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THURSDAY, MARCH 23, 2017 ~ VOL. XLI NO. 142 WSJ.com ASIA EDITION
As of 12 p.m. ET DJIA 20668.03 À 0.00% NIKKEI 19041.38 g 2.13% STOXX 600 374.27 g 0.37% BRENT 50.39 g 1.12% GOLD 1247.90 À 0.14% EURO 1.0808 g 0.04% DLR ¥111.03 g 0.61%

Violence Near U.K. Parliament Doubts

What’s
Upend
News
Business & Finance
Market’s
hina Petroleum &
Wagers
C Chemical said it would
acquire controlling stakes
in Chevron’s businesses in
South Africa and Botswana
On Trump
in a roughly $900 million BY GREGOR STUART HUNTER
deal. B1
The Trump trade is over. Get
 Elliott Management is
ready for “Trump Lite.”
threatening to use obscure
Developing doubt about the
Dutch corporate rules to
U.S. administration’s ability to
force Akzo Nobel to consider
deliver on its pro-growth policy
PPG’s sweetened bid. A1
agenda—at least anytime
 Baidu chief scientist soon—has upended a strategy
Andrew Ng said he was that had been a winner since
leaving the company to ex- November’s U.S. election: Sell
plore “a new chapter” in bonds, buy the dollar and pick
artificial intelligence. B1 up stocks that might benefit
TOBY MELVILLE/REUTERS

from improved U.S. growth.

 Four of Uber’s most
That trade went into re-
prominent female officials
verse in Tuesday’s U.S. trad-
sought to quell controversy
ing: The S&P 500 fell 1.2%, its
with the promise of sweep-
first decline of more than 1%
ing changes to the firm’s
this year, while the ICE U.S.
corporate culture. B4
ON THE BRIDGE: An attacker stabbed a police officer on the U.K. Parliament’s grounds and was shot by police, in what authorities were treating dollar index, which tracks the
 U.S. Justice Department as a terrorist attack. At least one person was killed and a dozen were injured. Nearby, a car struck pedestrians on Westminster Bridge, above. A3 dollar against six currencies,
investigators subpoenaed slipped below 100 for the first
top container-shipping time since Feb. 6.

PBOC Walks a Tightrope

firms as part of a probe on But even before the reversal
price fixing. B2 there had been weeks in which
markets seemed stalled. In
 Tencent warned it faces
fact, a more successful strategy
stiff competition in main-
this year than the Trump trade
taining rapid growth of its
has been to discount a U.S. re-
core gaming and content
businesses. B4 As China central bank ing costs; this week the closely from evolving into a full- covery and bet on Europe and

pushes up rates to
watched three-month interest blown credit crunch. Borrowing Barrier Asia. The MSCI Emerging Mar-
 A Chinese conglomerate rates at which banks lend to The PBOC didn’t respond to Short-term funding costs kets Index is up 8.6% in 2017—
is in contract to buy a Park contain financial risks, each other climbed to levels a request to comment. are surging in China. driven by double-digit gains in
Avenue office building for not seen in nearly two years. After years of largely ex- Turkey, China, Hong Kong and
$2.21 billion, among the small lenders default “The rising rates have made pansionary monetary policy, Three-month Shanghai India—trumping the S&P 500’s
highest prices ever paid it much more expensive for meant to spur economic interbank offered rate 4.7%. Even European stocks
for a New York tower. B5 BY LINGLING WEI small banks to borrow,” one growth—one of the central have outperformed those in
6%
trader said. “There were peo- bank’s mandates—the PBOC the U.S. over the past month,
 Wells Fargo is aiming
BEIJING—China’s central ple begging for liquidity.” has been tightening market li- despite concerns about
to survey all its employees
bank faces an increasingly On Monday, some small, ru- quidity and raising short-term France’s coming election.
about its culture, working 4
tough balancing act, trying to ral banks failed to make good rates to prevent excessive bor- “There’s a lack of confidence
with an academic who spe-
contain asset bubbles and on short-term funds borrowed rowing of the kind that has in the reforms and the overall
cializes in that area. B5
steady the yuan without trig- from other lenders, according caused a surge in corporate- policy agenda, and that’s been
 The yen rose to its high- gering a cash crunch and sti- to traders and banking execu- bond issuance. 2 spoken about underpinning the
est level against the dollar fling economic growth. tives. Late Tuesday, the PBOC But short-term funding is whole market sentiment and an-
in about four months. B8 The People’s Bank of China injected an estimated 300 bil- an increasingly popular form imal spirits so far,” Catherine
has tightened its hold on lion yuan ($43.6 billion) into of financing for banks, so the 0 Yeung, investment director at
World-Wide credit in recent weeks, part of the financial system via short- PBOC’s moves could set off a 2015 ’16 ’17 Please see MARKET page A2
government efforts to rein in term funding facilities, the liquidity shortage. That in
financial risks. The shift has people said, in an apparent ef- turn could jack up financing Source: FactSet  Yen soars as investors head
 The British Parliament pushed up short-term borrow- fort to prevent the defaults Please see BANKS page A2 THE WALL STREET JOURNAL. for safety..................................... B8
was placed on lockdown
after a police officer was
stabbed and the alleged
Game Companies Battle Cheaters
assailant shot by police in
what authorities are treat-
ing as terrorism. A3
AVON’S PUSH TO WIN
 China’s central bank
faces an increasingly tough
balancing act, trying to
BACK MIDDLE AMERICA
contain asset bubbles and
steady the yuan without
triggering a cash crunch. A1 Private-equity owner will raise commissions, scrap noncore products
 North Korea attempted
to fire a missile from its east BY SHARON TERLEP women in the U.S. heartland.
coast, but the test appar- The pedestrian crockpot slow cooker,
ently failed, U.S. and South To save the Avon lady, the crockpot had which sold for $59.99, wasn’t part of that
Korean officials said. A4 to go. plan. Cerberus executives saw it as one of the
 Gorsuch, the U.S. Su- Avon Products Inc., one of the nation’s superfluous products added over the years
preme Court nominee, is biggest direct sellers, lost legions of its sig- that diluted the brand, complicated the sup-
likely to rule on a variety of nature door-to-door sales representatives by ply chain and did nothing to facilitate repeat
ACTIVISION BLIZZARD

issues related to the presi- failing to modernize its products, develop an business. Same for the Mickey Mouse bedding
dent if he is confirmed. A5 online strategy or capitalize on social media. and colorful measuring cup and spoon set.
Now private-equity giant Cerberus Capital Some of the representatives who peddle
 Avian influenza is Management, which took over the 131-year- the goods—they operate as independent
spreading across Asia in old company’s failing North American busi- contractors, not Avon employees—are
what may be the worst out- ONLINE ARMS RACE: As e-sports grows, players looking for an edge ness last year, is trying to stop the bleeding. pleased they now are being paid more but
break in seven years, as the are using unapproved software and exploiting bugs, derailing honest It says its new strategy is to cut some costs aren’t yet sold on all aspects of the plan. At
human death toll rises A4 gamers. The team-based shooter game ‘Overwatch,’ above. B1 and refocus on selling cosmetics and skin- a January gathering of Avon’s top U.S. sell-
 The ECB defended Ger- care products to a group often overlooked ers in Scottsdale, Ariz., several were incred-
many’s massive foreign by the beauty industry: lower-income, aging Please see AVON page A6
surpluses as a sign of its
trading prowess. A3
 Workers in South Korea Pursuit of Iraqis Don’t Know Why You Say

Oracle #1
began the process of rais-
Goodbye, They Say Hello
ing a 6,800-ton ferry that
sank in 2014, killing more
than 300 people. A4
Paint Maker i i i

 Beijing denied having Akzo Nobel In country’s quirky vernacular, ‘hello’ is

plans to build on a dis-
puted South China Sea Heats Up used as a parting word; outsiders baffled SaaS Enterprise
outcrop also claimed by
the Philippines. A4 Applications Revenue
BY BEN DUMMETT BY NOUR MALAS The official, feeling pan-
 Secretary of State Tiller- AND IAN WALKER
son said the U.S. would work
icked, recalled thinking, “Whoa, 1,000+ Employees Segment, 2015
BAGHDAD—For visitors wait a minute. Are we starting
to establish “interim zones LONDON—Elliott Manage- here, it can be hard to say another meeting now?”
of stability” to protect refu- ment Corp., a prominent U.S. goodbye. The way some Iraqis say
gees in Syria and Iraq. A4 activist investor, is threatening In Iraq, the English word hello to mean goodbye is just

#1
to use obscure Dutch corporate hello has become entrenched one of many peculiarities that
CONTENTS Markets...................... B8
Business News.......... B3 Opinion.............. A10-11 rules to force paint-and-chemi- in the parting protocol, usu- make Iraqi Arabic unique
Crossword................. A9 Technology............... B4 cals giant Akzo Nobel NV to ally as a decre- among the Arabic dia-
Finance & Mkts....... B5
Heard on Street.... B7
Life & Arts........... A8-9
U.S. News.............. A5,7
Weather..................... A9
World News....... A2-4
consider a sweetened €22.37
billion ($24.19 billion) bid from
scendo—HELLO,
Hello, hello—un-
lects of the Middle
East. The vernacular #2
PPG Industries Inc. til a call is dis- here echoes a mish-
China: RMB28.00; Hong Kong: HK$23.00; Amsterdam-based Akzo on connected or a mash of historical in-
Indonesia: Rp25,000 (incl PPN);
Japan: Yen620 (incl JCT); Korea: Won4,000; Wednesday rebuffed its Ameri- door shut. Many fluences: ancient Is- Oracle Salesforce
Malaysia: RM7.50; Singapore: S$5.00 (incl GST)
can rival’s latest offer, worth Iraqis say they lamic empires, British Cloud Cloud
KDN PP 9315/10/2012 (031275); MCI (P)
NO. 066/01/2017; SK. MENPEN R.I. NO: 01/ €88.72 a share. The second ap- have no idea why. colonial rule and, 14.5% 12.4%
SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998
proach came just weeks after The practice Hello in Arabic more recently, West-
Akzo rejected an offer of €83. leaves newcom- ern-style consumerism
In both cases, Akzo said the ers perplexed. An official at and the internet.
offers undervalued the com- the American embassy re- Words in Farsi, a language
pany and didn’t warrant en- called when he was a new ar- most widely spoken in Iran,
gaging with PPG. rival and at the end of a long and Ottoman Turkish, the lan- oracle.com/applications
Elliott, which owns a 3% meeting his Iraqi counterparts guage of the former Ottoman Source: IDC “Worldwide SaaS Enterprise Applications Market Shares, 2015: The Top 15 by Buyer Size,”
s Copyright 2017 Dow Jones & stake in Akzo, on Wednesday shook his hand and said, Empire, pepper daily dis- doc #US41913816, Dec. 2016; Table 4. For the purposes of this report, SaaS enterprise applications include
the following application markets: CRM, engineering, ERP, operations and manufacturing, and SCM.
Company. All Rights Reserved
agreed that the new offer was “Thank you, hello, hello, hello, course here. Copyright © 2017, Oracle and/or its affiliates. All rights reserved.
Please see AKZO page A2 thank you.” Please see HELLO page A6
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Thursday, March 23, 2017
A Senator’s Plan to Reduce Legal Immigration
H
owever much they
quarreled over illegal
immigration, political
leaders in both parties used
to agree that the U.S. needs
more legal immigrants to
sustain its aging labor force.
Among Republicans, that
consensus is dissolving. One
dissident who bears watching
is Sen. Tom Cotton of Arkan-
sas. He says the U.S. admits
too many legal immigrants
based on family ties rather
than skills, education or the
ability to as-
similate.
Mr. Cotton
and fellow Re-
publican Sen.
David Perdue
CAPITAL have intro-
ACCOUNT duced a bill
GREG IP that would cut
legal immigra-
tion in half.
And while it’s a low priority
in Congress now, Mr. Cotton
may one day influence the
approach of President Donald
Trump, who has also argued
for less legal, and illegal, im-
migration.
The core of Mr. Cotton’s
critique is that historically,
immigration comes in big
waves. The country struggles
to assimilate the newcomers,
resulting in a backlash. The
last such backlash came in
BANKS
Continued from Page One
costs for many businesses, es-
pecially small and private
ones, adding to the headwinds
for an economy already facing
rising domestic debt, the
movement of capital offshore
and anemic global demand.
“Sustained elevated inter-
bank rates could cause signifi-
cant volatility in financial
By pushing up market rates, the PBOC hopes
to keep money at home and ease yuan pressure.
markets,” said MK Tang, a
Hong Kong-based economist
at Goldman Sachs Group Inc.
“Bank lending rates might also
face upward pressure amid
higher market rates.”
Many analysts, including at
UBS Group AG, expect the
PBOC to keep short-term bor-
rowing costs at elevated levels
in the coming weeks or
months, in line with the Chi-
nese leadership’s declaration
that dealing with financial
risks—including soaring cor-
porate debt and an out-of-bal-
Training Day in Southern China
WANG YU/ZUMA PRESS
PURPLE HAZE: Armed policemen underwent training in Nanning in China’s Guangxi region on Wednesday.
MARKET
Continued from Page One
Fidelity International, said about
investors’ reconsideration.
The skittishness spilled into
Asia on Wednesday. Japan’s
Nikkei Stock Average fell 2.1%
to 19183.27, erasing all its
gains for the year. The yen
strengthened to as much as
¥111.4350 to the dollar; a
strong yen typically hurts the
earnings of Japanese export-
ers. Shares also struggled in
Hong Kong, with Chinese com-
panies particularly hard hit.
Increasingly, investors are
1924 when the Immigra-
tion Act virtually slammed
the door shut on foreign en-
trants, including Jewish refu-
gees fleeing persecution in
Europe. Mr. Cotton believes
that if Congress had tapered
the influx sooner, it would
have avoided the draconian
restrictions of 1924.
H
e traces today’s ten-
sions to the system of
legal immigration put
in place in 1965. Its emphasis
on family reunification, he
claims, has tilted the immi-
grant pool toward workers
more likely to compete for
work with low-skilled Ameri-
cans.
“When new immigrants
get a chance to get their feet
beneath them, learn the lan-
guage, move up the ladder of
success, and assimilate to
American culture, they tend
to behave just like every
other group of Americans
have,” Mr. Cotton says in an
interview. But that requires a
system that doesn’t slow
down assimilation or aggra-
vate poverty. “I worry that
the system we have now is
tending in that direction.”
The U.S. now awards
roughly 65% of immigrant vi-
sas based on family ties to
current citizens and perma-
ance housing market—is this
year’s top economic priority.
Home prices in big Chinese
cities have surged, leading to
bubbles the government is
struggling to contain, while
smaller cities are still bur-
dened by numerous unsold
homes.
The analysts say the central
bank is likely to leave un-
changed its benchmark lend-
ing and borrowing rates—used
to price corporate loans—to
avoid crushing heavily in-
debted companies. UBS esti-
mates that overall nonfinan-
cial-sector debt in China
ended 2016 at 277% of gross
domestic product, up from an
already-alarming 254% a year
earlier.
By pushing up market rates,
China’s central bank also
hopes to keep money at home
and alleviate downward pres-
sure on the yuan, especially
from rising U.S. interest rates
that make the dollar more at-
tractive. Just hours after the
Federal Reserve raised rates
showing they believe the
Trump trade has gotten out of
hand. Around one-third of
portfolio managers believe
global equities are overvalued,
the highest level on record go-
ing back to the turn of the
century, according to a Bank
of America Merrill Lynch
monthly survey of 200 funds
managing $592 billion. Around
four-fifths believe U.S. stocks
are the most overvalued of all.
Around a third believe the U.S.
dollar is overvalued, the high-
est level since June 2006.
The “Trump Lite” trade
hinges upon the administra-
tion’s getting sandbagged in
policy fights, such as the cur-
WORLD NEWS
Family First
Legal immigration is dominated by relatives of citizens and prior
immigrants.
600,000 visas
500,000
400,000
300,000
200,000
100,000
0 Still, Mr. Cotton says eco-
2006 ’10
*Includes refugees, asylees, and diversity entrants
†Excludes children and spouses included in employment-based
Sources: Department of Homeland Security; Sen. Tom Cotton (employee only)
nent residents and just 15%
based on employment. Most
of the remainder are refu-
gees, asylum seekers and ap-
plicants from countries un-
derrepresented in current
immigration.
Family sponsorship heavily
shapes the future inflows of
migrants. In a 2013 study,
Stacie Carr and Marta Tienda
of Princeton University’s Of-
fice of Population Research
found that every 100 immi-
grants admitted between 1981
last week, the PBOC pushed up
a suite of short-term borrow-
ing costs in China.
“What the PBOC has to bal-
ance is very tricky,” said
Christopher Balding, an eco-
nomics professor at Peking
University. “They have to stay
close enough to the Fed to
keep money in.”
Headwinds aside, some fac-
tors are working in the central
bank’s favor. The dollar’s
surge, which began late last
year, has lost momentum in
recent weeks. The dollar
weakened against other major
currencies Tuesday as waver-
ing confidence in the pros-
pects for President Donald
Trump’s economic and trade
agenda caused a market selloff
in the U.S.
Softness in the dollar,
which fell further Wednesday
morning in New York, could
give China’s central bank some
breathing room as it works to
keep the yuan stable.
Meanwhile, as China takes
more steps to attract foreign
investors to its stock and bond
markets, Asia’s main capital-
markets trade group, the Asia
Securities Industry & Financial
Markets Association, urged
Beijing to adopt more mea-
sures to deepen the markets’
liquidity.
rent wrangling over health
care. Drawn-out congressional
debates over the details of
stimulus measures could cause
inflation to peter out, encour-
aging investors to resume the
hunt for yield—buying bonds
and stocks with sustainable
dividend income.
From the start, the market
had been too optimistic about
Donald Trump’s ability to exe-
cute the finer details of his eco-
nomic policy, said Megan E.
Greene, chief economist at
Manulife Asset Management.
“The risks were always going
to become more balanced in the
markets as it became apparent
how aggressive and difficult the
Immediate relatives
of U.S. citizens
All others*
Family-sponsored
Employment
Employee only†
’15
THE WALL STREET JOURNAL.
and 1985 without benefit of a
family sponsor went on to
sponsor 260 family members.
For unsponsored entrants be-
tween 1996 to 2000, that fig-
ure had risen to 345. Because
so many of these later mi-
grants were older parents,
this reduces their rejuvenat-
ing impact on the labor force.
Mr. Cotton would like to
emulate Canada and Austra-
lia, which admit more than
60% of immigrants based on
skill. His bill would make
AKZO
Continued from Page One
too low, but the hedge fund
stepped up pressure on Akzo
to talk with PPG. Elliott said it
might use Akzo’s corporate by-
laws to force a special share-
holder meeting to address
PPG’s overtures.
Some analysts have said
Akzo’s Dutch corporate rules
protect the company, rather
than make it vulnerable to El-
liott’s move.
In a call with reporters,
Akzo Chief Executive Ton Büch-
ner wouldn’t say whether he
had spoken with Elliott about
PPG’s latest approach but con-
firmed he had spoken with the
fund after the initial offer.
Akzo shares were off 1.8% at
€75.25 in afternoon Amster-
dam trading, suggesting inves-
tors remain skeptical about
the success of PPG’s overtures.
The standoff comes amid a
wave of consolidation in the
chemicals industry, including a
$120 billion merger of U.S. gi-
ants Dow Chemical Co. and Du-
Pont Co., and Bayer AG’s
planned $57 billion takeover of
Monsanto Co., as the industry
contends with weak growth and
overcapacity.
administration’s policy agenda
is this year, with limited legisla-
tive days remaining in the cal-
endar,” she said. “There is little
doubt some stimulus will come
through, but it is likely to be
smaller and take longer to hit
the real economy than many in-
vestors would like to believe.”
But if Mr. Trump’s woes are
bolstering emerging markets,
he has scope to spoil the party,
particularly by pushing his
campaign pledges to get tough
on the U.S.’s trade partners.
“The market seems to have
forgotten about the rhetoric
Trump has talked about re-
garding trade,” said Fidelity’s
Ms. Yeung.
THE WALL STREET JOURNAL.
most relatives ineligible for
sponsorship, except children
and spouses, while leaving
the employment quota un-
changed. His staff estimates
that would reduce annual le-
gal immigration to about
540,000 after a decade.
Whether immigration de-
presses wages is hotly de-
bated. An exhaustive review
by the National Academy of
Sciences concluded the im-
pact is “very small” for the
overall population, while
varying between zero and
sizable for the unskilled, de-
pending on the study.
nomics are only part of the
problem; immigration creates
other strains, on “security,
community, identity.”
M
ore practically, Mr.
Cotton says the pub-
lic wants fewer immi-
grants, and when mainstream
politicians don’t listen, voters
turn to candidates who do,
such as Mr. Trump and West-
ern Europe’s many populist
anti-immigrant parties. “As
an elected official you can lis-
ten to those concerns and try
to solve them…or you can
stick your head in the sand
and let it fester.”
There are problems with
Mr. Cotton’s approach. The
Some analysts have consid-
ered Akzo’s takeover defense a
major obstacle to PPG acquir-
ing its Dutch rival, unless of
course the two sides can agree
on friendly terms.
Akzo’s articles include so-
called priority shares, which
give holders “ultimate discre-
tion” over the composition of
Akzo’s management and super-
visory boards, according to Ol-
ivetree Financial, a research firm
5,000
Jobs possibly threatened by a deal,
according to four Dutch provinces
that specializes in analyzing
takeovers. The priority shares
are held by Foundation Akzo No-
bel, whose board consists of
members of the company’s su-
pervisory board who aren’t on
the audit committee. “There is
no real way in which an un-
wanted suitor can force its way
into Akzo, even with the pro-
gression of time,” Olivetree
wrote in a recent report.
However, Elliott is betting
that it can successfully chal-
lenge the power of Akzo’s pri-
ority shares if necessary. The
activist fund manager argues
that shareholders with a com-
bined stake of at least 10% can
call for a shareholder vote to
remove members of the Dutch
company’s management and
supervisory board members, if
a majority of shareholders
support the move.
If Akzo “is remiss in its gov-
ernance obligations to share-
holders, Elliott will consider ap-
propriate remedies, including
possibly requesting the convoca-
tion of an [extraordinary general
meeting] of Akzo Nobel,” the
hedge fund said in a release.
In its new proposal, Pitts-
burgh-based PPG offered
€56.22 in cash and 0.331 PPG
shares for each Akzo share. Its
previous offer was €54 in cash
and 0.3 PPG shares.
Akzo said a merger would
lead to a large number of asset
disposals because of overlaps
in both geography and busi-
ness lines, and would lead to
significant job cuts.
Local politicians in the
Netherlands share that con-
cern, presenting another po-
tential obstacle for PPG. Earlier
this week, four Dutch prov-
inces issued a statement warn-
ing that a deal would threaten
the loss of more than 5,000
jobs due to potential overlap of
the two companies’ businesses.
The Dutch company also
cited a “culture gap” between
the two firms.
“We are convinced that Akzo
Nobel is best placed to unlock
the value within our company
ourselves,” Mr. Büchner said.
Mr. Büchner said Akzo plans
CORRECTIONS 
AMPLIFICATIONS
Readers can alert The Wall Street
Journal to any errors in news
articles by emailing
wsjcontact@wsj.com.
first is that despite his admi-
ration for Australia and Can-
ada, his bill would admit one-
tenth as many skilled
immigrants, relative to popu-
lation, as those countries. He
would thus leave the country
short of the workers needed
to sustain even today’s slow
economic growth—never
mind Mr. Trump’s much
higher growth ambitions—
and support the mounting
ranks of retired baby boom-
ers.
The second is that while
Mr. Cotton argues for fewer
immigrants based on eco-
nomics and assimilation, Mr.
Trump hammers away at the
threat of crime and terror-
ism, particularly by Mexicans
and Muslims. Mr. Cotton
doesn’t condone Mr. Trump’s
language, nor does he dis-
avow the supposed link be-
tween crime and immigra-
tion. Yet independent
researchers overwhelmingly
find that immigrants commit
less crime than the native
born, says Alex Nowrasteh, a
pro-immigration scholar at
the Cato Institute.
Such unsubstantiated ste-
reotyping colors what should
be a fair-minded debate over
less-open borders. Mr. Cot-
ton’s case, despite its short-
comings, deserves one.
to separate its special-chemicals
division, a move it had said it
was considering in response to
PPG’s initial unsolicited offer. He
said the company was weighing
various strategic options for the
separation but hadn’t yet de-
cided which to pursue. The split
will be reflected in Akzo’s finan-
cial guidance “soon,” he said.
PPG, whose brands include
Pittsburgh Paints, Olympic and
Glidden, said earlier this month
that it continued to believe in
the strategic rationale for the
deal despite the initial rejection.
In a statement Wednesday, PPG
defended its latest offer, arguing
it provides Akzo shareholders
with “substantial” upfront cash
and shares to benefit from any
takeover. PPG said Akzo’s board
has so far declined to discuss
any of the proposals.
The takeover tussle puts at
odds two of the world’s oldest
industrial companies. Akzo No-
bel, which counts Dulux, Sik-
kens, Interpon and Eka among
its brands, was created from
the merger of paint and chemi-
cals companies in Sweden and
the Netherlands that dated
back more than a century.
Among them was a chemicals
firm founded by Alfred Nobel,
who launched the prizes that
bear his name. After the
merger in 1994, Akzo acquired
two of Britain’s oldest paint
and chemicals firms.
PPG, founded in 1883 as
Pittsburgh Plate Glass Co., was
the first U.S. company to suc-
cessfully market large sheets
of glass, until then an expen-
sive rarity. It quickly expanded
into chemicals to secure a sup-
ply of raw materials and was
an early supplier of the auto-
motive and aviation industries.
—Monica Houston-Waesch
and Christopher Alessi
in Frankfurt contributed
to this article.
THE WALL STREET JOURNAL.
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THE WALL STREET JOURNAL. Thursday, March 23, 2017 | A3

WORLD NEWS
Erdogan Faces Challenge in Turkey Parliament
Attack
Leader’s popularity dip,
In It Together
economic woes dent
support for changes to
Turkey's referendum is a test for
President Erdogan; he and his
Stuns
empower presidency "Yes" campaign are both
struggling for majority support.
Support for the
London
BY MARGARET COKER BY JENNY GROSS
constitutional changes
ISTANBUL—In a cavernous No 44.0% LONDON—A sport-utility
movie theater in central Istanbul vehicle struck pedestrians on
one recent evening, only two Yes 42.4% a central London bridge near
people had tickets to see the Parliament, leaving at least
Undecided 13.6%
sweeping film about President one person dead and a dozen
Recep Tayyip Erdogan’s rise President Erdogan’s injured, according to a doctor
from a saintly childhood to be- on the scene, in an attack po-
approval rating
come one of Turkey’s longest- lice said they were treating as
serving leaders. 70% a terrorist incident.
KAYHAN OZER/ASSOCIATED PRESS

The cinematic extravaganza, 60 On the grounds of Parlia-

“Reis,” or “Chief” in Turkish, ment, a police officer was
50
has been a box-office flop, illus- stabbed and the alleged assail-
trating the steep climb that the 40 ant shot by police, according
president and his party have in 30 to a lawmaker. The landmark
convincing the nation to vote was placed on lockdown and
2015 ’16 ’17
“Yes” on April 16 in a constitu- police and paramedics
Source: Metropoll poll; most recent of 1,000
tional referendum that is very likely voters conducted February 2017; swarmed the area. Prime Min-
much a vote about Mr. Erdogan. margin of error: +/-2.0 percentage points ister Theresa May’s Downing
Opinion polls suggest a dead- A film about President Recep Tayyip Erdogan, above in Ankara on Wednesday, has been a box-office flop. THE WALL STREET JOURNAL. Street office was also locked
lock among likely voters over down, according to a govern-
the series of proposed changes lowed a failed coup attempt last dia outlets. The “Yes” message over its refusal to allow AKP sway undecided voters. On a ment spokeswoman.
that would radically remake summer, but is struggling with dominates the airwaves. ministers to campaign among sunny Saturday afternoon in a Colleen Anderson, a doctor
Turkey’s democracy and could an economic downturn and ter- Mr. Erdogan’s ruling Justice Turkish expatriates there. working-class Istanbul neigh- at the scene on Westminster
allow Mr. Erdogan to extend his ror threats from Islamic State and Development Party, or AKP, The government has also borhood, a crowd of 500 senior Bridge, said a woman was
14-year rule by another decade. and the Kurdistan Workers’ says the referendum will herald raised fears of spies and fifth citizens gathered to hear retired killed after she was trapped
Some ruling-party officials say Party, or PKK. a new, prosperous chapter for columnists. This past weekend, government officials explain under the wheel of a bus. An-
they fear an uphill battle ahead. Opposition officials say the Turkey. The campaign aims to Mr. Erdogan called a detained why voting “No” was their patri- other dozen bystanders were
A “Yes” result would support constitutional changes would reach outside the party’s base journalist, a dual German-Turk- otic duty. injured across the length of
the transformation of Turkey’s cement what they see as a trend and draw voters from Turkey’s ish national, a spy who he was The audience laughed at the nearly 300-yard bridge,
parliamentary system with the toward authoritarianism. Lead- nationalists—a group that gen- glad was behind bars. Prime jokes at Mr. Erdogan’s expense, Ms. Anderson said.
establishment of an executive ers of the “No” campaign, who erally spurns Mr. Erdogan but Minister Binali Yildirim tells ral- and clapped loudly for speakers She said she treated a po-
presidency with significant are fragmented across the politi- helped the AKP pass the consti- lies that there is no difference who said Turkey faced economic liceman who had multiple rib
power to shape legislation and cal spectrum, criticize what they tutional reforms through parlia- between the supporters of the collapse if the president’s power fractures and a leg fracture.
appoint judges. say are unfair conditions for the ment in December. “No” campaign and the terror wasn’t reined in. “Think of your The leader of the House of
That is making for a heated vote, as the government has Most visibly, the ruling party groups threatening Turkey. grandchildren and their future,” Commons, David Lidington,
campaign with large stakes. Mr. jailed dozens of legislators and has sought to whip up anti-Eu- Some leaders of the “No” said Abdullatif Sener, a former said an officer was stabbed at
Erdogan is now ruling under a critics of the president and shut ropean sentiment in a diplo- campaign believe the economic AKP finance minister who left Parliament and an alleged as-
state of emergency that fol- down 160 mostly opposition me- matic spat with the Netherlands message is their best tactic to the party in 2008. sailant was shot by police.

