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TUESDAY 18 DECEMBER 2018 WORLD BUSINESS NEWSPAPER USA $2.50 Canada C$3.00

Fed: stay the course Blurred vision Trumping China

A policy flip flop could add to market Can Japan’s SoftBank justify its high There are no easy wins in the US’s
instability — MOHAMED EL-ERIAN, PAGE 18 debt levels? — LEX IN-DEPTH, PAGE 7 trade war — GIDEON RACHMAN, PAGE 9

Tech groups Briefing

accused in i Asos suffers as retail woes spread online
Shares in UK-based Asos plunged almost 40 per
Russia probe cent yesterday after the online fashion retailer
issued a profits warning, triggering a sell-off in
retail stocks across Europe.— PAGE 11
Former FBI director James Comey, cen-
tre, arriving on Capitol Hill in Washing- i Hungarians protest over ‘slave laws’
ton yesterday to testify at hearings into Thousands of people took to the streets of Budapest
the 2016 election campaign as a report for a fourth day of protests against new laws that
laid out the extent that Russia used US critics say erode workers’ rights and codify
tech groups to interfere in US politics. government control over the judiciary.— PAGE 2
The report, commissioned by the Sen-
ate intelligence committee, concluded i May warns against second Brexit vote
that Facebook, Twitter and Google Theresa May, prime minister,
failed to disclose key information on has warned of the “irreparable
how their services may have been used damage” that holding a second
by the Kremlin to promote Donald referendum on Britain’s EU
Trump during the presidential race. membership would inflict on
Mr Comey appeared in front of two the country’s politics.— PAGE 3
Republican-led committees investigat-
ing bias before the election, which said i Nissan delays choice of Ghosn successor
his team had conspired against Mr Renault and Nissan are grappling with the difficulty
Trump when probing his ties to Russia. of replacing Carlos Ghosn as they as they moved
Report page 11 to find successors to the man who built the now-
AP Photo/J. Scott Applewhite teetering automotive empire.— PAGE 12

i China debates Xi’s economic vision

Malaysia charges Goldman and

An unusual and relatively open debate has emerged
in recent weeks among economists in China on the
nature and direction of Beijing’s economic reform
programme.— PAGE 3

i Vienna presses Egypt to stem migration

two bankers over 1MDB scandal Austria is to hold talks with Egypt this week in an
attempt to revive the EU’s campaign for north
African countries to take in more Mediterranean
Sea migrants.— PAGE 2

i Kabila challenger faces down bullets

3 US firm accused of helping ‘misappropriate’ $2.7bn 3 Prosecutors seek $3bn-plus fines
EDWARD WHITE — TAIPEI
JOHN REED — BANGKOK
STEFANIA PALMA — LONDON
Malaysian prosecutors have filed crimi-
nal charges against Goldman Sachs and
two of its bankers for their role in the
alleged embezzling of billions of dollars
from the country’s scandal-wracked
state investment fund, 1MDB.
The Malaysian attorney-general’s
office is seeking fines worth more than
intensifies scrutiny of the investment
bank’s conduct after the US Department
of Justice indicted the two former bank-
ers last month on similar charges.
Tommy Thomas, Malaysia’s attorney-
general, said he was filing charges
against subsidiaries of Goldman and
former bankers Tim Leissner and Roger
Ng Chong Hwa, whom he described as
Goldman’s “key employees” in the case.
The two bankers are accused of brib-
Martin Fayulu, a presidential candidate in the
Democratic Republic of Congo, fears the election
will be decided by the state, after security forces
department, allege that as much as ‘We believe the fund’s former general counsel. reportedly fired on his convoy last week.— PAGE 4
$4.5bn was misappropriated from the Mr Low’s spokesman said he main-
investment fund. The scandal has these tained his innocence and would not sub-
already snared former premier Najib charges are mit to any jurisdiction where “guilt has Datawatch
Razak, 1MDB’s founder. He has pleaded been pre-determined by politics and
not guilty to charges of corruption. misdirected. there is no independent legal process”.
Goldman said the bank disputed the If found guilty, the individuals EU–Japan trade
allegations and would defend itself
We will charged face a maximum prison sen- % of countries’ exports/imports
The European
Council is poised
against the accusations. “We believe vigorously tence of 10 years and a heavy fine. Exports extra-EU to Japan to sign off an
EU-Japan trade
these charges are misdirected. We will A partner at a Malaysian law firm Exports Japan from EU
vigorously defend them and look for-
defend involved in financial services described Imports extra-EU from Japan agreement this

$3bn from Goldman subsidiaries and its
former bankers, accused of helping “dis-
honestly misappropriate” $2.7bn from
bonds issued by 1MDB in 2012 and 2013.
The charges brought by Malaysia yes-
terday are the first time that Goldman
has been directly targeted by prosecu-
tors for its alleged role in the widening
scandal. Kuala Lumpur’s move
ing Malaysian officials to secure involve- ward to the opportunity to present our them’ the severity of Malaysia’s accusations Imports Japan from EU
20
week. The deal
will strengthen the
ment in the auction of $6.5bn of bonds case,” the bank said. “The firm contin- against Goldman as “unprecedented”.
for 1MDB. Goldman received $600m in ues to co-operate with all authorities
Goldman Sachs They would “send chills down the spines 15
roles of Brussels
and Tokyo in
fees for its role, according to Mr Tho- investigating these matters.” of one or two expat bankers”. 10 setting global
mas, a total that was “several times Malaysia also filed charges against The Malaysian charges closely mirror 5 product standards.
higher than the prevailing market rates Low Taek Jho, the fugitive Malaysian allegations filed by US prosecutors last 0
The EU accounts
and industry norms”. businessman known as Jho Low who is month, which also charged Mr Ng and 1995 2000 05 10 15 for 11 per cent
Law enforcement agencies from sev- also sought by Singaporean and other Mr Leissner for their role in the bond Source: Unctad of Japan’s trade
eral countries, including the US justice authorities, and Jasmine Loo Ai Swan, offerings.

New York turns into second Silicon

Iran’s justice minister
leads charge against US
Iran’s newest weapon in its battle with
President Donald Trump is Laya
Joneydi, a rare woman in a male-
dominated system. As vice-president
for legal affairs, the academic has
already secured a victory over the US,
winning a case at the International
Court of Justice against any
re-imposition of sanctions against aid,
food and medicine. In an interview with
the FT, Ms Joneydi says she intends to
remain an independent figure.
Interview i PAGE 4
Valley as Google builds $1bn campus
ALIYA RAM — LONDON
RICHARD WATERS — SAN FRANCISCO
New York has bolstered its credentials
as the East Coast’s answer to Silicon
Valley after Google announced it would
build a new $1bn office campus in lower
Manhattan just weeks after Amazon
unveiled a similar plan in Queens.
The new Google offices, which will
occupy three separate buildings in the
Hudson Square neighbourhood, would
be a significant expansion of the tech-
nology group’s already considerable
presence in the city, which includes the
$2.4bn purchase in March of Chelsea
Market, a former biscuit factory-turned
shopping mall and office complex.
The New York moves by Google and
Amazon, as well as last week’s Apple
announcement that it was building a
$1bn campus in Austin, Texas, are a sign
of how the tech industry’s breakneck
growth is forcing companies to tap new
pools of staff outside Silicon Valley.
“New York City continues to be a great
source of diverse, world-class talent —
that’s what brought Google to the city in
2000 and that’s what keeps us here,”
said Ruth Porat, chief financial officer.
Staff will move into two of the new
buildings by 2020 and the third by 2022.
They will have space for Google to dou-
ble its workforce in New York over the
next decade. The campus will house
Google’s global commercial operations.
Although New York has long been a
hub for finance and creative industries,
Michael Bloomberg sought while he was
mayor to turn it into the US’s second city
of tech after the 2008 financial crisis,
setting up a separate office dedicated to
attracting the sector and backing an
applied sciences branch of the Ivy
League’s Cornell University on Roose-
velt Island. Cities have clamoured for
new offices from the big Silicon Valley
tech groups, offering financial incen-
tives and promising to invest in trans-
port links and other infrastructure.
But while Amazon’s expansion has
received a mixed reaction in New York
— prompting jubilation from property
developers and politicians but protests
from some residents in Queens, who
argue they will not benefit from the
influx of investment — Google has pur-
sued a low-key strategy that has not
included city tax breaks or subsidies.
Together, Google’s new offices in Chel-
sea and Hudson Square will allow it to
double its staff in the city from 7,000 at
present. Amazon is seeking to hire
25,000 staff in New York.
Additional reporting by Joshua Chaffin
in New York

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2 ★ FINANCIAL TIMES Tuesday 18 December 2018

INTERNATIONAL

Central Europe Revised budget

Protests against Italy’s leading

parties agree
‘slave law’ add to spend less
in bid to avert
to pressure on Brussels curbs
Hungary’s Orban MILES JOHNSON — ROME

The leaders of the two parties in Italy’s

populist coalition have backed propos-
als by the prime minister to cut
planned spending for next year in a bid
to avoid sanctions from Brussels.
Thousands denounce to a foundation run by an ally of the
prime minister. Matteo Salvini, leader of the anti-migra-
ruling Fidesz in fourth The flagship public channel began its tion League, and Luigi Di Maio, who
day of demonstrations morning broadcast yesterday without heads the anti-establishment Five Star
mention of the previous night’s protest. Movement, said they had given their
VALERIE HOPKINS — BUDAPEST Balazs Hidveghi, a spokesman for Mr blessing to Giuseppe Conte’s revised
Orban’s Fidesz party, said it was “quite budget plan.
Thousands of people took to the streets obvious” that the “Soros network” was There was “complete agreement
of Budapest for a fourth day of protests behind the protest, referring to George between Conte, Salvini and Di Maio on
against new laws that critics say erode Soros, the US-Hungarian billionaire fin- the numbers and content of the pro-
workers’ rights and codify government ancier who has been a frequent target of posal to send to Brussels”, the League
control over the judiciary. Mr Orban’s government. said yesterday.
The protests are becoming the most co- Mr Hidveghi alleged that protesters The changes are expected to be sub-
ordinated show of opposition to the way and opposition MPs had been “provok- mitted to Italy’s senate this week before
in which Viktor Orban, the nationalist ing” the police “in order to produce bad being approved by the country’s parlia-
prime minister, has centralised power news about Hungary”. ment by the end of the year.
since taking office in 2010. Another pro- Zselyke Csaky, research director at The changed budget — which is likely
test was called for yesterday evening. Freedom House, the democracy watch- to result in a dilution of the coalition’s
Students, union workers and opposi- dog, said the protests were significant flagship policies, such as Five Star’s so-
tion MPs gathered in front of Hungary’s because such levels of outrage had not called citizens’ income welfare pay-
parliament on Sunday and later been seen since riots in 2006 following ments and a reduction in the retirement
marched in sub-zero temperatures to the leak of a recording in which the age — marks a sharp reversal for Mr
the headquarters of MTV, the public tel- leader of the ruling Socialists admitted Salvini and Mr Di Maio, both of whom
evision broadcaster. About 15,000 peo- his party had lied to win an election.
ple participated throughout the day, Ms Csaky compared the protests to
and police used tear gas against a crowd previous demonstrations against gov-
‘We have agreed further
of about 2,000 outside MTV, where ernment attacks on the Central Euro- fiscal reductions that will
10 opposition MPs had asked to read pean University, the Soros-founded
protesters’ demands. institution that said last month it would
probably be appreciated
The protests were triggered by the move many of its operations to Vienna by the European Union’
approval last week of a law that would due to political pressure.
allow employers to seek up to 400 hours “Previously, everyone was so well had previously pledged to stick to their
of overtime a year. Opponents have behaved. Even if 50,000 people partici- Anger: istrative court system under the super- Fidesz said Europe’s Venice Commission, which original plans.
called the measure a “slavery law”. pated in the protests for Central Euro- Hungarians vision of the justice minister. The sys- advises on constitutional matters, yes- Under Mr Conte’s proposal to the
The measure was approved amid cha- pean University last year, there was an demonstrate tem, which will deal with government- protesters terday criticised another set of laws European Commission, Italy will pass a
otic scenes, with opposition MPs whis- almost festive atmosphere. This time it outside the state related activities, will start functioning had been passed this summer. The measures, budget law by the end of the year that
tling, sounding sirens and throwing is different,” said Ms Csaky. television in January 2020 and cases before it will known as the “Stop Soros” laws, impose will produce a budget deficit of 2 per
pamphlets from the parliament balcony Mr Orban has been under increased headquarters not be subject to final review by the provoking a 25 per cent tax on activity deemed to cent of gross domestic product in 2019,
in an attempt to disrupt the vote. The fire from Brussels over his anti-migrant in Budapest at supreme court. the police be “promoting migration”. instead of the 2.4 per cent first put for-
law nevertheless passed easily because policies and his party’s consolidation of the weekend Dunja Mijatovic, the Council of The panel found that the laws consti- ward by the government.
Mr Orban’s Fidesz party has a two- power. The European Parliament voted Bernadett Szabo/Reuters Europe’s human rights commissioner, ‘to produce tuted “unjustified interference, with the However, the offer has so far failed to
thirds majority in parliament. in September to initiate Article 7 pro- has called for Hungary’s president bad news’ right to freedom of expression and of satisfy the commission. Pierre Moscov-
Opponents are also calling for an ceedings, a process that could culminate to send the laws back to parliament “to association of the NGOs affected”, the ici, the EU’s economy commissioner,
“independent public media”, citing con- in sanctions, including a loss of Hun- enable a fully informed review of the council said. “The imposition of this tax last week said it was a “step in the right
tinuing consolidation of the industry in gary’s EU voting rights, although this is package”. will have a ‘chilling effect’ on the exer- direction, but we are not there yet”.
the hands of Orban loyalists, including highly unlikely. A joint panel of legal experts from the cise of basic human rights and on indi- The commission had rejected Italy’s
an initiative announced last month to Another set of laws approved last Organisation for Security and Co-opera- viduals and organisations that defend earlier budget plans, describing them as
donate almost 500 Fidesz-friendly titles Wednesday pave the way for an admin- tion in Europe and the Council of them.” an “unprecedented” breach of bloc
spending rules, and raised the prospect
of levying fines on Rome if it failed to
alter its course.
Digital duty The League also denied a report by
an Italian newspaper that Mr Conte

France brings forward plans to impose tax on large tech groups had threatened to resign if his new
budget plan was scuppered by intra-co-
alition fighting between the League and
Five Star.
Following the meeting, Mr Salvini
DAVID KEOHANE — PARIS giants”, after which France would act On Saturday, an estimated 66,000 the 287,000 that took part more than a sels has indicated that the increased told reporters: “We have found an
on its own if it failed to persuade its protesters took to the streets of France, month ago. deficit will be tolerated so long as it is agreement on further fiscal reductions
France will move to collect a tax on big
EU partners to agree to a pan-European half the number that demonstrated one But the measures have also raised temporary. that will probably be appreciated by the
digital groups from January without
levy. week previously and well below questions across Europe about France’s The French levy on big digital groups European Union,” according to Italy’s
waiting for an agreement on a Euro-
However, recent moves by Emmanuel commitment to the EU’s 3 per cent is expected to include taxes on the sale Ansa news agency.
pean levy, as its finances come under
Macron, the French president, to calm budgetary red line. With spending cuts of private data and on revenue from The government is also discussing
pressure from measures taken to
anti-government street protests by the and extra revenue, including from the online market places, and will be cali- additional budget measures, such as
appease the gilets jaunes protesters.
yellow vests have pushed the country’s tax on digital groups, France hoped to brated to not hit smaller companies, raising taxes on luxury cars to fund
Bruno Le Maire, the finance minister, budget deficit above 3 per cent and left keep the deficit closer to 3.2 per cent, according to the finance ministry. incentives for electric and hybrid vehi-
told journalists yesterday that France Paris looking for extra sources of reve- Edouard Philippe, the prime minister, It will have a wider scope than the lat- cles, as well as cuts to so-called golden
would impose a new domestic tax on nue. made clear in an interview with est European compromise proposal — a pensions of state employees.
international technology groups such The measures announced by the pres- daily Les Echos. narrow levy on advertising sales that Mr Di Maio did not explain in detail
as Google and Facebook from the start ident last Monday, which include a “We are focusing on the public would be likely to exclude companies in a blog post published on the Five Star
of 2019, a move that will raise €500m a boost in income for the lower accounts, and we are taking a series of such as Amazon and Apple. website how his party’s main policies
year for the state. The timing of the tax paid, appear to have taken the immedi- measures, on business and spending, of A more ambitious European proposal would remain intact after the changes
is three months sooner than originally ate sting out of the movement which the order of €4bn,” explained Mr has been blocked by some EU govern- to the budget, saying only that “there
planned. sprang up in protest at green fuel taxes Philippe. ments — including Denmark, Sweden is very little time left to approve a
At the start of December Mr Le Maire but is now focused more broadly on liv- France only last year emerged from a and Ireland — that have resisted target- budget law that contains measures
said he was giving himself “until March ing standards and dissatisfaction with A levy on Facebook and its peers is long period with a budget deficit in ing the revenues, rather than profits, of that everyone said would be impossible
to get a deal on a European tax on digital Mr Macron. intended to raise €500m a year breach of EU spending rules, but Brus- tech companies on their soil. to implement”.

North Africa
MAKE A SMART INVESTMENT
Subscribe to the FT today at FT.com/subscription Austria urges Egypt to help EU combat people-smuggling
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00
MICHAEL PEEL — BRUSSELS issue in Europe, police on Sunday fired phone last week before their Vienna Egypt,” said one European diplomat.
HEBA SALEH — CAIRO
Trump vs the Valley
Tech titans need to minimise
political risk — GILLIAN TETT, PAGE 13
A Five Star plan?
Italy’s populists are trying to woo
the poor — BIG READ, PAGE 11
Dear Don...
May’s first stab at the break-up
letter — ROBERT SHRIMSLEY, PAGE 12
tear gas and water cannon at demon- meeting. “Why wake a sleeping dog for all the
HMRC warns Lloyd’s of Brussels Insurance market
to tap new talent pool with EU base
UK £3.80; Channel Islands £3.80; Republic of Ireland €3.80
Briefing
SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017

Austria is to hold talks with Egypt this strators outside the EU headquarters in But the EU overtures to Mr Sisi have wrong reasons?”
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

Brussels after about 5,000 people met with scepticism from some diplo- The move to co-operate more closely
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the
HOW DRIVERLESS
OF THE
week in an effort to use the last days of
Atlantic.— PAGE 15; CHINA CURBS HIT DEALS, PAGE 17
TECHNOLOGY IS
being swamped i Report outlines longer NHS waiting times
A report on how the health service can survive CHANGING AN
ROAD
more austerity has said patients will wait longer for
non-urgent operations and for A&E treatment while AMERICAN WAY OF LIFE Censors and sensitivity
by Brexit surge
some surgical procedures will be scrapped.— PAGE 4

marched against a UN migration pact. mats, who note Cairo is unwilling to with Mr Sisi has also raised human
i Emerging nations in record debt sales Warning: this article may be

its EU presidency to revive the bloc’s

FT WEEKEND MAGAZINE
FEBRUARY 4 2017

Developing countries have sold record levels of

government debt in the first quarter of this year,
upsetting — LIFE & ARTS
taking advantage of a surge in optimism toward
emerging markets as trade booms.— PAGE 15

3 Confidence in IT plans ‘has collapsed’

Credit Suisse Art of persuasion Mystery deepens
i London tower plans break records
How To Spend It
“We would like to co-operate with offer more help, given the minimal rights concerns as the former general,
A survey has revealed that a
3 Fivefold rise in declarations expected record 455 tall buildings are
planned or under construction over disputed painting of Jane Austen

campaign for north African countries

JAMES BLITZ — WHITEHALL EDITOR adjust its negotiation position with the in London. Work began on

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

fresh tax probe

countries so they stop people from leav- migrant flows from Egypt to the bloc. who took power after a 2013 coup,
leaves the EU, customs authorities have In a letter to Andrew Tyrie, chairman tensions after talks in Ankara with President Recep
admitted to MPs.
HM Revenue & Customs told a parlia-
of the Commons treasury select com-
mittee, HMRC said the timetable for
Tayyip Erdogan on issues including Syria and the
extradition of cleric Fethullah Gulen.— PAGE 9
Chic new lodgings

to take in more migrants.

mentary inquiry that the new system
needed urgent action to be ready by
March 2019, when Brexit is due to be
completed, and the chair of the probe
said confidence it would be operational
in time “has collapsed”.
delivering CDS was “challenging but
achievable”. But, it added, CDS was “a i Toshiba investors doubt revival plan
in Scotland
complex programme” that needed to be In a stormy three-hour meeting, investors accused MAGAZINE
linked to dozens of other computer sys- managers ofhaving an entrenched secrecy culture
tems to work properly. In November, 3 UK, France and Netherlands swoop
and cast doubt on a revival plan after Westinghouse
HMRC assigned a “green traffic light” to filed for Chapter 11 bankruptcy protection.— PAGE 16
3 Blow for bid to clean up Swiss image

Setting up a digital customs system
has been at the heart of Whitehall’s
Brexit planning because of the fivefold
increase in declarations expected at
British ports when the UK leaves the EU.
ing irregularly in the first place,” said They also fear that Cairo would put a cracks down ever harder on dissent.
CDS, indicating it would be delivered on
time. But last month, it wrote to the i HSBC woos transgender customers
committee saying the programme had The bank has unveiled a range of gender-neutral
RALPH ATKINS — ZURICH it followed “a strategy offull client tax
been relegated to “amber/red,” which DUNCAN
titles such asROBINSON — BRUSSELS
“Mx”, in addition to Mr, Mrs, Misscompliance”
or but was still trying to
means there are “major risks or issues Ms, in a move to embrace diversity and cater togather the information about the probes.

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

Theresa May announced in January that
Brexit would include departure from
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
customs union, the number is expected
to hit 300m.
The revelations about the system,
Cairo has responded coolly to EU pleas one EU diplomat. “That’s where Egypt heavy price tag on any increased co- Critics also say the EU appeared pre-
international trade once the UK leaves its image as a tax haven. and certain ofits employees”. The UK
the EU . . . Internal ratings are designed
to make sure that each project gets the
focus and resource it requires for suc-
cessful delivery.”
HMRC’s letters to the select commit-
tee, which will be published today, pro- AFP
Terror attacks inwith
co-operating

were contacted
Highlighted
western

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

Martin Luther King Day, Presidents’ Day, Good Friday,

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

330 Hudson Street, Memorial Day, Independence Day, Thanksgiving,

likely to throw a sharper spotlight on
while Australia’s revenue department and Nice, and the while French officials said their
probe;
change, but some MPs believe it was sels over “five or six” other business written in Brussels bourg thought to be more likely Norway Brussels suicide
said it was investigating a Swiss
Nice bank. investigation had revealed “several

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

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

the day after Thanksgiving, Christmas Day and the

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

City watchdog sends a clear message as

coastal patrols in countering people- effective [in its own waters] in stopping €6bn payment to Turkey agreed under can states — by announcing its plans in
general’s office expressed “astonish- In 2014, Credit Suisse pleaded guilty
ment” that it had been left out of the in the US to an “extensive and wide-
actions co-ordinated by Eurojust, the ranging conspiracy” to help clients THE RISE
Escape OF
the taper ECO-GLAM
trap
banker loses job over WhatsApp boast
EU’s judicial liaison body.
Credit Suisse, whose shares fell 1.2 per

day after Christmas Day.

evade tax. It agreed to fines of $2.6bn.
Additional reporting by Laura Noonan in
cent yesterday, identified itself as the Dublin, Caroline Binham and Vanessa
subject ofinvestigations in the Nether-
lands, France and the UK. The bank said in Paris
Houlder in London, and Michael Stothard
Austen’s descendants insist the Rice portrait depicts her as a girl — see magazine Bridgeman Art Library
How high earners can evade
a pension headache — FT MONEY

smuggling along the wider north Afri- people from leaving. It has shown that it a 2016 deal for Ankara to take back June to send rescued migrants to coun-
LAURA NOONAN — DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to
JENNIFER THOMPSON — LONDON

Subscriptions and Customer Service

A boastful WhatsApp message has cost
a London investment banker his job
and a £37,000 fine in the first case of
Shutdown risk as border
regulators cracking down on commu-
Christopher Niehaus, a former Jeffer-
ies banker, passed confidential client
information to a “personal acquaint-
ance and a friend” using WhatsApp,
according to the FCA. The regulator said
ban people from installing apps on their
private phones.
Brussels takes tough stance on Brexit
Andrew Bodnar, a barrister at Matrix
Chambers, said the case set “a precedent
in that it shows the FCA sees these mes-
with Spain handed veto over Gibraltar
390_Cover_PRESS.indd 1 19/01/2017 13:57

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

Tel: +1 800 628 8088 US subscription rates, 1 year $406. Periodicals

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

avert a US government shutdown after
April 28 have resisted Donald Trump’s
attempt to tack funds to pay for a wall
on the US-Mexico border on to
stopgap spending plans. They fear
that his planned $33bn increase in
The fine by the Financial Conduct
Authority highlights the increasing
problem new media pose for companies
that need to monitor and archive their
staff’s communication.
Several large investment banks have
confidential information on the messag-
ing system “on a number of occasions”
last year to “impress” people.
Several banks have banned the use of
new media from work-issued devices,
but the situation has become trickier as
can Mediterranean coast. is possible to secure a long shoreline — migrants who travelled from its terri- tries outside the bloc without first con-
included the identity and details of a
client and information about a rival of ALEX BARKER — BRUSSELS ambitious trade and airline access deals. mise. If Britain wants to prolong its
Jefferies. In one instance the banker GEORGE PARKER — LONDON Gibraltar yesterday hit back at the status within the single market after
boasted how he might be able to pay off STEFAN WAGSTYL — BERLIN clause, saying the territory had “shame- Brexit, the guidelines state it would
his mortgage if a deal was successful. The EU yesterday took a tough opening fully been singled out for unfavourable require “existing regulatory, budgetary,
Mr Niehaus was suspended from Jef- stance in Brexit negotiations, rejecting treatment by the council at the behest of supervisory and enforcement instru-

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

to accept the proposals. encryption system that cannot be
US budget Q&A and accessed without permission from the
Trump attack over health bill i PAGE 8 user. Deutsche Bank last year banned
WhatsApp from work-issued Black-
as iPhone-loving staff spurn their work-
issued BlackBerrys.
Bankers at two institutions said staff
are typically trained in how to use new
Abdel Fattah al-Sisi, Egyptian presi- and others could emulate it.” tory to the Greek islands. sulting those countries. “When you fol-
Facebook did not respond to a request Senior EU diplomats noted that has been made on Britain’s exit bill and
for comment. About 2.3m people will benefit from European Council president Donald Mr Tusk’s text left room for negotiators citizen rights, which Whitehall officials
Additional reporting by Chloe Cornish today’s increase in the national living Tusk’s first draft of the guidelines, to work with in coming months. Prime believe means simultaneous talks are
Lombard page 20 wage to £7.50 per hour. But the rise which are an important milestone on minister Theresa May’s allies insisted possible if certain conditions are met.

