 AmerIntGrp 53.50 -0.88 57.59 36.16 2.23-239.02 46531.82 Kimb-Clark 135.00 0.48 140.62 100.32 2.87 27.29 46458.4
Italy (€) Spain (€) AmerTower 213.66 -3.29 218.79 140.40 1.54 67.60 94442.73 based on intraday trading over a rolling 52 week period.
ShgPdgBk RMB 11.07 -0.02 12.38 9.60 0.88 5.90 44182.77 KinderM♦ 19.67 -0.37 21.50 14.62 4.13 20.80 44517.73 ♦ ex-dividend
Enel 6.13 - 6.62 4.22 4.14 13.69 69942.79 BBVA 4.41 -0.01 6.09 4.37 5.72 6.32 32957.3 Amgen 181.03 -3.43 210.19 166.30 2.92 15.00 110416.66
Sinopec Corp 4.72 - 8.03 4.64 12.91 9.05 15354.24 Kraft Heinz 29.97 -0.62 62.54 26.96 7.96 -3.76 36555.47 ■ ex-capital redistribution
ENI 13.19 -0.19 16.71 13.15 6.10 14.17 53777.87 BcoSantdr 3.61 -0.01 4.75 3.57 6.17 9.13 65793.36 Anadarko 72.13 -0.67 76.23 40.40 1.52 -62.43 36238.23
Sinopec Oil RMB 2.11 0.03 3.35 1.82 - 134.74 3608.7 Kroger 22.91 0.63 32.74 20.70 2.22 10.50 18296.48 # price at time of suspension
Generali 16.31 -0.03 17.38 13.63 5.35 11.93 28712 CaixaBnk 2.20 0.01 4.23 2.16 7.48 10.20 14785.58 Anthem 283.73 -7.32 317.99 227.16 1.04 19.17 72581.74
Denmark (kr) Iberdrola 8.79 0.09 9.13 5.94 5.92 17.50 61502.81 L Brands 23.66 -0.20 38.00 21.45 8.27 11.13 6538.21
IntSPaolo 1.91 -0.03 2.47 1.80 9.92 8.83 37508.81 Aon Cp♦ 184.54 -2.85 198.61 135.30 0.85 34.57 44385.87 LasVegasSd 53.84 -0.65 69.72 47.39 5.39 22.55 41445.42
DanskeBk 95.88 -0.38 195.45 94.36 8.59 6.65 12424.76 Inditex 26.29 0.33 28.86 21.85 2.14 25.02 91896.54
Luxottica 49.00 -0.34 59.54 48.62 2.11 22.75 26878.18 Apple 196.39 -0.61 233.47 142.00 1.44 17.46 903612.94 LibertyGbl 25.32 -0.24 29.55 19.88 - -38.78 5196.27
MollerMrsk 7020 -14.00 10085 6854 4.15-377.10 10614.89 Repsol 13.16 -0.25 17.24 13.13 6.75 10.97 23008.49
Unicred 9.77 -0.51 14.92 9.54 3.06 5.75 24467.4 ArcherDan 36.80 -0.62 52.07 36.45 3.55 16.61 20614.08 Lilly (E) 110.04 -1.36 132.13 101.27 2.10 27.37 106830.23
NovoB 326.00 1.35 349.70 265.15 2.33 21.98 91261.67 Telefonica 6.51 -0.02 8.06 6.43 5.96 - 37880.29