Mideast Airports Race to Implement Electronics Ban

BY MARGHERITA STANCATI At Riyadh’s international air- vantage of 16 hours during
AND NICOLAS PARASIE port, staff at Saudia’s check-in which I could be working,” said
counter instructed passengers Bassam Islam, a Saudi software
DUBAI—Passengers and air- boarding an early flight to engineer, who Wednesday was
lines in the Middle East scram- Washington, D.C. to pack laptops preparing to board the 16-hour
bled to make sense of new rules and tablets in their suitcases. At Emirates flight from Dubai to
banning many carry-on elec- the gate, passengers had to un- Los Angeles, laptop in tow. He
tronics on flights to the U.S. and dergo a second, full security in- said he hoped the U.S. and U.K.
Britain on Wednesday, as carri- spection: metal detectors for governments would rethink
ers roll out the new restrictions travelers and an X-ray machine their restrictions.
over the next few days. for carry-on luggage. That is “I have had things stolen
On Tuesday, the U.S. and U.K. standard procedure for U.S.- from my luggage before during
said they would require most bound flights from Saudi Arabia, transit,” he said. “I’ve had a
electronic gadgets other than but this time they were also digital camera disappear. My
SEDAT SUNA/EUROPEAN PRESSPHOTO AGENCY

phones to be checked in on di- screening for electronic devices, laptop is very important to
rect flights from a handful of according to lawyer Christopher me—and I don’t like the risk of
Middle East and North African Johnson, who was on the flight. putting it in my checked-in lug-
airports, citing worries over ter- The process “was much bet- gage. I will avoid it if I can.”
rorism. The governments ha- ter than I feared,” Mr. Johnson Business people in the Mid-
ven’t cited specific threats. said by email during the flight. dle East have reacted strongly
U.S. officials have given air- He was planning to use his to the new rules, faced with the
lines affected—including the smartphone on the journey, prospect of working on their
Persian Gulf’s big three, Emir- saying it could do almost any- phones rather than laptops, or
ates Airline, Qatar Airways and thing a laptop or tablet could, not working at all, during the
Etihad Airways—until Saturday “so long as Wi-Fi works, as it long flight to the U.S.
to conform to the new rules. is now, intermittently.” However, parents, too, are
The U.S. rules affect airports in A passenger in Istanbul. Turkish officials have publicly criticized the new electronics ban. At Dubai’s main hub, Emir- worried.
eight Middle East and North Af- ates staff members were warn- “These people making the
rican countries, including flight guine—hours after the restric- Clark. Devices will then be spate of terror attacks and air- ing passengers about the Sat- decision to ban laptops and
hubs like Dubai and Abu Dhabi. tions were disclosed, Emirates stowed in the plane’s cargo and lines have been struggling to at- urday start to the new iPads clearly don’t travel with
The U.K. rules affect a tweeted “Who needs tablets and returned when the flights lands tract overseas passengers. restrictions. Some passengers, young fidgety children,” said
slightly different set of airports. laptops anyway? Let us enter- in the U.S., he added. At least two airlines have al- meanwhile, were rethinking Amanda Hodge, who is based in
Britain is exempting Dubai, Abu tain you,” along with a video of Turkish officials have pub- ready implemented the rules: travel plans. Faced with the Jakarta, Indonesia and some-
Dhabi, Kuwait City and Doha, actress Jennifer Aniston channel licly criticized the new rules and Qatar Airways introduced them prospect of not being able to times transits through Dubai.
Qatar, from its restrictions. The surfing the airline’s in-flight en- said they are pushing Washing- on Tuesday and Saudi Arabian work or watch movies on a She has a 2½ year old daughter
U.K. hasn’t set a deadline for tertainment options. ton to change course. Shares in Airlines, known as Saudia, on laptop, travelers over the last who often flies with her. “They
compliance yet. The airline is also working on Turkish Airlines and Pegasus Wednesday. Kuwait Airways two days have said they may will be responsible for the mis-
Officials from some of the af- “a solution that will enable our Airlines fell Wednesday, with in- plans to implement them on consider connections in Eu- ery of millions of passengers
fected airlines said they were passengers to utilize their elec- vestors fearing the ban could Thursday and Etihad and Emir- rope to avoid the restrictions. traveling in close proximity to
racing to introduce the new tronic devices to the last possi- hurt business. Turkey’s tourism ates said the new rules would “I may decide to fly through toddlers,” she said.
rules on Saturday, as planned. ble moment” before boarding, industry has already been hard apply on their U.S.-bound flights a city in Europe to travel to the —Yeliz Candemir in Istanbul
Some airlines appeared san- said Emirates’ President Tim hit by political instability and a from Saturday. U.S. in the future to take ad- contributed to this article.

Strike Said to Hit Civilians Near Raqqa ECB Says U.S. Should
BY NOAM RAYDAN Raqqa Is Being Slaughtered Si-
lently came as officials of the
ground forces close in on Raqqa
and the coalition’s air campaign
week that at least 46 Syrian ci-
vilians were killed in a coalition
Curb Barriers to Trade
BEIRUT—The U.S.-led coali- 68-nation coalition gathered in in the area intensifies. airstrike near the northern Syr- BY TOM FAIRLESS tectionism may actually in-
tion fighting Islamic State said Washington at the invitation of The observatory’s casualty ian city of Aleppo. crease America’s deficits,
Wednesday it had “no indica- the Trump administration to toll couldn’t be independently A Pentagon spokesman later FRANKFURT—The European rather than reducing them.
tion” that its aircraft carried discuss strategy to defeat Is- confirmed. confirmed the airstrike on Central Bank on Wednesday It found that economies
out an airstrike this week that, lamic State. The coalition has been ac- March 16 but said it was un- defended Germany’s massive whose firms are more en-
according to opposition moni- About 116 civilians have been cused of causing civilian casual- aware of any “credible” reports foreign surpluses as a sign of gaged in international value
toring groups, left at least 33 killed in coalition airstrikes ties before. of civilian casualties. its trading prowess and sug- chains—creating parts of the
Syrians dead in a school shel- since March 8, the observatory Rescue workers and opposi- —Tamer El-Ghobashy in Erbil, gested that the U.S. should fo- same product in different
tering the homeless. said, as U.S.-backed Kurdish tion monitoring groups said last Iraq, contributed to his article. cus on curbing its own persis- countries—tend to have larger
Opposition groups that mon- tent deficits by encouraging its foreign surpluses or smaller
itor the Syrian conflict said ear- firms to trade more. deficits.
lier Wednesday that coalition The ECB report wades into Persistent surpluses “do
aircraft had hit the school near a growing argument over not, as is often argued, reflect
the militant-held city of Raqqa. global trade and comes four domestic distortions, but are
One of the organizations, the days after Group of 20 finance in fact welfare-maximizing
U.K.-based Syrian Observatory ministers, at a meeting in Ger- outcomes against the back-
for Human Rights, described many, dropped a longstanding ground of differences in econ-
the bombing Monday as a “new commitment to free and open omies’ competitiveness,” the
DELIL SOULEIMAN/AGENCE FRANCE-PRESSE/GETTY IMAGES

massacre committed by the global trade following resis- report said.

U.S.-led coalition.” tance from U.S. Treasury Sec- It urged the U.S. and other
In its statement saying it had retary Steven Mnuchin. deficit countries to adopt poli-
no evidence of Monday’s air- Germany’s foreign surpluses cies that “reduce protectionist
strike, the coalition noted that have come under fire on both barriers,” or engage in multi-
its aircraft routinely strike Is- sides of the Atlantic amid con- lateral free-trade agreements.
lamic State targets near Raqqa, cerns that they reflect global This isn’t the first time the
the Sunni Muslim radical economic distortions. The ECB has defended Germany
group’s de facto capital in Syria. Trump administration has from international criticism of
It also said it would provide its sharply criticized surplus its massive foreign surpluses.
civilian casualty team with the countries like China and Ger- Responding to a question on
observatory’s information. many for exploiting global the German surpluses earlier
The claim of coalition re- trading relationships at Amer- this month, ECB chief Mario
sponsibility for the airstrike by ica’s expense. Draghi said he didn’t think
the observatory and the anti- But in its study, the ECB ar- there was “any merit in attack-
government activist network Syrians at a makeshift camp for displaced people near the northern town of Manbij on March 8. gued that a reversion to pro- ing Germany.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Thursday, March 23, 2017
New Avian-Flu Threat Spreads Across Asia
Death toll climbs from
current outbreak,
threatening region’s
poultry producers
BY LUCY CRAYMER
Avian influenza is spreading
across Asia in what may be
the worst outbreak in seven
years, as the human death toll
rises and chickens are culled
in Japan, South Korea and
China in an effort to contain
the disease.
In January and February,
140 people in China died from
bird flu, according to the lat-
est data from the National
Health and Family Planning
Commission, the highest
number since 2010, when 147
died.
The outbreak is also upend-
ing the poultry industry, as
wariness over chicken prod-
ucts weighs on prices in China,
while other markets rely on
Chinese Fury Clouds Showdown With South Korea
Seoul’s deployment of U.S.-made missile defense system vexes Beijing; longtime rivalry to play out on pitch
BY CHUN HAN WONG
BEIJING—Chinese soccer
fans are tapping nationalistic
anger against Seoul to de-
ride the visiting South Ko-
rean national team, ahead of
a match that China must win
to keep alive its fading bid
to reach the next World Cup.
South Korean players and
fans are bracing for a hostile
reception from Chinese sup-
porters angry over Seoul’s
deployment of a U.S.-made
missile-defense system,
which Beijing says under-
mines its own security.
China has ramped up eco-
nomic warfare against South
Korea in recent weeks, while
some ordinary Chinese have
pitched in with a string of
grass-roots protests across
China.
Defeat in Thursday’s
match would all but elimi-
nate China, whose players
still cling to a theoretical
chance of qualifying for the
2018 World Cup. Some Chi-
nese are characterizing the
coming clash as a grudge
match, with their nation’s
pride at stake.
“The Chinese national
team should do its bit, and
try to smack South Korea in
the face,” a fan wrote on
China’s popular Weibo mi-
croblogging service. Another
SOUTH KOREA
Salvaging Begins
Of Sunken Ferry
Workers began the difficult
process of raising a 6,800-ton
ferry that sank in 2014, killing
more than 300 people and trig-
gering a public uproar.
The salvaging operation began
after hours of preparations and
tests, an official from the Minis-
try of Oceans and Fisheries said.
Workers on two barges have
slipped 66 cables beneath the
Sewol ferry, which had been ly-
ing on its left side in about 130
feet of water. The cables are
connected to a frame of metal
beams divers have spent
months putting in place.
The bodies of 295 passen-
gers—most of whom were stu-
dents on a high-school trip—
were recovered after the sinking
on April 16, 2014, but nine are
still missing. Relatives are hop-
ing that those remains will be
found inside the ferry.
The ministry believes workers
will be able to lift the upper side
of the ferry about 42 feet above
the surface by Thursday morning
if water and weather conditions
remain stable.
Workers will then begin loading
it onto a semisubmersible, heavy-
lift vessel that will carry it to a
mainland port. That process, includ-
ing emptying the ferry of water
and fuel, is expected to take days.
The ferry disaster touched off
an outpouring of national grief
and triggered anger over what
was seen as a botched rescue
job by the government.
The ferry’s captain is serving a
life sentence after a court found
him guilty of committing homi-
cide through “willful negligence”
because he fled the ship without
issuing an evacuation order.
—Associated Press
imports from countries such
as the U.S. to ease domestic-
supply shortages.
The United Nations’ Food
and Agriculture Organization
said that as of early March,
there were more reported hu-
man cases of H7N9—the cur-
rent strain of bird flu in
China—than the combined
number of human cases
caused by other types of the
virus anywhere in the world.
That strain was first de-
tected in China four years ago
and can infect both humans
and live birds, although most
people who have contracted it
had recently been exposed to
live poultry or potentially con-
taminated environments, ac-
cording to the World Health
Organization.
Bird-flu outbreaks haven’t
been isolated to China. A dif-
ferent strain in South Korea
has forced the government to
order the culling of more than
30 million birds to prevent the
spread of the disease. In
fan described the match as
the Chinese team’s “battle to
rectify its name,” and urged
the players to “do or die.”
Both sides are taking pre-
cautions ahead of the soccer
showdown. Sports adminis-
trators in China’s central Hu-
nan province, where the
match is scheduled, are urg-
ing fans to “watch the match
in a civilized manner” and
behave “rationally” no mat-
ter which team wins.
The South Korean Em-
bassy advised compatriots
Monday to “refrain from
mass cheering in public
places,” and it urged South
Koreans to “pay special at-
tention not to cause any fric-
tion with Chinese people.”
Roughly 180 South Kore-
ans supporters are expected
to attend the match, accord-
ing to the Korea Football As-
sociation, which has advised
fans to travel together and
not wear South Korean jer-
seys outside the match
venue, the 55,000-capacity
Helong Stadium in the city
of Changsha.
Chinese authorities are
capping attendance at 31,000
for safety reasons, with
some 10,000 security person-
nel due to be deployed,
South Korea’s semiofficial
Yonhap News Agency re-
ported, citing the Korea
CHINA
Beijing Denies Plan
For Offshore Station
Beijing denied having plans to
build on a disputed South China
Sea outcrop also claimed by the
Philippines, days after a Chinese
mayor triggered alarm in Manila by
raising the prospect in an interview.
Foreign Ministry spokes-
woman Hua Chunying said re-
ports about Chinese plans to
construct an environmental-
monitoring station on Scarbor-
ough Shoal “are mistaken,” citing
checks with relevant Chinese au-
thorities.
Her denial followed an un-
usual sequence of events last
week, when a state-owned
A submersible vessel on Wednesday worked to salvage the sunken Sewol ferry in waters off Jindo,
South Korea. The craft went down in April 2014, killing more than 300 people.
HK JP KO ML SI IN UK
WORLD NEWS
Medical staff treated a H7N9 bird-flu patient in Wuhan last month.
Japan, hundreds of thousands
of birds have been wiped out.
There have also been out-
breaks elsewhere in Asia, Eu-
rope and the U.S. in recent
Members of China's national team trained for their World Cup qualifying match on Thursday.
Football Association. Chang-
sha police will escort South
Korean players and fans to
and from the stadium, the
association said.
South Korea has long had
a better soccer team. The
“Red Devils” once held China
to a winless streak from
WORLD WATCH
newspaper quoted Xiao Jie,
mayor of Sansha, a Chinese out-
post in the South China Sea, as
saying local authorities would
build environmental-monitoring
stations on several reefs and
maritime features, including
Scarborough Shoal—only to later
delete the remark from the in-
terview on its website.
Mr. Xiao’s remark prompted
Manila to ask clarification from
Beijing over its intentions. Philip-
pine officials say China has prom-
ised no construction on the unin-
habited outcrop—a pledge that
facilitated the recent rapproche-
ment between the two countries.
The Philippine Department of
Foreign Affairs didn’t respond to
a request to comment.
—Chun Han Wong
FR MN PR THE WALL STREET JOURNAL.
tility swings in the global avian-flu outbreak have cre-
poultry industry in terms of ated shortages of homegrown
prices and volumes,” said Nan- supplies, so the country was
Dirk Mulder, an analyst at Ra- importing millions of eggs
bobank. The human avian-in- from the U.S. before an out-
fluenza cases in China are break of bird flu there.
reducing the appetite for poul- Mr. Chen expects prices in
try imports there in the near China to recover as the crisis
term, he added. eases. He said the strain of
Prices in China for broiler avian flu affecting China tends
chickens, a breed grown for to spread faster in the winter
meat, are down one-third from as it can’t survive in warmer
TOM XIONG/EUROPEAN PRESSPHOTO AGENCY
a year ago while live chicken temperatures. As the weather
prices have fallen 13%, accord- warms, the situation will likely
ing to data released by China’s improve, reducing the risk of
Ministry of Agriculture, even flu outbreaks, he said.
as chicken imports slumped While China banned U.S.
24% from a year earlier in chicken outright in 2015 over
January. February export data avian-flu concerns, other im-
are due out on Thursday. porters such as Thailand could
“Farmers have been selling benefit from rebounding de-
poultry at dumping prices for mand.
fear of contagion,” said Chen The U.S. Department of Ag-
Jiao, an agricultural analyst at riculture estimates that
brokerage firm Industrial Se- China’s chicken imports will
months, including an outbreak curities. rise nearly 10% for all of 2017.
on a Tennessee chicken farm In South Korea, poultry- If that happens, China would
affiliated with Tyson Foods product prices are moving in become the world’s second-
Inc. in early March. the opposite direction. Bird biggest poultry importer be-
Bird flu “creates huge vola- cullings there because of the hind Mexico.
War, before winning the
whole tournament. Iran beat
the U.S. in the 1998 World
Cup in a 2-1 win during the
round-robin phase.
For China, beating South
Korea would salvage some
pride after a string of poor
performances has left its
World Cup dreams dangling
by a thread.
Its men’s national team
made it to the World Cup
just once, in 2002, and has
languished in the middle
tiers of international soccer.
Now ranked 86th, four
places below the Faeroe Is-
lands (population 50,000),
China still struggles to break
AGENCE FRANCE-PRESSE-GETTY IMAGES
into Asia’s elite, despite re-
cent efforts by Chinese soc-
cer fan No. 1, President Xi
Jinping, to overhaul the do-
mestic game.
South Korea, meanwhile,
ranks among Asia’s top
teams, having appeared in
the World Cup nine times. In
2002, it became the first
Asian team to reach a World
Cup semifinal; it finished
1978 to 2010 that Chinese side a Beijing stadium after fourth.
fans dubbed “Koreaphobia.” Japan beat China in the China, for its part, hopes
Nationalistic Chinese fans Asian Cup final. to extend a lucky streak in
have in the past run riot af- The World Cup has a his- Changsha. The national team
ter politically charged tory of geopolitically fraught hasn’t lost in the eight
matches. In 2004, hundreds matchups. In 1986, Argentina matches it played there since
of Chinese fans blocked traf- knocked out England with a 2005.
fic, burned Japanese flags 2-1 quarterfinal victory, four —Min Sun Lee in Seoul
and clashed with police out- years after the Falklands contributed to this article.
North Korea
ISLAMIC STATE Islamic State at the State Depart-
ment.
Missile Test
U.S. Sets Out Goals
For Protected Areas
The Trump administration has
been exploring various proposals
for establishment of protected
Failed, U.S.,
Secretary of State Rex Tiller-
son said the U.S. would work to
areas, sometimes called safe
zones, in Syria. The idea has been
Seoul Say
establish “interim zones of sta- pushed by Turkish President Re- BY JONATHAN CHENG
bility” to protect refugees in cep Tayyip Erdogan but the Pen-
Syria and Iraq as the interna- tagon has long opposed the idea SEOUL—North Korea at-
tional coalition against Islamic of creating heavily guarded zones tempted to fire a missile from
State works to retake territory because of the cost and military its east coast on Wednesday
from the extremist group. commitment required. morning, but the missile appar-
“The United States will in- There is growing receptive- ently exploded within seconds
crease our pressure on ISIS and al ness among U.S. and interna- of launch, U.S. and South Ko-
Qaeda and will work to establish tional officials to the idea of set- rean officials said, days after
interim zones of stability, through ting up unofficial Syrian safe the isolated country claimed a
cease-fires, to allow refugees to zones, which some officials have breakthrough with a high-
return home,” Mr. Tillerson said, dubbed “interim de-escalation ar- thrust rocket engine.
addressing the first meeting un- eas,” along Syria’s borders with North Korea’s launch of the
der the Trump administration of Turkey and Jordan. unidentified missile also comes
the 68-member coalition against —Felicia Schwartz days after U.S. Secretary of State
Rex Tillerson left the region af-
BELGIUM ter meeting with his counter-
parts and the leaders of Japan,
A Year On, Concerns South Korea and China, and de-
Of New Attack Grow livered tough words aimed at
reining in North Korea’s missile
U.S. and Belgian officials have and nuclear program.
grown increasingly worried The U.S. Pacific Command
about the prospect that a key said the launch happened about
figure behind the 2016 Brussels 7:49 a.m. It said the launch was
bombings is plotting a new ter- assessed as a failure.
ror attack, people briefed on the South Korea’s defense minis-
investigation said. try said the launch took place
The Brussels bombings— from a site near the eastern
which killed 32 people and in- coastal city of Wonsan. The mis-
jured hundreds more, some with sile was fired into the waters
life-altering injuries—took place between Japan and the Korean
SOUTH KOREAN MARITIME MINISTRY/GETTY IMAGES
one year ago. As the anniversary Peninsula, the ministry said.
approached, anxiety has grown On Tuesday, the Associated
among some officials about a Press reported that North Ko-
follow-up attack. rea appeared to be preparing a
Investigators see Oussama missile launch from a site near
Atar, a Belgian national who served Wonsan, citing unidentified
time in Iraq’s Abu Ghraib prison, as U.S. military officials.
having the motivation and possibly Japan’s Nikkei Stock Average
the means to organize a new at- declined in Tokyo after Kyodo
tack or carry one out himself. News first reported the missile
Mr. Atar is believed to be in launch. The Nikkei finished the
Syria and is likely to grow more day down 2.1%. In Seoul, the
desperate as pressure mounts on benchmark Kospi composite in-
Islamic State there, officials said. dex ended down 0.5% after re-
—Julian E. Barnes ports of the launch.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Thursday, March 23, 2017 | A5

U.S. NEWS
Court Nominee Faces Questions on Trump
Neil Gorsuch avoids
pitfalls of questioning
and appears on a safe
path to confirmation
BY BYRON TAU

WASHINGTON—Neil Gor-
such, President Donald Trump’s
nominee to the U.S. Supreme
Court, is likely to rule on a vari-
ety of issues related to the presi-
dent if he is confirmed, a pros-
pect that elicited a flurry of
questions at a Senate hearing
Wednesday.
Sen. Patrick Leahy (D., Vt.)
pressed Judge Gorsuch on the
Constitution’s emoluments
clause, a provision banning
U.S. officials from receiving
gifts from foreign govern-
ments. Democrats have com-
plained that Mr. Trump’s web
of international business ties
could violate that clause.
Asked to discuss the provi-
sion, Judge Gorsuch said it is
“not a clause that attracted a lot
of attention until recently,”
prompting knowing laughter in

JUSTIN SULLIVAN/GETTY IMAGES

the committee room. He added
that it has “sat in a rather dusty
corner,” resulting in a lack of
case law about it.
“Among other things, it pro-
hibits members of the govern-
ment of this country from taking
emoluments—gifts from foreign
agents,” Judge Gorsuch said.
“The question is what exactly
that means.”
But citing the possibility of
future litigation on the matter,
particularly in relation to Mr.
Trump’s business interests,
Judge Gorsuch largely declined
to expound on his thoughts
about the provision, saying he
was “hesitant” to discuss it.
“I have to be very careful
about expressing any views,”
Judge Gorsuch told the Senate
Judiciary Committee on the sec-
ond day of questioning at his
confirmation hearing.
An array of issues involving
Mr. Trump—from his executive
Neil Gorsuch, President Donald Trump’s nominee for the Supreme Court, testifying Wednesday at his Senate confirmation hearing on Capitol Hill.
order on travel to his efforts to
roll back regulations advanced
by predecessor Barack Obama—
are likely to reach the Supreme
Court in some form. That has
prompted Democrats to press
the question of his indepen-
dence.
Judge Gorsuch has said force-
fully that he could rule fairly re-
gardless of the parties involved.
The exchange on the emolu-
ments clause came as the com-
mittee began what may be its fi-
nal day of grilling Judge
Gorsuch. If he emerges without
serious missteps, as he did Tues-
day, the committee would likely marital privacy. women’s rights and its connec- fornia, saying: “I know what life
approve his nomination when it Judge Gorsuch said that since tion to the doctrine of original- was like. I have heard of young
votes on April 3. the Griswold case was more ism, which argues that the views women killing themselves.” She
The nomination would then than 50 years old, it was a stable of the Constitution’s writers raised the specter of abortion
head to the Senate floor with a precedent, and he added that should be emphasized when in- rights and other guarantees for
good chance of success, given threats to the right to use birth terpreting the law. women being rolled back under
Republicans’ 52-48 advantage in control are unrealistic today. Ms. Feinstein noted that the an originalist interpretation of
the chamber. “I just cannot imagine a state writers of the Constitution and the Constitution.
At Wednesday’s session, attempting to pass a law like its amendments, such as the Judge Gorsuch replied that
which followed a nearly 12-hour that. And I can’t imagine a Su- 14th Amendment guarantee to it doesn’t matter whether the
grilling on Tuesday, Sen. Lindsey preme Court of the United equal protection under the law, drafters of Constitution where
Graham (R., S.C.) asked Judge States taking that claim seri- were written at a time when racists or sexists. “The law
Gorsuch about birth control, cit- ously,” Judge Gorsuch said. “I Americans held very different they drafted promises equal
ing the 1965 case Griswold v. don’t see it as a real threat.” views about the rights of women protection of the law to all
Connecticut, which held that a Sen. Dianne Feinstein of Cali- and minorities. persons. That’s what they
state law banning the use of fornia, the committee’s top She recounted her time be- wrote,” he said, referring to
contraceptives was a violation of Democrat, raised the issue of fore abortion was legal in Cali- the 14th Amendment.

Partisan Lines Develop

On Probe of Russia Ties
BY SHANE HARRIS
The public confirmation
this week that federal investi-
gators are probing links be-
tween the Russian government
and associates of Donald
Trump’s presidential campaign
prompted Democrats to renew
their call for an independent
investigation into the matter.
and issuing a report that
members of both parties could
agree upon.
“I would rest a lot easier if
I knew there was an indepen-
dent commission there as a
backup,” Mr. Schiff said.
House Democrats have pro-
posed legislation that would
create a new commission mod-
eled on the panel that investi-
member said he doubted that
the hearings Monday would
prompt new action toward an
independent investigation.
Though members of the House
Intelligence Committee may be
split, that won’t prevent them
from producing a report that
includes both their views, he
said.
Leaders of the committee,
JOSHUA ROBERTS/REUTERS

Federal Bureau of Investiga-
tion Director James Comey, in
an unusual disclosure, ac-
knowledged the investigation
during testimony on Capitol
Hill Monday, thickening parti-
san lines that have formed
around the issue and casting
doubt on the congressional in-
telligence committees’ ability
to complete their own probes
into allegations of Russian in-
terference in the 2016 elec-
tion.
“I don’t know whether we’ll
be able to get to the finish
line,” Rep. Adam Schiff of Cali-
fornia, the senior Democrat on
the House Intelligence Com-
mittee, said Tuesday, adding
that goal would consist of
completing the investigation
gated the Sept. 11, 2001, ter-
rorist attacks. But Republican
leaders want to keep the in-
vestigations where they are
now, in the intelligence com-
mittees, where the GOP holds
chairmanships and majorities.
At Monday’s public hearing,
lawmakers appeared to be
pursuing two different investi-
gations. Democrats focused on
allegations that Mr. Trump’s
campaign aides or associates
may have colluded with Rus-
sian operatives trying to inter-
fere in election.
Many Republicans, defend-
ing the White House, de-
manded an investigation into
the source of leaks about the
FBI’s inquiry to journalists.
One congressional staff
Mr. Schiff and Rep. Devin
Nunes (R., Calif.), the commit-
tee’s chairman, have held joint
news conferences and have
jointly signed letters to federal
agencies to request informa-
tion about recent scandals.
“There is plenty of coopera- James Comey has confirmed an FBI probe of alleged links between Russia and Trump campaign associates.
tion,” the congressional staff
member said. “So they are and haven’t focused their at- The Senate Intelligence the alleged Russian meddling,
both committed to making this tention on leaks. Committee, which is also look- a congressional official said.
a credible and bipartisan in- Russia has denied any in- ing into potential links be- And all committee members
vestigation. We think they can terference. tween Mr. Trump’s associates have been given access to the
put together a report.” Sen. Susan Collins (R., and Russians, has scheduled agency’s material, not solely
A parallel investigation in Maine), said in a January ex- its own public hearing for the chairman and vice chair-
the Senate Intelligence Com- change with then-Director of March 30 and is moving ahead man, the official said.
mittee might feature less par- National Intelligence James with its inquiry. The committee also expects
tisan rancor. Several Republi- Clapper that “it’s important Senate aides have gone to to get access to documents
can members already have that we understand more fully Central Intelligence Agency from other intelligence agen-
expressed concerns in hear- the extent of Russian intru- headquarters in Langley, Va., cies, the official said.
ings about alleged Russian in- sions into the electoral pro- where they have been able to —Alan Cullison
terference in the 2016 election cess.” read agency documents about contributed to this article.