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will pile pressure on English councils,
which will have to pay care workers a
lot more. Some 43 per cent of care
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aged 25 and over — earn less than the
mailing offices; Post-Master. Send address changes
the road to Brexit, sought to damp Brit-
ain’s expectations by setting out a
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ess that prioritises progress on with-
drawal terms.
that the EU negotiating stance was
largely “constructive”, with one saying it
was “within the parameters of what we
were expecting, perhaps more on the
upside”.
Boris Johnson, the foreign secretary,
reassured European colleagues at a
Nato summit in Brussels that Mrs May
had not intended to “threaten” the EU
when she linked security co-operation

dent, is due to meet Sebastian Kurz, Backers of the Egypt plan hope Mr Sisi “We never understood in the first low the debate in Europe, you get the
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0.84 UK 3m
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that includes a gathering of African and what he is prepared to offer and what he that other countries have their own pri-
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Executive appointments All rights reserved. European leaders on economic co-oper- wants in return. orities,” said Izza Leghtas, senior Europe
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Tuesday 18 December 2018
China economists dare to disagree with Xi’s vision
Intellectuals challenge president’s centralised approach to growth as party marks 40th anniversary of Deng reforms
TOM MITCHELL AND YUAN YANG
BEIJING
Five months after Chinese scholars and
officials quietly grumbled about Xi Jin-
ping’s unprecedented political power
grab this year, an unusual and relatively
open debate has emerged about the
nature and direction of China’s eco-
nomic reform programme.
Unlike the largely anonymous sum-
mer carping about Mr Xi’s elimination
of term limits in March, which posi-
tioned him to be president for life if he
chooses, in recent weeks economists
have argued publicly whether the presi-
dent’s rapid centralisation of power over
the past six years would enhance or con-
strict the next phase of development.
Mr Xi will wade into the middle of this
debate today when he addresses the
nation on the 40th anniversary of
China’s era of “reform and opening”.
Deng Xiaoping, the former “paramount
ruler”, is credited with launching the
economic reforms that powered its
remarkable rise at a meeting of the
Communist party’s Central Committee
on December 18 1978.
“Chinese intellectuals are giving voice
to enduring disagreements about sub-
stantive policy matters, such as the bal-
ance of the state and market in the econ-
omy,” said Julian Gewirtz, a Harvard-
based scholar and author of a book
about the early years of Deng’s reforms.
The fundamental question at the heart
of this debate, he added, was whether
“China developed because of the per-
sistent rule of the state in the marketis-
ing economy, or despite that?”
Mr Xi appears to believe the former —
that a unique “China model” character-
ised by a powerful party-state
has been the foundation of
the country’s economic suc-
cess over the past 40 years.
Speaking at the October
2017 congress that marked
the beginning of his
second five-year term
as party general sec-
retary, Mr Xi said
that China’s experi-
ence “offered a new
option for coun-
tries that want to
Brexit May resists growing
impetus for second referendum
GEORGE PARKER — LONDON
Theresa May warned yesterday of the
“irreparable damage” that a second ref-
erendum on Britain’s EU membership
would inflict on the country’s politics, as
an idea previously on the fringes of the
Brexit debate moved to centre stage.
Announcing that MPs would vote on
her proposed Brexit deal in the week of
January 14, the British prime minister
said a second referendum would “break
faith with the British people”.
Why is there growing momentum
behind a second referendum?
Mrs May’s decision last week to abort a
parliamentary vote on her Brexit deal
has changed the debate at Westminster.
MPs increasingly believe the plan is
dead in the water and are looking at a
range of alternative options.
Given that more than 100 Tory MPs
voted to oust Mrs May in a confidence
vote in her leadership of the Conserva-
tive party, the opposition to her deal
appears entrenched. EU leaders meet-
ing in Brussels last week also expressed
doubts that it could be revived.
How could a second referendum arise?
There is growing clamour in the cabinet
to test alternative Brexit scenarios in an
“indicative vote” in the House of Com-
mons, to see if a Plan B could command
a majority. But there is little evidence
that any Brexit proposition will fly.
A no-deal exit might be backed by up
to 100 Tory MPs, but there is little sup-
port for it elsewhere in the 650-seat leg-
islature. A “Norway-style” economic
partnership, in which the UK would
remain closely integrated with the EU,
was rejected by 327 votes to 126 in a
Commons vote in June.
“A blocking group of MPs exists for
every proposal — leaving us left with
only a vote of the British people in a sec-
ond referendum,” wrote Justine Green-
ing, a former Tory cabinet minister.
But Mrs May has made her opposition
to a second vote clear — and even if a
cross-party group of MPs demanded a
second vote, the government would still
have to legislate for it. “Any Tory prime
minister who tried to legislate for a sec-
ond referendum would be gone by tea-
time,” said Nick Boles, a Tory MP. “The
only way to a second referendum would
be through a general election and a
Labour government.”
Would parliament support it?
Since the June vote on the Norway
★ FINANCIAL TIMES 3
INTERNATIONAL
speed up their development while pre- governments too much — our African two equally hyped speeches this year —
serving their independence”. friends should be careful.” at the Chinese government’s Boao
He added: “Government, military, Edmund Phelps, a Columbia profes- Forum in April and its “inaugural
society and schools — north, south, sor and 2006 Nobel Prize winner for export fair” in October.
east, west and centre — the party is ruler economics, added: “China needs broad If Mr Xi delivers another address that
of all.” innovation from ordinary people and is long on rhetoric and short on sub-
Despite the most repressive political the government can’t help much with stance, the chances are that the eco-
climate in Beijing since the 1989 Tianan- that.” nomic debate will quickly fade as the
men Square massacre put Deng’s Such arguments have seemingly been
reforms on hold for three years, an bolstered by slower economic growth in
increasing number of Chinese econo- China and Donald Trump’s punitive tar-
‘China’s leadership may
mists have dared to disagree openly iffs on Chinese exports, which have make mistakes that more
with policies associated with Mr Xi. depressed market sentiment and busi-
Most have, however, been careful not ness confidence. As China’s stock mar-
vigorous and open debate
to criticise the president directly. Their kets declined a further 8 per cent over could have helped to avoid’
voices are also useful for powerful offi- the past three months, falling share
cials, such as Vice-Premier Liu He, who prices forced many private sector com- party braces itself for a series of sensi-
do worry about market distortions and panies to sell shares pledged as collat- tive commemorations next year, includ-
trade frictions caused by powerful state- eral against state bank loans. ing the 30th anniversary of Tiananmen.
owned enterprises and rigid industrial The shares were often snapped up by “Experts who voice their worries
polices. state-owned rivals or government- about the enormous challenges facing
“China’s rapid growth over the past 40 controlled lenders, adding to the China’s economy are taking a significant
years has come from marketisation, malaise now hanging over China’s pri- risk,” said Mr Gewirtz.
entrepreneurship and technological vate sector. “We should pay attention to their
[learning] from the west rather than the Many Chinese economists now hope warnings. [Otherwise] China’s leader-
so-called China model,” Zhang Weiying, that Mr Xi will use today’s anniversary ship may make mistakes that more vig-
an economics professor at Peking Uni- to finally embrace a vision of reform orous and open debate could have
versity, said in a speech in October. President Xi Jinping in Beijing’s Great Hall of the People. Below, former leader closer to that originally articulated by helped to avoid.”
“Emphasising a China model will lead Deng Xiaoping, credited with starting China’s economic rise — Fred Dufour/Getty Deng. But similar hopes were dashed at Additional reporting by Xinning Liu
to strengthened state-owned enterpri-
ses, expanded government power and
reliance on industrial policies, reversing
the reform process. The economy will
eventually descend into stagnation,” he
suggested.
Mr Zhang’s speech was posted online,
only to be taken down by censors. Other
liberal economists were last month pre-
vented from travelling to a Harvard
forum about Chinese economic reform.
Even so, the debate has continued
over recent weeks in reform-anniver-
sary seminars held across Beijing’s uni-
versity district. At one such event last
week, Justin Yifu Lin, a Peking Univer-
sity professor and China model enthu-
siast, advised African economists
present that “[in] a hostile envi-
ronment, it’s better to follow
your own economic develop-
ment policies” rather than
western ones.
But Xiaodong Zhu from
the University of Toronto
countered: “It’s dangerous
for professors to admire
option, many of the 75 Labour MPs who
backed it have instead swung their sup-
port behind a second referendum. Some
Conservatives — although none so far in
the cabinet — also support the idea.
Labour has kept open “the option” of
a second referendum, maintaining that
the party could back such a vote if it
failed to eject Mrs May in a Commons
vote of no confidence in the govern-
ment. But Jeremy Corbyn has tried to
keep the idea on the backburner. The
Labour leader, a longtime Eurosceptic,
knows a second referendum would split
his party and infuriate its Leave-voting
supporters. Most Labour MPs’ constitu-
encies voted Leave in 2016.
So far there is no indication that such
an idea would command a Commons
majority but opinion could change if it
were seen as the only way forward.
What would be the question on the
ballot paper?
This is one of the big practical problems
of a second vote. Some commentators
suggest a second referendum might
simply ask voters to choose between
Mrs May’s deal and no deal. But, given
that three quarters of MPs voted to stay
in the EU in the 2016 referendum, the
Commons would almost certainly insist
on Remain being on the ballot paper.
Ms Greening has proposed a three-
way choice between Mrs May’s deal, no
deal and Remain, with a preferential
voting system to determine the out-
come. The Institute for Government, a
think-tank, suggested the alternative of
a two-part referendum, but that would
raise issues about sequencing.
The Electoral Commission, the body
charged with supervising votes in the
UK, has also made clear in past debates
that it is not enthusiastic about multi-
question referendums.
Would Brexit be delayed?
Almost certainly. It took 13 months to
set up the 2016 referendum. Although
Liberal Democrat leader Vince Cable
claims legislation could be concluded
“within a matter of weeks”, holding a
vote before March 29 seems impossible.
EU officials have indicated there
could be an extension of a few weeks of
the Article 50 exit process from the bloc
to allow Britain to sort itself out.
The European Court of Justice has
also ruled that the UK could unilaterally
revoke the Article 50 notification, clear
confirmation that, if all else fails, Britain
could, in theory, still call Brexit off.
Robert Shrimsley page 9
4 ★ FINANCIAL TIMES Tuesday 18 December 2018

INTERNATIONAL

Mueller investigation Khashoggi case

US charges Turkish associates of Flynn Riyadh hits

Two accused of meddling
in spat over refusal to
extradite Erdogan critic
DEMETRI SEVASTOPULO — WASHINGTON
LAURA PITEL — ANKARA
The US has charged two Turkish former
business associates of Michael Flynn,
the sacked White House national secu-
rity adviser, with conducting an illegal
lobbying campaign designed to pressure
the US to extradite Fethullah Gulen, a
Turkish cleric whom Ankara claimed
was the mastermind of an attempted
coup in 2016.
The US accused Bijan Rafiekian and
Kamil Ekim Alptekin of “a conspiracy to
covertly influence US politicians and
public opinion against a Turkish citizen
living in the United States”.
The indictment, which was unsealed
yesterday, said Mr Rafiekian and Mr
Flynn — referred to as “Person A” —
formed a company that tried to use Mr
Flynn’s national security experience to
“delegitimize” Mr Gulen, as a Turkish
request to extradite him was “meeting
resistance” from the justice depart-
ment.
The indictment is the latest offshoot
of the Russia investigation being led by
Robert Mueller, whose investigators
have held at least 19 interviews with Mr
Flynn. The retired general joined the
Trump campaign and served as national
security adviser for three weeks until he
Interview. Laya Joneydi
was fired for lying about conversations
with a Russian official.
Mr Flynn in December pleaded guilty
to lying to the FBI about those conversa-
tions. Last week, Mr Mueller recom-
mended that he receive little or no
prison time when he is sentenced this
month because he had provided investi-
gators looking into possible co-ordina-
tion between the Trump campaign and
Russia with “substantial” help, as well as
assistance in a separate unspecified
criminal probe.
After his appointment as national
security adviser, Mr Flynn also came
under scrutiny for lobbying work he
performed for Turkey during the presi-
dential campaign without registering as
a foreign agent. On the day Mr Trump
was elected, Mr Flynn published an arti-
cle in The Hill, a newspaper that focuses
on Congress, describing Mr Gulen as a
“radical Islamist” and a “shady Islamic
mullah residing in Pennsylvania”.
Mr Gulen, who has lived in self-im-
posed exile in the US since 1999, is Tur-
key’s most wanted man. Recep Tayyip
Erdogan, Turkish president, and the
country’s opposition both accuse him of
building a network of followers who
infiltrated many arms of the Turkish
state. Turkey said he ordered these fol-
lowers to lead a violent coup attempt in
2016 that left 250 people dead.
In the aftermath of the putsch, Mr
Erdogan has demanded the extradition
of Mr Gulen, who has denied all involve-
ment in the plot. But the US said the evi-
back at US
dence supplied by Ankara was insuffi-
cient to put before a US court. The
Senate over
indictment yesterday said the US justice
department had informed Ankara in
‘interference’
July 2016 that its request “had not yet
met the legal standards for extradition”
required under a US-Turkey treaty.
in Saudi affairs
Mr Alptekin, who is believed to be in
Turkey, did not immediately respond to SIMEON KERR — DUBAI
a request for comment. He has previ-
Saudi Arabia has fired back at its critics
ously admitted working with Mr Flynn
in Washington for their “interference”
but strenuously denied he was doing so
in its affairs after the US Senate blamed
on behalf of Turkey. He is accused of
the Saudi crown prince for the killing of
conspiracy, acting as an illegal foreign
journalist Jamal Khashoggi.
agent and lying to the FBI. He faces a
maximum sentence of 35 years. A statement from Riyadh said that
Mr Rafiekian, who is charged with the Senate vote “was based on unsub-
conspiracy and being an illegal foreign stantiated claims and allegations, and
agent, faces up to 15 years in prison. contained blatant interferences in the
kingdom’s internal affairs, undermining
the kingdom’s regional and interna-
tional role”.
In two votes last week the US Senate
blamed Crown Prince Mohammed bin
Salman for the murder of Khashoggi at

Female academic takes Iran sanctions battle to US
A rare woman in top ranks,
vice-president for legal affairs
scored early win with ICJ case
NAJMEH BOZORGMEHR — TEHRAN
In Iran’s hierarchical political system it
is rare for an outsider to be granted a
senior position. That is why the Islamic
republic’s newest weapon in its battle
with US president Donald Trump is so
unusual.
Laya Joneydi, a 50-year-old academic,
is a woman with no ties to conventional
politicians and no personal stories from
Iran’s revolutionary years. But as Iran’s
vice-president for legal affairs, she
has already secured a rare, if symbolic,
victory over the US on the global stage.
After the US administration withdrew
from the 2015 nuclear agreement this
year and re-imposed sanctions against
Iran, Ms Joneydi, in co-operation with
other ministries, filed a lawsuit against
the US at the International Court of
Justice — and won.
“What the US administration has
done to the Iranian people is illegitimate
from a legal point of view and more ille-
gitimate from a moral point of view,” she
told the Financial Times in her first
interview with a foreign media group.
Her rise is a result of mounting public
pressure on Iran’s leaders to appoint
women to top jobs, as an increase in the
number of female students at university
has not translated into more women in
senior official roles.
In the ICJ case, Ms Joneydi argued that
the US re-imposition of sanctions vio-
lated a 1955 Treaty of Amity between
the two countries that encouraged
closer economic relations.
On October 3, the court in The Hague
handed a victory to Tehran by ordering
Washington to ensure its sanctions did
not hit certain forms of trade, including
humanitarian aid, food and medicine.
The provisional ruling cannot, how-
ever, be enforced and the US immedi-
ately terminated the treaty, saying aid
was never a target of its sanctions.
The ICJ win was nonetheless hearten-
ing for Iran, where the economy has suf-
fered from sanctions that started to hit
oil exports last month and weakened
the national currency by about 50 per
cent against the dollar this year.
Laya Joneydi: “This has been an injustice to Iranian
‘It is the people, who see their economy and wel-
ultimate fare weakened while even their access to
satisfaction basic needs is hit,” said Ms Joneydi.
for me to see “The US knows that it cannot ignore
today’s young the ICJ’s rulings. It may not be the per-
and educated fect option [for Iran] but it is not useless.
generation push Indeed, I think it has been useful.”
for the country’s The ruling has helped in Iran’s efforts
progress’ to capitalise on an EU decision to stick
Kaveh Kazemi
with the nuclear accord. Without it, she
suggested, European countries might
not have been willing to set up a sanc-
tions-busting payments channel for
trade with Iran, which is due to be
launched in the coming weeks.
In addition, Ms Joneydi said, Tehran
was using the ICJ verdict in its talks with
foreign companies and banks that are
reviewing their ties with Iran.
In a country where conservative ideo-
logues are vying with moderates for pri-
macy, Ms Joneydi comes across as a non-
partisan pragmatist committed to
defending Iran’s sovereignty. She was
born into a middle-class family in the
town of Babol on the shores of the Cas-
pian Sea and moved to Tehran as a teen-
ager to study law at the University of
Tehran, where she was the only female
among her peers at masters and PhD
levels. In 2002, she received a post-doc-
toral research scholarship at Harvard.
She still teaches at the Tehran univer-
sity where she studied and said proudly
that most of her students are women.
“This means growth. It is the ultimate
satisfaction for me to see today’s young
and educated generation push for the
country’s progress. I do not claim that I
represent them, but I belong to this class
of educated, opinionated people who
believe in consistent improvements.”
After President Hassan Rouhani was
re-elected last year on a reform agenda,
Ms Joneydi got a call from his office. She
imagined it was something to do with a
legal case, thanks to her expertise in
international commercial arbitration.
Instead, it was a job offer.
“[I] ended up here by destiny. My life
was dominated by my academic profes-
sion as well as being a legal practitioner,”
she said. “I was never a politician and I
am still not linked to any political group.
I intentionally remain an independent
person because in my position . . . we
need to settle disputes impartially
between various state organisations.”
Being a woman in a male-dominated
system brought more challenges, she
said. But she has been joined by others
in the top ranks. The head of Iran Air is a
woman, as is the managing director of
the National Petrochemical Company,
and a new board member of the
‘The US National Iranian Oil Company.
Beyond fighting sanctions, Ms Joneydi
knows that has re-established the rights of religious
it cannot minorities to be members of city coun-
cils and is working on a plan to increase
ignore the government transparency.
ICJ’s But like many educated, middle-class
Iranians, she opposes any sudden policy
rulings. It changes that could lead to unrest. “This
may not be may be desired by those who impose
sanctions, but would put Iran at the risk
the perfect of turning into another Iraq, Syria or
option [for Afghanistan,” she said.
“I want our 200 years of experience in
Iran] but it struggling for the rule of law to bear
is not desirable outcomes in a mature way,
even if the process is difficult or slow,”
useless’ she added.
the Saudi consulate in Istanbul in Octo-
ber and called for the US to end its sup-
port for the Saudi-led war in Yemen.
As tensions grow between the US and
Saudi Arabia, its closest Arab ally, Riy-
adh rejected accusations that “disre-
spect its leadership” and emphasised
the oil-rich kingdom’s importance to the
energy market and fighting Islamist ter-
rorism.
The Senate resolutions were a rebuke
to President Donald Trump over his
relationship with Prince Mohammed
and his backing for the war in Yemen,
but were largely symbolic because the
House of Representatives is unlikely to
take them up.
Prince Mohammed’s erratic regional
policies have irked other western allies.
UN-led peace talks in Sweden last
week reached a breakthrough, with
agreement on a ceasefire in the Yemeni
port city of Hodeidah, an important
route for aid and goods to the impover-
ished state.
Riyadh on Sunday said it was working
towards a political solution and
regarded “the humanitarian situation in
Yemen a priority”.
The Senate vote to condemn the
crown prince for the murder of
Khashoggi, a Washington Post column-
ist who was critical of the kingdom’s
rulers, contrasts with the careful
approach taken by the Trump adminis-
tration, which has rooted its regional
policy in close relations with the young
prince.
The CIA has reportedly provided an
assessment that the crown prince was
responsible for Khashoggi’s murder.
“The US Senate sends the wrong mes-
sages to all those who want to cause a rift
in Saudi-US relationship,” Riyadh said
in its statement.
Turkish leaks of details of the grue-
some murder have increased pressure
on the crown prince, whose domestic
reform agenda and bid for regional lead-
ership has been jeopardised by interna-
tional condemnation of the incident.
Riyadh, which initially denied
involvement, has blamed Khashoggi’s
death on a rogue operation, arresting
about 20 suspects in its investigation.
Turkey has called for the extradition
of suspects involved in the killing, rais-
ing doubts about Riyadh’s willingness to
pursue justice.
On Sunday, António Guterres, UN sec-
retary-general, called for a “credible”
investigation into Khashoggi’s death.
The Saudi statement rejected “any
attempts to take the case out of the path
of justice in the kingdom”.