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
Altice 4.33 4.35 -0.02 -0.55 0.96 28.5 38.60 Gree Elec Apl 0.01 0.02 0.00 -6.67 -0.01 -30.0 0.00 Aug 07 date Coupon S* M* F* price yield yield yield US Aug 07 date Coupon S* M* F* price yield yield yield US
Nomura 381.80 383.20 -1.40 -0.37 33.70 9.7 -0.50 Delphi 15.18 15.14 0.04 0.26 -3.56 -19.0 -17.56 High Yield US$ US$
Fuji Hvy Ind 2809.00 2760.00 49.00 1.78 232.00 9.0 -0.32 Prudntl 83.64 86.23 -2.59 -3.00 -17.67 -17.4 -18.56 Qwest Capital Funding, Inc. 08/21 7.63 B+ WR BB 105.05 4.93 0.03 -1.12 3.18 Barclays plc 01/28 4.34 BBB Baa3 A 103.15 3.84 0.01 -0.07 -
Kroger 22.91 22.28 0.63 2.81 1.75 8.2 5.29 Halliburton 19.36 19.95 -0.59 -2.96 -3.64 -15.8 -15.91 High Yield Euro FleetBoston Financial Corp. 01/28 6.88 BBB+ Baa1 A 123.21 3.65 -0.01 -0.05 -
Cielo 7.77 7.93 -0.16 -2.02 0.53 7.3 12.81 RollsRoyce 730.00 759.00 -29.00 -3.82 -132.00 -15.3 -15.17 Aldesa Financial Services S.A. 04/21 7.25 - - B 71.10 28.23 0.00 0.64 25.98 Barclays plc 01/28 4.34 BBB Baa3 A 103.15 3.84 0.01 -0.07 -
CME Grp 208.49 208.38 0.11 0.05 14.07 7.2 2.81 Marathon Ptl 47.83 49.59 -1.76 -3.55 -8.56 -15.2 -12.92 FleetBoston Financial Corp. 01/28 6.88 BBB+ Baa1 A 123.21 3.65 -0.01 -0.05 -
Bhartiartl 366.10 368.45 -2.35 -0.64 20.35 5.9 0.36 Schlmbrg 34.00 35.46 -1.46 -4.12 -5.97 -14.9 -14.05 Emerging US$ NationsBank Corp. 03/28 6.80 BBB+ Baa1 A 123.46 3.60 -0.01 -0.10 -
ItauHldFin 31.22 30.60 0.62 2.03 1.32 4.4 -1.73 ShenwanHong 0.06 0.06 0.00 -4.69 -0.01 -14.1 -23.75 Peru 03/19 7.13 BBB+ A3 BBB+ 104.40 2.60 - - 0.34 NationsBank Corp. 03/28 6.80 BBB+ Baa1 A 123.46 3.60 -0.01 -0.10 -
VertexPharm 173.83 176.94 -3.11 -1.76 7.21 4.3 -2.52 Glencore 229.30 231.35 -2.05 -0.89 -37.15 -13.9 -99.17 Brazil 01/22 12.50 BB- Ba2 BB- 114.05 6.13 -0.12 -0.16 4.38
Brazil 01/23 2.63 BB- Ba2 BB- 95.75 3.80 -0.01 -0.40 1.29 Euro
PublStor 251.86 250.08 1.78 0.71 9.10 3.7 2.69 CharlesSch 37.24 39.41 -2.17 -5.51 -5.98 -13.8 -8.87 Citigroup Inc. 02/30 4.25 BBB Baa2 A- 118.21 0.87 0.05 -0.08 -0.84
Northrop 358.44 354.25 4.19 1.18 12.87 3.7 10.38 MylanNV 18.04 18.20 -0.16 -0.88 -2.86 -13.7 -7.67 Colombia 03/23 2.63 BBB- Baa2 BBB 97.75 3.24 0.10 -0.38 0.99
Poland 03/23 3.00 A- A2 A- 100.62 2.83 0.01 -0.21 0.58 HBOS plc 03/30 4.50 BBB- Baa1 A- 113.37 1.53 0.01 0.22 -0.18
Hind Unilevr 1777.25 1744.10 33.15 1.90 57.35 3.3 -0.79 ING 8.74 8.75 -0.01 -0.07 -1.33 -13.2 -16.71 HBOS plc 03/30 4.50 BBB- Baa1 A- 113.37 1.53 0.01 0.22 -0.18
BrisMySq 45.87 45.69 0.18 0.39 1.46 3.3 -0.07 Citic Secs 13.36 13.46 -0.10 -0.74 -1.96 -12.8 -14.03 Turkey 03/23 3.25 - Ba3 BB 88.50 6.59 -0.30 0.91 4.34
Mexico 10/23 4.00 BBB+ A3 BBB 104.90 2.74 -0.03 -0.15 1.18 Goldman Sachs Group, Inc. (The) 02/31 3.00 BBB+ A3 A 123.89 0.82 -0.01 -0.24 -0.89
AmerMvl 13.81 13.38 0.43 3.21 0.38 2.8 -3.16 Devon Energy 23.56 24.22 -0.66 -2.73 -3.44 -12.7 -15.59
Turkey 03/27 6.00 - Ba2 BB+ 101.26 5.82 0.00 0.17 3.07 Yen
Yum!Brnds 115.63 116.05 -0.42 -0.36 3.11 2.8 4.90 ChngKng 53.40 52.65 0.75 1.42 -7.70 -12.6 -13.59
Peru 08/27 4.13 BBB+ A3 BBB+ 103.50 3.66 0.01 -0.02 0.80 Mexico 06/26 1.09 BBB+ A3 BBB 101.57 0.85 0.01 0.03 -
BCE 61.21 60.77 0.44 0.72 1.57 2.6 1.22 SHK Props 111.80 113.40 -1.60 -1.41 -16.00 -12.5 -18.11
SunPhrmInds 421.05 418.20 2.85 0.68 10.70 2.6 12.21 MitsubishiEle 1301.00 1318.00 -17.00 -1.29 -182.50 -12.3 -11.77 Russia 06/28 12.75 BBB- Baa3 BBB- 165.65 3.92 -0.02 -0.10 - £ Sterling
Iberdrola 8.79 8.70 0.09 1.01 0.22 2.5 4.12 ValeroEngy 74.78 76.84 -2.06 -2.68 -10.47 -12.3 -8.65 Emerging Euro innogy Fin B.V. 06/30 6.25 BBB Baa2 A- 140.42 2.05 0.01 -0.24 0.34
Intcntl Exch 89.96 90.57 -0.61 -0.67 2.10 2.4 0.54 GuosenSec 12.09 12.24 -0.15 -1.23 -1.66 -12.1 -9.10 Brazil 04/21 2.88 BB- Ba2 BB- 104.44 0.17 0.00 -0.08 -1.58 innogy Fin B.V. 06/30 6.25 BBB Baa2 A- 128.68 3.20 0.00 -0.01 0.40
McDonald's 215.55 214.08 1.47 0.69 4.83 2.3 2.09 HaitongSecs 7.09 7.13 -0.04 -0.56 -0.97 -12.0 -15.48 Mexico 02/22 1.88 BBB+ A3 BBB 104.25 0.20 0.00 0.04 -1.55 Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other London
Mexico 04/23 2.75 BBB+ A3 BBB+ 107.76 0.76 0.00 -0.07 -1.56 close. *S - Standard & Poor’s, M - Moody’s, 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 BBB- Baa2 BBB 117.04 1.00 0.02 -0.15 -1.42
Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all
other London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Aug 07 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Aug 07 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 2.25-2.50 19-12-2018 2.00-2.25 2.00-2.25 1.25-1.50 Index change change change 1 month 1 year VIX 21.57 1.40 20.17 36.20 11.03 Aug 07 Price £ Yield Day Week Month Year High Low £m
US Prime 5.50 19-12-2018 5.25 5.25 4.25 Markit IBoxx VXD 21.11 1.38 19.73 33.17 4.07 - - - - - - - - -
US Discount 3.00 19-12-2018 2.75 2.75 1.75 ABF Pan-Asia unhedged 199.75 -0.05 -0.87 4.49 -0.42 7.50 VXN 25.34 1.07 24.27 38.70 14.55 - - - - - - - - -
Euro Repo 0.00 16-03-2016 0.00 0.00 0.00 Corporates( £) 373.91 -0.10 0.57 10.30 1.62 9.02 VDAX 21.59 -0.22 21.81 - 10.48 Tr 3.75pc '19 100.25 0.63 3.28 -1.56 -17.11 0.00 102.23 100.00 28.74
UK Repo 0.75 02-08-2018 0.50 0.50 0.25 Corporates($) 304.32 0.37 1.05 11.25 1.05 11.25 † CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 102.43 0.56 3.70 5.66 -12.50 -16.42 106.40 102.43 33.70