GOP Wrangles for Health-Bill Support as Vote Looms

BY KRISTINA PETERSON they say have pushed up the House Wednesday morning clear procedural hurdles in the
AND LOUISE RADNOFSKY cost of insurance under the with Rep. Steve Scalise, the Senate, where Republicans
ACA. For instance, they want Louisiana Republican who hold 52 seats.
WASHINGTON—Republi- the bill to remove the ACA’s heads the party’s effort to House Speaker Paul Ryan
cans began a crucial day of ne- requirement that insurance round up votes. (R., Wis.) suggested Wednes-
gotiations Wednesday on their policies include specific cover- Mr. McHenry told reporters day that he was still open to
bill to replace the Affordable age provisions, known as es- they were accompanying 10 modifying the bill if Republi-
Care Act, with President Don- sential health benefits, which lawmakers to the White House cans coalesced around altera-
J. SCOTT APPLEWHITE/ASSOCIATED PRESS

ald Trump and House leaders
still looking for support one
day before a scheduled House
vote.
“Big day for healthcare.
Working hard!” Mr. Trump
tweeted Wednesday morning.
A group including conserva-
tive lawmakers currently op-
posed to the bill was expected
to meet with Vice President
Mike Pence at the White
House Wednesday, congressio-
nal GOP aides said.
Even after Mr. Trump
trekked to Capitol Hill on
Tuesday to rally support for
the bill, Republican leaders
faced significant resistance to
their measure from conserva-
include maternity, certain pe-
diatric and mental-health ser-
vices.
“Unless there’s real change,
fundamental change, I do not
see how they get to the 216
number that they need to pass
it tomorrow night,” Rep. Jim
Jordan (R., Ohio) said on
MNSBC Wednesday morning.
He was referring to the num-
House Speaker Paul Ryan said Wednesday he was still open to ber of votes Republicans need
modifying the bill, provided its ‘shortcut’ status wasn’t impaired. to pass the bill if all lawmak-
ers are present and voting.
tive and centrist Republicans. would help people afford in- But Mr. Jordan said conser-
The bill would dismantle much surance if they don’t get it vatives remained open to ne-
of the 2010 health law’s taxes through employers. gotiations on the bill. “We’re
and subsidies, and replace But conservatives have de- still willing to talk,” he said.
them with a system of tax manded that the bill do more Rep. Patrick McHenry (R.,
credits largely tied to age that to unwind federal regulations N.C.) was at the White
who had a “myriad of con-
cerns.”
“We’re bringing them to the
closer,” he said, in an apparent
reference to the president.
GOP leaders have said some
of the changes sought by con-
servatives, including the es-
sential-health-benefits compo-
nent, risk stripping the health-
care bill of its special
procedural status. Republicans
are using a procedural short-
cut that enables them to pass
the health bill with just a sim-
ple majority in both chambers.
The bill qualifies for the short-
cut because it is tied to the
budget.
Most bills need 60 votes to
tions that didn’t threaten the
party’s ability to move the bill
through the Senate with just
Republican votes.
“All Republicans have to
come together and agree,
which is obviously hard,” Mr.
Ryan said on a Wisconsin ra-
dio show.
“When you’re coming
through the homestretch, peo-
ple want to negotiate up until
the end.”
Democrats have railed
against the bill, which they
said would strip millions of
people of health insurance.
—Stephanie Armour
and Natalie Andrews
contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Thursday, March 23, 2017
AVON
Continued from Page One
ulous about losing such items.
“That will never happen,”
said Pam Heller of Irmo, S.C.,
about the discontinued slow
cooker and other items. Her
team sold nearly $500,000
worth of Avon products in the
previous six months. “Avon
would never do that.”
Scott White, chief executive
of the North American busi-
ness, now called New Avon
LLC, says he is cautious about
eliminating products beloved
by representatives.
But Steven Mayer, the Cer-
berus executive driving the
changes, is unwavering. The
crockpot last appeared in a
summer catalog and won’t be
back. “Sometimes you have to
decide and have conviction
about what is right and what is
best for the representatives
and push through,” says the 25-
year restructuring veteran.
“Avon is like a boat that’s
been in the water for 130
years. You have to take it out
and scrape all the barnacles
off,” he says.
Sales by U.S. direct-selling
companies climbed 5% in 2015
to $36 billion, and are up more
than 25% from 2010, according
to the Washington-based Direct
Selling Association. Cerberus is
betting it can overhaul one of
the industry’s most belea-
guered names and catch up
with competitors that are using
social media to add representa-
tives and boost sales.
In coming months, Avon
plans to implement big changes
for sales representatives, in-
cluding richer compensation
and a speedier ordering sys-
tem. It also intends to enter the
fast-growing health and sup-
plement business, going up
against a crowded field that in-
cludes direct-selling giants Am-
way Corp. and Herbalife Ltd.,
Mr. Mayer says.
Cerberus paid $170 million
for an 80% stake in the Avon’s
North American business,
now a separate, private com-
pany. Avon Products owns the
other 20%. Cerberus paid an-
other $435 million for a 17%
stake in Avon Products itself,
which sells outside the U.S.
and is moving its headquar-
ters to London.
Cost cuts
Cerberus says it plans to
cut $90 million in annual
costs while spending an addi-
tional $75 million a year on
advertising, representative
pay, digital systems and other
improvements.
One big challenge for Cer-
berus, whose private-equity
portfolio includes the No. 2 U.S.
supermarket chain and one of
the world’s biggest gun makers,
is meshing with Avon’s unique
army of more than 200,000
North American representa-
tives, most of them women.
Cerberus executives say they
were uncomfortable at first re-
ceiving hugs and kisses, a com-
mon Avon greeting. “There was
a lot of touching,” says Mr.
Mayer. “I wasn’t used to it.”
Mr. Mayer also isn’t accus-
tomed to a workforce not di-
rectly beholden to its bosses.
“You’ve got hundreds of thou-
sands of representatives who
you can excite or train or influ-
ence or disappoint,” he said.
“But you cannot control.”
Indeed, some representa-
tives are openly skeptical about
HELLO
Continued from Page One
English words and con-
sumer-brand names are so
embedded in the colloquial di-
alect that some Iraqis don’t
realize they come from lan-
guages other than Arabic. A
drinking glass in colloquial
Iraqi is “glass,” and is conju-
gated into the Arabic plural:
“glass-at.” A flat tire is de-
scribed with the verb
“banchar,” from the word
puncture.
The origin of the Iraqi
word for rice, “temmen,” is
the subject of much folklore.
The most plausible theory,
according to Iraqi historians
and linguists, is that rice de-
livered for British troops at
the southern port city of
Basra was marked “RICE FOR
TEN MEN.” The ration label’s
last two words stuck.
“These are words that have
intruded into our language!
The legacy of British colonial-
ism,” said Omar Ismail, an eco-
nomics professor, on an eve-
ning stroll through Baghdad’s
Zawraa Park with his wife.
Avon representative Rehnea Walton, right, from Shelby, N.C., makes a delivery to customer Barbara Walton, her mother-in-law.
Global Army
As Avon added representatives, the U.S. share of its total declined.
Active representatives in U.S.
6 million
5 business to Cerberus, shares of
4 0
3 in March 2015 and now has a
2 than $2 billion.
1 berus executives asked when
0 whether the direct-selling
1993 2000
*through September
Source: the company
some planned changes.
Mia “Penny” Baynham, a 51-
year-old representative from
Redford, Mich., has been either
buying or selling Avon products
for 30 years. She thinks Avon
should stick to cosmetics and
skin care and not wade into
health and nutrition items.
“I don’t think they would do
well with that,” she says. “We
have so much of that in stores
now. I just don’t see where
people will order and wait for
it when they can go to a store.”
Some analysts say reviving
Avon’s business in North
America is a long shot, given
the changing times and years
of neglect from a parent com-
pany focused on opportunities
abroad. Before the North
American business was sold, it
posted eight straight annual
sales declines and years of
losses. It lost money again
last year.
UBS analyst Stephen Pow-
ers says a big part of the
problem is that the Avon name
is viewed unfavorably by con-
sumers. “The plan that Avon
and Cerberus put on paper,
there’s nothing wrong with
that plan,” he says. “But they
waited a long time to make
these moves, and the question
is, ‘Is it enough?’ ”
Over the years, Avon added
disparate new products but
didn’t invest in its core cosmet-
ics and skin-care lineups. Mar-
keting focused on touting very
inexpensive products, including
$1.99 lip gloss and a 2-for-
$3.49 deal on eyeliner.
The company never transi-
Two Iraqi men exchange greetings after prayers in Baghdad.
Mr. Ismail, like other
Iraqis, at first denied the
hello-as-goodbye usage, then
caught himself waving
“Hello” as the conversation
ended.
Such cross-pollination isn’t
unique to Iraq. Trade and wars
have carried foreign words,
phrases and languages over
seas and borders. Linguistic
borrowing is especially com-
mon in postcolonial states, like
those in the Middle East.
IN DEPTH
Decline of the Avon Lady
The overall direct-selling industry has been adding representatives,
but Avon has been losing them in its home market.
Global
Avon (North America, not including Mexico)
10% change from a year earlier
–10
–20
’06 ’07 ’08 ’09
2010 ’15*
*through September
THE WALL STREET JOURNAL. Source: the company
tioned to the digital world and wasn’t there.”
failed to embrace social media, Cerberus wants Avon to em-
its new leaders say. Avon brace its key demographic:
abandoned efforts in 2013 to older women in Middle Amer-
upgrade its computer systems ica. The lineup of nutritional
after a pilot in Canada went products, for example, eventu-
disastrously wrong, leading ally will include supplements
representatives to quit in for women entering meno-
droves. pause.
Cerberus’s move to shed Mr. Mayer, the Cerberus ex-
nonbeauty products is a rever- ecutive driving the changes,
sal of the strategy put into says Avon’s core customers,
motion by Avon Products CEO many living in small towns and
Sheri McCoy, who has run the rural areas, will supply growth
company since 2012 and engi- potential if Avon improves its
neered the deal with Cerberus. products and makes selling
She had wanted to increase simpler and more lucrative for
the sale of nonbeauty products representatives.
such as Betty Boop watches
and dishwasher-safe herb
choppers. The company de-
clined to make her available
Avon plans to
for an interview. implement big
More than a dozen Cerberus
employees made Avon their
changes for sales
full-time jobs for the first year representatives.
of the takeover. Some of the
problems, Cerberus believes,
are obvious. In an age when
Amazon.com Inc. promises to “If this election didn’t con-
deliver millions of items to vince people not to ignore
doorsteps in two days, Avon those parts of the country, I
customers who order directly don’t know what will,” he says.
from representatives might Avon entered the nutritional
wait two weeks to receive their market under former CEO An-
products. Customers who shop drea Jung, who led the com-
online can usually get their pany from 1999 to 2012, and
goods within a few days. considered a broader expansion
Mr. White, New Avon’s CEO, into the area. That didn’t hap-
says that before the takeover pen during her tenure.
Avon hadn’t done true market Cerberus created a separate
research nor had its represen- division for that business to en-
tatives received any training in sure it gets adequate attention.
selling via social media. It plans to enter the market
Cerberus, he says, has “an with vitamins, protein powders
analytic discipline, and there and other products with broad
is a sense of urgency that appeal and proven efficacy.
mate “my eye,” on a first or
second meeting.
For the 500 years of the
Abbasid Islamic empire, Bagh-
dad, its capital, was “a focus
of world culture and refine-
ment, the goal of every man of
talent from central Asia to the
Atlantic,” wrote Richard Coke
in “Baghdad: The City of
Peace,” published in 1927.
Until at least the 1950s,
Baghdad’s Muslim, Christian,
THAIER AL-SUDANI /REUTERS
and Jewish communities each
spoke distinct dialects, said
Clive Holes, a British scholar
of Arabic dialects. That was in
addition to other languages,
including Kurdish and Ara-
maic, spoken elsewhere in
Iraq, a linguistic variety
unique in the Arab world, Mr.
But Iraqis are especially Holes said.
lyrical in everyday talk, a rem- From such historical gran-
nant of past centuries when deur, modern Iraqi has turned
Iraqi cities were home to the into a linguistic stew—or des-
greatest writers of the Arabic sert. Anything chocolate or
language. Asking, “sh-lonak,” chocolate-flavored is called
(How are you?) is to ask, liter- “nastaleh,” a mispronuncia-
ally, “What is your color?” tion of Nestlé, the global
Greetings are embellished foods company with popular
with sweet accolades. Terms chocolate brands.
of endearment veer into po- Nestlé was one of the first
etry, even between strangers. multinational companies to
It isn’t unusual to be called set up across the region, and
“my heart” or the more inti- some of its other brands
Industry (U.S.)
2010 ’11 ’12 ’13 ’14
THE WALL STREET JOURNAL.
At the January gathering of
top Avon sellers, Cerberus ex-
ecutives were received
warmly. Hundreds of Avon
representatives, many of them
women in sparkling formal
wear, clapped and shouted
when they learned Avon would
eliminate sales minimums that
required them to reach a cer-
tain threshold before they
would earn commissions.
Rehnea Walton, a mother of
three from Shelby, N.C., began
selling Avon four years ago
when both she and her hus-
band were laid off. Having
twice lost jobs after buyouts,
she initially was suspicious of
Cerberus. Now she is optimis-
tic. “I love that they are listen-
ing to us,” she says.
Some Avon veterans, in-
cluding Ms. Heller, who has
been selling Avon products in
South Carolina for 24 years,
are wary of the planned prod-
uct streamlining. “A lot of
people will say, ‘Oh, I don’t
wear makeup,’ or ‘I already
have a skin cream,’ ” she says.
“And I can say, ‘Well that’s OK,
Avon sells everything.’ ”
Mr. White, the CEO, says
there is a “healthy level of
tension” over the strategy to
eliminate products in a way
that maximizes efficiency
while ensuring representatives
have an adequate selection.
Avon was started in 1866 in
Suffern, N.Y., by traveling
book salesman David McCon-
nell, who discovered that
women favored the free per-
fume samples he carried more
than his books.
have also become generic
terms in other countries,
such as Nescafé for coffee,
said Lynn Al Khatib, a com-
pany spokeswoman based in
Dubai.
“Motta” is used widely in
Baghdad for ice cream, but
people at parlors where it is
served don’t know its prove-
nance. “In Iraq we have our
own dictionary, but we never
thought to go see where we
came up with all this stuff,”
said Muhamad Jbouri, scoop-
ing up cinnamon and pome-
granate flavors.
It turns out Nestlé man-
ages, in a joint-venture, an
ice-cream brand called, you
guessed it, Motta.
Mr. Holes, the historian,
said borrowed words and
phrases often take on a life
of their own: “Once some-
thing is borrowed, it spreads
in ways that have nothing to
do with the original donor
language.”
This may be the best expla-
nation for the ultimate Iraqi
language conundrum: the re-
verse-meaning hello.
Nadia Kuba Obaidi hasn’t
been back to her native Iraq
in nearly three decades yet
THE WALL STREET JOURNAL.
Women with more free time
and money fueled Avon’s
growth through the 1900s. The
Avon Lady became the face of
the company, and product lines
such as Skin So Soft and Anew
skin-care were big sellers. For
many representatives, Avon
provided an opportunity for fi-
nancial independence before
women were commonly ac-
cepted in the workplace.
When U.S. growth slowed,
Avon expanded rapidly into de-
veloping countries such as
China and Brazil, where newly
affluent women sought modern
beauty products that hadn’t yet
arrived at traditional retailers.
The company’s profits nearly
LOGAN R. CYRUS FOR THE WALL STREET JOURNAL
tripled from 1999 to 2004.
Sales sputter
By 2005, sales began to
sputter as Avon struggled with
competition from beauty retail-
ers such as Sephora and a shift
to online shopping. By 2011,
Avon had lost its crown as the
world’s largest direct seller by
sales, to Amway, according to
data from industry tracker Eu-
romonitor International.
Costly restructurings and a
bribery investigation in China
distracted managers. In 2012,
the company turned down an
$11 billion takeover offer
from Coty Inc., a big seller of
perfumes.
Losses mounted and inves-
tors fled. In the year before the
sale of the North American
publicly traded Avon lost 40%
of their value. Avon was re-
moved from the S&P 500 index
market capitalization of less
One of the questions Cer-
considering the Avon deal was
’15*
model had a viable future.
“I was personally surprised
to learn it was a vibrant distri-
bution model,” says Mr. Mayer.
In 2015, Cerberus represen-
tatives visited the Grand Rap-
ids, Mich., headquarters of
Amway to find out more about
the industry. They learned
how representatives are com-
pensated to how to transition
to a digital business model.
Amway declined to comment
on the visit.
The overall direct-selling in-
dustry continues to expand,
with global sales rising 8% in
2015 to $184 billion, according
to the World Federation of Di-
rect Selling Associations.
The industry, however, is
getting more crowded. Old ri-
vals such as Avon, Amway and
Mary Kay Inc. now compete
with online startups such as
Younique LLC, which agreed in
January to be acquired by Coty
in a deal that valued the four-
year-old company at $1 billion.
A simplified product lineup
will help Avon lower costs, as
will streamlining the supply
chain and technology systems.
One way Avon will cut costs
and bring new products to
market faster: a “Shark
Tank”-like approach to prod-
uct development.
Entrepreneurs will present
their product ideas to small
teams that will make quick de-
cisions about whether to add
the item to the Avon lineup.
The aim is to get new products
on the market within six
months rather than two years.
“We’d rather be 80% right
today than 100% right two years
from now,” says Mr. Mayer.
—Joann S. Lublin contributed
to this article.
still says a departing “Hello”
to family and Arab friends in
California.
“I just do it, and I’ve only
been to Iraq once, when I was
6,” said Mrs. Obaidi, of Or-
ange County, Calif. “It’s a cul-
tural thing.”
She has a theory, shared
by some in Iraq. Just as Ital-
ians say “Ciao” for both hello
and goodbye, some Arabic
salutations are also used to
both greet and part, includ-
ing “ahla w sahla,” which
means welcome.
To this, Iraqis seem to
have added their characteris-
tic hospitality, using the hello
to convey an everlasting wel-
come, Mrs. Obaidi said: “They
never want to say goodbye.
They say, ‘Hello,’ like, ‘I’ll see
you soon.’ ”
Saud Murrani, a profes-
sional translator, said he
finds it annoying to “spend
30 seconds on the phone with
someone saying ‘hello, bye
bye, hello, hello.’ ”
He, too, attributes the
practice to the nature of
Iraqis. “We like to elaborate a
lot, and to be polite,” he said.
“Sometimes that can be a
real pain.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Kushner-Trump Ties Complicate Project
BY PETER GRANT
More than two years ago,
Charles Kushner had a vision
to convert his family’s trophy
Manhattan office and retail
skyscraper from a barely
break-even property into a
soaring 1,400-foot mixed-use
skyscraper with retail, a hotel
and some of the most expen-
sive condominiums in the city.
Then Donald Trump
sought—and won—the presi-
dency, and the project got
more complicated.
Mr. Kushner’s son Jared is
Mr. Trump’s son-in-law and a
top White House adviser,
which has ethics experts warn-
ing of conflicts of interest as
Kushner Cos. talks to investors
about its plan for the $7.5 bil-
lion project at 666 Fifth Ave.
Designed by Pritzker Prize-
winning architect Zaha Hadid
before she died last year, the
tower, which would be re-
named 660 Fifth Ave., would
join other new slender sky-
scrapers redefining Manhat-
tan’s skyline. The project
would entail stripping the 60-
year-old building to its steel
structure and adding about 40
floors. It could take until 2025
to complete.
Extensive negotiations are
under way between Kushner
Cos., its partners on the build-
ing, potential investors, lend-
ers and tenants who would
have to move for the project to
happen, according to people
close to the discussions. New
details of the company’s plans
were provided to The Wall
Street Journal by some of
Peabody Sheds Some Site-Cleanup Costs
BY JONATHAN RANDLES
A mining company’s debt-
cutting plan will leave taxpay-
ers facing a bigger bill for
cleaning up nearly two dozen
hazardous sites primarily in
the central U.S., including
a swath of northeast Okla-
homa that once produced lead
ore for bullets in both World
Wars.
The 22 properties will be
shed by Peabody Energy
Corp. when it leaves bank-
ruptcy with a plan that shifts
cleanup costs to the govern-
ment.
Peabody’s chapter 11
plan, approved Friday by a
federal judge, and related set-
tlements allow the company to
provide about 2% of as much
as $2.7 billion in environmen-
tal liabilities sought by fed-
eral, state and tribal authori-
ties for the sites polluted from
lead and zinc mining that
ended decades ago.
A Peabody spokeswoman
said the company is “pleased
to resolve the government’s
concerns and to be part of a
solution to remediate these
properties,” which it didn’t
mine but for which it was as-
signed liability through a 1997
corporate spinoff.
Peabody, along with other
liable companies, had paid for
cleaning these sites in the
Florida Tussle Intensifies Death-Row Debate
BY BETH REINHARD
AND ARIAN CAMPO-FLORES
Florida Gov. Rick Scott’s
move to replace a prosecutor
who refused to seek the death
penalty for an alleged cop
killer has brought into sharp
relief a nationwide shift away
from executions.
Aramis Ayala, newly elected
state attorney for Orange and
Osceola counties, announced
last week that she wouldn’t
push for capital punishment
because of what she says are
shortcomings in the criminal-
justice system. Mr. Scott then
assigned the case to another
prosecutor, prompting Ms. Ay-
ala to argue in a court filing
this week that the governor
doesn’t have the authority to
remove her.
The dispute has attracted
significant attention at a time
when the number of death
penalties imposed has dwin-
dled from a peak of 315 in
1996 to 30 last year. Adding to
the scrutiny: Ms. Ayala is the
first African-American elected
prosecutor in a Southern,
tough-on-crime state with 381
people on death row, second
behind California.
“You have a new prosecutor
in a county with a history of
Profits Could Soar
From Renovation
Owner believes it can wring
value out of a new skyscraper,
but some hurdles remain
Kushner Cos. is trying to
change the fortunes of a prop-
erty that looked at one point
like a disastrous investment.
The company purchased 666
Fifth Ave. for $1.8 billion in
2007, just before the real-es-
tate crash. By 2011, the com-
pany was struggling to make
mortgage payments, raising the
possibility of a default.
By greatly increasing its
height and quadrupling its re-
tail space, Kushner Cos. be-
lieves it can turn the property
into a signature development
that would be worth as much
as $12 billion, according to peo-
ple familiar with the plans.
Preserving only a portion of
the existing inner steel also
would enable Kushner to build
1.45 million square feet “as of
right,” meaning it wouldn’t
need extensive city approvals,
these people and confirmed by
a Kushner spokesman.
Anbang Insurance Group,
a big Chinese insurer with
strong political and family
connections to the govern-
ment in Beijing, is in ad-
vanced talks to provide as
much as half of the $2.5 bil-
lion in equity for the planned
redevelopment, according to
Toxic mine tailings, known as chat, rise above the abandoned town of Picher, Okla.
years before its chapter 11 fil-
ing.
But the gap between what
government authorities sought
from Peabody and what they
will get at the end of the bank-
ruptcy means the cost of
cleaning up the sites will fall
to governments and taxpayers.
That comes as state budgets
are stretched thin and the En-
vironmental Protection Agency
faces a 31% funding cut under
President Donald Trump’s
budget proposal.
The leftover mine waste in
aggressively using the death
penalty saying this doesn’t
work as a policy, at the same
time the rest of the country is
backing off from capital pun-
ishment and there is a harden-
ing of support among propo-
nents,” said Robert Dunham,
State Attorney Ayala argued against her removal on Monday.
Thursday, March 23, 2017 | A7
U.S. NEWS
with negotiations.
according to people familiar “Kushner Cos. is in ad-
with the plans. The first nine vanced, ongoing discussions
floors of the new tower would around 666 Fifth Avenue,” a
include retail, entertainment company spokesman said.
and dining space. The building Mr. Trump and Jared Kush-
also would include an 11-story ner have taken steps to insu-
hotel and 464,000 square feet late themselves from potential
of residential space. conflicts of interest. For exam-
Among the challenges fac- ple, Mr. Kushner has sold his
ing Kushner Cos.: It also must personal stake in 666 Fifth
cut a deal to buy out Vornado Ave. and dozens of other prop-
Realty Trust Inc., a real-estate erties to a trust controlled by
investment trust that is its other family members.
partner on office space and the But some ethics experts
owner of most of the prop- have said these measures have
erty’s retail space. Those talks fallen short. Others note that a
are under way, people said. A move by Anbang to exit the
Vornado spokesman declined to talks in New York would high-
comment. light how concerns over po-
Charles Kushner also would tential conflict can imperil
have to buy out current ten- businesses connected to Mr.
ants in the building, who would Trump and his top aides.
ZAHA HADID ARCHITECTS/KUSHNER COMPANIES
have to move before demoli- Mr. Kushner, who has a
tion could start. And he would hand in U.S. foreign policy,
have to refinance the existing might be overly influenced by
$1.15 billion of debt on the Anbang if the company helps
building. his family turn a so-so deal
If all goes well, Mr. Kushner into a bonanza, critics suggest.
hopes to close all the pieces of A White House spokeswoman
the deal sometime in the sec- didn’t respond to a request to
ond half of this year, according comment.
to people familiar with the Negotiations with Anbang
plans and negotiations. began after the Chinese com-
—Peter Grant pany, which had lost out to
A rendering of the skyscraper, to be renamed 660 Fifth Ave. competitors on other Manhat-
tan properties, reached out to
people close to the negotia- Manhattan’s Waldorf Astoria has signed a contract or made Jared Kushner, according to
tions. But worries over a con- hotel for $1.95 billion, might any kind of financial commit- people familiar with the nego-
flict of interest, given Jared decide whether or not to stay ment is inaccurate.” tiations.
Kushner’s role in the White or go as early as this week, A collapse of the Anbang “We’ve done a few deals,
House, could torpedo An- people familiar with the mat- talks, which began in July, but we’ve lost many more,”
bang’s participation. ter said. wouldn’t necessarily doom the Theo Cheng, Anbang’s head of
After reports of the talks “Contrary to recent reports, skyscraper deal. Mr. Kushner real estate, said during a panel
surfaced last week, Anbang Anbang has no investment in believes he could raise the discussion at an industry con-
said in statement that they 666 Fifth Avenue,” said an An- necessary equity from inves- ference in France. Before the
weren’t correct. The company, bang spokesman in an email. tors other than Anbang, ac- panel, Mr. Cheng declined to
which in 2015 bought the “Any suggestion that Anbang cording to people involved comment on 666 Fifth Ave.
U.S. WATCH
WASHINGTON
year amid a downturn in coal
prices, is legally obliged to Labor Nominee Backs
clean up sites related to its Job-Training Programs
coal mining. That is unrelated
to responsibility for the 22 Labor secretary nominee Alex-
sites it inherited through the ander Acosta testified in support
spinoff. of job-training programs targeted
Like other industrial con- for cuts by the White House. At
cerns, from auto maker Gen- his confirmation hearing on
eral Motors to copper-mining Wednesday, Mr. Acosta provided
company Asarco, Peabody senators the first clear look at
JIM LO SCALZO/EUROPEAN PRESSPHOTO AGENCY
sought to use bankruptcy’s ex- his views on labor policy. He said
pansive debt-cutting tools to he would be “a voice for workers”
trim these legacy liabilities and would enforce workplace
and free itself from future ob- safety laws “fully and fairly.”
ligations. Job-training programs can
Peabody said its environ- “have substantial positive impact
mental liabilities were no on American workers,” but a
more than $63 million, saying better effort must be made to
that roughly half of the $2.7 align training with the skills em-
billion in governmental claims ployers demand, he wrote.
were duplicates and others One program he named as a
were overstated. model, Job Corps, provides 16-
Government authorities to 24-year-olds with free voca-
objected. On March 16, Pea- tional training. President Donald
Oklahoma is in the Tar Creek it’s going to be a problem body announced settlements Trump’s budget, released last
Superfund site, where lead ore that’s going to be there for- of about $43 million to help week, would see centers closed
was once used to make bullets ever and that is not in the best fund the cleanup of the sites, and funding for other job-train-
for U.S. troops before mining interest of anybody.” beyond the more than $7 mil- ing programs reduced, thereby
operations stopped in the A spokeswoman for the lion already provided in its shifting responsibility for such
1970s. The area is still so pol- Oklahoma Department of Envi- bankruptcy-exit plan. services to state and local gov-
luted that the federal govern- ronmental Quality said Tues- A spokesman for the Jus- ernments, and employers.
ment has paid to relocate resi- day that funding for the fed- tice Department, which repre- —Eric Morath
dents. eral Superfund program is sented the EPA in the bank-
“The state doesn’t have the “critically important” to ad- ruptcy case, said Friday that LOS ANGELES
money to do it,” said Okla- dressing historical contamina- the settlement “is a favorable
homa State Rep. Ben Loring, a tion and that any reductions outcome that maximizes the Mayor Expands
Democrat whose district in- would likely mean delays in recovery for environmental li- Immigrant Protections
cludes the Tar Creek site. “If remediation. abilities while bringing an end
the EPA is being cut, as every- Peabody, which sought to further resource-intensive Los Angeles Mayor Eric Garc-
one seems to be suggesting, chapter 11 protection last litigation.” etti restricted city employees
from cooperating with federal im-
migration officials and instructed
police at the ports and airports
to refrain from investigating a
person’s immigration status.
The directive expands to
executive director of the Death fewest nationwide since 1991, Police say he fatally shot other city agencies the existing
Penalty Information Center, according to the center, amid a Sade Dixon, his pregnant for- policies of the Los Angeles Police
which doesn’t take a position dwindling supply of lethal-in- mer girlfriend, in front of fam- Department—which since 1979
on executions but has criti- jection drugs and mounting ily members at her Orlando has prohibited officers from de-
cized the way they are admin- concerns over the cost of exe- home on Dec. 13. Nearly a termining immigration status.
istered. cutions and potential racial month later, a shopper at a Since 2014, the LAPD has also
The 20 executions in just bias. New Mexico, Illinois, Wal-Mart alerted a police offi- refused to honor requests from
five states in 2016 were the Connecticut and Maryland cer that a man matching Mr. federal immigration officials to
have all outlawed capital pun- Loyd’s description was stand- detain illegal immigrants ar-
ishment in the past eight ing behind her. rested for nonviolent crimes.
years, leaving 31 states with Surveillance footage shows This week, the Trump adminis-
death rows, according to the Lt. Debra Clayton pulling out tration sought to ramp up pres-
National Conference of State her firearm and Mr. Loyd fir- sure on cities that offer protection
Legislatures. ing three shots at her, police to illegal immigrants by publicly
In three of those states— say. He then approached her releasing details of cases in which
Florida, Delaware and Ala- with his right arm out- local police released undocu-
bama—the death penalty has stretched and repeatedly fired mented immigrants that federal
become entangled in legal bat- toward her head, circling her officials had asked them to detain.
tles because judges, not juries, while she lay on her back, ac- —Alejandro Lazo
have imposed capital punish- cording to a police affidavit.
ment. Courts have ruled the The state judge overseeing HOUSING
laws in Florida and Delaware his case entered a not guilty
unconstitutional, though the plea on Mr. Loyd’s behalf. The Sales Fall on Tight
U.S. Supreme Court this year defendant doesn’t have a Supply, Higher Prices
declined to consider chal- court-appointed attorney and
lenges to Alabama’s capital he couldn’t be reached to com- Existing home sales declined
punishment system. ment. According to the docket, in February as tight inventory
It is too early to say the the trial is scheduled to start and rising prices frustrated
death penalty itself is on June 19. would-be buyers and damped
death row. Voters in Califor- Ms. Ayala announced last
RED HUBER/TNS/ZUMA PRESS
sales activity heading into the
nia, Nebraska and Oklahoma week that she wouldn’t seek critical spring selling season.
voted in November to retain the death penalty in this case Purchases of previously owned
capital punishment or add it or any other, saying the sys- homes decreased 3.7% from Jan-
to their state constitutions. tem of capital punishment was uary to a seasonally adjusted
The grisly allegations in the inconsistent, subjected vic- annual rate of 5.48 million last
Florida case would seem to tims’ families to protracted month, the National Association
make Markeith Loyd a prime appeals and deprived them of of Realtors said.
candidate, if he is convicted. closure. —Laura Kusisto
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A8 | Thursday, March 23, 2017 THE WALL STREET JOURNAL.