Presidential election Maritime rivalries

Kabila challenger faces bullets and tear gas in Congo campaign India agrees Maldives aid deal
TOM WILSON — LUBUMBASHI
When one of the Democratic Republic
of Congo’s leading opposition presiden-
tial candidates campaigned in the min-
ing town of Lubumbashi last week,
security forces reportedly sprayed his
convoy with live ammunition and tear
gas, leaving at least three people dead.
Martin Fayulu was heading from the air-
port towards the city centre surrounded
by thousands of supporters, when the
clash took place. The next morning, the
shells of burnt-out vehicles littered the
streets and torn campaign posters of the
ruling party flapped in the wind.
“First we felt the tear gas, and then
they fired shots,” Mr Fayulu told the
Financial Times in an interview in
Lubumbashi. “How can we continue
campaigning in this atmosphere?”
Congo’s elections next Sunday are set
to be historic — the country’s first transi-
tion of power by the ballot box as Presi-
dent Joseph Kabila steps down after 17
years in office. But Mr Fayulu’s experi-
ence has raised fears the exercise will be
far from democratic.
Backed by Moise Katumbi and Jean-
Pierre Bemba, the wealthy opposition
leaders who have been disqualified
from standing, Mr Fayulu has been
criss-crossing Congo in a private aircraft
for the past two weeks. But even with
significant financial resources at his dis-
posal, his campaign has faced huge
obstacles.
The military prevented his plane
from landing in the town of Kindu, a
stronghold of President Kabila’s chosen
successor, Mr Fayulu said.
Even if the vote is free and fair —
which is considered unlikely, given the
electoral commission’s decision to roll
out untested electronic voting machines
for the first time — Congo’s political sys-
tem makes democracy difficult.
Presidential candidates pay $100,000
to register, and campaigns cost millions.
The country is two-thirds the size of
western Europe, roads are poor, rail vir-
tually non-existent and aviation costly.
For a presidential candidate to visit even
a handful of constituencies during the
four-week campaign period, a private
plane is a base-level requirement.
Then there is the entrenched power of
the state. The face of Emmanuel Sha-
dary, the ruling party’s candidate, is
omnipresent on posters in Kinshasa and
Lubumbashi in the south-east, the
country’s two largest cities.
He flies on the ruling party’s aircraft
and is welcomed by officials from
Congo’s large government bureaucracy
in every town and village. His campaign
team, which is 400-strong, includes Mr
Kabila’s brother and sister and sitting
cabinet ministers.
Such is the dominance of Mr Sha-
dary’s campaign that Noel Tshiani, the
lesser-known opposition candidate, a
Martin Fayulu
fears the contest
will be decided by
the power of the
state and the
ruling party
former official at the World Bank, said
he cannot get a single billboard space in
the capital city.
But away from the presidential race,
some candidates are more optimistic
that Congo’s democracy is deepening in
other ways.
“The urban youth today, who are
active in the social networks, need
responses, they need to be convinced,
they don’t need T-shirts or drinks, they
need to understand what proposals the
politicians have to offer them,” said
Patrick Muyaya, a member of a party
allied to the ruling coalition running for
a parliamentary seat in the capital.
But Kinshasa, a sprawling city of 11m
people, is a world away from the small
towns and rural villages where most of
Congo’s 80m population live and voters
are more easily bought and intimidated.
On Thursday, when Felix Tshisekedi,
another opposition candidate, arrived
in the remote diamond-mining town of
Mbuji Mayi — an opposition stronghold
— the provincial governor deployed sol-
diers and police officers to keep people
away, leading to the reported death of a
16-year-old boy, according to the UN.
In a statement on Friday, Michelle
Bachelet, UN High Commissioner for
Human Rights, said that she was
“deeply worried” about the Congolese
state’s reported use of violence, includ-
ing live ammunition, against opposition
rallies. “Just days ahead of crucial elec-
tions in the DRC, it is essential that the
authorities ensure that the rights to
freedom of expression and peaceful
assembly are fully protected,” she said.
For Mr Fayulu, the UN’s words are too
little too late. The ruling party will do
everything it can to hold on to power,
including manipulating the result, he
said.
“Kabila is relaxing, he’s calm, every-
thing is done and the international com-
munity has sat back,” he added.
AMY KAZMIN AND JYOTSNA SINGH
NEW DELHI
India has agreed to provide $1.4bn in
financial assistance to the Maldives in
an effort to reverse its waning influence
over the strategically significant
archipelago nation.
The offer came as Narendra Modi,
Indian prime minister, rolled out the red
carpet for Ibrahim Mohamed Solih, the
Maldivian president, who is on his first
overseas visit since his election victory
three months ago.
Mr Solih stunned political observers
in September when he defeated Abdulla
Yameen, who as president had grown
increasingly hostile to India and forged
closer ties with China.
The Maldives is one of several Indian
Ocean nations, including Sri Lanka and
Mauritius, where India is vying with
China for influence as they seek to
entrench their maritime power.
Since his victory, Mr Solih has repeat-
edly expressed his desire to rebalance
the Maldives’ foreign relations, and
restore its close ties with India.
Mr Solih told a business forum in New
Delhi yesterday ahead of a meeting with
Mr Modi that “India is our closest neigh-
bour and our people are bound by ties of
friendship and cultural affinity. India is
not only our closest friend, it is also one
of our largest trading partners.”
The financial aid will come in the
form of budgetary support, concession-
ary loans and a currency swap. But ana-
lysts have warned that the Maldives’
precarious financial position means
that it will remain somewhat dependent
on China, to which it is heavily indebted.
Beijing has in recent years built a 2km
bridge from the Maldives’ main airport
to Malé, its capital, a journey that could
previously be made only by boat. It has
also forged a free trade deal and taken
long-term leases on several small Maldi-
vian islands.
But New Delhi was furious in August
2017, when Mr Yameen’s government
permitted three Chinese warships to
dock at a Maldivian port, raising con-
cerns that Beijing could use the archi-
pelago as a base for surveillance of
India’s coastal military installations.
The Maldives’ northernmost tip is
70 nautical miles from India.
In their joint statement yesterday,
India and the Maldives agreed to remain
sensitive to each others’ security con-
cerns, and not permit the “respective
territories to be used for any activity
inimical to the other”.
Tuesday 18 December 2018 FINANCIAL TIMES 5
6 ★
Joyful Paul gets back with Ringo
Yule be older too: Paul McCartney is flanked by Ringo Starr and Ronnie Wood at the O2 Arena — MPL Communications/MJ Kim
POP
Paul McCartney
O2 Arena, London
aaaae
Ludovic Hunter-Tilney
There were gestures of goodwill
throughout Paul McCartney’s set at the
O2 Arena, above and beyond the
demands of the festive season — thumbs
up, cheery salutes, blown kisses. “You’re
all pizzas and fairy tales,” as his old spar-
ring partner John Lennon once told him.
(“I almost made that an album title,”
McCartney said in 1986.)
In the past, his relentless good cheer
had a pre-rock and roll, variety-show
flavour, the cheese to Lennon’s chalk,
“Mr Thumbs Aloft” in the nickname of
the British music press. But as The
Beatles move further into history — it is
50 years since The White Album, the
same span that separated the album
from the end of the first world war —
McCartney’s indefatigability, at 76, has
become a less easily caricatured quality,
not so lightly dismissed.
His O2 Arena show ended the first leg
of his characteristically named Freshen
Up tour; the second leg will begin in
South America in March. The set list
comprised 40 songs lasting three hours,
an impressive display of stamina.
The outlines were familiar from
McCartney’s previous tours. The super-
fan in the audience holding a sign saying
he had seen 121 shows must have wit-
nessed the same routines about Jimi
Hendrix and George Harrison repeat-
edly — the former commemorated with
a blaze of guitars during a Hendrix-
styled version of Wings’ “Let Me Roll It”,
the latter with a ukulele-led version of
the Harrison-penned “Something”.
There is a formulaic quality to McCa-
rtney’s concerts. But the problem with
formulas is not so much their existence
FINANCIAL TIMES
ARTS
as what you do with them. McCartney
was not merely going through the
motions as he led us on this well-
rehearsed curation of his storied past.
He was backed by his usual punchy
live band: guitarists Rusty Anderson
and Brian Ray, keyboardist and percus-
sionist Paul Wickens and drummer Abe
Laboriel Jr. McCartney variously played
bass, electric and acoustic guitars, man-
dolin, ukulele and piano. His yowling
had a softer quality than in younger
days, his voice hoarse around the edges.
A solo version of “Blackbird” was sung
in the careful manner of a vocalist who
can no longer fly as easily as before. It
gave the song, one of his greatest, an
extra degree of pathos.
Elsewhere, signs of age were held at
bay with jolly jaunts through Beatles
classics, bold renditions of big 1970s
rockers from his Wings days and lively
tracks from his new album Egypt Station.
There was a dollop of Yuletide schmaltz
with a children’s choir-assisted version
of “Wonderful Christmastime”. But then
came a sublime moment of sentimental-
ity when an extra drum kit was wheeled
on stage and everyone in the venue held
their breath hoping for . . . yes! Ringo
Starr, whose arrival sparked mass
excitement, an echo of Beatlemania.
The two remaining Beatles were also
joined by The Rolling Stones’ Ronnie
Wood. The song they proceeded to play
was “Get Back”, decorated by Stonesy
guitar licks from Wood, with Starr grin-
ning as he performed a little drum fill.
In the past, to iconoclastic eyes, this
might have looked like rock chumoc-
racy, the kind of thing punk was meant
to stamp out. But in a show incorporat-
ing tributes to McCartney’s dead com-
rades, the likes of Lennon, Harrison and
George Martin, it was joyful and life-
affirming, a fairy tale’s happy ending.
“I don’t know about you,” Starr said
afterwards, “but it was a thrill for me.”
paulmccartney.com
When faith and identity collide
T H E AT R E
The Convert
Young Vic, London
aaaae
Sarah Hemming
Where do you belong? It’s a question
that just about everyone has to face in
Danai Gurira’s The Convert. And the fur-
ther we go, the more complex that ques-
tion becomes. It’s a terrific play — a rich,
thoughtful, carefully crafted piece —
first seen in the UK at London’s tiny Gate
Theatre in 2017, and revived here in Ola
Ince’s superbly acted production.
The setting is late 19th-century south-
ern Africa (now Zimbabwe) under Brit-
ish rule and the home of local would-be
priest, Chilford. With his trim suit and
his fastidious devotion to order, Chilford
is a fully paid-up convert, not just to
Christianity but to Victorian gentility.
So when his housekeeper’s young niece,
Jekesai, arrives on his doorstep, fleeing a
forced marriage and willing to adopt
Christianity in exchange for sanctuary,
he is thrilled. All the more so when Jeke-
sai, whom he renames Ester, proves a
quick learner and a powerful orator: a
protégée ready to help him spread the
word. But personal and political crises
are looming that will test Chilford, Jeke-
sai and all of those around them.
It’s a meaty, tightly structured play,
full of rich, finely drawn characters.
Gurira develops their dilemmas subtly:
DA N C E
The Nutcracker
Coliseum, London
aaaee
Louise Levene
The band play Tchaikovsky and the
whole thing looks like a giant Christmas
card. The Yuletide-treat crowd
demands little more from its Nutcrack-
ers and, once again, the London Coli-
seum is selling out very nicely for Eng-
lish National Ballet’s annual posh panto.
The current production, ENB’s 10th,
dates from 2010 and was made by then
director Wayne Eagling and designed by
Peter Farmer. The scenario is broadly
traditional: little Clara Stahlbaum, over-
excited by her parents’ Christmas party,
re-imagines its guests, her toys and a
recent rodent infestation in a long,
action-packed dream which culminates
OPERA
Hänsel und Gretel
Royal Opera House, London
aaaee
Richard Fairman
Ballet has long taken over the
Christmas season. Fairytale
favourites such as Tchaikovsky’s
Nutcracker and Sleeping Beauty fill
the theatre with family audiences.
There is little in the opera reper-
toire to compare.
That leaves one exception. From
the German romantic tradition
comes Humperdinck’s Hänsel und
Gretel. When the Royal Opera’s
recently installed director of
opera, Oliver Mears, wanted to
attract families to opera as well as
ballet at Christmas, it was the obvi-
ous choice.
In planning this new produc-
tion, Mears was clear that he did
not want it “set in a concentration
camp”. Antony McDonald’s stag-
ing, shared with San Francisco
Opera, stays four-square with the
fairytale of old. It offers a few ideas
of its own, but the result tends to
oscillate between what is novel but
off-key, and what is predictable.
For the first hour or so one waits
with increasing impatience for any
sign of enchantment or lurking
threat, or even individuality, until
in the dream sequence as the chil-
dren settle down to sleep, McDon-
ald at last opens his magic box of
tricks. There are no guardian
angels (yes, London has seen
angels many years ago at Sadler’s
Wells Theatre). Instead, other
characters from tales collected by
the Brothers Grimm dance a
Jekesai acquires real faith and is to an
extent liberated by her new life. But she
is torn in two by Chilford’s stipulation
that she may not attend an important
ritual for her deceased father. We see
too in Chilford the agonising internal
conflict of a man who has given up eve-
rything for a new life, but is now viewed
as a traitor by a local population rebel-
ling against the colonialists.
The two are outstandingly well played
by Letitia Wright and Paapa Essiedu.
Wright brings a moving, burning inten-
sity to Jekesai, her quick, neat move-
ments suggesting her character’s open-
ness and alacrity of spirit and mind.
Essiedu’s Chilford, meanwhile, is
beautifully pitched: comic, but not
ridiculous, in his ornate, often inaccu-
in her own grown-up self triumphing in
the Sugar Plum Fairy pas de deux.
Unfortunately Eagling is not a natural
storyteller. His Act One party scene is
hopelessly crowded with incident. Clara
is frequently upstaged by a big sister and
her three rival suitors who caper about
incomprehensibly during an impene-
trable puppet theatre sequence. Hyper-
active party guests distract us from the
main event — Michael Coleman’s bum-
bling, honeyroast grandpapa needs an
urgent review of his medication.
All Nutcrackers save the best dancing
for the second half but even here Eagling
seldom knows when to leave well alone.
He makes a very nice job of the Snow-
flake ballet blanc with a lot of rippling
waves in canon to match the rising
scales in the score, but Eagling’s more-
is-more philosophy continues to litter
the stage with mousy business. Some of
last Thursday’s Act Two ensembles
were rather ragged. Unison should
never be an end in itself but surely a
Tuesday 18 December 2018
charming ballet — Snow White,
Cinderella, Rapunzel, Rumpel-
stiltskin, and more.
After it has left the “Witch’s
Ride” to go for nothing, one won-
ders what the production has in
store for the witch herself. Out of
the murk appears, incongruously,
a Gothic mansion with blood trick-
ing down the windows straight out
of Psycho, and it houses a witch
who is not Norman Bates, but a
roly-poly Mrs Doubtfire, sung by
Gerhard Siegel, a tenor in drag.
None of this adds up, and the tone
shifts again at the denouement,
when the Witch falls into a vat of
chocolate and is revealed grue-
somely struggling in the gloop.
Hanna Hipp sings a nicely boy-
ish Hänsel and Jennifer Davis,
fresh from her Elsa in Lohengrin,
shines brightly as big sister Gretel.
Michaela Schuster brings an
appropriately Wagnerian scale to
the Mother and Eddie Wade
stepped in at the eleventh hour
convincingly as Father. Haegee
Lee, brilliantly made up, sings the
old Sandman, Christina Gansch
the gleaming Dew Fairy. It might
seem strange having a children’s
show sung in German, but so little
of the German text was audible,
especially before the interval, that
it hardly mattered.
Humperdinck’s music is satu-
rated in echoes of Wagner, from
Die Meistersinger in the overture to
Siegfried in the witch’s scene, and
the conductor, Sebastian Weigle,
drew playing that glowed with
Germanic warmth. After a season
dominated so far by cycles of the
Ring, here is a pleasing, but unex-
ceptional Wagner-style pendant.
To December 29, roh.org.uk
Enter
Sandman:
from left,
Jennifer
Davis, Haegee
Lee and
Hanna Hipp
Clive Barda
rate turns of phrase. They are comple-
mented by a range of characters all
caught up in the turbulence, among
them Ivanno Jeremiah as Chilford’s
more worldly friend Chancellor; Pamela
Nomvete as the housekeeper, dismissed
by Chilford for retaining a devotion to
her religion as deep as his own; and Luy-
anda Unati Lewis-Nyawo — excellent as
Chancellor’s sharply intelligent fiancée.
Naomi Dawson’s gauze-walled set
conveys the impossible halfway house
in which these characters are trapped,
although it sometimes obscures the
sightlines. But this is an electrifying
staging of a moving play about faith,
identity and colonialism.
To January 26, youngvic.org
Superbly
acted:
Ivanno
Jeremiah
in ‘The
Convert’
Marc Brenner
broad agreement on, say, leg heights in
arabesque isn’t too much to ask?
There are moments of magic in the
staging. Having the mice gas the toy sol-
diers with stinky cheese catapulted
from a mousetrap is inspired. The Act
One getaway to Confituremburg by
Montgolfier balloon is heart-catching.
James Streeter was a zesty, very clean-
footed Mouse King, the underused
Katja Khaniukova sparkled through her
fouettés in the Chinese dance and Dan-
iel McCormick gave a showstopping
account of the Spanish pas de trois, part-
nering a Kitri-ish Crystal Costa. Rina
Kanehara and Jeffrey Cirio were not
entirely at home with the tricksier pair-
work of the grand pas de deux but both
shone in their solo variations.
An uneven but intermittently enjoya-
ble evening. Take the kids, take the
mother-in-law — but maybe take a
hip flask . . .
To December 30, ballet.org.uk
Tuesday 18 December 2018
In a sign of anxiety about Masayoshi Son’s tech visions, SoftBank’s shares trade at a substantial discount
to the value of its investments. He hopes an IPO of its Japanese mobile business will change attitudes.
T
he “singularity” is the
theoretical point at which
machines can out-think
humans and technological
change becomes unstoppa-
ble. It justifies breakneck investment in
businesses with disruptive potential,
according to Masayoshi Son, founder
and chief executive of Japanese tech
group SoftBank.
“This is the biggest revolution in
human history,” he told analysts in
August. “Artificial intelligence will
change or will redefine all the indus-
tries . . . the winners in AI will be win-
ners in the future.”
For the moment, the real singularity
is Mr Son. As an iconoclast from consen-
sual Japan, he embodies big contradic-
tions. Fans see him as a tech investment
genius. Some traditionally-minded
Tokyo business people dismiss him as a
reckless chancer.
SoftBank hopes to undercut hostility
with one of the largest-ever initial public
offerings. This month the group is float-
ing a Japanese mobile phone operation
with a mooted equity value of more than
$60bn. Executives believe this will reas-
sure investors about the debts carried
by the business and trigger a re-rating.
SoftBank is the world’s largest focused
tech investor. Yet for all Mr Son’s futur-
istic talk, it sometimes buys relatively
mature businesses. Mr Son and his fans
believe it takes no unhedged risks. Crit-
ics decry it in the terms Warren Buffett
once reserved for derivatives: as a finan-
cial weapon of mass destruction. Soft-
Bank’s credibility problem is reflected
in a big gap between the value of its
investments and the price of its shares.
“They are the buyer of first resort,”
says one Asia fund manager, reflecting
on the group’s fondness for snapping up
‘Son is extremely bullish
and rarely mentions
negatives — investors
are wary of what is not
being talked about’
shares in well-hyped tech plays, such as
Uber and WeWork. “They always want
to supersize their investments. They
have an issue finding companies willing
to take the amounts of money they want
to hand out.”
The flotation will bring greater clarity
to a tangled structure that reflects Mr
Son’s restless quest for innovation
rather than any conventional corporate
strategy. But an FT analysis suggests the
move could heighten risks for Soft-
Bank’s shareholders and lenders rather
than dampen it. Dangers are already
understated by the group’s optimistic
account of its own finances.
Current valuation
The technological evangelism of Mr Son
divides opinion. “He is a visionary,” says
Dan Baker, an analyst at Morningstar
who rates the company a buy. “He is
extremely bullish and rarely mentions
negatives. Investors are wary of what is
not being talked about.”
These include “complexity, opacity
and leverage”, according to Chris Hoare
of New Street Research. Even compiling
a sum-of-the-parts valuation — a simple
exercise for most conglomerates — is
tricky for SoftBank. But the discount
between the impressive value of the
group’s investments and its lowly
Tokyo-listed shares is over 60 per cent,
according to FT analysis of S&P Global
data.
The chasm is hardly flattering for Mr
Son. It implies his investment skills — or
a perceived lack of them — have a
negative impact equivalent to $148bn.
The boss of a quoted private equity
group in the US or UK could be fired for
a discount as big as this.
One part of the calculation involves
nothing harder than totting up the value
of stakes in listed companies such as
Yahoo Japan and Sprint, a US telecoms
business. Another part requires bold
assumptions. Lex followed the lead of
many analysts in knocking 30 per cent
off the $100bn market value of a stake in
Chinese ecommerce group Alibaba —
SoftBank’s key asset — to allow for tax
on any sale. We assumed Arm, a chip
designer, is worth the full $32bn Soft-
Bank shelled out for it.
Deeper controversy bedevils Soft-
Bank’s $97bn Vision Fund. Saudi Ara-
bia, its largest backer, lost much of its
cachet as an investment partner after its
agents murdered journalist Jamal
Khashoggi in Turkey in October. Some
analysts fear Silicon Valley start-ups will
now spurn Vision Fund financing on
ethical grounds. Keeping track of Soft-
Bank’s contribution to the fund is a
more prosaic difficulty. Lex went with
the company’s most recent official
valuation of $35.8bn, implying a jump of
almost $8bn in a few months, though
the real value of the shares is in the eye
of the beholder.
★ FINANCIAL TIMES
FT BIG READ. TECHNOLOGY
By Jonathan Guthrie and Sujeet Indap
The gap between a tech pioneer’s promises and market reality
SoftBank intends to reduce share price ... and unlock more value in the group ... ... but a fall in tech and and telecoms stocks
discount with Japan Mobile IPO... Discount to value of SoftBank investments (%) would reduce asset cover of debts
$bn $bn
Miscellaneous Pre-IPO Post-IPO base case
stakes
250 Delta
60
Yahoo Japan
200 Sprint
Arm 50
150 Vision Fund
40
100 SoftBank
Japanese 30
50
mobile
Alibaba 20
stake
0 50
Current Forecast market Value of
SoftBank
10
market worth after
worth of Japan mobile investments Post-IPO tech
SoftBank IPO* 0 stocks gain 50%
*Assumes market attributes full value to cash raised and that Equity Enterprise value **Assumes 1.4 times correlation ***Current consolidated net debt
discount for mobile unit closes from over 60 per cent to zero
Paradoxically, the higher the number
in depth SoftBank puts on these stakes the
greater the dismaying share price dis-
count. No wonder Mr Son is trying to
reduce this. We value SoftBank’s invest-
SoftBank’s
ments at a grand total of $235bn, while
its market worth is just $85bn. The
difference is partly explained by
SoftBank’s substantial net debts but the
protection these receive is more fragile
credibility
than fans acknowledge.
Phone IPO
The flotation of the Japanese mobile
business is the first step in a plan to lift
problem
market capitalisation. It works bril-
liantly on paper, inspiring Bernstein
analyst Chris Lane to describe it as
“alchemy”. Transmuting base metal
into gold may be harder in practice.
In the eyes of most Japanese consum-
ers, SoftBank is a mobile phone com-
pany with a newsworthy entrepreneur
attached. The household name, com-
bined with fat dividends, should lure
retail investors. That has emboldened
SoftBank Group and its legions of bank-
ers to attach an aggressive float price to
the unit. At ¥1,500 ($13.20) per share,
the telecom company would have an
equity value of $64bn.
The sale of a 37 per cent stake for
$23.3bn should hopefully increase Soft-
Bank’s market worth by the same
amount. An optimist would expect the
shareholding in the mobile operator
retained by SoftBank to be priced into
its market worth in a similar way.
The gap between the parent’s implicit
and market values should narrow as a
result. This contraction would be
helped by a change in stock analysts
covering SoftBank from earnings-
obsessed Japanese telecoms specialists
to asset management analysts, some of
them based in the tech-friendly US.
There are three caveats. First, the re-
SoftBank has bought stakes in many high-profile tech companies. Its total rating of the retained stake is conjec-
investments are valued at $235bn, but its market worth is $85bn — FT montage tural, until shares in the phone unit start
Forecast market worth of SoftBank**
Value of SoftBank investments
Net debt***
300
250
200
150
100
0
Post-IPO tech
stocks lose 50%
Sources: S&P Global, FT research
to trade. Second, Mr Son is likely to sink
at least half the IPO proceeds into new
tech investments, where their value will
once again become opaque.
The third caveat is the most signifi-
cant. The mobile operator is coming to
the stock market when a telecoms price
war in Japan is threatening to erupt.
SoftBank Group’s racy pricing of
shares in its subsidiary is only justifiable
if fat dividends from the latter are sus-
tainable. The mobile operator should be
able to keep a pledge to pay out 85 per
cent of net income. But that will count
for little if net income itself is tumbling.
The problem would be more acute for
SoftBank Group than the consequent
reduction in the value of its sharehold-
ing in the phone unit. SoftBank is heav-
ily dependent on cash flows from Japa-
nese mobile phone charges to service its
$130bn net debt mountain.
Sprint challenge
About a quarter of that debt is the result
of a sally into US telecoms. In 2012,
SoftBank spent $20bn to buy 70 per cent
of the shares of Sprint. Mr Son’s plan was
to create a telecoms juggernaut to chal-
lenge AT&T and Verizon. He hoped to
merge Sprint with T-Mobile. But an
exercise in empire building became a
lesson in humility.
Trust busters blocked the merger.
Subsequent events have ominous paral-
lels with the Japanese telecoms industry
today. T-Mobile simplified and lowered
mobile phone pricing. Tens of millions
of subscribers defected from AT&T,
Verizon, and Sprint. T-Mobile shares
leapt by 120 per cent in the three years
to the end of 2017. In that time, Sprint’s
more volatile stock rose just 42 per cent.
Sprint’s debt of over $37bn prompted
fears of bankruptcy.
The advent of a more business-
friendly era in the US under President
Donald Trump encouraged Sprint and
T-Mobile to resurrect their merger plan.
7
The new deal terms betray the diver-
gence in the fortunes of the two part-
ners. T-Mobile is now taking over
Sprint. SoftBank would go from owning
83 per cent of Sprint to just 27 per cent of
the new T-Mobile.
The chances of US competition regu-
lators approving the all-stock deal this
time are put at no better than 50:50 by
analysts. If the deal goes through, it
would reduce pressure on Sprint’s bal-
ance sheet. The estimated annual free
cash flow of the combined business
would be almost $12bn. A key measure
of indebtedness — the ratio of net debt to
earnings before interest, depreciation
and amortisation — would be less than
three times at the new T-Mobile.
The takeover would also lighten
SoftBank’s bloated net debts to the tune
of $32bn. Accounting rules would per-
mit the group to “deconsolidate” these,
which means they would no longer
appear on SoftBank’s balance sheet.
SoftBank already tends to discount
Sprint’s debts when challenged on the
scale of its liabilities, as do some bullish
analysts. This is just one of the ways it
downplays borrowings that surpass
those of many developing economies.
Red flags to a bear
The justification is that Sprint’s debts
are “non-recourse”, which means Soft-
Bank is not liable for them if its subsidi-
ary defaults. SoftBank is likely to apply
the same logic to the mobile phone
unit’s $30bn of net borrowings after the
IPO. This treatment does wonders for
that important net debt-to-ebitda met-
ric. The ratio falls from the official level
of about five times, which looks steep, to
just over three times, which is a lot more
comfortable.
Incongruously, the group is happy to
include the earnings of subsidiaries and
affiliates in its own profits. All the earn-
ings of Sprint and Yahoo Japan go into
the pot. SoftBank owns less than half of
the quoted internet group’s shares, but
this is deemed to give it control.
Even a quarter of Alibaba’s profits are
included, on the arguable basis that
SoftBank has a significant influence on
the policies of the Chinese group.
This is permissible under Japanese
accounting rules. But the inclusions
undercut the assumption of some inves-
tors that ebitda is a useful measure of
SoftBank’s cash earnings. Few of the
It is an article of faith at
SoftBank — and among
many analysts — that
borrowings are offset by
valuable investments
companies in SoftBank’s portfolio pay
meaningful dividends. Very little of the
group’s reported net income of $9.8bn in
2017-18 passed through its hands in the
form of hard cash.
Strip out the forecast earnings, as well
as the borrowings, of SoftBank’s big
investments and net debt to ebitda soars
to over 10 times. Even a US leveraged
buyout specialist would regard this as
steep. Strip out the earnings of the
mobile phone unit too, to reflect the
impending IPO, and SoftBank would be
making a loss in some scenarios.
In fairness, the group weaves no cloak
of mystery around its accounting poli-
cies or its attitudes to risk. SoftBank
would like to be better understood. It is
an article of faith at the company — and
among many debt and equity analysts —
that borrowings are comfortably offset
by valuable investments, particularly
the stake in Alibaba. Mr Son is wont to
joke that “SoftBank has no net debt”.
That share price discount also covers
a lot of downside in advance, leaving
plenty of potential for capital gains. Mr
Hoare says: “You are buying the shares
at 60 cents on the dollar, and that dollar
could double in value.”
SoftBank shares are highly sensitive
to moves in tech stocks. Even privately
held businesses such as Uber are some-
times valued in relation to these. If long-
term past performance is any guide, a
three-fifths rise in new economy stocks
could lift SoftBank’s shares over four-
fifths. That troubling discount would
shrink significantly.
The corollary is that if tech and tele-
com stocks fell by just under a half, it
would theoretically cut the value of Soft-
Bank’s investments to below that of its
consolidated debt. The group’s illiquid
tech stakes would become hard to sell in
a much smaller rout.
Bulls believe in Mr Son’s singularity as
a tech visionary, as exemplified by his
inspired purchase of a stake in Alibaba
when it was an obscure start-up. Bears
shy away from SoftBank’s key person
risk, its impulsive rolls of the dice and
big debts. They worry that another defi-
nition of a singularity would apply to
SoftBank in a market rout: a black hole
in space, sucking in and crushing every-
thing in its path. They are right to do so.
8 ★
TUESDAY 18 DECEMBER 2018
Washington’s scrambled
approach to Africa
The Hobbesian view of the continent belongs to a bygone era
The Trump administration has
unveiled what John Bolton, the
national security adviser, has billed as
a “new” Africa strategy for the US. On
the commercial front, there is indeed
some fresh thinking. But much of what
Mr Bolton says has emerged from a
detailed inter-agency debate about
America’s future engagement with the
continent, seems to belong in the past.
If his speech on Friday is the guide,
Washington’s view of Africa is stuck
somewhere between the 19th century
scramble and the cold war, when the
continent played proxy for superpower
rivalry. Mr Bolton depicts US relations
with Africa as a geostrategic board
game in which Africans have less
agency than a pawn. Whatever “preda-
tory” moves by Chinese and Russian
policymakers may be going on, he
somehow finds America to be the prin-
cipal victim.
“Great power competitors, namely
China and Russia, are rapidly expand-
ing their financial and political influ-
ence across Africa. They are deliber-
ately and aggressively targeting their
investments in the region to gain a
competitive advantage over the United
States,” Mr Bolton claims.
It is unlikely many Africans will wel-
come the prospect of returning to the
era of “us or them” development part-
ners depicted in this vision, or feel
much sympathy if America is the one
left behind. If the US has lost ground to
rivals, it is successive administrations
that are to blame. Washington has
responded with complacency to the
past two decades of changing dynamics
on the continent, where bouts of rapid
economic expansion have meant the
emergence of more assertive govern-
ments, a growing consumer class and a
host of new suitors from around the
world.
The pioneering spirit with which
Americans built their nation has been
UK’s student funding is
overdue radical reform
An accountancy change sheds light on a system lacking clear strategy
The realities of Britain’s student loans
system have been papered over for too
long. Increasing numbers have
attended universities, accruing ever-
greater quantities of debt while the
government picks up the bill for loans
that will never be repaid. The aim of
bringing more students into higher
education, via loans repaid on future
salaries, was well intentioned. But the
poor design of the system has resulted
in rising costs and questionable out-
comes from some graduates.
A dose of financial clarity was deliv-
ered on Monday. The Office for
National Statistics announced it will
put the long-term costs of student loans
on to the government’s books. That
means £12.3bn will be added to the
annual deficit — wiping out much of the
Treasury’s fiscal headroom and poten-
tially breaching the chancellor’s “fiscal
mandate” to keep borrowing under 2
per cent. The accountancy tweak
might look like a dramatic policy
change. But it acknowledges reality.
The ONS’s procedure for measuring
student loans followed similar interna-
tional rules. But, given the large size of
the UK’s book and the fact that the debt
repayment is income contingent, it
flattered the public spending figures by
overlooking how many loans would not
be repaid. Student loans are higher as a
percentage of the UK’s gross domestic
product than in comparable countries,
such as Australia. The old measure
allowed the government to ramp up
student numbers without apparently
increasing spending. But this was a
delusion: the true cost of the loans
would not be accounted for in spending
terms for 30 years, while the interest
was welcomed in the present.
The ONS will now separate the UK’s
loan book into two: loans that will be