Japan O'night Call 0.00-0.10 01-02-2016 0.00 0.00--0.10 0.00--0.10 Corporates(€) 239.07 0.07 -0.06 6.92 0.92 5.71 ‡ Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 101.53 0.44 2.33 2.33 -21.43 -43.59 101.87 101.20 32.84
Switzerland Libor Target -1.25-0.25 15-01-2015 -0.75--0.25 -1.25--0.25 -1.25--0.25 Eurozone Sov(€) 255.32 0.20 0.78 8.58 1.63 9.51 Tr 4pc '22 109.38 0.35 6.06 0.00 -30.00 -58.33 111.30 109.00 38.39
Gilts( £) 354.34 -0.12 1.58 8.94 2.49 9.22 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 125.85 0.32 -3.03 -21.95 -41.82 -71.93 125.90 122.06 35.49
INTEREST RATES: MARKET Global Inflation-Lkd 276.97 0.70 1.24 7.19 1.10 5.62 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 106.72 0.39 -7.14 -26.42 -40.91 -71.53 106.72 96.94 23.73
Over Change One Three Six One Markit iBoxx £ Non-Gilts 365.38 -0.07 0.64 8.98 1.61 8.15 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 143.67 0.69 -6.76 -19.77 -28.87 -56.60 143.67 128.48 35.86
Aug 07 (Libor: Aug 06) night Day Week Month month month month year Overall ($) 259.75 0.59 1.48 8.55 1.48 8.55 Australia 12/21 2.00 102.96 0.74 0.03 -0.10 -0.21 -1.43 Tr 4.25pc '36 151.95 0.88 -6.38 -17.76 -24.14 -47.93 151.95 133.08 30.11
US$ Libor 2.09713 -0.008 -0.252 -0.010 2.21275 2.18700 2.05113 1.99413 Overall( £) 354.26 -0.10 1.28 8.94 2.22 8.88 11/28 2.75 115.08 1.04 0.03 -0.16 -0.25 -1.65 Tr 4.5pc '42 170.83 1.06 -6.19 -15.87 -20.30 -40.11 170.83 145.84 26.95
Euro Libor -0.46200 0.000 0.004 0.005 -0.42557 -0.41600 -0.43086 -0.36571 Overall(€) 247.68 0.14 0.57 7.57 1.39 7.93 Austria 10/23 1.75 110.48 -0.70 -0.01 -0.08 -0.12 -0.64 Tr 3.75pc '52 173.24 1.10 -5.98 -15.38 -17.29 -35.67 173.24 141.38 23.87
£ Libor 0.67000 -0.001 0.002 -0.006 0.70538 0.77288 0.80250 0.84463 Treasuries ($) 242.65 0.75 1.83 7.13 1.83 7.13 02/47 1.50 131.04 0.32 -0.03 -0.21 -0.28 -1.03 Tr 4pc '60 195.64 1.08 -5.26 -14.96 -16.92 -33.74 195.64 156.07 23.89
Swiss Fr Libor 0.001 -0.81920 -0.78160 -0.76940 -0.65760 FTSE Belgium 06/21 1.50 104.09 - - - - - Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per £100 nominal of stock.
Yen Libor 0.010 -0.10083 -0.09800 -0.03400 0.04783 Sterling Corporate (£) - - - - - - 06/47 1.60 126.60 - - - - -
Euro Euribor
Sterling CDs
0.001
0.000
-0.40000
0.75000
-0.38900
0.77000
-0.38300
0.82500
-0.31900 Euro Corporate (€) 104.47 -0.05 - - 0.54 -1.73 Canada - - - - - - - GILTS: UK FTSE ACTUARIES INDICES
Euro Emerging Mkts (€) 431.71 -12.66 - - 0.16 7.46 03/21 0.75 98.94 1.44 -0.10 -0.16 -0.23 -0.69
US$ CDs 0.000 2.45000 2.56000 2.65000 Eurozone Govt Bond 110.04 -0.19 - - -0.34 -0.64 Denmark 11/20 0.25 101.40 - - - - - Price Indices Day's Total Return Return
Euro CDs - - - - 11/23 1.50 110.00 - - - - - Fixed Coupon Aug 07 chg % Return 1 month 1 year Yield
CREDIT INDICES Day's Week's Month's Series Series 1 Up to 5 Years 91.80 -0.02 2462.22 0.34 1.88 0.36
Short 7 Days One Three Six One Index change change change high low Finland - - - - - - -
09/20 0.38 101.18 -0.69 -0.01 -0.03 -0.04 -0.16 2 5 - 10 Years 187.97 0.18 3725.02 1.46 7.41 0.38
Aug 07 term notice month month month year Markit iTraxx 3 10 - 15 Years 224.96 0.47 4721.28 2.43 11.15 0.63
Euro -0.61 -0.31 -0.59 -0.29 -0.56 -0.26 -0.56 -0.26 -0.59 -0.29 -0.57 -0.27 Crossover 5Y 284.89 3.68 32.15 37.60 315.74 234.62 France 11/20 0.25 101.22 -0.68 0.01 -0.03 -0.05 -0.21
4 5 - 15 Years 196.36 0.26 3969.50 1.74 8.44 0.47
Sterling 0.45 0.55 0.70 0.80 0.72 0.82 0.75 0.90 0.78 0.93 Europe 5Y 57.40 0.70 7.48 6.37 73.15 45.37 05/25 0.50 106.44 -0.59 -0.02 -0.08 -0.14 -0.81
5 Over 15 Years 377.88 1.37 6042.46 4.49 15.57 1.06
Swiss Franc - - - - - - - - - - - - Japan 5Y 62.75 -0.58 7.36 4.36 72.09 53.56 05/48 2.00 138.80 0.54 -0.03 -0.20 -0.23 -1.04
7 All stocks 189.92 0.72 3942.64 2.67 9.69 0.94
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 69.68 -0.05 6.34 7.70 93.48 53.22 Germany - - - - - - -
US Dollar 2.06 2.36 2.04 2.34 2.08 2.38 2.05 2.35 1.96 2.26 1.86 2.16 10/20 0.25 101.22 -0.77 -0.01 -0.06 -0.06 -0.19 Day's Month Year's Total Return Return
Markit CDX 02/25 0.50 107.29 -0.79 -0.02 -0.09 -0.15 -0.76
Japanese Yen -0.05 0.15 -0.20 0.00 -0.10 0.20 -0.15 0.15 -0.20 0.10 0.00 0.30 Index Linked Aug 07 chg % chg % chg % Return 1 month 1 year
Emerging Markets 5Y 182.55 -4.46 24.60 17.01 211.60 155.49 08/48 1.25 137.62 -0.04 -0.03 -0.22 -0.29 -1.08
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 313.93 -0.15 0.90 1.51 2540.64 0.90 2.99
Nth Amer High Yld 5Y 353.32 -7.65 36.42 - 360.97 311.41 Greece 02/25 3.00 110.08 2.10 -0.04 -0.01 -0.13 -1.92
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 2 Over 5 years 817.58 0.34 3.83 14.43 6151.40 3.88 14.96
Nth Amer Inv Grade 5Y 59.41 -2.72 6.80 5.34 70.26 49.61 02/25 3.00 110.08 2.10 -0.04 -0.01 -0.13 -1.92
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 3 5-15 years 523.24 0.00 2.65 9.97 4130.26 2.77 10.94
Ireland 10/20 5.00 106.77 -0.62 -0.03 -0.06 -0.05 -0.22 4 Over 15 years 1065.76 0.45 4.19 15.83 7818.97 4.22 16.20
05/30 2.40 124.72 0.09 -0.02 -0.18 -0.06 -0.98 5 All stocks 729.98 0.28 3.42 13.14 5583.84 3.47 13.77
Italy 11/21 0.35 100.46 0.14 -0.04 -0.01 -0.14 -1.35
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED 10/23 0.65 100.30 0.58 -0.05 -0.04 -0.19 -1.56 Yield Indices Aug 07 Aug 06 Yr ago Aug 07 Aug 06 Yr ago