LIFE&ARTS
THE MIDDLE SEAT | Scott McCartney

They Were Just in it for the Points

How a promotion between online dating sites Match.com and eHarmony with British Airways frequent fliers fell flat
WHAT DO YOU TELL your
spouse after signing up for a dat-
ing service? “I did it for the fre-
quent-flier miles.”
Travelers fell in love with an of-
fer of 150 points from British Air-
ways for every dollar spent by U.S.
customers on new subscriptions to
Match.com. U.S. members of the
BA loyalty program could also get
130 Avios points, as they’re called,
per dollar with eHarmony. A $215
annual Match subscription earned
32,250 points, enough to make
hearts flutter among mileage fa-
natics.
But the attraction was so strong
that the dating services quickly
called it off after a couple of days in
early March, canceling new sub-
scriptions, refunding fees paid and
pulling back points awarded.
Match.com says it ordered up the
quickie divorce because an affiliated
promoter launched the come-on
without authorization. eHarmony
says the relationship soured when
some married travelers signed up
and others created multiple profiles,
violating terms and conditions.
Frequent-flier discussion boards
went nuts over this promotion.
Some travel nerds wondered
whether dating services might be
counterproductive to mileage accu-
mulation, since actually finding a
partner meant booking two tickets.
Others wondered why dating sites
didn’t let you search for mates by

ILLUSTRATION BY CARLOS ZAMORA

their airline status level. Some de-
bated registering their wives.
Free travel has long been a mar-
keting lure. Sometimes offers have
loopholes exploited by mileage
junkies to churn thousands, even
millions, of miles. Bloggers quickly
point out opportunity and travel-
ers share tips on discussion boards
like FlyerTalk and InsideFlyer.
Firms typically buy frequent-
flier miles from airlines at less
than one penny per mile, but that
can get expensive quickly.
When the U.S. Mint offered free
shipping to put dollar coins into
circulation, frequent fliers ordered
millions on credit cards to get
points, then paid their bills with
the coins. In 1999, a Healthy Choice
frequent-flier promotion led a man
in Sacramento, Calif., to buy up
huge quantities of pudding and do-
nate it to the Salvation Army in re-
turn for help peeling off labels to
mail in. His scheme netted more
than 1 million American miles and
became a subplot in the movie
“Punch-Drunk Love.”
Gary Leff, a co-founder of In-
sideFlyer, went to a hair treatment
center offering 20,000 Delta miles
for a consultation, even though he
has a full head of hair. He and his
wife went to a Jaguar dealer when
Jaguar offered 10,000 British Air-
ways miles for a test drive. They
never drove—the dealership was with credit cards is less rewarding. approval. Normally Match pays For its part, London-based Av-
happy to sign their test-drive form That’s why the dating offers marketers for new subscribers gen- ios Group Ltd., a unit of British
and not waste time and gas. On stood out—there were few clear erated. In this case, Match says, it Airways parent International Air-
Christmas morning 2009, he used restrictions, especially for single had no idea about the offer until line Group, says points earned on
a stack of his own credit cards and people who could create a profile sign-ups started flocking to its site. valid transactions that met terms
friends’ credit cards to spend tens and use the services. A good offer In addition to married people and conditions will be honored.
of thousands of dollars on an offer was made great by a weekend pro- and others who had zero desire to (Match and eHarmony declared al-
that netted 16 million US Airways motion of double points. use Match, some people from out- most all the subscriptions invalid.)
miles for him and his friends. Chris Willers, a Denver restaurant side the U.S. tried to sign up for Frequent flier Dylan Schiemann
“I’m still spending those miles,” general manager who uses mileage the promotion offered only in the didn’t sign up because he figured
he says. When merchants make promotions to fund far-flung travels, U.S., says Match spokeswoman there was a line he shouldn’t cross
mistakes, Mr. Leff thinks the hon- signed up and saw more than Amy Canaday. “It led to a lot of with his wife. “It seemed like a
orable thing to do is to admit the 30,000 Avios points added to his ac- bad behavior,” she says. good offer, but I decided pretty
mistake and offer a couple of thou- count. He’s married, and when he Because it was an “unauthor- quickly not to go with it,” he says.
sand miles as an apology, not just told his wife she was unfazed. “I’ve ized promotion,” Match issued re- Mr. Schiemann, who runs a soft-
cancel the whole promotion and done crazier things,” he says. funds and a free seven-day trial to ware-consulting company and
say oops. Mr. Willers figured even though use the service, she says. travels frequently from his Phoenix
Mileage hustles have become he couldn’t use the service, Match eHarmony, based in Santa Mon- home, also skipped an AARP pro-
more difficult. Many airlines have would be happy with the sale and ica, Calif., says it nixed subscrip- motion popular with many fre-
curbed mileage runs—long trips obliged to honor what was adver- tions that didn’t meet its terms quent fliers: Buy a $16 member-
on cheap fares to accumulate miles tised. “They’re still getting their and conditions, such as people ship to the retired persons group
to cash in on expensive tickets—by money,” he says. signing up for multiple accounts, and get a coupon for up to $400
awarding miles based on the fare Dallas-based Match, a unit of or married users. “Our Trust & off a British Airways ticket. The
paid instead of the distance. Many IAC/InterActiveCorp, says it can’t Safety team immediately flagged offer to U.S. residents has no mini-
services have added credit-card disclose the name of the affiliate those accounts and removed them mum age requirement. Earlier this
fees or purchase limits so that marketing company that it says from the site,” eHarmony said in a year, it was cut in half to up to
buying cars or paying mortgages created the promotion without its statement. $200.

MUSEUMS

A NEW STRATEGY AT THE MET

Daniel Weiss, left, the Metropolitan Museum’s
BY KELLY CROW
interim chief, plans renovation projects.

AMID A DRAMATIC management shakeup overlap them. First up, he will advocate for
at the top of New York’s Metropolitan Mu- a “decidedly unsexy” project to replace
seum of Art earlier this month, interim chief 60,000 square feet of 1930s-era skylights
executive Daniel Weiss is moving in with a that are at risk of leaking above the mu-
sweeping plan to balance the budget and seum’s European art galleries, he said. Cost:
provide a road map for renovations. $140 million. Mr. Weiss also will champion a
The plan, to be presented to the Met’s roughly $20 million renovation of the mu-
board of directors on Wednesday, could seum’s British galleries, a $5 million facelift
amount to an audition by Mr. Weiss for the for its musical instrument galleries and seek
top job at the nation’s premier encyclopedic bids to renovate its African wing, a job he
museum. thinks could cost around $60 million.
A 59-year-old former head of Haverford One thing his proposal on Wednesday will
College in Pennsylvania, Mr. Weiss was not revive is any mention of the museum’s
PETER ROSS FOR THE WALL STREET JOURNAL

hired by the Met two years ago as presi-
dent. He took over as interim chief execu-
tive March 1 after director and former chief
executive Tom Campbell resigned under
pressure.
Daniel Brodsky, the Met’s chairman, said
the museum is “lucky to have him,” though
he said a search committee will still be
formed at some point to find a new direc-
tor—even if Mr. Weiss is eventually tapped
for the post. No time frame has been given
to launch the search. Mr Campbell remains
director until June 30.
The Met, which has two million objects
and hosted seven million visitors last year,
has been in turmoil since last spring when
the museum said it was struggling to close a
$15 million deficit that could balloon to $40
million if cost-cutting measures weren’t en-
acted quickly. Mr. Campbell laid off workers
and pared exhibits over the past six
months—but when those efforts fell short of
solving problems and criticism continued to
mount, Mr. Campbell resigned.
Mr. Weiss said recently that the overall
thrust of his plan is to cut costs—and still
grow—at a reasonable pace. “This ship was
going a little too fast and turned a little
too quickly,” Mr. Weiss said, sitting in his
airy office that overlooks Manhattan’s Cen-
tral Park and is decorated with a wintry
scene by Alfred Sisley. “I don’t lose sleep
over our ability to manage it.”
Specifically, Mr. Weiss said he intends to
tell the board that he can close the $15 mil-
lion deficit in the museum’s $398 million
budget over the next two or three years by
postponing exhibits and trimming back-of-
fice costs while pushing for more revenue
from gift shops and restaurants. He isn’t
planning on more layoffs following a string
of nearly 100 staff cuts over the past year.
Mr. Weiss said he plans to suggest that
the museum tackle several renovation proj-
ects one at a time, rather than attempt to
stalled, $600-million campaign to expand its
southwest section into a bigger area for
contemporary art—an effort that wilted last
year after fundraising proved scarce. The
museum’s newer art could go back into its
current spot known as the Wallace wing—or
continue to funnel into exhibits planned in
its leased Met Breuer space, Mr. Weiss said.
Leonard Lauder, who four years ago
pledged $1 billion worth of cubist art to the
museum, also seems to have thrown his
weight behind Mr. Weiss, calling him “very
good at his job.” Mr. Lauder said he recently
agreed to host several groups of curators at
his New York apartment to reassure them
that his promised gift isn’t in jeopardy be-
cause of the stalled contemporary-art wing,
Mr. Campbell’s departure or concerns about
the Met’s finances.
“The Met has seen its ups and downs and
its directors come and go,” Mr. Lauder said,
but the only things visitors ever remember
are the prized pieces on display within it.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Thursday, March 23, 2017 | A9

LIFE & ARTS

FILM

Laura Dern’s
Maverick Career
At age 50, the actor who never shied away from tough roles
is starring in ‘Wilson’ and finding herself busier than ever
The contrast between roles for older men
BY ELLEN GAMERMAN
and older women remains stark. In the top
100 films of 2016, men ages 40 and over
AT 50 YEARS OLD, Laura Dern is on the comprised 52 percent of all male characters,
opposite career trajectory of most middle- while women ages 40 and over accounted
aged actresses. for 32 percent of all female characters, ac-
Instead of loading up on plastic surgery cording to a report released last month by
in hopes of playing traditional supporting the Center for the Study of Women in Tele-
roles for women of a certain age, she is dig- vision & Film at San Diego State University.
ging into characters with wrinkles and jag- The majority of female characters were in
ged edges. In her latest movie, the comedy their 20s and 30s, while the majority of
“Wilson” opening Friday, Ms. Dern portrays male characters were in their 30s and 40s,
a former drug addict who clings to her frag- the study found.
ile stability as she is drawn back into the Knowing Hollywood’s attitude toward
messy world of her ex-husband, a truth-tell- older actresses, Ms. Dern is taking French
ing misanthrope played by Woody Harrel- lessons. She thinks the French are more
son. open to casting older women and one day
In May, she appears in the TV return of she might work abroad. Reading scripts, she
“Twin Peaks,” reuniting with director David refuses to rule out roles that seem one-di-
Lynch, who helped launch her career with mensional until she looks at them from dif-
the movies “Blue Velvet” in 1986 and “Wild ferent angles.
at Heart” in 1990. This December, she makes Her goal is to age on screen. Ms. Dern,
a high-wire leap with an undisclosed charac- whose mother is actress Diane Ladd, said

ALLEN J. SCHABEN/LATIMES/CONTOUR/GETTY IMAGES

ter in “Star Wars: The Last Jedi.” And she years from now she wants to play a charac-
currently can be found on HBO playing anx- ter like her late grandmother, a dynamo
ious working mother Renata Klein on the who, during the 1992 riots in south central
drama “Big Little Lies.” Los Angeles at age 79, drove over and made
In a way, she has been preparing for this sandwiches for people. “As I watch myself
moment since she was about 15, when dur- shift, as someone who has been watching
ing a flight with her dad, actor Bruce Dern, myself on film since I was 11, it should be
she complained about the lack of juicy roles exciting, it shouldn’t be daunting,” she said.
coming her way. A number of writers, directors and pro-
“My dad said, ‘You know what? If you de- ducers are changing the rules around roles
cide now to be a character actor, if you at for older actresses. Ryan Murphy, co-creator
20 can play fierce, sometimes unlikable peo- of the TV series “American Horror Story,”
ple and not be afraid of that girl, then when has helped devise textured parts for women
you’re in your 40s and 50s you’ll be working in their 50s (Angela Bassett) and 60s (Jes-
all the time,’” Ms. Dern recalled in a recent sica Lange and Kathy Bates). Laura Dern, in Los Angeles in January, says she now feels free to take parts that appeal to her.
interview. Ms. Dern’s experience in Hollywood,
Ms. Dern said she rejected many parts where she was raised and where her long- HBO show “Enlightened,” which she wrote tranged couple who reconnect after a long
that didn’t build toward a lasting movie ca- divorced parents remain working actors, is with co-star Mike White. The dramatic com- time, the actors drew on their on-set re-
reer, but now that she has put in that effort atypical. Steven Spielberg was a family edy, which ran for two seasons before its union to build their performances. For the
she feels more freedom to take whatever friend before he cast her as a lead in his abrupt cancellation, featured Ms. Dern as film’s melancholy moments about loss, Ms.
roles appeal to her. “I haven’t worked as 1993 blockbuster “Jurassic Park.” The years Amy Jellicoe, a woman striving for Zen calm Dern applies the wisdom of her years. “Most
much as I wanted to for many years—I that followed include noted performances in while her life and work spiral into chaos. of us live with a grief that there is someone
missed some great opportunities by being the 1996 comedy “Citizen Ruth” and 2001’s As she prepared for “Wilson,” she real- who we don’t get to share our life with,” she
so careful,” she said. “I’ve broken through “I Am Sam” along with a string of lower- ized that she and Mr. Harrelson went back said. “I don’t know a person who hasn’t
my own barriers of what I should do the profile roles. more than 20 years, when they met doing a been through that, having someone in their
last year or so.” In 2011, Ms. Dern reemerged with the play together in New York. Portraying an es- life they don’t get to keep.”

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
-15 1 2 3 4 5 6 7 8 9 10 11 69 Bro’s 28 Like burlap
-10 counterpart
-5 12 13 14 15 29 “The Cossacks”
0 70 Clear author
16 17 18
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25 2 Carbonaceous 33 Game leader
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35 34 35 36 37 3 Neighbor
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42 43 44 45
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la Lumpur
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49 50 51 6 Drudge 41 Downfalls
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52 53 54 55 56 57 58 59 60 7 Call on for divine 43 Plane heading
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61 62 63 64
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65 66 67
9 Striped top gai pan
Snow
68 69 70 51 “Personally...”
Sydney
d 10 Tierra
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b
Melbourne
surrounded by
Ice PIERCING WIT | By Alex Eaton-Salners agua 52 Gossip
Global Forecasts City
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Across 25 “Here Comes 48 Polo alternative 11 Look like a goat 53 “Getting to Know
1 “Suits” airer Santa Claus” 14 Home-coming You” singer
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; Geneva 16 7 c 16 6 c Ottawa 0 -4 pc 3 -2 r 49 “Lifestyles of
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 27 22 pc 27 21 c Paris 12 6 t 14 6 c
lyricist the Rich and stat? 55 Decline
4 Booking agent?
Havana 28 17 s 27 17 s Philadelphia 8 0 s 13 10 c 27 Shoemaker’s Famous” host
Today Tomorrow Hong Kong 25 21 pc 24 20 pc Phoenix 21 11 pc 26 13 s 7 Jeopardy 15 Sum 56 Some whiskeys
City Hi Lo W Hi Lo W tool Robin
Honolulu 30 22 c 30 22 pc Pittsburgh 9 4 s 19 12 r 17 Tentative taste 58 Saddle part
Amsterdam 13 4 c 13 3 pc Houston 28 20 pc 27 18 t Port-au-Prince 31 19 sh 31 19 sh 12 High return 50 Himeji Castle
30 Legionary
Anchorage 0 -11 s 0 -18 s Istanbul 15 7 s 15 6 c Portland, Ore. 14 7 r 12 6 r 13 Company whose shouts? moat swimmers 21 African game 59 “So that’s how
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Atlanta 16 9 pc 22 14 pc Johannesburg 26 14 s 27 12 pc Riyadh 27 17 c 31 19 s
business is 52 “___ Kapital”
picking up 34 Grievous state seeds or stones
Baghdad 22 12 r 21 11 pc Kansas City 24 13 c 21 10 t Rome 18 9 pc 20 9 pc 60 Thumb thing to
Baltimore 9 0 s 15 10 c Las Vegas 22 11 pc 25 14 pc Salt Lake City 12 3 r 16 7 pc 35 Tell to turn, say 54 Put into words 24 Leader of une read?
15 Galvanize
Bangkok 34 27 pc 34 27 pc Lima 30 23 c 30 23 pc San Diego 18 12 pc 19 14 s
36 “Jeepers!” 57 “Medic!” monarchie
Beijing 10 3 c 7 1 r London 12 6 pc 13 5 pc San Francisco 17 11 s 17 10 r 16 Meaningless 62 It’s drawn from
Berlin 8 2 pc 11 0 pc Los Angeles 20 11 pc 20 12 pc San Juan 29 23 sh 27 22 sh employment? 61 On the whole 26 Run wild a vein
Bogota 20 9 c 19 10 sh Madrid 9 -1 t 11 -1 t Santiago 29 12 s 27 12 pc
38 Openly
Boise 13 4 pc 13 6 sh Manila 35 25 pc 35 25 pc Santo Domingo 30 20 sh 29 20 sh 18 Butcher, as a confesses 63 How cattle are 27 Not here 64 NPR host Shapiro
Boston 3 -4 s 7 4 sh Melbourne 23 13 s 25 18 pc Sao Paulo 26 16 c 26 18 sh song 40 Coastal inlet wrangled?
Brussels 14 5 c 13 4 pc Mexico City 26 10 s 27 11 pc Seattle 13 7 r 12 6 r Previous Puzzle’s Solution
Buenos Aires 25 16 pc 26 16 pc Miami 26 20 sh 26 20 sh Seoul 14 1 pc 14 3 c 19 Our top story? 41 Seat of Oneida 65 Annoying spouse,
P U P A C R A
I G S A W S
Cairo 25 14 s 24 13 s Milan 16 10 t 16 8 pc Shanghai 13 8 c 13 7 sh
20 “Star Trek County perhaps O N U S L O R
R E C L I P
Calgary 12 -4 s 12 -1 c Minneapolis 6 3 r 8 0 r Singapore 31 25 c 31 25 c P I N K N U M B
E R A I D A
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Charlotte 13 2 pc 20 8 pc Montreal -1 -6 s 2 -3 sn Sydney 23 19 sh 23 19 pc dedicatee H H S S
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67 Sheepdog in H A B I T A T A L I
Chicago 9 7 c 23 9 c Moscow 10 1 s 8 -2 c Taipei 22 18 r 24 17 pc 43 It takes a bow A L O T C U R L G A B L E
Dallas 29 18 pc 26 13 t Mumbai 34 25 pc 35 26 pc Tehran 12 8 sh 14 7 r 22 Setting of many “Babe” N O W I N K S I T U A T I O N
Denver 23 0 c 10 -3 r Nashville 22 13 pc 23 16 pc Tel Aviv 20 13 s 21 11 pc a joke 45 Pron. type D E L T A C O E N L A N D
68 Initiator of the I S A R O T A T E S
Detroit 6 3 s 20 12 r New Delhi 37 19 pc 35 19 pc Tokyo 13 5 c 12 5 pc
Dubai 28 21 pc 27 22 pc New Orleans 27 20 pc 27 19 pc Toronto 3 -1 pc 12 3 r
23 Nice round 46 Longship White House M A Y A L I N K A S H
number protector? Easter Egg Roll A V E R S E N O E L L E O
Dublin 9 3 pc 10 3 pc New York City 6 1 s 11 9 c Vancouver 11 5 c 11 5 sh M I N T S K I N K C R E A M
Edinburgh 8 0 pc 11 2 pc Omaha 21 13 t 20 6 sh Washington, D.C. 9 2 s 16 11 c B A T S T A S T E E T R E
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Frankfurt 15 5 c 16 5 pc Orlando 25 15 pc 26 15 pc Zurich 17 5 c 17 6 pc O N L Y A T H O S P E N N

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A10 | Thursday, March 23, 2017 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK Leakgate’s Joe McCarthy
If Donald Trump avoid an Arctic environmental disaster
A President’s Credibility tweeted his accusa-
tions about President
from a strict by-the-letter compliance
with anti-Russia sanctions.

I
f President Trump announces that North FBI director James Comey also took re- Obama wiretapping Intoned Mr. Schiff in the manner of
Korea launched a missile that landed venge on Monday by joining the queue of Trump Tower to get a man uncovering a self-evident con-
the media off his al- spiracy: “Is it possible that all of these
within 100 miles of Hawaii, would most those saying the bureau has no evidence to
leged ties to Russia, events and reports are completely un-
Americans believe him? back up the wiretap tweet. BUSINESS
then Democrats at related and nothing more than an en-
Would the rest of the world? Trump’s falsehoods are Mr. Comey even took the un- WORLD
Monday’s hearing of tirely unhappy coincidence? Yes, it is
We’re not sure, which speaks usual step of confirming that By Holman W.
to the damage that Mr.
eroding public trust, the FBI is investigating ties Jenkins, Jr.
the U.S. House Intelli- possible.”
gence Committee used But what of the question that usually
Trump is doing to his Presi- at home and abroad. between the Trump election those same tweets to excites conspiracy theorists like Mr.
dency with his seemingly campaign and Russia. distract from their lack of goods on al- Schiff: Cui bono—who benefits?
endless stream of exaggera- Mr. Comey said he could leged collusion between the Trump It’s impossible to know whether Rus-
tions, evidence-free accusations, implausible make such a public admission only in “un- campaign and the Kremlin. sia’s DNC leaks accounted for Hillary
denials and other falsehoods. usual circumstances,” but why now? Could Adam Schiff, the California Democrat Clinton’s defeat, though it hardly seems
The latest example is Mr. Trump’s refusal the wiretap tweet have made Mr. Comey an- and ranking member, not once but likely. Powerful circumstantial evidence,
twice on “Meet the Press” touted “cir- however, suggests Democrats believed
to back off his Saturday-morning tweet of gry because it implied the FBI was involved
cumstantial evidence of collusion.” that linking Messrs. Trump and Putin
three weeks ago that he had “found out that in illegal surveillance? Mr. Trump blundered He tweeted the same words again al- would actually be their ace in the hole.
[Barack] Obama had my ‘wires tapped’ in in keeping Mr. Comey in the job after the most as soon as he got off the air. They still do. One conclusion recom-
Trump Tower just before the victory” on Elec- election, but now the President can’t fire the Then why were his first questions mends itself overwhelmingly on the ba-
tion Day. He has offered no evidence for his man leading an investigation into his cam- the next day to FBI Director James sis of circumstantial evidence: Presi-
claim, and a parade of intelligence officials, se- paign even if he wants to. Comey and National Security Agency dent Obama, in his final days, used his
nior Republicans and Democrats have since All of this continues the pattern from the chief Adm. Michael Rogers instead authority over the intelligence agencies
said they have seen no such evidence. campaign that Mr. Trump is his own worst about the Trump charges? to advance this partisan narrative.
Yet the President clings to his assertion like political enemy. He survived his many false Whatever their merits, the Trump
a drunk to an empty bottle, rolling out his press claims as a candidate because his core sup- tweets came four months after the
spokesman to make more dubious claims. Sean porters treated it as mere hyperbole and his election. They have no bearing on the On Trump-Russia links,
alleged “collusion.” Indeed, if evidence a Democrat tries to fool
Spicer—who doesn’t deserve this treatment— opponent was untrustworthy Hillary Clinton. of Trump-Russia collusion is as ram-
was dispatched last week to repeat an assertion But now he’s President, and he needs support pant as Mr. Schiff claims, it seems a Americans with randomness.
by a Fox News commentator that perhaps the beyond the Breitbart cheering section that mite odd to be stressing Team
Obama Administration had subcontracted the will excuse anything. As he is learning with Obama’s failure to put Trump Tower
wiretap to British intelligence. the health-care bill, Mr. Trump needs part- under surveillance. A congressman with a modest pro-
That bungle led to a public denial from the ners in his own party to pass his agenda. He The witnesses sat mostly stone-faced file, Mr. Schiff has been working hard
British Government Communications Head- also needs friends abroad who are willing to while the politicians spun, but they did ever since to become the public face—
quarters, and British news reports said the U.S. trust him when he asks for support, not least vouchsafe a few interesting tidbits. not to say the Joe McCarthy—of this
apologized. But then the White House claimed in a crisis. On the claim that Russia wasn’t witch hunt.
there was no apology. For the sake of grasping This week should be dominated by the merely trying to hurt Mrs. Clinton but This is his main chance. It’s suppos-
to help Mr. Trump, supposedly a key in- edly in his wheelhouse because, 27
for any evidence to back up his original tweet, smooth political sailing for Mr. Trump’s Su-
telligence-agency insight, this was years ago, he led the Justice Depart-
and the sin of pride in not admitting error, Mr. preme Court nominee and the progress of mostly a matter of “logic”: In a two- ment’s effort to put a sad sack FBI
Trump had his spokesman repeat an unchecked health-care reform on Capitol Hill. These are person race, hurting one necessarily agent in jail over his affair with an
TV claim that insulted an ally. historic events, and success will show he can means helping the other. equally pathetic Soviet agent.
The wiretap tweet is also costing Mr. deliver on his promises. But instead the week The Russians made little effort to con- Again, who really benefits from his
Trump politically as he hands his opponents has been dominated by the news that he was ceal their meddling. Their “loudness,” relentless campaign of disparagement
a sword. Mr. Trump has a legitimate question repudiated by his own FBI director. said the FBI’s Mr. Comey, suggested against Mr. Trump?
about why the U.S. was listening to his former Two months into his Presidency, Gallup “their No. 1 mission” was to discredit The answer is obviously Mr. Schiff—
National Security Adviser, Mike Flynn, and has Mr. Trump’s approval rating at 39%. No U.S. democracy by “freaking people out but also Mr. Putin.
who leaked news of his meeting with the Rus- doubt Mr. Trump considers that fake news, about how the Russians might be under- In truth, a U.S. president can’t do
sian ambassador. But that question never gets but if he doesn’t show more respect for the mining our elections.” much for Mr. Putin, except for one
NSA’s Adm. Rogers said to expect thing: give him a convenient enemy.
a hearing because the near-daily repudiation truth most Americans may conclude he’s a
more of the same, since the Russians The breadth of opinion in support of
of his false tweet is a bigger media story. fake President. evidently see a “positive outcome” in this proposition is truly impressive. In
“calling into question the democratic 2014, the New Yorker magazine noted a

The Fires in Tibet process.”

As for Rep. Schiff, a former prosecu-
Putin regime “shift in orientation . . . in
which isolation and conflict with the

A
tor, he should know better than to treat West are virtues in and of themselves.”
24-year-old farmer set himself on fire President Obama avoided seeing the Dalai “circumstantial evidence” as a synonym In January, the Hoover Institution’s
this weekend in Tibet’s first reported Lama upon taking office in 2009. After a meeting for guilt by association. Paul Gregory wrote of the regime’s need
self-immolation of the year, and approxi- in 2010, White House officials ushered him out There isn’t room to detail his fantas- to persuade the Russian people of an
mately the 150th since 2009. a side door past piles of gar- tically trivial basis for his portrayal of “imminent threat from the decadent he-
Pema Gyaltsen intended to pro- China has forced world bage. British leader David Trump pilot fish Roger Stone as an inti- gemonic West.”
mate of WikiLeaks’ Julian Assange and Mr. Putin’s efforts in the U.S. elec-
test Chinese repression and call attention away from its Cameron met him in 2012 but alleged hacker Guccifer 2.0, or the utter tion and elsewhere (Libya, Syria,
for the return of the exiled Da- faced criticism from Beijing fatuity of his attempt to place pilot fish Ukraine) really only ever had one audi-
lai Lama. When relatives went religious repression. and pointedly refused subse- Carter Page at the center of Russia’s re- ence, the Russian people, who must be
to find him afterward at a local quent meetings. When the os- cent sale of a Rosneft stake to a Qatari kept supine despite an unraveling
police station, they were tensible leaders of the Free investment fund. economy, lawlessness, corruption. How
beaten severely and detained overnight in harsh World act this way, it’s little surprise to see Democratic Rep. Jackie Speier tried is their restlessness to be suppressed?
conditions. It remains unclear whether he has smaller countries such as Mongolia turning to paint five visits of then-Exxon CEO By citing the supposedly warlike de-
survived or succumbed to his wounds. away the Dalai Lama more recently. Rex Tillerson to the White House in signs of the U.S.
This report, from Radio Free Asia’s Tibetan The Tibetan spiritual leader remains a global 2014 as nefarious, neglecting to men- Notice that we don’t suggest collu-
Service, is a reminder of the rough authoritari- icon, but he’s often identified more with a vague tion that these were visits to the sion between Mr. Putin and Mr. Schiff,
Obama White House and that the pur- whose ambition plays so incidentally
anism that still dominates life for millions of spirituality than with a gravely repressed peo-
pose of the intensive meetings was to into Mr. Putin’s hands.
people in China, especially in remote areas with ple. In a truly Orwellian turn, Beijing-backed
minority populations such as Xinjiang and Tibet. student groups at the University of California
Amid the glitz of Shanghai and the intrigue of San Diego are even protesting his scheduled LETTERS TO THE EDITOR
Beijing, it’s easy to forget—which is how Chinese commencement address on grounds that he’s a
leaders want it. “separatist” (he’s not) whose presence would of-
Not long ago Tibet was a humanitarian cause fend Chinese students.
Endangering U.S. Skies Through Sharing
and cultural reference world-wide. The movies So the same Chinese government that per- The Journal continues to provide tional pilot training and increased
“Seven Years in Tibet” (starring Brad Pitt) and sists in stifling religious freedom in Tibet in- a platform for proposals to remove oversight of the aircraft’s mainte-
“Kundun” (directed by Martin Scorsese) ap- creasingly demonizes and marginalizes the Dalai the safety net protecting the flying nance. The FAA allows a limited ex-
peared months apart in 1997, the latter an epic Lama overseas. This is the context for the self- American public, seemingly to assist ception for people with a common
internet investors and satisfy con- purpose to share expenses on a trip
about the life of the Dalai Lama. Today major immolations of recent years, which the Dalai
servative economists. “An Easy Way with the same destination.
studios duck such material for fear of angering Lama opposes on theological grounds but hasn’t to Make America’s Skies Friendlier” The authors’ proposal allows pi-
China’s government and losing access to the Chi- been able to stop. The reason Beijing works so (op-ed, March 16) by Christopher lots with as few as 35 hours, no
nese box office. Disney CEO Michael Eisner apol- hard to distract attention from Tibet is that its Koopman and Eli Dourado suggests training for flying in poor weather,
ogized to Beijing for “Kundun,” calling it a “stu- heavy-handed policies there continue to breed helping disadvantaged private pilots no insurance or even the need to
pid mistake,” before earning permission to build resentment and expose the enduring authoritar- build experience by letting them fly file a flight plan, to carry passen-
a Disneyland in Shanghai. ianism of Chinese governance. passengers for hire. gers for hire. Supporters of this pro-
Having failed to undermine safety posal continue to try and distract
through the courts, proponents now readers by focusing on the technol-
France’s Unsettled Election suggest U.S. Transportation Secre-
tary Elaine Chao act by fiat, or Con-
ogy used to communicate, despite
clear direction from the FAA and