repaid will be counted as genuine gov-
ernment lending, while those likely to
be written off will be counted as gov-
notably absent from US-Africa policy.
This has increasingly focused on com-
bating militant Islamists and terror-
ism, at the expense of a more multi-fac-
eted approach.
Mr Bolton is wrong to see China’s role
on the continent as uniquely negative.
While Washington has been otherwise
occupied, Beijing has adopted a long-
term view of Africa’s potential, marry-
ing its own quest for resources and new
markets to Africa’s need for infrastruc-
ture development and fast money.
Moscow, like Washington, is arriving
late to the party.
Mr Bolton is wrong on another front:
past development aid, which he dis-
misses as “aid without effect” and a
waste of US taxpayers’ money. That is
not true of the health initiatives
launched by George W Bush, the previ-
ous Republican president, and which
saved countless lives. Moreover, the
benefits — in terms of exerting stronger
US influence — of the stricter aid cond-
itionality he recommends have been
diluted by China’s willingness to pro-
vide billions of dollars in investment,
free of politicised conditions.
If there is a positive to draw, it is that
Washington is waking up to the need to
re-engage and that to do so effectively it
must place economic ties to Africa up
the priority list. The recent passage of
legislation that doubles the spending
power of the Overseas Private Invest-
ment Corporation is one step in the
right direction. Giving a bigger role to
the US government agency that han-
dles private sector lending abroad
plays to America’s strength by promot-
ing closer business ties. It is a pity,
however, that Mr Bolton depicts such
measures as designed explicitly to
project US power in Africa, rather than
to promote reciprocal interests, and to
counter the influence of “great power”
rivals. Such language is out of step with
the times.
ernment spending. This clarity is wel-
come, if overdue. Instead of spending
billions without transparency, there
will be greater honesty about the costs
of higher education.
The change might gradually alter
government policy. It reveals that the
public finances are less healthy than
previously admitted. It may also prove
a tempting carrot for politicians who
wish to reduce tuition fees, as the loans
now increase the associated cost to the
government. The crucial point, how-
ever, is that this accountancy change
allows the country to start a far more
important conversation about the pri-
orities, structure and funding of the
whole of tertiary education.
The Augar Review is examining all
post-18 education. It should start from
the fact that universities have survived
austerity relatively well, partly because
of the failure to recognise the true costs
of student loans. Successive govern-
ments have also paid too little attention
to other forms of tertiary education. It
was no coincidence prime minister
Theresa May launched the review at a
further education college.
The review should also recognise the
perverse incentives in the current
structure, which favours the taking of
university degrees by young adults
above all else. There is a debate to be
had about whether the least successful
students — those with the poorest job
opportunities — would not be better off
in other forms of tertiary education.
The review should also examine the
interest rates on student loans — over 6
per cent for higher earners with the
largest loans — as well as the lack of
caps on student numbers. The UK’s
renowned university sector must be
allowed to thrive, but at a sustainable
level. The aim must be to fund a diverse
system that provides opportunities for
all, while avoiding inordinate support
for the university sector alone.
FINANCIAL TIMES
Letters
Belmond founder deserves a place in its history
The announcement, and your own
otherwise excellent report (December
15), on the $3.2bn LVMH takeover of
the Belmond group made no reference
to its founder, Jim Sherwood, who
began it in 1976 when he bought the
Cipriani Hotel in Venice for £900,000
from the Guinness family. He then
bought what remained of the legendary
Orient-Express train, arguably the
most comfortable and romantic means
of long-distance travel ever invented,
with the idea of transporting well-
heeled passengers from London and
Paris to his hotel in Venice.
That took five years and cost $30m,
but provided the name and style for
what became a major international
company, Orient-Express Hotels (it
only became Belmond in 2014, after
Sherwood had left). For more than 30
Comments on the younger
de Botton were misplaced
As much as I often enjoy Lex’s familiar
and slightly snarky tone, I am taken
aback at the personal and misguided
tenor of “GAM: de Botton fishing”
(December 14), directed at Alain de
Botton, the son of the late founder of
GAM. Certainly a timely analysis of the
travails of GAM is appropriate, and
Lex’s first few paragraphs do this well.
But when the commentary drifts off
into a snide critique of the founder’s
son, the writer and public intellectual,
it loses its sense of fairness and
objectivity.
Gilbert de Botton died 18 years ago.
His son, as far as I can discover, does
not work for the company. What
possible connection is there between
the writer and the financial travails of
the dead father’s former company?
Using the son’s writings on philosophy
and psychology as a counterpoint to
the challenges faced by the leadership
of the company is to basely implicate
some connection.
The ad hominem (and ad canem)
attack in the last paragraph, and the
challenge to Mr de Botton fils to explain
the problems facing the company,
seem to drift off into the absurd.
William Meller
Santa Barbara, CA, US
Who would campaign
for Mrs May’s deal?
Camilla Cavendish has declared that it
would be “in the national interest” to
hold a second referendum “with only
two alternatives on the ballot paper:
Mrs May’s deal or remain” (“May must
call the bluff of hardliner Brexiters and
seek a second referendum”, December
15). This makes no sense. Who would
campaign for Theresa May’s deal? A
government that had just abandoned
it? Members of parliament whose
opposition had just caused the
government to abandon it?
If nevertheless a majority of the
electorate preferred Mrs May’s deal,
that would face parliament with the
prospect of implementing a course of
action opposed by the House of
Commons, and abandoned by the
government. It would be a further great
blow to the doctrine that MPs are the
representatives, not the delegates, of
their constituents.
If a second referendum were to offer
the electorate the choice between
remaining and crashing out, that would
Colonial law
catches India’s
social media
satirists off guard
New Delhi
Notebook
by Amy Kazmin
years Sherwood flew around the world
in search of iconic rundown hotels
which could be restored to their former
grandeur under the OrientExpress
logo. He bought the Villa San Michele,
outside Florence, the Hotel Splendido
in Portofino, the Copacabana Palace in
Rio, the Timeo in Sicily, Reid’s in
Madeira, Charleston Place in North
Carolina and many more.
He was prepared to take risks when
more cautious hotel groups stood back:
he gambled on a peaceful end to
apartheid in South Africa and bought
the Mount Nelson Hotel in Cape Town
for a song. He went into Russia before
the Iron Curtain came down and
picked up the Grand Hotel Europe in St
Petersburg, arguably the best hotel in
Russia today. He put riverboats on the
Irrawaddy when Burmah (Myanmar)
be even worse: it would be the
equivalent of a doctor offering a patient
a choice between life and assisted
suicide, and assisted suicide is still
illegal in this country.
No, the time has come for parliament
to reassert its sovereignty, and legislate
for the course it knows to be in the
nation’s best interests: to remain
in the EU.
Roger Garside
London SW16, UK
Simply show why we’re all
better off remaining in EU
Justine Greening’s view (“Parliament
must vote on Brexit now — and be
ready for a second referendum”,
December 17) that rolling back Brexit
will require people having more
opportunities and a greater stake in
society is much nearer the mark than
Jeff Colegrave’s abstruse argument
(Letters, December 17) that addressing
the lack of democratic political
architecture in the EU will be the key
issue for Remainers to confront in a
second referendum.
Politics and attitudes towards Europe
are formed locally — a point mirrored
in your Big Read article “Pinning the
blame on Brussels” (December 17),
which highlights that Italian attitudes
to Europe are changing as a result of
worsening local socio-economic
conditions in that country, particularly
for the young. The challenge for UK
Remainers will be to convince people
that their personal wellbeing,
community, security and life
opportunities will best be safeguarded
by staying in the EU and that the false
narrative of the Brexiter fantasists,
which has already done immense harm
to the country, offers no solution to the
country’s fundamental problems.
Richard Wright
London NW8, UK
An alternative model
worth FT’s consideration
While I agree with Martin Wolf’s
review of publications detailing the
damaging and perverse incentives of
the modern plc (“Rethink the purpose
of the corporation”, December 12) —
and can add Rana Foroohar’s Makers
and Takers to those mentioned — I do
not entirely share his prescription of
“better companies and more
competition” as the solution.
This indeed is part of the answer. But
alas I also feel the Financial Times is as
Reporting from a democracy, I don’t
generally expect my sources to be
arrested. That’s particularly true
when the contact in question is an
English-speaking defence analyst,
working for a strategic policy think-
tank backed by retired diplomats,
generals and intelligence officials.
But, in late October, Abhijit Iyer-
Mitra, a senior fellow at New Delhi’s
Institute of Peace and Conflict Studies,
was arrested in the eastern state of
Orissa and taken to prison, where he
was detained for 44 days. His crime?
A satirical video he posted on Twitter
of himself at the 13th-century Sun
temple in Konark known for its erotic
carvings.
In the video, Mr Iyer-Mitra, who is
openly gay, adopts a faux-scandalised
tone as he describes the brazen
display of sexuality on the temple’s
walls, including depictions of
homosexual acts and bestiality. He
says his intent was to mock rightwing
Hindu groups that opposed the recent
decriminalisation of homosexuality,
as antithetical to Hindu culture.
Police alleged the video was an
affront to Orissa’s people, and booked
him under colonial-era laws that
make it a crime to offend religious
feelings. They also took umbrage with
some older tweets in which Mr Iyer-
Mitra joked with a politician friend
about whether Orissa or its
neighbouring state was superior. That
became the subject of a second
criminal case. A local judge initially
refused to grant bail, scandalised by
Mr Iyer-Mitra’s attempt at humour.
If you are not satisfied with the FT’s response to your complaint, you can appeal
to the FT Editorial Complaints Commissioner: complaints.commissioner@ft.com
looked set to explode, ran luxury
railways across Asia and when Peru
decided to sell its railways, Sherwood
bought them and the Monasterio and
Machu Picchu hotels which came with
them.
A gourmet himself, he started
Harry’s Bar in London (in partnership
with Mark Birley) and bought Le
Manoir aux Quat’Saisons in
Oxfordshire, and 21 Club in New York.
And there were many more.
Belmond’s new management, who
inherited all but a handful of the
group’s 37 hotels, have largely written
him out of the company’s history,
which is a shame. LVMH’s Bernard
Arnault is buying Sherwood’s creation,
not theirs.
Ivan Fallon
Cape Town, South Africa
guilty as other business observers in
neglecting to mention the co-operative
as an alternative organisational model
in a capitalist society.
Co-operative businesses by definition
have first and foremost a social
purpose, from which profits then flow.
Here in “Silicon Fen” we have
innovative, high-tech, co-ops
succeeding with very actively engaged
shareholders as workers and owners
who are then equally committed to the
long haul. Meanwhile I continue to wait
for an FT Big Read on the broader UK
co-operative sector.
Stuart Newbold
Secretary,
Cambridge Co-operative party,
Cambridge, UK
Suggested rebrand has
painful connotations
I read with interest the commentary in
the Lex column of a potential tie-up
between Deutsche Bank and
Commerzbank (December 14).
However I am not entirely sure if
“Deutschmerz”, the name of the
merged entity suggested by Lex, would
make it past the re-brand consultants.
The Teutonophiles among your
readership would recognise that
“Schmerz” loosely translates into
English as “pain”. Probably not a good
reminder of what shareholders have
endured for some considerable time.
On the subject of connotation, I
imagine that another possible
abbreviation of the amalgam, “CoDak”,
would also be rejected.
Algernon Bennett
London SW15, UK
“The district magistrate told me:
‘You are an educated man — how can
you say these offensive words?’” the
defence analyst said last week, after
the charges against him were dropped.
Mr Iyer-Mitra’s prominence ensured
his arrest drew plenty of headlines.
But away from the media spotlight,
ordinary Indians are finding their
freedom of expression doesn’t extend
as far as they thought on social media.
India’s liberal, post-independence
constitution guarantees free speech
and free expression as a fundamental
right. But colonial-era provisions to
the penal code impose restrictions on
words deemed “provocative” or that
insult or offend others’ religious
feelings. These vague standards, as
well as prohibitions on “obscenity”,
are vulnerable to abuse.
In recent years, academic books,
paintings and even plays have been
removed from the public domain,
amid complaints they are offensive.
As more Indians get online and hook
up to services such as Facebook,
Twitter, and WhatsApp, they face a
growing risk of criminal prosecution
for expressing their views.
According to Mint, an Indian
financial newspaper, there have been
at least 50 reported incidents of
people being criminally prosecuted
for social media posts or comments in
2017 and 2018, spending anything
from a few days to six months behind
bars. But Apar Gupta, chief executive
of the Delhi-based Internet Freedom
Foundation, says the government’s
own data suggest that at least 3,000
Tuesday 18 December 2018
Email: letters.editor@ft.com
Include daytime telephone number and full address
Corrections: corrections@ft.com
Central banks must be
able to counterbalance
short-term fiscal policies
In this day and age, with central bank
autonomy under attack in many
countries, it’s hard to understand the
reasoning behind Lord Skidelsky’s
letter (December 12) that “the
experiment of independent central
banks has to be brought to an end”.
While the co-ordination of fiscal and
monetary policy under the government
sounds sensible, the reality is that
government fiscal policies are
frequently determined by short-term
political needs. Often the need to
address domestic economic conditions
and/or external balance of payments
issues is disregarded. Surely, an
independent central bank is required
to warn its government of such risks
and, should its advice be rejected,
adjust monetary policy accordingly.
Does central bank failure to prevent
the 2008 crisis lead to the conclusion
that central bank independence should
be eliminated? I doubt it. Before the
2008 crisis the notion of light
monetary regulation permeated
governments even more than central
banks. More recently, the current
Indian government has effectively
prevented its central bank from
launching painful but necessary
financial reforms, underscoring once
again the need for central bank
independence.
The US system of checks and
balances adds to this same need.
Whenever one political party controls
Congress while the other controls the
presidency, attempts to formulate
fiscal policy become hamstrung.
Imagine the consequences if the
Federal Reserve had lacked the
authority to lower interest rates
dramatically between 2010 and 2016.
Monetary policy would have been
stymied, leading to a far deeper
recession possibly approaching the
Great Depression of the 1930s.
Even during the past two years of
single-party control of Congress and
the presidency, the US has still not had
a sensible fiscal policy. The Trump
administration and a Republican
Congress implemented a tax cut
raising the deficit by nearly $1tn.
Cutting taxes at full employment is not
exactly what JM Keynes had in mind.
Consequently, the Fed has been raising
interest rates despite persistent
criticism from President Donald
Trump.
Finally, in the absence of an elected
EU government, who — apart from the
European Central Bank itself — could
have the authority to combine a
weighted average of EU government
eurozone fiscal policies with monetary
policy, and formulate a directive for
the ECB to follow?
Bob Sleeper
Boca Raton, FL, US
Correction
c An entry in a bar chart showing
banks’ total assets accompanying a
Lex note on Friday December 14 was
incorrectly labelled MUFG. The entry
was for Mizuho Financial Group.
OPINION ON FT.COM
The best of FT columns from 2018
Brexit, Trump, Merkel, China and trade, Big
Tech — the big stories of the year
www.ft.com/opinion
people have been criminally
prosecuted in the past few years.
The posts that seem to invite the
greatest wrath from officials have
been politically-tinged, criticising or
lampooning powerful individuals such
as prime minister Narendra Modi or
Yogi Adityanath, the chief minister of
Uttar Pradesh. While convictions are
rare, the years-long court processes
are in themselves a tough
punishment, particularly for working
class people, for whom even hiring a
lawyer is a crushing financial burden.
Mr Gupta frets that the number of
such cases is likely to rise, unless India
reforms its complex welter of “content
laws”, now easily abused by police
eager to please their political masters.
“The laws are a great danger to
everyday people — they don’t know
what [they mean],” says Mr Gupta,
who is a lawyer. “Indians are no
different from anyone else in the
world — they will talk about politics. If
you have content restrictions that are
penal offences and can lead to
imprisonment, it’s just going to lead to
an explosion of litigation and people
being in jails.”
For his part, Mr Iyer-Mitra has
returned to Twitter, seemingly as
irreverent and combative as ever. But
in his first tweet on regaining his
freedom, he recalled a former teacher,
who used to tell him: “‘Your jokes are
more dangerous than your serious
comments.’ Today I understand
exactly what she meant . . . finally.”
amy.kazmin@ft.com
Tuesday 18 December 2018
britain
Robert
Shrimsley
A
t one of the recent cabinet
discussions on no-deal
Brexit preparations, the
international development
secretary, Penny Mordaunt
chipped in to say that the Department
for International Development could
play a valuable role, given its expertise
in emergency planning. When the head
of the department specialising in
disaster relief offers help with post-
Brexit contingency planning, alarm
bells really ought to ring. Food parcels
and clean water might be welcome in
drought-ridden Afghanistan. Their
arrival in Cumbria might be taken as
America, China
and the art of
confrontation
global affairs
Gideon
Rachman
T
ell me how this ends? was
the despairing question
attributed to American
generals as they contem-
plated the quagmires in
Vietnam and Iraq. The same question
needs to be asked by US policymakers
now, as they consider the escalating ten-
sions between America and China.
The world’s two most powerful coun-
tries are locked into confrontations on a
range of issues, including trade, technol-
ogy, espionage and control of the South
China Sea. Broadly speaking, there are
two ways of interpreting these clashes.
The first is that Donald Trump’s admin-
istration is determined to reset the US-
China relationship. The second is that
the US has now embarked on an effort to
block China’s rise.
The first approach focuses on objec-
tionable Chinese behaviour; the second
objects to the very idea of China as a
rival superpower.
These two ways of thinking point to
very different potential endings. The
first approach — the reset — ultimately
ends with a deal. The second approach
— blocking the rise of China — points to a
prolonged and deepening antagonism.
Even within the Trump administra-
tion, there remains considerable ambi-
guity about which of the two approaches
the US is pursuing.
The president has recently tweeted
about getting a “a big and very compre-
hensive deal” with China. That suggests
that he is a “reset” man. In real estate
terms, he is aiming for a comprehensive
TECH NOLOGY
John
Thornhill
I
t is tempting to believe that we
must have reached peak chaos,
given the insanities of Brexit poli-
tics and the inanities of President
Donald Trump. But we can cheer
ourselves up this festive season by imag-
ining the ways in which things could be
so much worse.
During the past few years, a sprin-
kling of institutes has sprung up in UK
and US universities with the explicit aim
of researching existential risks to our
species. Catastrophic climate change,
nuclear war, pandemics, a rogue super-
intelligence and alien invasion are just
some of the scary scenarios explored by
No-deal dreamers could force a Brexit rethink
a sign that all was not well with Brexit.
Yet some supposedly serious figures
are embracing no-deal with a terrifying
equanimity. Jeremy Hunt, the foreign
secretary, opined that “even in a no-deal
situation this is a great country, we’ll
find a way to flourish and prosper. We’ve
faced much bigger challenges in our his-
tory.” Mr Hunt, whose journey from
Remainer to Brexit hardliner is Odys-
sean in its improbability, did concede
that “we shouldn’t pretend that there
wouldn’t be disruption”, but with British
phlegm, we’ll muddle through.
Leave aside the huge economic con-
cerns, the politics of the no-dealers are
truly baffling. Do they really believe vot-
ers are going to thank them for a period
of shortages and queues? People may
not ultimately be denied vital medicine,
but they have only to fear they will for it
to leave a lasting impression.
We may applaud the Blitz spirit but no
one actually voted for bombing. They
may have voted for Brexit; they did not
renegotiation of the lease rather than a
demolition of the building.
However if you listen to some of Mr
Trump’s senior officials — those who
actually make policy on a daily basis — it
is hard to avoid the impression that the
US is settling into a long-term confron-
tation with China. Their analysis is that,
for decades, America has got China pol-
icy wrong, naively assuming that China
would become less authoritarian as it
became richer, and that a rising super-
power could be safely integrated into a
US-led rules-based order. They argue
that the consequences of these miscal-
culations are now emerging in a pattern
of aggressive Chinese misbehaviour —
on everything from the construction of
military bases in the South China Sea to
industrial espionage.
These deep-rooted US objections
are not the kind of thing that can be
fixed by China lowering car tariffs, or
buying more soyabeans. Indeed a swift
trade deal could actually be counter-
productive.
The impression that a gap has opened
up between Mr Trump and some of his
advisers is strengthened by the current
furore over the arrest of Meng
Wanzhou, the chief financial officer of
Huawei, the Chinese telecoms com-
pany. Mr Trump apparently did not
know that the arrest was coming, and is
rumoured to have been furious when he
heard about it.
The fact that Mr Trump is talking
about possibly intervening in the Meng
case, as part of his mooted deal with
China, will strengthen the belief in Bei-
jing that this is no mere law enforce-
ment action, but instead part of a
broader policy of confrontation. Hua-
wei has been the subject of increasingly
vocal warnings by western intelligence
agencies which believe that it would be
foolhardy to allow a Chinese company
to play a central role in the introduction
The threat of catastrophe has never been greater for humanity
these academic doomsters. Many of
these threats are outlined in a disturb-
ingly eloquent book, On The Future, writ-
ten by Martin Rees, one of Britain’s most
eminent scientists, who helped set up
the Centre for the Study of Existential
Risk at Cambridge university. The
author’s contention is that the stakes
have never been higher for humanity:
we have reached such a level of techno-
logical capability that we now possess
the power to destroy our planet by mis-
take and must pursue more responsible
innovation.
Yet we exhibit no sense of urgency
about many of these potential dangers.
If we knew that there was a 10 per cent
probability that an asteroid might crash
into earth in 2100 then we would mobi-
lise every resource to save our descend-
ants. But we remain alarmingly insouci-
ant about the threat of global warming
or genetic engineering given the risks
seem more nebulous.
A working paper from Nick
★ FINANCIAL TIMES
Opinion
vote for disruption. Black Wednesday,
when the UK crashed out of the Euro-
pean exchange rate mechanism, lasted
only a few hours but people did not for-
get how they felt as mortgage rates rock-
eted. The Tory rout of 1997 will be as
nothing compared with what voters will
do to a government that needs the
assistance of Dfid in its own country.
But perhaps Mr Hunt is not position-
ing for the leadership. Maybe he truly
shares his predecessor’s view that once
the UK shows it is serious about no-deal
planning, the EU will blink. Boris John-
son wrote that the EU “will give in,
believe me, but only if we are ready to
walk away”.
From such thinking comes the Brexit
hardliners’ exciting new phrase: “man-
aged no-deal”. It’s no-deal, but it’s man-
aged. How soothing; well, it might be if
the people “managing” it weren’t the
same ones who had been managing the
negotiations for the past two years.
Worryingly, stories of immediate
of 5G technology. Law enforcement,
trade disputes, counter-espionage and a
competition for technological suprem-
acy are hard to disentangle in the Hua-
wei row.
Yet whatever the suspicions in Bei-
jing, the Chinese government is clearly
not resigned to the idea that it is locked
into an escalating and unavoidable con-
frontation with the US. For the moment,
China is focused on trying to use a three-
month truce in the trade war to achieve
a broader settlement. Apparent “retali-
atory” arrests in China have targeted
Canadians, because Ms Meng was
Beijing needs to recognise
that there has been a
profound and bipartisan
shift in US thinking
Bostrom, director of the Future of
Humanity Institute at Oxford univer-
sity and author of the best-selling
Superintelligence, suggests how we might
try to reduce those risks to our vulner-
able world. His paper starts with a stun-
ning metaphor. One way of thinking
about human creativity, Professor Bos-
trom says, is to compare the process to
pulling balls out of a giant urn. Thank-
fully, most of the balls that we have
pulled out, representing new ideas, dis-
coveries and technological innovations,
have been white — or beneficial.
A few, such as nuclear weapons, have
been grey and potentially lethal. There
is no doubt that the 70,000 nuclear war-
heads the superpowers built during the
cold war at a cost of more than $10tn
could have annihilated our civilisation,
if unleashed.
But the “saving grace” of nuclear
weapons is that they are extremely
expensive and hard to develop, let alone
deploy. Their demonstrable horror may
chaos distract attention from the long-
term economic damage. Disruption,
however bad, will ease. But the option of
simply trading under World Trading
Organization rules would, to take just
one example, make British agricultural
produce more expensive in Europe than
Canadian food, since Canada has a pref-
As hardliners become
more assertive, May’s
allies must keep her
deal afloat a little longer
erential trade deal. And a WTO exit does
nothing for services. But Brexit hardlin-
ers will take a cut in income as a price of
“independence”, perhaps because it is
not they who cannot afford the cut.
The increasingly vocal support for no-
deal is driving moderates into the reluc-
tant embrace of a second referendum.
arrested in Vancouver, but not, so far,
Americans.
Over the next few months, Beijing will
probably attempt to appease Mr Trump
with some headline-grabbing “wins”
that reduce the size of the US trade defi-
cit with China. Such a tactic might buy
some short-term peace. But, over the
long term, both Washington and Beijing
must think more profoundly about
“how this ends”.
The Chinese need to recognise that
there has been a profound and bi-
partisan shift in American thinking. So
trying to hoodwink Mr Trump or wait
him out will ultimately not work.
Instead, China has to consider much
more significant changes in its policies
on everything from forced technology
transfer, to the South China Sea. It could
be its last chance to head off a long-term
confrontation with the Americans.
The US also has some thinking to do.
have also helped deter rather than trig-
ger global conflict.
But what happens if humanity runs
out of luck and pulls a black ball out of
the urn, a technology that by default
threatens to destroy the civilisation that
invented it? There are some possible
candidates: the creation of vast swarms
We possess the power to
destroy our planet by
mistake and must pursue
responsible innovation
of killer drones, runaway artificial intel-
ligence or next-generation biological
weapons. The wider availability of
cheap, powerful and destructive tech-
nologies is one of the gravest threats of
our times.
We cannot hope to uninvent inven-
tions, Prof Bostrom argues. Short of
Most Tory moderates are not yet ready
to back a “people’s vote”. But the hard-
ening of stances is driving people to
extremes. Once you opt to spare your-
self the effort of untidy compromise the
choice comes down to two options: leave
brutally or reverse the decision.
With no-dealers getting more asser-
tive and Theresa May’s plan in desper-
ate straits, her allies need to keep both
the prime minister and her deal afloat a
little longer. This is where the idea gain-
ing ground in cabinet for an indicative
free vote comes in. Under this plan, MPs
get a non-binding vote to show the levels
of enthusiasm for a range of options: a
no-deal exit, a second referendum, the
May plan and the “Norway Plus” idea
that keeps the UK in the single market.
In an ideal world this could build
cross-party unity around a course of
action. At the least, it will show one side
the risks of not backing her plan. If, for
example, support for a second referen-
dum is not as strong as the campaign for
Daniel Pudles
The hawks in Washington are relishing
the more overt use of US power in their
confrontation with China. But they too
need to think about “how this ends”.
It is not realistic to think that the US
can ultimately stop China’s rise. Indeed
any effort to do that will lead to a dan-
gerous surge in tensions. And that could
easily end in war. Equally, it is not realis-
tic to think that profound changes in
Chinese behaviour can be achieved in a
grand bargain over the next three
months.
The US needs to set ambitious
but achievable goals in its current
confrontation with China. It should
accept that the chill in relations could
last a long time. But in the end, the
approach should be closer to Mr
Trump’s The Art of the Deal than Sun
Tzu’s The Art of War.
gideon.rachman@ft.com
calamity, technological regression is
not going to happen. So, logically, we can
only ever try to strengthen international
regimes that limit the risks of tech-
nological misuse and implement more
preventive policing to pre-empt bad
actors. In short, we need smarter global
governance and what he calls a “high-
tech Panopticon”.
It will be difficult to move towards
stronger global governance in an age of
revamped nationalism, especially when
the threats remain so abstract. But, as
the climate change agreement reached
in Katowice, Poland, at the weekend
shows, it is possible to make halting
progress when there is sufficient global
will.
Far more controversially, Prof Bos-
trom argues that it may be “technologi-
cally feasible and affordable” to
strengthen predictive policing by intro-
ducing continuous monitoring of the
world population. This would cost about
1 per cent of global gross domestic prod-
9
it suggests, it might push its backers
towards Mrs May’s plan to avert no-
deal. Conversely, if a referendum has
the numbers we will be down to arguing
over the question. It could even break
the logjam by allowing Mrs May to win
backing for her deal by promising to put
it to a public vote.
None of this factors in the wrecking
potential of a no-confidence vote, as and
when Jeremy Corbyn, the Labour
leader, tables it. But the real appeal of
the indicative vote idea is that it keeps
Mrs May’s deal alive while also being a
way to ease her from her own fixed posi-
tion. Once the parliamentary maths is
clear, one faction will have to change
tactics. It might be the people’s vote
campaign, it might be Mrs May; it might
even be the no-dealers.
But sooner or later one side has to
blink. For all the Johnsonian assurances,
I would not bet on it being the EU.
robert.shrimsley@ft.com
2018
A year in a
word / n.
Toxic
(adjective) poisonous, malignant
When Britney Spears took a “sip
from the devil’s cup” 15 years ago,
how could she know that her song,
“Toxic”, describing an addiction to a
dangerous man, would prove so
prescient? For this year toxicity has
been — in Ms Spears’ words — “in the
air and . . . all around”.
Toxic is the Oxford English
Dictionary’s word of 2018. The
dictionary said that in the past year
there had been a 45 per cent rise in
the number of times the term had
been searched on
oxforddictionaries.com.
In the year after the #MeToo
movement emerged, misogyny and
aggression were identified as signs of
toxic masculinity. As waves of mass
shootings hit the US, commentators
identified a common link: the
perpetrators were all men; furious,
bitter men. Toxic masculinity does
not only hurt women, wrote
Australian novelist Tim Winton this
year, it teaches boys to suppress their
emotions. It is a “burden to men . . .
it narrows their lives. Distorts them.”
Toxicity suffused political
discourse too, propelled by social
media outrage. Pick a side and lash
out — to hell with civility. In real life
(or IRL, as the “extremely online”
say), strongmen identified
bogeymen. In the US, President
Donald Trump whipped up attacks
on a carousel of moving targets —
fake news, migrants, Jeff Bezos.
In the UK, the novichok
poisonings brought into focus the
literal definition of toxicity. An
attack on a former MI6 informant
and his daughter was blamed on
Russia. A second couple, one of
whom died, were accidental victims.
Despite Kremlin denials, relations
between the states are poisoned.
Then there was the environment.
In October, the World Health
Organization published an alarming
report that said 93 per cent of the
world’s children breathe air so toxic
that thousands died.
Emma Jacobs
uct. The mass deployment of facial rec-
ognition technology and social credit
scoring in China may highlight the
shape of things to come.
But intrusive surveillance systems
are inherently dangerous to our
freedoms, as the Bostrom paper
acknowledges. Developing the capab-
ility for “turnkey totalitarianism”
carries risks even if the key is never
turned. But, he argues, it may be worth
taking those risks if preventive policing
really can stabilise civilisation against
the most hideous threats.
Similar logic about weapons of mass
destruction pushed a US-led coalition
into the tragic intervention in Iraq in
2003. Pre-empting presumed threats
can itself be a highly perilous business.
But Prof Bostrom is surely right to stir
the debate on how to protect our vulner-
able world from technological chaos.
The future is worth preserving.
john.thornhill@ft.com
10 ★ FINANCIAL TIMES Tuesday 18 December 2018

