WEDNESDAY 7 SEPTEMBER 2016 WORLD BUSINESS NEWSPAPER EUROPE

Too dull to fail Rescuing globalisation Rentrée blues

Are banks becoming the new Free trade has stalled and xenophobia Paris comes reluctantly back
utilities? — BIG READ, PAGE 7 is rising — MARTIN WOLF, PAGE 9 from holiday — NOTEBOOK, PAGE 8

Fox pays $20m Briefing

to Carlson i Tie-up creates $127bn pipeline group

over Ailes case Enbridge of Canada and Spectra Energy of the US

21st Century Fox said yesterday it had
settled a lawsuit with Gretchen Carlson,
the TV presenter who alleged she was
the subject of sexual harassment by
ousted Fox News chief Roger Ailes.
“We sincerely regret and apologise for
the fact that Gretchen was not treated
with the respect and dignity that she
and all of our colleagues deserve,” the
media company led by Rupert Murdoch
said. Fox did not disclose the terms of
the pact, but Vanity Fair reported the
lawsuit was settled for $20m.
The allegations forced the exit of Mr
Ailes from the channel he founded and
sparked a reshuffling of top executives.
“I am gratified that 21st Century Fox
took decisive action,” Ms Carlson said.
Report page 12
have agreed a deal to create the biggest oil and gas
pipeline group in North America, with an
enterprise value of $127bn.— PAGE 11
i Turkey in plan for Syrian safe zone
Ankara has plans for a de facto safe zone in Syria
that could cover 4,000 sq km where Isis and
Kurdish militias would be kept at bay. The plan
would require working with rebel groups.— PAGE 4
i Eyes on Frankfurt over QE programme
The consensus view among economists is that the
ECB governing council will tomorrow shrink from
any commitment to prolong its stimulus plan
despite low growth and inflation.— PAGE 3
i Student embodies HK’s generation gap
Nathan Law, who attended a
“red” school on the mainland
but was this week elected in
Hong Kong to oppose Beijing’s
The media group apologised to TV presenter Gretchen Carlson saying she had not been treated with the dignity she deserved — Slaven Vlasic/Getty rule, points to the alienation of
a whole generation. — PAGE 4

i Japan investment freeze threatens UK

Bayer edges closer to Monsanto

A former head of McKinsey in Tokyo has said he is
advising Japanese companies to delay investment
plans in the UK, which they see as a bridge to the
EU, until they learn the nature of Brexit.— PAGE 2

i Chinese group joins space tourism race

deal with $56bn sweetened offer A Hong Kong-listed answer to SpaceX and Virgin
Galactic has unveiled a $1.5bn push to develop a
balloon to take tourists 24km above the earth, twice
the altitude of commercial aircraft.— PAGE 14

i US holiday gains from emerging markets

3 Investors in US group eye bid above $130 a share 3 Takeover could be completed in weeks
GUY CHAZAN — BERLIN
JAMES FONTANELLA-KHAN — NEW YORK
Shareholders in Monsanto warned that
Bayer would have to increase its latest
sweetened takeover bid to create the
world’s biggest seed and crop spray
supplier, even as some investors in the
German company fretted it was already
paying too much for the US group.
Bayer announced on Monday that it
was in advanced talks with Monsanto
and was willing to boost its offer to
$127.50 a share — a 2 per cent increase
on an earlier bid of $125.
The offer, which values Monsanto at
$56bn excluding debt, puts Bayer within
striking distance of a deal at a time of
heavy consolidation in the global agri-
business sector, driven by low commod-
ity prices and squeezed farm incomes. It
Between the US Memorial day and Labor day
holidays, for which market lore advises “sell in May
and go away”, the top mutuals funds performers
would be the largest overseas takeover said a deal with Monsanto could be done range and with a higher break fee,” said have returned more than 20 per cent.— PAGE 13
by a German company, dwarfing car- within the next few weeks.
$127.50 one investor who owns stock in both.
maker Daimler-Benz’s acquisition of Analysts said Monsanto would be The improved But some Bayer shareholders said
offer per share is
Chrysler for $38.6bn in 1998. more inclined to do a deal now because 2% higher than
even $127.50 was too much. “Bayer has Datawatch
Dow Chemical and DuPont it had fewer other options — especially Bayer’s earlier bid backed itself into a corner,” said John
announced a $130bn merger last year. after the Committee on Foreign Invest- Bennett, fund manager at Henderson.
ChemChina is planning to acquire ment, a US panel that can block deals on “The money would have been better Migrant remittance inflows Global migrant
Switzerland’s Syngenta for $44bn and national security grounds, last month $130bn spent buying their own stock. Alas for $bn remittances fell in
Philippines Mexico 2015 for the first
PotashCorp, the world’s largest potash approved ChemChina’s proposed takeo- Size of the Dow shareholders, it was not to be.” China Others
India time since the
supplier, is in talks with rival Agrium to ver of Syngenta. Chemical-DuPont Greg Herbert, co-manager of the Jupi- 600 financial crisis,
create a near-$30bn fertiliser group. But two Monsanto investors con- deal announced ter global equity income fund, said according to the
Monsanto said it had been in “con- tacted by the Financial Times said Bayer last year investors knew Bayer would have to bid 400 World Bank. India
structive” negotiations with Bayer and would need to cross the $130 per share higher, and the offer was clearly getting still accounts for
would continue these as it evaluated the threshold to get a deal done. That view close to succeeding, “but it doesn’t the largest inflow,
200
German company’s latest offer, as well was echoed by analysts at Bernstein change our view that it presents signifi- despite a drop
as proposals from other parties. Research, who said Monsanto was cant risks to shareholders”. compared with
The statement was more positive than unlikely to accept a bid close to $127.50 Additional reporting by Lindsay Whipp 0 2014, and is equal
Monsanto’s responses to Bayer’s previ- since it “values itself well above $130”. in Chicago 2000 05 10 15 with China, where
ous offers of $122 and $125 a share. A “There’s a big likelihood that the deal Lex page 10 Source: World Bank they are rising
person close to Bayer’s management will go ahead but only in the $130-$135 Crop of mergers page 15

Japan supplies boats and planes to help

Philippines meet Chinese sea challenge
ROBIN HARDING — TOKYO overlap with those of Malaysia, the Phil- plans for a missile sale and a deal to base
MICHAEL PEEL — VIENTIANE
ippines and Vietnam, as well as Taiwan Indian ships in Vietnam and set up a
Japan is to supply patrol boats and air- and Brunei. satellite tracking and imaging station
craft to the Philippines in the latest step The Tokyo-Manila deal, struck on the there. India also recently agreed a
by international powers to counter sidelines of a summit of Southeast Asian $100m contract to supply fast patrol
Split left raises pressure Chinese expansion in Asia’s seas. leaders in Vientiane, Laos, covers two boats to Hanoi.
on struggling Hollande new vessels in the 90-metre class — sim- A Hague tribunal rejected Beijing’s
Shinzo Abe, Japan’s prime minister, and ilar to the largest ships in Japan’s own expansive maritime claims in July, rul-
Analysis i PAGE 5 Rodrigo Duterte, Philippines president, coastguard fleet. They follow 10 smaller ing that they had “no legal basis”. But
struck a deal yesterday for Tokyo to pro- vessels, the first of which Japan deliv- several of the countries affected have
vide two large patrol vessels and loan up ered in August. struggled to respond to China’s moves,
Austria €3.60 Luxembourg €3.60 to five used TC-90 unarmed surveil- Coastguard vessels are often on the lacking the air or sea capabilities even to
Bahrain
Belgium
Din1.7
€3.60
Macedonia
Malta
Den220
€3.50 lance planes. front line of territorial disputes in Asia, patrol disputed waters.
Bulgaria
Croatia
Lev7.50
Kn27.50
Morocco
Netherlands
Dh43
€3.60
The agreement marks another step in entering disputed waters where a naval Japan’s deal with Manila came as a
Cyprus €3.50 Norway NKr35 attempts by Japan and other powers to ship would be too provocative. There spat between the Philippines and the US
Czech Rep Kc100 Oman OR1.50
Denmark DKr32 Pakistan Rupee 280 check China’s growing maritime ambi- has been a trend towards ever bigger dominated the first day of the Associa-
Egypt
Finland
E£20
€4.10
Poland
Portugal
Zl 18
€3.50 tions by creating a chain of regional coastguard vessels that can intimidate tion of Southeast Asian Nations sum-
France
Germany
€3.60
€3.60
Qatar
Romania
QR15
Ron17
allies committed to the status quo and rivals with their sheer size. mit. Washington scrapped a planned
Gibraltar £2.70 Russia €5.00 the “rule of law” at sea. The US in May lifted its 50-year-old meeting between Barack Obama and
Greece €3.50 Serbia NewD420
Hungary Ft1090 Slovak Rep €3.60 China claims almost all of the South arms embargo against Vietnam and Mr Duterte after the latter made insult-
India
Italy
Rup195
€3.50
Slovenia
Spain
€3.50
€3.50 China Sea and has been building artifi- Narendra Modi, India’s prime minister, ing remarks about the US president.
Kazakhstan
Kenya
US$5.50
Kshs300
Sweden
Switzerland
SKr37
SFr5.90
cial islands on reefs and atolls. Its claims visited Hanoi at the weekend amid Obama slur page 4
Latvia €6.99 Tunisia Din7.50
Lebanon LBP7500 Turkey TL10
Lithuania €4.30 UAE Dh15.00

Subscribe In print and online World Markets

www.ft.com/subscribetoday
STOCK MARKETS CURRENCIES INTEREST RATES
email: fte.subs@ft.com
Tel: +44 20 7775 6000 Sep 6 prev %chg Sep 6 prev Sep 6 prev price yield chg
Fax: +44 20 7873 3428 S&P 500 2182.75 2179.98 0.13 $ per € 1.124 1.115 € per $ 0.890 0.897 US Gov 10 yr 99.60 1.54 -0.07
Nasdaq Composite 5267.02 5249.90 0.33 $ per £ 1.343 1.330 £ per $ 0.745 0.752 UK Gov 10 yr 108.01 0.66 -0.06
© THE FINANCIAL TIMES LTD 2016 Dow Jones Ind 18508.06 18491.96 0.09 £ per € 0.837 0.838 € per £ 1.195 1.193 Ger Gov 10 yr 106.46 -0.17 0.00
No: 39,262 ★ FTSEurofirst 300 1374.89 1380.00 -0.37 ¥ per $ 102.230 103.400 ¥ per € 114.896 115.245 Jpn Gov 10 yr 101.37 -0.02 0.00
Euro Stoxx 50 3070.06 3077.66 -0.25 ¥ per £ 137.295 137.471 £ index 79.843 79.925 US Gov 30 yr 100.43 2.23 -0.06
Printed in London, Liverpool, Glasgow, Dublin,
FTSE 100 6826.05 6879.42 -0.78 € index 88.769 89.006 $ index 99.694 100.033 Ger Gov 2 yr 103.13 -0.68 0.00
Frankfurt, Brussels, Milan, Madrid, New York,
Chicago, San Francisco, Washington DC, Orlando, FTSE All-Share 3726.47 3750.71 -0.65 SFr per € 1.093 1.093 SFr per £ 1.306 1.304 price prev chg
Tokyo, Hong Kong, Singapore, Seoul, Dubai CAC 40 4529.96 4541.08 -0.24 COMMODITIES Fed Funds Eff 0.39 0.38 0.01
Xetra Dax 10687.14 10672.22 0.14 Sep 6 prev %chg US 3m Bills 0.33 0.33 0.00
Nikkei 17081.98 17037.63 0.26 Oil WTI $ 44.43 45.19 -1.68 Euro Libor 3m -0.33 -0.33 0.00
Hang Seng 23787.68 23649.55 0.58 Oil Brent $ 46.89 47.63 -1.55 UK 3m 0.38 0.38 0.00
FTSE All World $ 279.71 278.17 0.55 Gold $ 1337.25 1326.35 0.82 Prices are latest for edition Data provided by Morningstar
2 ★
Japan Inc sends mixed signals
on strategies after Brexit vote
Uncertainty hangs over factories employing 140,000, while banks stress desire to remain
ROBIN HARDING — TOKYO
PETER CAMPBELL AND LAURA NOONAN
LONDON
Before June, Japanese companies barely
had to think about where they should
set up in Europe. The answer, in most
cases, was Britain.
Over the past five decades, about
1,000 Japanese groups have used the UK
as an effective springboard into Europe.
But Britain’s surprise vote to leave the
EU has prompted “a major departure
from the traditional thought pattern”,
according to Kenichi Ohmae, a consult-
ant who helped Nissan set up its Sunder-
land factory in the 1980s.
These days, Mr Ohmae, the former
head of McKinsey’s Tokyo office, is
advising Japanese companies to delay
their European plans — not just until
they learn what Brexit will look like, but
until it is clear the UK will even remain
united in its aftermath. “If you have to
make an investment beforehand, then
you have to invest in continental
Europe,” he said bluntly. “This is no
longer a country-by-country decision —
it is one country versus the whole EU.”
‘The imposition of
customs duties anew
could suppress the
revenues of businesses’
For Japan, it is not only future invest-
ments in the UK — in areas such as
nuclear energy, autos, public transpor-
tation, the internet-of-things and phar-
maceuticals — that Brexit has put at
risk. It has also hung a question mark
over existing factories that employ
some 140,000 British workers.
Japan Inc’s doubts were expressed in a
15-page memo published over the week-
end that included a list of safeguards —
including single market access and har-
monised regulations — Tokyo is seeking
in order to avoid an exodus.
According to the Japan External
Trade Organisation, the top concern of
Japanese businesses, held by 74 per cent
of companies, was potential tariffs on
trade between Britain and the EU; 67
per cent were concerned about diver-
gence in UK and EU regulation; and 36
per cent feared losing freedom of move-
ment for staff.
In its letter, Japan warned “the impo-
sition of customs duties anew could sup-
press the revenues of businesses, which
in turn could affect the sales prices of
their products and their international
competitiveness”.
In carmaking, for example, the impo-
sition of tariffs would make UK plants
less competitive against their EU coun-
terparts. Toyota’s UK business has pre-
viously warned that 10 per cent tariffs,
in line with WTO rules, would leave it
facing “huge cost-reduction challenges”
in the UK.
The letter also warned about the dan-
gers of double taxation: “manufactur-
ers . . . could have such levies imposed
twice, once for auto parts imported
from the EU and again for the final prod-
ucts assembled in the UK to be exported
to the EU, which would have significant
impact on their businesses”.
Nissan, Toyota and Honda will all face
decisions in the next three years on
whether to move some of their produc-
MAKE A SMART INVESTMENT
Subscribe to the FT today at ft.com/subscription
FINANCIAL TIMES
1 Southwark Bridge,
London SE1 9HL
Subscriptions & Customer service:
Tel: +44 207 775 6000, fte.subs@ft.com,
www.ft.com/subscribetoday
Advertising:
Tel: +44 20 7873 3794 asiaads@ft.com,
emeaads@ft.com
Letters to the editor:
Fax: +44 20 7873 5938,
letters.editor@ft.com
Executive appointments:
Tel: +44 20 7873 4909
www.exec-appointments.com
Published by: The Financial Times Limited, 1 Southwark
Bridge, London SE1 9HL, United Kingdom. Tel: +44 20
7873 3000; Fax: +44 20 7407 5700. Editor: Lionel Barber.
Belgium; BEA Printing sprl, 16 Rue de Bosquet, Nivelles
1400.
Germany; Dogan Media Group, Hurriyet AS Branch
Germany, An der Brucke 20-22, 64546 Morfelden -
Walldorf. Responsible Editor, Lionel Barber. Responsible
for advertising content, Dominic Good.
Italy; Poligrafica Europa, S.r.l, Villasanta (MB), Via Enrico
Mattei 2, Ecocity - Building No.8. Milan.
Owner, The Financial Times Limited; Rappresentante e
Direttore Responsabile in Italia: I.M.D.Srl-Marco Provasi -
Via G. Puecher, 2 20037 Paderno Dugnano (MI), Italy.
Milano n. 296 del 08/05/08 - Poste Italiane SpA-Sped. in
Abb.Post.DL. 353/2003 (conv. L. 27/02/2004-n.46) art. 1
.comma 1, DCB Milano.
FINANCIAL TIMES Wednesday 7 September 2016
INTERNATIONAL
GLOBAL INSIGHT
BRUSSELS
Alan
Beattie
Prognosis for US-EU
trade talks requires
strong dose of realism
I
t is a dispiriting thing to watch a trade deal start to
sicken. The pulse of progress in negotiations slows.
The public tone of optimism about its health becomes
increasingly unconvincing. Quiet confidence is
replaced by hoping for the best.
If political opposition becomes sufficiently strong, the
pact often has to be moved to intensive care to await either
a defibrillator or some brave soul to summon the courage
to switch off life support.
In the case of the Transatlantic Trade and Investment
Partnership, a supposedly new-model pact between the US
and EU, the patient has been ailing since talks were
launched in 2013. Although last week’s calls to suspend
negotiations from French and German ministers largely
reflected domestic political positioning, nonetheless TTIP
has struggled from the off.
The nature of the talks was always ambitious. Wisely,
Washington and Brussels identified regulations on serv-
ices and products rather than goods tariffs as the main bar-
riers to trade. If not necessarily harmonising the current
arrangements, they tried at least to reach a common
understanding about the way to set rules.
Yet focusing on regulation did not stop longstanding
points of contention popping up. The EU, again, has tried
to insist on “geographical indications” — legal protection
for regional names for food products. The US, again, has
tried to get the EU to drop its opposition to genetically
modified organisms in food. Both met stiff opposition.
Regulated industries by their nature are fiendishly hard
to reform. Regulators and lawmakers used to answering to
domestic needs are reluc-
tant to submit to interna-
tional imperatives. The
The patient is
Japanese companies in the UK (key locations) UK employees (selected companies) financial services sector, not yet dead, but
of interest to the EU and
Car particularly the pre-
has suffered from
Car/engine plant Brexit UK, was more or the bacillus of
Nissan 6,700 less dumped from the
Tech
talks. Washington has no
economic populism
Banking Honda 3,000 intention of substantially
reopening the elaborate system of regulation it painstak-
Toyota 3,000 ingly put in place after the global financial crisis.
Meanwhile, Brussels ran into its own domestic opposi-
Tech tion. Despite the fact protection for international investors
in the US and the EU is among the strongest in the world,
Fujitsu 14,000 both sides were keen to write an investor-state dispute set-
tlement system (ISDS), which allows foreign companies to
Arm sue governments for unfair treatment, into TTIP.
This poked Europe’s irascible anti-corporate campaign-
Canon ers in the eye, leading to ferocious opposition among non-
governmental organisations and the European Parlia-
Banking ment. The European Commission was forced to propose a
revised version of ISDS that the US finds far too cumber-
MUFG some and restrictive.
These multiple problems reveal an underlying philo-
Nomura sophical tension. While Brussels and Washington talk a
good game about setting the rules for world trade, they do
not agree what those rules should be. The EU, for example,
Mizuho
has the “precautionary principle” hard-wired into its regu-
Sources: companies; latory process, reflecting a suspicion of new technologies
0 2000 4000 6000 8000 FT research
and large corporations; the US is more trusting. Americans
have a functionalist attitude to food: they like it cheap and
Biggest concern: tion of new models to other factories been expanding rapidly overseas to Nomura, which has 2,000 staff in the available, and tend to accept new technologies like geneti-
Nissan has outside the UK. They will be doing so at boost their poor returns at home, and UK after cutting hundreds of jobs earlier cally modified organisms. European consumers are more
warned that if a time when the road to Europe looks have so far taken a softer stance on this year because of a decision to exit likely to see farming as an intrinsic part of their culture and
Brexit brings the ever more important. Brexit. The country’s biggest bank, European equities, also says it remains resist such changes. With regard to ISDS, Americans often
imposition of Toyota, which employs 3,000 people MUFG, said it had “no intention” of committed to the UK market, where it see litigation as a natural and healthy part of business
tariffs, its plants across two plants in Derbyshire and withdrawing from the UK, regardless of has had its European headquarters practice; Europeans are more likely to regard it as destruc-
— including in Flintshire, saw sales from the UK to the the outcome of the Brexit negotiations. since 1964. tive and undemocratic.
Sunderland — EU rise from €1.6bn to €2.2bn in the MUFG employs 2,000 people in the UK, “As the Japanese government has con- In bilateral trade treaties signed with smaller countries,
face ‘huge cost year to March. and has had a presence in the country veyed, we look to the EU and the UK to behemoths such as the US and EU can easily get their own
reduction Meanwhile, the share of UK-built cars since 1881 through its predecessor, ensure our clients across Europe can way. But when the two hegemons come up against each
challenges’ — Luke and engines destined for Europe rose Yokohama Specie. continue to access capital markets with other, the result is deadlock.
MacGregor/Bloomberg
from 60 per cent to 67 per cent. Only 12 A spokesman for MUFG in London minimal disruption,” it said. All of this should have been anticipated by the govern-
per cent of their production remains in said it would take “several years” for But, as Mr Ohmae noted, European ments involved. The patient is not yet dead, but has suf-
the UK. Brexit’s impact to be felt, while the pres- governments are trying to woo Japanese fered from the bacillus of economic populism and is ailing
As they work out their Brexit plans, ident of the MUFG’s core banking unit, businesses in a range of industries, and badly. A more realistic team of physicians than the US and
Britain’s new government may take Takashi Oyamada, emphasised his “there are quite a few decisions to be the EU might have been more alert to the danger.
more comfort from the more forgiving bank’s commitment at a speech to UK made”.
attitudes of Japan’s banks. They have and European clients at Mansion House. Martin Wolf page 9 alan.beattie@ft.com
Commerce
German industry warns of ‘deadlock’ delaying investment
STEFAN WAGSTYL — BERLIN That is not a threat but simply the logical — a principle that has antagonised many But, he said, the challenge was man-
consequence of the process.” in the UK. Putting up barriers to migra- ageable given that Germany lacked
The head of one of Germany’s leading
German companies are already under tion would damage the UK and EU econ- skilled workers.
industry lobby groups has warned that
pressure amid the uncertainty sur- omy, he warned: “It can and will lead to According to government figures, the
delays in launching the UK’s Brexit
rounding Britain’s exit from the EU, less business being done in Britain.” country has about 600,000 job vacan-
NOVEMBER 7 2015
negotiations are prolonging the uncer-
with the DIHK forecasting a 1 per cent But Mr Schweitzer cautioned EU lead- cies — up by 100,000 in two years amid
tainty hanging over the British econ-
decline in German exports to the UK ers against putting pressure on London economic growth and an ageing popula-
omy and hitting investment plans.
this year and 5 per cent in 2017. to ignore the referendum result. “The tion. Economists estimate that of the
Spain; Fabripress, C/ Zeus 12, Polígono Industrial Meco-
R2, 28880 Meco, Madrid. Legal Deposit Number Eric Schweitzer, head of DIHK, the Ger- However, although the UK was Ger- democratic decision has been taken,” he 1m-plus migrants who have arrived
(Deposito Legal) M-32596-1995; Publishing Director, man chamber of commerce and indus- many’s third-largest market, the impact said. “This should be respected.” since early 2015, some 400,000 are of
Lionel Barber; Publishing Company, The Financial Times
ROLLING IN THE DEEP
Limited, registered office as above. Local Representative try, criticised the decision by Theresa of Brexit would be mitigated by German Separately, Mr Schweitzer defended working age and can be prepared for
office; C/ Infanta Maria Teresa 4, bajo 2, 28016, Madrid.
ISSN 1135-8262..
361_Cover.PRESS.indd 1 21/10/2015 10:51
May, UK prime minister, to postpone companies’ diversification, Mr Sch- employment.
UAE; Al Nisr Publishing LLC, P.O.Box 6519. Dubai. Editor Brexit talks until next year and failing to weitzer said. The average exporter from “In Germany there is no issue that ref-
in Chief: Roula Khalaf. Origin of publication, twofour54, set a specific date. the Mittelstand — the small and medium Eric Schweitzer, ugees will take jobs from other people,”
Media Zone, Abu Dhabi. head of DIHK, says
France; Publishing Director, Dominic Good, 40 Rue La “The deadlock is creating a situation companies that form the backbone of Brexit unknowns Mr Schweitzer said. “But it is a long
Boetie, 75008 Paris, Tel. +33 (0)1 5376 8256; Fax: +33 (01)
5376 8253; Commission Paritaire N° 0909 C 85347; ISSN in which many investments are now Germany’s economy — was active in are holding up stony path before we together succeed
1148-2753. held up and will not be carried out about 10 countries, he said. German in completely integrating refugees in
Turkey; Dunya Super Veb Ofset A.S. 100. Yil Mahallesi
34204, Bagcilar- Istanbul, Tel. +90 212 440 24 24. because people don’t know . . . what the Mr Schweitzer rejected suggestions investment in UK training and the labour market.”
©Copyright The Financial Times 2016.
conditions will be over three or four the UK could model future ties with the Mr Schweitzer also intervened in the
Reproduction of the contents of this newspaper in any years,” Mr Schweitzer told the FT. EU on the bloc’s agreements with Swit- the role of German business in working debate on the Transatlantic Trade and
manner is not permitted without the publisher’s prior
consent. ‘Financial Times’ and ‘FT’ are registered trade
Quality was more important than zerland or Norway. Each country was to integrate the wave of refugees who Investment Partnership, the controver-
marks of The Financial Times Limited. speed in preparing negotiations, he said. different, he argued: Switzerland was had arrived in the country in the past 18 sial planned EU-US trade agreement
The Financial Times and its journalism are subject to a But it was essential negotiations con- surrounded by EU members, Norway months. He said refugees needed two that has run into strong criticism on
self-regulation regime under the FT Editorial Code of cluded “in an appropriate timeframe”. was an oil producer with no external years of language lessons and other both sides of the Atlantic. Playing down
Practice: www.ft.com/editorialcode
Mr Schweitzer, whose organisation debt and, unlike the UK, neither had preparations before they were ready to France’s call for negotiations to be
Reprints are available of any FT article with your
company logo or contact details inserted if required
represents 3.5m companies and entre- ever been in the EU: “There is no blue- take apprenticeships or training posts. ended and a statement by Sigmar
(minimum order 100 copies). preneurs, said it was clear the economic print. Nobody has yet left the EU.” The whole integration process would Gabriel, German deputy chancellor,
One-off copyright licences for reproduction of FT articles
are also available.
effects of Brexit would be “negative” for The DIHK president, who heads Alba, take five to 10 years. that the talks had failed, he said TTIP
For both services phone +44 20 7873 4816, or email the EU and “very negative” for the UK: a recycling group with 7,500 employees, “Now we are only in year one after the remained “a great opportunity” for Ger-
syndication@ft.com
“Great Britain will suffer economically. backs free movement of labour in the EU great rush.” man industry.
Wednesday 7 September 2016
EU. Monetary policy
ECB reluctant
to face tough
debate on QE
Altering bond rules is likely to
revive spat between hawks
and central bank’s top officials
CLAIRE JONES — FRANKFURT
With the eurozone facing lacklustre
growth, stubbornly low inflation and
political uncertainty, most economists
confidently expect the European Cen-
tral Bank to keep buying billions of
euros in bonds each month until well
into next year. But many of those same
economists also believe that the ECB is
not ready to take such a decision quite
yet. Instead, the consensus view is that
when the governing council meets
tomorrow it will shrink from any firm
commitment to prolong its landmark
quantitative easing programme beyond
March 2017.
The contrast between what the cen-
tral bank is eventually expected to do
and what it is thought likely to
announce this week underlines the
often fractious, and occasionally dys-
functional, way in which monetary pol-
icy works in the single currency area of
19 member states.
If the ECB is to continue its large-scale
asset purchases beyond March it must
drop or soften self-imposed limits that
‘At some point you hit the
limits of your programme,
and changing it involves
difficult discussion’
restrict the bonds it can buy; otherwise
it will faces a scarcity of eligible debt.
But altering those rules could revive a
spat between the council’s hawks —
notably Jens Weidmann, head of the
Bundesbank — and the ECB’s top offi-
cials, led by Mario Draghi, president,
who have backed QE to boost the euro-
zone’s economy.
“At some point you start running up
against the limits of your programme,”
Richard Barwell, economist at BNP
Paribas Investment Partners, said. “And
changing the programme involves a dif-
ficult discussion.” He adds that while
next to no one expects the bank to stop
its €80bn a month asset purchases as
soon as March, “the ECB may not
announce an extension yet because of
the internal politics”.
The sheer scale of the QE programme
is beyond doubt. As of the beginning of
this month, the ECB had spent €1tn on
government bonds. Its efficacy is a dif-
ferent matter.
At 0.2 per cent inflation remains well
below the ECB target of just under 2 per
Financial aid
Spain recovers small fraction
of banking bailout billions
TOBIAS BUCK — MADRID
Spain has recovered just €2.69bn of the
€53.55bn it spent on bailing out the
country’s tottering banking system
four years ago — a fraction of the total,
and significantly less than the govern-
ment hoped for and promised at the
time.
The latest figures were released by
Spain’s central bank yesterday, as part
of a broader review of the country’s
banking bailout. They offer a sobering
contrast with the bailout experience of
the US after 2008, when Washington
managed to turn a profit on its $620bn
financial sector rescue package.
The Bank of Spain report makes clear
that Madrid stands to make further
gains in the years ahead, not least by
fully privatising the two lenders that
remain in state hands: Bankia and
Banco Mare Nostrum. Bankia’s parent
group BFA has already raised €1.3bn
through a partial sale, which it has yet to
pass on to the state and which is not
included in the preliminary total. Ban-
kia’s current market value stands at
about €9bn.
But even including the expected pro-
ceeds from future sales and from con-
vertible bonds holdings worth €991m,
the government looks certain to recoup
only a fraction of the funds it pumped
into the system. Luis de Guindos, Spain’s
economy minister and the architect of
the country’s 2012 overhaul of the bank-
ing system, has said repeatedly that
Madrid expects to recover “most” of the
financial aid granted to the sector.
★ FINANCIAL TIMES 3
INTERNATIONAL
ECB asset purchase
programme
€bn
Actual purchases
2000
Expected purchases
1500
1000
500
0
cent and could well stay below that level 2015 16 17
until 2018 at least. Economists fear that
a new set of ECB forecasts to be unveiled Eurozone GDP growth and
tomorrow will show as much. inflation
“Against [the backdrop of the ECB’s GDP growth Inflation (annual
staff downgrading their inflation projec- (annual % % change
change) on CPI)
tions], the case for doing more is strong
at [tomorrow]’s meeting,” said Greg 3 3
Fuzesi, economist at JPMorgan. “And
yet there is no sign that any action will 2 2
be taken.”
Public opinion in Germany and else- 1 1
where often views QE as a bailout by the
backdoor for weaker EU states, while
some economists have long questioned 0 0 0
whether such am unorthodox policy is
the right prescription for the eurozone’s -1 -1
lacklustre economic recovery. But 2010 12 14 16
many others think that an ECB promise
to keep buying bonds in big quantities Many economists believe the ECB will shy away from a commitment to prolonging quantitative easing — Kai Pfaffenbach/Reuters Sources: ECB; Thomson Reuters Datastream
for much of next year will soothe fears
over persistently low inflation and the
long-term health of the economy.
So far, the ECB has said only that it will
maintain the purchases of €80bn a
month until “at least” next March.
With bond shortages likely to emerge
early in the new year in Germany, where
the Bundesbank must find around
€10bn of bonds to buy each month, the
ECB will have to come to some decision
on the design of the programme by
December. The most vocal opponents to
softening the rules are the governing
council’s German contingent, who are
keenly aware of the drawbacks of the
various possible alterations to QE.
Getting rid of the minus 0.4 per cent
floor on bond purchases, which prohib-
its policymakers from purchasing the
most expensive sovereign debt, would
expose the eurozone’s central banks to
heavy losses. The alternative of scrap-
ping the rule that bond purchases
should reflect the size of a member
state’s economy would open the way to
buying more bonds from the most
indebted countries, such as Italy, and
could provoke much criticism in Ger-
many.
But German officials are far from
alone in their reluctance to extend QE.
Other policymakers closer to the centre
of the council, such as Banque de France
governor François Villeroy de Galhau,
also support the ECB holding off from
such a step — at least for now.
Many ECB officials maintain the hope
that other actors will relieve the bank of
the need to doubling down on QE.
Reflecting Mr Draghi’s own frequently
expressed wish, Benoît Cœuré, a board
member, has called on governments to
do more to boost growth.
But with inflation still in the doldrums
and the end of the year fast approach-
ing, the ECB may find that the divisive
debate over QE can only be delayed just
a few months longer.
The economy ministry yesterday
said: “We continue to work towards
recovering most of the aid.”
Spain’s banking system came close to
collapse in mid-2012, mostly as a result
of the reckless expansion drive of its
highly politicised regional savings banks
during the country’s decade-long prop-
erty boom. Saddled with billions of
euros of toxic loans and real estate
assets, dozens of the so-called cajas were
threatened by bankruptcy — forcing
€2.69 bn $620 bn
Bailout recouped US 2008 financial
by Spain — a rescue package.
fraction of the Washington made
€53.55bn spent a profit on this
Madrid to seek European help for a sec-
tor bailout. The clean-up was controver-
sial and prompted fury among retail
investors who felt they were duped into
buying preference shares in some of the
stricken lenders. The near collapse of
Bankia has given rise to many law suits
and criminal investigations, and tainted
the reputation of dozens of bankers.
Most analysts regard Spain’s 2012
bank restructuring as a success all the
same, especially when set against the
problems that haunt Italy. Doubts over
the stability of the Spanish banking sys-
tem have largely disappeared, and
recent central bank data show the flow
of credit runs smoothly once again for
both households and small enterprises.
FT Big Read page 7
Comment page 9
4 ★
Laos
Duterte regrets Obama ‘son of a
whore’ slur at Asean summit
President Barack Obama delivers an address at the Lao National Cultural Hall, on the sidelines of the Asean summit yesterday
Philippines leader says he
did not intend words to be
seen as a personal attack
MICHAEL PEEL — VIENTIANE
Philippines president Rodrigo Duterte
has expressed regret after Barack
Obama cancelled what would have been
the first meeting between the two men
in response to the Filipino leader’s
threat to swear at the US president.
Mr Obama was expected to confront
Mr Duterte about the Philippines’ use of
extrajudicial killings in the country’s
war on drugs in a meeting on the side-
lines of the Association of Southeast
Asian Nations summit in Laos.
But hours before Mr Obama landed in
Vientiane, Laos’s capital city, Mr
Duterte told reporters in Tagalog that if
Mr Obama challenged him on the kill-
ings, “‘Son of a whore’, I will swear at you
in that forum.” “Who is he? I am a presi-
dent of a sovereign state and we have
long ceased to be a colony. I do not have
any master except the Filipino people,
nobody but nobody,” Mr Duterte, pic-
tured below, said.
After the bilateral meeting was can-
celled, Mr Duterte, who is known for his
colourful language, said yesterday:
“While the immediate cause was my
strong comment to certain press
questions that elicited concern
and distress, we also regret it
came across as a personal
attack on the US president.”
The diplomatic spat
highlights some of
the tensions over
the US’s “pivot to
Asia” amid China’s
territorial ambi-
tions. The Philip-
pines and the US
have been treaty
allies since the
Soft-spoken activist adopts hard line on Hong Kong ties with Beijing
Student takes fight against
mainland’s ideology to
territory’s legislative council
BEN BLAND — HONG KONG
Nathan Law is an unlikely poster boy for
Hong Kong separatism — having spent
the first six years of his life in mainland
China he grew up in an apolitical family
and attended what he calls a “red”, or
pro-communist, school.
Yet the 23-year-old cultural studies
student was elected on Monday after
promising to fight Beijing’s control over
Hong Kong, making him the youngest
member yet of the territory’s legislative
council. He is one of six activists aged 40
or less voted in on that promise.
Mr Law’s transformation from patriot
to enemy of Beijing highlights how
China’s hardline approach has alienated
early 1950s. Mr Duterte has cultivated a
tough-guy image — earning him the
nicknames “The Punisher” and “Dirty
Harry” — that helped drive him to the
presidency earlier this year.
However, his signature “war on
drugs” campaign, which has left about
2,000 alleged drug users and pushers
dead, has drawn the ire of the UN and
international human rights organisa-
tions.
Mr Obama’s trip to Laos is part of a
‘Colourful guy’
Philippines president
in his own words
On . . . the Pope
In 2015 Rodrigo Duterte cursed Pope
Francis over traffic jams in Manila
caused by the papal visit. “It took us
five hours. I asked why, they said it
was closed. I asked who is coming.
They answered, the Pope. I wanted to
call him, “Pope, son of a whore, go
home. Do not visit us again.” He later
claimed that he was complaining
about the government’s failure to ease
inconvenience for the public.
. . . rape and murder
During this year’s presidential
campaign he appeared to make light
of the rape and murder of an
Australian missionary during a 1989
prison riot in Davao, when he was
mayor. With the performance of a
stand-up comic, he recalled how the
36-year-old was taken hostage,
raped and murdered, and how he
reacted when he saw her body.
“She looks like a beautiful
American actress,” he said.
“What a waste. They lined up
and raped her. I was angry
because she was raped.
a generation of young people in the
semi-autonomous former British col-
ony, just as happened in nearby Taiwan.
The soft-spoken activist says his met-
amorphosis began in 2010 when the
headmaster at his school used an assem-
bly to attack Liu Xiaobo, the Chinese
human rights activist, after he was
awarded the Nobel Peace Prize.
“Those who receive that award
should be great people,” he said in an
interview shortly before he was elected.
“So I started wondering: what’s happen-
ing in my school with this ideology?”
Mr Law was not alone in his concerns.
A wave of discontent among Hong
Kong’s 7m people carried Mr Law and
the five other new legislators pushing
for self-determination into power,
angering China’s Communist leaders.
After a near total blackout on election
coverage in the mainland, Beijing’s
Hong Kong and Macau Affairs Office on
Monday night reiterated its “resolute
FINANCIAL TIMES
INTERNATIONAL
wider effort to gain Washington more of
a foothold in Southeast Asian countries,
such as Myanmar and Vietnam, where
political change or perceived strategic
shifts have offered opportunities.
But apart from his cancelled meeting
with Mr Duterte, Mr Obama’s meeting
with Asean leaders promises other
points of potential conflict. They will
have to navigate a growing split in
Southeast Asia over how to respond to
China’s claims to large parts of the
That’s one thing. But she was so
beautiful. The mayor should have
been first.”
. . . local criminals
Again during his bid for the
presidency, he promised to replicate
his record as a regional mayor, arming
local militias as death squads to take
on local criminals. “Forget the laws on
human rights. If I make it to the
presidential palace, I will do just what I
did as mayor. You drug pushers, hold-
up men and do-nothings, you better
go out. Because I’d kill you,” he said.
“I’ll dump all of you into Manila Bay,
and fatten all the fish there.”
. . . Barack Obama
Speaking before he left for an Asean
summit in Laos, Mr Duterte bristled at
reports the US president planned to
question his human rights record.
“I am a president of a sovereign
state, and we have long ceased to be a
colony. I do not have any master
except the Filipino people.” He then
switched into Tagalog, the local
language. “Putang in a, I will swear at
you in that forum,” he said, using a
phrase for “son of a whore”. Mr Obama
responded by showing how to use
language diplomatically, describing Mr
Duterte as a “colourful guy”.
Profile. Nathan Law
opposition” to “any form of Hong Kong
independence activities”.
It warned that such actions violated
China’s laws and were “a threat to
China’s sovereignty and security” while
damaging “the prosperity and stability
of Hong Kong”.
Mr Law, and the 15 per cent of voters
who backed the new legislators, see it
the other way round: that interference
by Beijing in Hong Kong is undermining
their livelihoods and the freedoms they
were guaranteed for 50 years after the
handover from Britain in 1997.
While some of the new generation of
politicians are pushing for Hong Kong to
become independent, Mr Law wants a
referendum on the city’s status first.
He accepts that Beijing, which is
unsettled by threats to Chinese unity, is
highly unlikely to agree to this. But he
believes that his election — and the
greater resources and profile it brings —
will help boost support for the idea.
— Jonathan Ernst/Reuters
region’s seas. Asean members have so
far avoided collective public criticism of
China after an international tribunal
ruling in July repudiated Beijing’s claims
over much of the region’s seas and criti-
cised its strategy of artificial island
building there. The Philippines, which
brought that case, had previously indi-
cated it was unlikely to push the matter
in Vientiane.
Mr Obama’s visit is also the first by a
sitting US president to the country,
where unexploded US ordnance from
the Vietnam war bombing still litters
rural areas in the landlocked country of
6.7m people.
The US president is likely to face ques-
tions over Washington’s increasing
engagement with Laos, despite the
country’s poor human rights record. He
met President Bounnhang Vorachit,
who took office this year, yesterday.
Political debate in Laos is stifled and
rights campaigners have for years
pressed Vientiane over unexplained dis-
appearances such as that of Sombath
Somphone, a high-profile community
activist. He has not been seen in public
since CCTV footage caught him being
stopped by police in Vientiane and
driven away in December 2012.
While Laos’s population and economy
are small, it is strategically placed in the
Greater Mekong subregion. It is only one
of six countries that shares borders with
all the others — China, Thailand, Myan-
mar, Vietnam and Cambodia.
Beijing has invested heavily in rail and
road infrastructure to make Laos a
trade bridge to Southeast Asia and a
friendly voice on disputes such as
China’s maritime claims.
But the complexities of regional poli-
tics and history mean Vientiane also has
strong ties to Hanoi, which is in bitter
dispute with China over the rights to
various islands.
Additional reporting by Adam Samson in
New York and Grace Ramos in Manila
“Putting discussion of our future and
even our sovereignty on the parliamen-
tary table, it’s a completely different
level to talking on the radio or else-
where,” he says.
Like many of his generation, Mr Law’s
political credo was shaped by the rise
and fall of the 2014 Occupy movement,
Nathan Law, centre, speaks at a
rally in Hong Kong on Monday
Conflict
Turkey seeks to establish
safe zone along Syrian border
MEHUL SRIVASTAVA AND DAVID
GARDNER — ANKARA
Turkey plans to deepen its involve-
ment in Syria by establishing a de facto
safe zone that could eventually cover
some 4,000 square kilometres of terri-
tory where both Isis and Kurdish mili-
tias would be kept at bay.
The plan involves the Turkey-backed
Free Syrian Army working with rebel
groups to consolidate and extend
recently captured territory south of the
Turkish border.
Specifically, the FSA would push from
the border town of Jarabulus to join a
rebel council about 40km to the south
in Manbij, which was recently wrested
from Isis control. The forces would
move south-west towards al-Bab, about
50km from Aleppo, a Turkish official
said.
Recep Tayyip Erdogan, Turkish presi-
dent, has asked for the US-led coalition
to help create a no-fly zone over this ter-
ritory, which he hopes to repopulate
with refugees who have fled to Turkey in
the five years since the Syria conflict
began.
Turkey is also pushing for a 48-hour
ceasefire in the disputed city of Aleppo
over next weekend’s Eid holiday, and
wants at least one of two aid convoys —
one each for government-held and
opposition-held quadrants of the city —
to depart from Turkey, the official
added. Negotiations over the convoys
stalled at the recent G20 summit in
China, where Mr Erdogan met Russia’s
Vladimir Putin and Barack Obama of
the US.
The US has been urging Turkey for
some time to orchestrate a campaign to
dislodge Isis from the last remaining
strip of the border that it still controls.
However, Washington has consist-
ently argued against proposals to set up
a formal safe zone in the area, which it
fears could involve a much bigger mili-
tary commitment by the US-led coali-
tion than simply providing air cover.
Goldman appointment
Head of EU ethics watchdog
weighs in to Barroso storm
JIM BRUNSDEN — BRUSSELS
The political storm around Goldman
Sachs’ decision to hire former Euro-
pean Commission president José
Manuel Barroso intensified yesterday,
after the EU’s ethics watchdog raised
concerns about guidance he might give
the bank on Brexit.
In a letter to the commission the head of
the European Ombudsman warns that
the case has called into question
whether rules for former EU officials are
fit for purpose and shaken public trust
at a “very challenging time for the EU”.
News that Mr Barroso, a former Por-
tuguese prime minister, had taken a job
as non-executive chairman of Gold-
man’s London-based investment bank
sparked outcry in some European coun-
tries, notably France.
François Hollande, French president,
branded the move “legally possible but
morally unacceptable”. Jean-Claude
Juncker, Mr Barroso’s successor in Brus-
sels , has made veiled criticisms of the
step, saying “one has to chose one’s
employer well”.
More than 120,000 people have
signed an online petition in protest at
the appointment and calling for Mr Bar-
roso’s EU pension to be withdrawn. A
preamble on the Change.org website
which tried to press Beijing into grant-
ing Hong Kong full democracy through
months of street protests.
Alex Chow, another student leader in
Occupy, says that Mr Law is “a sincere
and honest person” who is “willing to
speak up against the things he doesn’t
think are right”.
After the initial despair at the failure
of Occupy, young activists coalesced
around the need to take a tougher line
with Beijing and found that their sup-
port grew as the Chinese government
and its Hong Kong counterpart sought
to stifle them.
“Two years ago I couldn’t foresee
things changing so quickly,” says Mr
Law, who plans to complete the last year
of his degree at Lingnan University on a
part-time basis. “That’s also credit to the
government, which is doing so many
things to suppress the people.”
Demosisto, the party Mr Law founded
with fellow student leader Joshua Wong,
Wednesday 7 September 2016
For Mr Erdogan, a Turkey-adminis-
tered safe zone with international sup-
port would position him as a leading fig-
ure in a conflict in which he has largely
been frustrated.
Turkish-backed rebels had, until
recently, little battlefield success,
prompting his US allies to depend on a
Kurdish militia he despises to fight Isis.
Meanwhile, Russian and Iranian sup-
port has propped up Bashar al-Assad,
the Syrian president whose ousting Mr
Erdogan has long sought.
If it succeeds, the safe zone would also
bolster Turkey’s claims to be a vital
interlocutor in an eventual resolution of
the conflict as the only party whose bat-
tlefield plan has both Russian and US
approval.
Key to Ankara’s escalation in Syria has
been a recent rapprochement with Rus-
sia, after an eight-month rift triggered
by Turkey’s downing of a Russian
fighter jet in late 2015.
Turkey sent its tanks into Jarabulus
late last month, where they met little
resistance from Isis. This boosted the
morale of the Turkish military just a
month after a faction within the armed
forces attempted a coup against Mr
Erdogan. Several more Turkish tanks
and armoured vehicles crossed into
Syria over the weekend, adding to a
troop build-up.
The August intrusion was carried out
with US-support, since it effectively
expelled Isis from a 98km stretch of land
along Turkey’s border, which Turkish
and US officials said was used by foreign
fighters moving in and out of Syria.
But for Turkey, it also achieved a long-
stated goal of preventing the US-backed
Kurdish militia, which Mr Erdogan
equates with the Kurdistan Workers’
party, a terrorist group, from occupying
that same space. If Turkey’s latest plans
are carried out, it would place the Turk-
ish-backed rebels perilously close to the
Kurdish militia it opposes.
Additional reporting by Geoff Dyer in
Washington
says the petition was started by “EU
employees”.
Goldman has been criticised for
arranging complex financial instru-
ments to help the Greek government
massage its public finances when Mr
Barroso led the commission.
Brussels has said Mr Barroso’s deci-
sion cannot be challenged under EU
conflict-of-interest rules because 18
months have passed since he left post.
However, Emily O’Reilly, head of the
European Ombudsman, said in her let-
ter that “public unease” was rising
because Mr Barroso would advise his
employer on Brexit.
She said Brexit raised specific issues
regarding Mr Barosso’s appointment,
given his in-depth knowledge of the
commission and the sensitivity of the
issue. Ms O’Reilly also asked whether
the commission would issue guidance to
Michel Barnier, the EU’s chief Brexit
negotiator, on “how and whether they
will engage” with Mr Barroso in his new
role.
While the letter is an embarrassment
for Brussels, Ms O’Reilly cannot force it
to revisit its decision on Mr Barroso or to
change its code of conduct.
The commission said its ethics rules
were “the strictest in the world” and
had been “respected”.
has been blocked from registering as a
company — necessary to get a bank
account — because the government is
unhappy with its support for self-deter-
mination. Its election materials were
also censored for the same reason.
Some members of Mr Law’s family in
the mainland have been threatened by
China’s security services. However, he
says he will not relent.
“They’re really worried about me,” he
says, of his family. “But they know that
they just can’t stop me because I’m fairly
independent.”
Does he see any contradiction
between his strong connections to the
mainland and his advocacy for a sepa-
rate Hong Kong?
Not at all.
“A lot of people think we don’t know
China, so we hate them,” he says. “Actu-
ally, we know China, so that’s why we
hate them.”
Additional reporting by Gloria Cheung
Wednesday 7 September 2016
France. Presidential race
Hollande looks
to reassert
his authority
as left splinters
Socialist rivals have called on
their embattled leader not to
contest elections next year
ANNE-SYLVAINE CHASSANY — PARIS
François Hollande is seeking to stamp
his authority on a fragmenting French
left as new challengers from his Socialist
party press their unpopular leader to
withdraw from the presidential race.
In a speech tomorrow Mr Hollande is
expected to seize on the themes of
Islamist terrorism and far-right extrem-
ism in the hope of transcending the
sniping in his own party.
Several rivals on the left have in
recent weeks signalled their intention to
stand for president. Among them are
four former Hollande ministers, includ-
Net approval ratings of party
leaders
Favourable ratings minus unfavourable
ratings (%)
Hollande 20
Sarkozy 0 implosion of the left”.
-20
-40
Le
Pen
-60
-80
2012 13 14 15 16
Source: Ipsos; Le Point
ing former protégé Emmanuel Macron
and Arnaud Montebourg, a leftwing
firebrand and Mr Macron’s predecessor
at the economy ministry. Both hope the
president will back out in the face of
abysmal approval ratings.
“Hollande will try to reassert his lead-
ership and appear as the defender of the
nation,” said Laurent Bouvet, a special-
ist in politics at Versailles university.
“These are the only themes on which
the left can find a common ground. But
his credibility there has eroded too,
after the third and fourth big terror
attacks.”
Mr Hollande, 62, rose to the top of the
Socialist party and captured the presi-
dency by holding together a left riven by
disagreements between those in favour
of a centrist, market-oriented approach
and those still clinging to Marxist ideas.
But after four years in power this
achievement is under threat, increasing
the likelihood of a humiliating defeat in
presidential elections next year.
“This art of synthesis that Hollande
has long mastered as Socialist party sec-
retary-general was artificial,” said Prof
Bouvet, adding that it was a “paradox”
that he was “the one presiding over the
For the Socialists, competing candida-
cies raise the prospect of another April
21 2002, when Lionel Jospin, the prime
minister at the time, failed to qualify for
the second round of a presidential run-
off in a field crowded with leftwingers.
Jean-Marie Le Pen, the far-right leader,
reached the second ballot, handing an
easy win to Jacques Chirac, the centre-
right incumbent. This time Mr Le Pen’s
★ FINANCIAL TIMES
INTERNATIONAL
Under pressure: daughter, Marine, is widely expected to
François qualify for the second round after a
Hollande is strong showing in local elections by the
expected to National Front (FN). Opinion surveys
present himself suggest Mr Hollande and other leftwing
as the defender candidates would be eliminated, allow-
of the nation ing the centre-right nominee — be it
in a speech Nicolas Sarkozy, the former president,
tomorrow or Alain Juppé, a former prime minister
Etienne Oliveau/Getty Images
— to reach power. It is a scenario that has
failed to inspire unity.
“Fragmentation is suicidal,” said
Philippe Marlière at University College
London. “They know it, but there is the
question of egos and personal ambi-
tions, and the irreconcilable disagree-
ments.”
Many hold Mr Hollande responsible,
according to Prof Marlière. In particu-
lar, he is faulted for failing to deliver on
campaign promises to combat the finan-
cial industry and confront Angela Mer-
kel, German chancellor, on austerity.
Many party members are furious at his
move to grant more than €40bn in tax
breaks to companies and increase flexi-
bility in the job market.
The president has shaken the elector-
ate by seeking — unsuccessfully — to
change the constitution to strip terror-
ists of French citizenship, a measure
long requested by the FN.
Even a modest economic recovery
and a long-awaited decline in unem-
ployment might not be enough to win
over many Socialist voters. “For the first
time, part of the leftwing electorate is
tempted to abstain,” said Prof Marlière.
“Disillusion toward the elite and the
institutions is very strong.”
That may deepen this month with the
release of several unflattering books
about the presidency in which Mr Hol-
lande comes across as a passive and pro-
vincial leader. In Private Conversations
with the President, written by two jour-
nalists who have had many meetings
with the Socialist leader, he is quoted as
saying: “I don’t believe much in luck. I
believe in bad luck. I have had plenty
5
since I arrived. One day there ought to
be compensation.”
On his inability to curb record unem-
ployment, he is said to have com-
plained: “I didn’t have luck!”
The interviews in the book were
intended to give an honest account of
Mr Hollande’s actions, according to a
person briefed on the project. But some
of the passages are likely to heighten the
left’s sense of betrayal.
‘For the first Reflecting on his midterm pro-busi-
time, part of ness shift, the president is quoted as say-
the leftwing ing: “My election resulted from Socialist
party debates. I had to take on board
electorate is part of what the party had given me
tempted to . . . including a whole lot of burdens.”
In The First Secretary of the Republic,
abstain.
written by another journalist, Mr Hol-
lande appears to view last year’s terror
Disillusion attacks through the narrow prism of his
toward the political troubles. “The terror attacks,”
he is quoted as saying, “they were the
elite is very only time when I had some peace.”
strong’ Notebook page 8
6 ★ FINANCIAL TIMES Wednesday 7 September 2016

ARTS

Scorching anger, T H E AT R E

Crime and Punishment

blazing energy
The Scoop, London
aaeee
Ian Shuttleworth

For more than a decade now, Phil Will-

THEATRE
Burning Doors
Soho Theatre, London
aaaae
Sarah Hemming
Belarus Free Theatre celebrated their
10th anniversary last year: a remarka-
ble feat given that they are banned in
their home country because of the polit-
ical nature of their work. And this latest
work shows them at their best. Focusing
this time on the Putin regime, Burning
Doors draws on the experiences of three
artists, all of whom have been incarcer-
ated: Maria Alyokhina (a member of
Pussy Riot, who appears in the show),
Russian political artist Pyotr Pavlensky
and Ukrainian filmmaker Oleg Sentsov
(who is currently serving a 20-year
prison sentence in Russia). It’s a scorch-
ing piece of theatre: uncompromising,
urgent and angry.
The title alludes to one symbolic
action by Pavlensky, when he set fire to
the doors of the headquarters of the
Russian Federal Security Service (he
has also swaddled himself, naked, in
barbed wire and nailed his own scrotum
to the cobblestones in Red Square). The
whole piece is charged by intense scru-
tiny of what art is and what its role can
and should be under censorship. But
underpinning it too is a restless exami-
nation of what “freedom” means if,
either in or out of jail, you do not have
freedom of expression.
In a sequence of short vignettes, per-
formed in Russian and Belarusian with
English surtitles, the piece (written and
directed by Nicolai Khalezin) offers a
rich mix of styles. There’s savage politi-
cal satire here, as performers portray
government aides puzzling over what to
do with an artist such as Pavlensky;
there’s also wry wit about the difficulty
of making a show about making political
art — having to articulate slowly “so peo-
ple have time to read the surtitles”. This
ironic self-awareness recurs throughout
the piece: at one point the lights snap on
and the company stages an impromptu
interview with Alyokhina, taking ques-
tions from the audience.
But the passages that linger are physi-
cal sequences inspired by the artists’
experience of prison. The piece finishes
with tributes to Sentsov, most memora-
bly a silent, protracted duel during
which one man repeatedly hurls the
other to the ground, only for his victim
to stagger, defiantly, back on to his feet
— until, by the end, it is the aggressor
who is most exhausted.
It’s a brilliant physical metaphor for
the gruelling battle between oppressor
and oppressed, and a celebration of
resistance. It is performed, as is the
whole piece, with blazing energy and
commitment.
To September 24, sohotheatre.com
belarusfreetheatre.com
JA Z Z
Billy Cobham
Ronnie Scott’s, London
aaaae
Alison Gunn
There’s always a degree of apprehension
in going to see a musical “legend”, par-
ticularly one you hold in great respect. I
first saw fusion drummer Billy Cobham
at London’s Roundhouse in 1981, when
he sat god-like on a raised stage, sur-
rounded by his massive kit. Then, it was
all about power performance. Thirty-
five years later, he’s back in London with
music from his three most recent
albums and a new one, Tierra del Fuego,
that’s still in development. From the pal-
pable excitement, you could tell that the
gig is an annual treat for many fans.
And of course, he can still cut it. From
the first few rock-funk bars of “Mirage”,
from 2010’s Palindrome, to the complex,
driving “Tales from the Skeleton Coast”,
Cobham played with the mastery of
experience — superbly tight yet relaxed,
still inquisitive and in the moment. At 72
he looks fit as a fiddle: age has not dimin-
ished his playing or his composition.
After cruising through the irresistible
samba-inspired “Cat in a Hat”, the band
kicked into “Tierra del Fuego”,
an intense, rocky piece featuring a
moody analogue-synth solo from Steve
Hamilton, Cobham’s china cymbal
adding smoke and flames. Then came
“Panama”, full of layered atmosphere
and scenery. Christian Galvez’s rever-
berating bass led us into a cave, where
Hamilton’s piano solo opened out into a
pool of tranquillity, the drums simmer-
ing behind like geysers. “It’s a puzzle
that I’m still trying to work out,”
Cobham said of this number dedicated
to his homeland.
His big drum piece was also explora-
tory. Using double beaters, he gently
rolled over the toms, building to a boil in
a solo that was much more about
nuanced expression than virtuoso dis-
play. Those awaiting “Spectrum”, his sig-
nature number from 1973, were not dis-
appointed. Jean-Marie Ecay delivered a
searing guitar solo and Camelia Ben
Naceur on keyboards really got the
party going with funky Latin riffs and
infectious, singing melody.
By this time Galvez, as well as
the audience, was bouncing on his
bass stool, and it didn’t take much to
persuade him to play “Red Baron” as
an encore. He hopped off, let down his
hair, turned up the distortion and
despite a broken nail gave a brilliant
rendition of Cobham’s funk classic. The
legend lives on.
ronniescotts.co.uk
mott has been directing free summer
shows in the outdoor Scoop amphithea-
tre by London’s City Hall, concentrating
on classics of world literature retold
breezily for non-culture-heads. This
year his choice is Dostoevsky’s Crime and
Punishment, which is laudable. He has
staged it as a rock musical, which is
audacious. The songs are by flame-
haired 1980s new wave gadfly Toyah
Willcox, which shows breathtaking
nerve. And with the discovery that it’s a
jukebox Toyah Dostoevsky musical, all
diplomatic vocabulary flies out of the
window and the kindest term I can find
is “ludicrous”.
As far as I can tell no more than two
of the dozen-plus songs are new compo-
sitions by Willcox and her songwriting
partner Simon Darlow. A clutch of
the remaining numbers are drawn from
her 2008 album In The Court of the Crim-
son Queen (Willcox’s husband being
Robert Fripp of King Crimson), but as
many hail from her early 1980s heyday.
Urgent: Belarus Some lyrics have been retooled, but
Free Theatre’s even so . . .
‘Burning Doors’. When Willmott, as detective Porfiry
Below left: Billy Petrovich, opines that the murder of a
Cobham at pawnbroker is a mystery, yes, it’s a mys-
Ronnie Scott’s tery, and he’s still searching for a clue,
Alex Brenner
those of us who remember Willcox’s
Carl Hyde original version dissolve in titters. In
general the numbers with their pre-
recorded, synth-heavy arrangements
are as conspicuously bolted-on as Boris
Karloff’s head in Frankenstein.
Willmott’s intent is not to dwell on the
bleak social fabric depicted by Dosto-
evsky, but to focus instead on the former
student Raskolnikov, who commits the
murder in an enactment of his proto-
Nietzschean philosophy. Instead of a
charismatic figure burning a path
through 19th-century St Petersburg,
however, Alec Porter’s Raskolnikov is
more a pretty young man caught up in
his own self-mythologising. He wants to
be free, in the words of another of
Toyah’s hits; in the end, though, for 100
minutes we are the ones who end up
paying the price for his attempt.
To September 25, freeopenairtheatre.org