I
gress pass legislation, to weaken the courts that it isn’t the method but
f you thought American political debates be drawn to Ms. Le Pen’s protectionism if he flying public’s safety net. rather the intent and outcome of
are long, you haven’t been watching French faces her in a second-round run-off. Contrary to the authors’ asser- the communication that matters.
TV. On Monday the country’s presidential When Ms. Le Pen accused him of supporting tions, the FAA has been consistent MARTIN H. HILLER
rivals clashed—for three Muslim “burkinis” on French in its policy. If a pilot wants to get President
hours—and centrist candidate Macron wins a debate beaches, Mr. Macron accused paid to fly, he must comply with National Air Transportation
Emmanuel Macron seems to as the centrist choice, her of putting words in his regulatory requirements placed on Association
have made the best impres- mouth before adding that the charter aircraft. These include addi- Washington
sion going into the first elec- but he’s still vulnerable. far-right candidate is “divid-
tion round next month. ing our society” and “falling
That’s a hopeful sign in a into the terrorists’ trap” with Democrats: Strip Mall of Political Boutiques
campaign that has alternated between farce and her anti-Muslim rhetoric. Yet Mr. Fillon, the
In regard to Roger Altman’s March used by Democrats. As pointed out by
tragedy. François Fillon, the Republican candi- center-right candidate, had the best lines on 14 op-ed “How Democrats Can Come Jonathan Bernstein in Bloomberg
date and the closest thing to a Thatcherite in these cultural questions, calling for robust Mus- Back”: The most serious problem the View, Democrats have accumulated big
France, took the stage weighed down by allega- lim-integration measures without succumbing Democratic Party faces today is that margins in small geographic areas.
tions of putting family members on the public to Ms. Le Pen’s exclusionary nationalism. it lacks a unifying idea. It’s like a Many in the Democrat leadership re-
payroll. Benoît Hamon, the Socialist standard Postdebate polls suggest that Mr. Macron did strip mall of boutiques: old-time fuse to see that they have gone too far
bearer, represents his party’s worst statist in- best with viewers. France could do worse than Marxists who supported the Progres- to the left to have wide appeal across
stincts, while Marine Le Pen of the National Mr. Macron’s agenda of corporate-tax cuts and sive Party’s Henry Wallace for presi- the country.
Front is running against immigration, trade and fixes to the 35-hour workweek, though as a man dent, the slightly younger quasi- His second mistake is in claiming
the European Union. without a traditional party he may find it hard socialists ignorant of “Das Kapital” that Americans want to protect
Unless Mr. Fillon can rehabilitate himself, Mr. to implement his agenda. like Sens. Bernie Sanders and Eliza- ObamaCare. According to the latest
beth Warren, black activists, militant Rasmussen poll, 62% of likely voters
Macron would be the most plausible economic The best result would be for Messrs. Fillon
pacifists, global-warming enthusiasts, believe reducing the cost of medical
steward. The 39-year-old former investment and Macron to emerge as the final two candi- pro-abortion feminists, LBGTQ activ- care is the most important health-
banker helped implement modest pro-growth re- dates for the May runoff so France could have ists, trade-union members, public- care issue, and 50% oppose the man-
forms as Socialist President François Hollande’s a debate between two pro-growth reformers. school teachers, college professors, date. While a majority believe Obama-
Economy Minister before starting his own inde- But if the polls are correct, Ms. Le Pen will keep government employees, journalists, Care should not be repealed without a
pendent movement. His pitch is that he repre- her loyal but limited base and finish first with Hollywood actors and, of course, col- replacement, they are not opposed to
sents a break with the corruption and partisan Mr. Macron close behind. lege students, many unwilling and replacing it with something better.
gridlock of the French political class. The polls show Mr. Macron winning comfort- some too young to vote. CAROL MASON
Mr. Macron held his own against more expe- ably in a runoff with Ms. Le Pen, but there are PANAYOT BUTCHVAROV Richmond, Texas
rienced politicians Monday night. On taxes and no sure bets in Europe’s current political cli- Fort Lauderdale, Fla.
economic reform, he said his program offers mate. With unemployment at 10% after five Letters intended for publication should
Mr. Altman is correct in saying that be addressed to: The Editor, 1211 Avenue
“effectiveness and justice.” His economic slogan years of failed socialism, French voters want Democrats need “new faces and a of the Americas, New York, NY 10036,
is “freedom and protection.” Such rhetoric is change. The danger is that Mr. Macron’s relative whole new direction.” However, like or emailed to wsj.ltrs@wsj.com. Please
meant to draw a contrast with Mr. Fillon, who reform modesty could look wan next to Ms. Le many in his party, he continues to en- include your city and state. All letters
stresses freedom. Pen’s forceful economic nationalism. Mr. Ma- tertain certain self-delusions. For are subject to editing, and unpublished
The line may also make him more palatable cron needs to offer a reform agenda that pro- starters, gerrymandering is not a prac- letters can be neither acknowledged nor
returned.
to working-class voters who might otherwise vides a better vision of a revitalized France. tice exclusive to Republicans; it is also
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Rebuild U.S. Defenses for the Information Age
By Mackenzie Eaglen
P
resident Trump has
pledged to rebuild both
America’s military and its
infrastructure—priorities
that are more intertwined
than they might appear. In the 21st
century, “infrastructure” means more
than roads, bridges and airports. Just
as American life increasingly relies
upon the virtual infrastructure of in-
ternet and satellite connectivity, so
does the Pentagon.
The Global Positioning System is a
prime example. The same GPS signal
that helps you navigate around a traffic
jam or lets your kids play Pokémon Go
Trump’s infrastructure
upgrades could start at
the Pentagon, which still
uses 8-inch floppy disks.
also guides the Air Force’s smart weap-
ons and enables American command-
ers to direct ground forces in battle.
But much of this widely used techno-
logical infrastructure is out of date, un-
reliable or easily tampered with.
The Defense Department still uses
8-inch floppy disks and computers
from the 1970s to coordinate nuclear
forces, according to a report last year
from the Government Accountability
Although this week
got off to a crackling
start with high-pro-
file hearings on
Judge Neil Gorsuch’s
U.S. Supreme Court
POLITICS nomination and po-
tential Russian in-
& IDEAS
terference in the
By William
2016 presidential
A. Galston
election, the event
with the largest con-
sequences for the Trump adminis-
tration and the Republican congres-
sional majority occurs on Thursday.
That’s when the full House takes up
legislation to repeal and replace the
Affordable Care Act.
It is no accident that the Republi-
can legislative agenda kicks off with
this issue. For seven years, GOP
leaders have promised they would
get rid of ObamaCare. After regain-
ing a House majority in 2010, they
didn’t come close to doing it. After
regaining a Senate majority in 2014,
they sent a bill to President Obama,
who promptly vetoed it. In 2016 they
held on to their majorities in both
chambers and the American people
Greek Voters Are Smarter Than Their Government
By Yannis Palaiologos
A
consistent theme of Greece’s
critics over the past few years
has focused on the country’s at-
titude. Greece remains perpetually on
financial life support, they argue, be-
cause the political system and the pub-
lic at large are unwilling to reform. Ac-
cording to the hardliners in Berlin and
at the International Monetary Fund,
the bailout won’t work until Greeks
take ownership of the program.
But is this perception accurate? A
new survey by the think tank Dianeo-
sis, released earlier this month, offers
some intriguing evidence to the con-
trary. The survey, “What Greeks Be-
lieve,” contains findings that could
buttress the view that Greeks are un-
willing to change and adjust to Euro-
pean norms. But it also captures a
growing realization among the coun-
try’s beleaguered population that the
crisis cannot be overcome without
jettisoning the stale policies that
brought it about.
One theme among respondents, un-
surprisingly, is growing euroscepti-
cism. The view that membership in
the European community has benefit-
ted Greece is supported by 53.5% of
those questioned in the survey, down
from 68% in April 2015. Far more
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Office. Many of the Pentagon’s com-
munications systems are so vulnera-
ble to sabotage that the Army and
Navy regularly practice fighting with-
out them. Satellites can be shot down
by missiles or have their sensors daz-
zled by lasers. Their ground links can
be jammed or hacked.
Dale Hayden, a senior researcher at
the Air Force’s Air University, told an
audience of aerospace experts earlier
this month that proliferation of anti-
satellite technology has put U.S. com-
munications networks at risk. “In a
conflict, it will be impossible to defend
all of the space assets in totality,” he
said. “Losses must be expected.”
It has never been easier for Amer-
ica’s adversaries—principally China
and Russia, but also independent, non-
state actors—to degrade the U.S. mili-
tary’s ability to fight and communicate.
Senior military officials have expressed
grave doubts about the security of the
Pentagon’s information systems and
America’s ability to protect the wider
commercial virtual infrastructure.
The Navy, under its mission to
keep the global commons free, pre-
vents tampering with undersea ca-
bles. But accidents—and worse—do
happen. Last year a ship’s anchor
severed a cable in the English Chan-
nel, slowing internet service on the
island of Jersey. In 2013 the Egyptian
coast guard arrested three scuba div-
ers trying to cut a cable carrying a
third of the internet traffic between
Europe and Egypt. “When communi-
The Republicans Are Out of Excuses
elected a president who pledged to
sign a repeal-and-replace bill when
it reached his desk.
Republicans are out of excuses.
Failing to unite around a bill that ful-
fills their most visible pledge would
destroy their credibility and open the
door to electoral catastrophe.
But during their seven years of
promises, Republicans never really
got serious about either the conse-
quences of repeal or the content of
the replacement. They knew the bill
they passed in 2015 wouldn’t become
law, freeing them to score political
points. Now that they have the re-
sponsibility to govern, cracks in party
unity have emerged.
House conservatives in the Free-
dom Caucus failed to extract what
they demanded from Speaker Paul
Ryan, despite energetic efforts to
enlist White House support for their
cause. There’s a reason why most of
their amendments were rejected. To
attain 216 votes with no Democratic
support, the speaker has engaged in
a delicate balancing act between
hard-right conservatives, who com-
mand around 40 votes, and the
Greeks believe that membership has
been more beneficial to the European
Union (57.3%) than to Greece (29.6%).
Almost half (47.7%) think that “the
EU’s structures and the interests it
represents do not serve Greece.” Sup-
port for the euro is still a majority
view, but a shrinking one (59.6%, down
from 73.9% in April 2015).
A related, unmistakable element is
a wider skepticism toward the West
and an open society. Globalization is
viewed as a threat by 59.7% of
Greeks, while only 34.4% see it as an
opportunity. Capitalism, though gain-
ing support, is still unpopular—only
33.3% see it in a positive light.
On migration, almost 90% say there
have been too many immigrants com-
ing into the country in the past 10
years, and only 25% believe that immi-
gration can help alleviate Greece’s de-
mographic problem. Close to half
(47.2%) believe that one is born Greek
and cannot become one.
More than three-quarters (77.4%)
have a positive view of Russians, ver-
sus 49.7% for Americans and only
36.4% for Germans. One in three
think Greece would be better off leav-
ing the eurozone and forming a spe-
cial relationship with Moscow.
Yet concrete questions about the
crisis, its causes and the ways to
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Professional Information Business:
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Ingrid Verschuren, Deputy Head
OPINION
cations networks go down, the finan-
cial services sector does not grind to
a halt, rather it snaps to a halt,”
warned a senior staffer to Federal Re-
serve Chairman Ben Bernanke in
2009. Trillions of dollars in daily
trading depends on GPS, which is
kept free by the Air Force.
There are now an estimated 17.6
billion devices around the world con-
nected to the internet, including
more than six billion smartphones.
The tech industry expects those num-
bers to double by 2020. That growth
is dependent, however, on secure and
reliable access to intercontinental un-
dersea fiber-optic cables, which carry
99% of global internet traffic, and a
range of satellite services.
The U.S. military is working on
other 197 members of his Republi-
can caucus.
Counterbalancing the Freedom
Caucus is the center-right Tuesday
Group. Of its 51 members, only a
handful come from Southern and
If the party doesn’t unite
around the current health
bill, its credibility is shot.
border states, and none from Ala-
bama, Georgia, Louisiana, Missis-
sippi, North Carolina or South Caro-
lina. By contrast, seven hail from
Pennsylvania and six each from New
York and Ohio.
Although many in the Tuesday
Group represent solidly Republican
districts, their constituents are less
conservative and less hostile to the
federal government than are most
Republicans south of the Mason-
Dixon Line. If the House leadership
had accepted the hard right’s de-
mands, they would have risked losing
vital support from these center-right
overcome it produce a different pic-
ture. A majority of Greeks (62.1%) say
the crisis was the outcome “mostly of
our own weaknesses,” with only 9.7%
adhering to the view that foreigners
were the main culprits.
Even more remarkable are the
shifts in views toward the government
and its role in the economy. In April
2015, Greeks who wanted high taxation
combined with a strong welfare state
(49.7%) outnumbered those who pre-
ferred lower taxes and a weaker social
safety net (39.2%). Two years and
countless tax increases later, the pro-
ponents of low taxation, even at the
cost of fewer benefits, are now the ma-
jority—with a 22.6-point margin.
More than three out of five Greeks
(62.4%) want a smaller public sector,
while 73.2% believe the recovery will
come from incentives for foreign in-
vestment and exports. This is in con-
‘Media Attention’ and IRS Abuse
By John J. Vecchione
T
he Internal Revenue Service’s
targeting of Americans for their
political views may have ended
with the Obama administration—or
even with its exposure in 2013. But it
could easily recur. Even now, an inter-
nal IRS rule singles out applicants for
nonprofit status who might be tied to
anything newsworthy.
The genesis of the targeting scan-
dal was Section 7.29.3 of the Internal
Revenue Manual. As noted in a re-
port my organization issued Wednes-
day, this manual dictates how IRS
employees handle everything from
customer service to criminal investi-
gations. This particular section tells
them to flag for further review any
application for tax-exempt status
that might “attract media or Con-
gressional attention.”
That’s a broad, vague and subjec-
tive command that career IRS em-
ployees are nevertheless required to
follow. Emails between IRS personnel
make clear that low-level employees
were guided by this rule throughout
the targeting scandal. They repeat-
edly cited “media attention” on the
Tea Party as the reason to single out
DANIEL HERTZBERG
ways of making them more resilient.
For instance, the Tactical Undersea
Network Architectures program prom-
ises rapidly deployable, lightweight fi-
ber-optic backup cables, and autono-
mous undersea vehicles could soon be
used to monitor and repair cables. In
space, the military is leading the way
with advanced repair satellites as well
as new and experimental GPS satel-
lites, which will enhance both military
and civilian signals.
Still, America is falling behind in its
mission to keep the world’s virtual in-
frastructure secure. In part that’s be-
cause the Pentagon’s own IT is in such
dismal shape. Contractors buy com-
puter parts on eBay for missile-defense
systems, and the Navy pays Microsoft
to support obsolete operating systems.
representatives. Instead, the conces-
sions the leadership made to the cen-
trists have secured additional sup-
port for the health-care bill.
On Thursday, barring unexpected
developments, members of the Free-
dom Caucus will face a choice—with-
hold their votes and bring down a bill
supported by the House leadership
and President Trump, or surrender to
pressure and disappoint constituents
who are urging them to stand firm.
Assuming Mr. Ryan threads the
needle on Thursday and gets 216
votes, the House bill in its current
form cannot succeed in the Senate.
Nearly a dozen Republican senators—
including Ted Cruz, Mike Lee and
Rand Paul—have indicated serious
reservations.
On a recent trip to her home state,
Iowa’s Joni Ernst, a conservative rock
star during her 2014 race, said that
Republicans must “move cau-
tiously. . . . It is much more compli-
cated than simply saying ‘repeal
ObamaCare.’ ” That nearly 200,000
Iowans have gained insurance cover-
age under ObamaCare is probably a
relevant consideration.
trast to the 21.8% of Greeks who put
their faith in government spending to
spur growth. Globalization, spurned
in theory, is being embraced in prac-
tice as the only way out of the crisis.
A new poll shows
frustration with the EU,
but also with a lack of
economic reform at home.
After decades of dominance, the
ideological hegemony of the left seems
to be slipping, as the promises of a
left-wing government crash, wave af-
ter wave, onto the rocks of reality.
The opportunity that this creates
for Kyriakos Mitsotakis, the leader of
the center-right opposition New De-
and delay applications from conser-
vative groups.
This rule means that IRS enforce-
ment reflects the ideological biases
of the media. Aside from a small
number of groups related to the Oc-
cupy Wall Street movement and the
defunct advocacy group Acorn, liber-
tarian and free-market groups were
almost exclusively targeted.
These provisions of the IRS man-
ual have nothing to do with the mer-
its of a nonprofit application and ev-
erything to do with keeping the
agency from looking bad. It is inap-
propriate for a group’s tax-exempt
status to be deep-sixed because of
negative publicity.
In the targeting scandal, this ap-
proach allowed partisan concerns to
overtake the application process, re-
sulting in the unfair treatment of po-
litical viewpoints at odds with the
Obama administration.
Equal justice under the law de-
mands that the IRS abandon the
“newsworthy” criterion. To date,
however, the agency has promised
only to stop making lists of targeted
groups “until further notice.” Even if
the halt were permanent, it wouldn’t
be enough. IRS officials are still re-
Thursday, March 23, 2017 | A11
Ancient hardware and software not
only leave weapons vulnerable, they
also hamper the efficiency of back-end
business systems.
Earlier this month, I spent 10 hours
trying to reset a password on an Army
computer system so I could file finan-
cial disclosure forms. More than two
million people work for the Defense
Department. If only a fraction of them
has had a similar experience, think of
the time that the Pentagon’s anti-
quated IT wastes. That increases the
vulnerability of the front-line Ameri-
can soldier.
Investments in virtual infrastruc-
ture—to protect network connectivity
and upgrade military information sys-
tems—could have economywide bene-
fits. Recall that President Reagan’s de-
fense buildup in the 1980s not only
restored America’s military superior-
ity but helped juice recovery from the
1981 recession. It also pushed the
American electronics, aerospace and
communications industries toward in-
ternational dominance.
A reprise of targeted investment in
advanced IT—hardware and software—
is overdue. Getting it right could mean
more secure networks, more high-pay-
ing jobs and more technological break-
throughs in areas that will rule the
commercial and military future.
Ms. Eaglen is a resident fellow at
the American Enterprise Institute
and a former House, Senate and Pen-
tagon staffer.
Other Republican senators elected
in 2014—Cory Gardner, Shelley
Moore Capito, Bill Cassidy, Steve
Daines—have expressed similar
doubts. Arkansas’s Tom Cotton, not
hitherto known as a voice of re-
straint, is also counseling caution, be-
cause he doesn’t think the House bill
will work for the people of his state.
It’s easy to see why: Arkansas chose
to accept the ObamaCare option of
expanding Medicaid. The number of
uninsured Arkansans could more
than double, to 561,000 from 211,000,
if the ACA is repealed.
I doubt it has escaped Sen. Mitch
McConnell’s notice that these newly
elected senators are the reason he
became majority leader in 2015. Mr.
McConnell is under no obligation to
accept the House bill as his point of
departure, and he has a chance to
adopt a fresh approach.
At some point, some leader will be
clear-eyed enough to see, and brave
enough to say, that Americans would
fare better if both parties were in-
volved in this conversation. Why not
Mr. McConnell, a thoroughly unsenti-
mental realist?
mocracy party, is obvious. Greeks may
only be foul-weather liberals, led to
consider free-market solutions by the
abject failure of the previous model.
Yet, like Britons in the late 1970s, hor-
rified by the appalling outcomes of
statism and union excesses, they may
now be ready to back a radical pro-
gram—a “liberal revolution,” as Mr.
Mitsotakis puts it, to free up the econ-
omy from excessive taxation, regula-
tion and state intervention.
The question is whether Mr. Mit-
sotakis will be able to capitalize on
voters’ apparent receptiveness to
those ideas, win the next election and
stick to such a radical program, de-
spite the inevitable backlash.
Mr. Palaiologos is a journalist at
the Kathimerini newspaper in Athens
and the author of “The Thirteenth La-
bour of Hercules” (Portobello Books).
quired to follow the manual and pull
high-profile applications for en-
hanced scrutiny.
The IRS can change its employee
manual today. No new law is re-
quired. The simplest explanation for
why the agency hasn’t done so lies in
the nature of bureaucracies—they re-
fuse to relinquish power even after
demonstrated abuse. The procedure
for newsworthy applicants provides a
convenient cover to shield improper
partisan decision-making.
When an agency refuses to relin-
quish power, the White House can
step in. The Obama administration
had several years to address this is-
sue and didn’t.
This gives President Trump an op-
portunity to act decisively to end one
of his predecessor’s major scandals,
and to prevent one of his own. A sin-
gle change to internal IRS rules could
go a long way toward ending partisan
targeting by the tax agency, regard-
less of which party controls the exec-
utive branch.
Mr. Vecchione is president and
CEO of Cause of Action Institute, a
nonprofit government watchdog
based in Washington.
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BUSINESS & FINANCE
© 2017 Dow Jones & Company. All Rights Reserved.
Yen vs. Dollar 111.0290 g 0.61%
Baidu’s Chief Scientist Resigns
Andrew Ng said he was leaving Baidu to explore a ‘new chapter’ in artificial intelligence.
China Rally:
Full Steam
Ahead, for
Right Now
Doubts about U.S. Presi-
dent Donald Trump’s ability
to deliver on his agenda
knocked down U.S. stocks
after a big rally. An even
bigger upswing in China as-
sets remains intact: The
MSCI China International
Index is up 15% year to date,
the yuan has steadied and
credit-de-
fault swaps
are nearly
30% cheaper
than just 10
weeks ago.
HEARD ON But the
THE STREET domestic and
NATHANIEL global tail-
TAPLIN winds that
have pushed
Chinese as-
sets—in contrast to their U.S.
counterparts, lifted mostly by
high expectations—are al-
ready weakening.
The main driver has been
rising inflation, which boosts
companies’ pricing power,
shores up balance sheets and
pushes up earnings. Factory-
gate inflation, which was
negative as recently as Au-
gust, is now running at
nearly 8% a year, thanks in
large part to a commodity-
price recovery.
That is probably unsus-
tainable. Commodities prices
have fallen in recent weeks,
and year-on-year compari-
sons are going to get
tougher as we reach the an-
niversary of the late-2016 in-
flation surge. Improvements
in corporate pricing power
and earnings will lose mo-
mentum as well.
Valuations in the sectors
most vulnerable to a pullback
in inflation remain rich. In-
dustrial companies, China’s
second-largest sector by mar-
ket capitalization, traded at
59 times trailing earnings in
February, up from just 41
when the central bank’s cur-
rent easing cycle began in late
2014. Only information-tech-
nology and telecom stocks are
pricier. The median for all
Chinese shares is 53, accord-
ing to Wind Information Co.
The other factor support-
ing Chinese assets has been
an ebbing of capital outflows
as Beijing tightens controls
and the dollar slides, a prod-
uct of Mr. Trump’s slipping
momentum. Chinese govern-
ment bonds began to rally
on Feb. 7, the same day that
data showing a slowing of
capital flight was released.
The calm, however, may
not last. Chinese regulators
have largely closed the sluice
for outbound direct invest-
ment, but the country’s in-
vestors have proven remark-
ably skilled at finding holes
when market pressure war-
rants. If U.S. inflation and a
more-hawkish Federal Re-
serve reappear later this
year, we will find out just
how strong China’s newly re-
inforced barriers to capital
flight really are.
TECHNOLOGY: TENCENT WARNS OF RISKS AS PROFIT JUMPS B4
THE WALL STREET JOURNAL. Thursday, March 23, 2017 | B1
Hang Seng 24320.41 g 1.11% Gold 1247.90 À 0.14% WTI crude 47.78 g 0.95% 10-Year JGB yield 0.062% 10-Year Treasury yield 2.406%
Sinopec
BY LIZA LIN A Stanford University adjunct
professor, Mr. Ng was brought
Acquires
As Baidu Inc. accelerates ef-
forts to expand its artificial-in-
telligence capacities, it is losing
on to help the Chinese search-
engine firm build out its artifi-
cial-intelligence capabilities. He Assets
In Africa
one of its brightest stars. headed four Baidu research labs,
Baidu chief scientist Andrew including one in Silicon Valley
Ng said Wednesday that he was and Baidu’s big-data and
leaving the company to explore speech-technology groups. He
“a new chapter” in artificial in- split his time between Beijing
telligence, without providing and Sunnyvale, Calif. BY BRIAN SPEGELE
details. In a statement posted “This is a big blow to
online, Mr. Ng said he had been Baidu’s strategy on artificial BEIJING—China Petroleum
JEMAL COUNTESS/GETTY IMAGES FOR TIME “privileged to learn from both intelligence and a setback of & Chemical Corp. said it
the U.S. and Chinese AI com- the company’s international- would acquire controlling
munities—both of which are ization,” said Fang Xingdong, stakes in Chevron Corp.’s
powerhouses.” founder of internet strategy businesses in South Africa and
“The U.S. is very good at in- think tank Chinalabs. Botswana, in a roughly $900
venting new technology ideas,” Mr. Ng’s departure comes million deal that underscores
he said. “China is very good at two months after the firm the ambition of China’s oil
inventing and quickly shipping hired Qi Lu, a former top exec- companies to earn more
AI products. I’m happy also to utive with Microsoft Corp., to money abroad as profits
have had an opportunity to con- oversee key business units. shrink at home.
tribute to the rise of AI in both Baidu said on its social-media The Chinese company, bet-
China and the U.S.” Please see BAIDU page B2 ter known as Sinopec, said
Wednesday it will buy a 75%
stake in Chevron’s South Af-
E-Sports Cheaters in Crosshairs
rica assets including a Cape
Town refinery and hundreds of
gas stations. The other 25%
Videogame firms battle players who use software giving them perfect aim, making them invisible
will be owned by local share-
holders as required by South
African regulations.
Sinopec will acquire all of
Chevron’s Botswana subsidiary.
The deal, if completed,
would mark a significant
foray into Africa by China’s
largest refiner, which is seek-
ing new markets to sell gaso-
line, diesel and other prod-
ucts as growth at home slows.
The state-controlled Chinese
company said it plans to in-
vest in technological up-
grades for the businesses if
the deal is approved, although
it didn’t provide details.
For Chevron, the deal with
Sinopec would be part of a
broader move to shed billions
of dollars of assets world-
wide. The San Ramon, Calif.,
company has already been
paring back its Asia opera-
tions, and some observers had
been expecting the deal’s an-
UBISOFT/ASSOCIATED PRESS
nouncement this week.
“We believe the deal makes
broad commercial sense for
Chevron,” said analysts at BMI
Research in a note this week
ahead of the deal.
Chevron confirmed the
Ubisoft, which publishes ‘Tom Clancy’s The Division,’ banned more than 40,000 players for cheating over the course of nearly a year. deal and said it selected Sino-
pec as “the preferred bidder”
BY SARAH E. NEEDLEMAN are banning players by the solely to combat cheating. small prize pools, according for the assets due to its bet-
tens of thousands, hiring spies Panopticon Laboratories to Marcel Menge, managing ter offer and “the strategic
Videogame companies to uncover illicit code and LLC, a cybersecurity com- director at ESL. value this investment offers
pushing online competitions spending more on software pany, estimates players Players tend to feel anony- to their longer-term strategy
are grappling with the digital designed to prevent or iden- world-wide spend between mous at home, Mr. Kaplan in Africa.”
equivalent of performance-en- tify cheating. $350 million and $500 mil- said. When cheating becomes Despite its relatively mod-
hancing drugs. Activision Blizzard Inc., e- lion a year on cheat software, rampant, “the perception of a est size, the deal will likely
Players looking for an edge sports contest organizer ESL which is widely available for game and community around catch the eyes of investment
are using unapproved software and other companies said they purchase online. it can deteriorate very bankers and energy execu-
and exploiting bugs to make spend hundreds of thousands Using the software isn’t il- quickly,” he said. tives globally, many of whom
their weapons fire with per- of dollars a year on such soft- legal, though such behavior of- Widespread cheating at the have been eagerly awaiting
fect aim, among other advan- ware, and more for personnel ten violates a game’s terms of casual or amateur level could signs that China’s oil compa-
tages, derailing honest gamers to investigate complaints. service, said Ryan Morrison, reduce the likelihood that nies were returning to global
vying for prominence, social- Those costs are expected to an attorney in New York. players will aspire to go pro deal making after a hiatus.
media fame and, in some rise, they said. While cheating has been and hurt the perception of the An anticorruption campaign
cases, prize money. “It’s an arms race,” said Jeff rare among the professional e-sports industry overall, said by China’s president, Xi Jin-
The cheating pushes consci- Kaplan, director of the team- ranks of computer gamers, Mike Hickey, an analyst at in- ping, has targeted graft in the
entious players to quit, which based shooter game “Over- some of whom compete for vestment bank Benchmark Co. oil industry in particular,
can hurt sales and discourage watch,” around which Activi- million-dollar pots, it has If it gets out of control, “peo- which bankers and executives
people from embracing e- sion Blizzard is building a pro been more common at the ple will lose interest in e- in China say has contributed
sports just as it begins to win league. The game’s develop- amateur level, where aspiring sports and that will feed up to fewer overseas deals in re-
mainstream acceptance. ment team last month hired e-sports athletes vie from the chain.” cent years.
To fight back, companies its first full-time engineer home for recognition and Please see GAMES page B4 At the same time, Sinopec
says it must increasingly seek
profit outside its home mar-
Car Makers to Trump: Help Pry Open China ket. Falling diesel demand in
China has contributed to a
vast glut of supply, which has
eaten away at refining mar-
Top auto makers, facing the gins that Sinopec relies on for
threat of costly North Ameri- profit. Overseas deals help it
can trade-policy changes, want to hedge its bets on China’s
the Trump administration to economy as it increasingly
take a harder line on a market shifts toward services and
thousands of miles from their other less-energy intensive
home turf. sectors for growth.
BMI Research said oil stor-
By Trefor Moss, age tanks in South Africa in-
Chester Dawson and cluded in the deal would help
William Mauldin Sinopec improve its burgeon-
ing global trading operations.
China’s car business is at-
tractive to outsiders chasing
sales growth, but rules pro-
tecting local companies dent
profits of global auto giants
INSIDE
LUKE SHARRETT/BLOOMBERG NEWS
and force them to share tech-
nology with potential rivals.
YASUYOSHI CHIBA/AFP
The 25% tariff on vehicle im-
ports makes U.S.-built automo-
biles too expensive for most
buyers in the world’s largest
auto market.
President Donald Trump
has said he wants to level the
playing field with China on
trade, threatening steep tar-
Vehicles assembled in the U.S. awaiting shipment from the port in Charleston, S.C. GE TAKES AIM
iffs. Beijing sees its auto in- with Mr. Trump several times rates. Executives have said congressional proposal for a AT INDUSTRIAL
dustry as a strategic asset,
and a battle over trade barri-
since his inauguration, ex-
pressing a variety of concerns
they can adjust, given time, to
Mr. Trump’s promised over-
border-adjusted tax that
would hit imports.
PROFITS
ers could lead to a standoff. ranging from emissions regu- haul of the North American An adviser to Mr. Trump’s
Industry leaders have met lations to corporate tax Free Trade Agreement and a Please see CAR page B2 BUSINESS NEWS, B3
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Thursday, March 23, 2017
INDEX TO BUSINESSES
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
A Emirates Airline.........A3
Activision Blizzard B1,B4
Adidas ......................... B3
Akzo Nobel ................. A1
Alibaba Group.............B4
Amway........................A6
Anbang Insurance
Group ........................ A7
A. P. Moller-Maersk ... B2
Avon Products............A1
B Herbalife.....................A6
Baidu ........................... B1
Brookfield Property
Partners....................B5
C Bank of China...........B7
Cerberus Capital
Management ............ A1
China CITIC Bank........B5
Coty.............................A6
D Kushner Cos................A7
Dow Chemical.............A2
DuPont........................A2
E Mary Kay.....................A6
Electronic Arts............B4
INDEX TO PEOPLE
C
Case, Steve.................B5
H Loyd, Markeith ........... A7
Hornsey, Liane............B4
Huffington, Arianna...B4
J
J.D. Vance ................... B5
K
Kalanick, Travis...........B4
BAIDU
Continued from the prior page
platforms that Mr. Ng’s depar-
ture was a loss, but that it was
grateful for his contributions.
“Hey Andrew, our friend-
ship lasts as long as the world
endures,” Baidu said.
A person familiar with Mr.
Ng’s plans said he isn’t in talks
to join a major tech company
or a Baidu competitor, but
Mr. Ng’s departure
comes as Baidu is
strengthening its
focus on AI.
plans to continue working in
artificial intelligence. Those
plans might include launching
a startup or focusing on re-
search, this person said.
Mr. Ng’s departure comes as
the Beijing-based firm is
strengthening its focus on artifi-
cial intelligence. Facing increas-
ing competition from domestic
rivals Alibaba Group Holding
Ltd. and Tencent Holdings Ltd.,
Baidu has said it would be fo-
cusing on its core strengths of
machine learning and autono-
mous driving. Chairman Robin
ADVERTISEMENT
Legal Notices
  