Tech IPOs: directional hypothesis

Spotify took an unconventional route to a listing by selling shares directly to investors. Other tech
businesses may consider doing the same thing. A big brand and convincing growth story both helped
Spotify. However, that has not stopped its shares from drifting below their list price.

US IPO market Valuations of IPO candidates

Twitter: @FTLex
Auditors/competition:
called to account
After the collapse of UK construction
firm Carillion, the auditing profession’s
reputation took a pounding. Blows
were aimed at the competence of the
bean counters and the dominance of
the biggest firms. Their regulator fared
even worse. A rebuilding plan has been
set out in two hard-hitting reports.
Sir John Kingman, chairman of
Legal & General, wants to bulldoze
the Financial Reporting Council, the
existing watchdog. He describes it as
a ramshackle house that leaks and
creaks. Instead, he wants a new
organisation, with new leadership,
powers and funding. That makes sense.
A tougher set of questions has been
mulled by the Competition & Markets
Authority, amid concerns that the Big
Four have become too big to fail. The
watchdog’s challenge is underlined by
the failure of regulators’ previous tries.
Despite the halfhearted reforms of a
few years ago, the Big Four still conduct
97 per cent of the audits of big groups.
How to give smaller firms a better
chance of winning business? One idea
is to introduce caps on market share.
But that is no panacea. A better option,
which the CMA favours, is joint audits.
Giving small firms the chance to share
audits with bigger firms should help
them build up capacity. But given the
huge size gap between the Big Four and
the rest, the small fry will find it hard
to close the gap.
When it comes to improving
standards, some bold options are put
forward. The CMA suspects auditors’
focus on quality is diluted by the
massive share of revenues that comes
from other services such as consulting.
That point can be exaggerated. Some
of the oldest jokes about accountants
pre-date diversification. (An example:
What are profits? What do you want
them to be?) Even so, it is worth
sharpening the focus. The CMA thinks
the pay of audit partners should be
drawn only from profits from their own
part of the business. The only way to
be paid more will be to do good audits.
More drastic remedies are possible.
Labour has mooted a break-up. The
big firms have lobbied hard against
an outright split between audit and
consulting arms. Some arguments
have force, such as the impact on
international networks. But others,
such as the risk of damage to
recruitment, are weak. The CMA
warns that, if the proposed remedies
fail to work, tougher measures will be
revisited. The wrecking ball may only
have been stayed for now.
ABB/Cevian:
steampunked
Smoke-belching industrial
metropolises roam Europe on tank
tracks in the steampunk epic Mortal
Engines. They devour whole industries
before imploding. ABB boss Ulrich
Spiesshofer has good reason to avoid
the movie, two-star reviews aside: it is
too close to home. An activist has
forced him to restructure, dumping a
power grids unit via an $11bn sale. ABB
will clank onward. Mr Spiesshofer’s
role at the helm remains uncertain.
Bloated bureaucracies and poor
returns have left European
conglomerates exposed. ABB is the
second big victory for Cevian of late.
The Sweden-based “constructivist” also
pressed ThyssenKrupp to spin off a
steel unit. Pernod Ricard and Nestlé
are under attack from US activists.
Steampunk fiction is classed as
“alternative history”. One might define
the narrative offered by Mr Spiesshofer
the same way. ABB is selling a division
that produces high-voltage electrical
kit, apparently because the time is
right. Cevian was not mentioned.
Payouts to investors were tallied up.
A 5.4 per cent fall in the shares during
Mr Spiesshofer’s incumbency was
lower in the mix.
The stock was unchanged by the
restructuring news. The sale to Hitachi
at an enterprise value of $11bn is at the
low end of expectations. Without new
borrowing, the capital return to ABB
shareholders would be about $1bn less
than the $7.6bn to $7.8bn targeted.
Even a pledge to save $500m in costs
did not move the needle. Taxed and
capitalised, that should be worth
almost $4bn, nearly one-tenth of ABB’s
market worth. The group expects to
raise operating margins by as much as
4 percentage points from 12 per cent
today. That looks do-able.
Mr Spiesshofer’s presentation was
admirably slick. But the share price
suggests that he is in the unenviable
position of an incumbent re-applying
for his job. Until cost savings
Number
300
250
200
150
100
50
0 0
2008 09 10 11 12
FT graphic Source: Renaissance Capital; Refinitiv
Could the biggest start-ups in the US
be tempted to shed the trappings of
traditional flotations when they
make the leap to public markets? The
class of 2019 is packed with
household names that need no
introductory roadshow. Airbnb,
Uber and Lyft have just the right sort
of brand recognition to pull off a
direct listing.
Selling shares straight to the public
saves money and time. Spotify has
already demonstrated that it is
possible. Recode reports that others
are considering a copycat move.
Deviation from the norm means
extra risk — something that bankers
will be happy to point out as they try
to defend their fees. But Spotify
claims that valuations are higher
materialise, he will be a probationer.
By acting sooner, bosses of other
conglomerates can avoid that jeopardy.
Just Eat/Cat Rock:
pizza their mind
Three-quarters of Britons would rather
suffer in silence than complain about a
bad meal, according to one study. If US
dining is better, it may be because
Americans speak up more readily. In
the same way, one US investor hopes
that kicking up a stink over standards
of management at Just Eat will improve
the quality of their offering.
The UK food group dismissed the
private concerns of Cat Rock Capital.
So the hedge fund has gone public. It
Proceeds ($bn)
100
80
60
40
20
13 14 15 16 17 18
* Latest market capitalisation
when the market decides the price.
Barry McCarthy, chief financial officer,
said bankers tried to price listings low
enough to secure a 36 per cent pop on
the first day of trading. This is hard to
prove without more direct listings to
compare IPOs with. Spotify shares rose
13 per cent on the first day of trading
and now trade below the IPO price.
The real pull is saving money. Going
to investors means companies can
avoid bank fees ranging from 3.5 per
cent to 5 per cent of the money raised.
They can also sidestep the mandated
quiet period that limits information
provided and the post IPO lock-up that
prevents share sales.
The catch is that few can afford to list
without selling new shares. Spotify was
sufficiently well funded to eschew a
wants Just Eat to sell a minority stake
in the Brazilian food portal iFood. This
could fetch up to £800m. A subsequent
capital return to investors could go
some way to offsetting this year’s
25 per cent share price decline.
So far, so predictable. Activists
always want disposals. Cat Rock is a
small, obscure hedge fund with only
2 per cent of Just Eat’s shares.
Its subtler point is more convincing:
Just Eat risks sacrificing earnings in a
rush for sales. About three-quarters of
long-term incentive payments for the
likes of new chief Peter Plumb now
depend on sales performance.
Shareholder returns matter less.
Just Eat must feel threatened by
tougher competition from Uber Eats
and Deliveroo. But a scramble for
business could be self-defeating. As the
$bn
Uber
Airbnb
Spotify*
Lyft
0 20 40 60
Spotify underperforms
Index and share price, rebased
Spotify
Nasdaq
Composite
Apr 2018 Dec
balance sheet boost. Uber, set to be
the biggest IPO of 2019 with a
valuation in excess of $100bn, is
burning through $1bn per quarter.
Lyft, valued at $15bn, is trying to
challenge Uber in more cities. Both
would be unwise to turn down the
opportunity to raise more funds.
Slack claims to have plenty of cash
left over from the $1.2bn it has raised
so far but is less well known. It may
need banks to sell its story to
investors. Airbnb is high-profile,
profitable and lacks the sort of wildly
expensive expansion plans of Uber
and Lyft. Dave Stephenson, chief
financial officer, joins from Amazon
in the new year. If he wants to set
Airbnb’s IPO apart a direct listing is
one option he should consider.
number one food delivery platform,
Just Eat has the protection of a strong
network effect. JPMorgan notes
that only 5 per cent of the group’s
restaurants currently overlap with
its two private competitors.
Cat Rock supports Just Eat’s move
into delivering food with its own fleet
of vehicles. But it sees no reason why
this should hit profits per order more
than it already has. It wants Just Eat to
agree to three-year profit targets.
This seems like a big ask, given the
fluidity of the market. However, Cat
Rock is right to question the change of
direction at Just Eat. The business
could waste a lot of money pretending
to be a private company. To close the
discount with other listed peers such as
Takeaway.com and GrubHub, it should
return to behaving like one.
Hoshizaki Electric:
cube rout
80 In a cheap hotel, a noisy ice machine
in the corridor can ruin a good night’s
sleep. Investors in Hoshizaki Electric, a
Tokyo-listed maker of commercial ice
dispensers, know what that is like. The
140
dull whirr of an internal investigation
120 into suspected sales inflation at a big
regional subsidiary had dragged on the
100 stock for weeks. Then came an
announcement — ker-chunk! — that
80 the company’s auditor needed more
time to sign off third-quarter accounts.
Japanese business is supposed to be
improving governance. The allegations
against Hoshizaki point, instead, to an
old-fashioned corporate cover-up. A
whistleblower alleges that an employee
tried to coach sales managers on how
to respond to questions over the probe.
Shares in Hoshizaki have fallen
almost 30 per cent.
Hoshizaki had been one of a handful
of “ten-baggers” on the Topix — a stock
with a return of more than 10 times
since its initial public offering in
December 2008. Sales growth seemed
strong. Operating margins were about
one-quarter higher than competitors.
In 2014 the stock became a founder
member of the JPX-Nikkei 400, an
index designed to showcase the
country’s most profitable, shareholder-
friendly companies. Hence relatively
high ownership by foreigners. They
appeared happy to overlook miserly
cash returns. This summer, brokers
CLSA put Hoshizaki on a shameful list
of companies that had never offered to
buy back shares, despite free cash flow
well in excess of dividends.
Hoshizaki has eight business days to
complete a review that will satisfy
Deloitte before triggering Tokyo’s rules
on automatic delisting. For now, the
damage since disclosure of the sales-
inflation probe at the end of October is
about ¥285bn ($2.5bn) in market
capitalisation, or about 200 times
greater than the company’s early-
December estimate of its cost impact.
The scandal at Nissan, it seems, has set
investors’ nerves on edge.
Companies with questionable
governance are skating on thin ice.
Lex on the web
For notes on today’s breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
1 State essentially giving rector
5 Judge, stripped bare, nibbled
the queen (7)
No. 16,044 Set by CHALMIE restorable friary (8) 6 School groups lose 150 fools (5)
6 Warning about Belgium’s 7 Old character taken in by telco
       
Einstein? (6) set-up – they’re not fair! (9)
9 Taps notice backing energy 8 Hands over worried predator (5)
food (6) 14 Suddenly admits man’s
 
10 Crackers pieces about one small embarrassing situation (5,4)
copper (8) 16 Display equipment is £1,000
11 Determines position of sea otter less after climbing mushrooms
  in difficulties (10) (9)
12 Slippery customers were flush 17 Fruit gone off before people
occasionally (4) look inside (4,5)
     13 Force, in step, suffocate (6) 19 Covers Sarah Huckabee Sanders
15 Maybe Ferdinand’s holding very initially taking fierce criticism
dry dishes (8) (7)
   18 German aristos could be sex 22 More competent constable
party guests (8) redoubles arrests (5)
20 English flower festival (6) 23 See through poet’s sauce (5)
   
21 Friends hit back (4) 24 Flyer’s a six-footer, head-to-toe
23 Gross me out, somehow, with (5)
where relatives may sleep (10)
25 Organised the Panel for
 
Endangered Species (8)
26 Investigation about fraudulent Solution 16,043
royal ends in Leeds? (6) * 2 ) $ 6 7 ( 5 6 7 5 , 3 ( 6
 
27 Fail to start job, longing to 5 ( + 9 $ 8 8 2
( 8 6 7 $ & ( 7 $ 1 7 5 , &
return to islands (6) ( 7 5 1 8 , 6 ,
28 Ants held off My Little Pony (8) 1 $ , 9 ( 7 $ 5 $ 1 7 8 / $
+ 9 & $ ( /
JOTTER PAD DOWN 2 9 ( 5 5 ( $ & 7 & 2 5 * ,
2 He comes into estate to sort out 8 2 5 2 2 1
their iron (9) 6
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prosperous part of England (5) $ ' 9 1 5 / / $
6 $ 8 & , 1 * * 8 , 1 ( $ 1
4 They measure exposure to ( & 7 ( 8 2 $ &
nasty green snot (9) 6 ( ( 1 $ 3 / ( 6 $ 1 ' ' , (
Tuesday 18 December 2018 ★ 11

Huawei ahead Deals keep rolling in Pension power Funds are adding their
despite US concerns — ANALYSIS, PAGE 14 voices to investor activism — INSIDE FINANCE, PAGE 12

Techs hid Russian meddling in US Energy

Source
3 Senate reports criticise lack of disclosure 3 Groups withheld extent of poll interference
Their conclusions provide further rules for tech groups such as forcing gest US companies for withholding
Ed
KIRAN STACEY — WASHINGTON
ammunition for those in Congress who social media users to share their real ‘This information that could have helped Crooks
Big US technology companies have not want to take stronger action against the location to combat foreign interference. should tackle the abuses.
told Congress the truth about the extent US tech industry and those who want to The study by New Knowledge said the It said that neither Twitter, Facebook,
of Russian manipulation in the 2016 ramp up investigations into President Kremlin-backed Internet Research stand as nor Alphabet appeared to have “turned If you are still looking for the perfect present for an annoy-
presidential election, according to a Donald Trump. Agency used every social media plat- a wake-up over complete sets of related data to ing neighbour or unfaithful spouse, there are several serv-
report prepared for US senators. Mark Warner, the committee’s Demo- form, Google search and even online [the Senate intelligence committee]”. ices that will send a lump of coal. It would be an appropri-
Facebook, Twitter and Google failed cratic vice-chairman, said: “This should games such as Pokémon Go to spread call to us all’ The report added: “Regrettably, it ate gift for delegates at the COP24 climate talks in Kato-
to disclose information about how their stand as a wake-up call to us all that disinformation and social division. Mark Warner, appears that the platforms may have wice, Poland, to send each other after an often acrimoni-
services may have been used by the none of us are immune from this threat, It detailed how Moscow targeted Afri- intelligence misrepresented or evaded in some of ous fortnight of negotiations. Right from the choice of host
Kremlin to promote a pro-Trump and it is time to get serious in addressing can-American voters using sites with committee their statements to Congress.” city, in the heartland of the Polish mining industry, coal
agenda, said the report by New Knowl- this challenge. I hope these reports will names such as blackmattersusa.com to Facebook said that it was “fully co- has loomed large over the meeting, intended to agree ways
edge, a cyber security company. spur legislative action in Congress and sow messages hostile to Mr Trump’s operating” while Twitter said that pro- to implement the global commitment to curbing climate
The report is one of two written for provide additional clarity to the Ameri- rival Hillary Clinton, and, occasionally, tecting the integrity of elections was an change made in Paris in 2015.
the Senate intelligence committee lay- can public about Russia’s assault on our falsehoods such as that she took dona- “important aspect of [its] mission”. The talks finally concluded on Saturday after nearly 200
ing out in detail the extent of Russia’s democracy.” tions from the Ku Klux Klan. Google declined to comment. The countries reached a compromise on a single set of rules to
attempts to interfere in US politics. Mr Warner has proposed stricter The study criticised some of the big- Kremlin also declined to comment. govern how they report their greenhouse gas emissions
and their climate targets. The agreement was hailed as a
success, but the strongest emotion among supporters of
climate action was relief that the talks had not fallen apart.
EM returns ‘Under-owned’ asset class tempts fund managers again Two incidents at the start of last week highlighted the
difficulty of finding a global consensus on how to tackle the
threat of climate change. First, the US teamed up with Rus-
sia, Saudi Arabia and Kuwait
to water down governments’
Fund managers looking for top picks in
Emerging market currencies have fared badly in 2018 ... as have equities in most EM economies approval of a report spelling
In the US,
2019 are gravitating in greater numbers to Currencies (rebased) % change in benchmark equity indicies out the consequences of let- tackling the
what has been an unloved asset class: ting global temperatures rise
emerging markets, writes Katie Martin.
Dollar index
more than 1.5C since pre-
threat of climate
JPMorgan EM currencies index
The sector has taken a beating this year, industrial times. It was no change will
Turkish lira
with JPMorgan’s emerging market coincidence that the object-
currency index declining nearly 11 per Argentine peso Turkey
ing group included the three
be taken on
cent and stocks falling more than 13 per 120 largest oil producers, and by business
cent. That is getting close to the territory another in the top 10.
where previously uninterested investors The US delegation went on to hold an event to emphasise
take another look. the importance of fossil fuels, reflecting the Trump admin-
Part of the reason for rising confidence China istration’s plan to withdraw from the Paris agreement.
is the nature of this year’s pressure, which Wells Griffith, the lead official for international affairs at
has been very localised. The violent the US Department of Energy, told the meeting: “We
currency crisis in Turkey, for example, 100 strongly believe no country should have to sacrifice eco-
left few scars on other markets. Similarly, nomic prosperity or energy security in pursuit of environ-
Argentina’s troubles were largely MSCI EM mental sustainability.”
confined to its shores and Mexico’s The US may be in a minority of one in wanting to leave
wobbles following the election of a more the Paris accord, but there are a wide range of interests and
interventionist new president did not fan objectives among the remaining countries. Xie Zhenhua,
across the spectrum of emerging market 80 China’s senior climate official, described the Katowice
investments. Argentina agreement as “a victory of multilateralism”, but the effort
Heading into 2019, China’s shifting needed to reach that compromise suggests countries will
growth pattern is a risk and volatility is continue to take different paths, at least for now.
likely to remain sharp. But as Citigroup That means in some countries, particularly the US,
pointed out, the sector is demonstrating much of the work in addressing the threat of climate
greater resilience. “The asset class is India change will be taken by businesses investing in renewable
much better placed to weather negative 60 energy and taking other measures to reduce their emis-
shocks to risk appetite than it was earlier sions, often following pressure from shareholders. There
this year,” analysts at the bank said. are limits to this approach. Some of the world’s largest
“External financing gaps have closed, investors, including BlackRock, Vanguard and Axa, have
interest rates have risen, currencies are Russia increased their holdings in coal since the Paris agreement,
cheaper and EM is broadly speaking an according to a British non-profit group, InfluenceMap.
‘under-owned’ asset class.” 40 A study published in the journal Nature Climate Change
That is echoed by investment house Jan 2018 Dec -25 -20 -15 -10 -5 0 5 10 said companies were underestimating climate change. But
Pictet, which last month bought emerging Source: Bloomberg
given the difficulties attached to climate policy, the private
markets for the first time in three years. sector looks one of the best bets to make steady progress.