Sophistication trumps simplicity

Canon Fodder
While Dvořák’s ‘New World’
Symphony has become over-
familiar, a work of arguably
greater worth languishes in
obscurity. Hannah Nepil
makes the case for ‘Krútňava’
They both speak with the voice of their
respective nations — nations that are
joined at the hip. But in the
international arena, Krútňava, an opera
by the 20th-century Slovak composer
Eugen Suchoň, languishes in obscurity.
Meanwhile, the New World Symphony
by the Czech composer Antonín Dvořák
is played to death.
Perhaps that’s partly Ridley Scott’s
doing. If he hadn’t selected the
symphony for a starring role in his
wholesome Hovis bread TV advert of
1973, this music might retain more of its
dignity. But I doubt it. Not that the New
World Symphony isn’t a great work; it is
just too catchy for its own good.
So the tunemongers have swarmed in
by the dozen, bleaching out many of its
best points. How often do we get to
relish those Wagnerian harmonic
tensions, or the pathos of the funeral
march in the second movement? And
how often do we hear interpretations
that remind us just how much this piece
Folk-inspired: poster for ‘Krútňava’
speaks of regret and loss? Certainly less
often than we hear faceless, rushed and
out-of-tune performances from players
who seem to be out of their depth.
Dvořák’s musical language is in some
ways so straightforward that a child
could understand it, they might say,
forgetting that the illusion of simplicity
is hard-won.
Simplicity is not a quality you
could ascribe to Suchoň’s music.
Like Dvořák, this composer drew
inspiration from the folk music of his
country, but then mixed it with complex
chromaticism, a dash of impressionism,
and, later in his 60-odd year career, his
own brand of 12-note serialism. What
emerged was a body of tautly-
structured music, as notable for its
harmonic sophistication as it was for
its raw, earthy power. Twenty three
years since his death, he is generally
regarded as the father figure of
modern Slovak music, who
influenced more than one generation
of Slovak composers.
Krútňava (The Whirlpool), premiered
in 1949, is his best-known work, and no
wonder. Not only is it widely considered
to be the first truly Slovak opera,
focused as it is on Slovak country life,
but its psychological depth is
comparable to that of Leoš Janáček’s
Jenůfa, and indeed to the novels of
Dostoevsky: its libretto, based on Milo
Urban’s novella Beyond the Upper Mill,
deals with the Dostoevskian issue of a
murderer’s conscience.
Meanwhile the music, in the vein of
Janáček, faithfully follows the contours
of the language and transmogrifies
simple folk melodies into something of
expressionistic intensity.
This September, the Slovak National
Theatre in Bratislava will present the
work in a staging by the world renowned
Slovak film director Juraj Jakubisko.
Book your ticket now.
‘Krútňava’, Slovak National Theatre,
Bratislava, September 17 & 24, snd.sk

C L A S S I CA L M U S I C
Shanghai Isaac Stern International
Violin Competition
Shanghai Symphony Orchestra Concert Hall
Ken Smith
The late violinist Isaac Stern’s legacy in
China is often overshadowed by his
campaigns closer to home in the US —
saving Carnegie Hall comes to mind —
but across the Pacific memories still res-
onate deeply. The conductor Long Yu,
who hosted Stern’s return to China for
the 20th anniversary of his ground-
breaking 1979 tour (commemorated in
the Oscar-winning documentary From
Mao to Mozart), fulfilled his own long-
time goal this month by initiating the
Shanghai Isaac Stern International Vio-
lin Competition, which drew to a close
last week.
Over Thursday and Friday evening at
the Shanghai Symphony Orchestra Con-
cert Hall, six finalists each got roughly
an hour of stage time to perform a
concerto and shorter virtuoso piece
with the Shanghai Symphony Orchestra
under conductor Michael Stern (son of
Isaac). Mobile phones, plastic bags and
other potential noisemakers — includ-
ing “children under 120cm” — were
expressly banned from the hall.
Shanghai audiences got a further
crash course in the particular gravity
of music competitions, with their
First prize winner Mayu Kishima
deliberate pacing, frequent pauses for
tuning and the likelihood of hearing a
given piece performed multiple times in
a single evening. So too did the inaugu-
ral event immediately join the ranks of
established competitions, announcing a
contentious decision its first time out.
Judges listen with different criteria
than most concertgoers, and indeed
much of the jury’s decision was based on
earlier rounds of solo playing and cham-
ber music. But there was little on Friday
evening to explain why first prize win-
ner Mayu Kishima’s cautious perform-
ance and awkward presence in Shostak-
ovich’s Violin Concerto No. 1 should rate
higher than second prize winner Sergei
Dogadin’s stylistically assured account
of the same work. Kishima took home
US$100,000 in prize money; Dogadin
received $50,000.
Shanghai audiences not only had the
benefit of some high-stakes, often
inspired music-making. They also had
the joy of being able to complain about
the results afterwards.
shcompetition.com
Wednesday 7 September 2016
Post-crisis regulators wanted banks to behave more like utilities to end the ‘too big to fail’ culture. Now,
with valuations and profit levels converging, what does the shift mean for the sector?
T
he applause was faint when
Neel Kashkari, the influen-
tial president of the Minne-
apolis Federal Reserve,
addressed Washington DC’s
Brookings Institution in February. Little
wonder. A shocked audience had heard
Mr Kashkari, a man who had cut his
teeth as a Treasury official administer-
ing the US bank bailout programme in
2008, make a radical suggestion: “Turn
large banks into public utilities by forc-
ing them to hold so much capital they
virtually can’t fail, with regulation akin
to that of a nuclear power plant.”
It was a proposal, spun out of his con-
viction that America’s largest banks
remain “too big to fail” eight years after
the financial crisis, and six years after
the slew of Dodd-Frank regulation for
which Mr Kashkari himself helped lay
the groundwork.
Few expect his idea ever to go any-
where, given the still-powerful Wall
Street lobby and the fractured political
attitude to bank regulation. But the par-
allel Mr Kashkari drew was telling.
Banks, in the eyes of some policymak-
ers, and some bankers, too, have already
become like utilities — and not neces-
sarily in a good way.
Sir Philip Hampton has the perfect
perspective. Today he is chairman of
drugmaker GlaxoSmithKline. In past
lives he was finance director of priva-
tised utility British Gas and later chaired
Royal Bank of Scotland following its
2008 collapse, when the then world’s
biggest bank by assets had to be rescued
with £45bn of UK government money.
“Banks look increasingly like compet-
itive utilities,” says Sir Philip, who over-
saw a £1tn purge of RBS’s riskiest assets.
“There are ever-higher levels of regula-
tion and relatively low utility-like
returns.” RBS itself has remained loss-
making since the crisis.
A sector that before 2008 was known
for its freewheeling ways — vast profits,
huge pay packages and soaring stock
market valuations — has been so under-
cut by regulation and low interest rates
that it has come to resemble the most
humdrum of utilities.
Capital requirements and stress test-
ing set de facto price and profit controls.
There is a sharper focus among policy-
makers on the social usefulness of
banks’ activities. Stock market valua-
‘Banks have to continuously
make judgments on risk,
and appropriately price for
it . . . There is nothing about
banking that remotely
resembles a utility’
Jamie Dimon
tions are low. Dividend yields are high.
Growth prospects look limited. And,
perhaps most disturbing for their profit
outlook, the products and services that
banks sell are increasingly commodi-
tised as regulation has tightened and
risk appetites have reduced.
That might feel like just deserts for an
industry that triggered a global crisis
and whose most notorious staff have
been shown up as fraudsters, money
launderers and cartel operators. But for
anyone with an interest in the health of
banks, such as investors eager for a
decent return and customers wanting
good, low-priced services, it is bad news.
Generating returns
There is no universal definition of a util-
ity. Critics of the banks would point to
the irony in the underlying implication
of a utility being “useful”. But in large
parts of the world, particularly in
Europe and the US, the likes of sewerage
operators, electricity suppliers and gas
companies share traits. They tend to
operate under high levels of regulation,
with price and profit controls, low
returns on equity, high dividend yields,
constrained growth prospects and mod-
est stock market valuations.
The parallels with banking in the
developed world are undeniable. HSBC,
for instance, had a dividend yield of 6.5
per cent last year, higher than any blue-
chip utility, having generated a return
on equity of 7.6 per cent. A few banks
★ FINANCIAL TIMES
FT BIG READ. BANKING
By Patrick Jenkins
Too dull to fail?
Altered state How lenders have changed character
2006
$39.1m 28.8%
Total compensation for Goldman Sachs’
Jamie Dimon, JPMorgan RoE around a
CEO — $7.2m in shares decade ago
$121,536 4.1%
Average compensation HSBC’s dividend
at JPMorgan a decade yield — typical of
ago banks a decade ago
21.4% 3.3%
Barclays’ return on Dividend yield at
equity before the Wells Fargo, regarded
financial crisis by some as a ‘utility’
Sources: companies, Thomson Reuters Datastream
Forward earnings per share Dividend yields
$ Per cent
15
MSCI World Banks
10
MSCI World 5
Utilities
0 0
2007 10
Source: Thomson Reuters Datastream
12 14 16 2007
make a juicier RoE. Some, like RBS, are
stubbornly lossmaking.
But most are stuck in the 5 to 10 per
cent range. And none is anywhere near
hitting the high point that bank returns
reached in the years before the 2008
financial crisis. HSBC made an RoE of 17
per cent a decade ago; Goldman Sachs
was making 25-30 per cent. Today’s
returns are in line with a solidly-per-
forming power or water company.
Some of the decline is down to the eco-
nomic environment — anaemic growth
combined with slimmer margins based
on ultra-low rates has trimmed profits.
But the big constraint has been regu-
lation. Banks have to fund themselves
with far more equity and relatively less
debt — a logical response to the exces-
sive balance sheet leverage of the pre-
crisis years, but all the same a shock to
the system. Those capital requirements
have tripled or quadrupled when head-
line numbers and tighter definitions of
capital and asset risk are factored in.
At the same time so-called liquidity
rules have obliged banks to hold far big-
ger pots of cash — redundant money —
and take less risk by limiting the extent
to which potentially lucrative long-term
loans can be funded with cheap short-
term money.
Regulators have initiated and pro-
gressively toughened stress tests, with
changing scenarios that create a curb on
risk and profit. “Banks aren’t yet eco-
nomically regulated,” says Sir Philip,
pointing to the pricing caps imposed on
many utilities. “But there is a form of
that through stress tests. Regulators can
be assertive on a bank’s mix of business.
“If they see an ultra-high return oper-
ation, they worry about the potential for
stressed losses. They can get muscular
MSCI World Banks
MSCI World
Utilities
10 12 14
about high-risk, high-return businesses
that they don’t think you should be in.”
The utility parallel is set to be
extended still further in the UK, where
big banks are preparing to erect a regu-
latory “ringfence” around their high-
street operations to protect them from
their riskier investment banking activi-
ties. “A ringfenced bank is going to be
like a utility,” says one policymaker
close to the process. “It will have limited
operational manoeuvrability.”
Plumbing operations
Many bank activities have long been
commoditised and utility-like, with
some geographies and business areas
controlled by monopolies, duopolies or
oligopolies. ATM networks, for exam-
ple, or the infrastructure used to process
interbank transfers are like financial
cables, pipes and plumbing. In the US,
the mortgage market could not operate
without the financing provided by twin
utilities, Fannie Mae and Freddie Mac.
The parallels are intensifying in two
ways. First, as outlined above, much of
the sector is taking on the characteris-
tics of a utility — the regulation, the val-
uation, the profitability, the dividend
payouts. There is, however, a second
change that is bringing utility-market
dynamics to specific areas of banking.
Most obviously, it is happening in the
area of payments — an unexciting but
core part of banking, where commoditi-
sation is taking hold as an already utili-
ty-like function attracts competition
from technology companies.
Some draw a comparison with the
deregulation of the UK power market in
the 1990s, when monopolistic gas and
electricity companies were exposed to
competition. But it may be worse than
7
2015
$27m 9.8% Nuclear option Critics argue banks are
so dangerous they should be regulated
Dimon’s compensation Goldman Sachs’ RoE in the same way as nuclear plants
package last year — — a big drop from
$20.5m in shares the end of 2006
Reduced appetite Stress tests and
higher capital requirements have
$126,813 6.5% curbed risk and profit among lenders
Average annual pay at HSBC’s dividend
JPMorgan — up just yield — up more Cyclical business Banks, unlike utilities,
$5,000 in 10 years than 50% since 2006 are often at the sharp end of economic
cycles, contributing to income volatility
6.1% 2.8%
Barclays’ RoE — similar Wells Fargo’s yield
to a water or power has slipped as its a utility in the minds of the consumers
utility share price has risen where they expect everything to come
without a value price to it.”
By July, however, after attacks from
start-ups — one of which tweeted “big
banks are thieves” — and a free compet-
ing service from arch-rival Bank of
America, US Bancorp’s fee for instant
payments was cut to zero.
Payments are the visible tip of a
broader change — banks’ long-estab-
lished ability to charge high prices for a
whole range of services is crumbling.
Combined with a difficult macroeco-
nomic environment and new regula-
tion, the squeeze on profits has been
extreme. In many markets that would
have spurred a rush of mergers and
acquisitions as incumbents rushed to
find cost synergies and cut overheads.
Bank bosses, though, have reluctantly
accepted that regulators will block “too
big to fail” banks from getting any big-
ger. Instead, the focus is on collaborat-
ing in less-sensitive areas. Joint ventures
are being set up to cover everything
from “know your customer” risk checks
to equity research. The common theme?
Banks want to spin off utility-like back-
office functions, to eliminate duplica-
tion, cut costs and push up profits.
Different perspectives
So do all the similarities — commodity-
like products, ordinary services — mean
banks are now utilities in all but name?
No, says Chirantan Barua, analyst at
Return on equity Bernstein Research. “Banking is inher-
Per cent
ently volatile. It is a leveraged business,
10 20
with exposure to volatile things like
house prices. It also persists in paying its
8 MSCI World Banks staff far more generously than any util-
15
ity or low-risk business.” A typical util-
6 ity, he says, might have five or 10 staff
who are paid more than £1m a year. A
10
bank like Barclays or JPMorgan has
4 hundreds or even thousands.
Some investors are unfazed and are
5
2 warming to the increased utility fea-
MSCI World tures, particularly the high dividends.
Utilities
0
Paul Markham, a fund manager at New-
ton Investment Management, said last
16 2007 10 12 14 16 month that banks looked cheap and
seemed to be “on a journey” to a more
utility-like, high-payout model. That
that for the banks. The likes of Apple could be attractive to investors.
Pay and PayPal are popular brands that Exploiting that view is a key focus for
are capturing the all-important rela- some banks. “In this zero-rate environ-
tionship with the consumer, leaving ment, it is a good thing to be like a utility.
partner banks to do the routine, regu- It’s the right way to attract investors,”
lated behind-the-scenes work. It is a says Carlo Messina, chief executive of
trend that worries some bankers. Intesa Sanpaolo, Italy’s biggest domestic
“If you don’t have the relationship lender. But Mr Barua is cautious. “Eve-
with the customer, you’re just a utility, ryone calls Nordea [the Swedish
you’re just the dumb pipes,” says Fran- lender], Lloyds and Wells Fargo utilities
cisco González, executive chairman of because they are pumping out divi-
dends. But banking is cyclical. They
have very volatile income lines.”
Banks are seen as volatile because,
unlike utilities, they are at the sharp end
of sometimes extreme interest rate and
economic cycles, leading to high levels
of credit risk. And the market risk that
comes from trading securities is unpre-
dictable. “Taking and managing risk is a
core part of what a bank does,” says
‘Turn large banks into Ronit Ghose, banks analyst at Citigroup.
“While payments can be ‘utility-like’, it
public utilities by forcing is hard for a bank that does lending or
trading to be low risk.”
them to hold so much Jamie Dimon, JPMorgan’s straight-
capital they can’t fail, with talking chief executive, is unapologetic.
In a 22,000 word letter to shareholders
regulation akin to that of a in April, he delivered a blunt riposte to
Mr Kashkari’s proposal to regulate
nuclear power plant’ banks more like the nuclear-power util-
Neel Kashkari ities that some believe they resemble.
“Banks,” he wrote, “have to continu-
BBVA, which is determined to escape ously make judgments on risk, and
that fate by buying high-tech challeng- appropriately price for it, and they have
ers, such as the US lender, Simple. to do this while competing for a client’s
Other banks have been engaged in a business. There is nothing about bank-
losing battle. In the spring, US Bancorp ing that remotely resembles a utility.”
launched a service allowing customers JPMorgan is certainly doing all it can
to make instant payments from a smart- to undermine the parallels. Its RoE is
phone, charging $6.95 per transaction. scraping 10 per cent. And Mr Dimon
“We have to make sure,” chief executive was paid a total of $27m last year, down
Richard Davis told shareholders, “that by nearly a third from 2006 but hardly
the business of banking doesn’t become the remuneration of a utility operator.
8 ★
WEDNESDAY 7 SEPTEMBER 2016
Merkel’s challenge is
laid bare in Mecklenburg
Germany’s leader must hold her nerve and manage the migrant crisis
After a year in which more than a mil-
lion migrants arrived in Germany, one
of the biggest political questions facing
the country has been the impact on the
electoral fortunes of the anti-refugee
and anti-establishment party, Alterna-
tive for Germany.
A smattering of regional polls in the
spring gave a taste of the answer, show-
ing the three-year-old party picking up
support across states as diverse as
Baden-Württemberg, Rhineland Palat-
inate and Saxony Anhalt. But last
weekend the AfD went one further in
the state of Mecklenburg-Vorpom-
mern. In elections to the state legisla-
ture, it pushed Chancellor Angela Mer-
kel’s Christian Democrats (CDU) into
third place in her own home state.
One should not, of course, read too
much into a single election. Support for
the AfD tends to be higher in the east-
ern states of Germany, while Mecklen-
burg-Vorpommern in particular has a
tradition of unconventional parties.
Nonetheless, the increase in the
AfD’s popularity suggests it can no
longer be seen as a passing phenome-
non. Despite almost breaking up last
year when the political momentum
behind its original anti-euro manifesto
faltered, the party has been revived by
Ms Merkel’s courageous if controver-
sial policy of opening the door to refu-
gees and migrants from Syria and else-
where in the Middle East and north
Africa. AfD’s opinion poll ratings now
hover at between 11 and 14 per cent of
the electorate. At that level, it is likely
to enter the German parliament with a
significant block of seats when federal
elections take place next year.
A big AfD grouping would make the
mathematics of German politics much
more troublesome. It would accelerate
the fragmentation of the party system
that has governed German politics
since the 1960s, and undermine the
dominance of the two main parties.
Inclusive capitalism
must begin at home
G20 leaders need to change domestic rhetoric as well as policies
As befits a gathering deservedly known
for having a high ratio of words to
actions, the G20 wrapped up its meet-
ing last weekend with a strong but ill-
defined call to make globalisation and
capitalism work for the good of all.
Malcolm Turnbull, the Australian
prime minister, spoke of the need to
“civilise capitalism”; Christine
Lagarde, head of the International
Monetary Fund, said that growth had
been “too low for too long for too few”.
They were reflecting a concern that
the insecurities wrought by globalisa-
tion, particularly trade and migration,
were fuelling populist sentiment and
with it a flight towards protectionism
and xenophobia. But few universally
applicable solutions were offered.
In a way, that is not surprising. Not
only are such concerns largely limited
to a set of rich countries, but the
answers that they demand will vary
from nation to nation. The globalisa-
tion of trade, technology and to some
extent migration are widespread
challenges, but there are no universal
international solutions. The response
to globalisation must begin at home.
To much of the world, the obsession
with rising inequality and populism
must look like western solipsism.
Thanks to the rise of emerging mar-
kets, modern globalisation has pro-
duced the first worldwide fall in ine-
quality since the west’s industrial revo-
lution. There is little sign of a general
shift towards populism across emerg-
ing markets, albeit many of them are
starting off at a pretty high level.
Even within the rich countries, the
links between trade, technology and
migration on the one side, and inequal-
ity and populism on the other, are by no
means clear. In the UK, for example,
migration and the hollowing-out of tra-
ditional manufacturing have widely
been cited as reasons for the Leave vote
in the Brexit referendum. Yet income
Germany could face the prospect of
three-party coalitions, which are
intrinsically less stable than the two-
party governments the country has
had for decades.
Sizeable gains by the populist right
would also mean there were six parties
jockeying for position in the Bun-
destag, of which two — the socialist Die
Linke and AfD — have been placed
beyond the pale by the mainstream.
That would make the creation of a gov-
ernment both willing and able to act
much harder to achieve.
Germany’s establishment parties
need not yet panic. It is premature to
see the rise of the anti-immigrant right
as irrevocable. The AfD is prone to ugly
factional conflict. Germany has seen
the emergence of a number of populist
rightwing movements in recent dec-
ades. They have subsided once immi-
gration concerns have been addressed.
Nor has public support for Ms Mer-
kel’s “Willkommenskultur” evapo-
rated. Although a recent opinion poll
showed support for her refugee policy
dropping from 45 per cent last autumn
to 35 per cent, belief in her motto “we
can do it” has paradoxically gone up —
from 27 to 43 per cent. It helps that the
crisis has stabilised. The deal signed
with Turkey this year (as well as fence-
building in the Balkans) has helped
slow the flow of refugees to Europe.
Events could yet unbalance this pre-
carious equilibrium. The Turkish deal
could collapse; or another outbreak of
violent attacks could cement in the
public mind the link between migra-
tion and terrorism. But in the mean-
time, and despite recent sniping about
the lack of an integration policy from
her SPD coalition partners, Ms Merkel
retains sufficient authority and politi-
cal space to manage the refugee crisis.
The challenge is considerable. But it is
in Germany’s, and Europe’s, interest
that she succeeds.
inequality in the UK has been pretty
much flat since the early 1990s.
Still, the rise in inequality in many
countries, in wealth as well as income,
is incontrovertible. The problem is that
it usually has a lot more to do with tech-
nology than trade, and not much at all
with immigration. Yet while politicians
can address the latter two, they cannot
do much about the first, unless they
actually manage to ban automation or
digitisation in their economies.
Moreover, the tools that bear directly
on trade and movement of people, such
as protectionism and strict limits on
immigration, tend to do more harm
than good. Protecting one sector
exposed to international competition
tends to reduce efficiency and redis-
tribute the pain elsewhere.
Each country’s solution must be tai-
lored to its own conditions and what is
politically possible. But there are some
useful principles to bear in mind. Gov-
ernment policies towards the labour
market are best directed at equipping
workers for new occupations and cush-
ioning the income impact of structural
changes rather than trying to preserve
all current jobs through stultifying reg-
ulation. Rather than blocking immi-
gration, help should be directed at local
areas absorbing large numbers of new
migrants, to ease the social impact.
Complementing money and legisla-
tion must come a new honesty among
politicians about the nature of the
problem and what can be done. Prom-
ising massive import tariffs or a wall
with Mexico is easy. Explaining that
technology cannot be uninvented and
that adjustment can be eased but not
wished away is much harder.
The G20 did not and will not produce
a universal model for inclusive capital-
ism. But raising the issue at an interna-
tional level may encourage individual
governments to think harder about
what they can achieve at home.
FINANCIAL TIMES
Chancellor’s poll blow reflects surge of rightwing populism
Sir, While Stefan Wagstyl’s piece
“Merkel set for humiliating defeat in
regional election” (September 5) was
very interesting, I believe it erred in
that the election probably had little to
do with Chancellor Angela Merkel — no
matter what local Christian Democratic
Union politicians say.
Polls by Infratest Dimap showed
that all big parties lost voters to
Alternative for Germany party. The
neo-Nazi National Democratic party
Keynesian inspiration
for G20 leaders
Sir, You report that “the G20 leaders
were agreed on their most pressing
priority: to find a way to sell the
benefits of globalisation to an
increasingly sceptical public” in your
story, “May rejects radical shake-up of
immigration rules for EU citizens”
(September 5).
They should consider the possibility
that the problem is not underselling
benefits but rather exaggerating
benefits and under-weighing costs.
That is a plausible conclusion to
draw from the rise of highly polarised
politics, as the majority in western
countries who feel left behind as
income and opportunity sluice
upwards express their frustration with
the establishment and its projects, such
as the Transatlantic Trade and
Investment Partnership.
They should also read John Maynard
Keynes. Having been an orthodox
proponent of what would today be
called globalisation, he changed his
mind after the first world war and the
onset of the Great Depression. He came
to think that the drive for more and
more global economic integration —
beyond the regulatory purview of the
state — generates tensions between
states and between elites and the
populace, that can escalate into
political breakdown and war. He spent
the last decade of his life designing
forms of international regulation that
link economies within, rather than
beyond, the purview of the state.
The G20 leaders should take
inspiration from Keynes, and move
towards a new world economic order
based on co-operative but arm’s-length
economic and financial relations
between states, leaving more space for
national autonomy in “inside-the-
border” policies and institutions.
Prof Robert H Wade
London School of Economics,
London WC2, UK
Debt restructuring failures
jeopardise stability
Sir, The growth in bond issuance is only
a partial indicator of increasing debts
across emerging markets (“Emerging
markets on track to set sovereign debt
record”, September 4). Bonds account
for just 40 per cent of the external
government debt of all developing
countries, and for low and lower-
middle income countries it is only a
quarter. Direct loans from banks,
governments and multilateral
institutions account for the rest.
Looking at all of these, annual lending
to low and lower-middle income
governments has increased 250 per
cent since the financial crisis in Europe
and the US began in 2008.
An analysis of this full debt burden,
After the beach,
heavy-hearted
France returns
to the office
Paris
Notebook
by Adam Thomson
Letters
shed half its votes to AfD and slipped to
3 per cent.
A majority of those polled also stated
that state-level politics was the most
important field affecting their voting
decision, not federal politics. In fact,
compared with the elections in March,
AfD seems to be losing ground in
eastern Germany (it gained 24 per cent
of the vote in Saxony-Anhalt in March
as opposed to 21 per cent now in
Mecklenburg-Vorpommern).
not just those debts most visibly
traded, points to a high and growing
risk of a new round of debt crises.
Private lenders to countries such as
Ghana are already dependent on IMF
and World Bank bailout loans to keep
being paid interest.
The experiences of Argentina,
Greece and Ukraine have shown the
difficulty of restructuring bonds when
debt crises occur, never mind the lack
of systems and processes to make
restructurings apply to other kinds of
debt. The lending boom to developing
countries and global failure to create
debt restructuring processes across all
classes of external debt give huge cause
for concern in terms of global
economic stability.
Tim Jones
Economist, Jubilee Debt Campaign,
London N1, UK
Humpty Dumpty and
the meaning of Brexit
Sir, Listening to the various debates on
the meaning of Brexit, it may be
helpful to paraphrase Lewis Carroll in
Through the Looking-Glass: “When I use
Brexit,” Humpty Dumpty said, in
rather a scornful tone, “it means just
what I choose it to mean — neither
more nor less.” “The question is,” said
Alice, “whether you can make Brexit
mean so many different things.” “The
question is,” said Humpty Dumpty,
“which is to be master — that’s all.”
Mark Solon
Chairman, Wilmington Legal,
London N1, UK
Thinking on trading
priorities is upside down
Sir, Let me get this right — the UK is
about to can a trading relationship with
450m people on its doorstep and is
prioritising one with Australia, a nation
of 23m people, literally on the other
side of the world?
David Clarke
Edinburgh EH3, UK
On Monday, as a light drizzle fell
from a leaden sky, Paris officially
confronted the first full week of
what for many people in France is
the most depressing moment of
the year: returning to work after
nearly a month on the beach.
During la rentrée, as the painful
return is known, the French capital
is transformed from a sleepy city
of empty streets and family-owned
shops with “closed for the summer”
signs in their windows. It goes back
to its more usual state: a polluted,
traffic-clogged metropolis filled to
bursting point.
If television news channels are
to be believed, demand for therapists
hit a peak at the end of August, with
workers seeking professional help
as they wrestled with the grim reality
of summer’s end. Psychologies
magazine published a long article
about les blues d’après-vacances,
along with a wealth of tips for
overcoming them.
“La rentrée is a very big deal,”
Patrick Amar, an investment banker
turned clinical psychologist, tells me.
“It forces people to adapt to a rather
brutal change of environment, and
that requires some effort to adjust.”
What causes all of this angst?
After all, the rest of Europe also
takes summer holidays and seems
to cope fairly smoothly with getting
back into the work groove afterwards.
Research conducted in recent years
suggests that France has one of the
world’s most depressed populations.
A study in 2008 also showed that the
Over the past two years AfD has been
up, down and up again in the polls. In
the face of such volatility, I believe it is
difficult to say whether or not it will be
able to establish itself in the long term.
What is not difficult to say, however, is
that the rise of this group is part of a
larger surge of rightwing populist
parties that can be seen in other
countries.
They ride on a wave of nationalism,
chauvinism, bold statements and false
RBS will be well-funded to
develop banking activities
Sir, Your article, “RBS diverting billions
from NatWest to support riskier
operations” (September 3/4), was
deeply misleading.
Contrary to what the article says, and
as a reasonable reading of our balance
sheet makes clear, RBS will be well-
funded for both its ringfenced and
non-ringfenced banking activities.
NatWest, with its strong retail and
business customer base, has significant
deposits and a surplus over net
customer loans and advances. The vast
majority of this excess liquidity from
NatWest, approximately £53bn, is in
turn deposited overnight with the Bank
of England and other central banks, by
RBS bank on behalf of NatWest.
Depositing money with central banks
overnight is a normal and prudent
practice to manage our liquidity
position. It is not, as characterised, a
“high-risk activity”.
As with any banking group, we do
use some of the excess deposits to
support other customers across our
group. Every banking group uses
deposits to fund loans. It is the basic
premise of banking. Your article tries
to sensationalise something that is
perfectly normal practice for banks. In
future, lending to large corporate
customers from these surpluses will
continue as part of our ringfenced
banking activities.
Over recent years we have made
significant progress rebuilding our
capital strength and reducing our
balance sheet size and risk, while
maintaining strong liquidity across our
business. Since the end of 2013, our
common equity tier-one ratio is up 590
basis points to 14.5 per cent, our risk-
weighted assets have been reduced by
more than a third and our non-
performing loans have been reduced
by almost 70 per cent. We have a
balance sheet that is focused on
supporting our retail and commercial
customers, and as the largest business
bank in the UK, that focus has a
significant positive impact on the wider
economy.
Our business has developed to a
point where we go into ringfencing in
an excellent position to continue to
support UK families and businesses,
with well-funded ringfenced and non-
ringfenced activities.
Ewen Stevenson
Chief Financial Officer, RBS,
London EC2, UK
An opportunity to avoid
trade-offs with Uzbekistan
Sir, Your leader, “Uzbek transition
brings focus to a fragile region”
(September 5), argues that the west is
likely to face an “unedifying calculus”
when the successor to the deceased
French took more antidepressants
than any other country.
But Amar, who works as an
executive coach, argues that a lot of
the post-summer anxiety has to do
with the length and structure of
French holidays.
World Bank and International
Labour Organisation research
indicates that French workers have
36 days of paid holiday every year,
the same as Finland and Spain — but
more than the 30 for Belgians, 28 for
the British or 27 for the Swiss.
Some French workers have even
more. Last year, management at state-
controlled utility EDF began trying to
renegotiate employment contracts
that gave at least 30,000 of its staff 10
weeks’ holiday every year — a deal
that was struck in 1999 to compensate
for the fact that they worked 4.5 hours
more per week than the 35 hour legal
limit.
“We are no longer in the same
market as in 1999,” Philippe Torrion,
EDF’s strategy director, tried to
persuade employees at the time.
“It is also a question of credibility.
We cannot be out of step with the
world.”
None of this would be particularly
bad, argues Amar, if people
broke up their holidays into multiple
escapes spread throughout the year.
But in France most people
concentrate their lengthy time off
over the summer.
The effects of this extended break
were on full display on my street in
central Paris. In normal times, the Rue
Wednesday 7 September 2016
Email: letters.editor@ft.com or
Fax: +44 (0) 20 7979 7790
Include daytime telephone number and full address
Corrections: corrections@ft.com
or half-true contentions.
This is not about popular
dissatisfaction with specific politicians,
it is not even about policy or facts — if
faced with either facts or any piece of
journalism they do not like, many
German rightwing populists, including
some AfD politicians, will summarily
dismiss it as “propaganda” of the “lying
press”, or “Lügenpresse”.
Torsten Heinrich
Bremen, Germany
president of Uzbekistan, Islam
Karimov, is announced. You predict
that geopolitics will come out on top of
human rights. Such an outcome is not
inevitable, for two reasons.
First, as you note, Uzbekistan and
other countries in Central Asia have
some of the worst human rights
records in the world. Torture, political
imprisonment and blanket bans on
free speech and free elections are
commonplace. For both the EU and the
US, the protection of human rights and
the rule of law are key foreign policy
pillars. If the EU and US take these
policies seriously, the terrible
conditions in Uzbekistan should
influence their “calculus” in dealing
with the new leadership in Tashkent.
Second, in Central Asia, as in other
regions around the world, excessive
focus on geopolitics at the expense of
human rights has not helped achieve
the west’s apparent goal of maintaining
stability. For years, the west turned a
blind eye to Karimov’s brutal
authoritarian rule, yet they also knew
his government was inherently
unstable, as ordinary people had few if
any opportunities to express
themselves freely or to play a
meaningful part in society or the
economy. Only repression kept the lid
on the resulting deep frustrations.
At this turning point for Uzbekistan,
its international partners have an
opportunity to raise their sights and
not fall into familiar trade-offs between
security and human rights.
Hugh Williamson
Director, Europe and Central Asia
Division, Human Rights Watch,
Berlin, Germany
Wrongfooting traditions
Sir, I was brought up to believe that to
wear brown shoes with a blue or grey
suit was a solecism too far, which I
conscientiously observed (“Those
lacking polish still unsuited for life in
the City”, September 1). However, I was
led to question my position at one of
my first encounters with the City at a
senior level, when I attended a meeting
hosted by the deputy chairman of a
leading bank. Not only were his shoes
brown, but they were brogues — a
terrible culture shock for me.
I later worked out that no one would
doubt that a scion of one of the great
banking families knew what the rules
were and his flouting of them would
therefore not cause anyone to doubt his
integrity and ability. A neat allegory of
how the City works?
Roger Morton
Wirksworth, Derbyshire, UK
COMMENT ON FT.COM
David Gardner
Vladimir Putin’s balance sheet in
the Middle East
www.ft.com/comment
des Martyrs is a bustling foodies’
paradise of cheese shops,
delicatessens, butchers and bread
shops. But at one point in the depths
of August things grew so quiet that all
three of its bakeries were closed at the
same time.
In the first week of August, I
went to pick up some shoes I had
left at the menders the week before —
only to find the blinds pulled down
and a small note explaining that
the owners would not return until
August 29.
Even the homeless person who
spends the rest of the year sitting on
the doorstep of my building asking
passers-by for change takes holidays.
This year, like last, she went to Italy
for the summer — but not before
organising a special whip round
among all the neighbours to collect
donations for her ticket.
So what is the strategy for getting
over la rentrée blues? According to
Amar, who now makes a habit of
returning a week early to fulfil
television and radio requests to
furnish the public with advice, it is
important to set short-term targets.
“Reconnect with your colleagues,
highlight your priorities, make a to-do
list and identify pragmatic things that
you can check-off,” he says. “The
quicker you can get going, the quicker
you will forget the blues.” Then he
offers one more piece of advice: “If
you’re feeling really down, you could
start planning your next holiday.”
adam.thomson@ft.com
Wednesday 7 September 2016
Hail the algorithms that decode human gestures
SCIENCE
Anjana
Ahuja
T
here is a wealth of meaning
in the things we do not say.
There is the position state-
ment conveyed by the
bone-crushing alpha hand-
shake; the flirtation signalled by eye
contact held a second too long; and the
extended silence that greets your genius
idea, which means that everyone else
thinks it is a lemon.
Edward Sapir, the celebrated linguist
and anthropologist who died in 1939,
wrote: “We respond to gestures . . . in
accordance with an elaborate and secret
code that is written nowhere, known by
The tide of
globalisation
is turning
ECONOMICS
Martin
Wolf
H
as the tide of globalisation
turned? This is a vitally
important question. The
answer is closely con-
nected to the state of the
world economy and the west’s politics.
Migration raises quite specific issues.
The era of globalisation was not accom-
panied by a general commitment to lib-
eralising flows of people. So I will focus
here on trade and capital flows. The evi-
dence in these areas seems quite clear.
Globalisation has reached a plateau and,
in some areas, is in reverse.
An analysis from the Peterson Insti-
tute for International Economics argues
that ratios of world trade to output have
been flat since 2008, making this the
longest period of such stagnation since
the second world war. According to Glo-
bal Trade Alert, even the volume of
world trade stagnated between January
2015 and March 2016, though the world
economy continued to grow. The stock
of cross-border financial assets peaked
at 57 per cent of global output in 2007,
falling to 36 per cent by 2015. Finally,
inflows of foreign direct investment
have remained well below the 3.3 per
cent of world output attained in 2007,
though the stock continues to rise,
albeit slowly, relative to output.
Thus, the impetus towards further
economic integration has stalled and in
some respects gone into reverse. Glo-
balisation is no longer driving world
growth. If this process is indeed coming
to an end, or even going into reverse, it
would not be the first time since the
industrial revolution, in the early 19th
century. Another period of globalisa-
OPINION
Lars
Fjeldsoe-Nielsen
A
lmost a decade ago, a wave
of European-born entre-
preneurs and technologists
packed their bags and
headed for Silicon Valley. I
was one of them.
There were many factors drawing us
there, including the explosion of
start-up activity that made it so attrac-
tive to be an entrepreneur and the
arrival of Apple’s iPhone — the single
most transformative moment in the his-
tory of mobile phones. But perhaps
most important of all was a realisation
that if technology was your passion and
you aspired to build a major company,
none, and understood by all.” Now one
scientist is attempting to write that
seemingly universal code of human
non-verbal communication.
Ehsan Hoque from the University of
Rochester in New York — a specialist in
affective computing, which looks at the
role of emotion in the interactions
between humans and computers — has
developed a computerised “conversa-
tion assistant”. The program scans hand
movements, eye contact, nods, expres-
sions and pauses. It gives feedback on
friendliness, intonation and, like, over-
use of certain words. Lissa — “live inter-
active social skills assistance” — appears
to the speaker as a humanlike avatar
and is built on the responses of real peo-
ple who have rated speakers’ conversa-
tional styles. Those judgments have
been fed back to make the process more
automated and therefore quicker.
Mr Hoque has been justly named by
MIT Technology Review as a leading
tion, in an era of empires, occurred in
the late 19th century. The first world
war ended this and the Great Depres-
sion destroyed it. A principal focus of US
economic and foreign policy after 1945
was to recreate the global economy, but
this time among sovereign states and
guided by international economic insti-
tutions. If Donald Trump, who has
embraced protectionism and deni-
grated global institutions, were to be
elected president in November, it would
be a repudiation of a central thrust of
postwar US policy.
Given the historical record and the
current politics of trade, notably in the
US, it is natural to ask whether the same
could happen to the more recent era of
globalisation. That requires us to under-
stand the drivers.
Part of the reason for the slowdown is
that many opportunities are, if not
exhausted, radically diminished. When,
for example, the production of essen-
tially all labour-intensive manufactures
has moved out of the rich countries, the
growth of trade in such products must
fall. Similarly, when the biggest invest-
ment boom in the history of the world,
that in China, slows, so too must the
demand for many commodities. That
will affect both their prices and their
quantities. Again, the end of once-in-a-
lifetime global credit boom is sure to
lead to a decline in the cross-border
holdings of financial assets. Finally,
after decades of FDI, a host of compa-
nies with something to gain from it will
have taken their opportunity and suc-
ceeded or, in important cases, failed.
Yet this is not all there is to this story.
Trade liberalisation has stalled and one
can see a steady rise in protectionist
measures. The financial crisis brought
with it regulatory measures, many of
which are bound to slow cross-border
financial flows. The rise of xenophobic
sentiment and the slowdown in trade
are both likely to reduce the growth of
FDI. In brief, policy is less supportive.
Silicon Valley’s European stars are returning home
then you could not afford to be any-
where else.
Today, we are living through a compa-
rable growth spurt on the other side of
the Atlantic. Technology stars such as
Facebook’s Mark Zuckerberg and Drop-
box’s Drew Houston have inspired a
generation of talent from Helsinki to
Lisbon, and Tallinn to Tel Aviv. Success-
ful founders across Europe have
become local heroes, building compa-
nies such as Spotify in Stockholm, Unity
Technologies in Copenhagen, and Deep-
Mind and Deliveroo in London.
This frenzy of activity in Europe’s tech
scene has been a long time in the mak-
ing, and is partly down to a below-the-
radar trend: the steady flow of European
entrepreneurs returning home from the
Valley. They have come back bringing
their experience, deep networks and
global ambition with them. It is hard to
overstate the impact this is having.
A decade ago, for many Europeans,
★ FINANCIAL TIMES
Comment
innovator under 35, an accolade previ-
ously bestowed on such figures as
Jonathan Ive, chief designer at Apple.
Computers, Mr Hoque believes, can
teach us to be more accomplished ver-
sions of ourselves. In theory, Lissa could
help budding orators, shy people who
struggle with dating or graduates hop-
One scientist is attempting
to spell out that seemingly
universal code of non-
verbal communication
ing to impress job interviewers. But that
is not why he embarked on his career in
affective computing. He cares for a teen-
age brother with Down’s syndrome who
has limited verbal skills, and a potential
application of Lissa is helping those with
communication difficulties, such as
Trade stalls
Global bilateral trade in goods
and services as % of world GDP
60
50
40
30
20
1960 70 80 90 2000 10
Sources: Peterson Institute for International Economics; BIS; IMF; Unctad
The politics are becoming even less so.
Again, the US is the central part of the
story. Mr Trump is much the most pro-
tectionist candidate for US president
since the 1930s. But, revealingly, Hillary
Clinton, an architect of the US “pivot to
Asia” has turned against the Trans-Pa-
cific Partnership of which she was once a
keen supporter. The Transatlantic
Trade and Investment Partnership,
being negotiated between the US and
the EU, is now in deep trouble. The Doha
round of multilateral trade negotiations
is moribund. Above all, important seg-
ments of the western public no longer
believes increased trade benefits them.
Evidence on relative real incomes and
Trade liberalisation
has stalled and one
can see a steady rise in
protectionist measures
the culture shock of arriving in Silicon
Valley was considerable. The first thing
that struck me back then was the value
placed on the power of networking. The
second was the sheer turbocharged
pace. A 23-year-old founder, on his or
her first company, would not hesitate to
talk up their “global ambitions”.
Issues that were once
obstacles to start-ups in
Europe have either been
removed or fallen away
Third was an environment in which
the best talent would choose stock
options over salary when mulling their
next career move. That way of thinking
— still alien to much of Europe — fosters
an entrepreneurial climate that
prompts people to think big.
children on the autism spectrum, to
practise conversing. Early studies sug-
gest it is less painful for some to be
judged by a machine than by a person.
The US Army has spotted another use:
detecting when a person’s gestures and
speech do not marry. It is funding
research into whether the technology
can be used to sniff out deception.
That our gestures can be interpreted
by algorithms indicates that we are open
books, ripe for reading. We have been
“written” during thousands of years of
evolution, resulting in a universal reper-
toire of non-verbal gestures — the fur-
rowed brow and flared nostrils of anger,
and the face-contorting smile of genuine
pleasure. Even that classic expression of
powerlessness and/or indifference, the
shoulder shrug, is found and under-
stood across cultures. Such involuntary
actions are honest signals of emotion,
even as our lips tell a different story.
Displays of pride also seem to be of a
Assets decline
Cross-border financial assets,
amount outstanding as a % of world GDP
60
40
20
0 0
1980 85 90 95 2000 05 10 15
adjustment to rising imports provides
some support for such scepticism.
Globalisation has at best stalled.
Could it even go into reverse? Yes. It
requires peace among the great powers.
Some would also argue it requires a
hegemonic power: the UK before 1914
and the US after 1945. At a time of poor
economic performance in leading high-
income countries, rising inequality and
big shifts in the balance of global power,
another collapse must be a possibility.
Consider the impact of any fighting
between the US and China over the
South China Sea, though such a calamity
would be terrifying for far more than its
narrow economic effects.
Does globalisation’s stalling matter?
Yes. The era of globalisation has seen the
first fall in global inequality of house-
hold incomes since the early 19th cen-
tury. Between 1980 and 2015, average
global real income rose by 120 per cent.
The opportunities afforded by globali-
sation are vital. Our future cannot lie in
Fast forward to 2015, and after serv-
ing my time in the US at Uber and Drop-
box, and after a stint as an adviser to
WhatsApp, I decided the moment was
right for me to return home. Back in
London, it quickly became apparent
that I had returned to a transformed
European tech ecosystem.
Much of this cultural shift is down to
those entrepreneurs who have gradu-
ally decided to come back after long
spells in Silicon Valley. Of course, many
European entrepreneurs are still mak-
ing the trip — after all, of the 65 unicorns
(unlisted companies valued at $1bn or
more) recorded in California earlier this
year, at least 11 have European-born
founders — but they are no longer buy-
ing one-way tickets.
Wherever I go in Europe today, I come
across veterans of the West Coast who
feel the opportunities here are starting
to match those in the US. They recognise
that Europe, as a whole, is significantly
piece. From football pitches to trading
floors, we recognise victorious peers by
their erect postures, expanded chests
and outstretched arms, like a post-goal
Ronaldo. Research shows that, in the
Olympics and Paralympics, both
sighted and congenitally blind athletes
produce these displays, contributing to
the belief that such postures are innate
and spontaneous rather than learnt,
and probably evolved as a valuable
means of signifying status.
Once you begin noticing these no-
frills non-verbal cues, which come
unbidden from the day we are born, the
masks of others fall away with little
need for inquisition. We can more accu-
rately grasp the measure of the
puffed-up executive who loudly pro-
fesses modesty — and sympathise with
their beta colleague in the corner, shoul-
ders frozen in a perpetual shrug.
The writer is a science commentator
FDI slows
Global foreign direct investment inflows
and inward stock, as a % of world GDP
Flows Stock
4 40
3 30
2 20
1 10
0 led to lax regulation, which
1980 90 2000 10 15
closing ourselves off from one another.
The failure — a profound one — lies in
not ensuring that gains were more
equally shared, notably within high-
income economies. Equally dismal
was the failure to cushion those
adversely affected. But we cannot stop
economic change. Moreover, the impact
on jobs and wages of rising productivity
and new technologies has far exceeded
that of rising imports. Globalisation
must not be made a scapegoat for all
our ills.
Yet it has now stalled, as have the poli-
cies driving it. It might reverse. Yet even
a stalling would slow economic progress
and reduce opportunities for the world’s
poor. Pushing globalisation forward
requires different domestic and exter-
nal policies from those of the past. Glo-
balisation’s future depends on better
management. Will that happen? Alas, I
am not optimistic.
martin.wolf@ft.com
underinvested in; and that, thanks to
the quality of its maths, science and
engineering education, start-ups have
foundations on which to build — and at a
fifth of the price of engineering talent in
the Valley.
Furthermore, issues that were once
obstacles in Europe have either been
removed or have fallen away. Access to
capital and top-tier talent, fellow travel-
lers to scale alongside, as well as the
ready availability of developer tools and
services, mean that unicorns are
increasingly likely to emerge on this side
of the Atlantic.
A decade ago, the tech revolution was
made in America; and to be part of it you
had to take a flight. Now, as a generation
of European founders and technologists
returns home, the next chapter is being
written here.
The writer is general partner at Balderton
Capital
9
A little longer
on the naughty
step will
benefit banks
OPINION
Robert
Jenkins
T
here was a time when one
had to wait at least 20 years
between big banking crises.
Perhaps this was because
the generation that had
learnt the hard way had to retire before
the next crop could repeat the mistakes
of their elders. This is no longer the case.
Business leaders who were present at
the most recent crash seem determined
to ignore its lessons — even before the
damage has been repaired. The latest
example comes courtesy of Carolyn
Fairbairn, head of the CBI, the UK
employers’ organisation. Among her
suggestions: scrap the bank surcharge
tax and ensure that regulators give pri-
ority to the sector’s competitiveness.
“It’s time,” she says, “for banks to be
taken off the naughty step. This is about
sending a signal that a chapter [of crisis]
is over.”
Really? The crisis is not over. The
damage done has yet to be repaired
fully. Eight years after the collapse of
Lehman Brothers, interest rates are at
historic lows; government deficits are
high; and two of Britain’s biggest banks
remain in state hands. Low rates are
driving pension deficits higher. Plugging
these deficits diverts funds from compa-
nies — funds that might otherwise have
gone into building up their businesses.
The financial system remains fragile.
Regulators have tried but failed to
strengthen the system adequately. The
attempt has involved capital require-
ments, a resolution regime and stress
testing. How are they getting on?
With respect to capital, regulators
have raised minimum requirements
and placed a cap on leverage. But, at
present, the rules permit bank balance
sheets to balloon to between 20 and 33
times their loss-absorbing equity. At
that level of gearing, a decline of 3 to 5
per cent in the value of bank assets will
wipe out 100 per cent of capital.
Prioritising competitiveness
in turn set the stage for
staggering recklessness
In addition, regulators are working on
a cross-border regime by which they
might effectively resolve struggling big
banks. Alas, the regime is not yet in
place.
Then there are stress tests. These are
meant to gauge the level of loss that
banks might suffer under adverse sce-
narios. This is a useful exercise but one
whose effectiveness depends on regula-
tors knowing which risks to test and by
what degree. That is a lot to presume:
last time around, regulators managed to
miss the biggest credit bubble in history.
Given all that, our biggest banks
remain too big to let fail. It would be
helpful, therefore, that none gets into
too much trouble any time soon —
hence the need for strong supervision.
Prioritising competitiveness is pre-
cisely what led to lax regulation. This in
turn set the stage for recklessness on a
stupendous scale. So before taking the
banks off the “naughty step” it would
perhaps be worth recalling what put
them there in the first place. Finance
Watch, a non-partisan advocate for
sound financial reform, maintains an
expanding list of banking “misdeeds”.
The number of entries has just topped
100. It makes for sobering reading.
It is important to connect the dots.
The crash and its aftermath have cost
the economy, business, UK Treasury
and bank shareholders far more than
any benefits gleaned from soft-touch
regulation. The competitiveness gained
proved both illusory and short lived.
Finally, it is not a zero-sum game.
Why do bank boosters presume there is
a trade-off between a soundly regulated
banking system and one that is competi-
tive? In a post-2008 world, would you
not prefer to do your international
banking in a well-capitalised, stable and
high-standards regime? And, with a
banking sector still equal to four times
UK gross domestic product, can the peo-
ple of Britain tolerate anything less?
Perhaps the time for bank-bashing is
over. But it is far too early to engage in
financial amnesia. That will come soon
enough — when the next generation
takes the helm.
The writer is a senior fellow at Better Mar-
kets and a former member of the Bank of
England’s Financial Policy Committee
10 ★ FINANCIAL TIMES Wednesday 7 September 2016

Not yet Japanese

Quantitative easing is blamed in Japan and Europe for weighing down returns, but the
initial stages of Japanese QE were good for banks. European banks could mitigate low
revenues by raising their profitability closer to Nordic levels, through cost cutting

Twitter: @FTLex Email: lex@ft.com 2018 estimates Topix Banks Index

Profit before provisions as a % of revenues Revenue/assets ratio 250
50 4.0
Bayer/Monsanto: upside to be shared is, however, greater Reits:
when billions are not vaporised at the
tipping the scales outset by paying a cash premium. 40 moving house
3.0
Operational scale may be boring. But 200
Any company that sallies forth with a transformational scale is both elusive The desire to own a place of your own
$65bn bid thinks that bigger is better. and expensive. 30 is powerful. And as of this month,
There are a variety of ways that size 2.0 property shares no longer have to put
can matter, though. Pay attention to up with roommates or landlords.
those that Bayer is keen on. 20 Property-related shares now have their
In its pursuit of Monsanto, Bayer is
Sports Direct: 150
own sector within the indexes
not particularly interested in what limited time offer 1.0 constructed by MSCI and S&P.
might be called the operational 10 Previously they dossed in the financial
benefits of scale. It has not argued that Shopping at Sports Direct, the UK sector’s spare bedroom. The new
adding Monsanto to its own agriculture discount sportswear retailer, is not fun. accommodation may have increased
business would make production more This pile ’em high, sell ’em cheap shop 0 0 100 valuations already stretched by yield-
efficient or its marketing more does not provide the succour of retail US Nordics EU ex-Nordics Japan 2013 14 15 16 chasing — but real estate is no simple
muscular. One can see why not: a huge therapy. Working there gets lower play on low rates.
FT graphic Source: JPMorgan; Thomson Reuters Datastream
bet on operational scale, following marks still. Harsh and unfair working The new sector contains developers
mergers by big rivals, would look a lot conditions in its warehouses have and management groups but is mostly
like an admission that the industry is marred the company’s reputation. Decades ago, US and European undermined by high provisions. curve and compresses net interest made up of real estate investment
commodifying. While the recent dip in An equity market soured by this, and businessmen strove to understand Non-performing loan ratios, at 6 per margins. Yet it need not be so. trusts, or Reits. These have been big
growth at both bidder and target may concerned at rising costs, has shunned the magic of fast-growing Japan, Inc. cent, are around 3 times US and Barclays raises the possibility of a beneficiaries of low interest rates,
be a purely cyclical phenomenon, one the shares. Yet — unless the pound Today, to compare a sector to the Japanese levels. Italy is the main burst of fiscal stimulus from the UK which have both cheapened the debt
is never entirely sure. Sure, Bayer falls much further — plenty of pain Japanese — as JPMorgan has with culprit, with a 21 per cent ratio. after Brexit and the US after the that is integral to property funding and
foresees $1.5bn in annual cost savings, is already priced in. European banks — is to pronounce its Then there are costs, where the election, which could get longer-term prompted an investor stampede into
but this does not come close to Bad news comes cheap for Sports creeping demise. But nothing is fast-digitising, branch-closing Nordic rates rising again. Recall, too, how in income-generating assets. Reits are
justifying the $16bn premium that it is Direct these days. Corporate preordained about Europe following banks operate at a cost-income ratio of the first two years of Japan’s recent required to pay out 90 per cent of
offering as of yesterday, when it governance looks wanting. the same path as post-bubble Japan. 46 per cent, some 10-15 percentage QE programme the Topix Banks taxable income as dividends and the
bumped its all-cash offer from $125 to Mike Ashley, founder and deputy To illustrate, consider JPMorgan’s points below the rest of Europe. Europe index more than doubled, before an sector’s average 4 per cent yield has
$127.50 a share. This will remain true if chairman, owns 55 per cent. His deep “DuPont” analysis. It decomposes has twice the branches per person of ill-judged tax increase derailed it. pulled in the punters. Over the past
Bayer discovers more savings (as influence mocks the non-executive banks’ forecast return on equity in Denmark or Sweden. Hoping for the same success is not two years, FTSE’s NAREIT index beat
buyers tend to) when it is forced to chairmanship of Keith Hellawell. 2018. How much does leverage But it is in terms of asset turnover a strategy. But European banks can the S&P 500 by 12 per cent on a total
raise its bid again (as seems likely). Criticism of Sports Direct working (assets divided by equity) that Europe most risks “Japanifying”. note that cutting costs to Nordic return basis. Reits make up 3 per cent
It is transformational, not practices has brought the board’s contribute? Asset turnover At 2.1 per cent the continent is forecast levels would roughly outweigh the of the S&P 500 — similar to materials
operational, scale that Bayer is excited impotence to the fore, culminating in a (sales/assets)? Profit margins? to lag behind the US by half, and is far effect of asset returns falling to or telecoms.
about. In particular, it wants leadership haranguing by a parliamentary select When seen against US, Japanese closer to Japan’s 1.6 per cent level. Japanese levels. Delivering effective Their popularity has made the sector
in both pesticides/herbicides (its committee. That led to a promise to and Nordic banks, non-Nordic A gloomy view of quantitative easing stimulus that pushes rates up is out expensive. As a multiple of “funds
specialty) and seeds (Monsanto’s). raise wages. Overheads have duly risen Europe falls short in three ways. sees Japanese-style low returns as of their hands. Closing branches and from operations” — a tailored metric
Customising the one for the other is as a percentage of sales. A weaker First, European bank profitability is inevitable, since QE flattens the yield modernising services is not. defined as net income before
the way to superior products. Bayer pound since the Brexit vote only adds depreciation and profits from asset
points out that its rivals, Dow to pressure on margins. Nearly 80 per disposals — shares are trading at
Chemical-DuPont and ChemChina- cent of its sales are in the UK. Though historically high levels. But Reits are
Syngenta, will also offer both. It also Sports Direct does not reveal import Direct’s margins should recover some. private equity firm CVC and others. At therapy for Fresenius. A decade ago, not just another asset class pumped up
argues that combined research dollars figures, half its goods are sourced in US Mr Ashley likes a bargain. The share €5.7bn, the transaction is nearly twice quoted subsidiary Fresenius Medical by cheap money. Research by Morgan
and capacities are required to make it a dollars, the rest from brands such as buyback offers one. Get in line. as large as its 2013 acquisition of Rhön- Care accounted for almost 80 per cent Stanley suggests that the shape of the
player in the next generation of Nike that manufacture outside Britain. Klinikum. The price represents 11 of group operating profit. After yield curve is more important for
technologies. This has logic, but leaves Yet, as all shoppers know, there is a times forecast earnings before interest, acquiring Helios (in 2005) and Rhön- future performance than the absolute
two hard questions unanswered. price for everything. On a valuation of Fresenius: tax, depreciation and amortisation. Klinikum, the proportion is nearer level of interest rates. A higher short
One: how many mergers between just 12 times estimated earnings, the London-listed Mediclinic trades at 16. half. Quirónsalud, as it is known end allows for rent increases. A lower
two very large companies have resulted shares look historically cheap even patient capital All but €400m of the purchase price locally, is a respected operator in a long end reduces the discount rate
in the creation of an innovative hybrid after analysts have knocked down will be satisfied in cash, so Fresenius’s market where a fifth of the population applied to future cash flows, making
product line? That so few leap to mind profits estimates. And earnings per Most people would regard a stay in net debt will rise higher. And the lack have private-health insurance but them worth more in today’s money.
is sobering. share could get a boost. A buyback hospital as something to be avoided. of geographical overlap means cost provision of hospital services remains Reits remain a complex asset class
Two: is a merger the most cost programme of up to 5 per cent of But Stephan Sturm, newly installed savings are small: €50m, against €85m fragmented. but the more widespread visibility
effective way to bring together the two shares has begun. That could double as chief executive of Fresenius, has for the Rhön-Klinikum deal. The Initial returns will be fairly low, afforded by a dedicated real estate
product lines? The merger premium without board approval, thinks admitted the company for another market was unperturbed at this about 6 per cent on invested capital, sector is welcome. Their idiosyncrasies
could be saved by, for example, Liberum; the last programme, visit, concluding a multibillion-dollar prognosis, though. Shares rose nearly according to Morgan Stanley. could yet provide useful options for
establishing a joint venture. Listing between 2007 and 2009, lifted deal which, while fully priced, looks 5 per cent. That is partly because debt But if Quirónsalud continues to grow interest rate-sensitive equity investors.
some shares in the JV could allow Mr Ashley’s holding a lot. Buybacks sensible. is cheap, and partly because Fresenius at about 5 per cent a year, and with cost
shareholders in the parent companies do not add value; they can signal, After the market closed on Monday, says that leverage will quickly fall back savings thrown in, returns should
to realise its value. Any such deal though (Mr Ashley later sold shares the German medical group said that it to its target range. It said this in 2013, improve to more robust levels. Expect Lex on the web
For notes on today’s breaking
would require Bayer to share the at a profit). Finally, should the would buy IDC Salud Holding, Spain’s too — and was true to its word. Fresenius shares to continue their stories go to www.ft.com/lex
upside from the combination. The pound’s recent rally continue, Sports largest private-hospital group, from Acquiring hospitals has been good healthy outperformance.