New Avon ................... A6
Etihad Airways...........A3 Nike.............................B3
F P
Facebook......................B4 Panopticon
Laboratories ............ B1
G
Peabody Energy..........A7
Gas Natural.................B3 PepsiCo........................B7
General Mills...............B7 Ping An Insurance of
H China.........................B5
PPG Industries............A1
Hapag-Lloyd................B2
Q
Hermes International.B3 Qatar Airways ............ A3
I S
Industrial & Commercial Supercell......................B4
T
International
Tencent Holdings...B4,B7
Consolidated Airlines
Group ........................ A8 U
K Uber Technologies ...... B4
W
M-N Wal-Mart Stores........A7
Wells Fargo.................B5
Maersk Line................B2
Y
Monsanto....................A2 Younique ..................... A6
Kushner, Charles ........ A7 Parker, Mark ............... B3
L S
Scott, Rick .................. A7
M Sloan, Timothy ........... B5
Stolly, Dustin..............B5
Ma, Pony.....................B4
Mayer, Steven ............ A6 T U.S. issues subpoenas
McCoy, Sheri...............A6 Tang, MK.....................A2
Mnuchin, Steven.........B7
W
N-P
Wallace, Kim...............B7
Ng, Andrew.................B1 White, Scott...............A6
Li is seeking to make its offer-
ings more efficient.
Mr. Ng’s 2014 hiring was
considered a major coup for
the Chinese internet company,
whose main business is
search. Before joining Baidu,
he led Google Brain, Google’s
deep-learning research proj-
ect, and co-founded the Cours-
era online-education company.
The 40-year-old grew up in
Hong Kong and Singapore, and
holds degrees from the Massa-
chusetts Institute of Technol-
ogy and University of Califor-
nia, Berkeley.
Baidu has seen its influence
and market valuation slip in re-
cent years. Alibaba and Tencent,
once operating in separate areas
of the internet, are starting to
increase their investments in
similar technologies.
Baidu named Vice Presi-
dent Wang Haifeng as the
new head of its AI group to
succeed Mr. Ng.
Mr. Wang, a former presi-
dent of the Association for
Computational Linguistics, has
been with Baidu since 2010. He
is also the department chair at
Peking University’s department
for language information engi-
neering. He was previously
chief research scientist at
Toshiba China R&D Center and
held an assistant researcher
position at Microsoft.
—Yang Jie
contributed to this article.
BANKRUPTCIES
The largest ocean carriers have grouped into three major alliances, sharing port calls and vessels. Meanwhile, freight rates have risen.
Shipping Probe Intensifies
to fleet operators
amid investigation
of possible price fixing
BY COSTAS PARIS
AND PAUL PAGE
U.S. Justice Department in-
vestigators crashed a meeting
of the world’s 20 biggest con-
tainer-shipping operators and
gave subpoenas to top execu-
tives at several companies as
part of a probe on price fixing,
people with knowledge of the
matter said.
Maersk Line, a unit of Dan-
ish conglomerate A.P. Moller
Maersk A/S and the world’s
biggest container-shipping line,
confirmed it was subpoenaed
during the so-called Box Club
meeting in San Francisco last
Wednesday. Germany’s Hapag-
Lloyd AG also said it was
handed a subpoena by Justice
Department investigators.
The people familiar with the
investigation said that many of
the CEOs at the meeting were
given subpoenas, while investi-
gators went to the U.S. offices
of other smaller operators.
The probe is the latest in a
series of investigations by reg-
ulators around the world into
possible price fixing as the
CAR
Continued from the prior page
trade team said the auto in-
dustry’s China concerns are
definitely on the new adminis-
tration’s radar.
“Absolutely this has come
up, and it will be a very big
part of Trump’s actions and
policy toward China,” said Dan
DiMicco, former chief execu-
tive of steel firm Nucor Corp.
and an adviser to Mr. Trump’s
BUSINESS & FINANCE
largest ocean carriers have
grouped into three major alli-
ances, sharing port calls and
vessels in an effort to save bil-
lions in annual operating costs.
The alliances will begin opera-
tions in April and move about
90% of all cargo across the
world’s major trade routes.
A Maersk Line spokesman
said the subpoena didn't “set
out any specific allegations.”
Maersk and Hapag-Lloyd said
they would cooperate fully
with the U.S. authorities.
A Justice Department spokes-
man declined to comment. News
of the raid was earlier reported
by the Journal of Commerce.
The investigation comes as
industry analysts say ocean
freight rates have recovered
strongly from a deep trough in
early 2016 that sent carrier
earnings into a tailspin, and
that shipping prices have been
rising at a steep pace this year.
London-based Drewry Ship-
ping Consultants Ltd. said in a
recent report that freight-ship-
ping prices from Europe to Asia
rose sharply early this month
amid reports by shipping lines
that ships were full, something
Drewry termed “highly un-
usual” on routes where capacity
is usually plentiful.
Patrik Berglund, chief exec-
utive of Norway-based con-
tainer-shipping analysts Xen-
dustry bedrock to China’s fu-
ture as a high-tech manufac-
turer. Foreign car companies
use Chinese factories to build
most of the cars they sell in
China. They must operate
these factories and sales or-
ganizations as joint ventures
with local partners according
to Chinese government regula-
tions.
Yale Zhang, managing di-
rector of research firm Auto-
motive Foresight, said trying
to force a change is “just use-
less” because the WTO would
THE WALL STREET JOURNAL.
eta, said freight-shipping
prices under recent long-term
contracts for moving goods
from Asia to the U.S. West
Coast are up nearly 50% from
rates negotiated in early 2016.
Carriers have been able to
raise prices since last year by
idling ships, he said, and were
helped in part by the collapse of
South Korea’s Hanjin Shipping
Co. last year. Shipping lines ac-
celerated their withdrawal of
Rates for containers
have recovered
strongly from a deep
trough in early 2016.
ships during the period leading
to this year’s Lunar New Year,
when China’s production and ex-
ports typically slip.
But, Mr. Berglund said, “We
don’t see the net reduction of
capacity being significant
enough for the uptick” in prices.
In the Asia-to-Europe route,
the world’s busiest, freight rates
have averaged $960 per con-
tainer this year compared with
$695 in 2016, according to bro-
kers in Singapore and Europe.
Operators say anything be-
low $1,400 per box on the
Sales of foreign-made cars
accounted for just 4% of
China’s 24.4-million vehicle
market in 2016, which is
nearly unchanged from 15
years ago, according Michael
Dunn, founder of consultancy
Dunne Automotive Ltd. “There
might as well be a sign saying:
Imports not welcome,” Mr.
Dunn said.
The American Chamber of
Commerce in Shanghai also
calls for “reciprocity” in Sino-
U.S. trade, citing “the Chinese
government’s industrial poli-
SIMON DAWSON/BLOOMBERG NEWS
route is unsustainable and
have repeatedly denied price-
fixing allegations.
The low freight rates and
anemic trade demand resulted
in around $5 billion in com-
bined losses among the top 20
container lines last year, ac-
cording to shipping executives.
Korea’s Hanjin, at one time the
world’s seventh-largest con-
tainer-shipping line, filed for
receivership last August as a
result of the downturn.
The Justice Department
probe is the latest in a series
of investigations by watchdogs
in the U.S., European Union,
China, Australia and South Af-
rica. Many such probes end
without prosecutions.
The most recent Justice De-
partment prosecution came last
year in a Baltimore case when
four global ferry operators
pleaded guilty to price-fixing
charges and were fined $230
million in total, with some exec-
utives getting prison terms.
Then-Federal Maritime Com-
mission Chairman Mario Cord-
ero said in December as the reg-
ulatory body approved one of
the carrier groupings, called
THE Alliance, that the commis-
sioners “will continue to care-
fully focus on the impacts of the
carrier alliance restructuring
that is taking place in the ship-
ping industry.”
industry rashly” and expose
Chinese companies to the “di-
sastrous effects” of foreign
competition.
The domestic auto indus-
try’s reaction boosts the
stakes for Beijing, and could
complicate any effort by the
U.S. to reshape China’s auto
sector.
General Motors Co., one of
the largest auto makers in
China by volume, says Bei-
jing’s rules actually hold China
back from fully integrating in
the global auto industry.
  
 
 
     

 
 6 
 
 


  

campaign and transition team. likely back Beijing based on its cies and the lack of meaning- “It’s very difficult to export

   
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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Thursday, March 23, 2017 | B3

BUSINESS NEWS

Hermès Posts Strong Gains GE Pledges Cost Cuts

Amid Activist Pressure
Luxury firm’s profit
BY THOMAS GRYTA
rises 13% as shoppers
are undeterred by General Electric Co. prom-
ised to cut an additional $1
geopolitical uncertainty billion in costs from its indus-
trial operations over two years
BY MATTHEW DALTON and to more closely tie top ex-
ecutives’ bonuses to profit in
PARIS—Hermès Interna- its core business.
tional said Wednesday its The changes outlined
profit jumped 13% in 2016, as Wednesday follow discussions
the French luxury company with activist investor Trian
powered through tough market Fund Management, which has
conditions that have slowed been pressuring the conglom-
the industry globally. erate to boost profit.
The results confirmed Her- On Wednesday, GE said it
mès’s rare position in the lux- would target $17.2 billion in
ury-goods sector: a brand that operating profit in 2017 and
TONY GENTILE/REUTERS
with the new framework and
that GE should continue “simpli-
fying and streamlining” its or-
ganization to achieve financial
goals. “We will continue to hold
management accountable to its
commitments,” Trian said.
The firm took a $2.5 billion
stake in GE in late 2015 and had
expressed support for the com-
pany’s plan to divest most of its
lending business and refocus on
making jet engines, power tur-
bines and other heavy equip-
ment. But recently Trian has
been frustrated by missed profit
goals, according to people famil-
iar with the matter.

appears largely immune for plans to reduce its industrial In recent years, the conglom-
now to the vagaries of taste and expenses to $23.9 billion. It erate has refocused on its indus-
geopolitics. plans to cut another $1 billion trial businesses, shedding low-
Hermès’ mainstay busi- in spending in 2018. The new margin units like home
ness—bags that sell for thou- cost-cutting goal is twice that appliances and striking a big oil-
sands of euros—buoyed it in laid out by GE CEO Jeff Im- and-gas deal with Baker Hughes
an uncertain environment. A Hermès boutique in Rome. Tough conditions in Europe have had little impact on the brand. melt in a January earnings Inc. last fall. But analysts have
“We are outperforming the conference call. recently warned the company is
sector,” Chief Executive Axel all. The region has been a weak 2016, Hermès’s bag and leather Hermès has recently ex- Following talks with Trian, unlikely to reach a long-term
Dumas said. “To show this re- spot for other luxury compa- goods division was robust, panded bag production, hiring the GE board changed the bo- goal to deliver $2 a share in
sult in 2016 is quite an nies, as the attacks have with sales rising 14%. several hundred new employ- nus plan for Mr. Immelt and profit in 2018.
achievement.” prompted globe-trotting shop- The company reported re- ees at its workshops in France. those reporting directly to him GE has been discussing new
The company posted profit pers to stay at home. In the cord operating margins of The move carries risk for a so that the amounts could be cost moves since December. The
of €1.1 billion ($1.2 billion). Americas, sales rose 7% despite 32.6%. product renowned for its ex- sweetened or reduced by as cuts focus on four areas, includ-
Sales for the year rose 7.5% to political uncertainty fanned by The least expensive Hermès clusivity, some analysts say. much as 20% depending on ing shrinking headquarters staff,
€5.2 billion. the raucous U.S. presidential bags sell for slightly over “Assuming that Hermès is whether the two profit and centralizing information-technol-
Tough conditions in Europe vote. Other luxury companies €1,000, while iconic Birkin and different and will stay differ- cost goals are reached. Last ogy operations, reducing re-
in the aftermath of the Paris reported weak sales in the re- Kelly bags sell for tens of thou- ent over time may carry signif- year, GE’s executive compensa- search spending and accelerating
and Brussels terror attacks had gion amid the election turmoil. sands of euros each. “All of our icant risk for the long-term in- tion plan paid only 80% of its cuts in discretionary spending.
little impact on the company. While sales at Hermès’s models, regardless of the price vestor,” Exane BNP Paribas target because the company —Austen Hufford
Hermès said sales rose 5% in smaller businesses, such as point, sold very well,” Mr. Du- analyst, Luca Solca, said in a missed profit targets. and Ted Mann
France and 8% in Europe over- ready-to-wear fashion, fell in mas said. client note. Trian said it was pleased contributed to this article.

Spanish Utility Sues Colombia Over Asset Seizure

BY JEANNETTE NEUMANN in the United Nations Commis-
sion on International Trade
MADRID—Gas Natural SDG Law, a body that arbitrates
SA, one of Spain’s largest utility disputes between states and
providers, said it was filing a foreign private investors.
suit against Colombia after the Gas Natural demanded full
government seized one of its restitution of Electricaribe, as
companies, the latest example the company is called, accompa-
of an increase in legal claims nied by a “viable regulatory
that investors have brought framework” to be implemented
against governments in inter- by Colombia. If not, Gas Natural
national arbitration courts. said that it would demand more
Gas Natural accused Colom- than $1 billion in compensation
bia of “expropriation” of its from the Colombian govern-
electricity provider Electrifica- ment, based on what the com-
dora del Caribe SA and said it pany said in a statement was a
had filed a case against Bogotá preliminary valuation.
That figure represents Elec-
tricaribe’s market value, Gas
Natural’s General Counsel Ma-
nuel García Cobaleda said in
an interview. The company
says Electricaribe has a book
value of $514 million (€475
million). Shares in Gas Natural
were up 1.2% in afternoon
trading in Madrid.
Representatives of the Co-
lombian government and the
country’s embassy in Madrid
didn’t have immediate com-
ment.
Gas Natural’s move is in re-
sponse to Colombia’s an-
nouncement last week that it
would seize and sell off the as-
sets of Gas Natural’s Electri-
caribe because the electricity
provider was unable to pro-
vide adequate service to its
2.5 million customers along
Colombia’s Caribbean coast.
Electricaribe was also un-
able to afford the necessary
upgrades to prevent power
blackouts that have been exas-
perating clients, Colombia’s
superintendent of services
said last week. Gas Natural
owns 85% of Electricaribe.
Companies have increas-
ingly taken legal claims to in-
ternational arbitration over
the past few years. One re-
course is the U.N. commission
chosen by Gas Natural. An-
other is the International Cen-
ter for Settlement of Invest-
ment Disputes, known as
ICSID, a World Bank body.
The number of investor-
state dispute settlements has
risen partly because treaties
permitting such claims to be
settled by international bodies
have also increased. A record
74 investor-state arbitrations
were initiated in 2015, accord-
ing to U.N. data. Sixty-two
cases were brought last year.
Gas Natural’s case against
Bogotá would increase the
number of investor-state arbi-
trations against Colombia to
five, according to U.N. data.
Argentina, by comparison,
has faced 59 cases. Spain has
faced 34, most of which are
pending and relate to legisla-
tive changes the government
made to subsidies for photo-
voltaic and other green-energy
investments.
—Sara Schaefer Muñoz
contributed to this article.

Tepid Outlook on Growth

Sends Nike Shares Lower
BY SARA GERMANO

Shares of Nike Inc. fell

Wednesday after the world’s
largest sportswear maker gave
a tepid outlook for sales
growth.
Nike late Tuesday posted a
BRENDAN MCDERMID/REUTERS

jump in quarterly profit, but

the company faces stiffer com-
petition and a changing retail
landscape. Its shares were
down 6.3% in early afternoon
trading Wednesday, at $54.37.
The decline, Nike’s largest
single-day percentage slide
since 2012, made the stock the Nike CEO Mark Parker says online shopping presents a challenge.
day’s worst performer in the
Dow Jones Industrial Average. the end of its next fiscal year. lion.
Nike executives said the Nike reported Tuesday a Nike’s stock dropped 19%
shift to online shopping has quarterly profit of $1.14 bil- last year, making it the biggest
made traditional brick-and- lion, or 68 cents a share, up loser in the Dow Jones Indus-
mortar retailing more difficult. from $950 million, or 55 cents trial Average.
“It’s driving a more promo- a share, a year earlier. Reve- —Ezequiel Minaya
tional environment in the near nue increased 5% to $8.43 bil- contributed to this article.
term,” Chief Executive Mark
Parker said. ADVERTISEMENT
The world’s largest sports-
wear maker said it expected to
tighten the supply of products The Mart
it releases in North America,
the largest sporting-goods BUSINESS OPPORTUNITY
market. Sales in its home mar-
ket rose 3% in the quarter
ended Feb. 28.    
 

Nike’s world-wide futures

 
  


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ship in the next six months, 
 



 
  

fell 4%, and the company fore-     
 
  


 
cast mid-single-digit sales    


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 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B4 | Thursday, March 23, 2017
PAUL YEUNG/BLOOMBERG NEWS
The Chinese internet giant posted a 48% rise in revenue last year.
Tencent Remains Wary
Despite Rapid Growth
BY KATHY CHU
HONG KONG—Tencent
Holdings Ltd. warned it faces
stiff competition in its core
gaming and content busi-
nesses, despite notching
sharply higher quarterly reve-
nue as the Chinese internet gi-
ant continues to expand
abroad.
The company, one of Asia’s
most valuable technology
firms, is experiencing strong
growth in online games, so-
cial-media advertising and
cloud services, Chairman and
Chief Executive Pony Ma said
Wednesday.
While describing the com-
pany’s latest results as “solid,”
Mr. Ma sounded a note of cau-
tion. “We have to be very vigi-
lant to potential risks,” he told
reporters when asked about
the company’s top challenges.
“Our competition is one, and
whether we can catch up with
innovation” is another, he
said.
Tencent is the world’s larg-
est game publisher by reve-
nue—competing with U.S.
names such as Electronic Arts
Inc. and Activision Blizzard
Inc.—and obtains nearly half
of its revenue from online
games.
The Shenzhen-based com-
pany also operates social-me-
dia platforms WeChat and
Weixin in China, which to-
gether have close to 890 mil-
lion monthly active users.
Tencent on Wednesday re-
ported a 47% rise in fourth-
GAMES
Continued from page B1
A week after releasing
“Overwatch” in May, Activi-
sion Blizzard discovered thou-
sands of players using cheat
programs to help their charac-
ters see through walls and fire
weapons that never miss. Oth-
ers exploited a bug to repeat-
edly hide in unsanctioned ar-
eas, which Activision Blizzard
considers cheating. The com-
pany said it banned the of-
fenders.
“People who are very smart
come up with sophisticated
ways to get around the pre-
vention methods,” Mr. Kaplan
said.
Other examples of video-
game cheating include tweaks
that allow players to dodge
enemy attacks in ways not
permitted and the use of bots
to help players compile re-
sources such as virtual gold so
they can quickly advance in
the game’s environment.
Fernando Dominguez quit
playing “Tom Clancy’s The Di-
vision” two months after buy-
ing it. The 35-year-old Miami
resident, who said he spends
GEELY
Company Withdraws
Its Offer for Proton
Zhejiang Geely Holding
Group Co., the Chinese auto
maker that owns Volvo Cars,
has withdrawn its planned bid
for a majority stake in Malaysian
car maker Proton Holdings
Bhd., Geely President An Con-
ghui said Wednesday.
The company decided to walk
away from talks with Proton
some 10 days to two weeks ago,
he said. The Malaysian car
maker kept changing its mind in
the business proposal, Mr. An
said. He declined to comment
whether the discussions fell
apart because of the price.
A spokesman for Proton
owner DRB-Hicom Bhd. said the
company didn’t have any com-
ment at the moment about
Geely, but said the bidding pro-
cess is still ongoing.
Geely executives had been
engaged in talks with Proton for
quarter profit to 10.53 billion
yuan ($1.53 billion). Profit for
the year rose 43% to 41.10 bil-
lion yuan while revenue rose
48% to 151.94 billion yuan.
Investors and analysts are
watching to see how success-
fully Tencent can expand its
footprint overseas. One con-
cern is that Tencent’s aggres-
sive content investment will
drag down its gross margin,
according to Richard Ko, an
equity analyst at China Mer-
chants Securities.
Last year, Tencent joined
with Chinese investors in an
$8.6 billion acquisition of Su-
percell Oy, the Finnish maker
of the popular “Clash of Clans”
videogame. Tencent already
owned Riot Games Inc., the
Los Angeles-based developer
of “League of Legends,” one of
the top-grossing PC games.
Tencent is also counting on
growth in advertising and mo-
bile payments, where its
WeChat mobile wallet com-
petes with Alibaba Group
Holding Ltd.’s Alipay in China.
Tencent said Wednesday
that payment volume for its
online wallet has doubled from
a year earlier, and that its
monthly active users exceed
600 million.
“Online payment is one of
the areas that stand out for
Tencent,” said Connie Gu, an
analyst at Bocom International
Securities, who rates the stock
as a buy.
 Heard on the Street: The bar
gets higher for Tencent....... B7
Some videogame companies buy services designed to block the cheat software.
about $100 a year on extra
content for games he likes,
grew tired of players taking
advantage of a loophole to
make their characters invisi-
ble.
“They were literally like
ghosts,” Mr. Dominguez said.
Ubisoft Entertainment SA,
which publishes “The Divi-
sion,” said it fixed the bug and
has banned more than 40,000
a few months, according to peo-
ple familiar with the situation.
DRB-Hicom said in February
it expected to pick a foreign
strategic partner for the unit in
the first half of the year.
France’s PSA Group, which
makes Peugeot and Citroën cars,
said last month that it had sub-
mitted a bid.
—Kane Wu
ALIBABA
China Firm to Set Up
A Hub in Malaysia
Alibaba Group Holding said
it would set up a trading and lo-
gistics hub in Malaysia as part
of its efforts to expand its reach
outside China and into the
Southeast Asia region.
The establishment of the hub
under Alibaba’s so-called elec-
tronic world trade platform
would “function as a centralized
customs clearance, warehousing,
and fulfillment facility for Malay-
sia and the region,” according to
TECHNOLOGY
Uber Promises to Change
Lone female director
says corporate culture
must improve; no
room for ‘brilliant jerks’
BY GREG BENSINGER
Four of Uber Technologies
Inc.’s most prominent female
officials sought to quell a
storm of controversy Tuesday
with the promise of sweeping
changes to the company’s cor-
porate culture, a soon-to-be-
released diversity report and a
new chief operating officer.
On a call with media, Uber
director Arianna Huffington
said the ride-hailing firm was
well under way with a search
for a new executive to serve as
a deputy to co-founder and
CEO Travis Kalanick, saying
there was no room for “bril-
liant jerks” at the company.
The call put a spotlight on
Ms. Huffington. The outspoken
entrepreneur and Uber direc-
tor has served as the com-
pany’s public face after a se-
ries of scandals rocked
management, stirred unrest
among drivers, customers and
employees, and forced apolo-
gies from the normally pugna-
cious Mr. Kalanick.
In February, Ms. Huffington
stepped in to help lead an in-
vestigation into allegations of
systemic sexism and sexual
harassment after a former en-
gineer at Uber wrote online
about her alleged experience
with chauvinistic behavior at
the company. Mr. Kalanick
condemned the behavior and
ordered the investigation, hir-
ing former U.S. Attorney Gen-
eral Eric Holder to help review
the charges.
Not long after those allega-
tions, an embarrassing video
of Mr. Kalanick berating a con-
tract driver surfaced online,
leading the 40-year-old execu-
tive to say he needed to “grow
up” and find a new operating
chief.
Mr. Kalanick has addressed
the scandals publicly only at
arm’s length through blog
posts and leaked letters to em-
ployees, confessing at one
players for different kinds of
cheating over the course of
nearly a year.
In a January survey, 16% of
respondents said they cheated
in a videogame, according to
Nielsen, which polled 939 U.S.
console and computer gamers
ages 13 and older. Just more
than a third said they stopped
playing a game because of
cheating; 38% said it has got-
BUSINESS WATCH
Alibaba.
It will “lower trade barriers
and provide more equitable ac-
cess to global markets for small
and medium enterprises and
young people around the world,”
Alibaba’s founder and executive
chairman, Jack Ma, said in a
speech at the launch of the hub
on Wednesday.
Mr. Ma said Malaysia would
be the first in the world to be
connected to an existing hub at
Alibaba’s headquarters in Hang-
zhou, China.
Mr. Ma has been pushing
for the setup of an Electronic
World Trade Platform since
last year in a move to help
small and medium enterprises
to bypass complex regulations
and protectionists trade poli-
cies and gain from global eco-
nomic development.
Malaysia Prime Minister Najib
Razak appointed Mr. Ma as his
government’s digital economy
adviser during an official trip to
China in November.
Mr. Najib announced plans to
THE WALL STREET JOURNAL.
The search continues for a chief operating officer to assist Uber co-founder and CEO Travis Kalanick.
point he needed management male.
guidance. The call itself was an un-
“There is a real appetite to usual step for a company that
change internally,” Ms. Huff- has achieved a nearly $70 bil-
ington said. “Creating a great lion valuation in part by un-
culture will be key to the fu- apologetically barreling into
ture success and, going for- new markets and facing down
ward, there can be no room at regulators and yellow taxi op-
Uber for brilliant jerks and erations.
zero tolerance for anything Employees say Mr. Kalan-
but totally respectful behav- ick’s hard-charging leadership
ior.” style filters through the com-
Ms. Huffington indicated pany and has created a culture
Mr. Kalanick’s job was secure. where employees are encour-
The CEO and investor and di- aged to outmuscle one another
rector Bill Gurley, who weren’t for management approval and
on the call, were busy inter- where bad behavior by high
viewing candidates for the performers is often over-
deputy role, said Ms. Huffing- looked.
ton, who added she is also in- Many investors and execu-
volved in the hiring process. tives have stood by Mr. Kalan-
Ms. Huffington, the lone fe- ick despite the negative atten-
male on Uber’s board, was tion swirling around the
joined on the call by three company. “We’re in the fortu-
other executives: Liane Horn- nate position that the business
sey, chief human resources of- remains healthy,” said Rachel
ficer; Ms. Holt; and Rachel Holt, head of Uber’s U.S. and
Whetstone, who oversees pub- Canada businesses. “Last week
lic relations. Most of Mr. Ka- riders in the U.S. took more
lanick’s direct reports are trips with Uber than ever be-
Riot Games in August sued the
makers of LeagueSharp, a $15
monthly service based in Peru
that provided hacks to sub-
scribers for cheating in its e-
sports game “League of Leg-
ends,” causing irreparable
harm to the player community,
according to the complaint.
Earlier this month, a court
forced LeagueSharp to shut
down and awarded Riot $10
million.
“Cheating sucks,” a Riot
spokesman said. “Riot is abso-
lutely committed to upholding
the competitive integrity of
CHESNOT/GETTY IMAGES
our game.”
The makers of LeagueSharp
didn’t respond to requests for
comment.
ESL, which organizes more
than 10,000 competitions an-
nually, pays freelance spies be-
tween $25 and $40 an hour to
ten worse in the past year. secure cheat software it can
Some companies buy ser- study. Cheaters are banned for
vices designed to block the six months before they can pe-
cheat software. BattlEye Inno- tition to return.
vations e.K. of Germany Activision Blizzard rou-
charges on average between tinely bans players who claim
$10,000 and $100,000 a year someone else used their cre-
for its technology, depending dentials to cheat, Mr. Kaplan
on a game’s number of play- said. “There are a lot of little
ers. brothers and roommates
Companies also take legal cheating in the world,” he
action. Tencent Holdings Ltd.’s said.
set up the zone in Malaysia’s na- and investments to keep up
tional budget in October. On with e-commerce growth.
Wednesday, he announced the Both FedEx and rival United
launch of the Digital Free Trade Parcel Service Inc. are strug-
Zone together with Alibaba. gling to keep pace with the
“We are now leading the e- dramatic growth of e-com-
commerce market in the region,” merce. While more people do-
Mr. Najib said. ing their shopping online is
—Yantoultra Ngui bringing added volume into
their networks, both are spend-
FEDEX ing heavily to build out pack-
age-sorting centers and auto-
Delivery Giant’s mating facilities to handle the
Margins Take a Hit extra deliveries more profitably.
Over all, third-quarter profit
FedEx Corp. said some of its rose 11% to $562 million, or
largest retail customers shipped $2.07 a share. Excluding integra-
fewer packages during the holi- tion and restructuring costs tied
day season than forecast, after to the acquisition of TNT Ex-
the U.S. delivery giant had press, profit fell to $2.35 a share
ramped up spending and staffing from $2.51 a share. Revenue
in anticipation of a crush of de- rose 18% to $15 billion.
liveries. The company said the inte-
The outcome hurt FedEx’s gration of TNT Express, acquired
bottom line during its fiscal third last year, is progressing
quarter ended Feb 28. While rev- smoothly and would add be-
enue surged 18%, helped by tween $1.2 billion to $1.5 billion
higher rates and more packages to the operating income of its
shipped, overall margins fell Express division by fiscal 2020.
amid a 30% rise in fuel costs —Paul Ziobro
WSJ.com/Tech
IMAGO/ZUMA PRESS
fore.”
There are signs of dissen-
sion in the ranks. On Sunday,
Uber confirmed Jeff Jones,
president of ride-hailing who
reported to Mr. Kalanick, had
resigned just six months after
being hired from Target Corp.
where he oversaw marketing.
He said in a statement “the
beliefs and approach to lead-
ership that have guided my ca-
reer are inconsistent with
what I saw at Uber.”
Other high-level executives
have left in recent weeks in-
cluding Ed Baker, vice presi-
dent of product and growth,
and Raffi Krikorian, who
helped oversee Uber’s self-
driving car efforts.
The company will prepare
its first diversity report by
month’s end, a step many Sili-
con Valley firms have already
taken. And the results of the
internal workplace investiga-
tion are expected to be re-
leased as soon as the end of
April, said Ms. Huffington.
LinkedIn
Will Add
Stories to
Lure Users
BY JAY GREENE
Microsoft Corp.’s LinkedIn
has begun adding a stream of
links to news and posts from
the site that is curated by edi-
tors, in a bid to convince cus-
tomers to linger longer on the
professional social network.
The new feature, Trending
Storylines, which made its U.S.
debut Wednesday, is the latest
attempt by LinkedIn to drive
engagement among its 467
million members, particularly
those who only visit the site
when looking for a new job.
The more frequently people
visit LinkedIn, the more reve-
nue the company can generate
from ads and useful member
data. Other countries will be
added soon, it said.
Trending Storylines will ex-
ist alongside the regular news
feed under a “Trending” tab on
the mobile app and at the top
right of the desktop site’s
home page.
LinkedIn has 25 employees
on its editorial team around
the globe who will select and,
in some cases, write on the
major issues of the day in
health care, technology and fi-
nance to fill the feed. More
topics are expected later. The
feed will use algorithms, based
in part on a member’s industry
and contacts, to show people
relevant storylines.
LinkedIn ultimately wants
to be more like Facebook and
Twitter, social networks that
have become digital destina-
tions. That would drive ad rev-
enue, which LinkedIn gener-
ates in large measure through
“sponsored content” that ap-
pears in users’ LinkedIn feeds.
In the third quarter of
2016—LinkedIn’s last quarter
as a publicly held company—
the company generated $175
million in revenue from its
marketing-solutions unit, with
about two-thirds coming from
sponsored content. It stopped
disclosing that revenue after
the Microsoft acquisition.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Thursday, March 23, 2017 | B5