Asos shares fall almost 40% as profit

warning triggers retail sector sell-off
NAOMI ROVNICK — LONDON Consultancy Springboard added to margin forecast from 4 per cent the year
the gloom, saying at the weekend that before to 2 per cent. The group forecast
Shares in UK-based Asos plunged
the number of people visiting shops in that its sales growth for the year to next
almost 40 per cent yesterday after the
Britain in November was the worst since August would be about 15 per cent,
online fashion retailer issued a profits
the 2008 recession, with so-called foot- down from the 20-25 per cent it had
warning, adding to retailers’ fears over
fall at retail parks and high streets down been expecting.
poor Christmas trading and triggering
3.2 per cent against the year before. Asos said the reversal in fortunes was
a sell-off in retail stocks across Europe.
Activist Cat Rock hits out “2018 has been progressively worse partly driven by the “high level of dis-
at Just Eat’s performance Asos warned of a “significant deteriora- and weaker [for retailers] as the year counting and promotional activity” by
tion” in the run-up to the busiest shop- has unfolded, but this accelerated from rivals. This had forced it to step up its
The US hedge fund Cat Rock has ping period of the year, showing that the October,” said Richard Hyman, a retail price cuts “leading to a higher discount
called Just Eat, of which it owns 2 per consumer slowdown that has weighed consultant. “Stuff that goes on in West- and continued high clearance mix”.
cent, ‘the worst-performing public on high street chains has also hit the pre- minster . . . the endless uncertainty has Analysts at Berenberg remained
equity in online food delivery’. The viously strong online sector. affected people.” unsure whether Asos’s warning “was
fund urged Just Eat to shed assets The Asos trading statement follows a Asos said that trading in November, driven by marketwide conditions or
and change executive pay incentives. blunt warning from Mike Ashley, Sports “a very material month for us”, was sig- operational issues within the business”,
Lex i PAGE 10 Direct’s chief executive, last week that nificantly behind expectations. It added particularly as Asos had been rolling out
Analysis i PAGE 12 Christmas shopping would “literally that it had cut expectations for the full international distribution centres.
smash [retailers] to pieces”. year and downgraded its adjusted profit Analysis page 13

Companies / Sectors / People

Companies
1MDB..................................................................1
ABB............................................................10,14
AT&T................................................................7
Acacia Mining............................................18
Airbnb............................................................10
Alibaba.............................................................7
Altice .............................................................14
Amazon..................................................1,2,10
Apple..............................................................1,2
Arcadia .........................................................13
Arm....................................................................7
Asos.......................................................11,13,18
Bain Capital.................................................12
Belmond..........................................................8
Bestseller......................................................13
BlackRock.....................................................12
Boeing............................................................18
Boohoo.....................................................13,18
Burger King.................................................12
CQS..................................................................17
Carillion.........................................................10
Carmignac....................................................17
Cat Rock.......................................................10
Cboe Europe...............................................17
Cevian......................................................10,14
China Exim Bank.....................................14
Citigroup.......................................................17
Ctrip.................................................................14
Deliveroo.................................................10,12
Deutsche Bank..........................................17
Elliott Management................................12
Embraer.........................................................18
Ericsson.........................................................14
Facebook...................................................2,11
General Electric........................................14
Glencore........................................................12
Goldman Sachs......................................1,17
Google......................................................1,2,11
H&M...........................................................13,18
HSBC...............................................................12
Hennes & Mauritz...................................11
Hitachi......................................................10,14
Hoshizaki Electric...................................10
Huawei.......................................................9,14
IFood...............................................................10
Inditex.............................................................13
Innogy............................................................18
Iran Air ...........................................................4
JD Sports......................................................18
Jack in the Box.........................................18
Just Eat...................................................10,12
KFC...................................................................12
KKR..................................................................12
Kamoto Copper Company.................12
Katanga Mining...................................12,12
LVMH...............................................................8
Lyft..................................................................10
Matalan ........................................................13
Michelin.........................................................12
Missguided .................................................13
Mitsubishi.....................................................12
Morgan Stanley........................................17
NTT DoCoMo...............................................7
National Iranian Oil Company...........4
National Petrochemical Company..4
Nestlé........................................................10,17
Next...........................................................13,18
Nissan.......................................................10,12
Nokia...............................................................14
Novartis.........................................................17
Orient-Express Hotels............................8
Pernod Ricard...........................................10
Pull & Bear..................................................13
Qunar..............................................................14
Rakuten...........................................................7
Renault...........................................................12
Roche..............................................................17
SSE...................................................................18
Siemens.........................................................14
Six.....................................................................17
Slack................................................................10
SoftBank..........................................................7
Sports Direct...............................................11
Spotify...........................................................10
Sprint.............................................................7,7
Subway..........................................................12
T-Mobile....................................................7,14
Telefónica.....................................................17
ThyssenKrupp...........................................10
Total................................................................17
Toys R Us....................................................12
Twitter............................................................11
Uber.............................................................7,10
Uber .................................................................7
Uber Eats...............................................10,12
Verizon.............................................................7
Walmart.........................................................12
WeWork...........................................................7
Wells Fargo.................................................17
Yahoo Japan................................................7
Zalando...............................................11,13,18
Zara ................................................................13
Sectors
Aerospace & Defence...........................18
Automobiles................................................12
Banks................................................1,12,14,17
Energy............................................................18
Financials.......................................1,12,14,17
Food & Beverage.....................................17
Industrials..........................................8,10,14
Media.................................................................1
Mining.............................................................12
Pharmaceuticals.......................................17
Retail...............................................11,12,13,18
Retail & Consumer....................................1
Support Services.....................................10
Technology.......................1,2,7,10,11,12,14
Telecoms.............................................7,14,17
Travel & Leisure......................8,10,12,14
People
Arnault, Bernard........................................8
Ashley, Mike................................................11
Beighton, Nick...........................................13
Bloomberg, Michael..................................1
Bolloré, Thierry.........................................12
Buffett, Warren...........................................7
Captain, Alex..............................................12
Evans, Michael...........................................12
Gertler, Dan.................................................12
Ghosn, Carlos.............................................12
Glasenberg, Ivan......................................12
Green, Philip...............................................13
Hemsley, Mark..........................................17
Higashihara, Toshiaki...........................14
Hintze, Michael.........................................17
Kingman, John..........................................10
Low, Jho..........................................................1
McCarthy, Barry.......................................10
Meng, Wanzhou.........................................9
Mistakidis, Aristotelis............................12
Nakanishi, Hiroaki...................................14
Peng, Vincent............................................14
Phillips-Davies, Alistair........................18
Plumb, Peter...............................................12
Porat, Ruth.....................................................1
Razak, Najib...................................................1
Robertson, Nick........................................13
Saikawa, Hiroto.........................................12
Saint-Georges, Didier............................17
Senard, Jean-Dominique.....................12
Sherwood, Jim.............................................8
Son, Masayoshi...........................................7
Spiesshofer, Ulrich............................10,14
Stephenson, Dave...................................10
Sun, Jane......................................................14

© The Financial Times Limited 2018 Week 51

12 ★ FINANCIAL TIMES Tuesday 18 December 2018

COMPANIES
INSIDE BUSINESS
Automobiles
FINANCE

Nissan delays picking Ghosn successor Sujeet

Strains show as Renault
seeks investor meeting to
allow another board seat
KANA INAGAKI — TOKYO
DAVID KEOHANE — PARIS
PETER CAMPBELL — LONDON
Renault and Nissan are grappling with
the difficulty of replacing Carlos Ghosn,
their ousted leader, as they moved to
find successors to the man who built a
board meeting, but delayed the decision
until an overhaul of its governance
structure is completed next year.
Renault, the largest shareholder in
Nissan, has also pushed the company to
hold an extraordinary meeting for
shareholders that will allow it to appoint
another representative to the Japanese
board.
Under Japanese rules, Nissan has
eight weeks to respond to Renault’s
request for an EGM.
Indap
At a news conference following The decision second-largest automotive manufac-
yesterday’s board meeting, Mr Saikawa turer.
has been put
said he would not set a deadline for
choosing Mr Ghosn’s replacement. He
suggested the company might wait until
off until an
But the bonds between the carmakers
have been fraying, and signs of the
strain have emerged since Mr Ghosn’s
Union pension cash
the end of March when a newly estab-
lished committee of external experts
overhaul of
the group’s
arrest. In a letter dated December 14,
Mr Bolloré told Mr Saikawa of his deep
shakes fist for value
planned to compile proposals to
improve governance.
France is laying the groundwork for
governance
concern about last week’s indictment of
Nissan along with Mr Ghosn on financial
misconduct allegations.
and social priorities
Jean-Dominique Senard, chief executive
structure is At the news conference yesterday, Mr
of Michelin, the tyremaker, to take over completed Saikawa did not confirm the request

now-teetering automotive empire.
Nissan’s board failed to agree on a new
chairman yesterday, while the French
state accelerated plans to replace Mr
Ghosn at Renault amid increasing belief
that he cannot return.
Mr Ghosn remains in a Japanese
prison, having been charged with
understating his pay at Nissan, and will
be held until at least December 30.
Nissan had been due to choose a
replacement as chairman at yesterday’s
Mr Ghosn, who is also chairman and
chief executive of Renault, remains a
director of Nissan’s board even after he
was arrested and ousted as chairman
last month.
Hiroto Saikawa, chief executive of
Nissan, had earlier been expected to
double as interim chairman. But the
company’s three external directors,
who have been given authority to select
the new chairman, requested more time
for discussions.
Interview. Mark Carney
from Mr Ghosn as Renault chairman,
according to a number of people.
Both Mr Ghosn himself and Thierry
Bolloré, Renault’s chief operations
officer, worked at Michelin before join-
ing the carmaker.
Mr Senard, who leaves Michelin in
May, is considered a close ally of the
French state, able to defend its interests
not only within Renault but across the
alliance with Nissan and Mitsubishi, a
grouping built by Mr Ghosn into the
O
from Renault for an emergency meet-
ing. But he said that it would be better
for the company to hold an extraordi-
nary general meeting after the govern-
ance proposals were made, probably in
March.
The proposals, which will extend to
director remuneration, would be made
by a seven-member governance panel
led by an ex-prosecutor and including
three other governance experts and
three of Nissan’s external directors.
rganised labour’s most underrated weapon
may be its capital.
Hedge funds such as Elliott Management
and index investing groups such as Black-
Rock have been most vocal about putting
shareholder pressure on boards. But pension money
invested by trade unions and US states and municipalities,
which adds up to trillions, is increasingly asserting itself,
not just with the traditional “maximise shareholder value”
message but to push for social goals including higher wages
and worker protection.
In an era where there are growing calls to reconsider the
purpose of the corporation, social priorities are finding a
hearing in a place hitherto viewed as hostile territory: the
boardroom. And the views of pension money, once
thought of as a source of rogue proposals at annual meet-
ings and investor lawsuits, has started to sound much
more like the mainstream.

BoE stress test goals turn to climate risks
The first such test, in 2017, made
Governor hopes to include banks consider the threats and opportu-
green opportunities and nities posed by fintech, and suggested
that traditional lenders were optimisti-
threats in next year’s exercise cally presuming new technologies
would let them cut costs without losing
CAROLINE BINHAM AND DAVID CROW much market share.
LONDON “From the first one we learnt a lot
about how the banks managed or didn’t
The Bank of England is planning to manage these types of issues. And it was
include the impact of climate change in quite instructive,” Mr Carney said. “And
its UK bank stress tests as early as next so the question is whether [climate
year, in what would be an unprece- change is] the next one, or the one
dented move for a central bank of a after.”
major financial centre. He joked that the exercise was akin to
Mark Carney, BoE governor, told the the traditional “eyebrow raise” gover-
Financial Times in an interview that he nors would use to signal their displeas-
was weighing whether the risks — as ure at certain banking activity in the
well as the opportunities — from climate past. The ultimate decision will be taken
change should form a part of its stress by the BoE’s Financial Policy Commit-
test known as the exploratory scenario tee, which sets the stress-test scenarios.
in 2019. A survey earlier this year by the BoE
The BoE tests the balance sheets of revealed that only 10 per cent of banks
the biggest UK lenders every year were taking a long enough view of cli-
against a doomsday scenario to ensure mate-related risks.
they have enough capital to withstand a While Mr Carney did not specify the
shock without needing a taxpayer bail- types of climate-related scenarios the
out. bank could test, lenders are already
It has also introduced an exploratory looking at issues such as how mortgage
scenario every two years. Banks cannot portfolios could be affected by flooding
pass or fail this part of the exercise — and how investments in companies
instead they are required to scrutinise such as oil groups could be hit by global
whether they are doing enough around warming.
a particular issue. The BoE’s move comes as global car-
bon dioxide emissions are accelerating
at their fastest pace in seven years, hit-
ting a record in 2018, despite pledges by
nearly 200 countries to limit global
warming to well below 2 degrees Celsius.
Getting the financial sector to manage
climate change risk looks set to be one of
the key legacies of Mr Carney, who
has extended his tenure as governor
until January 2020 to help manage
Brexit fallout.
The BoE has already proposed that
boards of banks and insurers identify a
senior executive to take charge of man-
aging climate change risks and report to
the board — or face consequences. But
this has also brought accusations of mis-
sion creep, a charge to which Mr Carney
is particularly sensitive given that some
in the Brexit Leave camp have criticised
his warnings for being too political. Mr
Carney rejects this, arguing that it is
the BoE’s job to spot, warn and mitigate
threats to the UK’s financial stability.
“We stick to our remit,” Mr Carney
said. “One shouldn’t do it by the back
door, do it surreptitiously, do it
through a tweak to a capital rule
or something like that in order
to effect something that you
really should do out in the
sunlight with either a clear
regulation, a climate-related
regulation or a change to the
Banks consider carbon price.” For that reason, he is
how mortgage against lowering capital requirements
portfolios could for a bank if they invest in a green
be hit by floods, project per se. He argues banks should
but Mark only get favourable treatment if the risk
Carney, BoE of the investment is demonstrably
governor, below, lower. But he flagged that the opposite
wants them to may be true in the future — although not
weigh up wider contemplated for the moment — and
climate risks that banks could be penalised through
Andy Buchanan/AFP
higher capital charges if they invested in
polluting industries because these sec-
tors were more vulnerable to a clamp-
down in the future.
“We would be more open to a
‘brown’-penalising factor, if you will,
because something that is quite damag-
ing, quite polluting, one would expect at
some point that there would potentially
be some adjustment of regulation for
that. And a consequence of that would
potentially be higher risk,” he said.
This risk-based approach is one that is
gaining approval in banking circles.
Daniel Klier, HSBC’s global head of
sustainable finance, said: “I think the
right way of having this discus-
sion is saying they are pru-
dential regulators and want
to make sure financial insti-
tutions are prepared. It’s less
about a green-supporting or
a brown-penalising factor:
it’s about credit risk.”
Perhaps the most shocking victory for unorthodox
shareholder activism occurred in late November when two
blue-chip private equity firms, Bain Capital and KKR,
agreed to fund $20m in severance payments for workers of
Toys R Us, the bankrupt retailer that liquidated this year.
Private-equity-owned businesses fail regularly, leaving
nothing for their employees. But well-organised protests
by advocacy groups such as Rise Up Retail created a storm
that several state pension funds could not ignore. The Min-
nesota state pension, for example, has $650m committed
to four KKR funds (including the one used to purchase
Toys R Us). At a public meeting of the Minnesota State
Board of Investment in June attended by governor Mark
Dayton, the state suspended new commitments to KKR
until the plight of Toys R Us workers was examined.
In the statement announcing the employee fund, Bain
and KKR did not directly identify what prompted their
action. But the intense pressure, including direct threats to
investment (state pension money is estimated to provide a
third to a half of private equity assets under management),
attracted their attention. Toys R Us workers have even
thanked Minnesota for its scrutiny.
In a less publicised but equally interesting example,
Blackstone in 2017 agreed to
a formal “Responsible Con-
tractor Policy” that sets
Well organised
higher standards for the protests by
labour and construction con-
tractors it employs on
groups such as
projects in its multibillion- Rise Up Retail
dollar infrastructure fund.
The RCP was championed by
created a storm
the New York City Employ-
ees’ Retirement System and North America’s Building
Trade Union, whose members have hundreds of billions of
pension assets.
In his book The Rise of the Working-Class Shareholder, Bos-
ton University law professor David Webber recounts the
history of labour’s investor activism, predicting that
“there is no going back to a world in which labour and capi-
tal are mutually exclusive, lined up across a barren cavern
of confrontation”.
Reconciling the interests of pension money is a clear
point of confrontation, however. Retirement funds have a
mandate to meet the needs of beneficiaries and fiduciary
duties to maximise investment returns. Pressing public
companies or private equity firms to raise wages, for
example, could depress these returns.
Yet there are counter-arguments in this conundrum.
First, higher wages can make employees more productive.
Walmart’s wage raises were justified on these grounds.
Pensions also argue that by promoting better terms for
workers, a more resilient, stable base of jobs is created and
sustained which funds more pension contributions. Mr
Webber writes that pensions could choose a less profitable
investment “as long as trustees believe that the avoidance
of job losses and therefore maintenance of worker contri-
butions can outweigh the profit reduction”.
The increasing power of labour investor activism comes
at an otherwise difficult moment. The unionisation rate in
the US, hovering at close to 10 per cent, is at an all-time
low. Political and judicial hostility towards organised
labour and defined benefit pensions has increased.
“The attack on public pension plans is motivated
by an effort to silence the activism of outspoken public
funds who are at the forefront of moving an impactful
governance agenda,” Scott Stinger, the New York City
Comptroller, said.
That KKR fund, which had invested in Toys R Us, had
achieved an annualised return of more than 16 per cent,
says the state of Minnesota. And in September, the Minne-
sota State Board of Investment unanimously rescinded its
resolution to suspend future commitments to KKR.
sujeet.indap@ft.com