1000
Today’s temperatures
1010 Abu Dhabi Sun 41 Malta Sun 28
22 Amsterdam Sun 26 Manila Thunder 32
Ankara Sun 30 Miami Cloudy 31
23
21 16 Athens Shower 30 Milan Sun 29
17 Bahrain Sun 38 Montreal Fair 29
Barcelona Sun 29 Moscow Cloudy 17
1020
20 Beijing Fair 31 Mumbai Fair 30
Belfast Cloudy 20 Munich Sun 23
20 Belgrade Sun 28 Naples Thunder 24
1000 24 24 Berlin Sun 25 New York Cloudy 29
26 25 Brussels Sun 26 Nice Sun 27
23
Budapest Sun 29 Nicosia Sun 33
27 Cairo Sun 32 Oslo Sun 23
Cardiff Cloudy 24 Paris Sun 29
29 9 Chicago Thunder 32 Prague Sun 26
24 Cologne Sun 27 Reykjavik Drizzle 12
31
Copenhagen Fair 22 Riga Drizzle 20
35 25 Delhi Sun 35 Rio Fair 28
29 30 Dubai Sun 42 Rome Fair 28
Dublin Cloudy 22 San Francisco Sun 25
28 Edinburgh Cloudy 21 Singapore Thunder 30
26
39 24 Frankfurt Sun 27 Stockholm Fair 23
31 30 Geneva Sun 26 Strasbourg Sun 27
33
Hamburg Sun 25 Sydney Fair 21
30 27 29 16 Helsinki Fair 22 Tokyo Thunder 28
31
16 Hong Kong Thunder 29 Toronto Thunder 31
Istanbul Fair 28 Vancouver Rain 19
39 Lisbon Sun 26 Vienna Sun 27
Wind speeds in KPH London Fair 26 Warsaw Sun 24
Forecasts by Los Angeles Sun 27 Washington Fair 33
Wind speed Luxembourg Sun 25 Zagreb Fair 27
in KPH Madrid Sun 39 Zurich Sun 24

CROSSWORD ACROSS
1 British old school painter (5)
4 Playing rugby, dad wears nothing
for protection (9)
No. 15,339 Set by JULIUS 4 Grouped together, making lots of 5 They’re against 8; one who prays?
noise between the sheets! (9) (5)
        9 It guards quiet flat with 6, 7, 12 Partially developed blurred
fashionable interior (4,3) photograph enrages Sheik
10 Chap enters, to be announced in (4,4,2,1,11)
charge of ancient Egyptian city 8 Top secret (a tip ace detective
 
(7) comes up with) (10)
11 Provides filler for tricky game; St. 12 See 6
Helens’ first appearance on back 13 Bleak winter hasn’t started to
  page (7,3,3) trouble little ‘un (5-5)
14 Infielder regularly carries 10 water 16 Call for heads, possibly, to roll
 (4) with trouble in store (4,3,2)
  
15 Made one’s mark, reportedly, in 17 Well-built, wearing spectacles,
skin transplant (9) Penny was easy to spot (5,3)
 18 Left oddly situated? These will 20 This month’s record ball striker (6)
help you find your bearings (9) 22 Part of the media, Bill’s in the
  19 Knock back teaspoonful of Olympic venue (5)
sulphur? I say! (4) 23 One much admired, Labour leader

21 He’ll give you the lowdown on supports union agreement (4)
  British Airways’ soundproof 25 It hit Prescott, ex-deputy PM,
design (5,8) leaving Sri Lanka (3)
 24 Purchase storage on ship heading
eastbound (7)
   26 Made manual key corrections in
Jaguar E-type drivetrain (7) Solution 15,338
27 Fought to oust unionist creating % 5 2 / / < ' 5 - ( . < / /
  disturbance outside – it might 8 9 $ $ ; ( (
kick off! (5,4) 6 7 ( 3 8 3 ' , 6 7 5 $ , 7
< 5 1 6 2 6 6
28 High-level programming language % , 3 ( ' 6 / , % 5 ( 7 7 2
has one in danger (5) 2 $ ( % 8 1 7 < 1
JOTTER PAD DOWN '
<
( ,
'
' 5
6
(
. ,
&
5 8
$
1 6 $ $
1 Violent blow following blunder (by ( ( ' , & 7 8 0
1 across, as the saying goes?) (4) 6 ( 6 $ & ( 1 7 %
2 Allowed in using “bish bosh” – the 3 ( 1 = $ 1 & ( 6 ( 1 , 2 5
group passwords (11) $ 6 3 ( & 7 2
5 $ , 0 ( 1 7 6 $ 8 * 8 5 6
3 Drop-out seen in fast-food joints . * / , 5 ' ,
(6) 6 ( 1 7 ( 1 & ( * ( 1 ( 9 $
Wednesday 7 September 2016 ★ 11

Tencent Berkeley Spectra Shanghai German 10- A$ / US$ Brent crude Gold
Credibility deficit Central banks Composite year Bund
must learn lessons from the BoJ 2.3% 3.46% 13.2% 0.6% 6bp 1.24% 1.6% $18
JOHN PLENDER, PAGE 22
HK$215 £27.83 $40.93 3,091 -0.11% US$0.7677 $46.86 $1,345

Enbridge agrees $28bn Spectra deal Short

View
3 Canadian oil and gas group in tie-up with US rival 3 M&A flurry sweeps pipeline sector
to Spectra’s share price on Friday. The revenues of $31bn and earnings before projects. Mr Monaco is intended to
Katie
ED CROOKS AND
JAMES FONTANELLA-KHAN — NEW YORK news was received favourably by inves- interest and tax of $4.4bn. The deal is The two remain chief executive and president of Martin
tors, with Spectra’s shares up more than expected to generate ultimate savings of companies the merged company. Mr Ebel is to be
Enbridge of Canada and Spectra Energy 13 per cent and Enbridge’s nearly 5 per $415m a year from cost cuts. non-executive chairman.
of the US have agreed a deal to create the cent higher at midday in New York. Al Monaco, chief executive of Calgary- would have The agreed deal follows a couple of Something is cooking in Switzerland, and it’s not fondue.
largest oil and gas pipeline group in The deal would give Enbridge share- based Enbridge, said the deal would be generated years in which the pipeline business has Blink and you would have missed it, but the country’s
North America, with an enterprise holders 57 per cent and Spectra share- “transformational” for both companies, been the most active sector of the North super-long bond maturing in 2058 briefly weakened to the
value of $127bn, in the latest of a wave of holders 43 per cent of the merged group. giving them “unmatched scale, diver- combined American oil and gas industry for point where it actually offered a positive yield. You
deals sweeping through the industry. It is scheduled to close in the first quar- sity and financial flexibility with multi- revenues of merger and acquisition activity. remember? Yields? Like in the good old days when bond
The deal comes as the slowdown in ter of next year. ple platforms for organic growth”. Last year, MPLX bought MarkWest investors were rewarded rather than penalised for putting
the North American oil and gas industry Enbridge operates about 33,000 miles Greg Ebel, Spectra’s chief executive, $31bn in the for $17.4bn including debt, and Energy their funds to work. They were a pre-crisis thing.
caused by the slump in prices has raised of oil and gas pipelines and 79 liquids said the strength of the combined com- year to June Transfer Partners bought its affiliate That Swiss yield held above zero for almost a whole week
concerns for the growth prospects of terminals in Canada and the US. Spectra pany would “support a large capital pro- Regency Energy Partners for $17bn. — its first spell in positive territory since mid-July, and a far
pipeline operators. specialises in gas, with about 88,000 gramme to fund the continued develop- Williams agreed a deal to be bought by cry from the minus 0.13 per cent of earlier in the year. At
The all-share transaction values Spec- miles of pipelines and storage capacity ment of Spectra Energy’s existing, pre- Energy Transfer Equity, but the deal fell one point last week, new buyers could earn a thumping
tra at about $28bn, or $40.33 a share, of 300bn cubic feet. eminent project inventory”, as well as through. It subsequently rebuffed an 0.027 per cent on the debt, before the yield fell back.
based on Friday’s closing prices. That In the year ended June, the two com- allowing the combined company to approach from Enterprise Products Switzerland is even flirting with inflation, with its con-
valuation is at an 11.5 per cent premium panies would have generated combined compete for the most attractive growth Partners. sumer prices index creeping towards 0 per cent. On an EU-
harmonised basis, at least, inflation has already hit zero —
the first non-negative reading in almost two years.
Meanwhile, in Japan, the yield on 10-year government
debt has recovered to minus 0.028 per cent. That still locks
in a guaranteed nominal loss for new buyers but, even so,
Hitting a brick wall it’s the highest since March. Even UK yields are picking up.
Lego’s stellar pace Some see these flickers of life as a warning that if and
when inflation picks up, potentially pretty soon, global
of growth stalls bond markets are due an almighty reckoning. Memories of
the Great Bund Tantrum of 2015 are still fresh in the mind.
But most investors doubt that these are the canaries in
the fixed income coal mine, where more than $13tn in debt
Lego’s sales growth in the world’s biggest is in such intense demand — largely from central banks, of
toy market and its profitability both course — that it carries negative yields.
stalled in the first half of the year as the Instead, they think it reflects calmer nerves. The UK’s
Danish toymaker’s recent stellar Brexit vote has not, thankfully, morphed into the giant
performance came to an end, writes global systemic shock that some feared — dousing some
Richard Milne, Nordic Correspondent. demand for safe retreats, such as these bonds. Bullet
The privately owned maker of bright dodged. And the prospect of a rise in US interest rates this
plastic bricks still bucked the gloom in year is also exerting a strong gravitational pull.
the toy market by posting an 11 per cent However, that’s hardly enough for a serious rethink.
rise in revenues to DKr15.69bn ($2.4bn) “To get to the point where we consider these to be invest-
compared with a year earlier. able levels, we would need to see a real pick-up both in
But after years of its net profit rising by growth and inflation expectations,” says Luke Hickmore,
double-digit rates it fell 2 per cent in the an investment manager at Aberdeen Asset Management.
first six months to DKr3.49bn. “We could be down at these levels for a very long time.”
Lego is working with retailers in the The game of chicken continues.
US to sharpen its consumer marketing
after sales there were flat in the first half
compared with double-digit percentage A brief spell out of the freezer
increases in Europe and Asia. “It’s a Yields on Switzerland’s 2058 bond
situation that we are not comfortable (%)
with,” John Goodwin, chief financial 0.02
officer, told the Financial Times. 0.00
The Danish group has enjoyed a -0.02
remarkable turnround in the past The Swiss yield
-0.04
decade, moving from near financial held above zero
collapse to by far the world’s most -0.06 for almost a whole
profitable toymaker. It has also managed -0.08 week — its first
to counter the negative trend many 22 Jul Aug 2016 6 spell in positive
toymakers have experienced as children Sep territory since
Source: Bloomberg
play more with smartphones and tablets mid-July
than traditional games.
katie.martin@ft.com
Dan Kitwood/Getty Images

Henkel and Sanofi become first public

companies to sell negative-yield bonds
GAVIN JACKSON — LONDON 0.05 per cent. Bond yields fall as their The first euro corporate bond sold
prices increase. For negative-yielding with a negative yield-to-maturity was
A milestone in the world of negative
bonds, the price of the bond exceeds the from state-owned German rail com-
interest rates was reached yesterday
future coupons and repayment of capi- pany Deutsche Bahn in July, which
when Henkel and Sanofi became the
tal at maturity. yielded minus 0.006 per cent. Yester-
first public companies to sell euro
Bankers said investors would stom- day’s bonds are the first to be sold by a
bonds to investors for more than the
ach the losses because they are smaller non-financial company without the
buyers will get back.
Start-ups spark new than those on government bonds or on backing of a government.
breed of research analyst The sales are the latest sign of how Euro- keeping money in bank accounts. Central bank purchases have led to
pean Central Bank policies to suppress “Investors can park their cash in a more risky kinds of bonds being sold
As Silicon Valley’s biggest start-ups, borrowing costs for governments and higher-yielding instrument than is usu- with negative yields. Investors in
such as Uber and Airbnb, stay private companies have upended assumptions ally available,” said Rupert Lewis, head Europe have bought government bonds
for longer than ever before, a growing on the way financial markets operate. of European bond syndicate at BNP and covered bonds, a form of asset-
number of companies are launching German consumer goods group Hen- Paribas, who worked on both deals. backed debt, at yields below zero.
research teams to analyse private kel sold €500m of two-year debt with a Two-year German Bunds yield minus Chris Telfer, a portfolio manager with
ventures and produce reports on them yield-to-maturity of minus 0.05 per 0.67 per cent, so the Henkel bond offers ECM asset management, said: “It is diffi-
in an effort to improve transparency. cent, while French pharmaceuticals investors a premium of 52 basis points cult to look past the concept of greater
Report i PAGE 12 business Sanofi sold €1bn of three-and- over the so-called risk-free rate on sov- fool on negative yield deals.”
a-half year debt, also at a yield of minus ereign bonds. Markets pages 20-22

Companies / Sectors / People

Companies
21st Century Fox...................................1,12
AT&T..............................................................14
Agrium...........................................................15
Airbnb.............................................................12
Alba....................................................................2
Amlin...............................................................14
Anglo American........................................21
Apple.......................................................9,9,14
BASF................................................................15
BBVA.................................................................7
Banco Mare Nostrum..............................3
Bank of America...................................7,21
Bankia...............................................................3
Barclays.........................................................21
Barratt............................................................21
Bayer......................................................1,10,15
Beijing Xinwei Group............................14
Berkeley.........................................................21
British Airways..........................................12
British Gas.....................................................7
Canopius.......................................................14
ChemChina.........................................1,10,15
Chesapeake Energy...............................13
DeepMind.......................................................9
Deere & Co..................................................15
Deliveroo........................................................9
Delta................................................................12
Deutsche Bahn..........................................11
Dow Chemical...................................1,10,15
Dropbox..........................................................9
DuPont..................................................1,10,15
EDF....................................................................8
EMC.................................................................14
EOG Resources.........................................21
EasyJet...........................................................21
Enbridge...................................................11,21
Energy Transfer Equity.......................11
Enterprise Products Partners...........11
ExxonMobil..................................................21
Facebook..................................................9,14
Fannie Mae....................................................7
Fidelity...........................................................13
Fox News...................................................1,12
Franklin Templeton................................13
Freddie Mac..................................................7
Fresenius......................................................10
Gawker...........................................................12
General Motors.........................................14
GlaxoSmithKline.........................................7
Glencore.......................................................22
Goldman Sachs.......................................4,7
Grainger........................................................21
HSBC...........................................................7,21
Helios.............................................................10
Henkel.............................................................11
IDC Salud Holding..................................10
International Airlines Group.............12
Intesa Sanpaolo..........................................7
Israel Aerospace Industries..............14
JPMorgan...............................................10,13
Kinder Morgan...........................................11
KuangChi Science...................................14
Lego.................................................................11
Liberty Media ..........................................14
Lloyds...............................................................7
MPLX...............................................................11
MUFG,...............................................................2
MarkWest......................................................11
Mediclinic.....................................................10
Micron Technology................................13
Mitsubishi....................................................20
Mitsui Sumitomo.....................................14
Mondi..............................................................21
Monsanto.............................................1,10,15
MyDentist....................................................20
NRG Energy................................................21
Navistar.........................................................14
Nike.................................................................10
Nvidia..............................................................13
Olam...............................................................20
PayPal..............................................................7
PitchBook.....................................................12
Postal Savings Bank of China.........12
PotashCorp..................................................15
Poundland....................................................21
Redrow...........................................................21
Regency Energy Partners...................11
Rhön- Klinikum.........................................10
Royal Bank of Scotland.....................7,8
Sanofi...............................................................11
Seagate Technology..............................13
Silver Lake...................................................14
Simple...............................................................7
Sisal.................................................................20
Sompo............................................................14
Sony................................................................14
Southwest....................................................12
SpaceX...........................................................14
Spacecom.....................................................14
Spectra Energy....................................11,21
Sports Direct..............................................10
Spotify........................................................9,14
Sprint ............................................................14
Standard Chartered...............................21
Syngenta..............................................1,10,15
TAP..................................................................12
Temasek......................................................20
Tesla................................................................14
Tocqueville Asset Management.....13
US Bancorp...................................................7
Uber.............................................................9,12
Unilever.........................................................21
United.............................................................12
Unity Technologies..................................9
Universal.......................................................14
VMware.........................................................14
Verizon Communications....................21
Virgin Galactic...........................................14
Volkswagen.................................................14
Walt Disney ...............................................14
Warner...........................................................14
Wells Fargo..............................................7,21
WhatsApp......................................................9
Sectors
Airlines...........................................................12
Automobiles............................................2,14
Banks......................................3,4,7,8,9,10,13
Basic Resources.................................15,20
Chemicals............................................1,10,15
Energy.............................................................11
Financial Services........................12,13,20
Financials..........................................12,13,14
Healthcare............................................10,20
Industrial Goods......................................14
Insurance......................................................14
Media......................................................1,12,14
Mining............................................................22
Oil & Gas.......................................................11
Personal & Household Goods..........11
Retail...............................................................10
Retail & Consumer..................................15
Technology........................................9,12,14
Travel & Leisure...............................14,20
People
Ailes, Roger..............................................1,12
Ashley, Mike...............................................10
Baumann, Werner....................................15
Clarke, Troy................................................14
Dell, Michael...............................................14
Dimon, Jamie................................................7
Ebel, Greg.....................................................11
Ek, Daniel.....................................................14
Gabbert, John............................................12
Glasenberg, Ivan......................................22
González, Francisco.................................7
Hellawell, Keith.........................................10
Houston, Drew............................................9
Ive, Jonathan................................................9
John Goodwin, ..........................................11
Liu, Ruopeng..............................................14
Messina, Carlo.............................................7
Murdoch, Rupert...................................1,12
Musk, Elon...................................................14
Nelson, John...............................................14
Philip Hampton, Sir..................................7
Pollack, David............................................14
Renschler, Andreas................................14
Sakurada, Kengo.....................................14
Schweitzer, Eric..........................................2
Stevenson, Ewen.......................................8
Sturm, Stephan........................................10
Verghese, Sunny.....................................20
Weiss, Joseph............................................14
Zuckerberg, Mark......................................9

© The Financial Times Limited 2016 Week 36

12 ★ FINANCIAL TIMES Wednesday 7 September 2016

COMPANIES
INSIDE BUSINESS
Media
ASIA

Fox settles Carlson harassment case Jennifer

Channel apologises to
former presenter who
filed suit against Ailes
MATTHEW GARRAHAN — NEW YORK
Rupert Murdoch’s 21st Century Fox will
pay Gretchen Carlson $20m to resolve
the former Fox News presenter’s sexual
harassment lawsuit against Roger Ailes,
the former head of the channel.
fact that Gretchen was not treated with
the respect and dignity that she and all
of our colleagues deserve,” it said in a
statement announcing the settlement.
Ms Gretchen said she was “gratified” the
company had taken “decisive action”
after she filed her complaint.
Fox is incorporated in Delaware and is
paying the settlement because, under
Delaware law, senior company officers
are indemnified from legal action,
according to a person familiar with the
months before November’s US presi-
dential election. Greta Van Susteren,
one of its most prominent anchors, is
leaving the network after 14 years and
will be replaced as host of the network’s
On the Record show by Brit Hume.
In a statement on her Facebook page,
Ms Van Susteren said she had informed
Fox News on Thursday that she had
decided to leave. “Fox has not felt like
home to me for a few years and I took
advantage of the clause in my contract
Hughes
I think somebody is being falsely
accused or wronged . . . The facts I know
are that this is not the Roger Ailes I’ve
everheardaboutorseen.”
Mr Ailes, meanwhile, has hired Holly-
Zombies proliferate as
wood libel lawyer Charles Harder to
take on New York magazine after the
cornerstones entomb
publication ran an exposé about Mr
Ailes’ tenure at the helm of Fox News.
Mr Harder won $140m in damages
the Chinese market
this year for former pro wrestler Hulk
$20m Hogan against Gawker, the online

Ms Carlson had sued Mr Ailes directly
in New Jersey, alleging he once told her
that: “You and I should have had a sex-
ual relationship a long time ago and
then you’d be good and better and I’d be
good and better.”
Fox apologised to Ms Carlson. “We
sincerely regret and apologise for the
negotiations with Ms Carlson. The settle- which allows me to leave now,” she
ment was first reportedby VanityFair. wrote, adding that she hoped to con-
Mr Ailes, who received a pay-off of tinue her career in broadcasting.
$40m when he left Fox this summer, is Her departure came as a surprise, as
making “a contribution” to Ms Carlson’s she told the Daily Beast this summer that
the settlement, the person added. she had a “very long-term deal” with the
The settlement came as Fox News network. She also publicly defended Mr
shuffled its presenter line-up just two Ailes, telling the site: “I don’t like it when
Technology. Silicon Valley
What the group
media group that was forced to file for
will pay the bankruptcy following the verdict.
former presenter Mr Harder wrote to New York maga-
zine last week to take issue with articles
$40m about the former Fox News chief by
Pay-off received Gabriel Sherman, a biographer of Mr
by Roger Ailes Ailes who has chronicled his downfall
when he departed followingsexualharassmentallegations.
A
senior equities banker received a call last
week from a client whose company he helped
float in Hong Kong last year. How, asked the
client, can we increase trading volume and
interest in the company? The banker’s answer
was simple although his solution was anything but: inten-
sive pitching to potential investors all over again.
The company is in danger of becoming what Hong Kong
bankers are dubbing a zombie, or “Z-shares” — that is,
newish companies that trade little, relative to their size,
because their so-called free float is held mostly by corner-
stone investors. Locked up for six months, these big share-
holders at first cannot, and later do not, trade the shares.
The result is a collection of newish but illiquid stocks

Start-ups spur new breed of research analyst
Demand grows for investment
advice as US ventures such as
Uber stay private for longer
LESLIE HOOK — SAN FRANCISCO
As Silicon Valley’s biggest start-ups
stay private for longer than ever
before, there is a new face that is becom-
ing an increasingly familiar sight: the
research analyst.
In an effort to bring more transpar-
ency to big private tech companies such
as Uber and Airbnb, a growing number
of companies are launching research
teams to analyse private ventures and
produce reports on them.
Demand for research on start-ups has
grown as investment flows into big, late-
stage fundraising rounds, which have
come to be known as “mini-IPOs”.
Investment in venture-backed start-
ups reached $60bn last year, double the
level of 2013, as investors such as
mutual funds and asset managers enter
the scene.
“This is a new asset class that is
emerging,” says Greg Brogger, founder
of SharesPost, referring to late-stage
tech start-ups. “These are the same
companies that would have been public
at year six or seven in a previous era.
These are not start-ups in the garage.”
That new asset class calls for new
kinds of research, he argues.
SharesPost, which transacts shares in
private groups, has launched a research
division led by a former RBC analyst.
Other private market brokers have
taken similar steps. Scenic Advisement,
a boutique adviser and broker, poached
Contracts & Tenders
The rise of Uber and other big private tech groups is creating demand for research teams to navigate the opportunities — Martin Bureau/AFP/Getty
BlackRock director Peter Christiansen,
a 17-year veteran of the largest asset
manager, to lead its research efforts.
“We need to service our clients and
we also need to provide a voice,” says
Barrett Cohn, managing director at
Scenic. “Research standards have
been absolutely lacking in our space,
just because it’s a bit of a new space and
also because there are some absolute
yahoos out there.”
Part of the reason research is so chal-
lenging is that start-ups do not publicly
disclose financial metrics, such as reve-
nue or net income, making classic Wall
Street financial analysis impossible.
Much of the research on start-ups
focuses instead on sector-level analysis
such as trends and competitors, or
relies heavily on news reports of leaked
financial details.
At PitchBook, a research firm
founded in 2007, chief executive John
Gabbert sees the proliferation in
start-up research as a “sign of the
times” as more start-ups achieve billion-
dollar valuations.
“Private capital markets are becom-
ing more important than they have ever
‘Research been,” Mr Gabbert says. “Everyone is
becoming interested in these compa-
standards nies. There are more of them and
have been it is becoming harder to find the
lacking . . . needle in the haystack, which means
that using data and data tools is the only
there way to do that.”
are some As one of the oldest companies doing
absolute start-up analysis, PitchBook, which sells
clients subscriptions to its online data-
yahoos base, employs 250 analysts to cull infor-
out there’ mation about private companies.
While financial figures may be impos-
sible for outsiders to obtain, other meas-
ures have come to be reference points in
the opaque world of start-up finance.
Company filings in Delaware can
reveal the share price of each financing
round, for example, and brokers such as
Equidate have started putting these
online in an easy-to-access format.
Although researchers say they hope
to bring more transparency to a market
that is often opaque, no one expects
start-ups to begin disclosing their finan-
cials in the near future.
Mr Brogger says: “One of the great
advantages to staying private is that you
don’t have to show your hand.”
which do little to pique investor interest — and do even less
for Hong Kong’s efforts to rank alongside London and New
York, even though the territory is on course to host the
most initial public offerings for a second year running.
Hong Kong’s financial community has grumbled about
cornerstones for years. Indeed, a government advisory
group called for action two years ago — to no avail. But the
issues surrounding their use are growing rapidly.
Cornerstones have this year taken up almost half the
equity on offer — a record. Their share will jump above 50
per cent following next week’s $8bn IPO of Postal Savings
Bank of China. Up to three-quarters of PSBC’s shares are
expected to be taken by cor-
nerstones, who accept the
half-year lock-ups and the
These big
publication of their names, shareholders at
in return for the full alloca-
tion they want.
first cannot, and
Mainland Chinese compa- later do not,
nies now provide 71 per cent
of cornerstone money, up
trade the shares
from 55 per cent two years
ago, according to analysis of Dealogic data. A lot of those
investors are participating in so-called “friends and fam-
ily” deals, in which state-owned enterprises back a fellow
state-owned enterprise’s float. PSBC’s biggest cornerstone,
taking about $2bn, is China State Shipbuilding.
Bankers warn that the heavy use of cornerstones can
inflate share prices because they commit to buying at the
top of the range if needed, giving other investors less sway
over pricing. Chinese company cornerstones “have money
but nothing else”, says one banker. “They don’t have the
sophistication to research, to come up with a price — they
don’t care about that.”
Hong Kong’s financial services advisory committee
warned in 2014 that the practice — then running at less
than 30 per cent of total equity raised — risked having a
“distortive effect” on market pricing. But the Hong Kong
Exchange, the city’s for-profit equity trading monopoly,
last year said its Listing Committee had found “no conclu-
sive evidence” of this. The exchange says it continues to
monitor developments.
Bankers, however, say executives rely on cornerstones
to make sure their compa-
nies get the top float price
with no regard for its impact
In a rising market,
on liquidity later on. cornerstone
“A lot of our clients here
work for the government
issues would fade
and if you stick a book of as big investors
demand in front of a bureau-
crat and it is in theory more
eventually sold
than one-and-a-half times
covered at the top of the range, where do you think he’s
going to price that deal?” asked a Hong Kong banker.
Bankers care about trading volumes because active
markets mean more commission. There is an argument,
too, that lower listing prices help produce that first-day
price “pop” common in New York, which draws attention
to the company and gives favoured institutional clients —
who buy shares at the float price — a neat windfall.
But investors also want interesting, liquid, companies
on which to take a view. In two years, institutional inves-
tors’ presence as cornerstones has dropped from almost a
third to 11 per cent. On average, trading in recent large
Hong Kong IPOs — those that floated last year at more than
$500m — reaches 4 per cent of the value of the freely
floated shares per month and those with more corner-
stones trade even less. In New York, daily trading hovers at
the 13 per cent level.
In a rising market, cornerstone issues would fade away
as big investors eventually sold at a profit. The lack of
interest in China, particularly its banks, makes that
unlikely in the near term, while rehabilitating zombies will
take a long time. In the meantime, calls are growing for the
Hong Kong Exchange to reconsider the rules for lock-ups.
The likes of PSBC are too big to become zombies.
jennifer.hughes@ft.com

Airlines Contracts & Tenders

Tech outage compounds protest turmoil at BA

ROBERT WRIGHT
TRANSPORT CORRESPONDENT
Thousands of British Airways passen-
gers were faced long check-in queues,
delays and cancellations yesterday
after the airline suffered the latest of
several IT outages to hit airlines in
recent months.
The carrier, part of International Air-
lines Group, said its check-in system
had returned to normal yesterday
morning UK time after an overnight
glitch that caused problems checking
passengers in and dispatching aircraft.
The malfunction compounded tur-
moil at London City Airport, where BA
is the biggest operator, after activists
from the Black Lives Matter movement
breached security and staged a protest
on the airport’s runway.
The disturbance started at about 6am
and led to the closure of the runway for
six hours, with aircraft diverted to other
airports. The protesters were removed
at about 11.30am.
The airport urged passengers to check
the status of their flights because of con-
tinuing disruption.
BA’s IT glitch is the latest of several
system failures to hit airlines. Delta was
last month forced to cancel hundreds of
flights and delayed more than 1,000
more after a power cut near its Atlanta
headquarters. Southwest, the US low-
cost carrier, had to cancel about 2,000
flights over three days in July because of
computer problems, while United that
same month had to ground all its flights
for two hours because of a problem with
an internet router.
Although nearly all European airlines
have suffered serious delays in recent
months, largely because of air traffic
strikes in France, BA’s record has
been poor.
Figures from flightstats.com, an air-
line punctuality site, show that only
64.6 per cent of its flights arrived on
time in July, worse than any European
airline on the list except TAP Portugal.
Wednesday 7 September 2016
Financials. Late break
Fund managers
find summer
rewards in EM
Strategists warn of cooling
trend after top fund managers
notch up returns of 20%
STEPHEN FOLEY — NEW YORK
The summer of 2016 may have ended as
one of the quietest and least volatile for
US markets in memory, but there has
been money to be made nonetheless.
Just ask the fund managers who special-
ise in emerging markets or precious
metals.
In the 14 weeks between the Memo-
rial Day and Labor Day holidays — in
which market lore tells investors to “sell
in May and go away” — the top-perform-
ing mutual funds managers returned
more than 20 per cent this year.
And even larger profits were available
for the buyers of some exchange traded
funds and individual stocks.
The gains have gone disproportion-
ately to asset classes that benefit from
low interest rates, as markets settled
‘Emerging markets
have had a tremendous
and exceptional fair
wind this year’
into a view that the US Federal Reserve
will keep rates low in the short term and
may never raise them back to historical
norms.
“There is a lot of money in play on that
single factor,” said Shanquan Li, man-
ager of the Oppenheimer Gold & Special
Minerals Fund, whose 27.4 per cent gain
since Memorial Day on May 30 is the
best performance of all US mutual funds
with over $1bn in assets.
Mr Li’s $1.3bn fund invests in mainly
small- and mid-cap gold mining stocks,
to magnify the impact of changes in the
gold price, which has risen 9.3 per cent
over the summer. With rates staying
low, the lack of yield on precious metals
is less of a deterrent to investors, some
of whom also see gold as a hedge against
any inflation generated by loose mone-
tary policy.
Gold-focused mutual funds from
Summer 2016: Best performing mutual funds
Name Return (%)
Oppenheimer Gold &
Special Minerals
Tocqueville Gold
Franklin Gold and
Precious Metals
Fidelity Select Gold 24.5
Vanguard Precious Metals 21.5
and Mining
First Eagle Gold 20.3
PIMCO RAE Fundamental 20.0
PLUS EMG
PIMCO RAE Fundamental 19.9
Emerging Markets
Delaware Emerging 18.1
Markets
Fidelity Select Electronics 16.6
Source: Morningstar Assets over $1bn, Memorial Day to Labor Day total return (%)
Banks
Europe’s low-return lenders
put in a class with Japan’s
LAURA NOONAN
INVESTMENT BANKING CORRESPONDENT
European banks have more in common
with low-returning Japanese peers
than with Wall Street groups whose
returns they covet, researchers at
JPMorgan warn. And they suggest this
performance is unlikely to improve.
European banks’ valuations have lagged
behind those of US rivals as investors
look favourably on Wall Street’s rapid
restructuring after the financial crisis,
and the country’s stronger economy.
In a research note, JPMorgan’s Euro-
pean banks research team has claimed
that the divergence in performance is
permanent, with Europe’s institutions
joining a group of post-crisis low-return
lenders along with the Japanese.
Japan’s banks have struggled to
recover from a crisis that began in the
1990s after a property bubble burst and
triggered $700bn in credit losses.
Despite the best efforts of policymak-
ers, Japanese banks collectively trade at
little more than eight times their fore-
cast 2017 earnings and about 0.5 times
their book value.
Similarly, Europe’s banks — still in
recovery mode after the eurozone crisis
— trade at 10 times 2017 earnings and
roughly 0.8 times their book value. By
★ † FINANCIAL TIMES 13
COMPANIES
More on ft.com
For the latest
news, comment
and analysis on
the financials
sector, go to
ft.com/financials
Franklin Templeton, Fidelity and Toc-
queville Asset Management are also
among the best performers, according
to data from Morningstar.
Meanwhile, emerging markets have
seen growing interest throughout the
summer, as US fixed-income investors US fund
sought higher yields overseas and managers
equity investors expected capital to focusing on
continue flowing into emerging econo- gold miners
mies and forecast China would continue have
to stimulate demand. performed
Two “smart beta” mutual funds from strongly over
Pimco, which buy emerging market the summer
stocks, are in Morningstar’s top 10, but months,
the biggest gains have fallen to buyers of during which
exchange traded funds designed to give the price of
exposure to individual countries. gold has risen
Investors’ enthusiasm for the change 9.3 per cent
EPA
of political leadership in Brazil — plus
early signs of an earnings recovery at the
country’s recession-hit companies —
has generated a 31 per cent gain for an
iShares fund that tracks the stock mar-
ket. China funds also surged in value.
After a sharp rise in the wake of the
UK Brexit vote, volatility in US stocks
remained subdued as the summer
ended, but individual stockpickers were
still able to enjoy gains of more than 50
per cent on large-cap stocks.
Chesapeake Energy, whose large debt
burden has frightened many long-term
investors, jumped 59 per cent, the most
by any S&P 500 constituent. It has been
pulling itself back from the brink of
bankruptcy, thanks to a debt restruc-
turing and the sale of assets. And Sea-
gate Technology, whose business manu-
facturing computer discs is under pres-
sure, soared on news of a restructuring.
Investors have also warmed to micro-
chip stocks and to retailers.
The question is how markets will fare
as traders and investors return to work
following the extended break, and some
strategists are warning that summer
trends may cool, particularly the enthu-
siasm for emerging markets.
“I believe there is a ‘one-offness’ to
what has happened,” said Bhanu
Baweja, strategist at UBS. “Emerging
markets have had a tremendous and
exceptional fair wind this year. We have
seen the biggest decline in US real inter-
est rates in years, but even if rates stay
low, that is now priced in.”
Fund category Fund size ($bn)
27.4 Precious Metals 1.3
25.9 Precious Metals 1.4
25.0 Precious Metals 1.4
Precious Metals 1.9
Precious Metals 3.0
Precious Metals 1.3
Diversified 2.1
Emerging Markets
Diversified 1.5
Emerging Markets
Diversified 1.8
Emerging Markets
Technology 1.9
contrast, US banks, as measured by the
MSCI index, trade at 11 times earnings
and 1.0 times their book value.
JPMorgan’s analysts found that cen-
tral bank moves to flood the system
with cheap money through quantitative
easing have proved equally ineffective
in Europe and Japan, with banks in both
regions failing to use the cash to expand
their loan books.
“We would expect that the valuation
[of the European and Japanese banks]
will converge in an ongoing QE environ-
ment and negative rates,” said Kian
Abouhossein, head of JPMorgan’s Euro-
pean banks research team.
“[The] secondary longer-term effect
of ongoing QE has also resulted in reve-
nue pressure for European banks, simi-
lar to what we have seen in Japan,” the
JPMorgan team added, pointing to the
fall in net interest margins — the differ-
ence between the rate a bank lends and
borrows at — in both regions as interest
rates fell.
Mr Abouhossein said that, if any-
thing, European banks were “behind
the curve” relative to Japanese rivals
because they “haven’t done any of the
cost-cutting which Japanese banks have
done” or carried out the necessary “bal-
ance sheet clean-up”.
See Lex
14
Technology
Dell turns to tracking stock for EMC deal
Structure tied to VMware
investment swims against
corporate finance tide
RICHARD WATERS — SAN FRANCISCO
The final piece in Dell’s complex $62bn
acquisition of EMC is set to fall into place
today, when an unusual tracking stock
with a notional face value of more than
$16bn starts trading in New York.
On paper, the new class of stock,
whose value is tied to a large part of
Dell’s investment in data centre technol-
ogy company VMware, will be worth
Space science
Kuang-Chi
plots course
for futuristic
theme park
DON WEINLAND — HONG KONG
China’s homegrown answer to SpaceX
has outlined plans to invest $1.5bn in a
space travel and future technology
theme park, as the group prepares for
manned tests of Asia’s first near-space
tourism project.
Hong Kong-listed KuangChi Science has
already conducted unmanned tests for a
high-altitude balloon called the Travel-
ler. It is equipped with communications
and weather-monitoring components,
but is also intended to take tourists to
24km above the earth.
Manned tests are planned over the
next two years, the company said.
Chinese media has dubbed the com-
pany’s chairman, Liu Ruopeng, “the
Elon Musk of China”, referring to the
founder of Tesla and SpaceX.
Shenzhen-based KuangChi is devel-
oping a range of what it calls “future
technologies”, including a powered
exoskeleton suit. It has made several
overseas acquisitions and launched a
$50m investment fund targeting tech-
nology start-ups in Israel, with plans to
establish a second fund soon.
While its goals are less ambitious than
projects such as Virgin Galactic — which
aim to propel tourist-laden crafts across
the 100km-high Karman line into what
is officially considered space —
KuangChi is among several private
projects attempting to send leisure pas-
sengers to twice the altitude of commer-
cial aircraft.
The plans come as SpaceX has suf-
fered a series of challenges. Its pilotless
Falcon 9 rocket exploded on its Florida
launch pad last week, and in June a
cargo flight bound for the International
Space Station broke apart in mid-air.
The Kuang-Chi group, parent com-
pany of KuangChi Science, said the
space and future park it plans to build in
the Chinese city of Hangzhou will show-
case technologies, including a ride
designed to give visitors the sensation of
space travel in the Traveller balloon.
Set up in 2010, the company bought a
majority stake last year in Martin Jet-
pack, which makes an individual flight
craft. It also bought a stake in a Cana-
dian company that produces a hybrid
aircraft called Solar Ship.
Financials
Japan insurer shrugs off concerns over Brexit
OLIVER RALPH
INSURANCE CORRESPONDENT
The head of one of Japan’s biggest
insurers said the Brexit vote had not
dulled his company’s appetite to invest
in London as the city’s attractions
stretch beyond the business it does
with the EU.
“London has so many strengths in terms
of licences, information and underwrit-
ing expertise,” Kengo Sakurada, chief
executive of Sompo, told the Financial
Times.
Mr Sakurada did not see the Brexit
vote as a reason to move business away
from the Lloyd’s of London market. “I’ll
continue toputmoreresources and capi-
even more than the shares sold at the
time of Facebook’s stock market debut
in 2012, the biggest-ever US tech IPO.
But the use of a tracking stock struc-
ture — which gives holders no owner-
ship of any underlying assets, and few
rights — swims against the recent tide of
corporate finance, and is expected to
leave the new shares at a sizeable dis-
count to their theoretical value.
Since the late 1990s, when tracking
stocks were a faddish way for compa-
nies to get a valuation for their internet
businesses without having to spin them
off, “they’ve fallen way out of favour,”
said Matt Billett, a finance professor at
The successful launch of the Spacecom satellite at SpaceX was a condition of the Israeli group’s planned $285m purchase by Beijing Xinwei — USlaunchreport.com
Satellite disaster casts shadow over Spacecom deal
JOHN REED — JERUSALEM
The Israeli company, whose satellite
was destroyed in an accident at Elon
Musk’s SpaceX last week, said yester-
day that it still hoped its planned acqui-
sition by a Chinese company would go
ahead, but acknowledged that any deal
agreed would not be at the same price.
Spacecom lost its AMOS-6 communica-
tions satellite, which was due to help
Facebook offer satellite internet service
in Africa, in an explosion at SpaceX’s
Florida launch site on September 1.
The satellite’s successful launch was a
condition of Spacecom’s planned $285m
purchase by companies from China’s
Beijing Xinwei Group, announced in late
August.
“We are speaking to them; we are try-
tal into Lloyd’s because it gives us access
to other developed markets.” Only 4 per
cent of Lloyd’s premiums could be
affected by the Brexitvote,he added.
There have been fears that Lloyd’s,
which uses the EU’s passporting
arrangements, will suffer if free trade
between the UK and the EU is restricted.
Speaking on the BBC’s Today pro-
gramme on Monday, Lloyd’s chairman
‘I’ll continue to put more
resources . . . into Lloyd’s
because it gives us access
to developed markets’
John Nelson emphasised the impor-
tance of overseas capital to the market.
“Eighty-five per cent of capital in Lloyd’s
comes from outside the UK, and 16 per
cent comes from Japan,” he said.
On Sunday, the Japanese government
warned that some of its companies
could move their European bases out of
the UK unless there was a very “soft”
exit from the EU.
Mr Sakurada agreed that a “hard”
Brexit would be “disastrous”. However,
he added that for Sompo the big attrac-
★ FINANCIAL TIMES
COMPANIES
the University of Iowa. “One of the really
hard parts is understanding what the
rights are, and what you own.”
Dell’s use of a tracking stock has been
a key ingredient in its ability to take
storage company EMC private. Without
a publicly traded stock of its own to help
finance the highly leveraged deal, Dell
has turned to the 81 per cent stake in
VMware it will acquire as part of the
deal. Its new Class V shares will repre-
sent some 65 per cent of its stake in
VMware — though holders will have no
direct rights in VMware.
Besides helping Dell finance the take-
over, the use of tracking shares will
ing to adapt it to the new situation,”
David Pollack, chief executive, said of
the proposed merger in an interview
with the Financial Times. “It definitely
might go ahead . . . everybody is trying
to keep the deal.” However, he acknowl-
edged that price negotiations for the
deal were going ahead “at other levels”.
Beijing Xinwei said this week that the
company was “still studying the mean-
ing of the events” on September 1, when
a SpaceX rocket exploded during pre-
launch ground tests. A person familiar
with the Chinese company’s thinking
said that the price of any deal would
have to be lower “because it’s not the
same company now”.
Spacecom’s share price in Tel Aviv
trading has collapsed by more than a
third in the days since Thursday’s acci-
tion of operating in Lloyd’s was its links
with developed markets outside the EU.
“By 2025 the insurance market size in
developed markets will be 1.6 times
larger than it was in 2015,” he said.
In 2014, Sompo bought Canopius, a
Lloyd’s insurer, for £600m. Last year, it
tried to buy Amlin, another Lloyd’s
underwriter, but was outbid by rival
Mitsui Sumitomo, which paid £3.5bn.
Overseas expansion is a big part of
Sompo’s strategy. Operations outside
Japan account for 12 to 15 per cent of the
group’s profits but Mr Sakurada wants
that figure to rise to 25 per cent by 2020.
Acquisitions will have to do a lot of the
heavy lifting, said Nigel Frudd, head of
Sompo’s global M&A activity. “To get to
where we want to get to, you have to do
M&A — you can’t do it by organic
growth,” he said.
Sompo is interested in specialist com-
mercial insurance businesses, arguing
that the world’s retail markets are
already too competitive.
It plans to reinvest some of the profits
it makes overseas back in Japan. Mr
Sakurada’s strategy is to diversify away
from Sompo’s core insurance businesses
by moving into adjacent sectors such as
care homes and roadside services.
avoid the tax costs that would come
from distributing VMware shares
directly.
One ironic result will be to give
Michael Dell, the Dell founder, a new
group of public shareholders. Mr Dell
has been vociferous about the attrac-
tions of operating away from the public
gaze since taking his PC company pri-
vate in 2013.
However, in an interview with the FT
last week, Mr Dell denied that his new
Class V stockholders would be second-
class citizens. “Everybody has a voice,
and we take all input from shareholders
seriously,” he insisted.
dent. The company’s owners, led by
Israeli holding group Eurocom, have
been trying to sell it for years.
Mr Pollack said a refund was expected
for the loss of the satellite from state-
owned Israel Aerospace Industries
(IAI), its producer, that would be worth
more than $190m including interest.
The company also expects to get a
refund of $40m it paid to insurers, who
did not compensate it for the accident
because it happened before Thursday’s
planned launch.
On Sunday, Spacecom said that it
would also be seeking $50m or a free
launch of another satellite from Mr
Musk’s company. It told shareholders
that the loss of the satellite would have a
significant impact.
“AMOS-6 was very important, and
Automobiles
VW stake in Navistar seen as precursor to IPO
PATRICK MCGEE — FRANKFURT
Volkswagen has acquired a 16.6 per
cent stake in US truckmaker Navistar in
a move seen by investors as a first step
in the German company spinning off its
trucks business as early as next year.
VW’s truck and bus division paid $256m
for the stake in Navistar, buying shares
at $15.76 each — a 12 per cent premium
on the previous day’s closing price. Con-
firmation of the deal sent Navistar
shares soaring 57 per cent to $22.10 per
share in New York yesterday as VW
hinted it could increase its stake.
The deal comes ahead of an expected
flotation of VW’s trucks business, which
would raise money for a company need-
ing both to cover the costs of last year’s
emissions crisis as well as invest in the
next generation of car technology.
Andreas Renschler, head of VW’s
truck and bus division, which comprises
the brands MAN, Scania and Brazil’s
Volkswagen Caminhões e Ônibus, said
the two companies would work together
on new “power-train” technology — the
engine and transmission components —
that should be ready by 2019.
Navistar estimated the alliance would
create “at least $500m” of synergies in
Dell’s holding company, Denali, has
set up a capital stock committee, made
up of independent directors, to review
any changes to the shares in future. But
it will still be firmly under Mr Dell’s
control.
Considerable uncertainty over how
the new shares will trade continued to
weigh on EMC’s stock price yesterday,
the final day before completion of the
Dell acquisition.
The Dell offer of $24.05 in cash and
0.111 of a tracking share in VMware
implied a value of $32.12 for each EMC
share, still a 12 per cent premium to
trading yesterday.
definitely it’s a blow to our company,”
Mr Pollack said. Spacecom, he added,
was now looking for a “gap-filler” satel-
lite to use, while discussing when and
how it could launch a new one.
He said that Spacecom was aiming to
decide on a provider of a replacement
satellite as soon as possible, and would
be talking to IAI and competing produc-
ers. “We will go to IAI, but we will [also])
speak to others because time to market
will be a major factor,” he said. “IAI will
have a real challenge; maybe others can
launch a satellite faster.”
Joseph Weiss, IAI’s CEO, said he
believed his company could build a sat-
ellite within two years, if it received an
order with the same design as AMOS-6.
IAI says it is insured for the loss, and
expects to be fully compensated.
the first five years. VW will have the
right to appoint two directors to Navi-
star’s board as part of the deal.
Navistar has been struggling since
2010 when it built thousands of trucks
that did not comply with Environmen-
tal Protection Agency regulations.
Troy Clarke, Navistar’s chief execu-
tive, said an agreement to collaborate on
technology, supplies and procurement
would relieve anxiety among customers
worried that certain Navistar vehicles
would be “stranded” without access to
new technology.
“This gives us an opportunity to get on
the balls of our feet again,” he said.
Asked if VW planned to spin off the
Navistar shares jumped 57% on news
of VW’s stake in the truckmaker
Wednesday 7 September 2016
Media
Spotify set to
tighten access
to free music
streaming
ANNA NICOLAOU — NEW YORK
Spotify is considering changing its tune
on unfettered access to free music for
users of its streaming service, as a con-
cession to record labels in a tough new
round of licensing negotiations.
In exchange for restricting some new
albums to only paying subscribers for an
initial “windowing” period, it is hoping
for a substantial cut in the royalties it
pays to music rights holders, according
to people familiar with the discussions.
The perennially lossmaking service is
striving for a sounder financial footing
ahead of an initial public offering the
company is thought to be considering.
The long-term licensing deals it is seek-
ing with major record companies, in
revved-up discussions in recent weeks,
would also boost its appeal to investors.
Spotify, valued at $8.5bn in a recent
funding round, made a net loss of
€173m last year, despite revenues surg-
ing to €1.95bn, as royalty and distribu-
tion fees also jumped to €1.63bn.
However, persuading labels and pub-
lishers to accept less than the 70 per cent
of its streaming revenues it hands over
could be difficult, given that rights hold-
ers already receive around 73 per cent of
revenues from main rival, Apple Music.
The majors, which hold minority
stakes in Spotify, may be sympathetic —
The lossmaking service
is striving for a sounder
financial footing ahead
of a possible IPO
“We want them to succeed,” said one
executive, adding that “we don’t want
Apple to be the only player in town” —
but Spotify also has “windowing” as a
bargaining ploy.
The music industry has advocated the
practice for years, likening it to releas-
ing films in theatres before allowing
them to be streamed online.
Windowing “could be perceived as a
concession, but in a sense, [Spotify]
really doesn’t have a choice”, said one
executive. Spotify’s licensing contracts
are up for negotiation with Universal,
Sony and Warner.
Licensing talks could endure through
to the end of the year, people familiar
with the negotiations said.
Spotify declined to comment.
Daniel Ek, the company’s founder,
has for years defended his “freemium”
streaming model as the path forward,
even in the face of a high-profile critique
from Taylor Swift, who in 2014 abruptly
pulled her songs from Spotify in protest
at its free tier. Music labels, and the likes
of Ms Swift, want to limit Spotify’s free
service, which generates far less reve-
nues than paid subscriptions.
Universal has privately pressed Spot-
ify to modify its free tier, arguing that it
is not sufficiently distinct from its paid
service. Mr Ek has argued that Spotify’s
free service, supported by advertising,
is necessary to lure in users who then
convert to paying customers.
Spotify has amassed 100m users on its
free tier, which offers more limited
functionality, while 30m have con-
verted to its $9.99 per month service for
unrestricted access to its songs.
Additional reporting by Madhumita Mur-
gia in London
trucksunit,MrRenschlerwouldonlysay
that “all options will be open” once the
companybecomesa“globalchampion”.
One VW investor told the Financial
Times the carmaker would seek an ini-
tial public offering of the unit next year.
He said the trucks business was not con-
sidered a core part of the group and that
selling a sizeable stake could generate
cash needed for electrification plans.
VW needs to invest in new technolo-
gies even as it tries to show investors
that costs can be contained as the car
group recovers from last year’s emis-
sions crisis. It has already set aside
€18bn for the scandal, primarily for the
US where the scandal was uncovered,
but costs could grow as European regu-
lators take a tougher stance.
Lello Della Ragione, an analyst at Ital-
ian investment bank Intermonte Sim,
said the trucks business could be worth
about €20bn when measured against
comparable multiples at Volvo.
If VW sold half the business, it would
have €10bn of cash to finance future
investments, he said. “This could mark
a significant change in direction com-
pared to the expansionist strategy of the
[Ferdinand] Piëch era,” he added, refer-
ring to the former VW chairman.
Wednesday 7 September 2016 ★ FINANCIAL TIMES 15

COMPANIES

Crop of mergers serves to sow seeds of doubt

Deals between the biggest names in agribusiness are stoking fears about competition, choice and the food on our plates
GUY CHAZAN — BERLIN Bayer chief executive Werner Bau-
LINDSAY WHIPP — CHICAGO Share volume mann said in May that almost 60 per
When Bayer announced its bid for US cent of Monsanto’s revenues are in the
rival Monsanto back in May, Susanne US farm incomes Global seed market Americas, whereas the German com-
Schmidt immediately sold her shares in Net income ($bn) Market share, 2015 (%) pany is much bigger in Europe and Asia.
the German company. 140 Dow Anyway, said Liam Condon, Bayer’s
An environmental scientist from Syngenta Chemical Bayer 3 head of crop science, the combined
Monsanto
Landau in south-western Germany, she company could always sell off some
had inherited the stock from her father, small units to address antitrust con-
who worked all his life for Bayer. But the cerns.
thought of such a merger filled her with
horror. “The bigger the market share 26 21 8 5 44 29 But Mr Colley warns of the risk of reg-
ulators making “major demands and
they have, the harder it will be to control 120 concessions” a condition of antitrust
them,” she says. approval, in moves that undermine the
Bayer sweetened its bid for Monsanto financial logic of the tie-up. “By the time
DuPont Limagrain KWS Other
a second time late on Monday, saying it competition authorities have finished,
would be willing to pay up to $127.50 a the deal may well not have been worth
share if a negotiated deal can be US cotton market doing,” he says.
reached. That values the target at about % share by acreage, 2015 A Bayer takeover of Monsanto would
$56bn excluding debt, and would rank 100 create a player that is totally dominant
Monsanto Other
as the largest takeover attempted by a in some areas. The deal would combine
Germany company, according to Dea- the two largest cottonseed sellers in the
logic. But it is unclear whether the offer US into a single company, responsible
is enough to persuade Monsanto to sell. for almost 70 per cent of crop acreage,
A takeover would create the world’s 38.5 31.2 15.3 15.0 according to Verdant Partners, a consul-
largest supplier of seeds and agricul- tancy.
tural crop sprays, and Ms Schmidt is not 80 There is also overlap in the two com-
alone in fearing the consequences of panies’ herbicide-tolerant seeds,
such a tie-up. Bayer Phytogen Bayer’s LibertyLink and Monsanto’s
If the deal goes ahead, “mega-corpo- Roundup Ready. Peter Carstensen, a
ration Bayer would be able to decide vir- former justice department antitrust
tually single-handedly what is grown in US pesticides market attorney, says that if the two products
Revenue share, 2013 (%)
our fields and ends up on our plates”, end up under one roof, there will be “no
says Molly Scott Cato, a Green MEP who 60 incentive for somebody to develop a
has launched an online petition against Bayer Dow Chemical DuPont third alternative”.
the deal. Farmers do acknowledge some of the
Such misgivings accompany many big
corporate tie-ups. What is unusual
about Bayer’s move on Monsanto is that 20 18 13 10 8 6 25 ‘It is anything but clear
it is just the latest of a swath of mega
40
how customers will benefit
deals that are transforming the global
agribusiness sector.
with such a major
2000 02 04 06 08 10 12 14 16 Syngenta BASF Monsanto Other
The industry has already undergone
FT graphic Sources: USDA; ETC Photo: Brent Stirton/Getty Images
reduction in suppliers’
huge consolidation. In 1996, there were
600 independent seed companies: most
have since been bought out by bigger would otherwise be the case with more Department of Justice sued Deere & Co industrial logic behind Bayer’s pursuit
players, including the six — Monsanto, ChemChina-Syngenta It was a point echoed by the head competition,” he says. last week to block its purchase of Mon- of Monsanto — for example, the increas-
Syngenta, Bayer, DuPont, Dow Chemi- Takeover green light of a private Chinese corn trading John Colley, a professor at Warwick santo’s Precision Planting LLC equip- ing cost of obtaining regulatory
cal and BASF — that now control 63 per platform. “The government strategy Business School, says: “It is anything but ment unit, saying it would eliminate approval for biotech seeds or chemicals.
cent of the global seed market. sparks anger in US is . . . aimed at improving the technical clear how customers will benefit with competition and raise costs for farmers. Mr Young says that to bring products
That could dwindle to four companies capacity of Chinese agriculture,” said such a major reduction in suppliers.” Deere said it would contest the move. to market in the current regulatory
as falling crop prices and a decline in ChemChina received a boost last the trader, who declined to be named. Campaigners also worry about what But some deals are moving ahead environment, “you need a company
spending by farmers force a fresh wave month when the Committee on “Buying up overseas companies is so much concentration will do to biodi- more or less on schedule. Last month, with deep pockets. Bringing Bayer and
of deals. Dow and DuPont announced a Foreign Investment, a government likely to be mostly about tech versity. “By increasing the market ChemChina cleared a big hurdle when Monsanto together for example should
$130bn merger last year, while panel that reviews purchases of US transferral and developing safe and power of the dominant actors, the diver- the Committee on Foreign Investment, give you those kinds of resources”.
ChemChina is pursuing a $44bn takeo- assets by foreign acquirers for any efficient seeds.” sity of plant varieties available to farm- a US government panel that can block But these mega deals are coming at a
ver of Syngenta. Meanwhile Potash- national security implications, A takeover of Syngenta would be ers . . . is going to shrink further,” says deals on national security grounds, delicate time for farmers, particularly in
Corp, the world’s largest potash sup- approved its proposed $44bn China’s biggest overseas transaction, Martin Pigeon, a researcher at Brussels- approved the Syngenta transaction. the US. Corn and soyabean prices have
plier, is in talks with rival Agrium over takeover of Switzerland’s Syngenta. and the CFI’s approval has provoked based lobby group Corporate Europe The companies themselves are fallen so low that producers barely
creating a near-$30bn fertiliser giant. For the Chinese the deal is a logical anger at the US National Farmers Observatory. relaxed about the prospect of antitrust break even. The US Department of Agri-
The sheer volume of M&A activity is step, given a government push to start Union. More than 25 per cent of There is no certainty that all the deals probes. Dow and DuPont, which have culture said last month that net cash
ringing alarm bells in Washington and cultivating genetically modified corn Syngenta’s sales are in North America. will happen. Monsanto confirmed late agreed to split the combined company farm income would fall in 2016 for the
Brussels. for animal feed. One of Syngenta’s Roger Johnson, NFU president, said on Monday that it had received Bayer’s into three parts after their proposed third consecutive year.
“Any one of the proposed mergers/ specialities is GM corn seed. “significant threats to national security revised offer, saying it had been engaged merger, said the EU investigation Wendell Shauman, 70, who farms
acquisitions would probably have been “It gives ChemChina a way to and trade” could result from the in “constructive” discussions with the should not delay the closing of the deal. 1,000 acres of corn and soyabeans near
OK,” says Bob Young, chief economist at diversify away from agrochemicals acquisition. company. But Bernstein analysts have Bayer, which declined to comment for the Mississippi river in western Illinois,
the American Farm Bureau Federation, into GM seed technology,” said Loren “We should be reasonably previously said that Bayer might have to this article, is also sanguine about the says he would prefer for the mega deals
which represents US farmers. “But to Puette, founder of the ChinaAg concerned that ChemChina could raise its offer to $135 a share before regulatory hurdles. After they revealed not to go ahead.
have them all hit at once . . . kind of researcher. “The goal is that GM corn provide preferential treatment to Monsanto agrees to sell. their bid in May, executives stressed “More competition is better,” he says.
makes one wonder.” seeds will eventually be adopted in Syngenta, which should deleteriously Meanwhile, last month the European how well Monsanto’s business comple- “We’re in a situation where it strength-
Mr Young particularly worries about China. They will be an easier sell to impact the competitiveness of the Commission launched an in-depth ments Bayer’s: the US company is strong ens their position and weakens mine. I’d
the impact on prices for farmers. “The general public because it’s not a biotechnology sector.” investigation into whether the Dow- in seeds and genetic traits, while the prefer not to be in that situation.”
obvious concern is that increased con- traditional grain that is directly Lindsay Whipp and Dupont tie-up would limit competition. German group specialises in crop pro- Additional reporting by Amy Kazmin
centration would bring you to the point consumed like rice.” Christian Shepherd In a sign that regulators in Washing- tection products such as herbicides, and Christian Shepherd
where they would charge more than ton are just as alive to such issues, the US fungicides and insecticides. See Lex