09/28 4.75 129.35 1.31 -0.04 -0.08 -0.21 -1.71 5 Yrs 0.23 0.24 0.98 20 Yrs 1.07 1.13 1.78
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
03/48 3.45 120.54 2.45 -0.04 -0.14 -0.20 -1.11 10 Yrs 0.54 0.58 1.44 45 Yrs 1.09 1.16 1.61
Crude Oil† Aug 52.86 -0.91 Corn♦ Sep 405.50 0.75 Aug 06 Aug 06 Prev return stock Market stocks
Japan 12/21 0.10 100.77 -0.22 -0.01 -0.01 -0.01 -0.13 15 Yrs 0.88 0.94 1.69
Brent Crude Oil‡ 56.46 -2.40 Wheat♦ Sep 482.25 -2.25 Can 4.25%' 21 109.32 0.211 0.282 0.19 5.18 85053.19 8
12/23 0.60 103.83 -0.27 0.00 -0.03 -0.02 -0.22
RBOB Gasoline† Aug 1.68 -0.01 Soybeans♦ Sep 853.50 4.00 Fr 2.25%' 20 - - - - - - -
12/28 2.10 121.79 -0.20 0.01 -0.02 -0.01 -0.33 inflation 0% inflation 5%
Heating Oil† - - Soybeans Meal♦ Sep 296.90 2.00 Swe 0.25%' 22 115.59 -2.281 -2.291 -0.08 33.18 245665.53 7
09/47 0.80 113.72 0.29 0.02 -0.05 -0.03 -0.53 Real yield Aug 07 Dur yrs Previous Yr ago Aug 07 Dur yrs Previous Yr ago
Natural Gas† Aug 2.14 0.04 Cocoa (ICE Liffe)X Sep 1742.00 -19.00 UK 2.5%' 22 117.37 -3.098 -3.124 0.05 15.74 746571.12 28
Netherlands 07/21 3.25 107.92 - - - - - Up to 5 yrs -2.65 3.01 -2.70 -1.84 -3.10 3.03 -3.15 -2.28
Ethanol♦ - - Cocoa (ICE US)♥ Sep 2224.00 -32.00 UK 2.5%' 24 376.67 -2.917 -2.944 0.14 6.82 746571.12 28
07/25 0.25 105.55 - - - - - Over 5 yrs -2.12 25.48 -2.11 -1.60 -2.14 25.53 -2.13 -1.62
Uranium† Aug 25.15 0.00 Coffee(Robusta)X Sep 1302.00 -2.00 UK 2%' 35 302.88 -2.459 -2.463 1.25 9.08 746571.12 28
Carbon Emissions‡ - - Coffee (Arabica)♥ Sep 96.80 0.30 New Zealand - - - - - - - 5-15 yrs -2.68 10.29 -2.68 -1.65 -2.73 10.30 -2.73 -1.76
US 0.625%' 21 100.46 0.385 0.362 0.16 35.84 1398380.21 40
White SugarX 308.70 -7.70 05/21 6.00 108.00 - - - - - Over 15 yrs -2.06 29.68 -2.05 -1.59 -2.08 29.71 -2.06 -1.61
Diesel† - - US 3.625%' 28 129.55 0.193 0.216 1.05 16.78 1398380.21 40
Sugar 11♥ 11.67 -0.08 Norway - - - - - - - All stocks -2.13 22.50 -2.12 -1.60 -2.16 22.59 -2.14 -1.63
Base Metals (♠ LME 3 Months) Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total market
Aluminium 1754.00 -8.00 Cotton♥ Oct 57.86 -0.22 05/21 3.75 104.57 - - - - - 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 Alloy 1270.00 -20.00 Orange Juice♥ Sep 100.80 -2.15 Portugal 04/21 3.85 107.50 - - - - - ©2018 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSE
amount.
Copper 5720.50 16.00 Palm Oil♣ - - 10/23 4.95 122.25 - - - - - Gilt Closing Prices information contained herein is proprietary to
Lead 2008.50 17.00 Live Cattle♣ Aug 107.20 0.00 BONDS: TEN YEAR GOVT SPREADS Spain 01/21 0.05 100.82 -0.50 -0.01 -0.03 -0.08 -0.37 Tradeweb; may not be copied or re-distributed; is not warranted to be
Nickel 15240.00 285.00 Feeder Cattle♣ Aug 140.05 -0.35 10/28 5.15 146.11 0.12 0.00 -0.12 -0.14 -1.27 accurate, complete or timely; and does not constitute investment advice.
Tin 16780.00 -230.00 Lean Hogs♣ Oct 77.13 0.00 Spread Spread Spread Spread Sweden 12/20 5.00 107.45 - - - - - Tradeweb is not responsible for any loss or damage that might result from the use of this information.
Zinc 2265.50 -39.50 Bid vs vs Bid vs vs 11/23 1.50 109.24 - - - - -
% Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds Switzerland - - - - - - - All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Precious Metals (PM London Fix)
Gold 1465.25 0.00 Aug 06 Month Year 04/21 2.00 105.25 -1.01 0.02 -0.06 -0.14 -0.39 at the time of publication. No offer is made by Morningstar, its suppliers, or the FT. Neither the FT, nor
Australia 1.04 - -0.67 Italy 1.31 - -0.40
Silver (US cents) 1638.50 -10.00 S&P GSCI Spt 386.28 -8.55 -16.85 United Kingdom 01/21 1.50 101.54 0.44 0.00 -0.01 -0.13 -0.33 Morningstar’s suppliers, warrant or guarantee that the information is reliable or complete. Neither the FT nor
Austria -0.70 - - Japan -0.20 - -1.91
Platinum 852.00 -4.00 DJ UBS Spot 75.86 -4.08 -10.79 Belgium - - - Netherlands - - - 09/23 2.25 107.83 0.32 0.01 -0.08 -0.21 -0.70 Morningstar’s suppliers accept responsibility and will not be liable for any loss arising from the reliance on the
Palladium 1444.00 6.00 TR/CC CRB TR 176.05 -7.18 -11.60 Canada - - - Norway - - - 12/28 6.00 150.32 0.48 0.01 -0.12 -0.23 -0.89 use of the listed information. For all queries e-mail ft.reader.enquiries@morningstar.com
Bulk Commodities M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark - - - Portugal - - - 07/47 1.50 107.23 1.20 0.01 -0.16 -0.18 -0.55
Iron Ore 92.80 -5.10 UBS Bberg CMCI TR 13.62 -5.51 -9.62 Finland - - - Spain 0.12 - -1.59 United States 11/20 1.75 100.00 1.75 0.03 -0.21 -0.23 -0.94 Data provided by Morningstar | www.morningstar.co.uk
GlobalCOAL RB Index 58.50 -1.50 LEBA EUA Carbon 28.19 0.00 26.98 France 0.54 - - Switzerland - - - 12/23 2.25 102.92 1.56 0.01 -0.29 -0.29 -1.27
Baltic Dry Index 1712.00 -22.00 LEBA CER Carbon 0.21 0.00 -19.23 Germany - - - United Kingdom 0.48 - -1.23 11/28 5.25 130.28 1.71 0.01 -0.32 -0.31 -1.23
LEBA UK Power 1790.00 31.62 -44.50 Greece 2.10 - - United States 1.71 - 0.00 11/47 2.75 109.93 2.27 -0.03 -0.32 -0.28 -0.82
Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $ Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.
unless otherwise stated.
Thursday 8 August 2019 ★ FINANCIAL TIMES 17