Technology Mining

Investor accuses Just Eat of failing to deliver
LINDSAY FORTADO — NEW YORK
ALIYA RAM — LONDON
A US hedge fund has branded Just Eat
“the worst-performing public equity in
online food delivery”.
It urged the company to shed assets,
change pay incentives for senior execu-
tives and announce three-year financial
targets in the next month.
US-based Cat Rock Capital has built a
2 per cent stake in Just Eat as the group
faces tougher competition from Uber
Eats and Deliveroo.
Just Eat is the UK’s largest food deliv-
ery marketplace, connecting diners
with restaurants that provide their own
delivery service. Deliveroo and Uber
Eats, by contrast, mainly use their own
couriers to deliver, and charge restau-
rants a higher commission. But this year
Deliveroo launched a marketplace serv-
ice mimicking Just Eat’s model, and
Uber Eats said it plans to do the same.
In response, Just Eat, which operates
in 13 countries, has launched its own
delivery service, and uses its couriers to
deliver from chains including Burger
King, KFC and Subway. The company
has said it will tap revenues for money to
invest in delivery logistics.
Cat Rock said in a letter to Just Eat
chairman Michael Evans and chief exec-
utive Peter Plumb that “unambitious
targets and flawed incentive schemes
have significantly damaged the value of
the business and shareholder returns”.
Alex Captain, founder and managing
partner, wrote: “We believe the signifi-
cant underperformance of Just Eat’s
stock reflects shareholder frustration
with management’s lack of accountabil-
ity for delivering on the company’s
potential for profitable growth. This
frustration has been compounded by
the very concerning changes made to
Just Eat’s executive compensation plan
for 2018, which now incentivises reve-
nue growth without accounting for prof-
its or capital efficiency.”
See Lex
Watchdog says Glencore unit misstated results
HENRY SANDERSON AND NEIL HUME
Glencore’s subsidiary in the Demo-
cratic Republic of Congo misstated its
results and failed to disclose the full
extent of its relationship with Dan Ger-
tler, a billionaire businessman sanc-
tioned by the US, according to Cana-
dian regulators.
The Ontario Securities Commission said
Toronto-listed Katanga Mining, which is
majority-owned by Glencore, had not
“adequately described the heightened
risks” of its association with Mr Gertler,
a close friend of the DRC’s president,
Joseph Kabila.
It also found three of Glencore’s
employees who sat on the board of
Katanga were involved in conduct that
“undermined” the company’s “corpo-
rate governance, internal controls and
culture of compliance”.
One of those people is Aristotelis Mis-
takidis, the former head of Glencore’s
copper business. Mr Mistakidis, a lieu-
tenant of Glencore’s chief executive Ivan
Glasenberg, announced earlier this
month that he would be retiring at the
end of the year.
The OSC will hold a public hearing
today to consider approving a settle-
ment it has reached with Katanga. This
is expected to result in a multimillion-
dollar fine for the company and see
some current and former directors
banned from serving as directors in
Canada.
Katanga Mining is the majority inves-
tor of the Kamoto Copper Company, one
of Africa’s biggest copper and cobalt
mines and a vital asset for Glencore.
The deal with the OSC comes as Lon-
don-listed Glencore faces an investiga-
tion by the US Department of Justice
over its activities in the DRC, as well as
Venezuela and Nigeria.
Together with the Canadian investiga-
tion, this has put its hard-charging busi-
ness model under the microscope and
weighed on its share price, which is
down 19 per cent this year.
Tuesday 18 December 2018
Asos reeling as investors flee ecommerce crash
Severity of fast-fashion retailer’s slowdown raises questions over confidence of millennial consumers and future of a rare UK success story
JONATHAN ELEY
Asos called yesterday’s profit warning a
“bump in the road”. But investors, who
saw the shares crash almost 40 per cent,
experienced severe whiplash.
The severity of the slowdown at the
fast-fashion retailer, whose market
value peaked at £6.4bn in March, has
raised questions about the confidence of
Europe’s millennial consumers and the
future of one of the UK’s rare ecom-
merce success stories.
Shares in the company fell to a four-
year low after Asos revealed in an
unscheduled trading update that sales
growth would be slower than expected
and profit margins would fall from 4 per
cent to 2 per cent as it cuts prices and
spends more on marketing.
Analysts slashed their profit forecasts
for this year by up to three-fifths.
The fall is the most serious recent set-
back for a company that started 18 years
ago copying clothes celebrities wore,
hence the name “As Seen on Screen”.
Asos had to cut prices sharply in its
home market to maintain sales growth,
even at a lower pace. Customers
switched to cheaper items and spent
less. “Average basket size is up 3 per
cent,” said chief executive Nick
Beighton. “Average basket value is down
6 per cent. Those are trends I’ve not seen
for the best part of nine years.”
Suzy Ross, a consultant at Accenture,
said: “The whole of fashion retail, both
online and offline, has just become so
promotional.”
It is also much more competitive.
When Asos floated on London’s junior
market in 2001 at 20p a share, it was
venturing back into a marketplace few
thought was viable.
Boo.com, an early online fashion
retailer, had gone bust barely a year ear-
lier. Consumers surfed basic websites
with dial-up internet services.
Today, around a quarter of all fashion
sales are online, often via mobiles.
Domestic competitors such as Boohoo
and Missguided are growing rapidly and
established retailers have moved
online; this year, Next’s online sales
★ FINANCIAL TIMES
Asos revealed in exceeded its sales from stores for the
an update that first time.
sales growth Asos revenues of £2.4bn are bigger
would be slower than those of Sir Philip Green’s Arcadia
than expected but size has brought complexity and
and profit growing pain. Flagging consumer senti-
margins would ment and discounting in the UK was
fall from 4% to only one reason for the warning.
2% as it cuts In Australia, which it entered in 2011,
prices and Asos held off Black Friday promotions
spends more on as the event has traditionally not had
marketing the impact of the northern hemisphere.
Steve Whittaker
Germany and France, which between
them account for three-fifths of Asos’s
Europe revenues, were also weak.
Mr Beighton, a former finance direc-
tor at discount retailer Matalan who
succeeded founder Nick Robertson as
chief executive of Asos in 2015, said it
COMPANIES
was “hard to pin down why” sentiment
had worsened in those countries. Asked
whether the group would have to
rethink its Black Friday strategy, Mr
Beighton said: “The benefit of hindsight
is two weeks old. We need to have a good
think about what we do going forward.”
The share prices of other pan-Euro-
pean retailers also bear the scars of
heavy discounting. H&M stock fell yes-
terday after the Swedish fashion group
boosted sales only by cutting prices.
Spain’s Inditex, owner of Zara and Pull
& Bear, maintained greater price disci-
pline but might not now achieve its full-
year sales forecast.
Germany’s Zalando warned on profits
earlier this year but said it would not
change its guidance. The UK’s Boohoo
Asos shares dive
Share price (£)
Jan
Operating margins
Per cent
2012 13 14 15 16 17 18 19
Sources: Refinitiv; company
also rushed out a statement, saying sales
had been in line with its expectations.
Neither assurance was enough to pre-
vent a double-digit percentage fall in
Asos’s wake.
The company has been a market dar-
ling for much of its existence. At one
point in 2014, its shares were valued at
over 100 times forecast profits and
before yesterday, 18 of the 25 analysts
who follow the stock still rated it a buy.
Bestseller, the privately owned Danish
group that built up a 29 per cent stake in
Asos in 2010 and is still its biggest share-
holder, also remains supportive despite
selling some shares earlier this year.
But there are doubters; around 14 per
cent of the free float now is on loan to
short-sellers, according to Markit data.
13
At the start of the year, it was less than 1
per cent. Even before Monday’s fall,
Asos shares were down over 40 per cent
from their March highs. Michelle Wil-
80 son, analyst at Berenberg, attributed
this largely to negative sentiment
70 towards the UK, which still accountx for
a third of the group’s operating profit,
60 but others think that investors are
50
becoming more wary of the investment
needed to maintain the growth rate.
40 Asos was planning to spend up to
£250m a year on logistics and technol-
30 ogy for the next few years; that has been
scaled back to £200m. “The challenge is
20 to convert revenue growth into sustain-
2018 Dec able profit growth,” said Ms Ross.
The company’s history has not been
without adversity. In 2005, an explosion
at an oil terminal next to its warehouse
10 halted business for six weeks while the
Forecast group’s distribution centres in Barnsley
8 and Germany have also been damaged
by fires. And Asos has downgraded mar-
6 gin guidance before, in 2014, when high
levels of promotional activity and a
4 strong pound were the culprits.
At the time, Mr Beighton said margins
2 would recover but not to the 7 per cent
levels previously forecast. They have
0 remained around 4 per cent since.
This time, he is adamant they will
bounce back. “I am confident that 2 per
cent is a low point. I have every expecta-
tion that margins will recover and may
The shares even exceed 4 per cent,” he said.
Kate Calvert, analyst at Investec and
of other one of the few to recommend selling, is
European not so sure. “I think [margins] will
recover but perhaps not to 4 per cent,”
retailers she said, citing the growing proportion
also bear of third-party brands sold on Asos.
But Mr Beighton said poor current
the scars trading did not change the group’s aspi-
of heavy rations, which are to lift annual reve-
nues to £4bn and possibly more. Costs
discounting associated with the disruptive and risky
process of moving to newer, bigger
warehouses in Europe and the US would
start to fall away in the second half. “Our
ambitions have not changed. Macro
trends are challenging but that will not
stop us building the business that our
customers want and that we want.”
14 ★ FINANCIAL TIMES Tuesday 18 December 2018

COMPANIES

Technology

Deep roots help Huawei

Increasing share of revenue generated
in China (Rmb bn)

Huawei stand up
300
2015 250
2016
2017 200

to US pressure
With Beijing behind it all
the way, supplier wields
clout in emerging markets
LOUISE LUCAS — HONG KONG
JAMES KYNGE — LONDON
As the furore over whether Huawei is a
security risk to the west raged, an execu-
tive from the China telecoms supplier
gave a speech in London.
“Actions speak louder than words,”
said Ryan Ding, a Huawei board mem-
ber, as he revealed that the company
had signed 22 commercial contracts for
5G, the next generation of mobile inter-
net, and was working with “over 50 car-
riers” on 5G trials.
Days later, the company revealed a
deal with Altice for 5G in Portugal. Last
week, T-Mobile launched a 5G network
using Huawei equipment in Poland.
Malta and Papua New Guinea have in
recent days disregarded the concerns of
the US and its allies, pledging to con-
tinue to use Huawei for their networks.
The deals show that Huawei remains
a big supplier in many parts of
the world, even after the likes of Aus-
tralia, New Zealand and Japan have
pulled away.
The company has grown from the
developing periphery before expanding
into core developed markets, and has
managed to generate $92.5bn in 2017
revenue while remaining virtually shut
out of the US.
“We started in [markets such as] Cen-
tral Asia, Russia and Africa, then we
moved into western Europe,” said a
Huawei executive. “We needed to
understand customers’ requirements
for our products and then provide inno-
vations, and we accumulated that expe-
rience in emerging markets before
expanding into the sophisticated devel-
oped markets.”
The legacy of that strategy means the
overwhelming majority of the 170 coun-
tries in which the company sells prod-
ucts and services are in the developing
world, including China, that account for
the lion’s share of revenue.
For example, Huawei set up shop in
Africa years before it won a UK contract
that was a beachhead for more deals in
Europe, and now claims to partner with
customers throughout the continent.
In developing markets, its critics say
Huawei is backed by Beijing. In Septem-
ber, for example, China Exim Bank lent
Nigeria $328m to improve its telecoms
infrastructure with Huawei kit.
“Huawei could not become as strong
as it is without the government’s com-
plete support,” said the former head of a
Huawei supplier. “They provided a
practically unlimited budget.”
Huawei said it used only $3bn of a
150
100
50
0
China EMEA Asia Americas
Pacific
Global mobile infrastructure
market share (%)
2016 2017
Ericsson 28 Huawei 28
Huawei 25 Ericsson 27
Nokia 24 Nokia 23
ZTE 12 ZTE 13
Other 7 Other 6
Samsung 4 Samsung 3
Sources: company; IHS Markit
Checks are potential $40bn credit line available “Clearly there was commercial exi- $92.5bn 5G standard-setting body, just one short
carried out on a from China Development Bank in gency on the part of certain govern- Revenue generated of Ericsson, the leader.
cellular network 2005-11 for 35 projects. Sales over the ments,” said a former diplomat who was last year Huawei’s model was one of scale that
antenna at period hit $145bn. among those warning of the risks of relied on recycling income into R&D, on
Huawei, which Its fans and critics alike said that Hua- adopting Huawei equipment in the UK. $145bn which it was on course to spend $16bn,
fans and critics wei won share by providing reliable Advisers to Huawei said its position Sales over the or 15 per cent of sales, this year, said Vin-
alike say has technology and post-sales service, as was helped by its influence in research period 2005-11 cent Peng, president of Huawei in west-
won share by well as competitive pricing. and development and boots on the ern Europe.
offering reliable “We run into them all over the world,” ground. Rivals such as Ericsson 170 Analysts said developing markets
tech and service an executive at a US rival. “And the and Nokia, said one tech lawyer, might Countries in which
were likely to stick with Huawei.
as well as way they win business is they charge be able to sell kit in far-flung markets the group operates “We do not expect African govern-
competitive 10-20 cents in the dollar. Don’t get me but were less willing to have teams of ments to bow down to US pressure to
prices wrong — they are formidable in the mar- technicians ready to to fix glitches and keep Chinese telecoms players out of
ketplace. But we all have to make maintain the service. any potential 5G rollouts or 4G network
money somehow, and two or three years Huawei has funded universities, upgrades,” said Kenny Liew at Fitch
down the road they are figuring out including the University of Surrey 5G Solutions. “Operators will definitely be
ways to do it.” Innovation Centre, and standards bod- keen to slash costs where possible [for
In Europe the dynamics might be ies, from its large research budget. It has 5G], and one area is to adopt cost-effec-
more subtle but the method is similar. five chairmen and vice-chairmen on the tive Chinese telecoms equipment.”

Legal Notices Industrials

Hitachi to buy 80% of ABB’s power grids arm

KANA INAGAKI — TOKYO
RALPH ATKINS — ZURICH
Hitachi is buying an 80 per cent stake
in ABB’s power grids unit for $6.4bn, its
largest-ever overseas acquisition, as it
seeks to become a global industrial
powerhouse and its Swiss rival focuses
on digital and robotics businesses.
ABB will initially retain a 19.9 per cent
stake in the divested unit, valued at
$11bn, including debt. Proceeds of
$7.6bn to $7.8bn will be returned to ABB
shareholders through share buybacks.
The Swiss group also announced
restructuring measures to boost per-
formance — its shares have fallen almost
25 per cent over the past year.
The deal, which is expected to close
by the first half of 2020, will bolster
Hitachi’s ambitions to join the ranks of
global industrial groups such as General
Electric and Siemens.
“This is a good acquisition to ensure
our position as a global leader,” said
Toshiaki Higashihara, Hitachi’s chief
executive.
Hitachi, which has had a joint venture
with ABB in Japan since 2015, plans to
convert ABB’s power grids division into
a fully owned subsidiary in four years,
and will fund the deal using cash and
bank loans.
The ABB deal follows Hitachi’s acqui-
sition of rail assets in Italy. It has also
sold less profitable divisions to focus on
certain business lines, such as its power
grids business. The company said it
wants to increase revenue from its
power grids business by 60 per cent to
¥120bn ($1bn) in three years.
Analysts say the latest acquisition,
however, raises further questions about
‘This is a good acquisition
to ensure our position as
a global leader’
Toshiaki Higashihara, Hitachi
a £15bn nuclear power station it is
developing in Wales.
“If Hitachi cannot secure the prereq-
uisite financing arrangements and hard
commitments by the UK government, I
cannot see how they can proceed with
the project,” said Macquarie analyst
Damian Thong.
In response to recent media reports
that Hitachi might freeze the Wylfa
Newydd project, Mr Higashihara said
there were limits to how much risk the
company can take.
“We will go ahead with the project if it
makes economic sense, but otherwise it
may be possible for us to freeze the
project,” he added, saying no final deci-
sion had been reached.
At a separate news conference,
Hitachi’s chairman, Hiroaki Nakanishi,
said the proposed “tripartite” share-
holding structure, which would see the
UK and Japanese governments take
equity stakes alongside Hitachi, was
looking increasingly difficult.
The official announcement of the ABB
deal came after the Financial Times
reported that the two companies had
been talking privately and that negotia-
tions were fairly advanced.
Two years ago, Ulrich Spiesshofer,
ABB’s chief executive, resisted calls for a
break-up of the group from Cevian, the
European activist investor that owns a 5
per cent stake. At the time, ABB argued
that the power grids business would be
turned around under its ownership.
Since then, the performance of the
business has improved and Mr Spiess-
hofer told journalists yesterday that it
was “the right time” to divest. The unit
reported pre-tax operating profits of
$972m last year on revenues of $10.4bn.
Mr Spiesshofer said that by returning
the proceeds, the group would enable
shareholders to “participate in the
results of their patience”.
See Lex

Travel & leisure

China’s Ctrip counts cost of trade war upheaval

TOM HANCOCK — SHANGHAI
China’s largest online travel agent has
been caught out by the country’s trade
war with the US, which has hit con-
sumer spending on outbound trips and
Financial contributed to a $6bn fall in US-
listed Ctrip’s valuation this year,
according to its chief executive.
“The trade war caught many companies
in China by surprise; nobody was really
prepared,” Jane Sun told the Financial
Times. “The trade war affects confi-
dence in both countries.”
Ctrip and 45 per cent-owned affili-
ate Qunar together account for more
than half of China’s online travel mar-
ket, a fast-growing sector but one that
has slowed this year as consumer senti-
ment has weakened. “When the stock
market is tanking people don’t have the
confidence to spend,” Ms Sun said.
Shares in Nasdaq-listed Ctrip, which
Businesses has a stock market valuation of $15.8bn,
fell 19 per cent last month in their big-
For Sale gest one-day drop for five years after the
company forecast an operating profit
margin of less than 1 per cent for this
Business for Sale, Business Opportunities, year — down from 11 per cent last year —
Business Services, because of macroeconomic weakness
Business Wanted, Franchises and higher spending on marketing.
Runs Daily
.............................................................................................................................
“In the face of slowing economic
Classified Business Advertising growth, we expect international trips to
UK: +44 20 7873 4000 | Email: be curtailed somewhat, and for some of
acs.emea@ft.com those trips to be replaced by travel
within China,” said Maggie Rauch, an
analyst at Phocuswright, a travel indus-
try consultancy.
In the first six months of 2018, 80m
border crossings were made by Chinese
passport holders, up 16 per cent from
the same period last year, according to
the China Outbound Tourism Research
Institute. But the institute projects that
rate of growth to have slowed in the sec-
ond half of this year.
Chinese consumers’ spending power
overseas has been eroded by a weaken-
ing currency, with the renminbi this
year hitting its lowest level against the
US dollar for a decade.
“The depreciation of the renminbi
weakened tourists’ purchasing power
abroad. Visits by mainlanders to Hong
Kong and Macau have also picked up as
Jane Sun: Ctrip chief says a weaker
currency is curbing trips abroad
trips to foreign countries cool off,”
according to a report by Gavekal Drago-
nomics, a consultancy.
Ms Sun said the impact was felt most
keenly on trips to western destinations.
“[Consumers] might not travel to
Europe but they will travel to Asia, or
within China,” she said.
With close to half of Chinese travel
ticket sales and nearly 40 per cent of
hotel bookings made online, internet
travel agents are “past the sweet spot” of
rapid user growth, according to UBS.
Analysts at Daiwa Securities expect
“macro headwinds” and the increasing
cost of serving customers to weigh on
Ctrip’s margins.
However, Ms Sun said she expected
revenue growth, which was 18 per cent
last quarter, to stay strong even though
profits are growing more slowly. She
said Ctrip would not change its strategy,
which includes investing in initiatives
such as chatbots enabled by artificial
intelligence to handle customer queries,
and said the company would keep head-
count stable next year to control costs.
Economists expect Beijing to intro-
duce more stimulus in 2019, with fiscal
spending on infrastructure intended to
sustain growth above 6 per cent.
“If GDP is growing 5 to 6 per cent,
travel will be 8 or 9 [per cent] and we
will be double that,” Ms Sun said. “In the
long run there is a lot of room for China
to grow.”
Tuesday 18 December 2018 ★ FINANCIAL TIMES 15

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

-0.07% -0.14% -1.05% -1.15% -0.03% -0.29% -0.366% -0.111% -0.60%

0.16% 0.62% 0.354% 0.398% 1.00%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Nov 18 - - Index All World Nov 18 - Dec 17 Index All World Nov 18 - Dec 17 Index All World Nov 18 - Dec 17 Index All World Nov 18 - Dec 17 Index All World Nov 18 - Dec 17 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul

2,701.58 15,155.50 7,013.88 11,341.00 2,092.40

21,803.62 21,506.88 2,071.09
6,773.24
2,598.19 14,516.02 10,772.20
Day -0.07% Month -5.07% Year -2.92% Day -0.54% Month -4.23% Year -9.52% Day -1.05% Month -3.29% Year -9.45% Day -0.86% Month 1.41% Year NaN% Day 0.62% Month -0.80% Year -4.64% Day 0.08% Month -1.02% Year -16.56%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
1,409.22 9,056.80 3,083.60 3,114.25
42,343.96
7,136.39 41,195.74 26,183.53 26,087.98
1,355.76 8,812.50
6,922.04
Day 0.16% Month -4.54% Year -0.25% Day -0.28% Month -2.62% Year -14.29% Day -1.15% Month -3.65% Year -11.15% Day NaN% Month NaN% Year NaN% Day -0.03% Month 2.01% Year -9.47% Day 1.21% Month 0.99% Year -8.87%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
36,270.07
5,025.20
25,080.50 87,284.42 18,878.31 2,679.11 35,260.54
85,973.06 18,693.45
24,067.29 4,799.87 2,597.97
Day -0.14% Month -5.36% Year -2.44% Day -0.19% Month -1.40% Year 20.21% Day -1.11% Month -4.48% Year -10.27% Day -1.15% Month -0.75% Year -15.19% Day 0.16% Month -2.93% Year -20.46% Day 0.85% Month 2.29% Year 8.39%