FINANCE & MARKETS

Venture Capitalist Widens Search Wells Takes

Author of book about
A Deeper
poverty looks for tech
investments in states
Dive Into
off industry’s radar Its Culture
BY DENNIS K. BERMAN BY EMILY GLAZER

J.D. Vance’s memoir, “Hill- Wells Fargo & Co. has ad-
billy Elegy,” became a best mitted it has culture problems
seller for its unsparing look at related to its sales-practices
poverty and economic malaise scandal. Now, it is turning to
in American states such as an academic for help.
Kentucky and Ohio. Now, Chief Executive Timothy
Mr. Vance, a Silicon Valley Sloan said at a company town
venture capitalist, is heading hall Tuesday that the bank is
back to his home turf to find aiming to survey all its
venture deals for Steve roughly 269,000 employees
Case’s investment vehicle. about its culture, working with
Mr. Vance has relocated to an academic who specializes
Columbus, Ohio, and will begin in this area. The bank declined
his search for opportunities to name the academic.
there and across states that The 20- to 30-minute sur-
get sparse amounts of venture vey will roll out in May. The
investment, he said Monday. bank declined to say when the
He will be making the in- survey will be completed, but
vestments as part of Mr. Case’s Mr. Sloan said the analysis and
Revolution LLC funds, which proposed actions will be
ASTRID RIECKEN/GETTY IMAGES

have more than $1 billion in shared with senior executives.

capital for companies at differ- He added that “high-level
ent stages of development. results” will be shared with
Their first goal is to find bank employees.
the hottest new startups, but “Our goal is to uncover our
Mr. Vance said he wanted to culture’s positive attributes
help change the complexion of and its potential weaknesses,
economic development across so our leaders can understand
the U.S. In 2016, California J.D. Vance, a Silicon Valley venture capitalist and the author of ‘Hillbilly Elegy,’ a book that looks at poverty in America, has relocated how best to foster an ethical,
companies received $28.4 bil- to Ohio to find deals for Steve Case’s investment vehicle in the ‘47 states’ that get 20% of U.S. venture-funding commitments. inclusive, and customer-fo-
lion in venture funds out of a cused culture,” Mr. Sloan said.
total $52.4 billion, according has been a part of Mith- Ohio. He eventually went on to preaches a message of entre- the same for a generation. Cal- Earlier Tuesday, a regulator
to Dow Jones VentureSource. ril Capital, the venture vehicle the U.S. Marine Corps, Ohio preneurship to areas beyond ifornia attracted 46% of ven- continued to jab Wells Fargo
Ohio, by comparison, attracted for Silicon Valley investor Pe- State University and Yale Law venture hubs such as Silicon ture capital 10 years ago and about its culture problems. Fed-
$303 million and Kentucky ter Thiel, and he said he would School. The book is No. 2 on Valley and Boston. 45% in 1997, according to Dow eral Reserve Bank of New York
$22 million. continue to do some work for the New York Times’s nonfic- “We’re trying to do what Jones VentureSource. The last President William Dudley said
“A lot of problems I write Mithril. At Revolution, he said tion best-seller list, where it we can to level the playing significant technology deal in remarks prepared for a
about are not entirely eco- he isn’t focused on specific in- has been for 33 weeks. field,” Mr. Case said. “J.D.’s ex- from Columbus, Ohio, was also speech in London that the Wells
nomic,” said Mr. Vance, 32 dustry sectors or geographies Mr. Case met Mr. Vance via perience as an investor and in 1997, when AOL bought con- Fargo sales-practices scandal is
years old. “But a lot of these other than the “47 states” that exchanges on Twitter, and that understanding the sentiment sumer-Internet company Com- just one example of how banks
areas have been left behind receive 20% of the nation’s led to more serious discus- of a lot of people struggling, puServe for $1.2 billion. have to improve their cultures.
and it does add to the prob- venture commitments. sions about working together. brings us a reputation to take “My metric for success is “There was a serious mis-
lems and makes it harder to “Hillbilly Elegy,” published Mr. Case has for years been ‘The Rise of the Rest’ to the do we elevate the conversation match between the values
solve them. There is a lot of in 2016, is a coming-of-age promoting his ideas about next level.” and bring attention to these Wells Fargo espoused and the
energy and untapped re- story set amid parental neglect “The Rise of the Rest,” in While the numbers have ecosystems, and in the process incentives that Wells Fargo
sources in these cities.” and economic disruption in which the former America On- changed somewhat, the dy- do we close the capital and employed,” Mr. Dudley said in
Mr. Vance most recently Jackson, Ky., and Middletown, line Inc. chief executive namics have been essentially jobs gaps?” said Mr. Vance. prepared remarks. He has
been one of the most outspo-
ken regulators on bank culture

China’s HNA to Buy Building in New York

in recent years.
Speaking at the bank’s Or-
lando, Fla., event, Mr. Sloan
echoed the criticism. “This is
BY KEIKO MORRIS The agreement was first re- the U.S. overall and in New why our operating committee
ported by The Real Deal. York City in particular.” and I agree on this important
A Chinese conglomerate is Brookfield has a 51% stake in In 2008, Boston Properties point: If there’s one thing we
in contract to buy a Park Ave- the tower, and its partner Inc. and investors, including must get right as we lead
nue office building for $2.21 holds 49%. the sovereign-wealth funds of Wells Fargo forward, it is our
billion, among the highest Completed in 1967, the 45- Kuwait and Qatar, paid $2.8 culture,” he said according to
prices ever paid for a New story building at 245 Park Ave- billion to buy the General prepared remarks.
York tower, according to a nue has financial tenants in- Motors Building at 767 Fifth Wells Fargo in September
person familiar with the deal. cluding Société Générale and Ave. paid a $185 million fine over
HNA Group has signed a Ares Capital Corp., and sits In 2014, Chinese invest- opening as many as 2.1 million
deal to buy the 1.8-million- just north of Grand Central ments in New York City com- accounts using fictitious or
square-foot skyscraper from Terminal in the heart of Mid- mercial real estate totaled unauthorized customer infor-
Brookfield Property Partners town Manhattan’s traditional $500 million, according to mation.
COSTAR GROUP

LP and the New York State office corridor. Such proper- Cushman & Wakefield and Mr. Sloan said the San Fran-
Teachers’ Retirement System, ties are considered safe invest- Real Capital Analytics Inc. It cisco bank used a different type
according to the person. ments, said Ken McCarthy, grew to $5.4 billion in 2015, of survey for seven years about
The agreement reflects the principal economist at real-es- the same year Anbang Insur- how engaged its employees are,
increasing allure of New York HNA agreed to pay $2.21 billion for the 45-story tower on Park tate services firm Cushman & ance Group Co. bought the including how they score on a
City real estate for major Chi- Avenue, among the highest prices ever paid for a New York building. Wakefield. Waldorf Astoria hotel for $1.95 happy-to-grumpy ratio. Since
nese investors looking for “It’s more a focus on capital billion. Last year, Chinese in- the sales-practices scandal
property in so-called gateway office buildings, there contin- hood, are long-term holders,” preservation than on the rate vestments in commercial real erupted in September, the bank
cities in the U.S., said real-es- ues to be significant interest said Dustin Stolly, managing of return,” Mr. McCarthy said. estate reached about $8 bil- has sent surveys to more than
tate executives and analysts. from Chinese investors who director of capital markets for “There definitely has been a lion, representing about half 110,000 employees about its
“For trophy-quality assets can write extraordinarily large real-estate services firm JLL. significant pickup in Chinese of all foreign investment in culture, Mr. Sloan said. But it
in New York City, particularly checks and who, in all likeli- He wasn’t involved in the deal. investment in properties in the city. wants to dig deeper.

FINANCE WATCH Advertisement INTERNATIONAL INVESTMENT FUNDS

SEC Whale” trading debacle. PING AN INSURANCE [ Search by company, category or country at asia.WSJ.com/funds ]
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Is Cut for Stocks right to respond if they are iden- 15% for 2016 VP Classic-B Units AS EQ HKG 03/21 USD 128.38 12.1 20.9 1.0
tified in an enforcement action, VP Classic-C Units AS EQ HKG 03/21 USD 16.21 12.2 21.1 1.0
VP Classic-C Units AUD H AS EQ HKG 03/21 AUD 13.37 12.0 22.1 1.6
The Securities and Exchange and Mr. Macris had argued that Ping An Insurance (Group) VP Classic-C Units CAD H AS EQ HKG 03/21 CAD 12.95 11.8 21.4 0.8
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VP Classic-C Units NZD H
AS
AS
EQ HKG
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13.54
11.8
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Data as shown is for information purposes only. No offer is being made by
the settlement for stocks and matter clearly referred to him. net profit rose 15% from a year Morningstar, Ltd. or this publication. Funds shown aren’t registered with the VP Classic-C Units RMB AS EQ HKG 03/21 CNH 11.47 10.1 27.3 NS
U.S. Securities and Exchange Commission and aren’t available for sale to United VP Classic-C Units RMB H AS EQ HKG 03/21 CNH 10.90 13.4 23.3 NS
bonds to two business days The Supreme Court ruled that earlier, partly thanks to higher States citizens and/or residents except as noted. Prices are in local currencies. VP Multi-Asset Fund Cls A HKD OT OT HKG 03/21 HKD 10.10 5.0 NS NS
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VP Taiwan Fund AS EQ CYM 03/21 USD 18.75 11.9 23.5 6.5
ket risk. the FCA, overturning two rulings The big Chinese life insurer NAV —%RETURN—
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Regulators say Wednesday’s in favor of Mr. Macris’s claim. said net profit rose to 62.39 bil- For information about listing your funds,
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one party to a transaction will the identity of traders and exec- earlier.
default after the trade is made utives in enforcement notices The insurer said its 2016 to-
but before it settles. It also will are now likely to be abandoned, tal income rose 12% to 774.49
align U.S. standards with those lawyers said. billion yuan, while net earned
in Europe.
Trades “settle” when the
buyer receives the securities
J.P. Morgan was fined £137.6
million ($171.7 million) by the
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premiums rose 26% to 441.62
billion yuan.
—Chester Yung
n Website: Https://Www.Valuepartners-Group.Com/ Tel: (852) 2143 0688
China A-Share Fund Cls A AUD H OT
China A-Share Fund Cls A AUD UnH OT
China A-Share Fund Cls A CAD H OT
OT HKG
OT HKG
OT HKG
03/21 AUD
03/20 AUD
03/21 CAD
12.43
10.97
11.48
5.4
0.4
5.1
11.1
6.6
9.3
-0.4
-2.4
-1.3
LIST YOUR
China A-Share Fund Cls A EUR H OT OT HKG 03/20 EUR 11.94 3.9 9.5 -1.9
they have purchased and the executives in its London-based China A-Share Fund Cls A EUR UnH OT OT HKG 03/21 EUR 12.11 5.0 10.8 NS

seller receives the cash owed.

Wednesday’s change marks
Chief Investment Office were
described in a public enforce-
CHINA CITIC BANK
China A-Share Fund Cls A GBP H OT
China A-Share Fund Cls A GBP UnH OT
China A-Share Fund Cls A HKD H OT
OT HKG
OT HKG
OT HKG
03/21 GBP
03/21 GBP
03/21 HKD
12.09
14.28
12.27
4.9
6.6
5.1
12.2
23.4
9.7
-1.1
9.6
-1.2 FUNDS
one of the handful of modest ment notice. Mr. Macris, the Fee-Income Gain China A-Share Fund Cls A HKD UnH OT
China A-Share Fund Cls A NZD H OT
China A-Share Fund Cls A NZD UnH OT
OT HKG
OT HKG
OT HKG
03/20 HKD
03/21 NZD
03/21 NZD
12.00
12.26
10.67
7.6
5.7
7.1
7.3
11.5
3.2
-2.5
-0.2
NS
rule changes the SEC is able head of the unit, argued that he Lifts Annual Result China A-Share Fund Cls A RMB (CNH) OT
China A-Share Fund Cls A USD OT
OT HKG
OT HKG
03/21 CNH
03/20 USD
13.41
11.96
6.9
7.5
13.5
8.3
2.1
-2.3
to complete despite its de- could be identified by terms China A-Share Fund Cls A USD H OT OT HKG 03/21 USD 12.22 5.2 10.0 -1.0
China Greenchip-A Units AS EQ CYM 03/21 HKD 57.69 13.4 20.4 -4.4
pleted ranks. The agency is op- such as “CIO London manage- China Citic Bank Corp. said China Greenchip-A Units AUD H AS EQ CYM 03/21 AUD 9.74 13.4 21.0 -4.9
erating with just two mem- ment,” without having been its net profit last year rose 1.1% China Greenchip-A Units CAD H AS
China Greenchip-A Units NZD H AS
EQ CYM
EQ CYM
03/21 CAD
03/21 NZD
9.47
10.01
13.3
13.5
19.7
21.9
-6.2
-4.2
bers—three fewer than its full given the chance to give his ver- from a year earlier, thanks to China Greenchip-A Units USD AS EQ CYM 03/21 USD 9.54 13.3 20.3 -5.2
China Greenchip-A2 QDIs Units AS EQ CYM 03/21 HKD 10.51 13.4 20.4 -4.4
complement. sion of events. higher interest and fee income. GC Hi Yield Inc - Cls A MDIs GBP H OT OT CYM 03/21 GBP 9.92 5.7 20.0 NS
The SEC proposed the Supreme Court Justice Jona- The lender said 2016 net GC Hi Yield Inc-Cls A MDIs AUD H OT
GC Hi Yield Inc-Cls A MDIs CAD H OT
OT CYM
OT CYM
03/21 AUD
03/21 CAD
9.48
9.55
6.1
6.0
22.1
20.7
14.5
13.0 In print & online. Contact:
change last fall. It is expected to than Sumption disagreed that profit was 41.63 billion yuan GC Hi Yield Inc-Cls A MDIs NZD H OT OT CYM 03/21 NZD 9.83 6.4 22.9 15.6
GC Hi Yield Inc-Cls P HKD Acc sh OT OT CYM 03/21 HKD 14.97 6.2 21.3 13.2
go into effect Sept. 5. “CIO” or “CIO management” ($6.04 billion), up from 41.16 bil- GC Hi Yield Inc-Cls P HKD MDIs sh OT OT CYM 03/21 HKD 9.43 6.1 21.3 13.2
GC Hi Yield Inc-Cls P MDIs SGD H OT OT CYM 03/21 SGD 10.35 5.9 20.8 13.5
—Andrew Ackerman would be construed to mean Mr. lion yuan a year earlier. The re- GC Hi Yield Inc-Cls P USD Acc sh OT OT CYM 03/21 USD 15.07 6.1 21.1 13.2
Macris or even an individual. sult is in line with a forecast the GC Hi Yield Inc-Cls P USD MDIs sh OT OT CYM 03/21 USD 9.48 6.1 21.1 13.1 wsja.advertising@dowjones.com
GC Hi Yield Inc-ClsA MDIs EUR H OT OT CYM 03/21 EUR 10.37 5.6 19.1 11.9
U.K. REGULATION Mr. Macris in a statement lender made in January. Hi-Div Stk Cls A RMB H Acc OT OT HKG 03/21 CNH 11.47 14.7 20.6 6.1
Hi-Div Stk Cls A RMB UnH Acc OT OT HKG 03/21 CNH 13.71 11.9 24.4 8.4
said that he was “naturally dis- Net interest income rose 1.6%
Ex-Executive Loses appointed” and that the FCA to 106.14 billion yuan and nonin-
Hi-Div Stk Cls A1
Hi-Div Stk Cls A2 AUD H MDIs OT
Hi-Div Stk Cls A2 CAD H MDIs OT
OT OT HKG
OT HKG
OT HKG
03/21 USD
03/21 AUD
03/21 CAD
81.59
9.81
9.93
13.8
13.5
13.7
18.4
18.4
17.2
3.7
4.0
2.6
‘Whale’ Case Ruling had won its case on a technical terest income gained 17% to Hi-Div Stk Cls A2 GBP H MDIs OT
Hi-Div Stk Cls A2 HKD MDIs OT
OT HKG
OT HKG
03/21 GBP
03/21 HKD
9.42
10.22
15.0
14.1
17.9
18.9
2.5
3.7
interpretation. 47.64 billion yuan. Hi-Div Stk Cls A2 MDIs OT OT HKG 03/21 USD 11.17 13.7 18.2 3.6
Hi-Div Stk Cls A2 NZD H MDIs OT OT HKG 03/21 NZD 10.03 13.6 18.8 4.9
Former J.P. Morgan Chase & An FCA spokesman said it is China Citic Bank reported Hi-Div Stk Cls A2 RMB H MDIs OT OT HKG 03/21 CNH 9.72 15.2 21.0 6.1
Co. executive Achilles Macris lost pleased with the decision and is 48.58 billion yuan of nonper- Hi-Div Stk Cls A2 RMB UnH MDIs OT
Hi-Div Stk Cls A2 SGD H MDIs OT
OT HKG
OT HKG
03/21 CNH
03/21 SGD
10.17
10.79
12.2
NS
25.7
NS
8.8
NS
a final argument over whether considering what it means for forming loans, up from 36.05 bil- Intel-China Converg Fund-A AUD H AS EQ CYM 03/21 AUD 10.09 14.7 15.1 NS
Intel-China Converg Fund-A CAD H AS EQ CYM 03/20 CAD 11.00 8.2 10.3 NS
the U.K. financial regulator iden- other cases involving so-called lion yuan. Its bad-loan ratio rose Intel-China Converg Fund-A NZD H AS EQ CYM 03/21 NZD 11.40 11.1 11.2 NS
tified him in an enforcement no- third-party rights. to 1.69% from 1.43% at the end Intel-China Converg Fund-A Units AS
Intel-Chinese Mainland Foc Fund AS
EQ CYM
EQ CYM
03/21 USD
03/21 USD
150.73
43.27
13.0
16.8
14.6
20.1
-1.4
1.5
tice over the 2012 “London —Margot Patrick of 2015. —Grace Zhu VP Classic-A Units AS EQ HKG 03/21 USD 285.56 12.2 21.5 1.5
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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B6 | Thursday, March 23, 2017 THE WALL STREET JOURNAL.

MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 12 p.m. New York time
Last Year ago
19041.38 t 414.50, or 2.13% Year-to-date t 0.38% 374.27 t 1.40, or 0.37% Year-to-date s 3.56% 2349.49 s 5.47, or 0.23% Trailing P/E ratio * 24.89 23.61
High, low, open and close for each 52-wk high/low 19633.75 14952.02 High, low, open and close for each 52-wk high/low 378.32 308.75 High, low, open and close for each P/E estimate * 18.35 17.05
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 1.97 2.23
All-time high: 2395.96, 03/01/17

* P/E data based on as-reported earnings from Birinyi Associates Inc.

20000 380 2390

19500 370 2350

19000 360 2310

18500 350 2270

Session high
DOWN UP 65-day moving average
65-day moving average
t

Session open Close 18000 340 2230

Close Open
t

65-day moving average

17500 330 2190
Session low
Bars measure the point change from session's open
17000 320 2150
Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar.