MARKETS & INVESTING

Fixed income
Fixed income. Sovereign guarantee
Occidental’s
Investors eye Pemex bonds $13bn debt
sale draws
as a buying opportunity heavy demand
RICHARD HENDERSON — NEW YORK

Occidental Petroleum has issued $13bn

in bonds to fund its takeover of
Anadarko, an acquisition that has pitted
famed investors Warren Buffett and
Carl Icahn against one another.
Orders for the 10-part bond sale
swelled to $78bn by midday on Tuesday
in New York, according to two people
briefed on the matter, allowing under-
writers to lower the yield on the offering
compared with the initial guidance
released earlier in the day.
The strong appetite underscored
investors’ renewed interest in corporate
debt amid a global bond rally that has
pushed yields for government bonds
sharply lower.
The 10-year bond priced at 185 basis
points above comparably maturing US
Treasury bonds, down from the initial
guidance of 220bp.
This would peg the yield at about 3.56
per cent. Occidental’s current outstand-
ing debt, maturing in 2027, yielded 3.187
per cent as of Tuesday evening.
The effective yield on the ICE Bank of
America index of investment grade
energy debt was 3.52 per cent.
The more favourable pricing came
even after Moody’s, the rating agency,
last week downgraded Occidental’s
credit rating to Baa3, the lowest invest-
ment grade level.
Matt Brill, senior portfolio manager

Investor pull: may provide an opportunity to increase

Elevated yields show wariness
remains but prices increasingly
seen as too enticing to resist
COLBY SMITH — NEW YORK
JUDE WEBBER — MEXICO CITY
In the days after Mexico’s president
Andrés Manuel López Obrador
announced his plans last month to
revive the debt-laden, state-owned oil
company Pemex, investors panicked
and ditched the company’s bonds in
droves.
Now, investors are nibbling at the
edges of Pemex again, ramping up expo-
sure despite the company’s mounting
liabilities and meagre oil output.
Since mid-July, yields on Pemex debt
maturing in 2027 have fallen nearly 50
basis points to 6.44 per cent, indicating
a rise in price. The cost to insure against
the company’s default has stabilised as
well, although it still remains near a
three-year high.
While the relatively elevated yield
underscores just how wary investors are
about Pemex’s future, overseas buyers
are increasingly tempted by what they
say are enticing prices.
“We have a window of stability in
Pemex and that makes Pemex attractive
given the valuations,” said one investor
who has begun snapping up the debt.
“Given the search-for-yield world,
Pemex is a huge pick-up versus the sov-
ereign, for what I personally view as
similar if not the same risk,” the investor
added.
Just weeks ago, Mexican assets
gyrated wildly after Mr López Obrador
underwhelmed investors with his plan
to rescue Pemex, despite offering up bil-
Pemex pricing entices investors
Yield on Pemex bond maturing 2027 (%)
Mar 2018
Source: Bloomberg
lions of dollars of tax relief and cash
infusions.
Few investors believed the plan went
far enough to resolve Pemex’s most
acute problems and most were resigned
to the view that other ratings agencies
might follow Fitch by slashing Pemex’s
rating to junk within the year.
“Pemex has repriced substantially
and the real question is not if they will be
downgraded but when,” said Penny
Foley, co-head of emerging markets at
TCW, an asset manager, who is under-
weight in Mexican assets.
One of the big concerns is the govern-
ment’s unwavering commitment to a
Pemex-led $8bn refinery project in the
south-eastern state of Tabasco, which
many doubt can be built to budget
within the government’s three-year
timeframe.
Mr López Obrador’s aversion to pri-
vate sector involvement is also a worry
to some investors.
Pemex has ruled out deepwater
exploration, fracking and joint-ven-
tures with the private sector beyond
limited service contracts, in favour of
8.0
7.5
7.0
6.5
6.0
5.5
5.0
2019 Aug
the accelerated development of 20 shal-
low-water fields.
But the National Hydrocarbons Com-
mission, the sector regulator, has
already cautioned that those fields will
hit peak production by 2021.
“It’s a very short-term view that will
put the country in serious danger in
2022 if it doesn’t get extra production,”
said one former senior Pemex insider,
noting there had been scant emphasis
from Pemex on reserve replacement to
underpin future output.
But some investors said there was
money to be made in the event of a
downgrade. “If [Pemex] is downgraded,
there is the possibility for a significant
amount of forced selling,” said Ms Foley.
“You can pick things up at more attrac-
tive levels.”
Gorky Urquieta, the co-head of the
emerging markets debt team at asset
manager Neuberger Berman, said there
would be an opening created by inves-
tors who can only hold investment
grade bonds.
“When the downgrade comes and if
the market reacts to forced selling, that
Pemex oil rig our exposure,” he said.
workers on a Edward Al-Hussainy, a senior interest
platform in the rates and currency analyst at Columbia
Gulf of Mexico Threadneedle Investments, said he was
Omar Torres/AFP/Getty
not worried by the prospect of a forth-
coming ratings downgrade because the
oil company is such an integral part of
the state.
“The unambiguous trend here is one
in which the government is stepping up
support for Pemex,” he said. “It is criti-
cally strategic as a source of investment,
as a source of employment and as a
source of government revenue, so the
government cannot divorce itself from
Pemex.”
Jens Nystedt, a senior portfolio man-
ager at Emso Asset Management, also
found comfort in Pemex’s “full sover-
eign guarantee”.
As such, he may also step in and buy
Pemex after a downgrade.
Mr López Obrador, a leftist national-
ist, has made rescuing the 81-year old
company, which has $106bn in debt, an
issue of national security.
He wants energy self-sufficiency to
avoid relying on the US for a substantial
portion of the country’s fuel needs.
Bailing out Pemex comes with a cost,
however. Investors warn any bid to bol-
ster the oil company will weigh on the
‘We have a state’s fiscal health at a time when the
economy is on the brink of a recession.
window of Given the sluggish state of Mexico’s
stability in economy and Pemex’s broader chal-
lenges, some investors were not yet
Pemex and ready to take on the added risk.
that makes “Pemex is a credit we want to own but
the trajectory is bumpy and the direc-
it attractive tion is pessimistic,” warned a portfolio
given the manager at one of the world’s largest
investment groups. “There’s no rush to
valuations’ be overweight.”
‘Foreign investors are
hungry for yield because
of the negative rates in
Europe and elsewhere’
for Invesco, said the US investment
grade credit market was set to see an
increase in buying by foreign investors
facing negative yielding government
debt.
“Foreign investors are hungry for
yield because of the negative yielding
rates in Europe and elsewhere, so we
think there will be a lot of demand from
those investors for new credit issuance,”
he said.
Proceeds from the deal will be used to
finance Occidental’s $55bn takeover of
Anadarko. The companies agreed the
deal in May after a bidding war involv-
ing Chevron, which initially offered
$38bn.
The Occidental acquisition is set to
close later this year and expands the
group’s reach in the Permian Basin, a
centre of US shale oil production, where
Anadarko has drilling rights to 250,000
acres.
The purchase was sealed when
Occidental secured funding from Mr
Buffett’s Berkshire Hathaway.
Under the terms of the deal, Berkshire
will invest $10bn in Occidental in
preferred shares with an 8 per cent
dividend, above market rates.
In May, Mr Icahn filed a lawsuit
FastFT against the oil company, claiming the
Our global deal was “fundamentally misguided
team gives you and hugely overpriced”.
market-moving Occidental shares have traded lower
news and views, since the deal was announced in May,
24 hours a day indicating that investors share Mr
ft.com/fastft Icahn’s concerns that the oil major over-
paid for Anadarko.