Businesses For Sale

FT BUSINESS
Tuesday, Friday & Saturday: Business for Sale, Business Opportunities, Business Services,
Business Wanted, Franchises
.....................................................................................................................................................................................................................................................................................................................................................................................................................
Classified Business Advertising
UK: +44 20 7873 3920 | Email: jenny.fazakerley@ft.com
16 FINANCIAL TIMES Wednesday 7 September 2016

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

-0.78% -0.37% -1.132% -0.119% -1.62%

0.13% 0.33% 0.09% 0.26% 0.58% 0.55% 0.807% 0.977% 0.82%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Aug 07 - Sep 06 Index All World Aug 07 - Sep 06 Index All World Aug 07 - Sep 06 Index All World Aug 07 - Sep 06 Index All World Aug 07 - Sep 06 Index All World Aug 07 - Sep 06 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
17,081.98 2,066.53
6,879.42 10,687.14
14,792.86
2,182.87 2,182.75 14,648.77 16,254.45
6,740.16 10,432.36 2,031.12
Day 0.13% Month -0.02% Year NaN% Day -0.02% Month 0.99% Year 9.76% Day -0.78% Month 0.41% Year 12.88% Day 0.14% Month 0.28% Year NaN% Day 0.26% Month 5.09% Year -3.99% Day 0.31% Month 2.41% Year 9.57%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
1,374.89 8,899.50 23,787.68 2,896.55

5,267.02 8,562.50
47,571.28 1,345.09 2,828.17
5,221.12 47,368.65 22,494.76
Day 0.33% Month 0.87% Year 12.44% Day -0.57% Month 0.78% Year 11.28% Day -0.37% Month 2.24% Year -1.27% Day -0.60% Month 4.22% Year -9.39% Day 0.58% Month 7.41% Year 14.14% Day 1.57% Month 2.42% Year 1.14%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
59,653.54 4,529.96 17,052.57 28,998.22
16,626.28 3,090.71
18,543.53 18,508.06 57,635.43 4,415.46
3,004.28 27,714.37
Day 0.09% Month -0.20% Year 14.93% Day 0.15% Month 3.41% Year 28.24% Day -0.24% Month 2.71% Year 0.15% Day -0.80% Month 2.56% Year -20.58% Day 0.61% Month 3.83% Year -2.20% Day 1.63% Month 3.20% Year 14.98%

Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous
Argentina Merval 16107.14 16006.33 Cyprus CSE M&P Gen 68.23 68.20 Italy FTSE Italia All-Share 18715.43 18843.71 Philippines Manila Comp 7719.18 7764.05 Taiwan Weighted Pr 9181.85 9090.13 Cross-Border DJ Global Titans ($) 249.15 248.20
Australia All Ordinaries 5510.40 5524.40 Czech Republic
PX 882.42 880.84 FTSE Italia Mid Cap 30527.98 30507.53 Poland Wig 48022.44 47980.57 Thailand Bangkok SET 1496.90 1492.52 Euro Stoxx 50 (Eur) 3070.06 3077.66
S&P/ASX 200 5413.60 5429.60 Denmark OMXC Copenahgen 20 990.99 996.35 FTSE MIB 17052.57 17190.44 Portugal PSI 20 4742.10 4779.31 Turkey BIST 100 77791.60 76884.32 Euronext 100 ID 892.88 896.04
S&P/ASX 200 Res 2975.60 2958.20 Egypt EGX 30 8241.16 8136.44 Japan 2nd Section 4383.34 4363.15 PSI General 2528.40 2545.49 UAE Abu Dhabi General Index 4512.01 4472.20 FTSE 4Good Global ($) 5509.14 5496.20
Austria ATX 2381.31 2380.59 Estonia OMX Tallinn 1003.22 1001.85 Nikkei 225 17081.98 17037.63 Romania BET Index 7020.35 7026.05 UK FT 30 3030.10 3043.60 FTSE All World 279.71 278.17
Belgium BEL 20 3629.67 3637.26 Finland OMX Helsinki General 7979.72 8001.14 S&P Topix 150 1117.10 1112.91 Russia Micex Index 2036.08 2017.38 FTSE 100 6826.05 6879.42 FTSE E300 1374.89 1380.00
BEL Mid 6049.31 6012.83 France CAC 40 4529.96 4541.08 Topix 1352.58 1343.85 RTX 992.55 977.45 FTSE 4Good UK 6093.54 6137.46 FTSE Eurotop 100 2698.67 2709.88
Brazil Bovespa 59653.54 59566.35 SBF 120 3599.44 3608.52 Jordan Amman SE 2087.62 2083.54 Saudi-Arabia TADAWUL All Share Index 6204.08 6099.03 FTSE All Share 3726.47 3750.71 FTSE Global 100 ($) 1371.70 1366.38
Canada S&P/TSX 60 859.92 861.56 Germany M-DAX 21775.48 21772.29 Kenya NSE 20 3171.28 3187.87 Singapore FTSE Straits Times 2896.55 2851.74 FTSE techMARK 100 4342.55 4359.63 FTSE Gold Min ($) 1783.59 1763.82
S&P/TSX Comp 14792.86 14795.70 TecDAX 1766.05 1754.55 Kuwait KSX Market Index 5380.80 5395.49 Slovakia SAX 318.18 318.01 USA DJ Composite 6455.09 6440.07 FTSE Latibex Top (Eur) 3365.50 3384.60
S&P/TSX Met & Min 670.38 688.63 XETRA Dax 10687.14 10672.22 Latvia OMX Riga 677.16 635.36 Slovenia SBI TOP 734.49 733.58 DJ Industrial 18508.06 18491.96 FTSE Multinationals ($) 1574.69 1572.95
Chile IGPA Gen 20421.88 20496.42 Greece Athens Gen 578.49 578.27 Lithuania OMX Vilnius 534.93 534.73 South Africa FTSE/JSE All Share 53680.43 53622.00 DJ Transport 7942.62 7946.79 FTSE World ($) 494.71 492.21
China FTSE A200 8407.02 8365.30 FTSE/ASE 20 1557.67 1554.77 Luxembourg LuxX 1594.44 1602.17 FTSE/JSE Res 20 31723.35 31895.46 DJ Utilities 680.75 673.11 FTSEurofirst 100 (Eur) 3869.31 3888.24
FTSE B35 9682.10 9599.94 Hong Kong Hang Seng 23787.68 23649.55 Malaysia FTSE Bursa KLCI 1689.92 1678.08 FTSE/JSE Top 40 47008.42 47078.69 Nasdaq 100 4820.58 4798.74 FTSEurofirst 80 (Eur) 4203.61 4214.80
Shanghai A 3235.51 3216.02 HS China Enterprise 9938.39 9830.57 Mexico IPC 47571.28 47842.23 South Korea Kospi 2066.53 2060.08 Nasdaq Cmp 5267.02 5249.90 MSCI ACWI Fr ($) 421.28 420.17
Shanghai B 355.64 353.38 HSCC Red Chip 4049.35 4010.54 Morocco MASI 9933.46 9881.24 Kospi 200 260.93 259.64 NYSE Comp 10873.21 10856.92 MSCI All World ($) 1737.39 1734.60
Shanghai Comp 3090.71 3072.10 Hungary Bux 28597.82 28408.18 Netherlands AEX 461.11 464.13 Spain IBEX 35 8899.50 8953.30 S&P 500 2182.75 2179.98 MSCI Europe (Eur) 1415.07 1415.06
Shenzhen A 2142.53 2111.01 India BSE Sensex 28998.22 28532.11 AEX All Share 701.72 706.02 Sri Lanka CSE All Share 6524.46 6523.47 Wilshire 5000 21224.32 21238.05 MSCI Pacific ($) 2380.97 2353.00
Shenzhen B 1187.47 1176.94 S&P CNX 500 6627.95 6634.30 New Zealand NZX 50 7503.54 7492.03 Sweden OMX Stockholm 30 1345.44 1359.14 Venezuela IBC 11853.14 11843.12 S&P Euro (Eur) 1406.25 1410.33
Colombia COLCAP 1397.92 1394.38 Indonesia Jakarta Comp 5372.10 5356.95 Nigeria SE All Share 27756.67 28419.92 OMX Stockholm AS 480.68 485.01 Vietnam VNI 663.90 664.55 S&P Europe 350 (Eur) 1413.24 1418.85
Croatia CROBEX 1817.05 1823.65 Ireland ISEQ Overall 6265.53 6315.06 Norway Oslo All Share 663.11 665.18 Switzerland SMI Index 8304.34 8310.37 S&P Global 1200 ($) 1938.10 1930.51
Israel Tel Aviv 100 12.66 12.67 Pakistan KSE 100 39688.97 39688.98 Stoxx 50 (Eur) 2907.16 2920.66
(c) Closed. (u) Unavaliable. † Correction. ♥ Subject to official recalculation. For more index coverage please see www.ft.com/worldindices. A fuller version of this table is available on the ft.com research data archive.

STOCK MARKET: BIGGEST MOVERS UK MARKET WINNERS AND LOSERS

AMERICA LONDON EURO MARKETS TOKYO Sep 06 %Chg %Chg Sep 06 %Chg %Chg Sep 06 %Chg %Chg Sep 06 %Chg %Chg
ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's FTSE 100 price(p) week ytd FTSE 250 price(p) week ytd FTSE SmallCap price(p) week ytd Industry Sectors price(p) week ytd
traded m's price change traded m's price change traded m's price change traded m's price change Winners Winners Winners Winners
Facebook 14.4 128.89 2.38 Hsbc Holdings 218.9 568.50 -13.19 Unicredit 293.6 2.34 0.00 Mitsubishi Ufj Fin,. 422.4 567.20 0.10 Berkeley Holdings (the) 2783.00 7.2 -24.5 Sports Direct Int 349.60 18.3 -39.0 Flybe 52.50 15.4 -42.6 Automobiles & Parts 7551.95 4.5 4.8
Tyco Int 13.3 45.59 0.58 Sabmiller 129.8 4397.50 4.42 Bayer Ag Na O.n. 271.2 94.24 0.00 Toyota Motor 374.6 6235.00 -29.00 Gkn 323.00 6.0 6.3 Redrow 418.50 12.6 -11.6 Gulf Marine Services 47.25 11.2 -54.5 Electricity 9050.22 3.0 2.8
Hospira 11.8 89.95 -0.01 Shire 110.7 4795.00 19.85 Nestle N 220.0 72.38 0.00 Softbank . 342.8 6898.00 -40.00 Direct Line Insurance 378.60 4.9 -6.4 Zoopla Property 330.00 10.2 37.8 Cambian 83.25 9.5 -40.4 Food & Drug Retailers 2753.03 2.6 9.7
Spectra Energy 11.5 40.93 4.78 Lloyds Banking 94.9 58.08 -0.98 Fresenius Se+co.kgaa O.n. 202.5 66.17 0.00 Sumitomo Mitsui Fin,. 320.4 3716.00 47.00 Babcock Int 1080.00 4.6 6.3 Thomas Cook 74.80 7.8 -38.2 Ophir Energy 77.50 8.9 -20.1 Life Insurance 7069.52 2.3 -9.8
Apple 11.3 107.87 0.14 Wpp 90.9 1797.00 6.84 Eni 198.0 13.83 0.00 Mizuho Fin,. 207.6 183.70 1.60 Tesco 170.00 4.1 13.7 Go-ahead 2126.00 7.1 -20.1 Georgia Healthcare 292.00 8.0 88.4 General Retailers 2736.29 2.3 -9.0
Amazon.com 10.4 785.06 12.62 Astrazeneca 90.2 4866.00 -37.44 Daimler Ag Na O.n. 196.8 62.78 0.00 Fast Retailing Co., 199.1 36860.00 -260.00 Associated British Foods 3165.00 3.6 -5.4 Hochschild Mining 269.20 7.0 464.8 Mcbride 166.50 7.8 0.6 Gas Water & Multiutilities 6642.58 1.9 11.8
Baidu 8.5 187.40 9.62 Bp 90.0 427.65 -6.43 Novartis N 195.9 71.33 0.00 Sony 180.3 3435.00 34.00 United Utilities 1004.00 3.4 7.3 Diploma 885.00 6.6 16.3 U And I 184.50 7.7 -18.0 Forestry & Paper 17255.72 1.8 19.9
Bank Of America 8.1 15.74 -0.26 Glaxosmithkline 87.6 1631.50 -14.41 Intesa Sanpaolo 190.4 2.18 0.00 Nippon Suisan Kaisha, 163.6 449.00 12.00 Glencore 183.25 3.4 102.4 Card Factory 301.70 6.6 -17.7 Raven Russia Ltd 38.75 7.6 -4.3 Aerospace & Defense 4688.07 1.6 12.9
Emc 6.9 28.76 -0.02 Bt 83.9 395.00 2.29 Total 180.8 44.10 -0.17 Toshiba 150.6 340.80 6.50 Easyjet 1150.00 3.4 -33.9 Wh Smith 1612.00 6.0 -8.9 Hansard Global 125.00 7.2 13.9 Food Producers 8948.97 1.6 1.0
Procter & Gamble (the) 6.7 88.34 0.14 Vodafone 83.2 224.45 -2.48 Roche Gs 168.8 222.44 0.00 Familymart Co., 150.1 7090.00 -90.00 Hargreaves Lansdown 1350.00 3.3 -9.2 Kaz Minerals 185.00 6.0 80.9 Charles Taylor 300.00 7.1 15.4 Nonlife Insurance 2708.40 1.6 10.1
Bae Systems 550.00 3.3 11.2 Ted Baker 2775.00 5.9 -7.3 Carr's 160.00 6.4 3.2 Industrial Engineering 9657.77 1.5 34.8
BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's
Dixons Carphone 380.10 3.2 -24.0 Workspace 715.50 5.8 -25.4 Sanne 472.00 6.3 27.6 General Industrials 5344.09 1.5 21.4
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Spectra Energy 40.93 4.78 13.23 Redrow 418.50 31.22 8.12 Deutsche Wohnen Ag 28.23 1.12 4.15 Kyowa Hakko Kirin Co., 1590.00 79.00 5.23 Carnival 3440.00 -5.9 -11.0 Grafton 512.50 -15.7 -30.7 Carclo 128.00 -18.5 0.8 Mobile Telecommunications 5050.59 -2.7 -1.1
Eog Resources 94.78 5.87 6.60 Sports Direct Int 349.60 19.61 5.90 Rwe Ag 8.83 0.24 2.81 Konami 3745.00 135.00 3.74 Micro Focus Int 1961.00 -3.6 22.9 Mccarthy & Stone 186.10 -8.0 -26.7 Lindsell Train Investment Trust 740.00 -10.8 28.5 Oil & Gas Producers 7053.51 -1.9 24.4
Mallkrodt 76.65 4.23 5.84 Ascential 265.60 10.60 4.16 Pandora A/s 130.53 3.02 2.37 Sumitomo Osaka Cement Co., 470.00 16.00 3.52 Astrazeneca 4866.00 -2.7 5.4 Ibstock 165.90 -7.7 -24.9 Spirent Communications 80.00 -8.6 11.9 Oil Equipment & Services 14952.56 -1.6 15.0
Baidu 187.40 9.62 5.41 Thomas Cook 74.80 2.59 3.59 Publicise Sa 68.94 1.44 2.13 Shiseido , 2721.50 89.50 3.40 Vodafone 224.45 -2.6 1.6 Talktalk Telecom 199.20 -6.2 -8.4 Hunting 447.00 -6.5 46.3 Pharmaceuticals & Biotech. 14234.97 -1.4 10.2
The Goodyear Tire & Rubber 30.97 1.24 4.15 Berkeley Holdings (the) 2783.00 92.75 3.45 Delhaize Sa 94.30 1.88 2.03 Dena Co., 3215.00 105.00 3.38 Bhp Billiton 997.10 -2.4 33.6 Onesavings Bank 260.30 -5.9 -26.9 Soco Int 140.25 -6.5 -4.8 Construction & Materials 6252.05 -1.4 20.9
Coca-cola Hbc Ag 1654.00 -2.4 14.2 Cranswick 2260.00 -5.8 19.2 Premier Oil 67.50 -6.3 40.0 Technology Hardware & Equip. 1995.75 -0.9 57.0
Downs Downs Downs Downs
Travis Perkins 1662.00 -2.4 -15.8 Polymetal Int 1059.00 -5.0 81.2 Hss Hire 80.00 -5.9 11.1 Beverages 17042.96 -0.8 10.5
Centene 64.42 -4.21 -6.13 Grainger 227.20 -8.73 -3.70 Grifols Sa 14.99 -14.40 -48.99 Amada Co., 1037.00 -56.00 -5.12
Royal Dutch Shell 1862.00 -2.3 21.7 Allied Minds 335.40 -4.5 -16.2 Renold 40.38 -5.4 -27.5 Software & Computer Services 1992.13 -0.6 20.4
Cummins 119.05 -7.12 -5.64 Fisher (james) & Sons 1586.00 -51.10 -3.15 Bayerische Motoren Werke Ag 64.40 -4.15 -6.05 Mitsui O.s.k.lines, 249.00 -10.00 -3.86
Intu Properties 307.90 -2.1 -2.9 Redefine Int P.l.c. 41.25 -4.2 -15.8 Ite 166.50 -5.3 5.5 Chemicals 12135.85 -0.4 12.7
Ctrip.com Int 45.81 -2.09 -4.36 Sophos 248.70 -7.56 -2.94 Industrivarden Ab 16.14 -0.82 -4.81 Mitsubishi Logistics 1553.00 -45.00 -2.82
London Stock Exchange 2739.00 -2.1 -0.2 Ladbrokes 152.10 -4.0 27.1 Speedy Hire 36.00 -5.3 -13.8 Mining 11341.15 -0.3 54.3
Hess 51.22 -1.86 -3.50 Dfs Furniture 265.80 -6.80 -2.49 Svenska Handelsbanken Ab 11.40 -0.50 -4.18 Jfe Holdings,. 1616.50 -45.50 -2.74
Royal Dutch Shell 1938.50 -2.0 25.7 Inmarsat 773.00 -3.8 -31.9 Wanton 190.25 -4.9 -2.6 Electronic & Electrical Equip. 5053.03 -0.2 19.3
Discovery Communications 25.05 -0.84 -3.24 Ip 188.90 -4.40 -2.28 Vonovia Se 29.34 -0.93 -3.08 Inpex 858.80 -23.90 -2.71
Crh 2547.00 -1.6 29.0 Vectura 126.90 -3.7 -27.7 Baillie Gifford Shin Nippon 507.50 -4.6 10.7 Travel & Leisure 8632.73 0.1 -4.7
Based on the constituents of the S&P500 and the Nasdaq 100 index Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index
Based on last week's performance. †Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Sep 6 Currency Mid Change Mid Change Mid Change Sep 6 Currency Mid Change Mid Change Mid Change Sep 6 Currency Mid Change Mid Change Mid Change Sep 6 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 15.0050 0.0250 16.8641 0.1681 20.1518 0.2358 Indonesia Indonesian Rupiah 13126.5000 -26.0000 14752.8746 93.6861 17628.9425 142.6343 Poland Polish Zloty 3.8569 -0.0468 4.3348 -0.0161 5.1798 -0.0102 ..Three Month 0.7448 -0.0076 0.8367 -0.0015 - -
Australia Australian Dollar 1.3031 -0.0155 1.4646 -0.0051 1.7501 -0.0030 Israel Israeli Shekel 3.7531 -0.0122 4.2180 0.0215 5.0404 0.0345 Romania Romanian Leu 3.9589 -0.0323 4.4494 0.0009 5.3168 0.0104 ..One Year 0.7457 -0.0076 0.8361 -0.0015 - -
Bahrain Bahrainin Dinar 0.3770 - 0.4237 0.0035 0.5063 0.0051 Japan Japanese Yen 102.2300 -1.1700 114.8962 -0.3487 137.2952 -0.1756 Russia Russian Ruble 64.6157 -0.4294 72.6214 0.1253 86.7790 0.3014 United States United States Dollar - - 1.1239 0.0093 1.3430 0.0135
Bolivia Bolivian Boliviano 6.9350 -0.0100 7.7942 0.0537 9.3137 0.0803 ..One Month 102.2298 -1.1703 114.8961 -0.3487 137.2951 -0.1758 Saudi Arabia Saudi Riyal 3.7506 - 4.2152 0.0350 5.0370 0.0506 ..One Month - - 1.1237 -0.2056 1.3431 0.0135
Brazil Brazilian Real 3.2382 -0.0395 3.6394 -0.0138 4.3489 -0.0088 ..Three Month 102.2296 -1.1708 114.8961 -0.3487 137.2949 -0.1761 Singapore Singapore Dollar 1.3474 -0.0096 1.5143 0.0019 1.8096 0.0054 ..Three Month - - 1.1235 -0.2056 1.3432 0.0135
Canada Canadian Dollar 1.2842 -0.0083 1.4433 0.0027 1.7247 0.0063 ..One Year 102.2282 -1.1736 114.8961 -0.3489 137.2951 -0.1770 South Africa South African Rand 14.0525 -0.3296 15.7936 -0.2361 18.8725 -0.2486 ..One Year - - 1.1220 -0.2056 1.3441 0.0135
Chile Chilean Peso 666.0450 -7.8950 748.5670 -2.5754 894.5005 -1.5057 Kenya Kenyan Shilling 101.3500 0.1000 113.9071 1.0585 136.1134 1.5010 South Korea South Korean Won 1105.3000 0.1500 1242.2451 10.4958 1484.4213 15.1193 Venezuela Venezuelan Bolivar Fuerte 9.9850 0.0150 11.2221 0.1100 13.4099 0.1547
China Chinese Yuan 6.6803 0.0051 7.5080 0.0681 8.9717 0.0970 Kuwait Kuwaiti Dinar 0.3020 0.0002 0.3394 0.0030 0.4055 0.0043 Sweden Swedish Krona 8.4740 -0.1012 9.5240 -0.0335 11.3807 -0.0201 Vietnam Vietnamese Dong 22299.0000 -2.5000 25061.8401 205.5715 29947.6515 297.6402
Colombia Colombian Peso 2889.9500 -46.2500 3248.0113 -24.5420 3881.2116 -22.4796 Malaysia Malaysian Ringgit 4.0815 0.0125 4.5872 0.0521 5.4815 0.0717 Switzerland Swiss Franc 0.9724 -0.0081 1.0929 0.0001 1.3059 0.0024 European Union Euro 0.8898 -0.0075 - - 1.1950 0.0021
Costa Rica Costa Rican Colon 551.0200 0.0300 619.2906 5.1826 740.0215 7.4779 Mexico Mexican Peson 18.3470 -0.2076 20.6202 -0.0600 24.6401 -0.0284 Taiwan New Taiwan Dollar 31.4125 -0.0870 35.3045 0.1966 42.1871 0.3084 ..One Month 0.8896 -0.0075 - - 1.1949 0.0021
Czech Republic Czech Koruna 24.0431 -0.2003 27.0220 0.0014 32.2900 0.0582 New Zealand New Zealand Dollar 1.3501 -0.0183 1.5173 -0.0078 1.8131 -0.0061 Thailand Thai Baht 34.6800 -0.0300 38.9768 0.2906 46.5753 0.4282 ..Three Month 0.8893 -0.0075 - - 1.1948 0.0021
Denmark Danish Krone 6.6212 -0.0544 7.4416 0.0012 8.8923 0.0171 Nigeria Nigerian Naira 315.5000 0.7500 354.5900 3.7842 423.7174 5.2559 Tunisia Tunisian Dinar 2.1979 -0.0136 2.4702 0.0054 2.9518 0.0117 ..One Year 0.8878 -0.0074 - - 1.1942 0.0021
Egypt Egyptian Pound 8.8796 0.0003 9.9798 0.0833 11.9253 0.1203 Norway Norwegian Krone 8.1902 -0.1098 9.2050 -0.0458 10.9995 -0.0354 Turkey Turkish Lira 2.9304 -0.0164 3.2935 0.0090 3.9355 0.0177
Hong Kong Hong Kong Dollar 7.7556 0.0005 8.7165 0.0730 10.4157 0.1054 Pakistan Pakistani Rupee 104.5450 0.1900 117.4980 1.1887 140.4042 1.6638 United Arab Emirates UAE Dirham 3.6731 - 4.1282 0.0343 4.9330 0.0496
Hungary Hungarian Forint 275.4961 -2.3470 309.6296 -0.0415 369.9920 0.5984 Peru Peruvian Nuevo Sol 3.3773 -0.0177 3.7957 0.0118 4.5357 0.0221 United Kingdom Pound Sterling 0.7446 -0.0076 0.8369 -0.0015 - -
India Indian Rupee 66.5375 -0.3150 74.7814 0.2707 89.3601 0.4794 Philippines Philippine Peso 46.6000 0.0800 52.3737 0.5246 62.5839 0.7354 ..One Month 0.7447 -0.0076 0.8368 -0.0015 - -
Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata
UK SERIES
FTSE ACTUARIES SHARE INDICES www.ft.com/equities FT 30 INDEX FTSE SECTORS: LEADERS & LAGGARDS FTSE 100 SUMMARY
Produced in conjunction with the Institute and Faculty of Actuaries Sep 06 Sep 05 Sep 02 Sep 01 Aug 31 Yr Ago High Low Year to date percentage changes Closing Day's Closing Day's
£ Strlg Day's Euro £ Strlg £ Strlg Year Div P/E X/D Total FT 30 3030.10 3043.60 2989.50 2979.50 2990.50 0.00 3054.90 2508.90 Industrial Metals & 85.25 Industrials 13.28 Media 3.70 FTSE 100 Price Change FTSE 100 Price Change
Sep 06 chge% Index Sep 05 Sep 02 ago yield% Cover ratio adj Return FT 30 Div Yield 1.61 1.53 1.56 1.56 1.55 0.00 3.93 2.74 Tech Hardware & Eq 55.93 NON FINANCIALS Index 13.18 Household Goods & Ho 3.62 3I Group PLC 633.00 -7.50 Lloyds Banking Group PLC 58.08 -1.57
FTSE 100 (100) 6826.05 -0.78 6362.01 6879.42 6894.60 6074.52 3.71 0.68 39.68 200.35 5521.04 P/E Ratio net 27.73 29.18 28.56 28.60 28.74 0.00 19.44 14.26 Mining 54.02 Aerospace & Defense 12.66 FTSE 250 Index 3.37 Admiral Group PLC 2060 -18.00 London Stock Exchange Group PLC 2739 -6.00
FTSE 250 (250) 18003.44 -0.12 16779.56 18025.97 18016.45 16842.52 2.60 1.93 20.01 330.66 12778.78 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Basic Materials 45.64 Chemicals 12.22 Electricity 2.81 Anglo American PLC 826.80 12.80 Marks And Spencer Group PLC 347.30 -1.90
FTSE 250 ex Inv Co (207) 19418.67 -0.13 18098.57 19443.34 19437.21 18355.58 2.64 2.05 18.50 362.54 14058.10 FT 30 hourly changes Technology 39.14 Beverages 11.84 Food Producers 1.48 Antofagasta PLC 503.00 -4.00 Mediclinic International PLC 1017 -12.00
FTSE 350 (350) 3783.34 -0.67 3526.15 3808.77 3815.44 3396.33 3.53 0.83 34.07 104.05 6154.93 8 9 10 11 12 13 14 15 16 High Low Industrial Eng 36.09 Gas Water & Multi 11.50 Mobile Telecomms 0.62 Ashtead Group PLC 1258 -14.00 Merlin Entertainments PLC 486.20 -1.50
FTSE 350 ex Investment Trusts (307) 3756.41 -0.68 3501.04 3782.18 3789.14 3374.23 3.56 0.83 33.98 104.31 3147.44 3043.6 3033.7 3025.7 3028 3032.9 3030.2 3031.3 3028.3 3032.2 3046.7 3021.3 Oil & Gas Producers 25.35 Pharmace & Biotech 11.48 Financial Services -0.23 Associated British Foods PLC 3165 21.00 Micro Focus International PLC 1961 -17.00
FTSE 350 Higher Yield (126) 3530.79 -0.96 3290.77 3565.02 3567.27 3107.10 4.85 0.40 51.05 131.63 5956.69 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Oil & Gas 24.99 Health Care 11.11 Consumer Services -1.28 Astrazeneca PLC 4866 -37.00 Mondi PLC 1602 43.00
FTSE 350 Lower Yield (224) 3668.10 -0.33 3418.74 3680.22 3691.45 3362.72 2.01 2.02 24.65 60.72 3951.53 Tobacco 24.46 Nonlife Insurance 10.88 Financials -2.39 Aviva PLC 434.70 -3.00 Morrison (Wm) Supermarkets PLC 198.10 -0.80
FTSE SmallCap (276) 4926.40 -0.03 4591.50 4927.75 4901.58 4566.45 2.87 1.34 26.10 93.69 6893.88 Personal Goods 22.11 FTSE 100 Index 10.45 Leisure Goods -2.56
FTSE SmallCap ex Inv Co (143) 4402.56 -0.29 4103.27 4415.18 4397.80 4207.24 2.99 1.79 18.74 86.25 6471.56 FX: EFFECTIVE INDICES Industrial Transport 20.25 Food & Drug Retailer 10.37 Banks -3.22
Babcock International Group PLC 1080 -2.00 National Grid PLC 1072 -7.50
Bae Systems PLC 550.00 -5.50 Next PLC 5655 45.00
FTSE All-Share (626) 3726.47 -0.65 3473.15 3750.71 3756.40 3349.27 3.50 0.85 33.73 101.39 6130.79 Software & Comp Serv 20.17 Utilities 9.70 Travel & Leisure -4.19
Sep 05 Sep 02 Mnth Ago Sep 06 Sep 05 Mnth Ago Barclays PLC 169.70 -3.55 Old Mutual PLC 199.10 0.60
FTSE All-Share ex Inv Co (450) 3683.80 -0.67 3433.38 3708.81 3715.24 3313.25 3.55 0.84 33.48 101.72 3137.16 Construct & Material 18.15 FTSE All{HY-}Share Index 9.06 Telecommunications -5.83 Barratt Developments PLC 507.00 8.60 Paddy Power Betfair PLC 8960 -225.00
FTSE All-Share ex Multinationals (564) 1149.74 -0.33 888.14 1153.52 1156.66 1176.56 3.10 1.40 23.04 26.08 2005.97 Australia 91.51 91.31 91.60 Sweden 77.73 77.63 78.44 Electronic & Elec Eq 16.99 Support Services 8.13 Real Est Invest & Tr -6.90 Berkeley Group Holdings (The) PLC 2783 93.00 Pearson PLC 868.50 -11.50
FTSE Fledgling (103) 8255.86 -0.25 7694.63 8276.20 8269.10 7775.60 2.55 -0.01-6395.55 137.08 15145.47 Canada 90.27 89.65 89.39 Switzerland 158.74 158.67 159.93 Forestry & Paper 16.64 Equity Invest Instr 8.03 General Retailers -8.62 Bhp Billiton PLC 997.10 -6.90 Persimmon PLC 1870 32.00
FTSE Fledgling ex Inv Co (52) 10802.41 -0.64 10068.06 10871.76 10860.02 10995.81 2.77 -1.04 -34.85 181.04 19270.20 Denmark 107.56 107.70 107.58 UK 79.84 79.93 78.75 Oil Equipment & Serv 14.66 Health Care Eq & Srv 7.21 Life Insurance -8.91 BP PLC 427.65 -7.15 Provident Financial PLC 2988 -40.00
FTSE All-Small (379) 3416.06 -0.04 3183.83 3417.41 3400.13 3169.15 2.85 1.27 27.66 64.55 6137.08 Japan 148.63 147.51 152.19 USA 99.69 100.03 99.32 Consumer Goods 14.62 Automobiles & Parts 6.32 Fixed Line Telecomms -15.57 British American Tobacco PLC 4774 -29.50 Prudential PLC 1401 -1.00
FTSE All-Small ex Inv Co Index (195) 3281.13 -0.30 3058.08 3291.11 3278.62 3143.56 2.98 1.66 20.28 63.94 6110.22 New Zealand 118.43 118.38 115.72 Euro 88.77 89.01 88.70 FTSE SmallCap Index 5.76 Real Est Invest & Se -18.67 British Land Company PLC 664.00 -3.50 Randgold Resources LD 7610 20.00
FTSE AIM All-Share Index (817) 797.77 0.32 743.54 795.19 794.70 732.57 1.54 0.65 100.74 6.66 866.55 Norway 87.92 87.54 86.40
Bt Group PLC 395.00 2.35 Reckitt Benckiser Group PLC 7436 -29.00
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Bunzl PLC 2380 -9.00 RELX PLC 1455 -10.00
Oil & Gas (16) 7435.22 -1.67 6929.77 7561.55 7486.32 6074.59 6.25 -0.63 -25.31 352.53 6565.19 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Burberry Group PLC 1307 -9.00 Rio Tinto PLC 2323 -4.00
Oil & Gas Producers (9) 7092.40 -1.63 6610.26 7209.66 7138.56 5724.63 6.32 -0.66 -24.17 340.57 6479.82 Capita PLC 1044 -14.00 Rolls-Royce Holdings PLC 774.00 -9.00
Oil Equipment Services & Distribution (7)15378.76 -2.95 14333.31 15846.54 15649.20 17297.77 4.24 0.36 64.89 452.43 11672.93 FTSE GLOBAL EQUITY INDEX SERIES Carnival PLC 3440 -62.00 Royal Bank Of Scotland Group PLC 195.40 -1.70
Basic Materials (27) 4021.37 0.39 3748.00 4005.79 3993.78 3389.31 2.36 0.18 238.49 77.48 4036.62 Centrica PLC 236.50 - Royal Dutch Shell PLC 1938.5 -34.00
Chemicals (7) 12927.42 0.04 12048.60 12922.45 12921.18 11229.41 2.29 2.07 21.09 240.37 11347.80 Sep 06 No of US $ Day Mth YTD Total
YTD Gr Div Sep 06 No of US $ Day Mth YTD Total YTD Gr Div Coca-Cola Hbc AG 1654 -12.00 Royal Dutch Shell PLC 1862 -28.50
Forestry & Paper (1) 18829.16 2.76 17549.14 18323.75 18288.49 17254.18 2.87 3.44 10.16 539.50 20202.65 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Compass Group PLC 1460 -14.00 Royal Mail PLC 515.00 -5.50
Industrial Metals & Mining (2) 1401.32 1.26 1306.05 1383.85 1355.12 785.46 0.00 0.00 -7.72 0.00 1222.91 FTSE Global All Cap 7697 477.25 0.3 1.4 5.87.9 665.55
2.5 Oil & Gas 151 347.64 0.4 0.4 14.0 545.89 17.1 3.6 Crh PLC 2547 -33.00 Rsa Insurance Group PLC 505.00 -4.50
Mining (17) 10924.91 0.30 10182.23 10892.45 10856.09 9173.45 2.36 -0.27 -156.73 206.96 5742.87 FTSE Global All Cap 7079 462.39 0.3 7.3 -0.30.2 624.68
2.5 Oil & Gas Producers 110 324.24 0.4 0.4 13.6 518.67 16.9 3.7 Dcc PLC 6960 -45.00 Sabmiller PLC 4397.5 4.50
FTSE Global Large Cap 1424 419.01 0.3 1.3 5.17.3 598.60
2.6 Oil Equipment & Services 31 322.74 0.3 0.3 16.3 460.67 19.0 3.1 Diageo PLC 2107 -19.50 Sage Group PLC 732.50 -4.00
Industrials (115) 4929.08 -0.56 4594.00 4956.72 4944.99 4342.22 2.34 1.09 39.14 77.95 4985.26
Construction & Materials (15) 6361.67 -1.06 5929.20 6429.65 6349.49 5233.08 2.01 0.36 136.43 91.78 6615.70 FTSE Global Mid Cap 1638 645.91 0.3 1.6 7.39.0 857.02
2.1 Basic Materials 256 405.69 0.4 0.4 15.5 606.81 17.8 2.5 Direct Line Insurance Group PLC 378.60 -1.30 Sainsbury (J) PLC 244.60 -1.70
Aerospace & Defense (9) 4849.36 -0.94 4519.70 4895.34 4853.90 4456.60 2.43 -0.50 -82.24 75.54 5099.79 FTSE Global Small Cap 4635 680.58 0.3 1.5 8.5
10.0 875.57
2.0 Chemicals 125 620.02 0.1 0.1 4.8 931.60 7.1 2.7 Dixons Carphone PLC 380.10 4.00 Schroders PLC 2785 -39.00
General Industrials (5) 4352.27 -0.10 4056.40 4356.61 4355.13 3513.09 2.78 1.12 32.16 61.94 4815.42 FTSE All-World 3062 278.17 0.3 1.4 5.57.6 409.52
2.5 Forestry & Paper 16 216.20 0.3 0.3 10.3 358.15 13.7 3.6 Easyjet PLC 1150 19.00 Severn Trent PLC 2448 25.00
Electronic & Electrical Equipment (10) 6308.72 -0.22 5879.85 6322.52 6287.62 5359.74 1.98 1.80 28.02 75.89 5663.76 FTSE World 2537 492.21 0.2 1.2 5.37.3 972.71
2.5 Industrial Metals & Mining 62 332.11 1.5 1.5 29.1 495.38 30.8 2.2 Experian PLC 1524 -13.00 Shire PLC 4795 27.00
Industrial Engineering (12) 10402.94 -0.25 9695.74 10429.39 10404.64 8185.13 2.55 1.32 29.76 202.11 12475.68 FTSE Global All Cap ex UNITED KINGDOM In 7373 493.00 0.3 1.2 6.48.3 677.45
2.4 Mining 53 481.39 0.8 0.8 48.8 718.74 51.6 2.1 Fresnillo PLC 1694 21.00 Sky PLC 865.00 2.50
Industrial Transportation (8) 4709.23 -0.74 4389.10 4744.11 4732.91 4117.98 3.66 1.07 25.43 123.38 4076.15 FTSE Global All Cap ex USA 5761 435.22 0.6 2.8 4.36.9 647.32
3.0 Industrials 534 329.50 0.4 0.4 10.1 465.82 12.0 2.2 Gkn PLC 323.00 -4.00 Smith & Nephew PLC 1236 -2.00
Support Services (56) 7166.61 -0.42 6679.42 7197.06 7212.96 6484.29 2.22 1.77 25.38 110.85 7313.65 FTSE Global All Cap ex JAPAN 6434 487.89 0.2 1.2 6.38.4 686.80
2.5 Construction & Materials 112 476.89 0.6 0.6 13.8 705.98 15.8 2.0 Glaxosmithkline PLC 1631.5 -13.00 Smiths Group PLC 1372 1.00
FTSE Global All Cap ex Eurozone 7053 494.63 0.3 1.1 6.68.5 676.90
2.4 Aerospace & Defense 26 535.21 0.3 0.3 5.6 750.52 7.6 2.3 Glencore PLC 183.25 1.95 Sse PLC 1547 -11.00
Consumer Goods (39) 20716.90 -0.36 19308.56 20791.28 20975.96 16353.33 2.69 1.78 20.89 482.50 14979.31
FTSE Developed 2090 446.53 0.2 1.3 4.76.7 627.41
2.5 General Industrials 55 239.89 0.2 0.2 10.6 364.71 12.6 2.4 Hammerson PLC 590.50 2.00 St. James's Place PLC 972.00 -4.00
Automobiles & Parts (1) 7590.65 -1.22 7074.63 7684.65 7705.80 6333.38 2.71 1.29 28.70 205.63 7195.84
FTSE Developed All Cap 5664 470.06 0.2 1.3 5.17.0 652.93
2.4 Electronic & Electrical Equipment 69 337.30 0.4 0.4 6.6 439.21 8.3 1.9 Hargreaves Lansdown PLC 1350 -12.00 Standard Chartered PLC 639.00 -19.50
Beverages (6) 17072.63 -0.49 15912.03 17157.49 17254.85 12904.75 2.30 1.54 28.27 385.57 11900.24
FTSE Developed Large Cap 897 411.51 0.2 1.2 4.26.3 586.57
2.6 Industrial Engineering 103 615.21 0.6 0.6 14.8 856.85 16.9 2.4 Hikma Pharmaceuticals PLC 2201 1.00 Standard Life PLC 361.90 -6.10
Food Producers (8) 9004.36 -0.10 8392.24 9013.77 9049.71 8135.49 1.84 1.82 29.95 96.46 7627.00
FTSE Developed Europe Large Cap 222 324.95 -0.1 3.3 -1.51.8 529.16
3.6 Industrial Transportation 94 554.67 0.3 0.3 12.0 783.56 14.1 2.4 HSBC Holdings PLC 568.50 -13.10 Taylor Wimpey PLC 163.60 2.10
Household Goods & Home Construction (15)14235.52 0.52 13267.78 14161.20 14282.72 12972.37 2.26 2.51 17.62 250.41 9860.98
FTSE Developed Europe Mid Cap 306 511.90 0.1 3.9 -0.22.4 751.61
2.7 Support Services 75 296.40 0.4 0.4 7.4 401.25 8.8 1.9 Imperial Brands PLC 4035.5 -18.50 Tesco PLC 170.00 0.50
Leisure Goods (1) 5529.41 0.15 5153.52 5521.07 5337.59 5280.73 3.09 1.50 21.64 129.52 4793.08
FTSE Dev Europe Small Cap 703 720.14 0.2 4.3 -1.60.5 2.5 Consumer Goods
1025.24 423 442.72 0.2 0.2 6.3 640.85 8.2 2.4 Informa PLC 715.00 - Travis Perkins PLC 1662 -8.00
Personal Goods (6) 27130.40 -0.85 25286.06 27361.82 27465.40 20748.71 2.68 3.24 11.54 560.53 17908.77
FTSE North America Large Cap 291 465.43 0.0 0.0 6.68.3 622.44
2.2 Automobiles & Parts 103 365.26 0.6 0.6 -4.3 509.27 -2.3 2.9 Intercontinental Hotels Group PLC 3257 -26.00 Tui AG 1046 2.00
Tobacco (2) 56149.82 -0.57 52332.72 56469.55 57302.67 41220.31 3.37 1.17 25.42 1682.67 35359.90
FTSE North America Mid Cap 394 707.14 0.1 0.8 10.4
11.7 883.32
1.7 Beverages 48 600.79 -0.1 -0.1 5.1 881.36 6.8 2.5 International Consolidated Airlines Group S.A. 398.90 6.60 Unilever PLC 3616 -33.50
Health Care (19) 10439.25 -0.46 9729.58 10486.97 10542.89 9054.15 3.26 0.40 76.58 299.67 7855.93
FTSE North America Small Cap 1465 721.21 0.1 1.2 12.4
13.7 876.18
1.6 Food Producers 104 612.87 0.1 0.1 9.7 914.26 11.8 2.2 Intertek Group PLC 3541 -12.00 United Utilities Group PLC 1004 11.50
Health Care Equipment & Services (8) 7856.26 -0.48 7322.19 7893.79 7907.45 6792.60 1.40 2.03 35.16 64.89 6721.27
FTSE North America 685 312.61 0.0 0.1 7.38.9 428.16
2.1 Household Goods & Home Construction 47 433.07 -0.1 -0.1 7.9 623.20 9.8 2.3 Intu Properties PLC 307.90 2.30 Vodafone Group PLC 224.45 -2.65
Pharmaceuticals & Biotechnology (11)14127.24 -0.45 13166.87 14191.53 14272.28 12260.03 3.45 0.33 86.72 435.70 9466.17
FTSE Developed ex North America 1405 228.48 0.5 3.1 0.83.4 364.91
3.1 Leisure Goods 31 163.99 1.0 1.0 24.4 212.39 25.1 1.3 Itv PLC 206.60 -0.90 Whitbread PLC 4221 -23.00
Consumer Services (92) 4841.29 -0.10 4512.17 4846.28 4851.56 4750.12 2.56 1.97 19.85 91.09 4455.90 FTSE Japan Large Cap 176 329.34 0.9 4.2 0.51.7 417.08
2.3 Personal Goods 79 628.80 0.0 0.0 5.2 864.59 6.7 2.0
Food & Drug Retailers (7) 2872.24 0.27 2676.98 2864.55 2879.99 2915.01 1.52 2.30 28.49 30.18 3320.63 Johnson Matthey PLC 3302 -13.00 Wolseley PLC 4414 -11.00
FTSE Japan Mid Cap 306 499.73 1.0 2.4 1.72.7 610.14
1.9 Tobacco 11 1373.27 -0.4 -0.4 12.8 2745.40 15.4 3.5 Kingfisher PLC 373.80 1.40 Worldpay Group PLC 294.40 1.00
General Retailers (30) 2687.15 0.48 2504.48 2674.22 2687.68 3012.09 2.83 2.13 16.58 49.25 3002.20
FTSE Global wi JAPAN Small Cap 781 534.23 1.1 0.4 1.52.8 674.48
2.2 Health Care 176 450.45 0.1 0.1 -1.7 637.37 -0.2 2.0 Land Securities Group PLC 1085 -12.00 WPP PLC 1797 7.00
Media (21) 7815.02 -0.06 7283.75 7819.74 7791.27 7036.55 2.79 1.81 19.82 166.90 4718.41
FTSE Japan 482 137.35 1.0 3.9 0.71.9 195.37
2.2 Health Care Equipment & Services 63 708.80 0.0 0.0 9.1 817.78 9.8 1.0 Legal & General Group PLC 214.30 -1.30
Travel & Leisure (34) 8413.63 -0.55 7841.67 8459.77 8476.91 8139.73 2.52 1.97 20.12 161.36 7821.49
FTSE Asia Pacific Large Cap ex Japan 549 594.34 1.5 2.3 9.9
12.7 911.99
3.1 Pharmaceuticals & Biotechnology 113 329.90 0.1 0.1 -5.2 486.64 -3.4 2.4
Telecommunications (6) 3726.55 -0.55 3473.22 3747.05 3765.21 3873.92 4.58 -0.23 -93.21 115.66 4024.33 FTSE Asia Pacific Mid Cap ex Japan 420 818.34 1.2 1.6 9.6
12.0 1206.38
2.7 Consumer Services 389 399.51 0.2 0.2 2.5 525.95 3.9 1.8
Fixed Line Telecommunications (4) 4576.10 0.52 4265.01 4552.41 4564.32 4916.07 3.72 1.74 15.46 115.79 4068.19
Mobile Telecommunications (2) 5042.95 -1.13 4700.13 5100.83 5131.80 5150.06 5.07 -1.04 -18.89 172.86 4879.98
FTSE Asia Pacific Small Cap ex Japan
FTSE Asia Pacific Ex Japan
1443 525.40
969 471.57
0.9
1.5
0.2
2.2
5.2
9.8
7.4
12.6
763.15
2.6 Food & Drug Retailers
768.76
3.0 General Retailers
52 303.05
122 554.93
0.1
0.2
0.1
0.2
1.1 415.28
4.1 712.22
2.5
5.4
1.9
1.5
UK STOCK MARKET TRADING DATA
Utilities (7) 9237.70 -0.28 8609.72 9263.76 9214.54 7921.66 4.40 1.72 13.22 303.54 10186.37 FTSE Emerging All Cap 2033 652.90 0.9 1.9 14.3
17.2 954.69
2.9 Media 84 301.80 0.3 0.3 4.3 398.42 5.8 2.0 Sep 06 Sep 05 Sep 02 Sep 01 Aug 31 Yr Ago
Electricity (2) 9029.67 -0.65 8415.83 9088.90 9035.25 8444.83 5.49 1.47 12.42 484.22 12687.18 FTSE Emerging Large Cap 527 616.66 1.0 2.4 14.5
17.5 907.81
3.0 Travel & Leisure 131 376.41 0.3 0.3 -1.3 500.59 0.0 1.9 SEAQ Bargains 7939.00 5926.00 5926.00 5926.00 4259.00 5091.00
Gas Water & Multiutilities (5) 8778.85 -0.19 8182.06 8795.68 8750.21 7363.84 4.13 1.80 13.43 245.09 9675.69 FTSE Emerging Mid Cap 445 829.95 0.7 -0.5 16.9
19.6 1204.44
2.6 Telecommunication 91 168.42 0.4 0.4 6.9 305.26 10.2 4.0 Order Book Turnover (m) 159.92 144.23 144.23 144.23 152.19 132.45
Financials (288) 4400.04 -1.08 4100.93 4447.89 4463.14 4450.30 3.88 1.37 18.77 137.11 3972.66 FTSE Emerging Small Cap 1061 677.34 0.6 0.8 10.0
12.7 953.42
2.7 Fixed Line Telecommuniations 42 143.09 0.2 0.2 7.9 284.40 11.5 4.4 Order Book Bargains 718252.00 980493.00 980493.00 980493.00 974347.00 846245.00
Banks (11) 3546.84 -2.24 3305.72 3628.25 3648.63 3807.57 4.77 0.82 25.68 140.22 2553.01 FTSE Emerging Europe 112 309.67 1.1 3.1 15.9
19.8 469.72
4.0 Mobile Telecommunications 49 173.81 0.6 0.6 5.5 284.51 8.2 3.3 Order Book Shares Traded (m) 1345.00 2376.00 2376.00 2376.00 1697.00 1642.00
Nonlife Insurance (10) 3109.84 -0.71 2898.44 3132.17 3142.94 2618.66 2.70 2.30 16.10 71.38 5357.08 FTSE Latin America All Cap 236 804.25 -0.2 1.1 34.3
36.8 1209.24
3.0 Utilities 164 259.57 0.4 0.4 9.4 489.18 12.6 3.8 Total Equity Turnover (£m) 7158.78 7108.16 7108.16 7108.16 7613.54 7616.29
Life Insurance/Assurance (10) 7177.37 -0.39 6689.45 7205.17 7232.98 7334.52 4.17 1.35 17.71 251.73 6825.84 FTSE Middle East and Africa All Cap 218 692.86 1.1 -2.4 12.0
14.2 2.8 Electricity
1052.83 111 282.19 0.3 0.3 9.0 526.12 12.1 3.7 Total Mkt Bargains 824446.00 1088607.00 1088607.00 1088607.00 1082182.00 956403.00
Index- Real Estate Investment & Services (20) 2504.04 0.06 2333.81 2502.65 2508.58 3153.80 2.66 3.69 10.19 48.07 6556.52 FTSE Global wi UNITED KINGDOM All Cap In 324 324.42 -0.3 3.4 -1.41.6 3.5 Gas Water & Multiutilities
528.34 53 277.26 0.5 0.5 10.1 535.91 13.3 3.8 Total Shares Traded (m) 5199.00 6227.00 6227.00 6227.00 5359.00 4636.00
Real Estate Investment Trusts (28) 2735.75 -0.13 2549.77 2739.30 2750.05 2943.11 3.50 4.03 7.09 70.14 3317.21 FTSE Global wi USA All Cap 1936 537.26 0.0 0.1 7.28.7 2.0 Financials
698.44 691 201.48 0.3 0.3 0.4 321.09 3.0 3.2 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.
General Financial (33) 7971.72 -0.63 7429.79 8022.22 8065.37 7573.96 3.29 1.91 15.91 207.49 8896.87 FTSE Europe All Cap 1418 378.12 0.0 3.5 -0.82.2 3.4 Banks
595.58 247 173.93 0.3 0.3 -2.6 296.89 0.5 3.8 (c) Market closed.
Equity Investment Instruments (176) 8360.42 0.04 7792.07 8357.46 8325.56 7385.84 2.51 0.97 40.86 144.89 4481.43 FTSE Eurozone All Cap 644 354.53 -0.1 4.1 -1.21.8 3.3 Nonlife Insurance
564.40 68 218.91 0.1 0.1 2.1 311.29 4.3 2.5
Non Financials (338) 4481.27 -0.51 4176.63 4504.23 4508.32 3872.13 3.38 0.66 45.07 116.45 6454.81 FTSE RAFI All World 3000 3033 5765.65 0.4 2.6 6.38.8 3.1 Life Insurance
7434.65 51 186.17 0.5 0.5 -6.1 290.84 -3.3 3.3
Technology (17) 1988.59 -0.55 1853.40 1999.60 2005.79 1313.36 2.00 1.07 46.61 19.75 2519.89 FTSE RAFI US 1000 996 9558.53 0.0 0.5 8.1
10.0 2.4 Financial Services
12292.64 152 229.26 0.2 0.2 3.1 310.33 4.7 2.1 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Software & Computer Services (12) 2201.62 -0.64 2051.95 2215.83 2218.52 1618.20 1.92 1.43 36.53 39.30 2946.73 FTSE EDHEC-Risk Efficient All-World 3062 337.51 0.2 1.2 7.08.8 2.2 Technology
461.23 187 191.98 0.3 0.3 10.2 232.25 11.7 1.7 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Technology Hardware & Equipment (5) 2440.94 0.19 2275.00 2436.36 2481.35 1499.69 2.64 -1.01 -37.59 11.42 2822.95 FTSE EDHEC-Risk Efficient Developed Europe 528 280.81 0.0 3.1 0.62.9 2.6 Software & Computer Services
419.49 92 339.50 0.3 0.3 9.5 392.94 10.4 1.0 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Technology Hardware & Equipment 95 140.31 0.3 0.3 11.0 175.76 13.4 2.5 liable for any loss arising from the reliance on or use of the listed information.
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Alternative Energy 10 111.52 1.2 1.2 7.9 149.59 9.3 1.2 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 6885.97 6861.23 6864.61 6867.22 6862.40 6855.69 6854.97 6836.10 6827.32 6885.97 6819.08 Real Estate Investment & Services 102 300.62 1.4 1.4 6.3 489.87 8.5 2.5
FTSE 250 18056.59 18027.41 18058.96 18054.43 18036.26 18042.71 18025.32 18009.33 17984.82 18073.32 17966.75 The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/
mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC
Data provided by Morningstar | www.morningstar.co.uk
FTSE SmallCap 4931.32 4937.96 4946.23 4944.95 4943.32 4947.69 4944.66 4941.94 4932.58 4947.95 4926.40
FTSE All-Share 3754.77 3743.03 3745.78 3746.75 3743.98 3741.35 3740.38 3731.49 3726.57 3754.77 3723.15 (US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,
Time of FTSE 100 Day's high:07:03:00 Day's Low15:11:15 FTSE 100 2010/11 High: 6941.19(15/08/2016) Low: 5536.97(11/02/2016) WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
Time of FTSE All-Share Day's high:07:03:00 Day's Low15:12:00 FTSE 100 2010/11 High: 3773.93(15/08/2016) Low: 3046.53(11/02/2016) www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock Exchange
Group companies and is used by FTSE International Limited under licence.
Further information is available on http://www.ftse.com © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the
London Stock Exchange Group companies and is used by FTSE International Limited under licence. † Sector P/E ratios greater than 80 are not shown.
For changes to FTSE Fledgling Index constituents please refer to www.ftse.com/indexchanges. ‡ Values are negative.