International Stock Indexes Data as of 12 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 12 p.m. ET
World The Global Dow 2682.06 –8.28 –0.31 2193.75 • 2720.47 6.1 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1786.26 –14.07 –0.78 1471.88 • 1956.39 4.1 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 967.71 –5.37 –0.55 691.21 • 1044.05 21.8 5.250 Australia 2 1.788 54.1 53.5 65.1 108.8 1.803 1.871 1.981
4.750 10 2.772 36.6 39.8 43.0 67.0 2.816 2.846 2.614
Americas DJ Americas 565.35 1.05 0.19 480.90 • 577.65 4.6
3.000 Belgium 2 -172.1 -174.7 -132.2 -0.450 -0.528 -0.429
-0.474 -171.8
Brazil Sao Paulo Bovespa 63698.40 718.03 1.14 47873.65 • 69487.58 5.8
0.800 10 0.938 -146.8 -143.6 -163.8 -148.4 0.982 0.779 0.460
Canada S&P/TSX Comp 15309.20 –3.93 –0.03 13217.17 • 15943.09 0.1
0.000 France 2 -0.464 -171.2 -170.7 -168.6 -130.4 -0.439 -0.466 -0.411
Mexico IPC All-Share 48554.30 –34.75 –0.07 43902.25 • 49240.09 6.4
0.250 10 1.047 -135.9 -131.8 -141.2 -138.8 1.100 1.005 0.556
Chile Santiago IPSA 3609.61 –4.48 –0.12 2998.64 • 3616.61 12.0
0.000 Germany 2 -0.757 -200.4 -200.6 -211.9 -136.1 -0.738 -0.899 -0.468
U.S. DJIA 20668.03 0.02 0.0001 17063.08 • 21169.11 4.6
0.250 10 0.413 -199.3 -195.6 -213.6 -173.0 0.462 0.281 0.214
Nasdaq Composite 5816.35 22.53 0.39 4574.25 • 5928.06 8.0
0.300 Italy 2 -0.033 -128.1 -129.8 -119.6 -90.1 -0.030 0.024 -0.008
S&P 500 2349.49 5.47 0.23 1991.68 • 2400.98 4.9
1.250 10 2.270 -13.6 -10.7 -21.7 -69.2 2.311 2.200 1.252
CBOE Volatility 12.17 –0.30 –2.41 9.97 • 26.72 –13.3
0.100 Japan 2 -0.266 -151.3 -153.1 -147.9 -111.0 -0.263 -0.259 -0.217
EMEA Stoxx Europe 600 374.27 –1.40 –0.37 308.75 • 378.32 3.6 0.100 10 0.062 -234.4 -235.2 -233.2 -204.4 0.066 0.085 -0.100
Stoxx Europe 50 3115.31 –7.54 –0.24 2626.52 • 3151.89 3.5 4.000 Netherlands 2 -0.737 -198.5 -198.6 -200.6 -137.2 -0.718 -0.787 -0.480
France CAC 40 5000.85 –1.58 –0.03 3955.98 • 5054.91 2.8 0.750 10 0.659 -174.7 -171.9 -181.5 -164.5 0.699 0.601 0.299
Germany DAX 11917.22 –44.91 –0.38 9214.10 • 12156.44 3.8 4.450 Portugal 2 -0.073 -132.1 -130.9 -123.9 -62.2 -0.041 -0.019 0.271
Israel Tel Aviv 1416.01 4.17 0.30 1372.23 • 1504.42 –3.7 2.875 10 3.844 143.8 148.3 153.0 79.6 3.900 3.947 2.740
Italy FTSE MIB 19972.98 54.14 0.27 15017.42 • 20253.65 3.8 2.750 Spain 2 -0.184 -143.2 -144.5 -146.9 -87.0 -0.177 -0.249 0.022
Netherlands AEX 509.35 –4.24 –0.83 409.23 • 518.88 5.4 1.500 10 1.742 -66.4 -62.8 -72.5 -50.2 1.789 1.692 1.442
Russia RTS Index 1123.17 1.54 0.14 835.75 • 1196.99 –2.5 4.250 Sweden 2 -0.559 -180.6 -181.7 -187.2 -153.5 -0.549 -0.652 -0.642
Spain IBEX 35 10258.50 46.60 0.46 7579.80 • 10334.70 9.7 1.000 10 0.694 -171.2 -165.9 -179.7 -141.3 0.758 0.619 0.531
Switzerland Swiss Market 8575.34 –39.52 –0.46 7475.54 • 8704.11 4.3 1.750 U.K. 2 0.117 -113.0 -112.1 -116.7 -41.6 0.147 0.053 0.477
South Africa Johannesburg All Share 52096.71 –656.85 –1.25 48935.90 • 54704.22 2.8 4.250 10 1.187 -121.9 -116.1 -112.6 -48.6 1.257 1.291 1.458
Turkey BIST 100 89809.09 –797.37 –0.88 70426.16 • 91497.00 14.9 1.125 U.S. 2 1.248 ... ... ... ... 1.268 1.220 0.893
U.K. FTSE 100 7335.92 –42.42 –0.57 5788.74 • 7447.00 2.7 2.250 10 2.406 ... ... ... ... 2.418 2.417 1.944
Asia-Pacific DJ Asia-Pacific TSM 1550.94 –18.53 –1.18 1308.52 • 1570.38 9.0
Australia S&P/ASX 200 5684.50 –90.10 –1.56 4924.40 • 5816.30 0.3 Commodities Prices of futures contracts with the most open interest 12 p.m. New York time
China Shanghai Composite 3245.22 –16.39 –0.50 2806.91 • 3282.92 4.6 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
Hong Kong Hang Seng 24320.41 –272.71 –1.11 19694.33 • 24593.12 10.5 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 3/21/2017
India S&P BSE Sensex 29167.68 –317.77 –1.08 24673.84 • 29648.99 9.5 One-Day Change Year Year
Indonesia Jakarta Composite 5534.09 –9.00 –0.16 4704.22 • 5543.09 4.5 Commodity Exchange Last price Net Percentage high low
360.00 -1.25 -0.35% 387.25 357.50
Japan Nikkei Stock Avg 19041.38 –414.50 –2.13 14952.02 • 19633.75 –0.4 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 996.50 -5.00 -0.50 1,088.25 992.00
Malaysia Kuala Lumpur Composite 1748.30 –6.37 –0.36 1614.90 • 1754.67 6.5
Wheat (cents/bu.)
CBOT
CBOT 425.75 -0.75 -0.18 477.00 416.25
New Zealand S&P/NZX 50 7060.83 –24.71 –0.35 6662.55 • 7571.11 2.6
Live cattle (cents/lb.) CME 113.650 2.600 2.34% 114.050 103.150
Pakistan KSE 100 49016.79 –3.42 –0.01 32801.88 • 50192.36 2.5
Cocoa ($/ton) ICE-US 2,157 3 0.14 2,273 1,869
Philippines PSEi 7254.93 –68.38 –0.93 6563.67 • 8102.30 6.1
Coffee (cents/lb.) ICE-US 141.40 -3.35 -2.31 159.30 136.70
Singapore Straits Times 3118.19 –40.38 –1.28 2729.85 • 3169.38 8.2
Sugar (cents/lb.) ICE-US 17.21 -0.08 -0.46 21.21 17.02
South Korea Kospi 2168.30 –10.08 –0.46 1925.24 • 2178.38 7.0
Cotton (cents/lb.) ICE-US 77.71 0.87 1.13 79.46 71.55
Taiwan Weighted 9922.66 –49.83 –0.50 8053.69 • 9972.49 7.2 Robusta coffee ($/ton) ICE-EU 2162.00 -9.00 -0.41 2,279.00 2,093.00
Thailand SET 1566.66 –2.12 –0.14 1356.69 • 1591.00 1.5
Copper ($/lb.) COMEX 2.6215 0.0030 0.11 2.8360 2.4800
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1251.20 1.60 0.13 1,268.10 1,152.20
Silver ($/troy oz.) COMEX 17.560 -0.023 -0.13 18.540 16.000
Currencies London close on March 22 Aluminum ($/mt)* LME 1,930.00 6.00 0.31 1,939.00 1,688.50
Tin ($/mt)* LME 20,475.00 95.00 0.47 21,225.00 18,760.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Wed YTDchg Copper ($/mt)* LME 5,794.00 -118.00 -2.00 6,156.00 5,518.00
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,291.00 -6.00 -0.26 2,445.00 2,022.00
20%
s Yen Europe Zinc ($/mt)* LME 2,877.00 -6.50 -0.23 2,958.50 2,555.00
Bulgaria lev 0.5523 1.8105 –2.6 Nickel ($/mt)* LME 10,160.00 25.00 0.25 11,095.00 9,430.00
10 s WSJ Dollar index
Croatia kuna 0.1458 6.857 –4.4 Rubber (Y.01/ton) TCE 249.00 -14.00 -5.32 n.a. n.a.
Euro zone euro 1.0808 0.9253 –2.7
0 Palm oil (MYR/mt) MDEX 2827.00 18.00 0.64 3,068.00 2,642.00
Czech Rep. koruna-b 0.0400 25.003 –2.7
Denmark krone 0.1453 6.8826 –2.6 Crude oil ($/bbl.) NYMEX 47.83 -0.41 -0.85 57.50 47.01
–10 s Euro 0.003499 285.80 –2.9
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.5021 -0.0082 -0.54 1.7770 1.4825
Iceland krona 0.009048 110.52 –2.2 RBOB gasoline ($/gal.) NYMEX 1.6093 -0.0077 -0.48 1.9065 1.5824
–20 Norway krone 0.1181 8.4645 –2.1
0.2526 3.9594 –5.4
Natural gas ($/mmBtu) NYMEX 3.107 -0.048 -1.52 3.5070 2.7370
2016 2017 Poland zloty
Russia ruble-d 0.01728 57.856 –5.6 Brent crude ($/bbl.) ICE-EU 50.72 -0.47 -0.92 59.89 50.00
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1137 8.7962 –3.4 Gas oil ($/ton) ICE-EU 448.75 -4.50 -0.99 523.50 444.00
Wed Wed
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0101 0.9900 –2.8
Turkey lira 0.2771 3.6087 2.4 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1288 7.7666 0.1
Ukraine hryvnia 0.0371 26.9510 –0.5
Argentina peso-a 0.0642 15.5810 –1.8
India rupee
Indonesia rupiah
0.0153
0.0000750
65.4552
13336
–3.7
–1.4
U.K. pound 1.2474 0.8017 –1.0 Cross rates London close on Mar 22
Brazil real 0.3243 3.0839 –5.3 Middle East/Africa
Japan yen 0.009007 111.03 –5.1
Canada dollar 0.7489 1.3354 –0.7 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.003168 315.64 –5.4 Bahrain dinar 2.6525 0.3770 –0.05
Chile peso 0.001510 662.10 –1.1 Australia 1.3031 1.6258 1.3161 0.0117 0.1678 1.4081 0.9760 ...
Macau pataca 0.1250 8.0013 1.1 Egypt pound-a 0.0551 18.1488 0.1
Colombia peso 0.0003414 2928.95 –2.4 Canada 1.3354 1.6659 1.3490 0.0120 0.1720 1.4420 ... 1.0248
Malaysia ringgit-c 0.2259 4.4266 –1.3 Israel shekel 0.2738 3.6525 –5.1
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7058 1.4168 –1.9 Kuwait dinar 3.2830 0.3046 –0.3 Euro 0.9253 1.1545 0.9347 0.0083 0.1191 ... 0.6929 0.7099
Mexico peso-a 0.0525 19.0593 –8.1
Pakistan rupee 0.0096 104.700 0.3 Oman sul rial 2.5976 0.3850 0.003 Hong Kong 7.7666 9.6880 7.8450 0.0700 ... 8.3929 5.8149 5.9585
Peru sol 0.3075 3.2517 –3.0
Philippines peso 0.0199 50.229 1.3 Qatar rial 0.2746 3.642 0.04 Japan 111.0290 138.4800 112.1300 ... 14.2930 119.9400 83.1200 85.1800
Uruguay peso-e 0.0353 28.350 –3.4
Singapore dollar 0.7151 1.3985 –3.4 Saudi Arabia riyal 0.2667 3.7500 –0.02 0.9900 1.2351 ... 0.0089 0.1275 1.0699 0.7413 0.7597
Venezuela bolivar 0.100150 9.99 –0.1 Switzerland
South Korea won 0.0008937 1118.98 –7.4 South Africa rand 0.0797 12.5464 –8.4
U.K. 0.8017 ... 0.8097 0.0072 0.1032 0.8662 0.6003 0.6150
Asia-Pacific Sri Lanka rupee 0.0065867 151.82 2.3 Close Net Chg % Chg YTD % Chg
0.7674 1.3031 –6.2 Taiwan dollar 0.03281 30.474 –6.1 U.S. ... 1.2474 1.0101 0.0090 0.1288 1.0808 0.7489 0.7674
Australia dollar WSJ Dollar Index 89.97 –0.13 –0.15 –3.19
China yuan 0.1453 6.8833 –0.9 Thailand baht 0.02890 34.600 –3.4 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 12 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.98389% 0.43300% ¥ TakedaPharm 4502 5222.00 -1.75 8.00 £ RoyDtchShell A RDSA 2103.50 -0.43 -6.20 Last: 153.61 t 2.58, or 1.65% YTD s 9.0%
Three month 1.15678 0.63010 Asia Titans HK$ TencentHoldings 0700 225.20 -1.57 18.71 € SAP SAP 90.52 0.29 9.31
Six month 1.43128 0.91310 HK$ AIAGroup 1299 49.90 -0.50 14.06 ¥ TokioMarineHldg 8766 4813.00 -4.92 0.35 € Sanofi SAN 82.97 0.30 7.89 High 155
One year 1.80678 1.23740 66.50 -0.88 0.59
¥ AstellasPharma 4503 1504.00 -0.86 -7.36 ¥ ToyotaMtr 7203 6161.00 -3.33 -10.42 € SchneiderElectric SU Close 150
Euro Libor AU$ AustNZBk ANZ 30.76 -2.57 1.12 AU$ Wesfarmers WES 43.29 -1.43 2.73 € Siemens SIE 122.15 -0.85 4.58 Low 145
One month -0.39786% -0.32971% AU$ BHP BHP 23.92 -2.92 -4.55 AU$ WestpacBanking WBC 33.49 -2.42 2.73 CHF Syngenta SYNN 433.30 -0.28 7.65 t
Three month -0.35571 -0.24943 HK$ BankofChina 3988 3.93 -1.50 14.24 AU$ Woolworths WOW 25.43 -1.51 5.52 € Telefonica TEF 10.46 0.97 18.54 50–day 140
Six month -0.24729 -0.13629 HK$ CKHutchison 0001 96.45 -0.52 9.73 € Total FP 46.24 -0.17 -4.14 moving average 135
One year -0.11071 -0.01486 HK$ CNOOC 0883 8.93 -1.76 -7.94 Stoxx 50 CHF UBSGroup UBSG 15.56 -1.52 -2.45
130
Euribor AU$ CSL CSL 122.58 -1.98 22.08 € Unilever UNA 46.51 0.19 18.91
CHF ABB ABBN 22.91 -0.82 6.66
One month -0.37300% -0.33000% ¥ Canon 7751 3485.00 -1.41 5.77 £ Unilever ULVR 4034.00 0.14 22.52 23 30 6 13 20 27 3 10 17 24 3 10 17
€ ASMLHolding ASML 118.90 1.11 11.49
Three month -0.33000 -0.24100 ¥ CentralJapanRwy 9022 18290 -1.38 -4.89 € Vinci DG 72.15 -0.06 11.51 Jan. Feb. Mar.
€ AXA CS 23.64 -1.21 -1.46
Six month -0.24200 -0.13300 HK$ ChinaConstructnBk 0939 6.36 -2.15 6.53 £ VodafoneGroup VOD 208.10 -0.72 4.13
€ AirLiquide AI 106.10 0.38 0.43
One year -0.10600 -0.00300 HK$ ChinaLifeInsurance 2628 24.30 -3.57 20.30 CHF ZurichInsurance ZURN 285.00 -0.35 1.64
169.50
Yen Libor HK$ ChinaMobile 0941 90.35 ... 9.91
€
€
Allianz
AB InBev
ALV
ABI 102.95
-0.44
-0.72
7.96
2.39 DJIA Stoxx 50
One month -0.04914% -0.06800% HK$ ChinaPetro&Chem 0386 6.10 -0.16 10.91 £ AstraZeneca AZN 4867.00 0.84 9.68 Last: 3115.31 t 7.54, or 0.24% YTD s 3.5%
Three month 0.00543 -0.00557 AU$ CmwlthBkAust CBA 82.71 -2.03 0.36 € BASF BAS 88.57 -0.01 0.29
$ AmericanExpress AXP 78.04 0.66 5.35
Six month 0.03500 0.02307 ¥ EastJapanRailway 9020 9752.00 -1.62 -3.45 € BNP Paribas BNP 60.85 0.98 0.50
$ Apple AAPL 141.35 1.08 22.04 3175
One year 0.13514 0.11371 ¥ Fanuc 6954 22615 -1.70 14.13 £ BT Group BT.A 330.75 1.13 -9.85
$ Boeing BA 176.48 0.30 13.36
$ Caterpillar CAT 92.67 0.26 -0.08 3100
Offer Bid ¥ Hitachi 6501 611.60 -2.60 -3.23 € BancoBilVizAr BBVA 7.21 1.25 12.41
TW$ Hon Hai Precisn 2317 91.50 ... 8.67 $ Chevron CVX 107.87 -0.16 -8.35 3025
Eurodollars € BancoSantander SAN 5.73 1.24 15.49
¥ HondaMotor 7267 3413.00 -3.64 -0.06 $ CiscoSystems CSCO 34.16 0.83 13.04
One month 1.1000% 1.0000% £ Barclays BARC 226.05 -1.72 1.16 2950
KRW HyundaiMtr 005380 170000 ... 16.44 $ Coca-Cola KO 42.44 -0.13 2.37
Three month 1.3000 1.2000 € Bayer BAYN 105.45 0.05 6.38
2875
HK$ Ind&Comml 1398 5.14 -1.53 10.54 $ Disney DIS 111.86 0.10 7.33
Six month 1.4000 1.3000 £ BP BP. 455.40 -0.64 -10.64
$ DuPont DD 79.48 -0.35 8.28
One year 1.7500 1.6500 ¥ JapanTobacco 2914 3752.00 -2.70 -2.39 £ BritishAmTob BATS 5184.00 -0.08 12.17 2800
¥ KDDI 3007.00 -1.09 1.61
$ ExxonMobil XOM 81.52 -0.38 -9.69
Latest 52 wks ago 9433 € Daimler DAI 69.91 -0.91 -1.15 $ GeneralElec GE 29.54 0.49 -6.53 23 30 6 13 20 27 3 10 17 24 3 10 17
¥ Mitsubishi 8058 2427.50 -2.55 -2.51 € DeutscheTelekom DTE 16.01 0.34 -2.11 $ Jan. Feb. Mar.
Prime rates GoldmanSachs GS 231.00 -0.86 -3.53
¥ MitsubishiElectric 6503 1646.00 -2.52 1.01 £ Diageo DGE 2315.50 -0.17 9.74 $
U.S. 4.00% 3.50% HomeDepot HD 147.68 0.73 10.14
¥ MitsubishiUFJFin 8306 713.70 -4.29 -0.90 € ENI ENI 14.86 -0.40 -3.94 $
Canada 2.70 2.70 Intel INTC 35.34 0.86 -2.56
1637.50 -2.47 1.90 1676.16
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥
¥
Mitsui
Mizuho Fin
8031
8411 206.50 -2.13 -1.57
£
£
GlaxoSmithKline
HSBC Hldgs
GSK
HSBA 651.30
-0.26 7.31 $
-0.56 -0.85 $
IBM
JPMorganChase
IBM
JPM
174.60
87.85
0.41
0.53
5.19
1.81
Dow Jones Industrial Average P/E: 21
¥ NTTDoCoMo 9437 2673.00 -1.02 0.38 € INGGroep INGA 13.88 -3.58 3.85 $ J&J JNJ 126.92 -0.26 10.16 Last: 20668.03 s 0.02, or 0.0001% YTD s 4.6%
Policy rates
ECB 0.00% 0.00%
AU$ NatAustBnk NAB 31.71 -1.58 3.39 £ ImperialBrands IMB 3835.38 -1.05 8.27 $ McDonalds MCD 128.91 0.30 5.90
Britain 0.25 0.50
¥ NipponTeleg 9432 4923.00 -0.47 0.22 € IntesaSanpaolo ISP 2.53 1.12 4.37 $ Merck MRK 63.51 -0.63 7.87 21000
Switzerland 0.50 0.50
¥ NissanMotor 7201 1115.00 -2.02 -5.15 € LVMHMoetHennessy MC 199.60 0.45 10.03 $ Microsoft MSFT 64.98 1.20 4.57
¥ Panasonic 6752 1205.00 -3.21 1.30 £ LloydsBankingGroup LLOY 67.77 -1.41 8.41 $ Nike NKE 54.35 -6.31 6.93
20450
Australia 1.50 2.00
HK$ PingAnInsofChina 2318 43.25 -2.15 11.47 € LOreal OR 178.40 0.56 2.88 $ Pfizer PFE 34.27 0.07 5.53
U.S. discount 1.50 1.00 19900
Fed-funds target 0.75-1.00 0.25-0.50
$ RelianceIndsGDR RIGD 38.25 0.66 21.24 £ NationalGrid NG. 1004.50 0.40 5.56 $ Procter&Gamble PG 91.05 -0.16 8.28
Call money 2.75 2.25
KRW SamsungElectronics 005930 2123000 -0.23 17.81 CHF Nestle NESN 76.95 -0.19 5.34 $ 3M MMM 191.61 -0.27 7.30 19350
¥ Seven&I Hldgs 3382 4352.00 -1.56 -2.27 CHF Novartis NOVN 73.60 -1.14 -0.67 $ Travelers TRV 121.80 0.09 -0.51
Overnight repurchase rates 18800
U.S. 0.77% 0.37%
¥ SoftBankGroup 9984 8053.00 -2.67 3.71 DKK NovoNordiskB NOVO-B 233.60 -0.47 -8.28 $ UnitedTech UTX 112.06 -0.09 2.23
Euro zone n.a. n.a.
¥ Sony 6758 3553.00 -2.04 8.49 £ Prudential PRU 1721.50 -2.13 5.78 $ UnitedHealth UNH 167.30 -0.24 4.54 23 30 6 13 20 27 3 10 17 24 3 10 17
¥ Sumitomo Mitsui 8316 4150.00 -2.72 -6.95 £ ReckittBenckiser RB. 7428.00 -0.15 7.87 $ Visa V 88.88 0.93 13.92 Jan. Feb. Mar.
Sources: WSJ Market Data Group, SIX HK$ SunHngKaiPrp 0016 114.90 -0.17 17.24 £ RioTinto RIO 3307.50 -0.59 4.72 $ Verizon VZ 49.67 -0.97 -6.94 Note: Price-to-earnings ratios are for trailing 12 months
Financial Information, Tullett TW$ TaiwanSemiMfg 2330 193.50 -0.77 6.61 CHF RocheHldgctf ROG 251.00 0.36 7.91 $ Wal-Mart WMT 69.98 0.11 1.24 Sources: WSJ Market Data Group; Birinyi Associates
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Thursday, March 23, 2017 | B7

Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Why Trump’s Tax Cut May Disappoint OVERHEARD

The fight in Congress
over health care could go on
for a while. The more of the
legislative calendar it chews
up, the longer it will take for
the corporate tax cut inves-
tors are banking on to come
to the floor and the longer
the odds on it becoming law.
That, in turn, should be fac-
tored into stock prices.
The House is set to vote
on the Republican health-
care plan on Thursday, and
even with the tweaks law-
makers have been making to
it, passage looks iffy.
Moreover, if it does pass,
the bill’s prospects in the
Senate aren’t good. But be-
fore Senate Republicans can
come up with their own ver-
sion of the health-care legis-
lation, they have a Supreme
Court nominee to approve.
Then, if the Senate can pass
a bill of its own, there will
be a House-Senate confer-
ence to resolve differen-ces.
It is a process that would
come with significant hur-
dles even in normal times,
Getting Rich
S&P 500 forward price/earnings ratio
18
16
14
12
10
8
2007 ’08 ’09 ’10
Source: FactSet
much less today’s distrac-
tion-riddled political cli-
mate. At the least, the
health-care bill could be sit-
ting on Capitol Hill for a
long time.
For investors, this is
hardly ideal. Beyond having
little certainty on which
companies will be health
care’s winners and losers,
Republicans’ tax-reform
plans risk getting further
’11 ’12 ’13 ’14 ’15 ’16 ’17
THE WALL STREET JOURNAL.
into the future. That matters
because a big reason the
S&P 500 has rallied about
10% since Election Day,
pushing its forward price/
earnings ratio to 17.8 from
16.5, is an expectation that
some form of the blueprint
House Republicans drew up
last year would become law
this year. That includes a
drop in the corporate tax
rate to 20% from 35% that
Goldman Sachs estimates
would lift S&P earnings by
10%. Other shareholder-
friendly aspects of the plan,
such as lowering the penalty
for repatriating overseas
profits, also would get de-
layed.
Indeed, while Treasury
Secretary Steven Mnuchin
last month told The Wall
Street Journal that the ad-
ministration was working
with House and Senate Re-
publicans to pass tax reform
before Congress leaves for
its August recess, it is look-
ing as if the legislation
might not land on President
Donald Trump’s desk until
early next year.
If so, any boost to earn-
ings that a tax cut brings
also won’t come until next
year. Investors who are as-
suming a more aggressive
timetable also are assuming
companies will have stronger
cash flows over the next 12
months than they are going
to get.
The longer the health-care
debate drags out, the harder
it will be to craft a tax-cut
package. There are time con-
straints, too, points out Kim
Wallace, a policy analyst at
Renaissance Macro Research.
A year from now, when the
midterm elections are loom-
ing, it will be hard for Con-
gress to accomplish much of
anything.
In the end, Republicans
may have to settle for tax-re-
form lite. The contentious
idea of taxing imports to
help pay for tax reform
might have to be dropped in
an effort to speed passage.
Republicans might have to
settle for a shallower tax
cut. If it is something closer
to 30%, for example, Gold-
man estimates it would raise
S&P earnings by just 4%.
Companies still would
count that as a positive de-
velopment. Investors, who
have given stocks lofty valu-
ations in expectation of
something more, might not
agree.
—Justin Lahart
General Mills thought it
was doing well by doing good
in a giveaway for Honey Nut
Cheerios. It had wanted to do-
nate 100 million wildflower
seeds to help #BringBackthe-
Bees and reached 15 times its
goal. Unfortunately, some of
the seeds are considered inva-
sive plants in parts of the
country, according to a report
by Lifehacker.
Some promotions have gone
far worse. In the early 1990s,
PepsiCo had a campaign in the
Philippines offering anyone
finding a bottle cap with a cer-
tain number printed on it 1 mil-
lion pesos ($19,940 at today’s
exchange rates). It printed way
too many, incurring a liability in
the billions of dollars. It paid
out much smaller prizes and
saw its facilities attacked.
General Mills’s experiment
was far less disastrous. The
company also says the seeds
are the same variety as those
sold nationwide, in response to
“some articles posted and ques-
tions asked about the seeds.”

For Tencent, the Bar Is Getting Higher
Whether China’s most
valuable company can keep
getting bigger depends on
whether it can sell advertis-
ing as effectively as Face-
book. So far, it is progress-
ing well, but expectations
are also rising fast.
Shares of Tencent Holdings
have surged 41% over the past
year, making it the country’s
biggest company. Its $275 bil-
lion market value puts it ahead
of Alibaba Group Holding and
Industrial & Commercial
Bank of China, the world’s
biggest bank by assets.
The company owns
China’s largest social net-
work, WeChat, which has
889 million monthly active
users. WeChat is a mix of
WhatsApp and Facebook, but
it goes beyond that; users
can also buy movie tickets,
U.S. Stocks Pricey? Time to Look at Europe
for investors is that it con- The market’s political relatively narrow range since drought. The results for the
Good Impressions tinued to diversify outside pendulum may be swinging December. final quarter of 2016 showed
Tencent's quarterly revenue its old growth engine: online back. Hope for U.S. President By contrast, the conversa- a net 20% of the 450 compa-
from online advertising games. Advertising now ac- Donald Trump’s new admin- tion in Europe has been all nies tracked by UBS beating
8 billion yuan counts for nearly 20% of its istration has been driving about avoiding bad things, earnings expectations, the
revenue, compared with 9% U.S. markets, while fear of especially the risks posed by best result for six years.
6
three years ago. populist upheaval has 2017’s electoral calendar. The Meanwhile, flows out of Euro-
4 And there is big potential gripped Europe. The balance French presidential elections pean equities continued even
2 upside if Tencent manages to of risks is now shifting in are set to dominate head- as the eurozone PMI climbed
0 monetize its huge user base. Europe’s favor. lines in the next two months, last year, Citigroup notes.
It generated about $1.35 per Tuesday’s 1.2% drop in the but the closely watched While the S&P 500 has set a
2012 2013 2014 2015 2016 user from advertising last S&P 500 is mostly notable Dutch vote passed without record high this year, the
Note: 1 billion yuan = $145.2 million
Sources: company reports; S&P Global
quarter. In comparison, Face- for how long it has been drama. Meanwhile, the Euro- Stoxx Europe 600 is still some
Market Intelligence book made $19.30 in adver- since the market has seen pean economy has been 10% below its 2015 peak.
THE WALL STREET JOURNAL. tising revenue per user in such an event. The last time moving ahead. In February, On forward earnings mul-
the U.S. and Canada. Its ad- the index fell more than 1% IHS Markit’s eurozone com- tiples, the spread between
pay bills and play games vertising revenue last quar- was in October. But it also posite purchasing managers the S&P 500 and the Stoxx
without leaving the app. ter rose 45% year over year. represents a challenge to a index hit a near six-year high Europe 600 is close to its
Tencent on Wednesday re- Yet the stock isn't cheap. market that has been run- at 56. The European Central widest over the past five
ported results for last quar- It trades at 34 times forward ning on hopes for good Bank has started to sound years. Should America under-
ter that were largely in line earnings, above Facebook’s things to happen, namely op- more confident as the threat deliver the good news and
with analysts’ expectations. 26 times. To meet those timism about corporate tax of deflation has passed. Europe skate through the
Revenue rose 44%, while net lofty expectations, Tencent cuts and growth. Bond mar- Importantly, European bad, European stocks should
income climbed 47%. will need to churn more out kets have been more circum- companies seem finally to be end up being the winners.
What is more important from its users. —Jacky Wong spect, with yields locked in a emerging from an earnings —Richard Barley

23
3
March HONG KONG

Ken Brown: Editor, Heard on the Street, The Wall Street Journal (moderator)
Louis Kuijs: Head of Asia Economics, Oxford Economics
Andrew Tilton: Chief Asia Pacific Economist, Goldman Sachs
Anjani Trivedi: Columnist, Heard on the Street, The Wall Street Journal

THE AMERICAN CLUB

24
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Ken Brown: Editor, Heard on the Street,

The Wall Street Journal (moderator)
Karby Leggett: Head of Asia Public Sector, Client
Coverage–Financial Institutions, Standard Chartered Bank
Steve Okun: Vice Chairman, Asia Pacific Council,
American Chambers of Commerce (APCAC)
Ashley Perrott: Managing Director, Head of Pan Asia
Fixed Income, UBS Global Asset Management

288
Christopher Wood: Equity Strategist,
Author of Greed & Fear Report, CLSA
TOKYO
AURA SKY LOUNGE
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The Wall Street Journal (moderator)
Rober t Feldman: Chief Economist,
Morgan Stanley MUFG Securities
Naoki Kamiyama: Chief Strategist,
Nikko Asset Management
William Pesek: Executive Editor, Barron’s Asia

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B8 | Thursday, March 23, 2017 THE WALL STREET JOURNAL.

FINANCE & MARKETS

Yen Hits 4-Month High on Trump Doubt

As U.S. health bill runs said in Parliament. He brushed
Reversal aside speculation that Wash-
into snags, investors How many yen one dollar buys ington might pressure Tokyo
worry over plans for ¥100
to guide the yen higher.
Kenji Yoshii, foreign-ex-
tax cuts, infrastructure Nov. 8: election change strategist at Mizuho
105 Securities, said any failure to
BY KOSAKU NARIOKA Wednesday* move ahead on the health bill
110 ¥111.71 may cause “further unwinding
TOKYO—The yen rose to its of the Trump trade.”
highest level against the U.S. 115 The dollar was trading at
dollar in about four months on around ¥105 before the U.S.
Wednesday, prompted by 120 election on Nov. 8.
greater skepticism among in- Scale inverted to show Kosuke Hanao, head of for-
125 yen's recent strength
vestors about whether Presi- eign exchange at HSBC in Tokyo,
dent Donald Trump will be Nov. Dec. Jan. Feb. March said some investors were taking
JAMES LAWLER DUGGAN/REUTERS

able to stimulate the U.S. *As of 8:30 a.m. in New York profits ahead of the quarter’s
economy. Source: WSJ Market Data Group end on March 31 because of un-
The potential for trade fric- THE WALL STREET JOURNAL. certainty over the health bill.
tion following a weekend Until recently, the widening
meeting among the Group of New York. The euro briefly fell interest-rate gap between the
20 industrialized and develop- to a three-week low of ¥119.80 U.S. and Japan was supporting
ing nations also clouded the in Tokyo, compared with the dollar. The Federal Reserve
global economic outlook and ¥120.77 late Tuesday in New has been raising rates while
boosted the appeal of the yen, York. It was at ¥119.99 at mid- Japan’s central bank has been
a haven asset in times of eco- Japanese Finance Minister Taro Aso, shown last year, called for close communication with the U.S. day Wednesday in New York. keeping the yield on 10-year
nomic uncertainty. At the re- Japanese Finance Minister government bonds close to zero.
quest of the U.S., finance min- sharply on expectations of an Expectations for the ward?” said Katsunori Kita- Taro Aso on Wednesday said However, when the Fed raised
isters in the G-20 dropped a economic-stimulus policy in the changes began to weaken after kura, a strategist at Sumitomo Tokyo should maintain close its benchmark rate last week, its
longstanding clause criticizing Trump administration. The Mr. Trump struggled to round Mitsui Trust Bank. communication with the U.S. projections for further tighten-
protectionism. president has promised to intro- up support for a health-care The dollar was at ¥111.07 and continue its efforts to ing disappointed some investors.
The yen had risen against the duce tax cuts and spur $1 tril- bill headed for a vote this week around midday Wednesday in keep the yen stable. “Excessive —Takashi Nakamichi,
U.S. dollar in the hours immedi- lion in spending on U.S. infra- in the Republican-led House. New York, the lowest level sharp movements, up or down, Suryatapa Bhattacharya
ately after Mr. Trump’s Novem- structure construction, but he “If he stumbles here, what’s since about Nov. 23, and down could have a considerable im- and Hiroyuki Kachi
ber election victory, then fell hasn’t outlined a detailed plan. going to happen going for- from ¥111.72 late Tuesday in pact on the economy,” Mr. Aso contributed to this article.

U.S. Stocks Hold Their Ground, Aided by Technology

BY RIVA GOLD Financial shares in the S&P
AND AARON KURILOFF 500 suffered their worst per-
centage decline since June on
Technology shares gained Tuesday as doubts mounted
ground, buoying major U.S. about President Trump’s abil-
alize the complications in- all the good news you can ex-
volved in implementing the pect from the administration
president’s agenda,” said Da- by year-end, and what’s sink-
vid Kelly, chief global strate- ing in is the reality that politi-
gist at J.P. Morgan Asset Man- cians almost never deliver as

JOHANNES EISELE/AFP/GETTY IMAGES

stock indexes, as investors ity to enact corporate-friendly agement. quickly or successfully as ini-
sought a haven from areas policies ahead of Thursday’s Technology shares in the tially thought,” Mr. Reinhart
that suffered Tuesday from scheduled vote to dismantle S&P 500 rose 0.8%. Micron said.
concern over President Donald the Affordable Care Act. Technology rose 2.1% and Sy- A pullback in commodities
Trump’s Expectations for govern- mantec added 1.8%. prices also dented energy
WEDNESDAY’S ability to ment stimulus had helped lift Microsoft climbed 1.1%, the companies. U.S. crude fell 1%
MARKETS enact his U.S. stocks to record highs most in the Dow industrials. to $47.79 amid concerns about
legislative earlier this year, and some Shares of Nike fell 6.1% after a buildup in U.S. stockpiles.
agenda. were concerned about the the sportswear maker late The Stoxx Europe 600 fell
Near midday in New York, new administration’s ability Tuesday gave a weak outlook 0.3%. The Nikkei Stock Aver-
the Dow Jones Industrial Aver- to deliver on campaign prom- for sales growth, despite a Nike fell 6.1%. The firm on Tuesday gave a weak sales outlook. age shed 2.1% in its biggest
age was down 8 points, or ises such as tax cuts, deregu- jump in quarterly profit. daily drop since the U.S. elec-
less than 0.1%, to 20651, and lation and infrastructure in- U.S. government-bond cording to Tradeweb, from health-care legislation, it will tion, a response to gains in the
the S&P 500 added 0.2%, a day vestment as President Trump yields fell again Wednesday as 2.432% Tuesday. Yields move be seen as wounded,” said yen, which make Japanese ex-
after the indexes logged their struggled to round up sup- investors favored assets seen inversely to prices. Vincent Reinhart, chief econo- ports less competitive. Austra-
first 1% declines in five port for health-care legisla- as safe. The yield on the “The administration has mist at Standish Mellon Asset lia’s S&P/ASX 200 ended down
months. The tech-heavy Nas- tion. benchmark 10-year U.S. Trea- chosen to start with health Management. 1.6% and Hong Kong’s Hang
daq Composite climbed 0.4%. “People are beginning to re- sury note fell to 2.403%, ac- care, and if it can’t pass ”Markets mostly priced in Seng Index shed 1.1%.

Breguet, the innovator.

Classique Phase de Lune Dame 9088
Embellished with an elegant diamond setting, the Classique Phase
de Lune Dame 9088 houses a mechanical self-winding movement
equipped with a silicon escapement and balance-spring. The grand
feu white enamelled dial, adorned with the iconic Breguet numerals,
endows this timepiece with an exquisitely feminine and timeless
design. History is still being written...

B A L H A R B O U R B E I J I N G C A N N E S C H E N G D U D U B A I E K AT E R I N B U R G G E N E VA G S TA A D H O N G K O N G K U A L A L U M P U R L A S V E G A S L O N D O N
L O S A N G E L E S M A C A O M I L A N M O S C O W N E W Y O R K N I N G B O PA R I S S E O U L S H A N G H A I S I N G A P O R E TA I P E I T O K Y O V I E N N A Z U R I C H – W W W. B R E G U E T. C O M