Currencies Asset management

Surprise dovishness from central banks
triggers bout of Asian forex weakness
EVA SZALAY
Asian currencies notched up broad-
based declines yesterday after central
banks in the region delivered larger
than expected rate cuts and warned of
mounting growth concerns.
The dovish tone caught investors off
guard, leading to the selling of both
developed and emerging markets
currencies in the region with some, such
as the Australian dollar, “sinking in
sympathy” with peers.
The New Zealand dollar fell 2 per cent
against the greenback to trade at its
weakest level since the start of 2016
after the country’s central bank cut its
key rate to a record low of 1 per cent.
The Reserve Bank of New Zealand
also signalled that further easing could
follow and hinted at unconventional
policy measures.
India’s central bank also trimmed its
base rate by more than investors
expected, cutting 35 basis points com-
pared with the usual 25bp increment,
while the Bank of Thailand surprised
markets by lowering its key rate.
The downbeat tone from the region’s
central banks came amid worries about
global trade, sluggish economic data
and escalating Sino-US trade tensions.
In response, investors have sought the
safety of the US dollar and the Japanese
yen while currencies linked to risker
trades were sold, such as Australian and
New Zealand dollars and the South Afri-
can rand.
“Global central banks have delivered
with gusto over the past 24 hours . . .
for now, sentiment should remain rocky
and that should reinforce support of
The New Zealand dollar has hit its
weakest level since the start of 2016
safe havens like the yen and the dollar,”
said Mark McCormick, global head of
FX strategy at TD Securities.
The Australian dollar fell to its lowest
levels against the greenback in more
than a decade, “sinking in sympathy”
with its New Zealand peer, said Win
Thin, global head of currency strategy at
Brown Brothers Harriman, after the
country’s reserve bank kept its rates
unchanged at historic lows on Tuesday.
The Indian rupee also declined
against the US dollar.
In China, officials fixed the onshore
renminbi’s rate at its lowest since 2008
but kept it below the key Rmb7 against
the US dollar level, which it breached on
Monday after the US announced addi-
tional tariffs on Chinese imports.
Officials from the People’s Bank of
China said the renminbi’s weakness was
unlikely to accelerate significantly, reas-
suring investors that authorities had no
intention of weaponising the currency
in response to the trade tensions.
“We find this to be, quite frankly,
unenforceable,” said Mr Thin. “If the
rest of EM FX is selling off, we can bet
the [renminbi] will as well.”
Dalio stays bullish on China investing
despite escalating trade war with US
LINDSAY FORTADO — NEW YORK
Ray Dalio, founder of Bridgewater
Associates, the world’s largest hedge
fund, has made a resounding argument
for investing in China even as a trade
war between Beijing and Washington
appears to be escalating.
In a video posted online on Tuesday, a
day after Sino-US trade tension spread
to the currency markets, Mr Dalio said
there remained a historic opportunity
to buy into a country that is opening up
its markets to foreign investors over the
long term.
“Would you not have wanted to invest
with the Dutch in the Dutch empire,
would you have not wanted to invest in
the Industrial Revolution and the Brit-
ish empire, would you have not wanted
to invest with the United States? I think
it’s comparable,” he said. “Would you
have not wanted to have invested in
those places?”
The billionaire hedge fund manager
has been a China bull for decades and
has repeatedly pointed to growth oppor-
tunities there. Bridgewater opened its
first office outside of Connecticut in Bei-
jing in 2011 to be closer to clients there,
although it was not until more recently
that the Chinese market opened up to
allow foreign investors to launch
onshore funds. Bridgewater launched
an onshore fund investing in Chinese
securities last year.
The appearance of the half-hour
video online on Tuesday pointedly
invited investors to look past the latest
‘The US is risky in its own
ways, the conflict between
socialism and capitalism
will be part of our election’
round of trade tension, which had
rocked equity and bond markets
around the world since President Don-
ald Trump announced tariffs on $300bn
more of Chinese goods and Beijing
allowed its currency to weaken against
the dollar. Monday was the worst day for
US equities this year.
Bridgewater was also planning to add
a section to its website this week that
will be devoted to its research on China
and commentary on investing there.
“I believe China is a competitor of the
United States or Chinese businesses are
competitors of American businesses or
other business around the world and
that therefore you want to be, if you’re
diversified, having bets on both horses
in the race,” Mr Dalio said.
He said the two countries are unlikely
to go to “classic war” but added: “I think
there’s a restructuring of the world
order, in terms of changes in supply
chains, who’s making what technolo-
gies.”
In the video, Mr Dalio dismissed the
idea that investing in China now is too
risky. “I think Europe is very risky when
monetary policy is almost out of gas and
we have the political fragmentation and
they’re not participating in the technol-
ogy revolution,” he said. “I think the
United States is very risky in its own
ways, having to do with the combination
of the wealth gap, the political system,
the conflict between socialism and capi-
talism that will be part of our election,
the fragmented decision-making, so
many different things and the absence
of the effectiveness of monetary policy.”
18 ★ Thursday 8 August 2019