UK RIGHTS OFFERS UK COMPANY RESULTS UK RECENT EQUITY ISSUES

Amount Latest Company Turnover Pre-tax EPS(p) Div(p) Pay day Total Issue Issue Stock Close Mkt
Issue paid renun. closing 1pm Pre 12.554 5.534 3.346 1.62 5.87 3.72 0.5 0.35 Oct 7 0.5 0.35 date price(p) Sector code Stock price(p) +/- High Low Cap (£m)
price up date High Low Stock Price p +or- Ashmore Group Pre 211.6 268.1 167.5 181.3 19.13 20.26 12.1 12.1 Dec 2 16.65 16.65 08/24 100.00 AIM LOOP LoopUp Group PLC 118.50 1.50 127.00 104.00 4832.9
There are currently no rights offers by any companies listed on the LSE. Craneware Pre 49.846 44.817 13.923 12.496 0.394 0.35 12.013 12.108 Dec 8 23.1 21.9 07/27 11.00 WDC WideCells Group PLC 13.50 -0.15 13.65 11.00 729.8
Curtis Banks Group Int 10.82 7.524 1.528 1.331 2.3 2.13 1 - Nov 15 4.481 -
Forbidden Technologies Int 0.327 0.327 1.313L 1.351L 0.97L 1.02L - - - - -
Gamma Communications Int 104.7 92.4 10.6 7.6 9.5 7 2.5 2.2 Oct 20 6.876 4.191
Harworth Group Int 17.405 4.171 7.386 51.332 0.3 2.73 0.23 - Dec 1 0.281 -
InterQuest Group Int 73.77 81.196 2.195L 2.02 6.7L 4.7 0.5 1 Nov 16 2.489 3
Johnson Service Group Int 137.6 109.2 10.4 1.2 2.4 0.2 0.8 0.65 Nov 4 2.242 1.85
Learning Technologies Group Int 12.785 8.39 0.065L 0.209 0.094 0.099 0.07 0.05 Oct 28 0.169 0.12
Mucklow (A & J) Group Pre 23.8 22.6 25.2 56.2 39.86 89.02 6.88 11.53 Jan 16 16.47 20.84
Redrow Pre 1382 1150 250 204 55.4 44.5 6 4 Nov 11 10 6
Stadium Group Int 24.335 25.126 0.709 0.67 1.7 2 0.95 0.9 Oct 21 2.74 2.296
Tasty Int 21.794 17.05 2.305L 1.327 4.95L 1.98 - - - - -

Figures in £m. Earnings shown basic. Figures in light text are for corresponding period year earlier. §Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/ir
For more information on dividend payments visit www.ft.com/marketsdata For a full explanation of all the other symbols please refer to London Share Service notes.
Wednesday 7 September 2016 FINANCIAL TIMES 17

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES

52 Week 52 Week 52 Week 52 Week 52 Week 52 Week
Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m
Australia (A$) Finland (€) Japan (¥) Sweden (SKr) AT&T 41.34 0.39 43.89 31.85 4.64 17.74 254323.68 Lilly (E)♦ 78.59 1.74 92.85 67.88 2.58 33.72 86751.06
ANZ 27.24 -0.01 29.17 21.86 8.89 13.08 61192.63 Nokia 5.09 -0.01 7.11 4.48 3.12-136.44 33383 AstellasPh 1580 -28.50 1804 1358 2.03 15.69 33288.09 AtlasCpcoB 223.40 -0.10 224.80 162.60 2.77 24.87 10287.28 AutomData 89.63 -0.76 96.00 75.73 2.33 27.45 40887.14 Lockheed♦ 243.72 0.40 266.93 199.01 2.42 23.08 73824.2
BHPBilltn♦ 20.56 0.22 25.77 14.06 9.57 28.29 50673.29 SampoA 38.49 0.74 47.67 34.42 4.72 14.60 23954.71 Bridgestne 3607 4.00 4620 3089 3.89 10.74 28688.84 Ericsson 58.95 -1.65 88.40 58.35 6.31 14.07 21352.34 Avago Tech 171.31 -1.80 179.42 111.53 0.941698.73 67756.29 Lowes 75.97 -0.99 83.65 62.62 1.58 24.07 67317.38
CmwBkAu♦ 71.76 -0.55 85.85 69.79 8.15 13.90 94450.62 France (€) Canon 3040 12.00 3862 2780 4.94 16.62 39661.95 H&M 268.70 3.00 339.90 234.50 3.40 25.36 46315.82 BakerHu 49.71 -0.08 58.23 37.58 1.37 -7.05 21268.84 Lyondell 78.91 -0.81 98.25 69.10 4.06 8.44 32804.61
CSL 103.39 -1.53 121.25 87.68 1.95 29.36 36218.88 Airbus Grpe 54.40 0.54 68.50 48.07 2.37 14.65 47241.63 CntJpRwy 17120 -25.00 22935 16305 0.73 9.71 34497.9 Investor 305.60 0.10 331.70 256.80 3.29 -16.09 16426.14 BankAm 15.74 -0.26 18.09 10.99 1.19 13.26 160623.53 Marathon Ptl♦ 42.76 0.44 59.99 29.24 3.01 11.73 22609.77
NatAusBk 27.70 0.08 32.76 23.82 9.56 12.59 56477.45 AirLiquide 98.60 -0.10 123.65 88.25 2.62 19.94 38297.64 Denso 4312 -3.00 6047 3317 2.79 15.79 33493.34 Nordea Bk 84.45 -0.95 101.80 66.30 6.84 11.28 40360.69 Baxter♦ 45.80 -0.48 49.49 32.18 1.04 5.26 24910.06 Marsh&M 68.20 -0.10 68.69 50.81 2.08 24.33 35343.79
Telstra♦ 5.12 -0.03 5.86 4.98 8.43 17.05 48035.7 AXA 19.18 -0.15 26.02 16.11 5.70 7.96 52258.43 EastJpRwy 9093 8.00 12350 8388 1.43 14.45 34636.47 SEB 84.40 - 100.50 67.75 5.04 11.75 21613 BB & T 37.93 -0.56 39.47 29.95 2.89 14.58 30893.99 MasterCard 98.38 0.49 101.76 78.52 0.75 28.72 105999.59
Wesfarmers 42.58 -0.02 44.56 36.65 5.80 22.52 36797.38 BNP Parib 46.72 -0.66 58.17 35.27 4.91 8.79 65445.86 Fanuc 17355 -80.00 22790 15300 2.83 24.31 34644.25 SvnskaHn 113.80 -0.70 130.10 90.25 3.97 13.48 25535.2 BectonDick 177.54 0.22 178.79 128.87 1.46 33.73 37802.85 McDonald's♦ 117.15 1.32 131.96 94.31 3.02 22.34 99967.09
Westpc 29.59 -0.08 33.74 27.57 8.43 13.01 75982.72 ChristianDior 159.25 0.85 187.50 133.75 1.77 21.16 32525.66 FastRetail 36860 -260.00 50700 25305 0.83 90.92 38245.87 Swedbank 195.90 -2.30 200.20 150.80 5.49 11.84 26169.3 BerkshHat 224720-1330.00 226490 186900 - 16.13 177280.26 McKesson♦ 184.49 1.51 208.03 148.29 0.61 17.97 41639.75
Woolworths 24.12 0.07 28.03 20.30 7.11-328.46 23669.45 Cred Agr 8.54 -0.15 12.07 6.79 6.98 6.75 26954.36 Fuji Hvy Ind 4162 27.00 5223 3252 2.94 8.75 31314.78 Telia Co 38.72 -0.14 48.38 35.56 3.89 15.79 19785.2 Biogen 313.38 -0.21 333.65 223.02 - 20.60 68668.06 Medtronic 87.05 -0.27 89.27 63.98 1.60 38.29 121306.33
Belgium (€) Danone 69.26 -0.79 70.53 52.88 1.91 37.45 51055.43 Hitachi 503.90 2.60 754.60 400.00 2.38 10.63 23824.53 Volvo 95.35 -0.30 99.85 72.20 3.07 13.62 18261.3 BkNYMeln 41.29 -0.36 44.73 32.20 1.54 15.97 44084.28 Merck 63.44 0.46 64.00 47.97 2.68 41.65 175424.81
AnBshInBv 113.35 -0.15 124.20 92.73 3.13 53.50 204880.24 EDF 11.90 -0.01 18.32 9.13 13.61 199.65 26914.69 HondaMtr 3179 2.00 4142 2417 2.77 17.18 56329.17 Switzerland (SFr) BlackRock 371.37 -2.48 376.65 280.55 2.42 19.70 60413.33 Metlife 42.87 -0.39 52.45 35.00 3.57 11.20 47108.66
KBC Grp 53.87 -0.68 59.89 39.35 3.52 16.15 25312.84 Engie SA 14.76 0.04 16.83 12.34 6.73 -7.66 40398.31 JapanTob 4107 7.00 4850 3551 3.12 16.94 80348.24 ABB 21.93 0.10 22.00 15.94 - 28.40 49947.89 Boeing 132.71 1.55 150.59 102.10 3.03 24.06 82787.94 Microsoft♦ 57.49 -0.19 58.70 42.20 2.43 27.25 447952.76
Esslr Intl 117.00 0.40 125.15 102.10 0.94 32.55 28678.85 KDDI 3166 39.00 3446 2519 1.74 18.86 81155.08 CredSuisse 12.79 -0.27 26.55 9.76 5.10 -5.39 27488.46 BrisMySq 56.97 0.62 77.12 55.11 2.66 33.16 95196.83 Mnstr Bvrg 152.14 -1.72 166.50 113.08 - 45.23 28963.7
Brazil (R$)
Hermes Intl 389.90 2.75 399.00 281.20 0.67 47.84 46261.37 Keyence 71660 600.00 75820 50500 0.16 - 42620.23 Nestle 79.20 0.10 79.45 70.20 2.46 30.95 253479.08 CapOne 70.81 -0.83 81.62 58.03 2.11 11.04 35835.28 MondelezInt 44.18 -0.01 47.42 35.88 1.55 9.48 68723.54
Ambev 19.92 0.04 20.46 15.99 2.19 26.51 96688.01
LOreal 173.75 - 177.90 142.35 1.77 34.17 109312.54 MitsbCp 2200.5 -19.00 2300 1565 2.27 -28.78 34226.39 Novartis 77.90 -0.05 96.15 67.00 3.16 30.84 210460.98 CardinalHlth 80.34 0.61 91.23 73.25 2.01 18.51 25595.44 Monsanto 107.61 0.17 114.26 81.22 1.84 35.45 47088.99
Bradesco 30.34 0.21 32.00 16.27 3.55 9.83 26016.96
LVMH 156.15 0.70 174.30 130.55 2.26 21.42 89105.85 MitsubEst 1950 -7.50 2707.5 1724 0.82 30.88 26526.83 Richemont 59.80 0.55 86.75 56.65 2.53 19.36 32101.61 Carnival♦ 46.00 -0.40 55.77 40.52 2.41 20.05 25338.25 MorganStly 31.62 -0.27 35.74 21.16 1.91 14.44 60451.4
Cielo 32.79 0.04 37.78 23.36 1.46 19.67 22925.39
Orange 13.60 -0.07 16.98 12.38 3.89 20.58 40644.07 MitsubishiEle 1328 -9.50 1409.5 947.00 2.04 12.65 27892.84 Roche 243.60 0.50 281.40 229.90 3.33 23.05 176001.93 Caterpillar 82.11 0.42 84.73 56.36 3.77 52.39 47971.22 MylanNV 40.69 0.72 55.51 37.59 - 27.22 21765.55
ItauHldFin 31.86 -0.05 32.35 21.49 2.34 7.21 29979.22
PernodRic 106.90 0.05 110.25 88.00 1.48 33.62 31889.01 MitsuiFud 2280 9.00 3536 2031.5 1.23 19.33 22111.4 Swiss Re 85.25 0.30 99.75 80.70 5.45 7.67 31567.45 CBS 51.48 -0.74 58.22 38.51 1.09 17.71 20945.92 Netflix 99.55 2.17 133.27 79.95 - 309.65 42679.61
Petrobras 15.84 -0.24 16.14 5.67 - -5.87 36405.58
Renault 74.54 -0.41 98.14 59.59 2.24 8.23 24774.25 MitUFJFin 567.20 0.10 841.80 425.80 2.70 11.60 78612.63 Swisscom 478.00 0.70 528.50 445.00 4.62 18.08 25464.14 Celgene 107.08 1.59 128.39 93.05 - 44.78 82999.28 NextEraE 125.12 1.99 131.98 93.74 2.63 22.28 57802.05
Vale 17.97 0.07 22.19 8.60 1.76 -3.65 17853.4
Safran 64.61 0.01 72.45 48.87 1.69 -71.92 30282.64 Mizuho Fin 183.70 1.60 263.20 142.00 4.09 5.65 45617.42 Syngent 429.60 -3.10 433.30 288.50 2.59 34.22 40900.42 CharlesSch 30.53 -0.74 34.52 21.51 0.82 26.20 40391.31 Nike♦ 57.44 -0.58 68.20 51.48 1.00 28.82 77451.27
Canada (C$) Murata Mfg 13510 -95.00 19820 10365 1.56 14.67 29769.26 Charter Communications 272.56 0.77 279.95 156.13 - 14.81 73844.09 NorfolkS 94.99 0.83 98.75 64.51 2.50 17.71 27884.29
Sanofi 70.08 0.09 93.82 62.50 4.15 22.23 101518.15 UBS 14.14 -0.20 20.54 13.64 - 11.37 55988.21
BCE 61.74 -0.12 63.41 52.38 4.29 19.67 41812.16 NipponTT 4753 70.00 5419 4005 2.32 12.63 97468.09 ChevrnTx♦ 102.08 1.15 107.58 74.31 4.21-260.54 192576.01 Northrop♦ 214.29 1.05 224.12 161.05 1.40 20.83 38266.77
Sant Gbn 39.50 -0.24 42.46 31.47 1.38 67.96 24634.33 Zurich Fin 255.80 0.20 272.90 194.70 - 28.11 39598.69
BkMontrl 86.41 -0.61 87.92 68.65 3.61 13.82 43390.55 Nissan Mt 1055 15.50 1321.5 893.10 3.99 8.66 45311.61 Chubb 127.68 -0.13 131.00 99.55 2.12 20.37 59381.35 NXP 87.03 -1.13 98.09 61.61 - 21.08 30110.9
Schneider 62.03 -0.61 63.07 45.32 2.73 28.63 41252.3 Taiwan (NT$)
BkNvaS 70.26 -0.23 70.80 51.17 4.03 12.48 65917.52 Nomura 485.40 3.00 809.00 338.80 2.68 16.39 18149.99 Cigna 127.53 -0.66 148.99 121.87 0.03 16.46 32719.11 Occid Pet 77.97 0.46 78.48 58.22 3.87 -6.90 59563.33
SFR Group 25.30 -0.24 46.48 19.51 - -35.33 12528.73 Chunghwa Telecom 114.50 - 125.50 96.00 4.15 21.01 28276.28
Brookfield♦ 43.99 -0.64 46.52 37.11 1.47 26.43 33818.03 Nppn Stl 2186.5 -28.50 2608 1773.5 2.06 34.89 20325.52 Cisco 31.76 -0.07 31.95 22.46 2.57 17.15 159743.65 Oracle 41.16 -0.09 42.00 33.13 1.35 21.55 169691.57
SocGen 32.16 -0.64 45.90 25.00 3.54 7.46 29192.2 Formosa PetChem 93.70 -0.50 100.50 71.20 4.18 15.79 28414.89
CanadPcR 201.48 0.51 204.40 140.02 0.76 20.72 23165.66 NTTDCMo 2664.5 6.00 2946 1961 2.63 17.40 103174.59 Citigroup 46.86 -0.65 56.46 34.52 0.43 9.80 136145.83 Pepsico 107.70 -0.17 110.94 90.43 2.44 32.93 154997.3
Total 44.10 -0.18 47.40 35.21 5.14 31.76 124050.86 HonHaiPrc♦ 79.70 -0.10 90.10 72.50 4.04 10.31 43966.65
CanImp 103.75 -0.28 104.97 82.19 4.47 10.11 31904.5 Panasonic 1066.5 1.50 1466 799.00 1.45 16.00 25591.14 CME Grp 107.19 -1.32 109.65 81.87 2.06 26.94 36321.54 Perrigo 94.33 3.58 184.77 82.50 0.45 109.69 13515.68
UnibailR 249.25 0.75 257.85 212.05 3.86 9.80 27821.86 MediaTek 253.50 -1.00 307.00 192.00 8.49 17.46 12682.75
CanNatRs 41.44 0.08 42.35 21.27 2.21-106.96 35545.44 Seven & I 4522 34.00 5868 4051 1.45 29.07 39210.51 Coca-Cola 43.66 -0.01 47.13 37.84 3.13 24.97 188416.27 Pfizer 34.87 0.10 37.39 28.25 3.34 30.72 211509.3
Vinci 69.03 0.21 69.80 55.38 2.65 18.08 46180.46 TaiwanSem 178.00 -1.00 182.00 122.00 3.30 16.75 146935.28
CanNatRy 84.27 -0.82 85.61 66.62 1.62 18.73 50691.76 ShnEtsuCh 7396 25.00 7639 5160 1.49 20.11 31261.48 Cognizant 58.34 -0.02 69.80 51.22 - 22.75 35409.05 Phillips66 79.21 0.34 94.12 71.74 2.93 13.71 41414.9
Vivendi 17.95 -0.06 22.73 14.87 15.83 16.33 25956.16
Enbridge 55.15 1.90 57.84 40.03 3.58 39.65 40120.7 Softbank 6898 -40.00 7012 4133 0.58 17.54 81014.92 Thailand (THB) ColgtPlm 75.05 0.16 75.38 61.31 2.05 47.89 66906.56 PhilMorris 101.84 0.07 104.20 77.00 4.02 24.25 157987.14
GtWesLif♦ 31.16 -0.30 37.10 30.83 4.28 11.59 24090.96 Germany (€) PTT Explor♦ 333.00 - 357.00 197.00 2.77 51.14 27426.42
Sony 3435 34.00 3568 2199 0.49 34.40 42425.55 Comcast 65.96 -0.20 68.36 52.34 1.45 21.39 158452.9 PNCFin 89.20 -1.34 97.50 77.40 2.30 12.25 43833.69
ImpOil♦ 40.46 -0.41 46.27 37.25 1.40 116.37 26704.45 Allianz 134.70 -0.80 170.00 118.35 4.48 10.51 69184.84
SumitomoF 3716 47.00 5220 2766.5 4.04 6.68 51400.09 United Arab Emirates (Dhs) ConocPhil 40.98 0.06 57.24 31.05 4.85 -7.17 50753.94 PPG Inds♦ 107.83 0.79 117.00 82.93 1.38 19.84 28689.62
Manulife 17.70 -0.11 22.65 15.32 3.98 14.14 27192.6 BASF 73.05 -0.17 79.20 56.01 3.63 16.91 75407.83
Takeda Ph 4734 -22.00 6250 4098 3.81 23.96 36599.43 Emirtestele 19.80 0.10 20.20 13.00 4.02 19.43 46880.2 Corning 22.80 0.03 23.13 16.13 2.03 69.72 23640.8 Praxair♦ 122.29 -1.15 125.00 95.60 2.41 22.17 34880.98
Potash 22.74 -0.62 34.27 19.93 7.89 21.76 14864.27 Bayer 95.92 1.68 127.25 83.45 2.59 18.16 89148.57
TokioMarine 4202 47.00 5030 3063 2.22 14.67 31136.82 United Kingdom (p) Costco 156.92 -1.06 169.73 138.18 0.97 32.15 68741.69 Priceline 1431.98 9.13 1476.52 954.02 - 30.31 70778.41
RylBkC 81.24 -0.26 83.00 64.52 3.92 11.87 93948.2 BMW 77.55 -0.69 104.85 63.38 3.54 8.28 52468.9
Toyota 6235 -29.00 7862 4917 3.37 8.78 203584.2 AscBrFd 3165 21.00 3606 1910 1.07 44.35 33650.93 CrownCstl 97.57 1.51 102.82 75.71 3.58 97.12 32936.07 ProctGmbl 88.34 0.14 88.87 67.33 2.80 29.82 235813.56
Suncor En♦ 35.41 -0.22 40.35 27.32 3.25 -18.28 45895.11 Continental 193.40 1.00 231.90 162.05 1.93 13.35 43473.7
Mexico (Mex$) AstraZen♦ 4866 -37.00 5505 3680 4.15 37.17 82667.35 CSX♦ 28.16 0.02 30.53 21.33 2.39 15.70 26639.11 Prudntl♦ 78.24 -1.25 88.77 57.19 3.44 8.00 34190.88
ThmReut♦ 54.52 -0.53 57.66 47.56 3.19 25.61 31640.07 Daimler 63.29 0.51 85.50 50.83 5.10 8.55 76099.19
AmerMvl 10.91 -0.04 15.36 10.40 2.38 25.39 26320.75 Aviva 434.70 -3.00 522.50 290.00 4.78 36.23 23691.9 CVS 93.34 -0.50 106.67 86.50 1.67 21.46 99520.51 PublStor 221.51 -5.28 277.60 198.56 2.87 38.05 38410.14
TntoDom 58.45 -0.32 59.10 48.52 3.34 14.17 84453.93 Deut Bank 12.90 -0.35 27.98 11.06 - -2.21 19997.1
FEMSA UBD 171.59 -1.75 183.00 28.35 1.28 39.24 - Barclays♦ 169.70 -3.55 266.41 121.10 3.24 -36.89 38555.61 Danaher 79.75 -1.44 82.64 61.58 0.74 20.20 55067.4 Qualcomm♦ 62.99 -0.36 63.70 42.24 3.14 18.28 92825.11
TrnCan♦ 59.60 -1.06 62.44 40.58 3.62 -29.70 37121.33 Deut Tlkm 15.04 -0.01 17.57 13.54 3.15 13.01 79055.69
WalMrtMex 42.94 -0.19 47.44 38.98 1.30 27.62 40867.37 BP 427.65 -7.15 464.40 249.44 7.03 -20.02 107885.77 Deere 84.50 0.45 88.63 70.16 2.60 18.47 26568.74 Raytheon 141.38 1.25 143.39 102.58 1.99 19.76 41720.53
ValeantPh 38.01 0.67 325.49 24.32 - -10.02 10153.08 DeutsPost 28.81 -0.01 28.98 19.55 2.93 19.21 39261.57
BrAmTob♦ 4774 -29.50 5135 3354.6 3.23 20.61 119532.34 Delphi 70.64 0.47 88.89 55.59 1.38 17.58 19268.1 Regen Pharm 400.23 11.59 592.59 329.09 - 62.15 41376.86
E.ON 8.41 0.07 10.24 7.08 5.91 -2.36 18908.93 Netherlands (€)
China (HK$) BSkyB 865.00 2.50 1134 560.00 3.79 24.03 19969.59 Delta 36.80 -0.37 52.77 32.60 1.47 5.97 27559.8 ReynoldsAm 50.69 - 54.48 41.39 3.09 14.33 72351.93
Fresenius Med 80.79 0.72 85.65 67.88 0.99 25.04 27813.25 Altice 15.30 -0.15 27.41 9.98 - -13.92 14466.23
AgricBkCh 3.36 0.03 3.36 2.50 5.82 - 13317.29 BT 395.00 2.35 502.60 359.60 3.27 13.39 52806.25 Devon Energy 44.07 -0.20 48.68 18.07 1.78 -1.51 23075.05 S&P Global 125.68 0.25 126.00 78.55 1.00 31.95 33279.67
Fresenius SE 70.43 4.26 70.43 52.39 0.78 26.46 43198.65 ASML Hld 96.06 -0.04 100.50 70.54 0.69 37.00 46783.42
Bk China 3.70 0.05 3.88 2.83 5.84 6.00 39894.52 Compass 1460 -14.00 1521 1000.67 2.01 26.55 32213.91 DiscFinServ 59.54 -0.48 60.29 42.86 1.76 12.25 24031.96 Salesforce 75.34 0.24 84.48 52.60 - -4109.76 51607.9
HenkelKgaA 101.05 -0.45 102.15 75.76 1.42 21.93 29505 Heineken 80.69 -0.39 86.95 68.13 1.29 27.76 52236.17
BkofComm 6.27 - 6.30 4.24 4.90 6.22 28305.34 Diageo 2107 -19.50 2218 1695.5 2.73 23.65 71263.44 Disney 93.46 -0.96 120.65 86.25 1.37 18.42 150199.68 Schlmbrg♦ 78.58 0.03 83.97 59.60 2.56 -61.11 109280.7
Linde 153.05 -2.65 169.70 113.50 1.95 25.97 31948.46 ING 11.30 -0.14 13.88 8.30 2.81 9.30 49250.39
BOE Tech 1.77 -0.10 2.65 1.55 1.03 32.87 45.41 GlaxoSmh 1631.5 -13.00 1716.5 1227.5 4.90-16315.00 106828.18 DominRes♦ 75.48 0.73 78.97 64.54 3.59 23.41 47234.16 Sempra Energy 105.54 1.24 114.66 86.72 2.77 27.72 26364.04
MuenchRkv 163.65 -0.90 193.65 140.90 4.49 10.36 29622 Unilever♦ 42.35 -0.34 43.11 33.57 2.88 24.65 81616.07
Ch Coms Cons 8.59 0.09 11.06 5.77 2.24 7.90 4903.85 Glencore 183.25 1.95 200.97 66.67 2.45 -7.25 35426.18 DowChem 54.01 -0.17 57.10 39.84 3.04 11.29 60860.1 Shrwin-Will 285.88 -0.55 312.48 218.27 1.06 24.01 26364.16
SAP 80.36 -0.34 80.89 55.51 1.42 27.15 110954.19 Norway (Kr)
Ch Evrbrght 3.79 0.09 4.00 3.07 5.90 5.30 3356.61 HSBC♦ 568.50 -13.10 588.30 392.37 6.79 15.83 151844.96 DukeEner♦ 80.98 0.74 87.31 65.50 4.09 21.21 55789.84 SimonProp 216.97 0.28 229.10 173.79 2.94 38.36 68177.1
Siemens 107.95 -0.05 109.00 77.91 2.69 19.46 103126.12 DNB 101.30 -0.50 123.40 90.10 4.37 7.46 20145.7
Ch Rail Cons 9.31 -0.04 12.64 6.72 - 8.18 2492.45 Imperial Brands♦ 4035.5 -18.50 4154 3135 3.49 34.21 51959.14 DuPont♦ 69.77 -0.32 75.72 47.11 2.19 28.12 61001.66 SouthCpr 26.22 0.12 31.31 21.55 0.96 34.22 20286.91
Volkswgn 131.35 -0.15 172.15 95.00 0.08 -17.92 43562.36 Statoil♦ 133.10 -1.90 150.20 97.25 5.31-196.37 52116.5
Ch Rail Gp 5.71 0.01 7.81 4.21 1.56 9.67 3097.69 LlydsBkg 58.08 -1.57 78.02 47.10 3.87 27.66 55672.94 Eaton 66.62 -0.93 68.20 46.19 3.38 16.37 30289.84 Starbucks 56.00 -0.18 64.00 52.63 1.36 31.32 82129.6
ChConstBk 6.07 0.08 6.08 4.31 5.29 5.69 188167.42 Hong Kong (HK$) Telenor 145.40 -1.20 173.40 116.80 5.07 152.45 26655.26 eBay 32.61 0.33 32.64 21.52 - 21.28 36811.66 StateSt 70.14 -0.49 75.40 50.60 1.81 17.18 27353.8
Natl Grid 1072 -7.50 1148 824.00 4.03 15.60 54200.37
China Vanke 20.20 0.20 24.10 14.56 4.17 10.25 3424.92 AIA 50.40 - 51.00 36.85 1.27 33.54 78304.62 Qatar (QR) Ecolab 123.97 -0.08 124.60 98.62 1.12 38.68 36149.07 Stryker 116.36 0.76 123.55 86.68 1.28 27.32 43516.44
Prudential♦ 1401 -1.00 1578.5 1045.99 2.77 19.59 48526.97
ChinaCitic 5.22 0.03 5.35 4.00 4.78 5.06 10016.74 BOC Hold 28.35 0.20 28.35 18.82 3.60 13.71 38648.27 QatarNtBk 159.40 -0.60 169.80 122.50 2.03 12.66 36757.78 EMC 28.76 -0.02 29.00 22.99 1.61 26.75 56268.99 Sychrony Fin 27.70 -0.10 34.60 23.25 - 10.52 23096.9
RBS 195.40 -1.70 336.00 148.40 - -4.53 30849.19
ChinaLife 19.36 0.04 31.15 16.00 2.32 17.81 18575.26 Ch OSLnd&Inv 27.00 0.10 28.25 20.45 1.86 8.20 34328.43 Emerson♦ 52.70 -0.21 56.82 41.25 3.61 18.60 33914.42 Target♦ 70.00 -0.81 84.14 65.50 2.88 14.52 40240.53
Russia (RUB) ReckittB♦ 7436 -29.00 7786 5621 1.87 34.30 70166.09
ChinaMBank 20.15 0.17 21.95 12.72 4.04 7.22 11927.8 ChngKng 56.25 0.25 65.85 38.20 2.50 11.50 27890.9 EOG Res 94.78 5.87 94.89 57.15 0.71 -10.05 52189.99 TE Connect♦ 62.84 -0.80 67.99 51.70 2.17 14.31 22472.6
Gzprm neft 140.77 4.72 170.43 122.75 4.62 4.66 51574.4 RELX 1455 -10.00 1473 631.02 2.04 28.03 39039.18
ChinaMob 95.50 -0.55 99.30 79.00 2.69 16.56 252130.18 Citic Ltd 12.16 0.06 14.80 10.02 2.25 8.49 45610.91 EquityResTP 64.49 -0.10 82.39 63.11 3.29 5.61 23574.71 Tesla Mtrs 202.98 5.20 271.57 141.05 - -23.85 30181.62
Lukoil 3062 9.00 3090 2040.1 4.69 10.58 40306.41 RioTinto♦ 2323 -4.00 2621 1557 6.73 796.37 42887.92
ChinaPcIns 28.85 0.20 34.25 23.70 1.89 13.53 10323.89 Citic Secs 17.88 0.14 20.45 12.82 1.79 10.67 5252.57 Exelon 34.43 0.36 37.70 25.09 3.37 19.09 31774.5 TexasInstr 69.40 -0.28 72.58 45.33 2.14 23.34 69622.76
MmcNrlskNckl 9864 154.00 11284 7840 14.80 13.75 24157.2 RollsRoyce 774.00 -9.00 875.50 497.00 2.11 -6.93 19113.51
ChMinsheng 8.53 0.02 8.60 6.13 2.46 5.95 7625.97 CK Hutchison 102.20 -1.00 111.80 80.60 3.32 9.46 50861.54 ExpScripts 72.56 0.02 89.20 65.55 - 20.60 45728.69 TheTrvelers 118.97 0.13 119.32 97.18 2.11 11.44 34296.83
Novatek 678.20 0.30 710.00 535.10 2.02 12.34 31868.79 RylDShlA♦ 1862 -28.50 2127.4 1256 7.56 -30.73 108176.56
ChMrchSecs RMB 17.92 0.13 24.95 13.45 4.23 17.62 12884.36 CNOOC 9.70 0.08 10.20 6.41 5.07-165.41 55841.47 ExxonMb♦ 88.37 0.95 95.55 71.55 3.34 34.91 366439.47 ThrmoFshr 150.92 -0.26 160.68 117.10 0.37 32.44 59502.15
Rosneft 357.50 3.90 358.30 228.30 3.34 13.91 58636.75 SABMill 4397.5 4.50 4590.8 2901.5 1.82 38.08 95919.47
Chna Utd Coms RMB 4.28 0.04 7.27 3.75 1.35 55.60 13580.45 HangSeng♦ 137.60 0.20 149.40 121.10 4.16 17.30 33920.16 Facebook 128.89 2.38 128.99 85.72 - 84.63 299415.21 TimeWrnr♦ 78.05 -0.48 81.33 55.53 1.74 16.91 60710.59
Sberbank 150.69 1.19 150.81 72.67 0.26 18.60 50342.92 Shire 4795 27.00 5562.83 2707.19 0.38 30.65 58087.69
ChShenEgy 14.76 0.28 15.52 10.12 2.54 18.00 6468.01 HK Exc&Clr 198.10 3.70 219.40 160.10 3.02 34.79 31096.02 Fedex 164.65 -0.84 169.57 119.71 0.56 47.33 43722.38 TJX Cos 77.29 -0.39 83.64 63.53 1.16 22.21 50752.09
Surgutneftegas 31.14 0.08 41.16 29.46 - 3.03 17214.57 StandCh 639.00 -19.50 791.80 373.40 1.61 -6.61 28175.34
ChShpbldng RMB 6.64 0.08 12.21 5.66 0.55 -44.72 17849.57 MTR 42.50 -0.30 44.50 33.10 2.50 25.04 32326.4 FordMtr 12.58 0.08 15.84 11.02 4.79 5.91 49092.05 T-MobileUS 47.14 -0.15 48.11 33.23 - 34.32 38783.97
Saudi Arabia (SR) Tesco 170.00 0.50 205.90 137.00 - 61.59 18662.74
ChStConEng RMB 6.41 0.03 7.44 4.93 2.59 7.81 28734.38 SandsCh 32.95 -0.05 33.40 20.75 6.05 26.77 34286.53 Franklin 36.02 -0.13 42.23 30.56 1.71 13.92 20751.89 UnionPac♦ 96.00 0.72 98.28 67.06 2.14 19.20 79960.23
AlRajhiBnk 57.75 0.50 62.75 44.70 2.40 13.28 25021.33 Vodafone 224.45 -2.65 240.10 197.70 5.03 -14.88 80213.26
ChUncHK 9.25 0.02 11.36 7.70 2.17 37.55 28561.44 SHK Props 118.10 1.00 118.20 79.00 1.85 12.42 44086.41 GenDyn 154.78 0.97 154.98 121.61 2.12 17.85 47251.06 UPS B 109.41 -0.18 111.83 87.30 2.54 21.29 75632.03
Natnlcombnk 36.10 1.60 57.50 34.00 4.27 7.89 19250.5 WPP 1797 7.00 1875 1204 2.49 27.95 30974.46
CNNC Intl RMB 6.77 0.03 11.68 6.58 - 28.75 4298.21 Tencent 215.00 4.80 216.80 125.10 0.22 50.29 262425.97 GenElectric 30.93 -0.36 33.00 23.85 2.78 51.72 277170.94 USBancorp 43.75 -0.41 44.58 37.07 2.34 13.65 74879.6
SaudiBasic 84.50 2.25 92.75 59.50 6.47 15.17 67590.09 United States of America ($)
CSR 7.20 0.10 10.72 6.45 4.40 13.95 4057.97 India (Rs) GenMills 70.63 -0.32 72.95 53.53 2.33 27.63 42343.44 UtdHlthcre 136.27 -0.34 144.48 107.51 1.57 21.23 129782.38
SaudiTelec 57.75 - 69.75 55.50 6.89 13.76 30795.48 21stC Fox A 24.27 -0.28 31.40 22.66 1.15 21.47 25823.45
Daqin RMB 6.38 0.03 10.04 5.98 7.13 10.35 14198.53 Bhartiartl 321.50 - 385.00 282.30 0.68 34.09 19314.88 GenMotors 32.02 -0.14 36.88 26.69 4.26 5.17 50012.74 UtdTech♦ 105.92 -1.01 109.83 83.39 2.45 23.38 88647.3
Singapore (S$) 3M♦ 180.39 -0.42 182.27 134.64 2.38 22.90 109027.77
Gree Elec Apl 0.18 - 0.30 0.16 - -3.82 272.23 HDFC Bk 1300.4 - 1303.65 928.00 0.72 27.14 49686.96 GileadSci 78.14 1.25 113.31 76.67 2.26 6.86 103111.52 ValeroEngy♦ 55.37 0.54 73.88 46.88 3.81 8.82 25544.45
DBS♦ 15.43 0.18 18.25 13.01 3.91 9.02 28879.57 AbbottLb 42.23 0.14 46.38 36.00 2.38 32.58 62077.91
GuosenSec RMB 17.47 - 23.41 13.28 1.10 12.93 5740.41 Hind Unilevr 937.85 - 951.45 766.40 1.55 52.97 30505.56 GoldmSchs♦ 168.17 -1.01 199.90 138.20 1.44 20.27 68188.43 Verizon 53.81 0.93 56.95 42.20 4.22 15.13 219345.8
JardnMt US$♦ 62.71 0.21 62.75 45.00 2.32 11.27 44601.2 Abbvie 64.82 0.70 68.12 45.45 3.03 20.83 105562.12
HaitongSecs 14.02 0.12 15.50 10.20 3.82 14.58 6163.61 HsngDevFin 1458.05 - 1461.75 1011.45 1.09 21.88 34687.11 Halliburton♦ 43.50 0.18 46.90 27.64 1.55 -16.33 37457.96 VertexPharm 95.90 0.79 136.97 75.90 - -84.47 23761.11
JardnStr US$♦ 33.49 -0.09 34.17 25.24 0.85 8.38 37099.91 Accenture 115.34 -0.32 120.78 91.40 1.76 21.12 93997.3
Hngzh HikVDT RMB 25.36 0.68 32.06 19.77 2.79 24.45 17866.87 ICICI Bk 272.70 - 292.70 180.75 1.72 16.68 23844.31 HCA Hold 75.59 -0.92 88.46 60.07 - 12.99 28621.87 VF Cp 59.50 -0.53 73.81 52.21 2.17 22.80 24676.89
OCBC 8.82 0.11 9.60 7.41 4.11 10.16 27379.09 Adobe 103.62 0.05 104.16 71.27 - 63.45 51632.9
Hunng Pwr 4.98 0.13 9.89 4.43 11.07 5.82 3018.21 Infosys 1045 - 1279.3 1009.1 2.33 17.18 36074.5 Hew-Pack 14.60 0.11 14.82 8.91 3.77 6.58 24970.23 Viacom 39.31 -0.59 53.35 30.11 4.09 7.57 13650.65
SingTel 4.03 0.08 4.36 3.38 4.37 16.51 47686.44 AEP 66.13 0.89 71.32 52.29 3.08 21.11 32516.75
IM Baotou Stl RMB 2.92 0.02 4.55 2.66 - -24.27 6881 ITC 262.60 - 265.90 178.67 1.49 34.17 47752.96 HiltonWwde 23.61 -0.14 26.27 16.16 1.19 14.15 23363.67 Visa Inc 82.28 0.28 82.30 66.12 0.59 31.23 155215.78
UOB 18.65 0.39 20.78 16.80 3.77 9.56 22247.3 Aetna 116.89 0.16 123.57 92.42 0.86 17.06 41005.01
In&CmBkCh 5.05 0.07 5.19 3.72 5.76 5.85 56515.94 L&T 1516.4 - 1629.6 1016.05 0.90 30.73 21248.05 HomeDep♦ 134.14 -1.01 139.00 109.62 1.68 25.71 165739.85 Walgreen 81.76 -0.46 95.74 71.50 1.63 31.20 88490.28
Aflac 73.46 -0.53 74.50 54.57 2.04 12.93 30087.4
IndstrlBk RMB 15.93 -0.11 17.63 13.76 3.45 6.18 45432.58 OilNatGas♦ 238.55 - 267.75 187.75 3.73 11.57 30673.14 South Africa (R) Honywell 115.49 -0.91 120.02 91.57 2.00 18.19 88012.9 WalMartSto 72.75 0.25 75.19 56.30 2.07 15.50 225034.49
AirProd 157.06 -0.03 157.84 114.64 2.14 23.44 34011.3
Kweichow RMB 309.94 1.44 326.80 185.00 3.44 23.47 58282.71 RelianceIn 1019.9 - 1089.75 825.10 0.90 12.31 49710.96 Firstrand 46.80 1.27 54.00 34.08 3.71 14.20 18681.67 HumanaInc 178.01 0.68 191.65 150.00 0.65 27.18 26535.48 WellsFargo 49.78 -0.78 56.34 44.50 2.82 13.09 251142.11
Alexion 125.76 2.09 193.45 110.56 - 417.26 28201.43
Midea 1.72 - 2.07 1.64 5.30 11.01 47.69 SBI NewA 260.10 - 261.50 148.25 0.99 23.91 30345.24 MTN Grp 120.74 -1.86 192.95 109.56 10.46 80.81 15844.2 IBM♦ 159.57 0.02 164.95 116.90 3.04 12.89 152524.06 Williams Cos 28.89 0.49 48.47 10.22 8.12 -32.89 21686.5
Allegran 240.78 4.82 322.68 195.50 - -39.42 95337.37
New Ch Life Ins 32.20 - 37.50 22.00 0.72 10.72 4293.48 SunPhrmInds 782.65 - 933.95 704.00 0.35 52.83 28308.84 Naspers N 2527.22 7.32 2553.59 1630.3 0.17 89.72 78776.99 IllinoisTool 119.72 -1.40 123.50 79.15 1.85 22.19 42495.85 Yahoo 44.55 1.27 44.73 26.15 - -8.51 42401.91
Allstate♦ 69.00 0.05 70.38 56.03 1.83 17.48 25630.8
PetroChina 5.24 - 6.60 4.16 1.95 82.75 14255.47 Tata Cons 2484.05 - 2770 2115 1.73 19.88 73562.14 South Korea (KRW) Illumina 170.46 2.56 213.27 127.10 - 65.62 24989.44 Yum!Brnds 91.29 0.03 91.99 64.58 1.97 27.37 35592.79
Alphabet 807.39 10.52 813.88 617.84 - 31.13 238054.24
PingAnIns♦ 42.35 0.50 46.70 30.50 2.88 10.75 40668.31 Indonesia (Rp) HyundMobis 287000 13000 289000 203500 1.18 16.45 25276.11 Intcntl Exch 285.84 0.47 287.02 223.49 1.12 23.48 34059.01 Venezuela (VEF)
Altria 66.99 0.11 70.15 52.14 3.09 25.88 130878.95
PngAnBnk RMB 9.41 -0.01 11.15 7.85 1.64 7.06 20609.77 Bk Cent Asia 15025 - 15500 11300 1.06 19.47 28220.86 KoreaElePwr 57400 200.00 63700 45600 4.88 2.87 33338.22 Intel 36.39 0.31 36.56 27.68 2.52 16.64 172161.09 Bco de Vnzla 95.00 -5.00 137.00 85.00 - - 538.13
Amazon 785.06 12.62 785.47 474.00 - 194.39 372176.65
Pwr Cons Corp RMB 6.26 0.07 9.99 5.40 1.54 16.88 8995.97 SK Hynix 38000 500.00 38100 25650 1.27 11.98 24272.21 Intuit 110.67 -1.40 116.97 84.11 1.10 35.99 28546 Bco Provncl 2201 0.99 4400 2200 - 0.32 367.96
Israel (ILS) AmerAir 36.86 0.33 47.09 24.85 1.09 3.61 19532.61
SaicMtr RMB 21.99 0.05 24.36 16.04 5.97 7.82 36293.63 SmsungEl 1643000 37000 1694000 1088000 1.03 14.32 210587.82 John&John 119.86 0.54 126.07 89.90 2.34 23.37 327922.2 Mrcntl Srvcs 4880 5.00 6200 4300 0.13 34.38 449.43
TevaPha♦ 192.20 2.40 259.30 189.40 2.62 34.45 51845.47 AmerExpr 65.46 0.27 78.40 50.27 1.66 14.00 60470.7
ShenwanHong 0.17 0.00 0.23 0.12 - -0.24 115.78 Spain (€) JohnsonCn 47.77 2.32 48.17 33.62 2.38 99.06 30465.12
Italy (€) AmerIntGrp 59.09 -0.77 64.31 48.41 2.04 588.13 63264.23
ShgPdgBk RMB 16.41 -0.08 18.29 12.87 3.17 - 50404.07 JPMrgnCh 67.08 -0.41 69.03 52.50 2.70 11.32 242291.78 Closing prices and highs & lows are in traded currency (with variations for that
Enel 4.02 -0.02 4.28 3.33 3.30 17.68 45933.77 BBVA 5.59 -0.10 8.28 4.50 6.27 16.95 40728.01 AmerTower 117.23 2.14 118.26 83.07 1.71 72.48 49880.1
Sinopec Corp 5.70 0.02 5.88 3.86 3.10 21.70 18751.36 Kimb-Clark 128.79 -0.04 138.87 103.04 2.81 23.78 46315.73 country indicated by stock), market capitalisation is in USD. Highs & lows are
ENI 13.74 -0.09 15.85 10.93 5.78 -5.11 56120.43 BcoSantdr 4.07 -0.05 5.41 3.15 4.88 10.56 66010.96 Amgen♦ 171.55 1.78 176.64 130.09 2.10 17.48 128381.31
Sinopec Oil RMB 3.88 0.01 11.58 3.60 - -17.62 1636.92 KinderM 22.06 0.14 32.89 11.20 5.691097.99 49228.12 based on intraday trading over a rolling 52 week period.
Generali 11.42 -0.09 18.09 9.76 6.26 9.75 20020.98 CaixaBnk 2.40 -0.05 3.99 1.82 4.97 19.04 15928.75 Anadarko 57.00 0.51 73.87 28.16 1.13 -5.54 29096.08
Denmark (kr) Iberdrola 6.02 -0.03 6.71 4.80 0.49 16.14 43066.44 Kraft Heinz♦ 89.43 -0.18 90.54 68.18 2.38 683.67 108894.52 ♦ ex-dividend
IntSPaolo 2.14 -0.04 3.30 1.52 6.50 15.07 38108.97 Anthem 124.24 -0.01 152.44 115.63 2.06 14.21 32695.05
DanskeBk 195.00 -1.80 215.80 161.80 4.08 14.66 28971.18 Inditex 32.30 -0.10 35.38 26.60 1.28 37.03 113122.94 Kroger 32.49 -0.02 42.75 31.31 1.15 16.56 30828.01 ■ ex-capital redistribution
Luxottica 43.10 -0.19 65.90 41.90 2.05 26.96 23439.38 Aon Cp 112.10 -0.01 112.21 83.83 1.10 21.13 29772.43
MollerMrsk 10080 -260.00 11490 7355 - -64.52 15315.91 Repsol 12.36 -0.16 12.86 7.95 6.09 -10.93 20359.83 L Brands 73.43 -0.76 101.11 60.00 3.03 17.75 21111.3 # price at time of suspension
Unicred 2.30 -0.04 6.17 1.70 4.93 8.62 15997.21 Apple 107.87 0.14 123.82 89.47 1.80 12.80 581273.44
NovoB 304.70 -2.60 402.90 299.50 1.99 23.96 92615.88 Telefonica 9.35 0.01 12.57 7.45 7.92 -58.83 52264.87 LasVegasSd 54.44 0.51 54.80 34.88 4.58 26.12 43262.41
ArcherDan♦ 43.91 0.09 47.03 29.86 2.65 17.77 25545.22
LibertyGbl 33.05 0.21 49.24 26.16 - -109.29 8737.4

FT 500: TOP 20 FT 500: BOTTOM 20 BONDS: HIGH YIELD & EMERGING MARKET BONDS: GLOBAL INVESTMENT GRADE
Close Prev Day Week Month Close Prev Day Week Month Day's Mth's Spread Day's Mth's Spread
price price change change % change change % change % price price change change % change change % change % Red Ratings Bid Bid chge chge vs Red Ratings Bid Bid chge chge vs
SFR Group 25.30 25.54 -0.24 -0.94 2.71 12.0 19.51 HonHaiPrc 79.70 79.80 -0.10 -0.13 -9.80 -10.9 -9.73 Sep 06 date Coupon S* M* F* price yield yield yield US Sep 06 date Coupon S* M* F* price yield yield yield US
ICICI Bk 272.70 272.70 0.00 0.00 27.40 11.2 10.88 Bhartiartl 321.50 321.50 0.00 0.00 -22.45 -6.5 -11.68 High Yield US$ US$
HyundMobis 287000.00 274000.00 13000.00 4.74 28000.00 10.8 12.33 ValeantPh 37.34 37.34 0.00 0.00 -2.26 -5.7 31.52 Navient Corporation 06/18 8.45 BB- Ba3 BB 108.71 3.36 0.00 -0.26 2.62 Cummins Inc. 02/27 6.75 A+ A2 A 127.01 3.65 -0.01 0.00 2.11
SandsCh 32.95 33.00 -0.05 -0.15 3.00 10.0 10.20 Salesforce 75.34 75.10 0.24 0.32 -4.49 -5.6 -7.29 High Yield Euro Korea Electric Power Corporation 08/27 6.75 AA Aa2 AA- 106.92 5.97 -0.01 -0.08 4.42
ChinaMBank 20.15 19.98 0.17 0.85 1.73 9.4 17.97 PTT Explor 333.00 333.00 0.00 0.00 -19.00 -5.4 -0.60 Kazkommerts Intl BV 02/17 6.88 B Caa1 B 97.50 - 0.00 0.00 - Archer Daniels Midland Company 12/27 6.75 A A2 A 126.31 3.89 -0.01 -0.01 2.34
BOC Hold 28.35 28.15 0.20 0.71 2.40 9.2 11.39 CSL 103.39 104.92 -1.53 -1.46 -5.28 -4.9 -9.85 SouthTrust Bank 12/27 6.57 A Aa3 A+ 127.88 3.57 -0.01 -0.04 2.03
Bk China 3.70 3.65 0.05 1.37 0.30 8.8 13.15 VF Cp 59.50 60.03 -0.53 -0.88 -3.02 -4.8 -4.39 Emerging US$ SunTrust Banks, Inc. 01/28 6.00 BBB+ Baa1 A- 117.04 4.15 -0.01 0.28 -
BkofComm 6.27 6.27 0.00 0.00 0.50 8.7 16.76 MylanNV 40.69 39.97 0.72 1.80 -2.06 -4.8 -16.01 Mexico 09/16 11.40 BBB+ A3 BBB+ 106.80 1.49 0.03 0.01 0.44 FleetBoston Financial Corp. 01/28 6.88 BBB Baa3 A- 126.14 4.03 -0.01 -0.10 -
JohnsonCn 47.77 45.45 2.32 5.10 3.74 8.5 4.89 BOE Tech 1.77 1.87 -0.10 -5.35 -0.08 -4.3 -1.67 Brazil 01/18 8.00 BB Ba2 BB 105.02 4.12 -0.07 -0.20 3.37
Russia 07/18 11.00 BB+ Ba1 BBB- 116.45 2.03 0.00 -0.03 1.28 Euro
ChShenEgy 14.76 14.48 0.28 1.93 1.14 8.4 0.54 L Brands 73.43 74.19 -0.76 -1.02 -3.03 -4.0 -1.61 Credit Agricole S.A. 03/27 2.63 BBB Baa2 A- 105.85 2.00 -0.01 -0.17 0.46
SHK Props 118.10 117.10 1.00 0.85 9.10 8.3 6.40 Tesla Mtrs 202.98 197.78 5.20 2.63 -8.36 -4.0 -11.65 Peru 03/19 7.13 BBB+ A3 BBB+ 128.75 1.95 0.00 0.00 1.21
Peru 03/19 7.13 BBB+ A3 BBB+ 114.01 2.60 0.00 0.20 0.84 Electricite de France (EDF) 03/27 4.13 A A2 A- 122.21 1.91 0.00 0.00 0.37
AgricBkCh 3.36 3.33 0.03 0.90 0.25 8.0 15.07 Telstra 5.12 5.15 -0.03 -0.58 -0.21 -3.9 -9.54 B.A.T. Netherlands Fin B.V. (Re - British American Tobacco) 03/29 3.13 A- A3 A- 124.11 1.05 -0.01 0.03 -
SumitomoF 3716.00 3669.00 47.00 1.28 268.00 7.8 15.80 Ch Coms Cons 8.59 8.50 0.09 1.06 -0.35 -3.9 -2.39 Colombia 07/21 4.38 BBB Baa2 BBB 112.75 2.64 0.00 0.00 1.51
Brazil 01/22 12.50 BB Ba2 BB 110.14 9.97 -0.08 -0.68 8.84 Philip Morris Intl, Inc. 05/29 2.88 A A2 A 121.65 1.04 -0.01 0.02 -
Nordea Bk 85.40 85.40 0.00 0.00 6.05 7.6 10.76 Viacom 39.31 39.90 -0.59 -1.47 -1.54 -3.8 -9.98
Poland 03/22 5.00 BBB+ A2 A- 117.38 2.80 0.00 0.00 1.67 Yen
Altice 15.30 15.45 -0.15 -0.94 1.05 7.4 16.39 CharlesSch 30.53 31.27 -0.74 -2.37 -1.08 -3.4 2.04
Turkey 09/22 6.25 - Baa3 BBB- 110.48 4.31 0.00 0.06 3.18 Wal-Mart Stores, Inc. 07/15 0.94 NR WR NR 100.00 0.31 0.00 0.00 -
Mizuho Fin 183.70 182.10 1.60 0.88 12.20 7.1 12.91 Avago Tech 171.31 173.11 -1.80 -1.04 -5.69 -3.2 0.69
LasVegasSd 54.44 53.93 0.51 0.94 3.48 6.8 9.31 Costco 156.92 157.98 -1.06 -0.67 -5.04 -3.1 -6.41 Turkey 10/26 4.88 - Baa3 BBB- 102.52 4.61 -0.01 0.09 3.07 £ Sterling
Ch Evrbrght 3.79 3.70 0.09 2.43 0.24 6.8 9.22 Bayer 94.24 94.24 0.00 0.00 -3.01 -3.1 -1.37 Emerging Euro IPIC GMTN Limited 03/26 6.88 AA Aa2 AA 122.65 4.11 0.06 0.12 1.82
Tencent 215.00 210.20 4.80 2.28 13.60 6.8 16.47 Carnival 46.00 46.39 -0.40 -0.85 -1.42 -3.0 -2.22 Brazil 02/15 7.38 BBB- Baa2 BBB 111.75 0.73 0.00 0.00 0.09 B.A.T. Intl Fin plc (Re - British American Tobacco) 09/26 4.00 A- A3 A- 104.67 3.47 0.06 0.29 1.18
IntSPaolo 2.18 2.18 0.00 0.00 0.14 6.8 12.53 ConocPhil 40.98 40.92 0.06 0.15 -1.25 -3.0 0.90 Mexico 07/17 4.25 BBB+ A3 BBB+ 111.13 1.50 0.00 0.00 0.75 Data provided by SIX Financial Information. US $ denominated bonds NY close; all other London close. *S - Standard & Poor’s, M -
Mexico 02/20 5.50 BBB+ A3 BBB+ 121.63 2.06 0.00 0.00 0.93 Moody’s, F - Fitch.
Based on the FT Global 500 companies in local currency Based on the FT Global 500 companies in local currency
Bulgaria 09/25 5.75 BB+ - BBB- 124.34 2.72 -0.02 -0.08 1.18
Data provided by SIX Financial Information & Tullett Prebon Information. US $ denominated bonds NY close; all other
London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Sep 06 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Sep 06 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 0.25-0.50 16-12-2015 1.00 0.25-0.50 0.00-0.25 Index change change change 1 month 1 year VIX 12.32 0.34 11.98 32.09 11.02 Sep 06 Price £ Yield Day Week Month Year High Low £m
US Prime 3.50 16-12-2008 3.50 3.50 3.50 Markit IBoxx VXD 11.98 0.33 11.65 32.44 10.30 Tr 4pc '16 100.00 4.00 0.00 0.00 1900.00 733.33 102.23 100.00 0.35
US Discount 0.75 16-12-2015 0.75 1.00 0.75 ABF Pan-Asia unhedged 187.61 0.35 0.31 8.27 -0.29 10.36 VXN 14.67 0.35 14.32 35.40 13.20 Tr 1.75pc '17 100.63 0.07 -12.50 -30.00 -46.15 -87.04 101.74 100.63 0.29
Euro Repo 0.00 10-09-2014 0.05 0.05 0.05 Corporates( £) 342.64 0.25 -0.47 16.08 0.50 16.33 VDAX - - - - - Tr 5pc '18 107.35 0.10 -16.67 0.00 66.67 -85.92 110.85 107.34 0.35
UK Repo 0.25 05-03-2009 0.25 0.50 0.50 Corporates($) 271.25 -0.20 -0.22 8.73 -0.22 8.73 † CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.5pc '19 111.12 0.05 -28.57 -16.67 150.00 -94.90 112.71 110.85 0.36
Japan O'night Call 0.00-0.00 05-10-2010 0.00 0.00-0.10 0.00-0.10 Corporates(€) 224.29 0.10 -0.01 6.16 0.30 6.39 ‡ Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 4.75pc '20 116.24 0.10 -16.67 11.11 233.33 -91.80 117.12 114.45 0.33
Switzerland Libor Target 0.00-0.25 15-01-2015 0.00-0.75 -1.25--0.25 0-0.25 Eurozone Sov(€) 238.83 0.17 -0.16 6.01 -0.25 7.23 Tr 1.5pc '21 105.48 0.24 -7.69 14.29 26.32 -83.33 106.04 99.91 0.32
Gilts( £) 335.19 0.41 -0.58 16.85 1.36 15.46 BONDS: BENCHMARK GOVERNMENT Tr 4pc '22 120.40 0.26 -10.34 13.04 30.00 -83.01 121.31 114.48 0.38
INTEREST RATES: MARKET Global Inflation-Lkd 261.69 -0.60 -0.05 9.80 2.90 6.70 Red Bid Bid Day chg Wk chg Month Year Tr 5pc '25 136.66 0.58 -4.92 16.00 3.57 -67.96 138.11 126.02 0.35
Over Change One Three Six One Markit iBoxx £ Non-Gilts 338.25 0.24 -0.45 14.69 0.65 14.59 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '27 137.00 0.80 -3.61 8.11 -1.23 -61.17 138.26 121.91 0.31
Sep 06 (Libor: Sep 05) night Day Week Month month month month year Overall ($) 239.36 -0.18 -0.18 6.37 -0.18 6.37 Australia 10/18 3.25 103.61 1.51 0.01 0.07 0.04 -0.29 Tr 4.25pc '32 146.42 1.05 -2.78 8.25 -7.08 -55.13 148.92 124.00 0.35
US$ Libor 0.42044 0.004 0.002 -0.006 0.51933 0.83344 1.24867 1.56244 Overall( £) 333.07 0.36 -0.54 16.21 1.16 15.23 11/27 2.75 107.42 2.01 0.00 0.07 -0.01 0.00 Tr 4.25pc '36 153.08 1.19 -2.46 7.21 -8.46 -51.82 155.77 125.16 0.30
Euro Libor -0.40071 -0.001 0.001 0.000 -0.37400 -0.32514 -0.20586 -0.07557 Overall(€) 233.05 0.14 -0.11 5.60 -0.07 6.43 Austria 10/19 0.25 99.98 0.26 0.00 0.00 0.00 0.00 Tr 4.5pc '42 171.29 1.29 -2.27 6.61 -10.42 -49.01 174.65 134.26 0.27
£ Libor 0.22813 0.000 0.000 0.001 0.27344 0.38313 0.51844 0.73775 Treasuries ($) 228.34 -0.19 -0.16 5.33 -0.16 5.33 10/26 0.75 106.69 0.09 -0.06 -0.04 0.01 0.00 Tr 3.75pc '52 173.29 1.22 -3.17 6.09 -10.95 -51.00 177.28 125.74 0.24
Swiss Fr Libor 0.000 -0.81080 -0.73600 -0.65000 -0.48800 FTSE Belgium 06/18 0.75 99.97 0.77 0.01 0.01 -0.05 0.65 Tr 4pc '60 197.09 1.15 -3.36 6.48 -11.54 -53.06 201.27 136.28 0.23
Yen Libor 0.004 -0.07386 -0.02864 -0.00214 0.09314 Sterling Corporate (£) 123.04 0.16 - - 0.31 10.75 06/26 1.00 108.60 0.12 -0.07 -0.03 -0.02 0.00 xd Ex dividend. Closing mid-prices are shown in pounds per £ 100 nominal of stock. Red yield: Gross redemption yield.
Euro Euribor 0.000 -0.37300 -0.30100 -0.19500 -0.05200 Euro Corporate (€) 111.22 0.29 - - 0.03 4.29 Canada 11/18 0.50 99.84 0.58 -0.02 -0.02 0.00 0.00 This table shows the gilts benchmarks & the non-rump undated stocks.
Sterling CDs 0.000 0.25000 0.37000 0.52500 Euro Emerging Mkts (€) 897.33 4.66 - - 6.29 12.29 06/27 1.00 98.71 1.13 -0.03 0.00 -0.01 0.00
US$ CDs
Euro CDs
0.000
0.000
0.46000
-0.42500
0.65000
-0.33500
0.91000
-0.23500
Eurozone Govt Bond 118.96 0.62 - - -0.02 5.37 Denmark 11/18 0.25 101.92 -0.62 0.00 0.00 0.00 0.00 GILTS: UK FTSE ACTUARIES INDICES
CREDIT INDICES Day's Week's Month's Series Series 11/25 1.75 116.36 -0.03 0.00 0.00 0.00 0.00
Price Indices Day's Total Return Return
Short 7 Days One Three Six One Index change change change high low Finland 05/18 1.00 99.98 1.01 0.00 0.01 0.06 -0.07
Fixed Coupon Sep 06 chg % Return 1 month 1 year Yield
Sep 06 term notice month month month year Markit iTraxx 04/26 0.50 104.52 0.03 -0.06 -0.02 -0.01 0.00
1 Up to 5 Years 98.35 0.09 2432.85 -0.07 3.00 0.11
Euro -0.45 -0.35 -0.45 -0.35 -0.50 -0.35 -0.41 -0.26 -0.31 -0.16 -0.12 0.03 Crossover 5Y 369.26 -12.07 35.21 40.34 390.04 288.69 France 05/19 1.00 104.35 -0.59 0.00 0.00 0.00 0.00
2 5 - 10 Years 190.19 0.29 3541.22 0.06 9.33 0.41
Sterling 0.18 0.28 0.20 0.30 0.32 0.42 0.45 0.60 0.61 0.76 Europe 5Y 85.00 -1.98 7.21 7.01 90.43 67.59 11/20 0.25 103.17 -0.49 0.00 0.00 0.00 0.00
3 10 - 15 Years 230.75 0.34 4371.56 0.45 14.48 0.85
Swiss Franc - - - - - - - - - - - - Japan 5Y 70.05 -2.51 2.21 -0.87 93.03 64.22 11/26 0.25 100.70 0.18 -0.06 0.00 0.00 0.00
4 5 - 15 Years 200.37 0.30 3749.51 0.18 10.99 0.60
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 111.86 -3.89 10.86 12.50 121.66 80.36 05/45 3.25 157.82 0.94 -0.08 0.00 0.03 -1.07
5 Over 15 Years 374.95 0.03 5559.35 2.23 27.22 1.22
US Dollar 0.40 0.50 0.40 0.50 0.45 0.55 0.80 0.90 1.20 1.30 1.50 1.60 Germany 04/19 0.50 103.11 -0.68 0.00 0.00 0.00 0.00
Markit CDX 7 All stocks 193.59 0.12 3718.99 0.99 14.75 1.04
Japanese Yen -0.15 0.05 -0.15 0.05 -0.50 -0.25 -0.35 -0.10 -0.20 0.10 -0.15 0.15 10/20 0.25 103.78 -0.66 0.00 0.00 0.00 0.00
Emerging Markets 5Y 242.52 0.00 0.76 0.57 313.33 236.63 02/26 0.50 106.42 -0.17 0.00 0.00 0.00 0.00
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: Day's Month Year's Total Return Return
Nth Amer High Yld 5Y 389.89 0.00 3.22 -1.46 476.69 378.81 08/46 2.50 157.48 0.44 -0.08 0.02 0.02 -0.97
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. Index Linked Sep 06 chg % chg % chg % Return 1 month 1 year
Nth Amer Inv Grade 5Y 72.41 0.00 1.24 1.11 91.05 69.58 Greece 04/19 4.75 90.95 8.76 0.17 0.39 -0.13 -0.80
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 1 Up to 5 Years 313.95 0.06 -0.13 1.14 2430.39 -0.13 2.97
02/27 3.00 69.32 8.15 0.06 0.11 -0.06 -0.61 2 Over 5 years 728.82 0.45 6.89 23.34 5402.71 6.89 24.14
Ireland 10/17 5.50 106.60 -0.42 0.00 0.00 0.00 0.00 3 5-15 years 482.74 0.31 1.85 10.79 3701.23 1.85 12.07
05/26 1.00 105.95 0.37 -0.04 -0.01 0.02 0.00 4 Over 15 years 940.43 0.50 8.66 28.07 6830.80 8.66 28.65
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED Italy 04/19 0.10 100.33 -0.03 0.00 0.00 0.00 0.00 5 All stocks 658.01 0.42 6.30 20.80 4946.41 6.30 21.78
06/21 0.45 101.12 0.21 -0.05 -0.02 -0.03 0.00
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
12/26 1.25 101.00 1.15 -0.06 -0.01 -0.02 0.00 Yield Indices Sep 06 Sep 05 Yr ago Sep 06 Sep 05 Yr ago
Crude Oil† Sep 44.44 -0.73 Corn♦ Sep 314.25 -2.00 Sep 05 Sep 05 Prev return stock Market stocks
03/47 2.70 112.48 2.15 -0.07 0.01 0.09 0.00 5 Yrs 0.14 0.19 1.17 20 Yrs 1.29 1.30 2.37
Brent Crude Oil‡ 46.89 -0.51 Wheat♦ Sep 369.75 -3.50 Can 4.25%' 21 124.12 -0.315 -0.309 -0.23 5.18 76842.05 7
Japan 09/18 0.10 100.59 -0.19 0.00 0.00 0.00 0.00 10 Yrs 0.70 0.73 1.82 45 Yrs 1.17 1.16 2.35
RBOB Gasoline† Sep 1.32 0.00 Soybeans♦ Sep 966.25 0.25 Fr 2.25%' 20 113.55 -1.143 -1.125 -0.08 20.31 211753.06 14
09/21 0.05 100.91 -0.13 0.00 0.00 0.00 0.00 15 Yrs 1.11 1.13 2.20
Heating Oil† Sep 1.41 0.00 Soybeans Meal♦ Sep 312.50 -2.00 Swe 0.25%' 22 113.79 -1.704 -1.693 -0.10 29.20 226699.09 7
06/26 0.10 101.18 -0.02 0.00 0.00 0.00 0.00
Natural Gas† Sep 2.76 0.00 Cocoa (ICE Liffe)X Sep 2276.00 -9.00 UK 2.5%' 20 370.19 -2.362 -2.374 -0.42 6.58 639750.14 27
06/46 0.30 94.63 0.51 -0.02 0.11 0.08 0.00 inflation 0% inflation 5%
Ethanol♦ - - Cocoa (ICE US)♥ Sep 2918.00 0.00 UK 2.5%' 24 370.17 -2.088 -2.074 -0.72 6.82 639750.14 27
Netherlands 01/19 1.25 104.49 -0.64 0.00 0.00 0.00 0.00 Real yield Sep 06 Dur yrs Previous Yr ago Sep 06 Dur yrs Previous Yr ago
Uranium† Sep 25.65 0.40 Coffee(Robusta)X Sep 1865.00 13.00 UK 2%' 35 274.81 -1.828 -1.803 -0.52 9.08 639750.14 27
07/25 0.25 103.23 -0.11 0.00 0.00 0.00 0.00 Up to 5 yrs -2.13 2.66 -2.11 -0.88 -2.65 2.66 -2.63 -1.56
Carbon Emissions‡ - - Coffee (Arabica)♥ Sep 150.75 -0.30 US 0.625%' 21 103.89 -0.173 -0.171 -0.01 35.84 1205002.10 37
White SugarX 538.00 -2.20 New Zealand 03/19 5.00 107.73 1.85 0.00 0.02 0.12 -0.79 Over 5 yrs -1.79 25.22 -1.77 -0.94 -1.81 25.30 -1.79 -0.97
Diesel† - - US 3.625%' 28 137.57 0.324 -0.171 -0.10 16.78 1205002.10 37
Sugar 11♥ 19.94 -0.30 04/27 4.50 120.45 2.31 0.02 0.06 0.14 -0.99 5-15 yrs -2.00 9.13 -1.96 -0.86 -2.11 9.14 -2.08 -0.96
Unleaded (95R) - - Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total market
Norway 05/19 4.50 110.53 0.56 -0.01 0.02 0.08 -0.16 Over 15 yrs -1.77 30.33 -1.75 -0.95 -1.78 30.37 -1.76 -0.97
Base Metals (♠ LME 3 Months) Cotton♥ Oct 67.80 0.70 value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
02/26 1.50 103.59 1.10 0.00 0.03 0.09 0.00 All stocks -1.79 23.46 -1.77 -0.94 -1.82 23.56 -1.80 -0.98
Aluminium 1588.00 8.50 Orange Juice♥ 186.00 0.00 amount.
Aluminium Alloy 1595.00 20.00 Palm Oil♣ - - Portugal 06/19 4.75 110.41 0.92 -0.05 -0.03 0.08 0.00 See the FTSE website for more details: http://www.ftse.com/products/indices/gilts
Copper 4628.00 1.50 Live Cattle♣ Oct 101.53 0.00 BONDS: TEN YEAR GOVT SPREADS 07/26 2.88 99.09 2.98 -0.06 -0.02 0.20 0.00
Spain 01/19 0.25 100.86 -0.11 0.00 0.00 0.00 0.00 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Lead 1932.00 -42.00 Feeder Cattle♣ Sep 135.00 -2.35
Nickel 10100.00 75.00 Lean Hogs♣ Oct 60.60 0.00 Spread Spread Spread Spread 10/26 1.30 102.72 1.02 -0.06 0.00 -0.05 0.00 at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor guarantee
Tin 19300.00 -85.00 Bid vs vs Bid vs vs Sweden 10/18 1.00 99.95 1.03 0.00 -0.03 0.07 0.00 that the information is reliable or complete. The FT does not accept responsibility and will not be liable for any
Zinc 2315.50 -42.50 % Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds 05/25 2.50 122.39 -0.07 0.00 0.00 0.00 0.00 loss arising from the reliance on or use of the listed information. For all queries e-mail
Precious Metals (PM London Fix) Sep 05 Month Year Australia 2.01 2.18 0.46 Italy 1.15 1.32 -0.40 Switzerland 05/19 3.00 110.74 -0.94 0.00 0.00 0.00 0.00 ft.reader.enquiries@morningstar.com
Gold 1337.25 10.90 S&P GSCI Spt 346.98 1.41 -4.94 Austria 0.09 0.26 -1.46 Japan -0.02 0.15 -1.56 05/26 1.25 117.18 -0.47 0.00 0.00 0.00 0.00
Silver (US cents) 1960.00 14.00 DJ UBS Spot 83.10 -0.91 -6.10 Belgium 0.12 0.29 -1.43 Netherlands -0.11 0.06 -1.66 United Kingdom 07/19 1.75 104.75 0.09 -0.04 -0.04 0.01 -0.97 Data provided by Morningstar | www.morningstar.co.uk
Platinum 1087.00 22.00 R/J CRB TR 181.29 -0.76 -8.09 Canada 1.13 1.30 -0.42 Norway 1.10 1.27 -0.45 07/22 0.50 101.10 0.31 -0.06 -0.04 0.00 0.00
Palladium 689.00 13.00 M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark -0.03 0.15 -1.57 Portugal 2.98 3.16 1.44 07/26 1.50 107.97 0.66 -0.06 0.02 -0.02 0.00
Bulk Commodities UBS Bberg CMCI TR 12.96 -0.28 -4.30 Finland 0.03 0.20 -1.52 Spain 1.02 1.19 -0.53 12/46 4.25 173.91 1.29 -0.03 0.06 -0.08 -1.11
Iron Ore (Platts) 59.90 0.40 LEBA EUA Carbon 5.83 0.00 -22.37 France 0.18 0.36 -1.36 Switzerland -0.47 -0.30 -2.02 United States 08/18 0.75 100.01 0.75 -0.06 -0.06 0.00 0.00
Iron Ore (The Steel Index) 58.60 -0.20 LEBA CER Carbon 0.40 0.00 -21.57 Germany -0.17 0.00 -1.72 United Kingdom 0.66 0.84 -0.88 08/21 1.13 99.98 1.13 -0.07 -0.05 0.00 0.00
GlobalCOAL RB Index 66.50 -0.10 LEBA UK Power 1307.00 -56.04 -61.87 Greece 8.15 8.32 6.60 United States 1.54 1.72 0.00 08/26 1.50 99.59 1.54 -0.07 -0.02 0.00 0.00
Baltic Dry Index 745.00 21.00 Ireland 0.37 0.55 -1.17 08/46 2.25 100.41 2.23 -0.06 0.00 0.00 0.00
Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $ Data provided by SIX Financial Information & Tullett Prebon Information Data provided by SIX Financial Information & Tullett Prebon Information
unless otherwise stated.
18 FINANCIAL TIMES Wednesday 7 September 2016