The day in the markets Popular safety trade

What you need to know
for stocks is fraught
3 Global bond yields sink in flight to
with jeopardy
safety
Spooked investors seek the safety of US debt
3 Gold surpasses $1,500 a troy ounce Treasury yields (%)
after being swept up in haven rally
3 Oil prices dip amid worries that crude
demand will weaken
2.8

2.6
Richard Henderson
Global bond markets rallied and Wall
Street’s stocks slipped as renewed
30-year
2.4 Markets Insight

P
worries about global growth hit investor
sentiment. 2.2
The central banks of India, New rudence comes at a cost. That simply may be paying too much to play Jim Tierney, chief investment officer
Zealand and Thailand lowered key 2.0 is one lesson equity investors it safe. Whether that is the case is a ques- of AllianceBernstein’s concentrated US
interest rates yesterday in moves 10-year should keep in mind this tion that should be considered given the growth equities fund, is adamant the
designed to tackle the threat of slowing 1.8 August, a month sorely lack- overpowering trend since the financial recent market dip is a passing concern.
growth. ing the tranquility typical of crisis for stocks to rebound to new The sell-off was an overreaction to
Weak manufacturing data from 1.6 this period. records despite rocky patches. new trade tariffs that will hurt China
Germany added to the downbeat mood. Jul 24 2019 08 Aug Monday’s bloodbath was the worst Even after Monday’s pain, US stocks more than the US; multinationals will
Industrial production in the country fell
Source: Bloomberg
day of the year for US blue-chip stocks — have gained more than 14 per cent in the simply adjust supply chains to sidestep
1.5 per cent month on month in June, investors ended the day 3 per cent year to date, retracing the worst the higher costs. Investors who have
stoking fears that Europe’s largest poorer. The drawdown extended the December since 1931 and shaking off a moved into defensive stocks will be
economy was heading towards a previous week’s selling when the two quick bout of conniptions in May. caught flat-footed, he argued.
recession. Atlantic. The yield on the 30-year steep fall in Walt Disney after its results central drivers that have consistently The question of whether investors are “Defensive stocks have been a good
“The crisis in the automotive sector is Treasury fell 12bp to 2.15 per cent, its disappointed analysts. moved markets failed, almost in unison, paying too much for defensive stocks place to hide but there is not a lot of
continuing unabated,” said Ralph Solveen, lowest level since 2016. Meanwhile, the The S&P 500 index fell 0.7 per cent by across a bruising 24 hours. was posed in a note from Andrew Lap- value there,” Mr Tierney said. “There’s
deputy head of economic research at yield on the 10-year note dropped 9bp to midday in New York while the Jay Powell, the Federal Reserve chair, thorne, head of quantitative equity not a lot of earnings growth in those sec-
Commerzbank. “The main reason for this 1.65 per cent. technology-heavy Nasdaq Composite dashed hopes of a prolonged easing research for Société Générale. tors — they have been supported largely
weakness is now likely to be significantly Government bonds were not the only index was 0.8 per cent lower. cycle and President Donald Trump Cyclical stocks such as banks fall by lower interest rates.”
weaker foreign demand.” haven assets attracting attention. The Oil prices plummeted as escalating deepened the trade fracas. At the start of the year, a common
Investors scuttled to safer corners of refrain among portfolio managers was
Investors took note of the souring
sentiment. A rush into the safety of
price of gold rose more than 2 per cent to
breach $1,500 a troy ounce, its highest
US-China trade war tension raised fears
that crude demand would decline. the market. Real estate and utilities
‘Defensive stocks have that a broad trade agreement, light on
government bonds left the yield on level since 2013. Brent, the international benchmark, weathered the downturn as investors, been a good place to details, would emerge within months to
fearing further tumult, favoured these neutralise the tensions.
Germany’s 10-year Bund down 6 basis
points to a new record low of minus 0.61
The risk-off trade seeped into Wall
Street trading.
dropped 4 per cent to $56.46 a barrel
while WTI, the US marker, dipped almost so-called bond proxies as armour for
hide but there is not It would sidestep the thorny issues
per cent. The Dow Jones Industrial Average was 5 per cent to $50.99 a barrel. their equity portfolios. a lot of value there’ such as the transfer of technology to
The script was repeated across the down 1 per cent, dragged lower by a Nikou Asgari Utility stocks are an interesting case Chinese companies that the US has long
study. They are the classic alternatives railed against and instead offer an initial
to cyclical stocks, such as banks, whose sharply during recessions. During the step on the path to a deeper deal.
Markets update performance is tethered to growth, financial crisis, profits from these types Instead, the opposite has happened.
making them vulnerable to recessions. of company tumbled 60 per cent or Trumpian obstinacy and Chinese pos-
Dull, slow-moving electricity and water more. Investors rightly bet that con- turing has prolonged the unrest, which
companies churn out dividends from sumers would forgo a new television or is set to endure beyond next year’s presi-
US Eurozone Japan UK China Brazil safe, commanding market positions. holiday but would still eat and wash. dential election, said Goldman Sachs.
Stocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp Bovespa NextEra Energy, the largest utility in Yet this thesis is not as strong as many “While we had previously assumed
Level 2853.61 1449.92 20516.56 7198.70 2768.68 101541.07 the S&P 500 basket of blue-chips, has may hope. Profits for defensive stocks that President Trump would see making
% change on day -0.98 0.25 -0.33 0.38 -0.32 -0.61 outperformed the broader index by also did poorly through the 2008 crisis, a deal as more advantageous to his 2020
Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $ 20 per cent over the past 12 months. dropping up to 40 per cent. This evi- re-election prospects, we are now less
Level 97.673 1.122 105.770 1.215 7.041 3.975 As a group, utilities have gained more dence dents the appeal of these bell- confident that this is his view,” said Jan
% change on day 0.044 0.268 -0.578 -0.164 0.121 0.005 than 11 per cent over the same period, wether safety stocks at a time when they Hatzius, Goldman’s chief economist.
Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bond outpacing the S&P 500 by about the are priced at a premium to cyclicals. “We expect the newly announced
Yield 1.631 -0.586 -0.201 0.484 3.055 7.278 same margin after Monday dipped the “Investors are then paying twice the 10 per cent tariffs on the last $300bn to
Basis point change on day -11.130 -5.100 -1.510 -3.000 -0.700 -13.500 index briefly into negative territory. price for bond proxies than the more remain in place on election day and
World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX) Outperforming the broader index economically exposed cyclical assets,” other forms of tit-for-tat retaliation are
makes defensive stocks expensive and Mr Lapthorne warned. “However, the possible along the way.” Investors will
Level 330.87 56.46 51.09 1465.25 16.39 2727.20
increases the risk that yield-hungry mistake they may be making is believ- have to strap in for the ride.
% change on day -0.42 -4.08 -4.59 0.00 -0.61 0.07
Yesterday's close apart from: Currencies = 16:00 GMT; S&P, Bovespa, All World, Oil = 17:00 GMT; Gold, Silver = London pm fix. Bond data supplied by Tullett Prebon.
investors could miss out on a bounce in ing these companies are immune from
cyclical and growth stocks. Investors the economic cycle. This is not the case.” richard.henderson@ft.com
Main equity markets
S&P 500 index Eurofirst 300 index FTSE 100 index
3040 1560 8000