MANAGED FUNDS SERVICE

Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield

Aspect Diversified Trends GBP £ 128.23 - 0.57 0.00 Gbl RealEstate Sec. IX $ 14.2743 - 0.0652 0.00 Middle East & Developing Africa Fund (Final) $ 19.81 - - 0.00 Invesco Emerging Europe Equity Fund A $ 8.83 - 0.08 0.00 Eq Market Neutral Plus B Acc 955.77 - 1.19 - Low Volatility Gb.Eq.Fd.Yen ¥ 9022.00 - 149.00 0.00

ACPI Global UCITS Funds Plc (IRL) Saudi Arabia Equity Fund SR 11.13 - 0.09 0.00 Frontier Capital (Bermuda) Limited Invesco Emerging Local Currencies Debt A Inc $ 7.16 - 0.03 6.00 High Yield Global Bond A GBP Inc 534.22 - 0.22 3.80
www.acpishard.com Other International
Regulated Atlantas Sicav (LUX) Invesco Emerging Mkt Quant.Eq. A $ 10.72 - 0.10 0.00 High Yield Global Bond B GBP Inc 1114.07 - 0.46 4.36 MMIP Investment Management Limited (GSY)
Regulated Commercial Property-GBP Class £ 71.42 - -0.53 - Regulated
Rubrics Emerging Markets Fixed Income UCITS Fund $ 122.43 - 0.33 0.00
Ennismore Smaller Cos Plc (IRL) Invesco Energy A $ 18.12 - 0.02 - Investment Grade Global Bd A GBP Inc 588.32 - 0.19 2.05 Multi-Manager Investment Programmes PCC Limited
American Dynamic $ 3688.98 - -0.33 0.00 Global Real Estate-GBP C Class £ 45.26 - -0.50 -
5 Kensington Church St, London W8 4LD 020 7368 4220
Rubrics Global Credit UCITS Fund $ 14.86 - 0.00 0.00 UK Equity Fd Cl A Series 01 £ 2316.48 2343.11 53.41 0.00
FCA Recognised Invesco Euro Corporate Bond Fund (A) € 17.83 - 0.01 0.00 Kames Global Equity Income B GBP Acc 1379.85 - 3.44 -
American One $ 3456.96 - 6.41 0.00
Rubrics Global Fixed Income UCITS Fund $ 159.27 - -0.03 0.00 Ennismore European Smlr Cos NAV £ 112.66 - -0.10 0.00 Diversified Absolute Rtn Fd USD Cl AF2 $ 1517.27 - 21.29 0.00
Bond Global € 1439.84 - 2.44 0.00 GYS Investment Management Ltd (GSY) Invesco Euro Inflation Linked Bond A € 16.05 - 0.04 - Kames Global Equity Income B GBP Inc 1280.71 - 3.19 -
Crèdit Andorrà Asset Management (LUX)
Q Rubrics India Fixed Income UCITS Fund $ 10.61 - -0.01 0.00 www.creditandorra.com Ennismore European Smlr Cos NAV € 134.39 - -0.07 0.00 Regulated Diversified Absolute Return Stlg Cell AF2 £ 1530.22 - 20.67 0.00
Eurocroissance € 915.51 - 12.83 - FCA Recognised Invesco Euro Reserve A € 322.08 - 0.00 0.00 Strategic Global Bond A GBP Inc 1123.22 - -0.33 0.56
Taurus Emerging Fund Ltd $ 178.22 181.86 -1.19 -
Rubrics India Fixed Income UCITS Fund $ 90.72 - -0.06 0.00 Global Equity Fund A Lead Series £ 1189.14 1193.30 61.34 -
Crediinvest SICAV Money Market Eur I € 11.21 - 0.00 - Invesco Euro Bond A € 7.51 - 0.02 - Strategic Global Bond B GBP Inc 637.64 - -0.18 1.03
Far East $ 742.37 - 13.32 0.00
Rubrics International Bond UCITS Fund $ 18.67 - 0.00 0.00 Ennismore European Smlr Cos Hedge Fd
Crediinvest SICAV Money Market Usd A $ 10.08 - 0.00 - Other International Funds Invesco European Growth Equity A € 24.31 - 0.01 0.00
Generali Worldwide
PO Box 613, Generali House, Hirzel Street, St Peter Port, Guernesy, GY1 4PA 01481 714108 Marwyn Asset Management Limited (CYM)
Bank of America Cap Mgmt (Ireland) Ltd (IRL) Crediinvest SICAV Fixed Income Eur € 10.91 - 0.00 0.00 NAV € 487.02 - 9.61 0.00 Invesco Global Absolute Return Fund A Class € 11.00 - -0.01 0.00 Lloyds Investment Fund Managers Limited (1000)F (JER) Regulated
International Insurances PO Box 311, 11-12 Esplanade, St Helier, Jersey, JE4 8ZU 01534 845555
ACPI Select UCITS Funds PLC (IRL) Regulated
Regulated Crediinvest SICAV Fixed Income Usd $ 10.78 - 0.00 0.00 Invesco Global Bond A Inc $ 5.59 - 0.00 0.59 Other International Funds Marwyn Value Investors £ 418.32 - 9.05 0.00
Global Multi-Strategy Managed $ 4.87 5.25 -0.01 0.00
Global Liquidity USD $ 1.00 - 0.00 0.61
ACPI Balanced UCITS Fund USD Retail $ 14.70 - 0.05 0.00 Lloydstrust Gilt £ 13.6800 - 0.0400 1.95
Crediinvest SICAV Spanish Value € 262.22 - 0.96 - UK Multi-Strategy Managed £ 5.10 5.50 -0.02 0.00 Invesco Global Conservative Fund 90 (EUR) A € 11.67 - 0.01 0.00
Lloyds Investment Funds Limited
ACPI Balanced UCITS Fund EUR Retail € 10.97 - 0.04 0.00
Crediinvest SICAV International Value € 242.48 - 1.11 0.00
Meridian Fund Managers Ltd
Barclays Investment Funds (CI) Ltd (JER) EU Multi-Strategy Managed € 2.95 3.18 -0.01 0.00 Invesco Global Equity Income Fund A $ 59.59 - -0.07 0.00
Euro High Income € 1.6870 - 0.0000 2.64 Other International Funds
ACPI Balanced UCITS Fund GBP Retail £ 11.14 - 0.04 0.00 39/41 Broad Street, St Helier, Jersey, JE2 3RR Channel Islands 01534 812800
FCA Recognised Crediinvest SICAV Big Cap Value € 15.92 - 0.05 - Global Bond USD $ 3.60 3.88 -0.01 0.00 Invesco Global Inc Real Estate Sec A dist $ 9.73 - 0.01 2.20 Global Gold & Resources Fund $ 351.42 - 127.42 -
European £ 8.5620 - 0.0030 1.03
ACPI Balanced UCITS Fund USD Institutional $ 10.00 - - - Bond Funds
Crediinvest SICAV US American Value $ 18.75 - -0.01 0.00 EnTrustPermal Ltd. Invesco Global Inv Grd Corp Bond A Dist $ 12.48 - 0.01 2.95 Global Energy & Resources Fund $ 40.11 - 8.16 -
High Income £ 0.9326xd - 0.0011 4.47
Sterling Bond F £ 0.51 - 0.01 - www.entrustpermal.com
ACPI Balanced UCITS Fund EUR Institutional € 10.00 - - -
Crediinvest SICAV Sustainability € 15.84 - 0.13 - Other International Funds Genesis Asset Managers LLP Invesco Global Leisure A $ 39.52 - 0.02 0.00
International £ 4.8200 - 0.0150 0.51
Offshore Fund Class A US $ Shares Other International Funds
ACPI Balanced UCITS Fund GBP Institutional £ 10.00 - - -
Invesco Global Smaller Comp Eq Fd A $ 60.71 - 0.08 0.00 Mirabaud Asset Management (LUX)
BlackRock (JER) Investment Holdings N.V. $ 4992.53 - 101.58 0.00 Emerging Mkts NAV £ 6.64 - 0.05 0.00 North American £ 18.7300 - 0.0400 0.00
www.mirabaud.com, marketing@mirabaud.com
ACPI Horizon UCITS Fund $ 13.33 - 0.02 0.00 Regulated DAVIS Funds SICAV (LUX)
Invesco Global Structured Equity A $ 46.40 - 0.03 1.15 Regulated
Regulated Macro Holdings Ltd $ 4141.38 - -15.30 0.00 Sterling Bond £ 1.6230 - 0.0030 3.05
BlackRock UK Property £ 40.95 - -0.15 3.20 Mir. - Conv. Bds Eur A EUR € 134.17 - 0.14 0.00
Davis Value A $ 42.19 - 0.30 0.00 HPB Assurance Ltd Invesco Global Total Ret.(EUR) Bond Fund A € 13.63 - 0.01 0.00
Fixed Income Holdings N.V. $ 336.20 - 6.33 - UK £ 7.3180 - -0.0110 1.25
Blackrock UK Long Lease £ 1075.79 - -1.26 - Anglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490 Mir. - Conv. Bds Glb A USD $ 113.61 - 0.18 0.00
Davis Global A $ 30.96 - 0.37 0.00 International Insurances Invesco Gold & Precious Metals A $ 6.68 - 0.01 0.00 Lloyds Gilt Fund Limited
EnTrustPermal Absolute Return Fund $ 153.10 - -0.04 0.00
BLK Intl Gold & General $ 7.06 7.45 -0.05 0.00 Mir. - Eq Asia ex Jap A $ 189.18 - 1.38 0.00
Holiday Property Bond Ser 1 £ 0.54 - 0.01 0.00 Lloyds Gilt Fund Quarterly Share £ 1.4260 - 0.0040 1.48
Invesco Greater China Equity A $ 49.99 - 0.37 0.00
Mir.- EqEurope ExUK Sm&Mid £ 125.65 - 0.80 -
Holiday Property Bond Ser 2 £ 0.64 - 0.01 0.00 Monthly Share £ 1.3700xd - 0.0040 1.48
Invesco India Equity A $ 60.29 - 0.95 0.00
BLI - Banque de Luxembourg Investments S.A. Equinox Fund Mgmt (Guernsey) Limited (GSY)
Regulated Lloyds Money Fund Limited Mir. - Eq Glb Emrg Mkt A USD $ 100.62 - 1.00 0.00
Algebris Investments (IRL) FCA Recognised Invesco Japanese Equity Adv Fd A ¥ 3490.00 - 39.00 -
Regulated Equinox Russian Opportunities Fund Limited $ 116.66 - 5.99 0.00 Sterling Class £ 52.6530 - 0.0000 0.00
BL-Equities Europe B € 6253.56 - -2.79 0.00 Mir. - Eq Global Focus A USD $ 96.79 - 0.17 0.00
Haussmann Invesco Japanese Value Eq Fd A ¥ 1127.00 - 12.00 -
Algebris Financial Credit Fund - Class I EUR € 138.87 - -0.45 0.00 Lloyds Multi Strategy Fund Limited
Other International Funds
BL-Equities America B $ 5920.00 - -0.57 0.00 Mir. - EqPanEuropeSm&Mid € 118.83 - 0.81 0.00
Algebris Financial Income Fund - Class I EUR € 117.28 - 0.12 0.00 Invesco Latin American Equity A $ 6.99 - -0.01 0.00 Conservative Strategy £ 1.2030 - 0.0050 1.67
Dodge & Cox Worldwide Funds (IRL) Euronova Asset Management UK LLP (CYM) Haussmann Cls A $ 2592.50 - 6.98 0.00
BL-Equities Japan B ¥ 15154.00 - 204.00 - 6 Duke Street,St.James,London SW1Y 6BN Regulated Mir. - Eq Spain A € 26.02 - 0.09 0.00
Algebris Financial Equity Fund - Class B EUR € 95.93 - 0.15 0.00 Invesco Nippon Small/Mid Cap Equity A ¥ 1084.00 - 20.00 - Growth Strategy £ 1.6470 - 0.0060 1.22
www.dodgeandcox.worldwide.com 020 3713 7664 Haussmann Cls C € 2247.31 - 4.39 0.00
BL-Emerging Markets B € 166.75 - 1.01 0.00 FCA Recognised Smaller Cos Cls One Shares € 36.15 - 0.11 0.00 Mir. - Eq Swiss Sm/Mid A SFr 366.08 - 2.20 0.00
Algebris Asset Allocation Fund - Class B EUR € 98.57 - 0.01 0.00 Invesco Pan European Equity A EUR Cap NAV € 17.46 - -0.04 0.00 Aggressive Strategy £ 2.0740 - 0.0040 0.00
Dodge & Cox Worldwide Funds plc - Global Bond Fund Haussmann Cls D SFr 1183.86 - 2.10 0.00
BL-Global Equities B € 775.61 - 1.87 0.00 Smaller Cos Cls Two Shares € 25.12 - 0.06 0.00 Mir. - Glb High Yield Bds A $ 114.30 - 0.01 -
Algebris Macro Credit R EUR Acc € - - - - EUR Accumulating Class € 12.40 - 0.06 0.00 Invesco Pan European High Income Fd A € 14.09 - 0.00 2.68 Global USD Growth Strategy $ 1.4430 - 0.0030 0.00
BL-Global 30 B € 1434.89 - 1.93 0.00 Smaller Cos Cls Three Shares € 12.64 - 0.04 0.00 Mir. - Glb Eq High Income A USD $ 99.76 - 0.46 0.00
Dealing Daily
Algebris Macro Credit RD EUR Inc € - - - - EUR Accumulating Class (H) € 9.81 - 0.01 0.00 Heartwood Wealth Management Limited (IRL) Invesco Pan European Small Cap Equity A € 20.76 - 0.04 -
BL-Global 50 B € 1728.53 - 2.76 0.00 Smaller Cos Cls Four Shares € 16.26 - 0.05 0.00 Regulated Mir. - Glb Strat. Bd A USD $ 109.42 - -0.09 0.00
EUR Distributing Class € 11.52 - 0.06 4.00 Invesco Pan European Structured Equity A € 17.15 - -0.02 0.00
Heartwood Caut Multi Asset B Acc 139.55 - 0.30 0.00 M & G Securities (1200)F (UK)
BL-Global 75 B € 2353.98 - 4.15 0.00 Mir. - US Shrt Term Credit Fd $ 102.65 - 0.02 -
Amundi Funds (LUX) EUR Distributing Class (H) € 9.10 - 0.01 4.03 Invesco UK Eqty Income A £ 32.79 - -0.08 0.00 PO Box 9039, Chelmsford, CM99 2XG
5 Allee Scheffer L-2520 Luxembourg + 44 (0)20 7074 9332 www.mandg.co.uk Enq: 0800 390 390, Dealing: 0800 328 3196
BL-Global Flexible EUR B € 156.29 - 0.63 0.00
www.amundi-funds.com GBP Distributing Class £ 11.77 - -0.01 3.59 Invesco UK Investment Grade Bond A £ 1.11 - 0.00 2.30 Authorised Inv Funds
FCA Recognised M&G Episode Growth A Inc 53.03 - 0.07 2.29 MW Japan Fund Plc (IRL)
GBP Distributing Class (H) £ 9.24 - 0.02 4.07 Invesco US Structured Equity A $ 22.85 - 0.00 - FCA Recognised
Bd. Euro Corporate AE Class - R - EUR € 19.51 - 0.01 0.00
BONHOTE M&G Global High Yield Bond A Inc 50.55 - 0.03 3.93 MW Japan Fund PLC A $ 25.78 - 0.13 0.00
Other International Funds USD Accumulating Class $ 9.98 - 0.02 0.00 Invesco US Value Eq Fd A $ 32.54 - -0.01 0.00
Bd. Global AU Class - R - USD $ 27.76 - 0.04 0.00
Eurobank Fund Management Company (Luxembourg) S.A. M&G Global High Yield Bond A Acc 122.89 - 0.07 3.92 MW Japan Fund PLC B $ 25.89 - 0.12 0.00
Bonhôte Alternative - Multi-Arbitrage (USD) Classe (EUR) € 6478.00 - 75.00 1.94 Dodge & Cox Worldwide Funds plc-Global Stock Fund Invesco USD Reserve A $ 87.12 - 0.00 -
Eq. Emerging Europe AE Class - R - EUR € 26.83 - -0.24 0.00 Regulated
USD Accumulating Share Class $ 17.03 - 0.17 0.00 Hermes Investment Funds Plc (IRL) M&G Managed Growth A Inc 90.25 - 0.18 0.34
Bonhôte Alternative - Multi-Performance (USD) Classe (EUR) € 9820.00 - 275.00 0.81 MW Japan Fund PLC C $ 84.78 - 0.39 0.00
(LF) Absolute Return € 1.32 - 0.00 0.00 Hermes Investment Management Limited, 1 Portsoken Street, London E1 8HZ +44 (0) 207 680 2121
Eq. Emerging World AU Class - R - USD $ 91.33 - 0.73 0.00
FCA Recognised
GBP Accumulating Share Class £ 21.08 - 0.18 0.00
(LF) Eq Emerging Europe € 0.78 - 0.01 0.00 Invesco Global Asset Management Ltd (IRL)
Eq. Greater China AU Class - R - USD $ 616.44 - 8.12 0.00 Hermes Abs Return Credit Fund Class F Acc £ 1.17 1.17 0.00 0.00 Dublin 00 353 1 439 8100 Hong Kong 00 852 2842 7200
GBP Distributing Share class £ 15.26 - 0.13 0.79 M & G (Guernsey) Ltd (GSY) Morant Wright Funds (Ireland) PLC (IRL)
CG Asset Management Limited (IRL) FCA Recognised
(LF) Eq Flexi Style Greece € 0.94 - -0.05 0.00 Regulated FCA Recognised
Eq. Latin America AU Class - R - USD $ 387.21 - -2.85 0.00 Northern Trust, George's Court, 54-62 Townsend Street, Dublin 2, Rep of Ireland Hermes Abs Return Credit Fund Class R Acc € 1.99 1.99 0.01 0.00
00 353 1 434 5098 EUR Accumulating Share Class € 22.93 - 0.33 0.00 Invesco Stlg Bd A QD F £ 2.72 - 0.00 3.42 The M&G Offshore Fund Range
(LF) Eq Mena Fund € 13.06 - 0.08 0.00 Morant Wright Fuji Yield EUR Acc Hedged € 10.36 - 0.09 -
Gl. Macro Bds & Curr Low Vol AHG - GBP £ 98.81 - -0.02 0.00 FCA Recognised Hermes Asia Ex-Japan Equity Fund Class F Acc £ 1.96 1.96 0.02 0.00 Corporate Bond A 1425.79 1469.89 3.00 3.83
Dodge & Cox Worldwide Funds plc-International Stock Fund Invesco Asian Equity A $ 7.13 - 0.07 0.00
Capital Gearing Portfolio Fund Plc £ 29337.47 29337.47 -99.66 0.56 (LF) Greek Government Bond € 19.36 - -0.01 0.00 Morant Wright Fuji Yield EUR Dist Hedged € 9.32 - 0.08 2.78
USD Accumulating Share Class $ 14.11 - 0.14 0.00 Hermes Asia Ex-Japan Equity Fund Class R Acc € 3.70 3.70 0.04 0.00 Global Basics X 2884.64 2973.85 6.89 0.18
CG Portfolio Fund Plc Invesco ASEAN Equity A $ 98.63 - 0.34 -
(LF) Greek Corporate Bond € 12.68 - 0.02 0.00 Morant Wright Fuji Yield GBP Acc Hedged £ 9.76 - 0.09 0.00
The Antares European Fund Limited EUR Accumulating Share Class € 14.89 - 0.21 0.00 Hermes Europe Ex-UK Equity Fund Class F Acc £ 1.59 1.59 0.00 - Global Dividend A 137.83 143.57 0.05 2.79
Other International Real Return Cls A £ 196.90 196.90 -3.24 1.47 Invesco Bond A $ 28.57 - 0.03 1.94
(LF) FOF Dynamic Fixed Inc € 12.28 - 0.05 0.00 Morant Wright Fuji Yield GBP Dist Hedged £ 8.96 - 0.07 7.01
Dodge & Cox Worldwide Funds plc-U.S. Stock Fund Hermes Europe Ex-UK Equity Fund Class R Acc € 3.24 3.24 0.00 -
AEF Ltd Usd (Est) $ 585.76 - 8.11 - Global Leaders A 3925.21 4088.76 9.68 0.90
Dollar Fund Cls D £ 153.28 153.28 0.18 1.37 Invesco Continental Eurp Small Cap Eqty A $ 206.87 - 0.58 0.00
USD Accumulating Share Class $ 19.53 - 0.11 0.00 (LF) FOF Real Estate € 17.72 - 0.04 0.00 Morant Wright Fuji Yield USD Acc Hedged $ 9.59 - 0.08 0.00
Hermes European Alpha Equity Fund Class F Acc £ 1.49 1.49 0.00 - Global High Yield Bond X 994.02 1024.76 0.79 3.94
AEF Ltd Eur (Est) € 586.83 - 8.29 0.00 Capital Value Fund Cls V £ 142.57 142.57 -0.50 0.24 Invesco Emerging Markets Equity A $ 39.93 - 0.22 0.00
GBP Accumulating Share Class £ 22.85 - 0.08 0.00 Morant Wright Fuji Yield USD Dist Hedged $ 9.49 - 0.09 2.73
Hermes European Alpha Equity Fund Class F Dis £ 1.43 1.43 0.00 -
Asset Management
Global Macro Bond A 12952.65 13353.25 4.48 2.36
Invesco Emerging Markets Bond A $ 22.29 - 0.01 4.60

Arisaig Partners Cedar Rock Capital Limited (IRL)

GBP Distributing Share Class £ 14.47 - 0.05 0.61 FIL Investment Services (UK) Limited (1200)F (UK)
130, Tonbridge Rd, Tonbridge TN11 9DZ
Callfree: Private Clients 0800 414161
Hermes European Alpha Equity Fund Class R Acc € 3.13 3.13 0.00 0.00
Asset Management
Invesco Continental European Equity A € 8.11 - -0.01 1.20
North American Dividend A 192.04 200.04 0.36 2.04 Asset Management
Morant Wright Fuji Yield YEN Acc ¥ 999.68

Morant Wright Fuji Yield B YEN Acc ¥ 883.52

-

-
8.76 0.00

7.74 0.00
Other International Funds Regulated EUR Accumulating Share Class € 22.71 - 0.22 0.00
Broker Dealings: 0800 414 181 Hermes Global Emerging Markets Fund Class F Acc £ 1.48 1.48 0.01 0.00 Optimal Income A 147.54 152.10 -0.01 3.54
Arisaig Africa Consumer Fund Limited $ 12.33 - -0.03 0.00 Cedar Rock Capital Fd Plc $ 395.22 - -6.81 0.00 Invesco Gilt A £ 17.25 - 0.07 -
OEIC Funds Morant Wright Fuji Yield YEN Dist ¥ 964.36 - 8.45 2.75
Hermes Global Emerging Markets Fund Class R Acc € 3.26 3.26 0.03 0.00 Recovery A 10638.86 11082.15 -39.00 0.76
Arisaig Asia Consumer Fund Limited $ 67.78 - -0.02 0.00 Cedar Rock Capital Fd Plc £ 473.74 - -14.32 0.00 Target 2020 A-ACC-GBP £ 0.62 - 0.00 0.47 Invesco Global Small Cap Equity A NAV $ 126.12 - 0.55 0.00
Morant Wright Sakura Fund Sterling Acc Hedged £ 11.87 - 0.06 0.00
Hermes Global Equity Fund Class F Acc £ 1.81 1.81 0.00 0.00 Strategic Corproate Bond A 141.59 147.49 0.18 2.42
Arisaig Global Emerging Markets Consumer Fund $ 10.45 - -0.01 0.00 Cedar Rock Capital Fd Plc € 369.41 - -4.98 0.00 Target 2025 A-ACC-GBP £ 1.46 - 0.00 0.29 Invesco Global High Income A NAV $ 12.47 - 0.00 6.17
Morant Wright Sakura Fund Euro Acc Hedged € 11.96 - 0.06 0.00
Hermes Global Equity Fund Class R Acc € 4.13 4.13 0.00 0.00 UK Inf Lkd Corp Bd A Inc 108.58 111.94 -0.02 1.10
Arisaig Global Emerging Markets Consumer UCITS € 12.13 - 0.01 0.00 Target 2030 A-ACC-GBP £ 1.59 - 0.00 0.36 Invesco Gbl R/Est Secs A GBP F F £ 9.64 - 0.01 0.79
Morant Wright Sakura Fund Yen Acc Unhedged ¥ 1240.18 - 6.47 0.00
Hermes Global ESG Equity Fund Class F Acc £ 1.37 1.37 0.00 0.00 UK Select A 1519.70 1583.02 -2.10 1.10
Arisaig Global Emerging Markets Consumer UCITS STG £ 12.88 - 0.00 0.00 Charles Schwab Worldwide Funds Plc (IRL) Institutional OEIC Funds Invesco Global Health Care A $ 119.01 - -0.02 0.00
Morant Wright Sakura Fund Dollar Acc Hedged $ 11.91 - 0.06 0.00
Regulated Dragon Capital Group Hermes Global High Yield Credit Fund Class F Acc £ 1.32 1.32 0.01 0.00
Europe (ex-UK) Fund ACC-GBP £ 4.40 - -0.01 1.31
Arisaig Latin America Consumer Fund $ 24.77 - 0.13 0.00 1501 Me Linh Point, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, Vietnam Invesco Global Select Equity A $ 12.97 - 0.01 0.07
Schwab USD Liquid Assets Fd $ 1.00 - 0.00 0.01 Morant Wright Sakura Fund Swiss Franc Acc HedgedSFr 11.78 - 0.07 0.00
Fund information, dealing and administration: funds@dragoncapital.com
Reduced Duration UK Corp Bond Gross £ 11.24 - 0.01 3.30 Hermes Global High Yield Credit Fund Class R Acc € 2.97 2.97 0.00 0.00 MFS Investment Funds (LUX)
Other International Funds Invesco Jap Eqty Core A $ 1.86 - 0.01 - FCA Recognised
Reduced Duration UK Corp Bond Inc £ 10.12 - 0.01 3.30 Hermes Global Small Cap Fund Class F Acc £ 1.19 1.19 0.00 0.00
Artisan Partners Global Funds PLC (IRL) Vietnam Property Fund (VPF) NAV $ 0.80 - -0.11 0.00 Blend.Research Gb.Eq.Fd. € 105.77 - 1.09 0.00
Chartered Asset Management Pte Ltd Invesco Japanese Equity A $ 19.37 - 0.20 -
Beaux Lane House, Mercer Street Lower, Dublin 2, Ireland Other International Funds Reduced Dur UK Corp Bond Gross Inc £ 10.13 - 0.01 3.30 Hermes Global Small Cap Fund Class R Acc € 2.03 2.03 0.00 0.00
Tel: 44 (0) 207 766 7130 Invesco Korean Equity A $ 28.81 - -0.30 0.00 Blend.Research Gb.Eq.Fd. £ 119.18 - 0.82 0.00
FCA Recognised CAM-GTF Limited $ 322728.55 322728.55 -5875.86 0.00
DSM Capital Partners Funds (LUX) UK Gilt Fund Inc £ 1.45 - 0.01 1.77 Hermes Multi Asset Inflation Fund Class F GBP Acc £ 1.02 1.02 0.00 0.00
Blend.Research Gb.Eq.Fd. $ 104.23 - 0.80 0.00
Artisan Partners Global Funds plc Invesco PRC Equity A $ 55.88 - 0.42 0.00
www.dsmsicav.com
CAM GTi Limited $ 791.62 - 38.82 -
Artisan Global Equity Fund Class I USD Acc $ 14.93 - 0.10 0.00 Regulated UK Long Corporate Bond - Gross Inc £ 12.90 - 0.06 3.51 Hermes Multi Strategy Credit Fund Class F Acc Hed £ 1.10 1.10 0.01 0.00
Invesco Pacific Equity A $ 51.49 - 0.36 0.07 Blend.Research U.S.Core Eq.Fd. € 108.05 - 0.67 -
Raffles-Asia Investment Company $ 1.64 1.64 0.04 5.24 Global Growth I2 Acc € 140.86 - 0.99 0.00 Morgan Stanley Investment Funds (LUX)
Artisan Global Opportunities I USD Acc $ 13.48 - 0.06 0.00 Hermes US All Cap Equity Class F Stg £ Acc £ 1.22 1.22 0.00 0.00
Invesco Global Technology A $ 15.95 - 0.01 0.00 Blend.Research U.S.Core Eq.Fd. £ 116.02 - 0.31 - 6b Route de Trèves L-2633 Senningerberg Luxembourg (352) 34 64 61
Global Growth I1 Eur € 105.27 - 0.73 0.00 www.morganstanleyinvestmentfunds.com
Artisan Global Value Fund Class I USD Acc $ 17.07 - 0.16 0.00
Findlay Park Funds Plc (IRL) Hermes US All Cap Equity Class R € Acc € 2.07 2.07 0.00 0.00
Invesco UK Eqty A £ 8.16 - -0.02 1.46 Blend.Research U.S.Core Eq.Fd. ¥ 9366.00 - 117.00 0.00 FCA Recognised
30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900
DSM US Large Cap Growth $ 103.19 - 0.32 - FCA Recognised
Artisan US Value Equity Fund Class I USD Acc $ 12.30 - 0.10 0.00 Hermes US SMID Equity Fund Class F Acc £ 2.07 2.07 0.00 0.00 US Advantage A F $ 61.54 - 0.09 -
Blend.Research U.S.Core Eq.Fd. $ 106.58 - 0.37 -
American Fund USD Class $ 87.27 - 0.38 -
Artisan Global Opportunities Class I EUR Acc € 18.16 - 0.15 0.00 Hermes US SMID Equity Fund Class R Acc € 3.85 3.85 0.00 0.00 Asian Equity A F $ 45.68 - 0.44 0.00
Em.Mk.Eq.Fund Euro € 119.93 - 1.83 0.00
Edinburgh Partners Limited (IRL) American Fund GBP Hedged £ 47.33 - 0.20 0.00
27-31 Melville Street, Edinburgh EH3 7JF Em.Mk.Eq.Fund Sterling £ 118.26 - 1.41 0.00 Asian Property A F $ 19.35 - 0.12 0.00
Tel: +353 1 434 5143 Dealing - Fax +353 1 434 5230 American Fund GBP Unhedged £ 65.43 - 0.01 0.00
Ashmore Sicav (LUX) Cheyne Capital Management (UK) LLP (IRL) INDIA VALUE INVESTMENTS LIMITED (INVIL) Diversified Alpha Plus A F € 27.59 27.59 -0.01 0.00
FCA Recognised Em.Mk.Eq.Fd.US Dollar $ 102.25 - 1.29 0.00
2 rue Albert Borschette L-1246 Luxembourg Regulated www.invil.mu
Edinburgh Partners Opportunities Fund PLC Latin American Fund USD Class $ 14.76 - 0.14 0.00
FCA Recognised Other International Funds Emerg Europ, Mid-East & Africa Eq A F € 71.59 - 0.96 0.00
Cheyne Convertibles Absolute Return Fund € 1360.19 - 1.93 0.00 Gb.Conc.Eq.Fd.Euro € 299.97 - 3.58 0.00
Emerging Opportunities I USD $ $ 1.21 - 0.02 0.87 GAM
Ashmore SICAV Emerging Market Debt Fund $ 101.56 - 0.06 8.00 Latin American Fund GBP Unhedged £ 11.22 - 0.06 0.00 NAV £ 9.11 - -0.05 0.00
Cheyne Global Credit Fund € 122.73 - 0.02 0.00 funds@gam.com, www.jbfundnet.com Gb.Conc.Eq.Fd.Sterl.UK T £ 210.52 - 1.78 0.00 Emerging Markets Debt A F $ 85.01 - 0.05 0.00
European Opportunities I EUR € 2.33 - 0.01 1.61 Regulated
Ashmore SICAV Emerging Market Frontier Equity Fund $ 150.68 - 0.20 1.11
Cheyne European Mid Cap Fund € 1081.59 - 0.96 0.00 Gb.Conc.Eq.Fd.Sterling £ 318.55 - 2.69 0.00 Emerging Markets Domestic Debt AX F £ 12.56 12.56 0.01 4.22
European Opportunities I GBP £ 1.94 - 0.00 1.56 Ms EF Special Val. EUR/A € 147.19 - 0.26 1.07
Ashmore SICAV Emerging Market Total Return Fund $ 87.52 - 0.17 6.26
The First Investor QSCC Intrinsic Value Investors (IVI) LLP (IRL)
5th Floor, Barwa Bank Building, Grand Hamad Street 1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210 Emerging Markets Equity A F $ 37.61 37.61 0.36 0.00
Strategy Balanced-CHF/B SFr 153.75 - 0.06 0.00 Gb.Conc.Eq.Fd.US $ 212.00 - 1.96 0.00
European Opportunities I USD $ 2.60 - 0.00 1.73 , P.O. Box 16034, Doha, State of Qatar FCA Recognised
Ashmore SICAV Global Small Cap Equity Fund $ 135.91 - 0.58 0.00
Cheyne Capital Management (UK) LLP + 974 4459 6111
Strategy Balanced-EUR € 158.99 - 0.10 0.00 Gb.Eq.Hdg Fd.Euro IRE T € 196.48 - 2.05 0.00 Euro Bond A F € 16.55 16.55 0.03 -
European Opportunities A EUR € 2.28 - 0.01 1.04 IVI European Fund EUR € 19.37 - 0.06 0.00
Other International Funds http://www.tfi.com.qa/
EM Mkts Corp.Debt USD F $ 90.91 - 0.06 7.92
Other International Funds Euro Corporate Bond AX F £ 26.01 26.01 -0.06 1.44
IVI European Fund GBP £ 21.88 - 0.06 0.54 Strategy Balanced-USD/B $ 134.33 - 0.01 0.00 Gb.Eq.Euro Hdg Fd. € 278.33 - 2.91 0.00
Cheyne European Event Driven Fund € 126.18 - -0.62 0.00 Global Opportunities I USD $ 1.63 - 0.00 1.22
EM Mkts Loc.Ccy Bd USD F $ 83.60 - 0.31 3.82 TFI GCC Equity Opportunities Fund (Q)QAR 1245.70 - 11.19 0.00
Gb.Eq.Fund Euro € 300.94 - 3.64 0.00 Euro Strategic Bond A F € 46.04 46.04 0.10 -
Cheyne Real Estate Credit Holdings Fund £ 168.24 - 0.22 0.00 Strategy Growth-CHF/B SFr 94.87 - 0.07 0.00
Global Opportunities I GBP £ 1.23 - 0.00 1.27

Gb.Eq. Fd Euro IRE T € 190.46 - 2.30 0.00 European Currencies High Yield Bd A F € 23.20 23.20 0.02 -
Cheyne Real Estate Credit Holdings Fund III £ 111.42 - 0.44 0.00 Strategy Growth-EUR € 119.12 - 0.12 0.00
Global Opportunities A GBP £ 1.15 - 0.00 0.76 Foord Asset Management
Other International Funds Gb.Eq.Fd.Sterling UK T £ 255.47 - 2.21 0.00 European Equity Alpha A F € 41.40 - 0.08 0.00
Cheyne Real Estate Debt Fund Class A1 £ 129.44 - -0.61 0.00 Strategy Inc-CHF/B SFr 121.54 - 0.04 0.00
Pan European Opportunities I EUR € 1.40 - 0.00 -
Foord International Trust $ 35.89 - 0.11 0.00 European Property A F € 34.94 34.94 0.05 -
Strategy Inc-EUR/B € 163.18 - 0.07 0.00 Gb.Eq.Fd.US Dollar $ 335.77 - 3.16 0.00
Cheyne Total Return Credit Fund - December 2017 Class $ 200.42 - 8.05 0.00
Foord Global Equity Fund_Class B $ 13.05 - 0.04 0.00 Eurozone Equity Alpha A F € 11.37 11.37 0.04 -
Strategy Inc-USD/B $ 151.37 - 0.02 0.00 Gb.Eq.Fund Sterling £ 252.44 - 2.18 0.00
Cheyne Total Return Credit Fund 2020 $ 111.93 - 7.10 - Invesco (LUX)
Aspect Capital Ltd (UK) Dublin 00 353 1 439 8100 Hong Kong 00852 3191 8282 Global Bond A F $ 41.52 41.52 0.07 0.00
Gb.Val.Ex-Jap.Fd.USD $ 129.12 - 1.07 0.00
Other International Funds FCA Recognised
Franklin Templeton International Services Sarl (IRL) Invesco Management SA Global Brands A F $ 106.07 - -0.24 0.00
Aspect Diversified USD $ 413.83 - -2.74 0.00 Cohen & Steers SICAV (LUX) JPMorgan House - International Financial Services Centre,Dublin 1, Ireland Gb.Val.Ex-Japan Fd.Yen ¥ 13224.00 - 229.00 0.00
Regulated Other International Funds Invesco Active Multi-Sector Credit Fund A € 3.06 - 0.00 0.00
Gb.Val.Fd. Euro € 142.89 - 1.50 0.00 Global Convertible Bond A F $ 42.32 - 0.07 0.00
Aspect Diversified EUR € 248.69 - -2.57 0.00 Franklin Emerging Market Debt Opportunities Fund Plc
European Real Estate Securities € 23.9969 - 0.0526 1.69 EFG Hermes Invesco Asia Balanced A dist $ 14.45 - -0.03 3.54
DIFC, The Gate Building, West Wing Level 6, PO BOX 30727, Dubai UAE Franklin Emg Mkts Debt Opp CHFSFr 17.88 - 0.39 8.56 Gb.Val.Fd.Sterling £ 145.66 - 1.03 0.00 Global Property A F $ 29.75 - 0.08 0.00
Aspect Diversified GBP £ 129.23 - -1.27 0.00
Europ.RealEstate Sec. IX € 32.7019 - 0.0717 0.00 Contact: Telephone + 971 4 363 4029 Email AMsales@EFG-HERMES.com
Invesco Asia Consumer Demand Fund A income $ 13.56 - 0.10 0.23
Other International Funds Franklin Emg Mkts Debt Opp EUR € 12.63 - 0.25 6.59 Gb.Val.Fd.USD $ 114.75 - 0.90 0.00 Indian Equity A F $ 39.94 - 0.48 0.00
Aspect Diversified CHF SFr 118.13 - -1.24 0.00
Gbl Listed Infrastructure I $ 10.8697 - 0.0323 - Kames Capital VCIC (IRL)
The EFG-Hermes Egypt Fund $ 29.93 - - 0.00 Invesco Asia Infrastructure (A) $ 13.46 - 0.05 0.71 1 North Wall Quay, Dublin 1, Ireland +35 3162 24493
Franklin Emg Mkts Debt Opp GBP £ 11.06 - 0.28 6.41 Low Volatility Gb.Eq.Fd.Euro € 112.64 - 1.14 0.00 Latin American Equity A F $ 48.43 - 0.23 0.00
Aspect Diversified Trends USD $ 122.78 - 0.54 0.00
Gbl Listed Infrastructure IX $ 10.9968 - 0.0327 - FCA Recognised
EFG-Hermes Frontier Equity UCITS Fund Class I $ 1065.30 - -4.23 - Invesco Asia Opportunities Equity A $ 112.84 - 0.78 0.00
Franklin Emg Mkts Debt Opp SGD S$ 23.41 - 0.56 5.13 Absolute Return Bond B GBP Acc 1096.06 - 0.26 1.69 Low Volatility Gb.Eq.Fd.Sterl £ 126.97 - 0.85 0.00 Short Maturity Euro Bond A F € 20.43 20.43 0.01 0.00
Aspect Diversified Trends EUR € 122.17 - 0.53 0.00
Gbl RealEstate Sec. I $ 11.8321 - 0.0537 1.88
EFG-Hermes MENA Equity UCITS Fund Class A $ 965.88 - -26.69 - Invesco Balanced Risk Allocation Fund A € 16.14 - 0.01 -
Franklin Emg Mkts Debt Opp USD $ 18.00 - 0.36 6.60 Eq Market Neutral B Acc 988.19 - 0.55 - Low Volatility Gb.Eq.Fd.USD $ 111.07 - 0.83 0.00 US Dollar Liquidity A F $ 13.03 - 0.00 0.00
Wednesday 7 September 2016 FINANCIAL TIMES 19

MANAGED FUNDS SERVICE

Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield Fund Bid Offer D+/- Yield

US Growth A F $ 71.35 - 0.45 - Pictet-Biotech-I USD F $ 686.60 - -1.08 0.00 European Income Acc EUR € 11.36 11.36 -0.01 0.00 Renminbi Bond Fund USD Cls B $ 128.09 - 0.28 2.82

US Growth AH F € 49.03 49.03 0.31 0.00 Pictet-CHF Bonds I CHF SFr 514.27 - 0.22 0.00 European Ex UK Inc EUR Acc € 9.88 9.88 0.01 0.00 S W Mitchell Capital LLP (IRL) Renminbi Bond Fund YEN Cls B ¥ 14419.71 - 31.79 0.00 Zadig Gestion (Memnon Fund) (LUX)
Regulated FCA Recognised
US Growth AX F £ 53.29 53.29 0.08 - Pictet-China Index I USD $ 113.53 - 1.74 0.00 Financial Opps I USD $ 11.39 - -0.02 1.71 SWMC European Fund B EUR € 13588.96 - -17.84 0.00 Renminbi Bond Fund USD Cls A $ 176.57 - 0.39 3.06 Memnon European Fund I GBP £ 135.13 - 0.06 0.00

US Property A F $ 76.34 - -0.13 0.00 Pictet-Clean Energy-I USD F $ 81.70 - 0.71 0.00 GEM Growth I USD $ 9.54 - 0.09 0.00 SWMC UK Fund B £ 11899.87 - 21.19 0.00 Renminbi Bond Fund GBP Cls A £ 170.89 - 0.37 3.26

Pictet-Digital Communication-I USD F $ 296.26 - 1.78 0.00 GEM Income I USD $ 10.44 - 0.10 0.00 SWMC Small Cap European Fund B EUR € 12745.03 - 68.22 0.00 Renminbi Bond Fund SGD Cls A S$ 169.44 - 0.38 3.19
Oasis Crescent Management Company Ltd TreeTop Asset Management S.A. (LUX)
Other International Funds Regulated Data Provided by
Morgens Waterfall Vintiadis.co Inc Pictet-Em Lcl Ccy Dbt-I USD F $ 172.68 - 0.58 0.00 Global Alpha I USD $ 13.38 13.38 0.13 0.00 Renminbi Bond Fund YEN Cls A ¥ 21339.00 - 46.00 0.00
SWMC Emerging European Fund B EUR € 10223.71 - 79.83 0.00 TreeTop Convertible Sicav
Other International Funds Oasis Crescent Equity Fund R 10.09 - 0.00 0.00
Pictet-Emerging Europe-I EUR F € 305.22 - 3.46 0.00 Global Convertible I USD $ 11.62 11.62 0.01 0.00 Renminbi Bond Fund EUR Cls A € 115.03 - 0.25 3.22 International A € 285.38 - 1.21 0.00
Phaeton Intl (BVI) Ltd (Est) $ 371.07 - 3.12 0.00

Pictet-Emerging Markets-I USD F $ 548.54 - 5.28 0.00 Global Insurance I GBP £ 5.06 - 0.00 0.00 International B $ 370.47 - 1.57 0.00
Oasis Global Mgmt Co (Ireland) Ltd (IRL)
Regulated Pictet-Emerging Markets Index-I USD F $ 240.06 - 2.63 0.00 Global Technology I USD $ 26.84 - 0.19 0.00 International C £ 121.63 - 0.51 3.33
Oasis Global Investment (Ireland) Plc

Oasis Crescent Global Short Term Income Fund $ 0.99 - 0.00 1.22
Pictet-Emerging Corporate Bonds I USD $ 117.71 - 0.05 0.00 Healthcare Blue Chip Fund I USD Acc $ 10.81 10.81 0.09 0.00 International D € 256.64 - 1.08 3.17
www.morningstar.co.uk
Pictet-Emerging Markets High Dividend I USD $ 104.99 - 0.84 0.00 Healthcare Opps I USD $ 36.23 - 0.22 0.00 TreeTop Global Sicav
Data as shown is for information purposes only. No
Oasis Global Equity $ 28.12 - 0.03 0.33 RobecoSAM (LUX)
Tel. +41 44 653 10 10 http://www.robecosam.com/ Global Opp.A € 144.94 - 0.90 0.00 offer is made by Morningstar or this publication.
Oasis Crescent Global Investment Fund (Ireland) plc Pictet-Emerging Markets Sust Eq I USD $ 93.28 - 0.95 0.00 Income Opportunities B2 I GBP Acc £ 1.85 1.85 0.00 0.00
Regulated E.I. Sturdza Strategic Management Limited (GSY)
Natixis International Funds (LUX) I SICAV (LUX) Global Opp.B $ 146.35 - 0.95 0.00
Regulated
One Carter Lane, London, EC4V 5ER, 0044 20 3405 6000 Oasis Crescent Global Equity Fund $ 28.94 - 0.05 0.11 Pictet-EUR Bonds-I F € 593.69 - 0.69 0.00 Japan Alpha I JPY ¥ 175.35 175.35 0.89 0.00 RobecoSAM Sm.Energy/A £ 13.54 - 0.03 1.40
FCA Recognised Nippon Growth Fund Limited ¥ 82234.00 - 3138.00 0.00
Global Opp.C £ 202.21 - 1.53 2.70
Oasis Crescent Variable Balanced Fund £ 10.66 - -0.03 1.37 Pictet-EUR Corporate Bonds Ex Fin i EUR € 151.97 - 0.10 0.00 Japan I JPY ¥ 1695.35 - 11.52 1.22 RobecoSAM Sm.Energy/N € 12.30 - 0.03 0.00
Harris Global Equity R/A (USD) $ 250.92 250.92 -0.07 0.00
Strat Evarich Japan Fd Ltd JPY ¥ 68006.00 - 1392.00 0.00
Sequoia Equity A € 141.51 - 0.51 0.00
OasisCresGl Income Class A $ 10.86 - 0.00 2.50
Harris U.S. Equity Fund R/A (USD) $ 221.02 221.02 -0.01 0.00 Pictet-EUR Corporate Bonds-I F € 210.52 - 0.15 0.00 North American I USD $ 18.50 18.50 0.10 0.00 RobecoSAM Sm.Materials/A £ 151.07 - 0.52 1.16
Strat Evarich Japan Fd Ltd USD $ 663.47 - 13.59 0.00
Sequoia Equity B $ 148.66 - 0.66 -
Guide to Data
OasisCresGl LowBal D ($) Dist $ 11.99 - 0.01 0.00 Pictet-EUR Government Bonds I EUR € 167.43 - 0.30 0.00 UK Absolute Equity I GBP £ 14.34 14.34 -0.05 0.00 RobecoSAM Sm.Materials/N € 156.06 - 0.60 0.00
Harris Concentrated U.S. Equity R/A (USD) $ 168.22 168.22 -0.03 0.00
Sequoia Equity C £ 184.64 - 1.03 2.71 The fund prices quoted on these pages are supplied by
OasisCresGl Med Eq Bal A ($) Dist $ 12.25 - 0.02 0.61 Pictet-EUR High Yield-I F € 255.63 - 0.23 0.00 RobecoSAM Sm.Materials/Na € 107.73 - 0.42 0.00
Loomis Sayles Strategic Alpha R/A (USD) $ 113.82 113.82 -0.04 0.00 the operator of the relevant fund. Details of funds
E.I. Sturdza Funds PLC (IRL)
Regulated published on these pages, including prices, are for the
Oasis Crescent Gbl Property Eqty $ 10.12 - -0.02 1.61 Pictet-EUR Short Mid-Term Bonds-I F € 137.56 - 0.04 0.00 Polar Capital LLP (CYM) RobecoSAM Gl.Small Cap Eq/A £ 93.09 - 0.22 1.08 purpose of information only and should only be used
Regulated UBS Asset Management (UK) as a guide. The Financial Times Limited makes no
Nippon Growth (UCITS Fund Euro Hedged Class EUR) € 879.17 - 2.74 0.00
Natixis International Funds (Dublin) I plc (IRL) Pictet-EUR Short Term HY I EUR € 124.16 - -0.43 0.00 ALVA Convertible A USD $ 130.31 - 1.64 0.00 RobecoSAM Gl.Small Cap Eq/N € 166.50 - 0.46 0.00 21 Lombard Street, London, EC3V 9AH representation as to their accuracy or completeness
One Carter Lane, London, EC4V 5ER, 0044 20 3405 6000 Nippon Growth (UCITS Fund Euro Hedged Institutional Class EUR) € 1038.58 - 3.22 0.00 Client Services 0800 358 3012, Client Dealing 0800 358 3012 and they should not be relied upon when making an
investment decision.
Regulated Pictet-EUR Sov.Sht.Mon.Mkt EUR I € 102.62 - 0.00 0.00 European Conviction A EUR € 146.87 - 4.49 0.00 RobecoSAM Sustainable Gl.Eq/B € 185.64 - 0.35 0.00 www.ubs.com/retailfunds
Nippon Growth (UCITS) Fund JPY Class A shares ¥ 82972.00 - 246.00 0.00 Authorised Inv Funds The sale of interests in the funds listed on these pages
Loomis Sayles Global Opportunistic Bond R/D (USD) $ 13.34 13.34 -0.04 1.27

Asset Management
Pictet-Euroland Index IS EUR € 129.83 - 0.01 0.00 European Forager A EUR € 160.78 - 2.31 0.00 RobecoSAM Sustainable Gl.Eq/N € 161.03 - 0.32 0.00 OEIC may, in certain jurisdictions, be restricted by law and
the funds will not necessarily be available to persons
Asset Management
Nippon Growth (UCITS) Fund JPY Class B Acc shares ¥ 69610.00 - 206.00 0.00
Loomis Sayles High Income R/D (USD) $ 8.77 8.77 0.02 - UBS Global Emerging Markets Equity C Acc £ 0.61 - 0.01 1.33
Pictet-Europe Index-I EUR F € 167.48 - 0.08 0.00 RobecoSAM S.HealthyLiv/B € 182.89 - 0.15 0.00 in all jurisdictions in which the publication circulates.
Nippon Growth (UCITS) Fund JPY Class C Dis shares ¥ 82212.00 - 968.00 0.00
Persons in any doubt should take appropriate
Loomis Sayles Multisector Income R/D (GBP) $ 12.67 12.67 0.02 5.39 UBS Global Optimal C Acc £ 0.79 - 0.00 1.02 professional advice. Data collated by Morningstar. For
Odey Asset Management LLP (CYM) Pictet-European Equity Selection-I EUR F € 623.67 - -0.07 0.00 Private Fund Mgrs (Guernsey) Ltd (GSY) RobecoSAM S.HealthyLiv/N € 171.36 - 0.15 0.00
other queries contact reader.enquiries@ft.com +44
Regulated Regulated Nippon Growth (UCITS Fund Class D Institutional JPY) ¥ 45261.00 - 137.00 0.00 (0)207 873 4211.
Pictet-European Sust Eq-I EUR F € 244.44 - 0.01 0.00 UBS UK Opportunities C Acc £ 0.71 - 0.00 3.16
RobecoSAM S.HealthyLiv/Na £ 125.31 - 0.06 -
OEI Mac Inc GBP A £ 235.44 - -7.07 0.00 Monument Growth 30/08/2016 £ 512.27 517.67 2.95 1.18
Strategic China Panda Fund USD $ 2305.27 - 31.21 0.00 The fund prices published in this edition along with
Pictet-Global Bds Fundamental I USD $ 126.06 - -0.38 0.00 UBS US Equity C Acc £ 0.96 - 0.00 0.47 additional information are also available on the
RobecoSAM S.Water/A £ 212.11 - 1.26 0.97
OEI Mac Inc GBP B £ 142.47 - -5.59 0.00 Financial Times website, www.ft.com/funds. The
Strategic China Panda Fund Hedged EURO € 2221.64 - 29.78 0.00
UBS S&P 500 Index C Acc £ 0.66 - 0.01 1.56 funds published on these pages are grouped together
Pictet-Global Bonds-I EUR € 178.39 - -0.32 0.00 Prusik Investment Management LLP (IRL) RobecoSAM S.Water/N € 183.09 - 1.16 0.00
OEI MAC Inc USD $ 1236.63 - -37.94 0.00 by fund management company.
Enquiries - 0207 493 1331 Strategic China Panda Fund Hedged Sterling £ 2259.61 - 30.34 0.00
Pictet-Global Emerging Currencies-I USD F $ 101.36 - 0.00 0.00 UBS Targeted Return C Acc £ 12.38 - -0.01 1.69
Regulated Prices are in pence unless otherwise indicated. The
Odey European Inc EUR € 544.87 - -17.67 0.00
Strategic Euro Bond Accumulating Class CHFSFr 988.50 - -0.19 0.00 change, if shown, is the change on the previously
New Capital Fund Management Ltd (IRL) Prusik Asian Equity Income B Dist $ 178.95 - 1.45 3.73 UBS Sterling Corporate Bond Indexed C Acc £ 0.63 - 0.00 2.84 quoted figure (not all funds update prices daily). Those
Pictet-Global Emerging Debt-I USD F $ 400.04 - 0.10 0.00
Leconfield House, Curzon Street, London, W1J 5JB Odey European Inc GBP A £ 214.70 - -6.77 0.00 designated $ with no prefix refer to US dollars. Yield
Strategic Euro Bond Institutional Class EUR € 1024.63 - -0.07 0.00
FCA Recognised Prusik Asia A $ 207.33 - 0.97 0.00 UBS Multi Asset Income C Inc Net £ 0.50 - 0.00 3.06 percentage figures (in Tuesday to Saturday papers)
Pictet-Global Env.Opport-I EUR € 173.18 - 2.19 0.00
Odey European Inc GBP B £ 121.82 - -3.84 0.00 allow for buying expenses. Prices of certain older
New Capital UCITS Funds Strategic Euro Bond Fund Accumulating Class Shares € 1146.30 - -0.11 0.00 insurance linked plans might be subject to capital
Prusik Asian Smaller Cos A $ 161.88 - -0.01 0.00 UBS UK Equity Income C Inc Net £ 0.61 - 0.00 -
Pictet-Global Megatrend Selection-I USD F $ 234.02 - 1.59 0.00 gains tax on sales.
Asia Pac Bd USD Inst Inc $ 96.65 - 0.18 3.26 Odey European Inc USD $ 253.43 - -8.16 0.00
Strategic Euro Bond Fund Distributing Class Shares € 1035.16 - -0.10 0.00
Pictet-Greater China-I USD F $ 485.39 - 5.13 0.00 UBS Corporate Bond UK Plus C Inc Net £ 0.56 - 0.00 3.62 Guide to pricing of Authorised Investment Funds:
Asia Pac Bd USD Ord Inc $ 98.67 - 0.17 2.59 Giano Capital EUR Inc € 4398.20 - 4.97 0.00 Schroder Property Managers (Jersey) Ltd (compiled with the assistance of the IMA. The
Purisima Investment Fds (CI) Ltd (JER) Strategic European Smaller Companies Fund EUR Class € 1042.00 - 7.11 0.00
Other International Funds UBS Global Allocation (UK) C Acc £ 0.70 - 0.00 2.20 Investment Management Association, 65 Kingsway,
Pictet-Health-I USD $ 262.71 - 0.34 0.00
Asia Pac Eq EUR Ord Inc € 92.83 - 1.36 2.72 Regulated London WC2B 6TD.
Indirect Real Estate SIRE £ 125.50 134.94 -1.50 - Strategic Global Bond RMB Acc $ 1075.76 - 0.91 0.00 Tel: +44 (0)20 7831 0898.)
Pictet-High Dividend Sel I EUR F € 164.64 - 2.15 0.00 PCG B 171.59 - -1.61 0.00 UBS Global Enhanced Equity Income C Inc £ 0.46 - 0.01 10.43
Asia Pac Eq GBP Ord Inc £ 96.23 - 1.41 3.35 Odey Asset Management LLP (IRL)
FCA Recognised Strategic Global Bond USD Acc $ 1077.91 - -0.24 0.00 OEIC: Open-Ended Investment Company. Similar to a
Pictet-India Index I USD $ 104.45 - 0.66 0.00 PCG C 168.99 - -1.59 0.00 UBS US Growth C Acc £ 0.97 - 0.00 0.00 unit trust but using a company rather than a trust
Asia Pac Eq USD Ord Inc $ 98.06 - 1.42 2.68 structure.
Odey Pan European EUR R € 290.36 - 0.60 0.00 SIA (SIA Funds AG) (CH) Strategic US Momentum and Value Fund $ 734.73 - 3.35 0.00
Pictet-Indian Equities-I USD F $ 497.05 - 7.64 0.00 Other International Fds UBS Emerging Markets Equity Income C Inc £ 0.45 - 0.01 4.83
Asia Pac Eq USD Inst Acc $ 107.82 - 1.57 0.00 Different share classes are issued to reflect a different
Odey Absolute Return Focus Fund $ 95.67 - -1.76 - Strategic US Momentum & Value Fund USD I Class $ 489.82 - 2.24 0.00 currency, charging structure or type of holder.
Pictet-Japan Index-I JPY F ¥ 14374.33 - 70.49 0.00
Putnam Investments (Ireland) Ltd (IRL) LTIF Stability Growth SFr 192.90 - 1.90 - UBS FTSE RAFI Dev 1000 Index J Acc £ 117.70 - 0.90 1.62
Asia Pac Eq USD Inst Inc $ 109.41 - 1.60 3.24 Odey Allegra European EUR O € 255.07 - 0.29 0.00 Regulated
Strategic US Momentum and Value EUR Hedged Class EUR € 508.82 - 2.27 0.00 Selling price: Also called bid price. The price at which
LTIF Stability Inc Plus SFr 165.60 - 1.70 0.54 UBS MSCI World Min Vol Index J Acc £ 134.32 - 1.01 1.52 units in a unit trust are sold by investors.
Pictet-Japanese Equities Opp-I JPY F ¥ 8699.84 - 56.75 0.00 Putnam New Flag Euro High Yield Plc - E € 1028.94 - 1.16 3.65
Dyn Europ Eq EUR Ord Inc € 169.79 - 0.48 1.10 Odey Allegra International EUR O € 156.04 - 0.33 0.00 Strategic US Momentum and Value CHF Hedged Class CHFSFr 503.51 - 2.23 0.00
Buying price: Also called offer price. The price at
Pictet-Japanese Equity Selection-I JPY F ¥ 12723.51 - 69.09 0.00 which units in a unit trust are bought by investors.
Dyn Europ Eq GBP Ord Inc £ 178.72 - 0.53 1.59 Odey Allegra Developed Markets USD I $ 134.49 - -0.63 0.00
Standard Life Wealth (JER) Unicapital Investments (LUX) Includes manager’s initial charge.
Pictet-LATAM Lc Ccy Dbt-I USD F $ 127.29 - -0.15 0.00 PO Box 189, St Helier, Jersey, JE4 9RU 01534 709130
Dyn Europ Eq USD Ord Inc $ 170.70 - 0.48 1.04 Regulated
Odey European Focus Fund € 17.26 - -0.02 0.00 Single price: Based on a mid-market valuation of the
FCA Recognised
Pictet-Multi Asset Global Opportunities-I EUR € 119.37 - 0.12 0.00 Investments III € 5.03 - -22.38 - underlying investments. The buying and selling price
China Equity EUR Ord Acc € 132.43 - 2.13 0.00 Standard Life Offshore Strategy Fund Limited for shares of an OEIC and units of a single priced unit
Odey Giano European Fund EUR R € 113.24 - -0.13 0.00
trust are the same.
Pictet-Pacific Ex Japan Index-I USD F $ 361.94 - 5.78 0.00 Bridge Fund £ 1.7750 - 0.0053 2.01 Investments IV - European Private Eq. € 206.46 216.79 0.00 0.00
China Equity GBP Ord Acc £ 138.74 - 2.24 0.00 Odey Naver Fund EUR I € 114.52 - -0.37 0.00
Treatment of manager’s periodic capital charge:
Pictet-Premium Brands-I EUR F € 145.65 - 1.36 0.00 Diversified Assets Fund £ 1.2464 - 0.0046 3.30 Investments IV - Global Private Eq. € 286.62 300.95 0.00 0.00 The letter C denotes that the trust deducts all or part
China Equity USD Ord Acc $ 135.98 - 2.18 0.00 Odey Odyssey USD I $ 120.06 - -0.04 0.00 Ram Active Investments SA of the manager’s/operator’s periodic charge from
www.ram-ai.com Superfund Asset Management GmbH capital, contact the manager/operator for full details
Pictet-Quality Global Equities I USD $ 146.15 - 0.55 0.00 Global Equity Fund £ 2.1143 - 0.0073 1.40
China Equity USD Inst Acc $ 140.66 - 2.27 0.00 Other International Funds www.superfund.com, +43 (1) 247 00 of the effect of this course of action.
Odey Swan Fund EUR I € 63.61 - 0.11 0.00
Pictet-Russia Index I USD $ 58.50 - 0.65 0.00 RAM Systematic Emerg Markets Core Eq $ 88.12 - 0.86 - Global Balanced Fund - Income Units £ 1.5017 - 0.0003 2.40
Regulated Value Partners Hong Kong Limited (IRL)
Europ. Equity Fd EUR € 102.77 - 0.31 - www.valuepartners.net, fis@vp.com.hk Exit Charges: The letter E denotes that an exit charge
Odey European Absolute Return GBP S £ 90.25 - -0.08 0.00 Superfund Green EUR SICAV € 925.75 - 8.12 0.00 may be made when you sell units, contact the
RAM Systematic Emerg Markets Eq $ 159.61 - 1.59 - Regulated
Pictet-Russian Equities-I USD F $ 56.73 - 0.57 0.00 Global Balanced Fund - Accumulations Units £ 1.7878 - 0.0005 2.35 manager/operator for full details.
Europ. Equity Fd GBP £ 100.56 - 0.29 -
Superfund Red EUR SICAV € 814.56 - 1.60 0.00 Value Partners Asia Dividend Stocks Fund $ 9.45 - 0.13 0.00
Pictet-Security-I USD F $ 214.66 - 1.43 0.00 RAM Systematic European Eq € 387.44 - 1.38 - Global Fixed Interest Fund £ 1.0412 - 0.0005 4.50 Time: Some funds give information about the timing of
Europ. Equity Fd USD $ 102.20 - 0.29 - Odey Wealth Management (CI) Ltd (IRL) price quotes. The time shown alongside the fund
Superfund Blue EUR € 887.57 - 5.94 0.00 Value Partners Classic Equity Fund USD Z Unhedged $ 11.80 - 0.11 0.00 manager’s/operator’s name is the valuation point for
www.odey.com/prices
Pictet-Select-Callisto I EUR € 103.11 - 0.05 0.00 RAM Systematic Global Shareholder Yield Eq $ 105.92 - 0.36 0.00 Sterling Fixed Interest Fund £ 0.9298 - 0.0022 3.69
Global Val.Cr.Fd GBP Ord Inc £ 113.71 - -0.04 3.56 FCA Recognised their unit trusts/OEICs, unless another time is
Value Partners Classic Equity Fund CHF HedgedSFr 12.15 - 0.11 0.00 indicated by the symbol alongside the individual unit
Odey Opportunity EUR I € 218.76 - 0.30 0.00 Pictet-Small Cap Europe-I EUR F € 1128.71 - 3.48 0.00 RAM Systematic Long/Short Emerg Markets Eq $ 119.88 - -0.07 - UK Equity Fund £ 2.0138 - -0.0002 2.83 trust/OEIC name.
Global Val.Cr.Fd USD Inst Acc $ 130.79 - -0.03 0.00
The Hartford International Funds (IRL) Value Partners Classic Equity Fund EUR Hedged € 12.34 - 0.12 0.00
Pictet-ST.MoneyMkt-I € 140.23 - 0.00 - RAM Systematic Long/Short European Eq € 142.60 - 0.37 - Regulated The symbols are as follows: ✠ 0001 to 1100 hours; ♦
Global Val.Cr.Fd GBP Ord Acc £ 187.81 - -0.05 0.00 1101 to 1400 hours; ▲1401 to 1700 hours; # 1701 to
Gbl Govt Bond (Ex Japan) Index (GBP) £ 1907.69 - 3.42 0.00 Value Partners Classic Equity Fund GBP Hedged £ 12.61 - 0.10 0.00
Omnia Fund Ltd midnight. Daily dealing prices are set on the basis of
Pictet-ST.MoneyMkt JPY I USD ¥ 101414.31 - -2.93 0.00 RAM Systematic North American Eq $ 251.68 - 0.25 -
Global Val.Cr.Fd USD Ord Acc $ 176.43 - -0.05 0.00 the valuation point, a short period of time may elapse
Other International Funds Value Partners Classic Equity Fund GBP Unhedged £ 14.54 - 0.13 0.00 before prices become available. Historic pricing: The
UK Corporate Bond £ 1777.26 - 2.83 0.00
Pictet-ST.MoneyMkt-ICHF SFr 123.52 - -0.01 0.00 RAM Tactical Convertibles Europe € 144.42 - 0.05 - letter H denotes that the managers/operators will
Global Val.Cr.Fd EUR Ord Acc € 162.79 - -0.06 0.00 Estimated NAV $ 875.65 - 16.02 0.00
Value Partners Classic Equity USD Hedged $ 14.45 - 0.13 0.00 normally deal on the price set at the most recent
Gilt £ 1822.41 - 6.98 0.00
Pictet-ST.MoneyMkt-IUSD $ 136.04 - 0.00 0.00 RAM Tactical Global Bond Total Return € 144.74 - -0.02 - valuation. The prices shown are the latest available
Swiss Select Equity Inst Acc SFr 124.45 - 0.62 0.00 before publication and may not be the current dealing
Global Eq (Ex Japan) Index Fund ¥ 1.45 - 0.00 0.00 Value Partners Greater China Equity Fund $ 8.87 - 0.14 0.00 levels because of an intervening portfolio revaluation
Pictet-Timber-I USD F $ 153.77 - 1.11 0.00 RAM Tactical II Asia Bond Total Return $ 136.62 - 0.14 -
Swiss Select Equity Ord Acc SFr 122.46 - 0.60 0.00 Stenham Asset Management Inc or a switch to a forward pricing basis. The
www.stenhamassetmanagement.com Global Eq (ex Japan) Class HJ4 ¥ 1.51 - 0.00 0.00 Value Partners Health Care Fund RMB Class Z UnhedgedCNH 10.80 - 0.05 0.00 managers/operators must deal at a forward price on
Pictet Total Ret-Agora I EUR € 116.40 - -0.19 0.00 request, and may move to forward pricing at any time.
US Growth USD Ord Acc $ 204.29 - -0.03 0.00 Other International Funds
Value Partners Health Care Fund HKD Class A UnhedgedHK$ 10.11 - 0.06 0.00 Forward pricing: The letter F denotes that that
Global Eq (ex Japan) Class JP5 ¥ 1.40 - -0.01 0.00 managers/operators deal at the price to be set at the
Pictet Total Ret-Corto Europe I EUR € 137.74 - 0.32 0.00 Stenham Asia USD $ 122.25 - 2.31 0.00
US Growth EUR Ord Acc € 193.55 - -0.04 0.00 next valuation.
Global Eq Ex Japan Index Fund (Hedge) ¥ 1.28 - -0.01 0.00 Value Partners Health Care Fund USD Class A Unhedged $ 10.13 - 0.06 0.00
Pictet Total Ret-Divers Alpha I EUR € 106.10 - -0.05 0.00 Stenham Credit Opportunities A Class USD $ 101.21 - 0.85 0.00 Investors can be given no definite price in advance of
US Growth GBP Ord Acc £ 204.06 - -0.02 0.00 Optima Fund Management
Gbl Govt Bond (Ex Japan) Index ¥ 1.21 - -0.01 0.00 the purchase or sale being carried out. The prices
Other International Funds Pictet Total Ret-Kosmos I EUR € 110.49 - -0.04 0.00 Stenham Equity UCITS USD $ 140.51 - -0.47 0.00 appearing in the newspaper are the most recent
US Growth USD Inst Acc $ 189.74 - -0.01 0.00 Waverton Investment Funds Plc (1600)F (IRL) provided by the managers/operators. Scheme
Cuttyhunk Fund II Limited $ 1386.05 - 35.38 0.00 Gbl Govt Bond (ex Japan) Class JP4 ¥ 1.18 - -0.01 0.00 particulars, prospectus, key features and reports: The
Pictet Total Ret-Mandarin I USD $ 120.29 - 0.62 0.00 Stenham Growth USD $ 202.01 - 4.32 - waverton.investments@citi.com
Wealthy Nat Bd EUR Inst Inc € 115.46 - -0.08 3.22 Robeco Asset Management (LUX) most recent particulars and documents may be
FCA Recognised
JENOP Global Healthcare Fund Ltd $ 12.36 - 0.12 0.00 Weena 850, 3014 DA Rotterdam, The Netherlands Japan Equity Index Fund ¥ 0.94 - 0.00 0.00 obtained free of charge from fund
Pictet-US Equity Selection-I USD $ 194.69 - 0.85 0.00 www.robeco.com/contact Stenham Healthcare USD $ 172.55 - 7.58 0.00 Waverton Asia Pacific A USD $ 19.63 - 0.11 5.29 managers/operators. * Indicates funds which do not
Wealthy Nat Bd GBP Inst Inc £ 120.54 - -0.08 3.35
FCA Recognised Japan Equity Class JP3 ¥ 1.14 - 0.01 0.00 price on Fridays.
OPTIKA Fund Limited - Cl A $ 94.90 - 0.38 0.00
Pictet-US High Yield-I USD F $ 152.53 - 0.15 0.00 Stenham Managed Fund USD $ 108.76 - 1.95 0.00 Waverton Global Equity Fund A GBP £ 16.50 - 0.03 0.44
Wealthy Nat Bd EUR Ord Inc € 114.73 - -0.07 2.96 Asia-Pacific Equities (EUR) € 140.21 - 1.17 0.00 Charges for this advertising service are based on the
Optima Fd NAV $ 84.87 - 0.10 0.00 number of lines published and the classification of the
Pictet-USA Index-I USD F $ 194.38 - 0.82 0.00 Stenham Macro UCITS USD $ 96.15 - -0.53 0.00 Waverton Global Strategic Bond Fund A USD $ 8.65 - 0.01 4.99
Wealthy Nat Bd GBP Ord Inc £ 121.39 - -0.08 3.11 BP US Premium Equities (EUR) € 193.74 - 1.03 0.00 fund. Please contact data@ft.com or
Optima Discretionary Macro Fund Limited $ 84.98 - 0.06 0.00 call +44 (0)20 7873 3132 for further information.
Pictet-USD Government Bonds-I F $ 667.00 - -1.44 0.00 Stenham Multi Strategy USD $ 107.79 - -1.69 - Waverton UK Fund A GBP £ 14.20 - 0.00 1.64
Wealthy Nat Bd USD Ord Inc $ 118.75 - -0.07 2.91 BP US Premium Equities (USD) $ 218.33 - 1.17 0.00
The Dorset Energy Fd Ltd NAV $ 37.20 - 1.61 0.00
New Capital Alternative Strategies Pictet-USD Short Mid-Term Bonds-I F $ 131.44 - -0.02 0.00 Stenham Quadrant USD A $ 399.21 - 0.09 - Waverton Equity Fund A GBP £ 16.15 - 0.05 0.33
Chinese Equities (EUR) € 79.37 - 0.58 0.00
All Weather Fd USD Cls $ 114.97 - 0.91 0.00 Platinum Fd Ltd $ 87.15 - 0.61 0.00
Pictet-USD Sov.ST.Mon.Mkt-I $ 103.03 - 0.00 0.00 Stenham Trading Inc USD $ 115.60 - 0.03 - Waverton Sterling Bond Fund A GBP £ 9.79 - 0.01 4.94
Em Stars Equities (EUR) € 187.07 - 2.54 0.00
All Weather Fd EUR Cls € 102.64 - 0.69 0.00 Platinum Fd Ltd EUR € 16.66 - 0.10 0.00 Toscafund Asset Management LLP (UK)
Pictet-Water-I EUR F € 304.76 - 5.39 0.00 Stenham Universal USD $ 410.76 - 4.05 -
Emerging Markets Equities (EUR) € 160.44 - 1.83 0.00 www.toscafund.com
All Weather Fd GBP Cls £ 110.83 - 0.82 0.00 Platinum Japan Fd Ltd $ 55.60 - 0.01 0.00 Authorised Funds
Stenham Universal II USD $ 151.67 - 1.44 0.00 WA Fixed Income Fund Plc (IRL)
Flex-o-Rente (EUR) € 109.02 - 0.02 0.00 Regulated
Optima Partners Global Fd $ 14.06 - 0.01 0.00 Aptus Global Financials B Acc £ 2.99 - -0.02 4.88
Tactical Opps USD Cls $ 144.11 - -1.13 0.00
Glob.Consumer Trends Equities (EUR) € 155.04 - 1.38 0.00 European Multi-Sector € 123.60 - -0.05 0.00
Optima Partners Focus Fund A $ 15.01 - 0.01 0.00 Aptus Global Financials B Inc £ 2.52 - -0.01 5.10
Tactical Opps EUR Cls € 120.09 - -0.97 0.00 Stratton Street Capital (CI) Limited (GSY)
High Yield Bonds (EUR) € 137.12 - 0.10 0.00 Regulated
Tactical Opps GBP Cls £ 134.70 - -1.06 0.00
Japan Synthetic Warrant Yen Class ¥ 1310.29 - 367.92 0.00
Lux -O- Rente (EUR) € 148.15 - 0.08 0.00 Toscafund Asset Management LLP
Oryx International Growth Fund Ltd
Japan Synthetic Warrant GBP Hedged Class £ 134.52 - 36.47 0.00 www.toscafund.com
Other International Funds Platinum Capital Management Ltd New World Financials (EUR) € 51.04 - 0.63 0.00 Other International Funds
Other International Funds
NAV (Fully Diluted) £ 7.36 - 0.44 0.00 Japan Synthetic Warrant USD Class $ 14.30 - -0.10 0.00
Tosca A USD $ 241.71 - -41.64 -
Platinum All Star Fund - A $ 117.69 - - -
Japan Synthetic Warrant USD Hedged Class $ 136.70 - 37.58 0.00
Tosca Mid Cap GBP £ 258.90 - 1.75 0.00 Yuki International Limited (IRL)
Platinum Global Dividend Fund - A $ 49.93 - - -
Tel +44-20-7269-0207 www.yukifunds.com
Renminbi Bond Fund AUD Cls A A$ 129.03 - 0.30 3.17
Tosca Opportunity B USD $ 358.22 - 2.84 0.00 Regulated
Platinum Maverick Enhanced Fund Limited $ 91.82 - - 0.00
Northwest Investment Management (HK) Ltd Renminbi Bond Fund AUD Cls B A$ 130.99 - 0.30 2.96 Yuki Mizuho Umbrella Fund
Pegasus Fund Ltd A-1 GBP £ 61.28 - -0.06 0.00
11th Floor, Kinwick Centre, 32, Hollywood Road, Central Hong Kong +852 9084 4373
Yuki Mizuho Japan Dynamic Growth ¥ 6569.00 - 146.00 -
Other International Funds Renminbi Bond Fund CHF Cls A SFr 122.83 - 0.26 3.31
S W Mitchell Capital LLP (CYM)
Yuki Japan Low Price ¥ 24831.00 - 389.00 0.00
Northwest $ class $ 2350.49 - 24.22 0.00
Pictet Asset Management (Europe) SA (LUX) Regulated Renminbi Bond Fund CHF Cls B SFr 122.63 - 0.26 3.07
15, Avenue J.F. Kennedy L-1855 Luxembourg S W Mitchell European Fund Class A EUR € 245.25 - 7.78 - Yuki Japan Value Select ¥ 12586.00 - 210.00 -
Tel: 0041 58 323 3000 Renminbi Bond Fund CNH Cls A CNH 139.76 - 0.37 3.04
FCA Recognised YMR Umbrella Fund
S W Mitchell Small Cap European Fund Class A EUR € 204.47 - 3.45 -
Renminbi Bond Fund CNH Cls B CNH 139.46 - 0.37 2.82
Pictet-Absl Rtn Fix Inc-HI EUR € 109.00 - -0.20 0.00 YMR N Growth ¥ 10931.83 - -2753.17 -
Polar Capital Funds Plc (IRL) The Charlemagne Fund EUR € 254.81 - 4.13 -
Regulated Renminbi Bond Fund Euro Cls B € 125.10 - 0.27 2.98 Yuki Asia Umbrella Fund
Pictet-Agriculture-I EUR F € 190.64 - 1.65 0.00
Asian Financials I USD $ 326.37 326.37 2.88 1.03 Renminbi Bond Fund GBP Cls B £ 128.24 - 0.28 3.03 Yuki Japan Rebounding Growth Fund JPY Class ¥ 21965.00 - 364.00 -
Pictet-Asian Equities Ex Japan-I USD F $ 233.67 - 2.94 0.00
Biotechnology I USD $ 16.22 16.22 0.04 0.00 Renminbi Bond Fund SGD Cls B S$ 127.95 - 0.29 2.96 Yuki Japan Rebounding Growth Fund USD Hedged Class $ 864.77 - 14.35 0.00
Pictet-Asian Local Currency Debt-I USD F $ 165.99 - 0.17 0.00
20 ★ FINANCIAL TIMES Wednesday 7 September 2016

MARKETS & INVESTING

Currencies
FT Explainer

Keep calm and throw

away the capital key
After 18 months of
aggressive monetary
easing, inflation and
growth in the eurozone is
still in the doldrums. This
has prompted investors to
speculate that the
European Central Bank is
poised to extend its
quantitative easing project
— QE3 — again.
But there’s a snag. The
bond markets rally has
reduced the stock of bonds
eligible for eurozone QE,
and if the ECB wants to
expand the programme, it
will need to consider
loosening its rules.
One change suggested is
a deviation from the capital
keys used to calculate
sovereign bond purchases
— a move that would free
up billions of euros of fresh
bonds to buy. Restrictions
are self-imposed, so
change is possible. But any
alteration would require
Germany’s approval, so the
hurdle is high.
What is the capital key?
The key determines how
much capital each country
should contribute towards
the ECB — the calculation
roughly equates to the size
of individual economies.
For Germany — both the
largest economy and most
populous country — the
share is 18 per cent. For
Cyprus it is 0.15 per cent.
EU countries not in the
eurozone also contribute
— with the UK responsible
for almost 14 per cent.
When the ECB launched
QE in March 2015, it used
the capital key to work out
how much of each
country’s bonds should be
purchased, recalculating
the total to exclude non-
euro countries.
Germany is supposed to
make up 25 per cent of
total purchases — but
falling yields and a lack of
fresh bond sales mean the
number of German bonds
available for the ECB to
buy is dwindling.
If nothing changes, the
ECB might hit a wall in a
couple of months finding
itself without available
German bonds to buy, says
Peter Schaffrik, head of
European rates strategy at
Royal Bank of Canada.
What would happen if the
key was abandoned?
Credit Suisse estimates
that if the ECB disregarded
the capital key it would
free up an extra €620bn of
bonds to buy — meaning
the programme could run
until the projected March
2017 end date.
ECB bond purchases by country
Securities purchased under the public sector purchase
programme as of Aug 31 2016 (€bn)
0 50
Germany
France
Italy
Spain
Supranationals
Netherlands
Belgium
Austria
Portugal
Finland
Ireland
Slovakia
Slovenia
Lithuania
Luxembourg
Latvia
Malta
Cyprus
Estonia
Source: ECB
Most of the additional
supply will be in the
eurozone’s smaller
economies. As a result, the
yields on bonds issued by
countries such as Spain
and Italy will probably fall
closer in line with German
Bunds — the benchmark
for European markets.
Frederik Ducrozet at
Pictet says an explicit
deviation from capital key
would make the greatest
difference in addressing
the ECB’s shortage of
assets, even “small,
targeted deviations”.
However, at its last
meeting in July the ECB
quashed the idea, saying
“no attention [had been]
given”. Policymakers are
not expected to seriously
consider altering the
capital key at this week’s
ECB meeting either.
Why doesn’t the ECB want
to alter the capital key?
Any alteration would be
politically sensitive.
Removing the key would
allow the ECB to include
more bonds issued by
weaker economies into QE
— favouring countries with
large debt piles, such as
Italy.
Jens Weidmann,
president of Bundesbank,
has said moving away from
the capital key risks
blurring the line between
monetary and fiscal policy.
What other changes to QE
could the ECB make
instead?
The ECB has already
added corporate debt to its
QE programme and could
broaden the pool of
available assets further —
adding bank bonds, stocks
or exchange traded funds.
Alternatively it could
tweak existing rules and
raise the limit on how much
it can purchase of each
bond issue from 33 per
cent, increasing available
maturities beyond 2-30
years and buying bonds
with yields below the
minus 0.4 per cent deposit
rate.
Of these, raising the
issue limit on bonds would
be relatively simple,
according to HSBC, while
Credit Suisse thinks that
ECB would free up an extra
€390bn of bonds if it
lowered the yield floor at
which it will buy bonds.
However, this could be
more controversial as the
central bank could no
longer offset losses on the
bonds with income gained
from its deposit account.
Elaine Moore
100 150 200 250
Weak US services numbers hit dollar
Fed rate rise expectations
damped as sector suffers
steep monthly decline
ROGER BLITZ
The dollar took a hefty blow across the
foreign exchange market after surpris-
ingly poor US services data damped
expectations of a September rate rise
from the Federal Reserve and raised a
headache for other central banks wary
of a strengthening in their currencies.
Already weakened by Friday’s less
than impressive US jobs data, the big-
gest reserve currency fell against peers
after economic activity in the services
sector, the largest part of the US econ-
omy, slowed to a pace not seen since
early 2010.
Falls of 1 per cent against the yen,
Europe’s borrowers call the shots on covenants
Investors lose influence over
leveraged loan and junk bond
terms in a low-yield world
GAVIN JACKSON
Financial markets began the year beset
by concerns over the health of the world
economy, a tumbling oil price, the effec-
tiveness of central banks’ unconven-
tional policies and the valuation of both
bonds and equities.
However, there was a silver lining: the
turbulence gave those investors who
buy junk bonds and leveraged loans
more muscle over covenants — which
are the terms attached to the securities
that cover everything from the debt
repayment schedule to allowing exami-
nations of an issuer’s financial health.
That marked a significant departure
from the trend of the last five years
in which ultra-low interest rates left
borrowers with the upper hand to
dictate terms and fanned the growth
of so-called covenant-lite structures
in Europe. About half of loans sold
last year to institutional investors
in Europe included a covenant-
lite structure, according to S&P
Provisions are leading to
‘much more flexibility for
companies to restructure
the balance sheet’
Capital IQ, up from zero in 2011.
“It is just the terms that have been put
in front of investors are seen as just com-
pletely egregious,” says Stephen
Mostyn-Williams, chairman of DebtX-
plained, a research company that exam-
ines covenants for investors.
Roughly half of all the 2016 loans had
changes made to the covenants at the
request of investors, according to DebtX-
plained’sreview.Withthefinalquarterof
the year in sight, the question now is
whether buyers of leveraged loans and
junkbondscanwrestfurtherpowerfrom
thecompaniesdoingtheborrowing.
The answer will not cheer investors.
For a start, the supply picture is shifting
against them — a sharp contrast to ear-
lier in 2016 when the broader turmoil in
financial markets left a backlog of loans
to choose from.
As Michael Curtis, co-head of Euro-
pean loans at Intermediate Capital
Group, an asset manager, says “the pen-
dulum swung definitively in the favour
of lenders”. Overall supply has slowed in
0.8 per cent against the euro and 0.8 per quickly propel the UK into recession.
1% same day as the Federal Open Market
cent against the pound underlined the The dollar also fell more than 1 per cent Committee meeting.
sweeping nature of the hit. against the Swedish and Norwegian cur- Drop for the US Neither needs stronger currencies as
currency against
Kit Juckes, macro strategist at Société rencies, the Brazilian real and the Mexi- the yen. It fell 0.8% they battle low inflation and slow
Générale, said that for months the big can peso, and by more than 2 per cent on versus the euro growth. But any hope that the Fed would
winners of dollar weakness had been the rand. make their lives easier by raising rates is
higher-yielding and emerging market Rob Martin at Barclays said that the $1.34 receding, according to Mr Juckes.
currencies. Investors had been weighing services data matched the deterioration Sterling mark —
The BoJ was unlikely to be happy with
up a likely September rate rise, pushing in the pace of job creation, suggesting regained for the upward pressure on the yen as a
up the index that measures the dollar that Friday’s non-farm payrolls for the first time result of general dollar weakness, said
against its peers. But with the index August data were not driven by “statisti- since mid-July Mr Cole. The yen has advanced 14 per
dropping below 95, those prospects cal noise”. cent against the dollar so far this year,
looked bleak. Adam Cole, a currency strategist at confounding forecasts that the intro-
The weakening in the services sector RBC Capital, said the market was in the duction of negative rates would dent the
represented the “final nail in the coffin process of pricing out the risk of a Sep- Japanese currency.
of the September FOMC hike”, Mr tember rate rise following the slowing in “But it is running out of policy
Juckes said. the labour market. options, as any form of easing that
The greenback’s decline saw sterling The dollar’s falls have implications for pushes rates further into negative terri-
regain the $1.34 mark for the first time central banks ahead of crucial monthly tory risks driving bank stocks down,
since mid-July, fuelling a rally that has meetings. The European Central Bank and the resulting rise in risk aversion
been driven by UK data that have defied meets on Thursday while the Bank of may simply drive the yen higher still,”
predictions that the Brexit vote would Japan gathers on September 21, the he said.
Analysis. Capital markets
European leveraged
loan volume
Year-to-date total ($bn)
300
250
200
150
100
50
0
2006 08 10 12 14 16
Moody’s covenant
quality score
Five = weakest score
4.0
All high-yield
bonds
3.5
3.0
Excluding
“high-yield lite”
2.5
2011 12 13 14 15 16
Sources: Thomson Reuters LPC; Moody’s
Turbulence gave 2016. Across currencies about €84bn of “much more flexibility for companies to money managers, it is that the borrow-
investors who leveraged loans has been sold in Europe restructure the balance sheet”. ers that have been executing covenant-
buy junk bonds so far this year, down from the €129bn Indeed, analysis by rating agency lite deals are among those junk-rated
and leveraged that had been dispatched by this time in Moody’s suggests that, while investors companies that once commanded an
loans more 2015, according to Thomson Reuters. in loans and junk bonds enjoyed tail- investment-grade credit rating.
muscle over And in the euro junk bond market — winds during the period of market tur- Lisa Gundy, an executive at Moody’s
covenants where issuance so far this year is €33bn, bulence earlier this year, covenant-lite says, “what we can conclude is that, yes,
down from about €50bn last year — structures are a long way from extinc- there is more high yield-lite in 2016, but
there are some signs of the resumption tion in Europe. it has been dominated by the better
of covenant erosion. As the European About 37 per cent of European junk credits and by issuers with a historic
Central Bank has begun buying corpo- bonds sold this year were “high-yield- investment-grade programme”.
rate bonds the balance of power has lite offerings”, meaning they lack cer- That may hand investors some confi-
shifted back towards the borrowers. tain protections for creditors including dence as they weigh up the risks in snap-
A number of this summer’s bond sales restrictions on payments to equity hold- ping up covenant-lite loans and bonds.
— including offerings from the UK- ers or on the ability of a company to take Currently the average yield on corpo-
based MyDentist, which is backed by on more debt. That total is up from rate bonds is 0.62 per cent according to
private equity firm Carlyle, and from 28 per cent in 2015. BankofAmericaMerrillLynchindices;for
Italian gaming company Sisal — have According to a metric from Moody’s euro-denominated leveraged loans the
included contentious clauses in the that ranks covenant quality on a scale equivalent is 4.7 per cent, according to
event the companies are taken over. from 1 to 5, with 5 being the weakest, S&PLeveragedCommentaryandData.
“European investors are either una- the rating of the average high-yield Without a reversal from a fixed-
ware or unable to push back,” says Sab- bond in the first six months of the year is income universe dominated by low and
rina Fox, an analyst at Covenant Review, about 4. That compares with the aver- negative yields, it is the borrowers that
which examines covenants for institu- age of 3.1 at the beginning of 2011. will call the shots over debt documenta-
tional investors. The provisions led to If there is any encouragement for tion for at least the rest of the year.

Commodities

Olam forecasts revival of palm oil crops as prospect of La Niña damage fades
NEIL HUME AND EMIKO TERAZONO
Olam, one of the biggest traders of agri-
cultural commodities, has predicted
good crops this year — from grains to
palm oil — because the chances of a
harmful La Niña are so slim.
The forecast is likely to weigh on prices
for agricultural commodities, which are
already in decline.
Sunny Verghese, chief executive and
co-founder of Olam, said he did not
believe there was going to be “a serious
problem” this year from the weather
phenomenon.
“We follow this very closely and do a
lot of proprietary research, and all of
our indicators show that the chance of
it even being a mild La Niña is very,
very small,” he said.
The phenomenon, which is caused
by the cooling of the tropical Pacific
Ocean, normally brings dryness to
the farm belt of the US Midwest and
drives rain to Southeast Asia, where
most palm is grown.
In the past floods linked to La Niña
have disrupted the harvesting of oil
palm in Malaysia and Indonesia.
Palm oil, the most widely consumed
vegetable oil, is used for cooking and in a
wide range of packaged foods and cos-
metics, including ice cream, shampoo
and lipstick.
“The crop will be restored now that
the prospect for a large La Niña is out of
the way,” said Mr Verghese.
“We expect [palm oil] production to
revive.”
Prices in Malaysia have rallied in the
past two months. The commodity is
trading up 27 per cent since a July low to
2,880 ringgit ($709) a tonne, in part where near-term prices are much
because of sharp falls in inventories at higher than those further out. “It’s one
ports in China and India. of the highest we have ever seen,” said
The palm oil market has flipped into Mr Verghese.
steep backwardation — a situation Olam, which trades palm oil, has
planted 31,500 hectares of the crop in
Gabon. The group is also one of the lead-
Palm oil price ing traders of coffee and rice and is
Malaysian ringgit per tonne active in Russian wheat exports.
3000 Mr Verghese is not alone in his predic-
tion about the next La Niña. Many
2800 meteorologists have said the phenome-
non, which is forecast to develop later
2600 this year, will not be as strong as in 2012,
when severe droughts in the US devas-
2400 tated crops.
Wheat prices, meanwhile, have fallen
2200 to levels not seen in a decade. Asked
Jan 2016 Sep about the outlook for wheat, Mr Vergh-
ese said the weak crop in western
Source: Thomson Reuters
Europe would be more than offset by
strong harvests in other parts of the
northern hemisphere. “The Russian
crop is good, the US crop is good, the
Ukrainian crop is good, Kazakhstan
crop is good, Canada is good,” he said.
“So all of these guys together will
more than compensate for the shortfall
in western Europe.”
Mr Verghese was speaking after he
appeared at the Financial Times Com-
modities Asia Summit, held in Singa-
pore on Sunday and Monday.
During his speech, he highlighted the
importance of having long-term share-
holders — the only kind that could
stomach the volatility of agricultural
commodities.
Olam International’s biggest share-
holders are Temasek, Singapore’s
state investment agency, which owns
51.7 per cent, and Japanese trading
house Mitsubishi, which acquired a 20
per cent stake last year. Temasek
became the company’s majority share-
holder in 2014 when Olam was under
pressure after being attacked by Muddy
Waters, the US short seller.
“You can develop a business that is
well diversified across value chains,
geographies and product lines, but
you cannot run away from the fact that
it’s a cyclical business and cyclical busi-
nesses are not suitable for listing,” Mr
Verghese said.
“Personally, if I were to make a call, I
would like to be private. Many players
in the agricultural industry remain pri-
vate for a very good reason. And I think
the principal reason is that you have
take a long-term view, and you have to
be prepared to accept cyclicality in this
business.”
Wednesday 7 September 2016
TRADING POST
Jamie
Chisholm
Morgan Stanley has sent out its latest
Cross-Asset Playbook, a strategy note
chock full of observations and
opportunities for investors.
The US bank reckons growth in
developed economies and China will
disappoint in the coming months, but
emerging markets will do better.
Crucially, given the markets’ focus
this week, it says: “We think the risks of
a [US Federal Reserve] hike this year
are manageable, and would be more
concerned that the [European Central
Bank] disappoints dovish
expectations”.
It highlights several new trades,
including the following.
First, Morgan Stanley prefers US to
European equities. “The US is a high-
quality market, with a high total yield,
and the best 2016 earnings outlook
(outright or v consensus) of the major
markets we cover,” it says.
European stocks face possible
headwinds from a stronger euro,
weak earnings per share growth and
political risk, it adds.
Indeed political risk in Italy is one
reason the bank thinks US Treasuries
will outperform Rome’s paper.
Reduced expectations for more ECB
asset purchases as deflationary
pressures recede may also weigh on
Italian government debt.
Finally, among emerging market
stocks, those of South Korea are
among the most attractive, based
“on relative ROE trends, dividend
yield and valuation multiple”, says
Morgan Stanley.
With volatility costs low, it suggests
buying Kospi call options.
jamie.chisholm@ft.com
South Korean stock market
Kospi index (’000)
2.1
2.0
1.9
Sep 2015 2016 Sep
Source: Thomson Reuters Datastream
Wall Street
BofA and Wells Fargo
lead banks lower while
dividend payers rally
Adam Samson
Financial stocks fell yesterday as sectors
favoured for their dividends rallied,
after a gloomy US economic report
dimmed expectations of a Federal
Reserve interest rates rise this month.
September rate rise odds dropped
yesterday by 10 percentage points to 22
per cent, Bloomberg data show, after the
Institute for Supply Management
reported that growth in the US services
sector cooled in August to the lowest
level since early 2010.
The report came just days after the
ISM revealed that the factory sector,
which has long been struggling under
the weight of a strong US dollar and a
cutback in spending by energy groups,
unexpectedly contracted last month
London
Anglo advances as
diamond business
continues recovery
Bryce Elder
The continued recovery of its De Beers
diamonds arm meant Anglo American
outperformed a weak London market.
De Beers said it had sold $630m of
rough diamonds in its seventh offering
of 2016, up from $528m in the previous
sale. The result contrasted with US data
a day before, which showed polished
stone imports for July falling a fifth to
the lowest level since 2012. “Given how
Global overview
Dollar falls as weak US services
data drag on rate rise expectations
Treasury yields sink as
policy outlook dominates
trading, while Brent
retreats amid scepticism
over Saudi-Russian pledge
FT REPORTERS
US and European equity gauges were
mixed, while Treasury yields and the
dollar dropped as the outlook for global
monetary policy dominated trading
yesterday.
A report showing that growth in the
US service sector fell in August to the
lowest level since early 2010 weighed on
sentiment in the US and Europe, further
hitting expectations for a US rate rise
this month.
The pan-European Stoxx 600 index
finished down 0.3 per cent, as oil prices
remained under pressure and energy
stocks were weaker.
Brent crude for November retreated
1.6 per cent to $46.86 a barrel as inves-
tors voiced scepticism about the pledge
by Saudi Arabia and Russia to work
together to stabilise the market.
On Wall Street the S&P 500 returned
from the Labor Day break to trade up
0.2 per cent to 2,184.49 by midday in
New York. Traders digested the Insti-
tute for Supply Management’s non-
manufacturing purchasing managers’
index, which dropped to 51.4 in August,
from 55.5 the month before and lower
than expectations.
Based on federal funds futures, the
report prompted a cut in the odds that
Federal Reserve officials will add a sec-
ond rate rise when they give their deci-
sion on September 21.
“September is pretty clearly off the
table,” said JJ Kinahan, chief market
strategist at TD Ameritrade.
Yesterday’s weak showing for the
service sector reinforced sentiment fol-
lowing Friday’s jobs report for August.
S&P 500 sectors
Rebased
105
100
Aug 2016 Sep
Source: Thomson Reuters Datastream
Indices Close
change
S & P 500 2182.75
DJ Industrials
Nasdaq Comp
18508.06
5267.02
Russell 2000 1204.70
VIX 12.32
US 10 yr Treas Bd 1.54
US 2 yr Treas Bd 0.75
for the first time since February.
The services sector data, which is
far larger than the factory industry,
were “likely to give policymakers pause
as they consider raising rates at the
September [Fed] meeting”, said
Andrew Hollenhorst, a strategist at Citi
Research.
The financials sector logged the
steepest drop on the S&P 500 index
yesterday with the banks index
skidding 1.3 per cent.
The banking industry had jumped 7.1
per cent in August as investors bet
higher rates would help lenders increase
their profit margins by widening the
spread between their funding costs and
rates they charge on loans.
quickly sentiment can turn in the
midstream part of the market, it will be
important that the two majors remain
disciplined on volumes in order to avoid
the same midstream excess inventory
issues seen in 2012 and 2015,” said
Credit Suisse. Anglo closed 1.6 per cent
higher at 826.8p.
Banks led the wider market lower
with HSBC off 2.3 per cent to 568.5p and
Barclays down 2 per cent to 169.7p as
weaker than expected US services data
made an interest rate rise look a distant
prospect. The FTSE 100 was 0.8 per cent
lower, off 53.37 points at 6,826.05.
Standard Chartered dropped 3 per
cent to 639p with Barclays moving to
“underweight” on a 520p price target.
“While we see the macro outlook as
relatively supportive and expect
earnings to continue improving, we
believe that the valuation has now
significantly disconnected from the
medium-term earnings potential of the
business,” it told clients.
Unilever faded 0.9 per cent to £36.16
after Merrill Lynch restarted coverage
with “underperform”. Consensus
forecasts are premised on 5 per cent
annual organic sales growth and
continued margin expansion from zero-
based budgeting, which looked
★ FINANCIAL TIMES 21
MARKETS & INVESTING
Markets update
S&P 500 index
Change on day 0.14%
2190
2180
2170
2160
Aug 2016 Sep
0.8 per cent, as shares in foreign cur- US equities The telecoms and
rency earners came under pressure. utilities sectors rallied as chances of a
The ECB is due to make a monetary Federal Reserve interest rate rise
policy announcement tomorrow, declined after weak economic data
although most analysts expected no
changes to interest rates or its asset pur-
chase programme. FTSE 100 index
In the meantime, the euro added Change on day 0.78%
0.9 per cent on the day to $1.1246 and 7000
the German 10-year Bund yield was
6bp softer at minus 0.11 per cent. 6900
The central banks of Canada and Swe- 6800
den will deliver updates today. 6700
Earlier in the global session the Aug 2016 Sep
Reserve Bank of Australia met expecta-
tions and kept interest rates on hold at a UK equities Banking stocks such as
record low 1.5 per cent in what was Standard Chartered and Lloyds led a
Glenn Stevens’ final policy meeting as retreat on the benchmark FTSE 100
governor. index as the pound rallied
The S&P/ASX 200 trimmed morning
losses to be down 0.3 per cent, while the
Australian dollar was up more than a Eurofirst 300 index
per cent to US$0.7677 with traders con-
Change on day 0.37%
sidering the RBA’s accompanying state- 1380
ment less dovish than had been hoped. 1370
Paul Dales at Capital Economics said 1360
Dreamstime
the RBA had provided “no hint that 1350
No escape for Japan equity investors: FT.com/video another rate cut is around the corner”,
1340
The FT’s Leo Lewis on the difficulty of investing in Japanese particularly given that it seemed to
Aug 2016 Sep
stocks after Bank ofJapan’s comments on negative rates damp concerns about a buoyant hous-
ing market. European equities The German
Other stock markets in the region market bucked the trend with Spanish
The dollar index, which measures the economy adding fewer jobs than were more upbeat. Japan’s Nikkei 225 and Italian bourses closing more
greenback against a basket of its peers, expected in August, prompting inves- rose 0.3 per cent, helped by exporters as than a half of 1 per cent lower
extended early losses to trade down tors to review the prospect of the Fed the yen was initially one of the few
nearly 1 per cent to 94.93 as the US gov- lifting interest rates this year. major currencies to weaken versus the
ernment bond market staged a small There is still more than a 50 per cent greenback.
rally. The 10-year Treasury yield fell chance of an increase in December, but The yen then strengthened, however, Nikkei 225 index
7 basis points to 1.54 per cent. those odds are also under pressure. to trade more than 1 per cent firmer at (’000) Change on day 0.26%
17.0
“The market continues to discuss the Gold, which is sensitive to interest ¥102.15. The Japanese currency also
16.8
impact of the lower than expected rates and the greenback, rose $18 to gained on Monday following a speech
non-farm payrolls number from the $1,345 an ounce. from Haruhiko Kuroda, in which the 16.6
16.4
US last week and what it means for risk The softer dollar and weaker US data Bank of Japan governor signalled a cau-
assets and Fed pricing,” said analysts at also helped lift sterling nearly 1 per cent tious approach to cutting interest rates 16.2
Aug 2016 Sep
Citigroup. to $1.3432, with the pound also bol- further into negative territory.
“Focus is also turning to the European stered by UK economic data that has Hong Kong’s Hang Seng was up 0.6 per Asian equities Bourses were mostly
Central Bank meeting later this week been better than expected since the cent, while on the Chinese mainland the firmer but Australia’s S&P/ASX 200
along with Bank of Canada and Riks- Brexit vote. Shanghai Composite climbed 0.6 per dipped 0.3 per cent after the central
bank rate decision.” A firmer pound left London’s FTSE cent and the tech-focused Shenzhen bank was less dovish than expected
The NFP report showed the US 100 underperforming with a drop of Composite jumped 1.5 per cent.
Bank of America and Wells Fargo,
two of the biggest American banks, fell Trading Directory
1.6 per cent each yesterday to $15.75
and $49.75 respectively.
95 Stocks that are seen as bond proxies
because of their consistent dividend
90
streams had the opposite reaction. Both
the telecommunications and utilities
sectors rallied about 1 per cent.
Day's
The two sectors were the worst
2.77
performers on the S&P 500 last month
as the spectre of higher interest rates
16.10
17.12
weakened their allure.
NRG Energy, a power group, rose 1.5
-8.35
per cent to $12.16, while blue-chip
0.34
telecoms Verizon Communications
-0.07
climbed 1.8 per cent to $53.81.
-0.06
Elsewhere, Spectra Energy led the
S&P 500 energy sector higher.
Enbridge of Canada yesterday said it
would acquire the group for about
$28bn in a deal that will create the
largest oil and gas pipeline company in
North America.
Spectra rallied 13.2 per cent to $40.93
yesterday. Other groups in the sector
were in the black as well: EOG
Resources, an exploration and
production company, rose 6.4 per cent
to $94.60, while ExxonMobil, the
biggest US energy group, climbed
1.1 per cent to $88.35.
In midday trading, the S&P 500
advanced 0.1 per cent to 2,182.7, the
Dow Jones Industrial Average rose by
the same margin to 18,509.7 and the
Nasdaq Composite edged up 0.3 per cent
to 5,267.7.
ambitious, Merrill said. Housebuilders
rallied on reassuring trading updates
from Berkeley, up 3.5 per cent to 27.83p,
and Redrow, ahead 9 per cent to 418.5p.
Barratt, which has full-year results due
today, climbed 1.7 per cent to 507p.
Residential landlord Grainger was
weakest in the wider property sector,
sliding 3.6 per cent to 227.2p. JPMorgan
Cazenove downgraded Grainger to
“neutral”, largely to factor in reduced
house price forecasts in the wake of the
Brexit referendum result.
Paper maker Mondi took on 2.8 per
cent to £16.02 after telling customers
that from next month it was hiking
Trading Directory
prices of sack paper used for packaging.
EasyJet added 1.7 per cent to £11.50
on an August traffic report that was
towards the top end of market forecasts.
Analysts highlighted that easyJet cut
prices in the wake of the Brexit vote, so
the benefit to earnings for its year
ending September could be muted.
Poundland edged 0.2 per cent
higher at 224p. A day before the
shareholder vote on Steinhoff’s
takeover offer, activist hedge fund Trading Directory
Elliott said it had raised its stake in Runs Daily
Poundland to 25.3 per cent via the .....................................................................................................................................................................................................................................................................................................................................................................................................................
purchase of contracts for difference Classified Business Advertising
UK: +44 20 7873 4000 | Email: acs.emea@ft.com
that carry no voting rights.
22 ★ Wednesday 7 September 2016

INSIGHT Analysis. Capital markets

John
Plender
Hunt for yield risks inflating EM bond bubble
Issues by developing countries Rare returns
are at a high, and international
Central banks must appetite is growing intense
Emerging market sovereign debt yields Tradable external debt outstanding
2015 ($tn)
learn from the BoJ’s JONATHAN WHEATLEY
Government
Non-financial corporates
Financial institutions

credibility deficit Starved of returns in their home mar-

kets, institutional investors across the
15

developed world have been pouring 10

money into emerging market assets at a

T
here is a growing conviction in the markets rate of more than $20bn a month since 5
that for the world’s hardest pressed central the middle of this year — quite a turn-
banks there is no alternative to a helicopter
money drop. A last-ditch effort to channel
round after the outflows that dominated
much of the previous 12 months.
8.4% 7.1% 6.0% 0
purchasing power direct to people who are An improving outlook for many EM Russia India All emerging EM DM
likely to spend a monetary windfall strikes many as the economies is one factor, but another
natural next step, as the effectiveness of unconventional stems from the more than $13tn of Tradable domestic debt outstanding
measures dwindles. bonds in developed markets that charge 2015 ($tn)
Yet the authors of the latest Geneva report*, published investors for the privilege of owning Government Financial institutions
Non-financial corporates 80
annually by the International Centre for Monetary and them. The perennial hunt for yield has
Banking Studies and the Centre for Economic Policy taken on a new urgency. The question is 60
Research, beg to differ. whether EM bonds have the capacity to
They say there is room to push interest rates further meet the demand. 40
below zero, and that both the scale and scope of central
bank asset purchases have scope to expand. And it would
“People are desperate and frus-
trated,” says Atanas Bostandjiev, head
4.4% 2.3% 2.2% 1.4% 20
be possible to loosen the constraint on traditional interest of Gemcorp Capital. “They don’t want to Brazil Romania Poland South Korea
rate policy in the exceptionally low interest rate environ- commit long term at these [developed- 0
ment by increasing central banks’ inflation targets. market] levels but they have to put their FT graphic Sources: BofA ML; Emerging Sovereign indices EM DM
Well, maybe. money somewhere.”
The snag is that those prescriptions are a pretty good EM bonds offer an appealing alterna-
description of what the Bank of Japan has done since 2013 tive. Ten-year dollar-denominated sov- according to the Bank for International rency EM corporate debt has a total become the markets,” he says. “They are
as its contribution to Abenomics. When Haruhiko Kuroda ereign bonds issued by Brazil, for exam-
‘If all the Settlements. value of just $170bn. influencing government bonds, corpo-
took over as BoJ governor he introduced the most radical ple, pay investors about 4.5 per cent a pension But how much of this debt can be Were yield-starved institutions to rate bonds, interest rates, even equities
quantitative and qualitative easing the world has seen, year. But are there enough of such bonds bought by international investors? make a mass move into EM debt, supply . . . That just causes further distortions
encompassing not just government bonds but equities via to go round?
funds put Many funds operate under rules that would quickly run dry. and it will end in tears.”
exchange traded funds and real estate investment trusts. Figures compiled by Bank of America in 2 or 3% restrict the bonds they can buy to issues “EM bonds are not the answer,” says David Hauner of BofAML says such
An elevated inflation target of 2 per cent was to be Merrill Lynch show the total stock of over a certain size or to those that are Mr Bostandjiev. “If all the pension funds distortions risk driving a bubble in EM
achieved in two years. In January, negative interest rates EM bonds and other tradable debt —
of their listed in market indices. put 2 or 3 per cent of their assets in EM debt markets as early as next year.
were introduced. The pro- that which can be bought and sold, on assets, there While most of the $850bn of EM sov- debt, there would be a massive rally and “Nobody doubts that there is a bubble
gramme has been ramped up, or off an exchange — was $18.2tn at the ereign bonds will be open to them, along yield compression.” in developed-market fixed income due
with a big increase in the size
Timing and end of 2015.
would be a with most (though not all) of the nearly In such a case the big institutions to the demand caused by central banks,”
of government bond pur- context are all With issuance of international bonds massive $2tn of bonds issued internationally by would probably stop long before the hesays.
chases in 2014 and a commit- by EM sovereigns running at a record EM banks and non-financial corpora- supply ran out. “Why would EMs not go the same
ment in July to raise annual
when it comes to high this year, the total is likely to have
rally’ tions, only a “tiny, tiny” proportion of Mr Bostandjiev says 10-year sover- way? If you get another six months of
purchases of ETFs from unconventional risen to about $18.5tn. the $15.5tn in EM local-currency trada- eign bonds from Bulgaria, which yield [EMs] looking in better shape and peo-
Y3.3tn to Y6tn ($58bn). This figure is dwarfed by the out- ble debt is actually traded by foreign about 1.8 per cent, already fail to reward ple falling over each other to buy, there
The initial impact was posi-
measures standing debt issued by governments investors, says Jane Brauer of BofAML. investors for the risks they are taking. willinevitably be ascarcity of assets.
tive, not least because looser and companies in developed markets, The bonds in JPMorgan’s benchmark While he still sees opportunities in The most recent EM bubble, he adds,
monetary policy brought currency depreciation. But a but it still makes EM debt a substantial index of local-currency EM government EM debt, prices in parts of the asset class “ended badly” with the taper tantrum of
consumption tax increase in 2014 subverted the thrust of asset class — bigger than the roughly debt have a total face value of about have already been distorted by western 2013. “I would argue that we will repeat
the policies. More than three-and-a-half years after Shinzo $16tn market in US government debt, $1.7tn. BofAML’s index of local-cur- policymakers. “Central banks have exactly the same story.”
Abe became prime minister, the inflation target remains
tantalisingly out of reach, the economy is smaller, con-
sumer spending has failed to take off, government debt is
up from 238 per cent to 248 per cent of gross domestic Commodities
product and the BoJ has a credibility problem.
With the central bank buying more Japanese govern-
ment bonds than are being issued the yield curve is flat:
bonds yield much the same regardless of maturity. The
Glencore unveils $1bn
role of private-sector participants has been reduced to a
simple carry trade, buying bonds from the government
bond to refinance debt
and selling to the central bank. The equity market is like-
wise thoroughly distorted. Investors are overwhelmingly
concerned with when and where official money will flow. GAVIN JACKSON due to mature at points in the
AND DAVID SHEPPARD
That is not to say buying equities is a misconceived pol- coming year.
icy. In a world that is short of safe assets, diversifying the Glencore has launched its Concerns about Glencore’s
portfolio into riskier assets makes sense. It makes most first euro bond since a dra- debt, as measured by the cost
sense in the depths of a liquidity trap because the central matic fall in the price of its of insuring its bonds through
bank and ultimately the taxpayer will benefit from buying shares last year, as the min- credit default swaps, have
low in a crisis. It is a less attractive policy when equity ing and commodity house fallen sharply in the last
prices have been dragged up in the slipstream of a big looks to refinance debt and seven months, down from
bond-buying programme. demonstrate its standing above 1,100 bps in January to
Failures of communication, as the Geneva report recog- has recovered. just above 200 today.
nises, have not helped credibility. Mr Kuroda said in A Glencore spokesman
December there would be no negative interest rates. In The €1bn, seven-year offer- described the move as “a
January, the marginal deposit rate went from 0.1 per cent ing, which will yield about prudent decision to refi-
to minus 0.1 per cent. This tiny shift prompted widespread 1.95 per cent, comes as the nance upcoming maturities
criticism from politicians, the public and the big banks. commodity-trading and at competitive levels”.
After initially weakening, the yen appreciated resolutely mining company executes At its first-half results two
t
through spring and summer. This break in the connection a wide-ranging debt reduc- weeks ago, Mr Glasenberg
between monetary easing and currency depreciation is tion programme that has told investors it was stepping
telling. There is a tendency in the markets to interpret any helped to fuel a 160 per cent up its debt reduction pro-
new expansionary measures as signs of desperation. rally in its share price since gramme and aimed to
A lesson from Japan is that timing and context are all January. resume dividend payments
when it comes to unconventional measures. In the midst of At their nadir at the start of next year. Its shares have
a financial crisis it pays to go for shock and awe to relax this year, Glencore’s euro risen from an all-time low
financial conditions and help the economy bounce out of bonds maturing in 2025 were of 69p in January to 183p
recession. But over time, especially if policy is halfhearted trading at 56 cents on the yesterday.
or — as with Japan — contradictory, credibility issues arise euro. They have since recov- Prices for Glencore’s main
and policy exhaustion sets in. ered to 96 cents as the com- mined commodities, includ-
pany’s billionaire chief exec- ing coal, copper and zinc,
* ‘What Else Can Central Banks Do?’ by Laurence Ball, Joseph utive Ivan Glasenberg moved have recovered since plung-
Gagnon, Patrick Honohan and Signe Krogstrup to raise cash, sell off assets ing to multiyear lows at the
and pay down a debt load beginning of the year.
john.plender@ft.com that had threatened to derail Its large trading division,
the company. which sets the company
The London-listed group, apart from rivals such as
which has its headquarters in BHP Billiton and Rio Tinto, is
Zug, Switzerland, sold a also on course to deliver at
small Swiss franc bond in least $2.4bn of full-year earn-
More comment and data on ft.com April in a move that was ings before interest, tax and
widely interpreted as signal- depreciation, Mr Glasenberg
ling to investors that it con- said, after reporting $1.2bn
Y Fast FT Our global economies, headed tinued to retain the ability to in the first half.
team gives you market- by Brazil, Russia, India access financing. HSBC, BNP Paribas,
moving news and views, and China. “It’s another positive that UniCredit and RBS are book-
24 hours a day, five days ft.com/beyondbrics shows they can refinance runners, with Caixa as a co-
a week. ft.com/fastft their existing debt profile,” manager.
Y Podcast The Hard
Y Alphaville Our Currency podcast takes a said Investec mining Concerns over the health
irreverent financial blog. look at what is driving industry analyst Hunter of oil, gas and metals compa-
Join Paul Murphy and the global currency Hillcoat. nies were at the heart of a
Bryce Elder for the daily market. ft.com/podcasts The euro bond has seen sell-off in the US junk bond
Markets Live session at strong demand, being almost markets last year. Like Glen-
Y Lex Video Analysis six times oversubscribed core — which has defended
11am. ft.com/alphaville
and opinion from the with orders in the region its investment-grade credit
Y beyondbrics News and team on the hot issues of €5.8bn. rating — these riskier parts of
comment from more affecting companies and The €1bn Glencore wants the debt market have also
than 40 emerging markets. ft.com/lexvideo to raise will be used to refi- recovered as commodity
nance existing bonds that are prices have risen.