2960 1520 7680

2880 1480 7360

| | | | | | | | |
2800 | | | | | | | | | | | | | | | | | | | |
1440 | | | | | | | | | | | | | | | | | | | | 7040 | | | | | | | | | | |

Jun 2019 Aug Jun 2019 Aug Jun 2019 Aug

Biggest movers
% US Eurozone UK
Fleetcor 5.77 Bayer 6.02 Just Eat 6.82
Cvs Health 5.53 Ferrovial 2.54 Flutter Entertainment 5.97
Ups

Assurant 4.65 Reed Elsevier 2.31 Fresnillo 5.58

Newmont Mining 4.03 Casino Guichard 2.20 Bae Systems 3.25
Kroger (the) 2.81 Sap 2.12 Itv 3.05
%
E*trade Fin -5.71 Seadrill -9.02 Nmc Health -11.43
The Charles Schwab -5.51 Commerzbank -6.43 Standard Life Aberdeen -7.52
Downs

Walt Disney (the) -5.43 Unicredit -4.94 Spirax-sarco Eng -6.39

Svb Fin -5.10 Saipem -3.44 Rolls-royce Holdings -3.82
Citizens Fin -5.03 E.on -3.04 Legal & General -3.10
Prices taken at 17:00 GMT Based on the constituents of the FTSE Eurofirst 300 Eurozone
All data provided by Morningstar unless otherwise noted.

Wall Street Eurozone London

Walt Disney slipped to a two-month low Commerzbank led lenders lower after its Sirius Minerals hit its lowest since 2015
after results revealed a tough quarter for second-quarter core profit came in 10 per after Berenberg cut the stock off its “buy”
the recently acquired 21st Century Fox cent below the consensus forecast. list in response to this week’s shelving of
film studio and Star, its Indian TV and Corporate loan losses and pressure on a junk bond issue.
streaming arm. fees resulted in lower revenues and The company’s plans to develop a
Disney’s theme park business also higher provisions with Commerzbank Yorkshire fertiliser mine still make sense if
dragged on performance after the launch cautioning that hitting its full-year finance can be secured but the risk of
of Star Wars Land at Disneyland flopped. revenue and net income targets had failure was too high to stay positive, the
Charles Schwab and E*Trade sunk become “significantly more ambitious”. broker told clients.
after Fidelity stoked competition fears by UniCredit’s quarterly profit also missed Aim-listed Burford Capital fell sharply
revealing it would put new customers’ the consensus forecast on revenue after Muddy Waters, the activist short
cash balances into money market funds pressures and came with a warning, seller, confirmed that it was betting
rather than a sweep account. sending the Italian bank sharply lower. against the litigation financing specialist
“The industry has largely done the Bayer gained after the sale of its 60 per and published a critical report.
opposite over the past few years as cent stake in Currenta, its environmental BAE Systems climbed on the back of
brokers have increasingly used the management joint venture with Lanxess, “buy” advice from Investec Securities.
economics on lower yielding brokerage to Macquarie Infrastructure and Real Flutter, the bookmaker formerly known
cash to offset pricing pressure Assets for gross proceeds of €1.35bn. as Paddy Power, rallied after leaving full-
throughout the industry,” said Goldman The stock also took a lift from news year guidance unchanged.
Sachs. that a lawsuit scheduled to start this Half-year results from Flutter showed
Match, the dating site operator, and month — the first tied to its glyphosate core earnings down 10 per cent due to
parent company IAC jumped after weedkiller to be heard outside California duty and regulatory changes.
reporting another acceleration in revenue — was likely to be postponed. NMC Health was the FTSE 100’s
growth from its Tinder app. MorphoSys, the German antibody sharpest faller, the hospital operator
Tinder’s addition of 503,000 users last developer, climbed after revealing its having already slid on Tuesday after
quarter, its second-fastest growth on Tafasitamab cancer treatment had been Muddy Waters tweeted to tease its
record, meant Match was able to hike full- given a green light to file for approval in research without naming a target.
year targets. Europe two years ahead of plan. Barclays analysts said they had
Weight Watchers was in demand after Early recognition of a development received “numerous questions” about
better than expected quarterly earnings milestone payment from GlaxoSmithKline NMC in response to the short seller’s
helped support turnround hopes. meant MorphoSys’ second-quarter tweet, adding: “We believe accounting
Bryce Elder earnings beat forecasts. Bryce Elder concerns are misplaced.” Bryce Elder