Wednesday September 7 2016
Investors
battle nerves
to keep calm
and carry on
The initial panic is over, but it is too soon to assess
the full impact of the Brexit vote, says Judith Evans
W
hen UK voters made the
historic decision on
June 23 to leave the EU,
London’s property mar-
ket rapidly felt the
aftershocks.
Investors called their agents to aban-
don advanced deal negotiations on the
purchases of prime office buildings.
Wealth managers in Mayfair and the
City requested transfers of investors’
money out of property funds. Financial
services companies hunting for new
office space pulled back, developers
across London put planned new
projects on ice and house-hunters
reconsidered whether they really
needed to move.
Within days, property funds holding
£15bn of assets had closed the gate to
redemptions after investors rushed for
the exit, bringing back memories of the
FT Property London
property crash that accompanied the
credit crunch of 2008.
Within a month it became clear that
there would inevitably be an immediate
downturn in London property after
three strong years of surging prices and
returns — with vulnerable sectors
including offices and luxury housing.
But the aftermath of the Brexit vote
looks as if it is playing out very differ-
ently from the crisis of 2008-09 which
still looms large in memory.
“We have seen prices on some trans-
actions falling and a few transactions
cancelled as a result of Brexit, but trans-
actions are still happening and financ-
ing is still available to buy good assets,”
says Adam Bogdanor, a partner at Ber-
win Leighton Paisner, a law firm special-
ising in real estate.
The Brexit vote derailed about a third
of commercial property investment
FT SPECIAL REPORT
www.ft.com/reports | @ftreports
deals under way at the time, according
Inside
to Cushman & Wakefield, the property
advisers. But the rate of deals complet-
ing as planned was slightly higher in
London than in other UK regions,.
Unlike in 2008, when the property
market ground to a halt for parts of the
EU vote stalls boom in
demand for offices
Blue-chip clients are
year, central London assets have contin-
ued to change hands, including at least
one — the Debenhams building on
Oxford Street — sold at a price equiva-
lent with pre-referendum transaction
reining back on schemes
until clarity emerges
Page 3
values.
Another retail building on the same
street, home to the chemist Boots, sold
at about a 15 per cent discount to the
asking price, but this was a deal carried
out at high speed by Aberdeen’s prop-
Housing shortage puts
squeeze on workers
Sadiq Khan,
London’s
new mayor,
erty fund to raise cash to meet investor
‘Long-term investors are
faces uphill
task on
affordable
homes
not going to go away. Page 4
They’ll take a breath and
see what happens’ Crossrail bonanza
Experts predict buoyant
prices along the
redemptions. Even so the property,
which was sold to Norway’s sovereign renamed Elizabeth Line
wealth fund, fetched a price 63 per cent Page 6
higher than it was bought for in 2011.
Simon Price, a real estate partner at
the law firm Linklaters, calls the market Capital’s status as tax
since the referendum “surprisingly nor-
mal”, while Tony Gibbon, a veteran cash cow under threat
dealmaker at the property advisory A fall in transaction
firm GM Real Estate, says: “Long-term volumes could unravel a
investors are not going to go away.
They’ll take a breath and see what hap- surge in receipts
pens.” Demand is strongest for “assets Page 8
with long income from quality tenants”,
says Walter Boettcher, director of Greenbelt under strain
research at property advisers Colliers.
Lending against property is set to con- Growing demand for
tract, according to the Bank of England, land challenges postwar
but existing lending risk is much lower scheme to counter
than in the last crash: “Gearing is gener-
ally lower on commercial property, so urban sprawl
Voters at the crossroads: London’s Oxford Street in June — Odd Andersen/AFP/Getty Images Continued on page 2 Page 9
2 ★ FINANCIAL TIMES Wednesday 7 September 2016

FT Property London

Residential History does not always repeat itself in

house price downturns, reports James Pickford

Too soon to
tell if what has
gone up must
come down
A
fter reaching vertiginous
highs in the past decade,
the pace of London house
price growth has slowed in
recent months — but the
broad figures conceal a great deal of dif-
ference between hot and cold spots.
Data available for the period since the
Brexit vote remain limited, so hard con-
clusions about the impact of the refer-
endum are hard to draw. But estate
agents believe prices in some parts of
the capital appear more resilient to eco-
nomic and political turmoil than others.
London has continued to lead the
ranking of UK regions by house price
growth, even as some were calling time
on its predominance.
In the year to June, average prices
across the capital climbed 12.6 per cent,
according to the Office for National Sta-
tistics house price index, eclipsed only
by the east of England, where growth
ran to 14.3 per cent annually. But Savills,
the estate agent, says prices for the most
expensive properties — found in prime
central London — have fallen by 8 per
cent since their last peak in 2014.
Over the past 20 years, housing
wealth has radiated out from the prime
central areas of Kensington & Chelsea
and Westminster, bringing higher prices
to places like Fulham, Wandsworth and
Battersea in the south-west, and Isling-
ton and Hackney in the north and east.
The influx of cash-rich overseas buyers
that took place in the years following the
financial crisis of 2008 pushed up prices
to stratospheric levels in central areas,
sending more domestic purchasers out
to these high-end commuter zones.
But their strong performance may not
persist. In previous economic turbu-
lence, says Ed Mead, director at agent
Douglas & Gordon, the areas that expe-
rienced the steepest price rises had a
greater propensity to fall harder as the
housing market cycle turned down.
“There’s no doubt that the areas that
always get hit the hardest are always the
ones that have just seen the most
growth. If you look around the emerging
prime areas of London, the areas that
jumped the most and have suffered
most recently are places such as Batter-
sea Park,” he says.
The formula is not foolproof. Hack-
ney, which has seen sharp house price
growth, might appear one of the riskiest
areas. But Lucian Cook, research direc-
tor at Savills, warns: “You need to distin-
guish between late-cycle house price
growth and a shift in the character of the
place. Where you’ve seen a change in the
nature of the people living in those areas
— and that’s become quite entrenched —
that would support prices. It’s some-
thing more fundamental.”
Richard Donnell, research director at
housing market analyst Hometrack,
says the strongest-growth markets
remain the cheapest, such as Barking &
‘The areas Dagenham and Newham, where growth
is running at 16-18 per cent, compared
most with central areas where year-on-year
insulated growth is just 2.5 per cent (and therein
concealing falls of 2.5 per cent over the
are rock past quarter).
solid, “Momentum is already falling out of
the London market on affordability
established pressures, tax changes for investors and
housing concerns on value for money and
Brexit,” he says.
markets Mr Donnell also says the zones most
with family exposed when the market cools tend to
be emerging market areas with unsus-
housing’ tainable pricing levels. This often
applied to new-build or regeneration
schemes in their early stages and “value
for money” markets that did not have
the services in place to support the pric-
ing. “The areas that are most insulated
are rock solid, established housing mar-
kets with family housing that is always
in demand — this is much of London to
all intents and purposes.”
Inner and outer London show further
evidence of a different market dynamic.
The high-end prime central market is
more often characterised by cash buy-
ers; mortgages are more common in the
“doughnut” of outer boroughs, making
those areas more vulnerable to a rise in
interest rates. Though the likelihood of
an interest rate rise has receded even
further since August’s interest rate cut
by the Bank of England, a return of infla-
tion could speedily alter that picture
should it prompt evasive action by the
central bank.
That sinking Interest rates also illustrate another
feeling: shoppers difference in today’s conditions versus
in front of a new previous moments of turmoil, since
housing their record low levels are limiting
development repossessions among mortgaged home-
Danial Leal Olivas/AFP/
Getty Images
owners in the mid-range to lower-prime
areas. Mortgages are cheap, but afforda-
bility rules mean there are tighter limits
on the amount of debt buyers can take
on, Mr Cook says. These constraints on
the amount people can borrow should
also limit the number of forced sellers
that might emerge in a downturn. “That
suggests you don’t get the same levels of
house price falls as in the past.” he adds.
Data from previous crises lend weight
to arguments that, when the storms hit,
London owners prefer to batten down
the hatches. Mr Donnell says experience
suggests market shocks typically affect
transaction levels much harder than
prices, especially in central London.

Investors other sectors, depends ultimately on the

battle nerves
to keep calm
and carry on
Continued from page 1
few are forced to sell,” notes Guy
Grainger, UK chief executive at the
property advisers JLL.
Still, property agents are acutely
aware that the market has not yet set-
tled. One, who asked not to be named,
believes commercial property prices
have already fallen by 15-20 per cent
since last summer, but that this has not
appeared in formal valuations since
vendors have removed properties from
sale rather than concede on price.
According to the IPD property index,
capital values in UK commercial prop-
erty showed their second month of
decline in July, falling 2.8 per cent — its
largest drop since 2009.
“No one believes the valuations at the
moment,” the agent says. “Last summer
was the top of the market — all Brexit
has done is take people back to reality.”
In the housing market, reality had
already begun to set in at the top end,
where prices have been falling since
2014. In London’s prime markets, the
referendum was followed by a wave of
discounting.
Clusters of new luxury apartment
towers are being built, especially on the
south bank of the Thames, but there too
prices are softening. Average prices per
square foot for resales in new develop-
ments have dropped 12 per cent since
2014, according to LonRes, a data pro-
vider. Countrywide, the estate agency
chain, predicts a 6 per cent fall in the
prices for prime London homes in 2016.
Across the capital it foresees 3.5 per cent
price growth, but then a fall of 1.25 per
cent in 2017. Analysts at Capital Eco-
nomics predict a “very steep fall in
transactions” in London for the remain-
der of the year.
One mitigating factor has been the
drop in sterling against other currencies
since the referendum outcome became
clear, which has made UK assets look
cheaper for dollar-linked buyers. “Once
the immediate surprise of the Brexit
result dissipated, it became clear that
the weaker pound sterling was also cre-
ating buying opportunities in some
markets,” says Adam Challis, head of
UK residential research at JLL. “Latent
demand remains strong, but buyers are
patient and will only buy when they per-
ceive good value.” In residential prop-
erty, as in commercial, the traditionally
busy autumn season will offer much
stronger evidence of the direction of the
market, he adds.
Investors are keenly aware that the
longer-term impact on property, as for
nature of the Brexit deal that the UK
strikes with its EU neighbours, and the
economic effects of that deal.
A JLL survey of 67 investors in UK
property found that 86 per cent
intended to keep their UK holdings at
the same level as before the vote. But
this was tied in with optimistic assump-
tions about the Brexit agreement: only
about 15 per cent believe the UK would
reach a “‘hard’ settlement in which the
UK does not have access to the single
market”.
Other concerns include the future
immigration status of workers from the
EU. In the construction industry, for
example — which is already suffering
from a skills shortage — more than half
of workers in London are foreign-born,
according to the National Institute of
Economic and Social Research. This
compares with single-digit percentages
throughout the rest of the UK, highlight-
ing the capital’s greater reliance on
workers from overseas. Across the
country, about half of overseas con-
struction workers are from Europe.
London’s new mayor Sadiq Khan,
elected in May, has been seeking to
shore up confidence, insisting the capi-
tal will retain its cosmopolitan charac-
ter even post-Brexit. “London is open,”
read posters dotted around the city. The
capital’s property sector — worth
£280bn before housing is included —
also wants to spread that message. Mr
Price of Linklaters says there is a “deter-
mination to keep business as usual, and
a general lack of panic”.
But he adds: “The danger now is for a
series of major ‘bad news’ incidents that
will rock the optimism of investors, such
as more bad economic data, a few high-
profile relocations out of London for
investment banks or perhaps a realisa-
tion that the government isn’t going to
get any kind of good deal for London’s
financial services industry in its negoti-
ations with Europe.”

Contributors
Judith Evans Claer Barrett Steven Bird
Property correspondent Personal finance editor Designer

James Pickford Paul McClean Alan Knox

Deputy editor, FT Money Companies reporter Picture editor

Conor Sullivan Vanessa Houlder For advertising details, contact:

UK news reporter Tax correspondent Lyn Thompson, +44 (0)20 7873 4967
lyn.thompson@ft.com or your usual FT
Barney Thompson Kate Allen representative.
Deputy UK news editor Political correspondent
All editorial content in this report is
Edwin Heathcote Andrew Bounds produced by the FT. Our advertisers have
Architecture and design critic North of England correspondent no influence over or prior sight of articles.

Gill Plimmer Michael Kavanagh All FT Reports are available at:

Companies reporter Commissioning editor ft.com/reports
Wednesday 7 September 2016
Votetoleave theEU putsbreakonoffice boom
Commercial Blue-chip
clients are reining back
on new schemes until
clarity emerges on the
shape of a post-EU
future, says Judith Evans
I
f the health of central London’s
office market is to be measured by
the number of cranes, it is doing
well. Construction sites are dotted
across the Square Mile, Canary
Wharf and the West End. A Deloitte sur-
vey released in March found that more
new offices had broken ground in cen-
tral London in the past six months than
at any point in the previous two dec-
ades.
Boosted by strong demand for office
space — occupancy is at a 15-year high —
and rapid growth in capital values,
property developers have had little hes-
itation in beginning construction on
new office schemes.
But the vote to leave the EU delivered
a major blow to that confidence, bring-
ing into question the capital’s future as a
global financial centre and casting a
shadow over its economic prospects.
Within a week of the vote, Axa, the
French insurance company, put plans
for a 62-storey City skyscraper under
review, saying that it was “considering
all our options” for 22 Bishopsgate, a
1.4m sq ft tower it is due to build with
the developers Lipton Rogers.
Germany’s Union Investment, mean-
while, pulled out of talks to buy a
£465m City office building as it
rethought its UK investment strategy
after the unexpected vote for Brexit.
The City of London and Canary Wharf
are the focus of particular worries
because of concerns about a potential
loss of so-called European “passport-
ing” rights that give UK-based financial
services companies access to the single
market. The fear is that the loss of such
privileges could prompt those compa-
nies to relocate parts of their businesses
to continental Europe. Capital values
for City of London offices dropped 6.1
per cent in the month of July after the
vote, according to CBRE data.
Walk on by: pedestrians passing a construction site in the City of London — Niklas Halle’n/AFP/Getty Images
While companies in the financial
services sector still account for the lion’s
share of new office take-up, property
advisers Cushman & Wakefield point
out a growing proportion of new offices
have been occupied by technology and
media companies over the past decade.
These lack the financial sector’s worries
on passporting but are said to be
concerned about their future
prospects for hiring from within the EU,
★ FINANCIAL TIMES
FT Property London
given fierce competition for skilled
workers.
Derwent London, the property devel-
oper known for its office buildings in
London’s tech belt, has lowered its
expectations for rental growth to 1-5 per
The office development cent in 2016 since the vote, down from
its previous prediction of 5-8 per cent.
bubble has met the Brexit This reflects a more general fear that
demand shock businesses will hold off making deci-
sions such as moving to new offices until
the picture surrounding the shape of
future trading agreements with the EU
following the Brexit vote are clearer,
causing a knock to demand and hence to
growth in rents. This is a prospect long
flagged by Rob Noel, chief executive of
the UK’s largest listed property com-
pany, Land Securities.
While some financial groups, notably
the Swiss asset manager GAM, have
pulled back from plans to move to new
3
London offices, the US bank Wells Fargo
cheered the property market in July by
opting to spend £300m on a new Euro-
pean headquarters under development
in the City of London.
Amazon, meanwhile, agreed to
increase its occupation of its London
headquarters, Principal Place, by
80,000 sq ft in July.
Simon Price, a partner at the law firm
Linklaters, says: “There’s no particular
sign of deals in the occupation market
going on hold, although it will be inter-
esting to see whether some of the more
substantial occupation requirements in
the City are put on a ‘go slow’ later in the
year.”
Levels of investment into London
office buildings have fallen since the
start of the year, but that is partly down
to vendors holding back until pricing
and the nature of Brexit become clearer.
“We speak to a number of major
investors around the world who are tell-
ing us that they are now more likely to
acquire properties in London because
the heat has been taken out of what they
considered an over-competitive mar-
ket,” says Mr Price.
“In a world where it’s difficult to get
any sort of decent yield from fixed
income products, London real estate
looks good value.”
Yet with so many Brexit unknowns,
plans for about 25m sq ft of new office
space in London — according to an esti-
mate by analysts at Jefferies — may now
be curtailed. If the hiatus in approvals
for new development continues beyond
the summer, that could help to support
rent levels, benefiting investors in exist-
ing properties.
“The London office development
bubble has met the Brexit demand
shock,” says Mike Prew, an analyst at
the Jefferies who called time on the com-
mercial property market a year ago.
The City of London is taking a bullish
stance: its planners are forging ahead
with a consultation on expanding the
Square Mile’s cluster of skyscrapers to
deliver another increase in prime office
space. It would be a sign, they say, that
the district remains “open for business”.
Their ability to attract developers and
financiers to build those skyscrapers
may be a key test of London’s post-
Brexit allure.
4 ★ FINANCIAL TIMES Wednesday 7 September 2016

FT Property London

Housing shortage puts squeeze on workers

Politics London’s new
mayor faces thorny task
of reversing collapse in
rate of new affordable
housing starts, says
Conor Sullivan

D
emands to tackle the capi-
tal’s housing shortage
emerged as the most press-
ing issue in this May’s elec-
tion campaign for mayor of
London, thrust to the top of the agenda
by soaring prices and rents.
Fort the first time, housing policy
replaced transport and crime at the top
of voters’ list of concerns, according to
polls. Yet Sadiq Khan, the new mayor,
will not find it easy to grapple with a
problem that business groups say
threatens London’s prosperity.
House prices in London are now so
high that it has become difficult for
many well-paid people to own their
home. The average price is £530,000,
while for a semi-detached home it is
£600,000, according to estate agents
Savills and the Land Registry. The
median inner London salary is just
£34,000 a year.
Those that do manage to buy are
highly paid, receive substantial help
from their families, or both. First-time
buyers in London put down an average
deposit of £96,000 compared with a
national average of £34,000, according
to a survey published by Halifax in July. Bridge over determined through negotiations homes were built. This was the lowest homes we want, clear how we’re going to done that before without a big public
The housing shortage is a byproduct troubled waters: between developers and local councils. figure for at least eight years and a 66 get them — and clear when to stare our sector intervention”.
of London’s economic success and a protest march This process has become controversial per cent fall on the previous year. One opponents down.” City Hall is in talks with government
booming population. For most of the against housing as developers succeeded in negotiating City Hall official said that during negoti- Alongside this more demanding over how much it will get from a £4.7bn
late 20th century, London’s population shortages and lower and lower levels of affordable ations between developers and former approach to private development is a national fund for affordable housing,
was in decline. But after hitting 6.7m in high rents housing. Mr Khan accuses them of hir- mayor Boris Johnson’s administration, desire to get the state more involved in talks that were disrupted by the rapid
1988 it recovered to reach a new record crosses Tower ing expensive consultants to outsmart “when something needed to give, housebuilding. Tom Copley, a leading change in government post-Brexit.
of 8.6m at the start of 2015 and is fore- Bridge cash-strapped local authorities. affordable housing would give”. voice on housing in the London Labour Mr Copley says the mayor is well posi-
cast to reach 10m by the mid-2030s. Andrea Baldo/LightRocket via This motivated a key election pledge, Mr Khan signalled his approach by party, says that the roots of the current Building tioned “to attract investment from pen-
Getty Images
Despite promises from local politicians that half of homes built in London are installing James Murray as his deputy situation can be traced back to the 1980s sion funds and other institutional inves-
over the years to increase housebuild- “affordable”. However since the vote mayor for housing. He had demon- when large parts of public housing stock 50,000 tors” to build housing and “channel that
ing, homes are only being built at about this has become a “long-term strategic strated a strict approach to develop- were sold to their tenants. homes a money away from off-plan luxury flats
half the rate needed to deal with this target” and the mayor has warned that ment in his previous job in charge of Once councils stopped building towards more productive uses”.
growth. “it will take time to turn things around”. housing policy at Islington council. Last houses “nothing ever filled the gap”, Mr year, double New solutions might also be needed —
Mr Khan accepts the need to build A key moment will come in October year Mr Murray wrote: “At the moment, Copley says, creating a supply deficit the current he gave the example of Pocket Homes,
more. But he places more emphasis on when Mr Khan is expected to update landowners know they can pitch for a that has led to today what many which builds small, well designed flats
what proportion of new housing stock is planning rules with a stricter definition huge windfall on their land; and the describe as a crisis. level, is sold at a discount to people on lower sal-
“genuinely affordable” for people on of affordable housing and revised rules developer who buys it can be confident He says building 50,000 homes a year, needed to aries. “What they provide is a really
average incomes. for how much developers need to they will meet this cost and still make double the current level and the consen- good product,” says Mr Copley. “I would
Across England a proportion of new include in their schemes. their profit by aggressively squeezing sus estimate of what is needed to meet meet like to see the mayor working with them
homes in developments is supposed to Mr Khan is starting from a low base — affordable housing out.” He added: demand, “will require a big public sec- demand to be one of the main affordable-to-buy
be “affordable”, but the exact level is in 2015-16 in London 6,759 affordable “We’re going to have to be clear what tor intervention, because we haven’t housing products that we support.”

High rise projects Social housing is too often an

struggle to win
public affection
Architecture
The economic imperative to
build housing higher in the
capital divides opinion, says
Barney Thompson
Building upwards has been regarded as
the answer to the UK’s housing prob-
lems before, yet the high-rise estates of
the 1950s and 1960s quickly turned into
symbols of poor planning, inequality
and urban blight. But even as Britain
grapples with the legacy of those experi-
ments, high-rise living is back in vogue
— this time marketed towards a very
different demographic.
Once again, however, it is attracting
criticism. Glass-encased towers are only
for the rich, say their opponents; they
largely lie empty — walk past them at
night and they are mostly dark —
because they are viewed as investments
rather than places to live; and they clash
with their surroundings and cast them
in shadow. All this, critics declare, fails
to deal with the needs of Londoners who
do not enjoy large pay packets, drives up
prices and forces people further out of
the centre.
Yet the boom continues, with scores
more high-rise buildings planned. Is this
merely greed, with developers thinking
only of rich, and often foreign, buyers,
or can high-rise living be part of the
solution to the capital’s housing crisis?
“Since the appreciation in [property]
prices we have come to see our homes as
investments rather than as shelters, and
that is a mistake,” says Hank Dittmar,
who advises government and business
on planning. “One of the strange charac-
teristics of the property market is that
people seem to rush to one solution, bet-
ting on an imperfect knowledge about
the future and assuming that what they
do is what everyone else wants.”
But Peter Murray, chairman of
the think-tank New London Architec-
ture, says London’s housing would be
in a “dire state” without overseas
investment.
“High-rise blocks are not the answer
to London’s housing problems but they
are a part of the answer,” he says. “We
need a mix of different sorts of develop-
ment to suit particular locations and
particular sorts of occupiers.”
Although it is true London has plenty
of luxury flats, he says, “as you get out of
the centre and some of the ‘hotter’ areas
like Battersea and Nine Elms you are
seeing more affordable taller buildings”.
He cites the White City development in
west London involving Japanese devel-
oper Mitsui Fudosan, Alberta Invest-
ment Management of Canada and Lon-
don-based manager Stanhope, as an
example of a development that was
delivering cheaper homes alongside
luxury properties.
“That would not be happening if you
had no foreign investment, so we need
it . . . or we would have virtually no con-
struction industry in London. If we
accept we are part of a global economy,
it would be tough to say to the fellow
countrymen of those investors that they
cannot buy any of those flats — ‘we are
happy to take your money but don’t
want you living here’.”
Six in 10 Londoners favour
controls on the height of
new developments
Yet the local opposition to high-rise
developments has become vociferous —
and effective. In July, the Paddington
Pole, a planned 254m residential tower
by Renzo Piano, the architect, and
Irvine Sellar, the property developer —
the team behind the London Shard —
was redesigned and turned into a 14-
floor cube after an outcry in the area.
A recent Ipsos Mori poll for the Sky-
line Campaign — which says it wants to
stop the “devastation of London by
badly designed tall buildings in the
wrong location” — found almost six out
of 10 Londoners favoured controls on
the height of new developments.
Respondents were split on whether
Construction near London’s Shard
the 270 buildings over 20 storeys being
planned or under construction were too
many, with 47 per cent happy with the
proposed numbers and 39 per cent
believing it was too many. But far fewer
— only 8 per cent — thought tall build-
ings were the best answer to the capital’s
housing needs, with terraced houses
and low-to-medium-rise the preferred
solutions. More than half said tall build-
ings should be limited to particular
areas such as the City or Canary Wharf.
Part of the problem in winning sup-
port, says Mr Murray, is that it is hard
for both developers and the public to get
a clear understanding of how a new tall
building can change the area around it.
According to New London Architecture,
which began researching the prolifera-
tion of tall buildings three years ago: “It
is difficult to understand in detail what
the implications of a new tower are
going to be . . . the impact on every
street, view, vista and walking route.”
Experts agree that a mixture of sizes
and densities, with close attention paid
to the use of public space, is important
to the look and feel of the city as well as
to the need for more housing. Not every-
one agrees this ideal is being met.
Even among the much-maligned
developments of the 1950s and 1960s,
says Mr Dittmar, there were examples of
a mix of “different people, price points
and lifestyles with substantial public
space . . . well-designed, roomy flats
that could accommodate people
through various stages of their lives”.
But as London becomes a 24-hour
city, well-designed tall buildings with
good transport links are an important
part of the housing mix, says Mr Sellar.
Land costs mean providing affordable
housing in the centre of the city is diffi-
cult, he adds. “But there are 32 bor-
oughs . . . and in the right locations,
particularly close to transport hubs, tall
buildings can be part of the solution.”
afterthought for city leaders
OPINION
Edwin
Heathcote
For many years after the second world
war, the centres of most of the biggest
cities from Los Angeles to London were
left to the poor as the wealthy left for
big houses in the sprawling suburbs.
Now everything has changed. City
centres are fashionable again, high-rise
living — the modernist dream — is back
and lofts, condominiums, penthouses
and duplexes in tall towers represent
the pinnacle of urban aspiration.
In the UK, when London was rebuilt
after the blitz, social housing was
deliberately interspersed with the city’s
established affluent neighbourhoods.
The idea was to create a more equitable
city in which the served and their
servants could live together.
But as Margaret Thatcher’s right-to-
buy programme in the 1980s
encouraged those on lower incomes in
local authority-owned properties to
buy and then sell their properties, the
city’s social housing stock was
depleted. This transfer of assets from
the public to the private sector has
resulted in a more segregated city.
Across the channel in Paris, social
housing was built beyond the
Périphérique ring-road that runs
outside the city, creating a ring of social
exclusion and resentment in which the
edges felt excluded from the centre.
New York was closer to the London
model, with big municipal blocks right
at the heart of the city. This system of
subsidised housing still works,
although is increasingly inadequate.
The socialism and central planning
of the former Soviet bloc countries
certainly led to supply — endless
landscapes of towers providing decent
housing — but the grim estates hardly
represent an ideal model.
A city needs social housing to work.
Even the wealthiest cities need to be
able to accommodate their workers as
well as their bankers, and near enough
the centre that they can live a decent
life. A city that exiles its poor to the
outskirts begins to die. Its centre
becomes a tourist attraction — a mall
with walls. Social housing is too often
an afterthought, yet it is, in fact, at the
heart of what make a city liveable.
Before stepping down as UK prime
minister, David Cameron announced
an initiative to “transform” sink estates
— council homes characterised as being
poor and deprived.
The plan, as set out in January and
backed by £140m of government
money, is to knock down the country’s
worst council estates and rebuild them
in a way to tackle exclusion.
The suspicion among critics is that
this is code for gentrification,
demolition and decanting of the
original residents.
Few cities have found a real solution
to the problem of how a successful
metropolis manages to house all of its
citizens, but there are dozens of
individual developments that might
point the way to better futures. Using
young architects and striking
architectural features, these have
become distinctive places in which
people are proud to live.
Adaptable: Alejandro Aravena’s
Quinta Monroy —
In Paris, for example, the Tour Bois-
le-Prêtre was an unprepossessing slab
block on the edge of the Périphérique.
Architects Lacaton & Vassal aided by
Frédéric Druot transformed it into an
ethereally beautiful minimalist tower.
The architects “wrapped” the tower in
a lightweight, superstructure layer of
slender white steel. This added an
indoor/outdoor zone of terraces and
winter-gardens, expanding the
apartments. The result is hauntingly
beautiful.
Very different is Quinta Monroy, on
the edge of Chile’s Atacama Desert.
Here architect Alejandro Aravena
created designs for “half a good house”.
The idea was to build a low-budget
basic house with plumbing and
serviceable spaces, habitable but with
room to grow. It was good enough to
win Mr Aravena this year’s Pritzker
Prize, one of architecture’s biggest
awards. The effect is of a terrace of
houses with gaps. As occupants’
circumstances improve those gaps are
filled in to accommodate workshops,
garages, shops or extra space for
growing families.
The result is a visually and socially
mixed community. People do not need
to leave their homes as they get richer,
they can simply expand and the
community stays stable. It also means
the architecture changes and adapts,
becoming richer and more personal
while within a predetermined
framework.
It is a brilliant idea and, although
aimed at the poor, it is applicable to
anyone and any city.
Recently the US, which had long
appeared to have abandoned new
public housing projects, has been home
to some interesting developments.
Harvest Commons in Chicago and The
Savoy in Oakland, California, are long-
derelict historic hotels that have been
brilliantly repurposed as housing for
transitional and very-low-income
residents.
Meanwhile, the Star Apartments in
Los Angeles’ Skid Row, redeveloped by
Michael Maltzan Architects, saw the
conversion of an old industrial unit
transformed into a piece of avant-
garde, sculptural architecture
containing low-income housing and
social facilities.
Wednesday 7 September 2016 ★ FINANCIAL TIMES 5
6 ★
All aboard The Crossrail line stretching from Maidenhead through central London to Essex promises to save time and money for those living on the route
Forty years since it was first proposed, the
Crossrail train line that will link the east and west
of London’s outskirts is nearing completion and is
reshaping the property market along its route.
Crossrail, which has been renamed the
Elizabeth Line, will open in stages, stretching
from Shenfield in Essex to Paddington in central
London by May 2019 and later extending to
Heathrow airport and Reading. It will offer a
29-minute journey from Bond Street in the
capital’s West End to Heathrow airport, shaving
20 minutes off that trip.
The benefits of cut journey times will not just
be enjoyed by rail passengers. According to
‘Last mile’ puzzle
drives demand for
warehousing hubs
Logistics
Growth in online shopping
and just-in-time delivery is
transforming industrial
estates, says Claer Barrett
The Park Royal area of west London has
always been known for food, explains
Segro’s chief operating officer Andy Gul-
liford. For years, he says, it was called
“London’s bread basket” because such a
high percentage of sandwiches con-
sumed in London were made on site. As
the capital’s eating habits have changed,
so have the occupiers.
Segro, the biggest industrial landlord
in the South East, is leading the trend.
The FTSE 250-listed company has just
completed the development of Origin,
near Heathrow airport, and it has all the
ingredients needed for an urban logis-
tics park — including giant mushrooms.
For the crucial “last mile” of delivery
into major cities, particularly London,
changes the way we consume have
transformed the way retailers and res-
taurants need to occupy space.
The lesser known story is how it has
also changed industrial estates, as urban
logistics parks are being hailed as the
solution to new retailing needs.
Basing supplies in a central ware-
house “hub” then using smaller
“spokes” located close to where people
live is how retailers are able to satisfy
time-sensitive shopping demands, be it
orders from a smartphone, top-up shop-
ping in a convenience store, or even a
freshly prepared takeaway.
One of the first to move into Segro’s
Origin was Charlie Mash, which supplies
speciality vegetables — including mush-
rooms the size of dinner plates — to
high-end restaurants and hotels in the
capital. Proximity to its customers
means small and frequent deliveries to
congested areas are possible. The same
philosophy is employed by neighbour-
ing Ocado, whose electric delivery vans
loaded with grocery orders swarm
in and out of its mini-hub next door.
Crossrail: Predicted impact on house prices
Maidenhead
7%
6%
Burham
Langley
Taplow
5%
Slough
4%
3%
2%
1%
0 7%
10
20
30
40
Source: CBRE
CBRE, the property consultancy, a 10 per cent
reduction in commuting times can in general
cause house prices to increase by as much as 6
per cent, all other things being equal. Prices have
already risen by around 31 per cent in hotspots
near the new stations since Crossrail received the
go-ahead, it says.
Despite economic uncertainty in the wake of
the UK’s decision to leave the EU, CBRE, the
property consultancy, expects average prices
along the line to increase a further 3.3 per cent
per year above local house price growth until the
line launches in 2018/19.
This amounts to an average £133,000 price
“Lots of people want lots of little things
frequently and quickly — it completely
changes the structure of the supply
chain,” Mr Gulliford says. This has
resulted in a model where the biggest
UK retailers — be it Amazon, John Lewis
or Marks and Spencer — have “massive”
warehouses sitting in the middle of the
country which can deliver goods by the
lorry-load to their store networks, and
also decant inventory to smaller hubs
close to conurbations, he says. “These
locations are able to break down goods
and make home deliveries in smaller
vehicles to suburban streets,” he
explains.
Wasabi, the fast-growing Japanese
takeaway chain founded by Dong Hyun
Kim, is in the process of relocating its
head office and food production centre
to Origin. Large kitchens are being
installed inside its unit, where enough
chicken katsu curry to supply its 50
London outlets can be prepared and
chilled before being shipped to restau-
rants to be reheated and sold within
hours. Similarly, tons of fresh fish will be
prepared and filleted here, then shipped
while still chilled to stores to be made
into sushi. These time-saving steps
make it possible for Wasabi to deliver
fresh food at scale.
Growing numbers of consumer
“clicks” are altering the “last mile” strat-
egies of online suppliers as the retail sec-
tor adapts to changing consumer habits
— but the need to control costs is also
‘The retailer has to
have facilities closer to
where people live’
shaping the trend. “What is driving
demand for ‘last mile’ depots is the UK
consumer’s increasing expectation for
next-day or same-day delivery,” says
Andrew Jones, chief executive of Lon-
don Metric, the FTSE 250 property
developer. “The retailer has to have
facilities closer to where people live to
make good on these promises.”
FINANCIAL TIMES Wednesday 7 September 2016
FT Property London
House price increase Time saving into cental London New station Tunnel
(%) (minutes)
7%
6%
Chadwell Heath
Forest Gate
5%
Seven Kings
Acton Main Line
Goodmayes
Maryland
Manor Park
Brentwood
Harold Wood
4%
Romford
Stratford
Gidea Park
Tottenham Court Road
Farringdon
Paddington
Ilford
3%
Liverpool Street
Whitechapel
Shenfield
Hayes & Harlington
Ealing Broadway
2%
Hanwell
West Ealing
West Drayton
1%
Southall
0
Bond Street
Heathrow
10
Iver
20
Abbey Wood
Custom House
Canary Wharf
Woolwich
6%
5%
4%
3%
2%
1%
0
10
20
30
40
increase within Crossrail’s catchment area The biggest beneficiaries are investors along The CBRE research is backed by a London
between now and when the first trains run. By the the line in the central part of London that School of Economics report into offices. It
time Crossrail is operational in 2018, it will have stretches from Paddington to Canary Wharf. analysed property deals for signs of an uplift
added up to £35bn on to the residential property CBRE expects these to increase by an average 4.8 from the Crossrail project and found that
sector around the 37 stations. per cent per annum over and above wider price between 2005 and 2013 central London office
“We don’t think Brexit will have a significant inflation until it opens in 2018. properties within half a mile of new stations saw a
impact on the forecasts for property in the Development around the central stations will 15 per cent rise in values beyond a rising price
immediate proximity to Crossrail, nor will it affect transform these areas, particularly at Tottenham trend.
Crossrail’s success as a major infrastructure Court Road where Derwent London, the property Between 2008 and 2013, more than 40 per cent
initiative,” says Jennet Siebrits, head of residential group, is in charge of a significant regeneration of planning applications within a kilometre of
research at CBRE. “Our research on Crossrail project. This will include a new theatre, the stations also cited the new route as a justification
suggests that demand for property close to these redevelopment of the totemic Centrepoint for new construction, according to research
stations has been so strong that we expect prices building and the arrival of new shops including commissioned by Crossrail.
to continue to remain buoyant.” Zara, New Look and Primark. Gill Plimmer
Prime capital sites
dodge retail gloom
Shopping outlets
High vacancy rates on many
of Oxford Street, Bond Street and
Regent Street in recent years, sending
vacancy rates across central London
down to historic lows,” says Mark Stans-
UK high streets mask field, analyst at CoStar. “Covent Garden
has also really emerged as retail destina-
buoyant demand for key tion,” he adds. “While many retailers
locations, says Paul McClean will probably continue to look to exit
underperforming stores elsewhere in
the UK, on the big prime pitches in Lon-
A UK-wide slowdown in consumer don that is unlikely to happen, and rents
spending and high street footfall has should keep increasing.”
killed off some of the high street’s big- London has not finished expanding
gest names. Even so, analysts remain yet. About 2.5m sq ft of retail space will
sanguine over the general prospects for be added to the capital by 2018, through
retail property in the capital, though developments such as Coal Drops Yard
they are warning of a widening gap at King’s Cross, Battersea Power Station
between London and the rest of the UK. and a 740, 000 sq ft extension of west
A flurry of high street failures, most London’s Westfield centre, one of
notably the collapse of department Europe’s largest shopping venues.
store BHS and men’s clothings chain Retail spending benefits from mil-
Austin Reed, raises the prospect that lions of tourists each year — foreigners
empty stores could lead to falls in prop- can account for close to 60 per cent of
erty values as the market struggles to shoppers in some parts of the West End,
absorb vacant shopping space. according to Savills. But there are other
Dozens of BHS’s landlords could
struggle to fill properties following the
retailer’s collapse, as the portfolio is Business failures
such as BHS are
largely made up of large, old-fashioned adding to the
stores that predate online shopping. number of retail
Nationally, the position is stark. units without a
Just in time: a Wasabi customer snacks in a shop window — Corbis via Getty Images Across the UK, the proportion of retail long-term tenant
units without a tenant for between one
Some established chains are able to several “top-up shops” in convenience and two years has jumped from 15 per reasons for its success. Analysts say
use surplus store space on existing high stores. “Convenience stores require cent to 24 per cent says Colliers, the good retailers seek property next to cin-
streets to fulfil increasing online much more frequent replenishment, commercial property advisers. Invest- emas, restaurants and other food and
demand. “Argos is using its central Lon- and there’s no storage capacity, plus ment into retail property fell 54 per cent drink outlets, underlining the impor-
don stores as a last-mile stock depot for when you’re delivering to congested year on year to £1.6bn in the first quar- tance of shopping as an experience
online orders, and I’ve also heard of areas like high streets, big trucks just ter of 2016, the weakest quarter in four rather than simply a transaction.
retailers using self-storage units to fulfil won’t make it,” Mr Gulliford says. years, according to CoStar, another The relationship between landlord
orders,” Mr Jones adds. “It’s not unique And parcel carriers such as DPD have research group. and retailer has also become more prag-
to London. We have also got a ware- invested in technology to ensure online Hammerson, the FTSE 100 retail matic. In the 1980s, most retailers were
house in Reading let to Bibendum purchases arrive when customers are at property group, recently wrote down forced into 25-year leases with upward-
Wines doing next-day delivery, and sim- home, by texting live updates to avoid the value of its UK portfolio by £51m. only rent reviews. But the online revolu-
ilar examples in Leicester and Bristol. the chance of missed deliveries. Earlier this year Lord Wolfson, chief tion helped hasten the demise of some
The UK is already one of the most In Greater London, land used for executive of Next, described today’s of the high street’s most famous names
sophisticated internet shopping nations industrial and warehousing has reduced retail environment as “like walking up a such as Blockbuster and Woolworths.
in the world. As we move through the by 50 per cent over the past 30 years, down escalator”. Today the average retail lease is around
generations, that can only go one way.” and the Greater London Authority pre- Retail property at a glance looks pre- eight years, meaning retailers have far
Retailers such as John Lewis offer free dicts it will reduce by a further 25 per carious at best. But London is the excep- more power if they can find more
delivery to customers who “click and cent over the next 15 years. tion. Since 2008, retail property rents in favourable terms elsewhere.
collect” from its network of stores which Yet every £1bn increase in online the capital have risen 60 per cent. “Traditionally, landlords and retailers
includes Waitrose supermarkets. This sales triggers a corresponding require- Across the rest of the UK, stripping out didn’t need to have relationships
reduces the volume of individual home ment for nearly 1m sq ft of warehousing London, they have fallen 22 per cent in because long leases were the norm . . .
drops and has the added bonus that cus- space, according to a separate study by the same period, according to Colliers. landlords didn’t care much about the
tomers might buy something else when property consultants Gerald Eve. Yet London prime rents rose by an aver- retailer as long as they survived,” says
they come to collect goods. With predictions that online shopping age of 7.8 per cent in the year to the end James Gulliford of Savills. “Now, land-
The supermarkets have also had to could grow from 12 to 20 per cent of UK of April. lords view them as customers, and the
rethink their supply chain, as Britons retail spending, a supply crunch would “There’s been strong demand from value of property is intrinsically linked
move away from a big weekly shop to be the likely result. international retailers for prime pitches with performance of the retailer.”
Wednesday 7 September 2016 ★ FINANCIAL TIMES 7
8 ★
Capital’s status
as Treasury
cash cow is
under threat
Property tax Revenue growth is slowing in the
highest priced areas, reports Vanessa Houlder
W
hen the tax paid by Lon-
don’s property buyers
broke new records
three years ago, it
showed how far the cap-
ital’s booming market had pulled away
from the rest of the country.
In the six years since the financial cri-
sis, residential stamp duty land tax
(SDLT) receipts from London more
than tripled, growing more than twice as
fast as most English regions. By March
2015, the capital was still the only part of
Britain where annual stamp duty reve-
nues outstripped the last market peak.
The strength of the London market —
coupled with a series of tax increases on
expensive property — has made London
property an increasingly valuable
source of revenue for the Treasury.
Just two boroughs — Westminster and
Kensington & Chelsea — together col-
lected £938m of SDLT for the 2014-15
tax year. This meant that more than
twice as much tax was paid by property
buyers in 13 square miles of central Lon-
don last year than in all of Scotland,
Wales and Northern Ireland.
Some of the gloss has now been
rubbed off London’s high-end property
market: the growth in its SDLT revenues
was 11 per cent in 2014-15, compared
with 16 per cent for the UK as a whole.
Even so, residential transactions in Lon-
don contributed £3.03bn of residential
SDLT, about 43 per cent of the UK total
in 2014-15. The importance of the
London property market for tax
revenues has grown significantly
since 2007-08, when it accounted for
only 28 per cent of total UK residential
SDLT.
Tax revenues from south-east Eng-
land have also risen sharply since 2008,
accounting for around 22 per cent of the
UK’s total residential SDLT revenue of
£7.5bn in the year to 2015.
The growth in stamp duty revenues
reflects both the appeal of the London
property market to wealthy buyers and
a series of tax rises. Before 1997, stamp
duty was charged at 1 per cent for all
properties purchased over the value of
£60,000. But since then the Treasury
has introduced additional bands and
higher rates, culminating in reforms
announced by George Osborne, then
chancellor, in December 2014.
They replaced the “slab” system of
stamp duty — under which homebuyers
paid stamp duty at a single rate on the
entire property price — with a banded
system, reducing the cost of buying
property for many buyers but raising it
for others. The effect of this measure
was to raise rates for properties worth
more than £937,000, focusing the
impact of the tax more closely on high
value properties in London and the
south-east. Rates on the portion of prop-
erty above £1.5m rose to 12 per cent.
The former chancellor went further in
last December’s Autumn Statement,
saying that, from April 2016, anyone
buying a second home would have to
pay an additional 3 per cent stamp duty
FINANCIAL TIMES
FT Property London
UK residential SDLT (stamp duty land tax) yield by regions in England
£m
London
South East
West Midlands
East Midlands
East England Yorks
and Humber
South West
North West North East
2004-05 05-06 06-07 07-08
FT graphic Sources: HM Revenue & Customs; FT research
surcharge. However, the long lead-up to
the rule change prompted aspiring buy-
to-let landlords and holiday homeown-
ers to accelerate their plans to avoid
paying higher taxes.
The rising value of London property
has also contributed to a growth in
inheritance tax and capital gains tax
receipts — the latter helped by the impo-
sition in April 2015 of capital gains tax
on the disposal of property by non-resi-
dent owners.
The capital gains tax levy was one of a
number of ways in which the Treasury
has chipped away at the tax advantages
for foreigners of owning property
through an offshore company. In 2012,
it introduced a 15 per cent SDLT rate for
property worth more than £2m that was
bought by a company; in 2014, the
threshold fell to £500,000. The last
3000
2500
2000
1500
1000
500
0
08-09 09-10 10-11 11-12 12-13 13-14 14-15
remaining tax advantage of holding
property through offshore companies —
an exemption from inheritance tax —
will be scrapped next April.
The Treasury has also imposed a
hefty annual charge — now as much as
£218,200 a year for properties worth
more than £20m — in an attempt to per-
suade people to scrap the companies
and hold the property directly.
On top of this, the annual tax on
enveloped dwellings (Ated) rose by 50
per cent to £174m last year.
Some property experts have warned
that continued tax rises might become
counterproductive in terms of raising
revenue — arguments which the newly
appointed chancellor Philip Hammond
will have to consider as he prepares for
his first Autumn Statement. Sales of
Taxing times: Philip Hammond expensive London property have been
Wednesday 7 September 2016
Between 2008-09 and 2014-15,
residential SDLT receipts from London
grew by 248 per cent
Of the £7.5bn of residential SDLT
revenue collected in 2014-15, around
43 per cent accrued from London
South-east England is the next biggest
SDLT contributor, generating around 22
per cent of the tax yield in 2014-2015
The yield from non-residential SDLT
covering commercial buildings increased
by 14 per cent to £3.2bn in 2014-15
A single London borough – Westminster
– generated 8.4 per cent, or £273m,
of the UK’s non-residential SDLT yield
in 2014-15
slowing — with a potentially big impact
on SDLT receipts. Between July and
November last year, the Office for
Budget Responsibility downgraded its
forecast for residential SDLT revenues
for 2020-21 by a sixth.
But the tax costs of buying London
property are in the middle of the range
of 15 big cities around the world exam-
ined by Knight Frank, the property con-
sultancy, and EY, the professional serv-
ices group.
The report calculated that an individ-
ual buying a London property in August
2015 and selling it five years later after
capital growth of 5 per cent a year would
pay 9.7 per cent of its sale value for a $1m
investment and 20.7 per cent for a $10m
investment. It said that on tax, London
“very much remains in the middle of the
pack”.
Wednesday 7 September 2016
Greenbelt bucklesunderstrain
Rural protection
A main tenet of postwar
planning – aimed at
avoiding urban sprawl –
divides opinion, writes
Kate Allen
W
hen the residents of the
well-heeled town of
Ascot in London’s com-
muter belt backed plans
to rejuvenate their high
street, they faced a challenge: to be
allowed to build on protected land.
London is surrounded by a ring of
undeveloped countryside known as the
greenbelt. It was created after the sec-
ond world war in a bid to stop the capital
sprawling into the kind of low-density
ribbon development that has marred
the outskirts of many American cities.
For those who live in and near com-
muter-belt towns and villages such as
Ascot, the greenbelt is widely seen as a
precious amenity that should be pro-
tected from avaricious developers.
But some communities have also
come to see it as a constraint.
Ascot residents felt that their town
needed an economic boost and backed a
scheme to build on vacant land on one
side of the high street, which would cre-
ate more shops, homes and facilities.
Over 90 per cent of respondents to a
consultation supported the plan to get
the high street site de-designated so that
it could be built on.
Ascot is just one of many examples of
how London’s greenbelt is gradually
being eroded. Councils across England
have approved plans for 275,000 homes
on greenbelt land, including 117,000 in
the area around London, according to
research carried out earlier this year by
the Campaign to Protect Rural England,
a lobby group.
That figure rose by a quarter in a year,
CPRE found. Greenbelt construction
has been growing steadily for more than
half a decade as cash-strapped public
bodies sell off land and demand for
housing soars.
Not everyone regards this as a bad
This green and pleasant land: an aerial short of London’s greenbelt boundary — Dan Kitwood/Getty Images
thing: most economists agree that the
greenbelt acts as a significant constraint
on the supply of new housing and fuels
rising house prices, particularly in areas
of high demand such as London.
Andrew Jones, a director at Aecom, a
planning consultancy, says that many
sites within the greenbelt already have
good road and rail connections. Given
that “we’ve already invested in the
infrastructure”, it would make sense to
“look at whether those sites are better
used for urban growth”, he says.
The loss of greenbelt land could be
offset by giving additional protection to
areas of countryside that are not cur-
rently covered by greenbelt rules, he
suggests.
Many economists and housing cam-
paigners want the government to carry
out a strategic reassessment of all green-
belt areas, to avoid their gradual deple-
tion and to create a proper plan for how
best to go about developing those areas,
when permission is granted.
★ FINANCIAL TIMES
FT Property London
But Paul Miner, planning campaign
manager at CPRE, says building on the
greenbelt was “not the solution”.
“Young people should have access to
jobs, amenities and affordable housing.
Developers want to go into the greenbelt
to build executive homes, which will not
provide for this need,” he says. Instead,
Mr Miner argues, London should focus
on building on brownfield land — it has
enough to create 300,000 homes,
according to the CPRE.
The government had planned to give
councils greater discretion over
whether local greenbelt areas should be
built on, but that could be reined in after
new prime minister Theresa May
pledged to protect the countryside.
During her leadership campaign this
summer Mrs May said that councils
should “avoid development on the
greenbelt as far as is possible”. New
communities secretary Sajid Javid rein-
forced that shortly after his appoint-
ment in July when he told MPs that the
greenbelt was “absolutely sacrosanct”.
Despite this, the residents of Ascot
might get their way: their local council is
now considering de-designating the
high street site and a swath of other
greenbelt areas around the town to
accommodate the 1,600 homes that it
says must be built there over the next
two decades.
The residents, however, are less sup-
portive of the plan than they were when
they backed de-designation by an over-
whelming majority two years ago.
They fear that developers will not
deliver all the facilities and infrastruc-
ture that residents had hoped for.
Margaret Morgan, a spokeswoman for
Ascot’s neighbourhood plan delivery
group, says: “We have deep concerns.
We fear that what the community
signed up for won’t be delivered.”
“If you ask me whether I am in favour
of releasing greenbelt land for develop-
ment, I would now have to say the
answer is no.”
Provincial cities profit
from capital spillover
Nearshoring
London’s high prices are
boosting the appeal of
other UK cities, writes
Andrew Bounds
Four years ago One St Peter’s Square in
Manchester was lauded as the first spec-
ulative office development outside Lon-
don since the financial crash of 2008.
This August it was sold, with its 288,000
sq ft fully let, to a German buyer for
£164m. The property cycle is once more
on an upturn outside the capital.
Part of the reason is the booming mar-
ket in London, agents say. Some inves-
tors have been priced out while yields
tend to be higher in regional cities, even
if capital growth is more subdued. And
companies are increasingly looking to
shift jobs to cheaper centres.
It is not just that their own costs are
lower: their workers might be able to
afford somewhere to live. Average
house prices are nine times average
earnings in London, but just 3.4 times in
the north. “For companies in the capital,
attracting young employees is becoming
an increasing problem,” says Kelvin
Craddock, an office specialist at JLL, the
consultancy. “Cities such as Birming-
ham, Manchester, Leeds and Bristol are
increasingly more attractive as employ-
ment destinations to graduates.”
Examples include Deutsche Bank
opening an office in Birmingham and
HSBC moving its retail headquarters to
the city. Insurer Hiscox has shifted jobs
to York while Nottingham has attracted
Now: Pensions, owned by ATP of Den-
mark, and Thomson Reuters, the news
agency.
The tactic has been dubbed “near-
shoring” as opposed to the offshoring of
jobs abroad to cut costs. The most popu-
lar destinations are the “Big 6” cities
that offer cultural and sporting attrac-
tions, good transport connections and a
ready pool of graduates from universi-
ties. They are Manchester,Birmingham,
Bristol, Leeds, Glasgow and Edinburgh.
9
JLL said that 1.4m sq ft of commercial
spaces was acquired by nearshoring
occupiers across the “Big 6” over the
past two years. The banking and finance
sector accounted for almost half.
In 2015 there was a record £2.6bn
worth of property investment in the Big
6 and a record level of pre-lets. Accord-
ing to CBRE, the property consultancy,
60 per cent of commercial property
deals by value are outside London and
the South East.
However there is still a shortage of tal-
ent in many big cities as graduates leave
for London. Research by PwC, the pro-
fessional services firm, found that in
2014 more than 66,300 people in their
twenties moved out of northern Eng-
land while just 42,500 moved in.
The vote to leave the EU in June has
also unsettled the market. London
rental prices should slow, meaning
Cities such as
Birmingham (right),
Manchester, Leeds
and Bristol are
tempting more
employers
there is less pressure to look elsewhere.
But the weakening pound has also made
UK property cheaper for overseas buy-
ers. And many cities are still catching up
after a dearth of new building following
the 2009 recession.
Matt Long, director of national offices
at advisers Colliers, says the provisional
bull run should continue. “Birmingham
continues to offer value for money, with
current rents for prime office space in
the city quoted at £35 per sq ft, as
opposed to £60 to £80 per sq ft for
equivalent space in London.”
Building is continuing in Manchester.
The city centre vacancy rate is just 6.8
per cent, and prime space even scarcer
at 1.8 per cent. BNYMellon made the
move to Manchester 11 years ago. It is
one of the US bank’s six global delivery
centres. Matt Wells, Manchester site
manager and former London resident,
says it had been a “perfect home” and
predicts more financial services compa-
nies will gravitate to the city.
10 ★ FINANCIAL TIMES Wednesday 7 September 2016