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 30453.15 31109.45 Cyprus CSE M&P Gen 68.46 68.68 Italy FTSE Italia All-Share 20479.86 20740.61 Philippines Manila Comp 7520.40 7524.37 Taiwan Weighted Pr 9787.53 9774.16 Cross-Border DJ Global Titans ($) 291.08 291.36
Australia All Ordinaries 5732.90 5678.80 Czech RepublicPX 1027.87 1028.40 FTSE Italia Mid Cap 33887.85 34628.05 Poland Wig 58197.08 58780.55 Thailand Bangkok SET 1601.48 1609.45 Euro Stoxx 50 (Eur) 3066.15 3092.60
S&P/ASX 200 5658.30 5602.00 Denmark OMXC Copenahgen 20 925.96 935.84 FTSE MIB 18693.45 18910.79 Portugal PSI 20 4730.62 4803.42 Turkey BIST 100 116840.94 116315.98 Euronext 100 ID 932.09 943.27
S&P/ASX 200 Res 4043.40 3961.30 Egypt EGX 30 13215.40 12992.06 Japan 2nd Section 6765.77 6784.87 PSI General 2768.38 2809.95 UAE Abu Dhabi General Index 4831.14 4861.53 FTSE 4Good Global ($) 6266.27 6284.55
Austria ATX 2862.87 2911.96 Estonia OMX Tallinn 1188.13 1192.55 Nikkei 225 21506.88 21374.83 Romania BET Index 8524.69 8574.48 UK FT 30 2807.80 2822.20 FTSE All World ($) 308.47 309.38
Belgium BEL 20 3331.26 3384.29 Finland OMX Helsinki General 8980.19 9046.55 S&P Topix 150 1303.62 1299.52 Russia Micex Index 2359.13 2365.69 FTSE 100 6773.24 6845.17 FTSE E300 1355.76 1371.54
BEL Mid 6543.67 6597.55 France CAC 40 4799.87 4853.69 Topix 1594.20 1592.16 RTX 1113.44 1116.50 FTSE 4Good UK 6157.11 6227.60 FTSE Eurotop 100 2635.69 2664.69
Brazil Bovespa 87284.42 87449.50 SBF 120 3812.18 3857.71 Jordan Amman SE 1863.29 1843.02 Saudi-Arabia TADAWUL All Share Index 7968.26 7908.07 FTSE All Share 3692.57 3732.96 FTSE Global 100 ($) 1596.73 1601.49
Canada S&P/TSX 60 874.51 878.92 Germany M-DAX 21915.28 22281.45 Kenya NSE 20 2759.18 2762.34 Singapore FTSE Straits Times 3114.25 3077.09 FTSE techMARK 100 4320.47 4385.15 FTSE Gold Min ($) 1292.61 1320.34
S&P/TSX Comp 14516.02 14595.07 TecDAX 2497.95 2519.83 Kuwait KSX Market Index 6633.44 6603.51 Slovakia SAX 334.99 334.04 USA DJ Composite 7983.99 8010.05 FTSE Latibex Top (Eur) 4440.00 4432.20
S&P/TSX Div Met & Min 862.74 876.66 XETRA Dax 10772.20 10865.77 Latvia OMX Riga 950.94 963.53 Slovenia SBI TOP 797.02 797.29 DJ Industrial 24067.29 24100.51 FTSE Multinationals ($) 1804.94 1840.56
Chile S&P/CLX IGPA Gen 25955.15 26211.19 Greece Athens Gen 632.04 645.24 Lithuania OMX Vilnius 625.33 630.30 South Africa FTSE/JSE All Share 51560.47 51744.16 DJ Transport 9517.73 9514.11 FTSE World ($) 547.05 548.69
China FTSE A200 8393.45 8402.52 FTSE/ASE 20 1664.07 1699.55 Luxembourg LuxX 1362.40 1380.21 FTSE/JSE Res 20 39656.63 39583.95 DJ Utilities 745.62 757.85 FTSEurofirst 100 (Eur) 3785.56 3824.51
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 26087.98 26094.79 Malaysia FTSE Bursa KLCI 1641.62 1661.96 FTSE/JSE Top 40 45528.87 45639.00 Nasdaq 100 6609.54 6594.96 FTSEurofirst 80 (Eur) 4272.22 4319.29
Shanghai A 2720.47 2716.00 HS China Enterprise 10351.81 10359.43 Mexico IPC 41195.74 41312.17 South Korea Kospi 2071.09 2069.38 Nasdaq Cmp 6922.04 6910.67 MSCI ACWI Fr ($) 468.51 476.07
Shanghai B 278.74 279.40 HSCC Red Chip 4296.74 4314.07 Morocco MASI 11143.73 11237.51 Kospi 200 266.33 265.55 NYSE Comp 11737.37 11755.38 MSCI All World ($) 1942.55 1974.41
Shanghai Comp 2597.97 2593.74 Hungary Bux 39675.76 40125.72 Netherlands AEX 500.08 506.53 Spain IBEX 35 8812.50 8886.10 S&P 500 2598.19 2599.95 MSCI Europe (Eur) 1446.50 1456.07
Shenzhen A 1383.74 1388.03 India BSE Sensex 36270.07 35962.93 AEX All Share 734.96 743.90 Sri Lanka CSE All Share 6067.63 6062.55 Wilshire 5000 26728.33 26749.34 MSCI Pacific ($) 2501.55 2535.64
Shenzhen B 853.91 856.27 Nifty 500 9153.95 9091.30 New Zealand NZX 50 8745.59 8722.51 Sweden OMX Stockholm 30 1451.95 1471.67 Venezuela IBC 747.53 745.22 S&P Euro (Eur) 1423.61 1439.02
Colombia COLCAP 1359.31 1365.35 Indonesia Jakarta Comp 6089.31 6169.84 Nigeria SE All Share 30672.79 30568.05 OMX Stockholm AS 538.31 545.09 Vietnam VNI 933.65 952.04 S&P Europe 350 (Eur) 1392.35 1408.12
Croatia CROBEX 1744.58 1734.00 Ireland ISEQ Overall 5470.72 5519.26 Norway Oslo All Share 925.36 939.04 Switzerland SMI Index 8602.61 8713.68 S&P Global 1200 ($) 2161.95 2164.95
Israel Tel Aviv 125 1415.69 1441.70 Pakistan KSE 100 38309.17 38307.44 Stoxx 50 (Eur) 2819.64 2844.81
(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 Dec 17 %Chg %Chg Dec 17 %Chg %Chg Dec 17 %Chg %Chg Dec 17 %Chg %Chg
ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's FTSE 100 price(p) week ytd FTSE 250 price(p) week ytd FTSE SmallCap price(p) week ytd Industry Sectors price(p) week ytd
traded m's price change traded m's price change traded m's price change traded m's price change Winners Winners Winners Winners
Amazon.com 54.6 1568.87 -23.04 Shire 551.7 4532.50 -140.50 Telefonica 333.7 7.83 0.04 Softbank . 699.3 8540.00 44.00 Gvc Holdings 686.00 9.0 -27.4 Indivior 94.92 24.0 -76.4 Interserve 14.11 22.7 -85.8 Mining 17129.69 6.8 -8.3
Apple 26.3 168.04 2.56 Bhp 153.2 1659.80 43.20 Adidas Ag Na O.n. 328.2 186.85 -8.65 Takeda Pharmaceutical 407.8 3943.00 -38.00 Bhp 1659.80 8.5 8.6 Serco 97.00 15.3 -1.5 Sportech 38.00 16.6 -52.5 Construction & Materials 4825.16 4.0 -
Johnson & Johnson 23.7 129.27 -3.73 Glaxosmithkline 147.8 1467.60 -12.40 Total 303.6 48.62 -0.48 Familymart Co., 387.4 17610.00 1000.00 Anglo American 1707.60 8.4 7.1 Hikma Pharmaceuticals 1882.50 9.9 69.9 Carpetright 19.00 16.2 -54.5 Media 7720.60 2.9 2.5
Microsoft 12.6 105.33 -0.70 Diageo 126.8 2809.00 -16.00 Royal Dutch Shella 241.3 25.83 -0.24 Toyota Motor 353.1 6840.00 11.00 Wpp 870.80 8.2 -34.8 Kier 409.80 8.9 -61.5 Restaurant 143.20 11.4 -33.6 Gas Water & Multiutilities 4876.78 2.8 -5.5
Netflix 11.1 271.09 4.25 Rio Tinto 122.3 3762.50 87.00 Bayer Ag Na O.n. 215.8 64.00 0.64 Fast Retailing Co., 297.8 60990.00 220.00 Antofagasta 796.00 7.6 -20.5 Sig 111.00 8.6 -37.0 Stv 350.00 8.4 6.1 Aerospace & Defense 4316.32 2.7 -
Nvidia 9.4 147.75 1.30 Royal Dutch Shell 120.8 2322.00 -20.50 Sap Se O.n. 213.6 88.66 -1.28 Mitsubishi Ufj Fin,. 240.3 583.90 0.80 Just Eat 579.00 7.1 -25.5 888 Holdings 166.80 8.4 -40.0 Independent Investment Trust 504.00 8.2 -23.5 General Industrials 5005.43 2.4 -
Advanced Micro Devices 9.0 19.80 -0.10 Astrazeneca 110.3 6043.00 -87.00 Allianz Se Na O.n. 196.1 175.28 -1.56 Sony 209.6 5839.00 -16.00 Glencore 292.95 6.7 -25.7 G4s 190.40 8.3 -27.5 Kcom 66.80 8.1 -26.0 Support Services 7173.56 2.2 -
Facebook 8.9 144.44 0.38 Vodafone 103.8 160.70 0.02 Siemens Ag Na 195.3 99.58 -0.62 Sumitomo Mitsui Fin,. 200.7 3939.00 22.00 Rio Tinto 3762.50 6.7 -5.7 Rhi Magnesita N.v. 3662.00 8.2 -4.6 Reach 62.50 7.8 -21.8 Travel & Leisure 8908.95 1.4 -
Bank Of America 8.4 24.86 0.38 Bp 102.4 508.60 -4.10 Hennes & Mauritz Ab, H & M Ser. B 187.1 13.93 -1.30 Showa Denko K.k. 183.6 3785.00 -5.00 Rolls-royce Holdings 807.80 6.4 -4.1 Balfour Beatty 250.00 7.5 -15.3 Foxtons 52.00 7.7 -37.3 Mobile Telecommunications 3567.21 1.3 -
J P Morgan Chase & Co 8.0 100.15 -0.14 Hsbc Holdings 100.5 648.80 -4.70 Inditex 185.2 23.60 -0.95 Nippon Telegraph And Telephone 176.4 4727.00 31.00 Melrose Industries 155.10 6.0 -26.6 John Laing 321.20 7.1 17.4 Arrow Global 188.40 7.7 -52.0 General Financial 9090.34 1.1 -
Standard Life Aberdeen 240.90 5.1 -50.4 Jpmorgan Indian Investment Trust 679.00 7.1 -9.8 Discoverie 389.00 7.5 4.6 Electricity 6451.38 1.0 -16.3
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
Rentokil Initial 330.90 4.7 7.6 Aggreko 734.40 6.2 -5.8 Robert Walters 514.00 7.1 -11.4 Industrial Metals 4336.78 0.9 13.3
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Alexion Pharmaceuticals 113.78 4.35 3.97 Superdry 430.80 25.80 6.37 Kerry Grp A Eo-,125 91.50 1.70 1.89 Familymart Co., 17610.00 1000.00 6.02 Wood (john) 534.00 -13.0 -18.4 Superdry 430.80 -30.3 -78.2 Low & Bonar 16.50 -22.9 -68.9 Oil Equipment & Services 10689.24 -9.7 -
Applied Materials 33.73 1.08 3.31 Talktalk Telecom 121.50 4.50 3.85 Brenntag Ag Na O.n. 37.46 0.46 1.24 Nippon Meat Packers,. 4335.00 185.00 4.46 Next 4137.00 -10.4 -8.1 Dunelm 482.80 -15.3 -29.2 Brown (n) 93.50 -19.7 -64.9 General Retailers 1864.91 -6.0 -
Stanley Black & Decker 122.24 3.88 3.28 Stobart Ld 155.60 4.80 3.18 Relx 20.37 0.22 1.08 Keio 6640.00 270.00 4.24 Sainsbury (j) 264.30 -10.3 9.6 Sports Direct Int 234.00 -12.8 -39.0 Mccoll's Retail 54.00 -18.2 -79.5 Food & Drug Retailers 3303.50 -3.5 1.5
Leggett & Platt 37.26 1.10 3.04 Bhp 1659.80 43.20 2.67 Bayer Ag Na O.n. 64.00 0.64 1.01 Thb Kansai Electric Power ,orporated 1814.50 70.00 4.01 Marks And Spencer 251.30 -8.9 -20.5 Plus500 Ltd 1292.00 -11.3 46.6 River And Mercantile 245.00 -11.6 -31.6 Tobacco 30964.10 -2.9 -
Freeport-mcmoran 10.88 0.31 2.89 Ted Baker 1512.00 39.00 2.65 Iberdrola 7.10 0.07 0.97 Tokyo Electric Power ,orporated 763.00 22.00 2.97 Nmc Health 2910.00 -7.3 1.5 B&m Eur Value Retail S.a. 285.20 -9.9 -31.5 Circassia Pharmaceuticals 59.00 -10.6 -40.1 Automobiles & Parts 6672.60 -2.5 -9.9
Kingfisher 216.00 -6.3 -37.1 Just 88.20 -9.8 -46.6 Debenhams 4.97 -10.4 -85.9 Forestry & Paper 17831.88 -2.4 -
Downs Downs Downs Downs
Randgold Resources Ld 6674.00 -4.9 -10.4 Dixons Carphone 134.95 -9.4 -33.5 Capital & Regional 31.75 -8.0 -45.4 Food Producers 6536.72 -2.4 -
Xerox 23.12 -1.34 -5.46 Dunelm 482.80 -57.70 -10.68 Hennes & Mauritz Ab, H & M Ser. B 13.93 -1.30 -8.53 Chiyoda 312.00 -19.00 -5.74
Royal Mail 284.90 -4.0 -37.4 Stagecoach 142.50 -9.1 -14.3 Dfs Furniture 184.60 -7.7 -7.1 Electronic & Electrical Equip. 5991.96 -2.1 -8.6
Pacific Gas & Electric Co 24.63 -1.38 -5.31 Jd Sports Fashion 330.10 -25.30 -7.12 Saipem 3.28 -0.23 -6.55 Ube Industries, 2356.00 -71.00 -2.93
Micro Focus Int 1408.00 -3.6 -43.4 Moneysupermarket.com 267.00 -8.4 -25.6 Clipper Logistics 221.00 -7.5 -52.5 Real Estate & Investment Servic 2340.20 -1.8 -
Westrock 42.05 -2.32 -5.23 Equiniti 196.80 -14.20 -6.73 Adidas Ag Na O.n. 186.85 -8.65 -4.42 Daiichi Sankyo , 4047.00 -119.00 -2.86
British American Tobacco 2628.00 -3.4 -46.8 Halfords 257.20 -8.3 -27.3 Enquest 21.00 -7.5 -17.0 Industrial Transportation 2147.82 -1.7 -
Centene 120.89 -6.64 -5.21 Games Workshop 2855.00 -200.00 -6.55 Commerzbank Ag 6.36 -0.28 -4.19 Oki Electric Industry , 1315.00 -38.00 -2.81
Tesco 190.25 -3.2 -8.8 Premier Oil 65.00 -8.2 -14.9 Dp Eurasia N.v. 106.80 -7.1 -50.2 Health Care Equip.& Services 6975.23 -1.4 -7.8
Packaging Of America 89.10 -4.34 -4.64 Galliford Try 569.00 -38.50 -6.34 Kinnevik Ab Ser. B 20.73 -0.89 -4.11 Showa Shell Sekiyu K.k. 1540.00 -40.00 -2.53
Mondi 1584.00 -2.5 -18.1 Renishaw 3796.00 -8.0 -26.7 Alfa Fin Software Holdings 104.40 -6.8 -80.7 Nonlife Insurance 2989.69 -0.8 -7.0
Based on the constituents of the S&P500 Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index
Based on last week's performance. †Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Dec 17 Currency Mid Change Mid Change Mid Change Dec 17 Currency Mid Change Mid Change Mid Change Dec 17 Currency Mid Change Mid Change Mid Change Dec 17 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 38.2750 0.0200 43.3903 0.1716 48.2685 0.2221 Indonesia Indonesian Rupiah 14577.5000 -7.5000 16525.7297 48.2791 18383.6709 65.6331 Poland Polish Zloty 3.7756 -0.0237 4.2802 -0.0120 4.7614 -0.0103 ..Three Month 0.7935 -0.0033 0.8986 -0.0006 - -
Australia Australian Dollar 1.3927 -0.0014 1.5788 0.0039 1.7563 0.0055 Israel Israeli Shekel 3.7672 -0.0045 4.2707 0.0096 4.7508 0.0138 Romania Romanian Leu 4.1010 -0.0220 4.6491 -0.0089 5.1718 -0.0066 ..One Year 0.7952 -0.0033 0.8976 -0.0006 - -
Bahrain Bahrainin Dinar 0.3770 - 0.4274 0.0015 0.4754 0.0019 Japan Japanese Yen 113.0000 -0.4150 128.1019 -0.0289 142.5040 0.0605 Russia Russian Ruble 66.7007 -0.0263 75.6149 0.2300 84.1160 0.3104 United States United States Dollar - - 1.1336 0.0039 1.2611 0.0051
Bolivia Bolivian Boliviano 6.9100 - 7.8335 0.0269 8.7142 0.0356 ..One Month 112.9996 -0.4158 128.1019 -0.0290 142.5038 0.0600 Saudi Arabia Saudi Riyal 3.7508 -0.0003 4.2521 0.0143 4.7301 0.0190 ..One Month - - 1.1333 -0.1223 1.2613 0.0052
Brazil Brazilian Real 3.9095 0.0169 4.4320 0.0344 4.9303 0.0414 ..Three Month 112.9991 -0.4168 128.1019 -0.0289 142.5036 0.0595 Singapore Singapore Dollar 1.3739 -0.0031 1.5575 0.0018 1.7326 0.0032 ..Three Month - - 1.1327 -0.1223 1.2617 0.0051
Canada Canadian Dollar 1.3378 0.0006 1.5165 0.0059 1.6870 0.0076 ..One Year 112.9965 -0.4220 128.1020 -0.0287 142.5038 0.0583 South Africa South African Rand 14.3969 -0.0144 16.3210 0.0398 18.1559 0.0561 ..One Year - - 1.1299 -0.1223 1.2634 0.0051
Chile Chilean Peso 687.2200 -0.1150 779.0639 2.5457 866.6515 3.3931 Kenya Kenyan Shilling 102.5000 - 116.1987 0.3991 129.2625 0.5276 South Korea South Korean Won 1131.4000 0.6500 1282.6066 5.1394 1426.8061 6.6404 Venezuela Venezuelan Bolivar Fuerte - - - - - -
China Chinese Yuan 6.9008 0.0025 7.8231 0.0297 8.7026 0.0387 Kuwait Kuwaiti Dinar 0.3043 -0.0003 0.3449 0.0008 0.3837 0.0012 Sweden Swedish Krona 9.0418 -0.0250 10.2501 0.0069 11.4025 0.0151 Vietnam Vietnamese Dong 23319.0000 31.0000 26435.5145 125.8178 29407.6130 159.0382
Colombia Colombian Peso 3189.5350 -8.2400 3615.8022 3.1089 4022.3158 6.0693 Malaysia Malaysian Ringgit 4.1810 -0.0045 4.7398 0.0112 5.2726 0.0159 Switzerland Swiss Franc 0.9942 -0.0023 1.1271 0.0013 1.2538 0.0022 European Union Euro 0.8821 -0.0030 - - 1.1124 0.0007
Costa Rica Costa Rican Colon 595.9500 -1.5800 675.5960 0.5353 751.5512 1.0833 Mexico Mexican Peson 20.0973 -0.2403 22.7832 -0.1932 25.3446 -0.1983 Taiwan New Taiwan Dollar 30.8665 -0.0020 34.9917 0.1179 38.9257 0.1564 ..One Month 0.8817 -0.0031 - - 1.1123 0.0007
Czech Republic Czech Koruna 22.7332 -0.0904 25.7714 -0.0137 28.6688 0.0034 New Zealand New Zealand Dollar 1.4701 - 1.6665 0.0057 1.8539 0.0076 Thailand Thai Baht 32.7850 -0.0100 37.1666 0.1163 41.3451 0.1562 ..Three Month 0.8812 -0.0030 - - 1.1121 0.0007
Denmark Danish Krone 6.5870 -0.0214 7.4673 0.0015 8.3069 0.0070 Nigeria Nigerian Naira 363.0000 - 411.5133 1.4133 457.7785 1.8686 Tunisia Tunisian Dinar 2.9809 -0.0056 3.3793 0.0052 3.7592 0.0082 ..One Year 0.8784 -0.0030 - - 1.1111 0.0007
Egypt Egyptian Pound 17.9150 -0.0195 20.3093 0.0477 22.5926 0.0677 Norway Norwegian Krone 8.6257 0.0037 9.7785 0.0378 10.8779 0.0491 Turkey Turkish Lira 5.3890 0.0134 6.1092 0.0361 6.7960 0.0446
Hong Kong Hong Kong Dollar 7.8120 0.0019 8.8561 0.0326 9.8518 0.0426 Pakistan Pakistani Rupee 138.8700 0.0200 157.4293 0.5633 175.1286 0.7400 United Arab Emirates UAE Dirham 3.6732 - 4.1640 0.0143 4.6322 0.0189
Hungary Hungarian Forint 285.0087 -1.4795 323.0988 -0.5618 359.4237 -0.3911 Peru Peruvian Nuevo Sol 3.3425 -0.0110 3.7892 0.0006 4.2152 0.0034 United Kingdom Pound Sterling 0.7930 -0.0032 0.8989 -0.0006 - -
India Indian Rupee 71.5800 -0.2852 81.1463 -0.0436 90.2694 0.0102 Philippines Philippine Peso 52.9825 0.0900 60.0634 0.3080 66.8161 0.3858 ..One Month 0.7932 -0.0032 0.8988 -0.0006 - -
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 Dec 17 Dec 14 Dec 13 Dec 12 Dec 11 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 2807.80 2822.20 2836.30 2801.30 2773.80 0.00 3384.10 2766.70 Tech Hardware & Eq 32.39 Leisure Goods -8.41 Industrials -15.08 FTSE 100 Price Change FTSE 100 Price Change
Dec 17 chge% Index Dec 14 Dec 13 ago yield% Cover ratio adj Return FT 30 Div Yield 2.12 2.11 2.10 2.11 2.14 0.00 3.93 2.74 Pharmace & Biotech 14.63 Chemicals -9.17 Financials -15.98 3I Group PLC 764.00 -15.60 London Stock Exchange Group PLC 4020 -20.00
FTSE 100 (100) 6773.24 -1.05 5864.59 6845.17 6877.50 7537.01 4.51 1.96 11.31 302.84 5984.36 P/E Ratio net 21.06 21.18 21.29 21.12 20.89 0.00 19.44 14.26 Industrial Metals & 12.89 Basic Materials -9.69 Industrial Eng -16.58 Admiral Group PLC 1959.5 -21.00 Marks And Spencer Group PLC 251.30 -12.10
FTSE 250 (250) 17416.96 -1.41 15080.43 17666.91 17818.56 20255.40 3.36 2.05 14.53 530.10 13149.52 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Health Care 12.08 Automobiles & Parts -9.95 Financial Services -17.00 Anglo American PLC 1707.6 13.20 Melrose Industries PLC 155.10 -4.30
FTSE 250 ex Inv Co (196) 18235.39 -1.54 15789.07 18520.68 18701.77 21719.78 3.57 1.84 15.22 580.78 14057.68 FT 30 hourly changes Beverages 3.37 NON FINANCIALS Index -9.96 Real Est Invest & Se -17.46 Antofagasta PLC 796.00 18.00 Micro Focus International PLC 1408 -54.50
FTSE 350 (350) 3740.30 -1.11 3238.53 3782.20 3802.36 4190.89 4.33 1.97 11.72 158.59 6617.29 8 9 10 11 12 13 14 15 16 High Low Food & Drug Retailer 3.13 Mining -9.98 Banks -18.74 Ashtead Group PLC 1653.5 -66.50 Mondi PLC 1584 -48.00
FTSE 350 ex Investment Trusts (295) 3697.76 -1.11 3201.70 3739.37 3759.52 4154.26 4.40 1.93 11.77 159.24 3372.48 2822.2 2782.8 2787.4 2795.7 2799.9 2803.2 2808.7 2813.7 2808.8 2822.2 2778.2 Media 1.99 Electronic & Elec Eq -10.12 Food Producers -19.12 Associated British Foods PLC 2110 -70.00 Morrison (Wm) Supermarkets PLC 221.00 -4.85
FTSE 350 Higher Yield (103) 3425.22 -0.80 2965.72 3452.96 3470.83 3855.13 5.91 1.77 9.55 193.81 6472.65 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Personal Goods 0.98 Support Services -10.16 Household Goods & Ho -19.12 Astrazeneca PLC 6043 -87.00 National Grid PLC 835.30 -8.20
FTSE 350 Lower Yield (247) 3705.50 -1.45 3208.39 3760.11 3780.80 4132.43 2.53 2.50 15.81 98.72 4197.02 Equity Invest Instr -4.02 FTSE 100 Index -10.96 Consumer Goods -19.79 Aviva PLC 368.50 -8.50 Next PLC 4137 -201.00
FTSE SmallCap (283) 5188.58 -0.39 4492.52 5208.80 5228.91 5793.83 3.75 1.82 14.65 184.70 7775.80 Oil & Gas Producers -4.80 Travel & Leisure -11.08 Technology -23.70
FTSE SmallCap ex Inv Co (157) 4258.96 -0.61 3687.61 4285.07 4284.86 5029.14 4.04 1.53 16.17 162.20 6716.18 FX: EFFECTIVE INDICES Gas Water & Multi -4.82 Aerospace & Defense -11.32 General Retailers -23.84
Bae Systems PLC 454.90 -1.20 Nmc Health PLC 2910 -152.00
Barclays PLC 152.84 -5.60 Ocado Group PLC 779.20 -35.80
FTSE All-Share (633) 3692.57 -1.08 3197.20 3732.96 3752.66 4136.81 4.31 1.97 11.80 155.65 6602.82 Oil & Gas -4.97 FTSE All{HY-}Share Index -11.58 Life Insurance -24.39
Dec 14 Dec 13 Mnth Ago Dec 17 Dec 14 Mnth Ago Barratt Developments PLC 434.00 -6.50 Paddy Power Betfair PLC 6475 -130.00
FTSE All-Share ex Inv Co (452) 3624.68 -1.10 3138.42 3665.08 3684.43 4076.50 4.39 1.92 11.84 155.76 3359.00 Nonlife Insurance -6.24 Forestry & Paper -11.67 Telecommunications -24.60 Berkeley Group Holdings (The) PLC 3319 -113.00 Pearson PLC 940.00 -5.80
FTSE All-Share ex Multinationals (563) 1057.34 -1.54 758.78 1073.84 1080.13 1255.43 4.29 1.60 14.59 42.79 1988.91 Australia - - - Sweden - - - Utilities -6.99 FTSE SmallCap Index -11.89 Construct & Material -25.22 Bhp Group PLC 1659.8 43.20 Persimmon PLC 1859.5 -37.50
FTSE Fledgling (97) 10051.66 -0.77 8703.20 10129.74 10160.29 10790.46 3.29 1.55 19.63 282.40 19590.54 Canada - - - Switzerland - - - Health Care Eq & Srv -7.35 Oil Equipment & Serv -12.88 Software & Comp Serv -26.31 BP PLC 508.60 -4.10 Prudential PLC 1394 -21.50
FTSE Fledgling ex Inv Co (48) 14613.51 -0.79 12653.07 14729.21 14778.38 15309.38 3.80 -0.53 -49.94 477.32 27961.39 Denmark - - - UK 76.49 76.58 79.36 Consumer Services -7.58 Real Est Invest & Tr -13.58 Mobile Telecomms -31.06 British American Tobacco PLC 2628 -32.00 Randgold Resources LD 6674 -268.00
FTSE All-Small (380) 3624.63 -0.41 3138.38 3639.51 3653.39 4039.13 3.73 1.81 14.85 127.58 6970.73 Japan - - - USA - - - Fixed Line Telecomms -7.66 Electricity -14.31 Industrial Transport -32.97 British Land Company PLC 544.20 -14.00 Reckitt Benckiser Group PLC 6176 -88.00
FTSE All-Small ex Inv Co (205) 3216.59 -0.62 2785.07 3236.54 3236.83 3780.28 4.03 1.45 17.09 121.78 6426.01 New Zealand - - - Euro - - - FTSE 250 Index -14.76 Tobacco -42.43 Bt Group PLC 250.05 -1.50 Relx PLC 1639 10.00
FTSE AIM All-Share (803) 860.37 -3.01 744.95 887.05 888.88 1019.65 1.66 1.33 45.51 13.04 964.96 Norway - - -
Bunzl PLC 2388 -37.00 Rentokil Initial PLC 330.90 -1.10
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Burberry Group PLC 1710.5 -40.50 Rightmove PLC 433.00 -6.90
Oil & Gas (15) 8852.90 -0.95 7665.26 8937.38 8954.02 9173.69 5.57 1.23 14.62 493.65 8889.23 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Carnival PLC 4370 -1.00 Rio Tinto PLC 3762.5 87.00
Oil & Gas Producers (10) 8550.29 -0.87 7403.24 8625.13 8638.05 8839.82 5.59 1.24 14.46 478.77 8895.22 Centrica PLC 135.55 -2.45 Rolls-Royce Holdings PLC 807.80 -0.80
Oil Equipment Services & Distribution (5)11251.00 -4.91 9741.65 11832.47 12075.05 13082.34 4.40 0.61 37.36 487.46 9176.35 FTSE GLOBAL EQUITY INDEX SERIES Coca-Cola Hbc AG 2418 -44.00 Royal Bank Of Scotland Group PLC 208.20 -3.40
Basic Materials (28) 5764.13 1.03 4990.86 5705.13 5784.57 5986.47 4.99 2.42 8.28 287.69 6280.83 Compass Group PLC 1663.5 -19.50 Royal Dutch Shell PLC 2339 -19.00
Chemicals (8) 13477.31 -1.46 11669.30 13677.49 13928.11 14903.50 2.34 2.36 18.08 318.02 12423.73 Dec 14 No of US $ Day Mth YTD Total
YTD Gr Div Dec 14 No of US $ Day Mth YTD Total YTD Gr Div Crh PLC 2027 -10.00 Royal Dutch Shell PLC 2322 -20.50
Forestry & Paper (1) 19457.85 -2.94 16847.53 20047.49 20053.63 21826.31 3.60 3.13 8.88 700.08 22025.81 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Croda International PLC 4600 -91.00 Royal Mail PLC 284.90 -11.40
Industrial Metals & Mining (2) 4671.40 -0.21 4044.72 4681.04 4833.95 3982.52 14.92 1.45 4.62 691.01 5003.32 FTSE Global All Cap 7855 528.03 -1.6 -3.3 -7.2-9.3 776.49
2.6 Oil & Gas Producers 108 344.70 -1.6 -1.6 -8.4 598.21 -5.2 4.0 Dcc PLC 5920 -40.00 Rsa Insurance Group PLC 496.60 -10.00
Mining (17) 16357.32 1.51 14162.95 16114.12 16333.50 16866.62 5.14 2.46 7.91 840.82 9361.42 FTSE Global Large Cap 1439 469.40 -1.6 -3.0 -6.0-8.2 709.39
2.7 Oil Equipment & Services 33 238.28 -2.0 -2.0 -24.3 363.05 -21.6 4.6 Diageo PLC 2809 -16.00 Sage Group PLC 589.60 -6.60
FTSE Global Mid Cap 1764 693.61 -1.3 -4.2 -11.6 963.94
-9.9 2.4 Basic Materials 257 447.51 -1.2 -1.2 -17.9 711.73 -15.4 3.5 Direct Line Insurance Group PLC 304.90 -2.60 Sainsbury (J) PLC 264.30 -11.20
Industrials (104) 4616.32 -1.11 3997.03 4668.12 4707.84 5395.18 2.99 1.80 18.63 128.87 4930.82
Construction & Materials (15) 5070.58 -1.25 4390.35 5134.79 5137.47 6598.06 3.29 0.39 78.21 169.84 5579.18 FTSE Global Small Cap 4652 722.53 -1.4 -4.5 -11.1-12.6 969.41
2.2 Chemicals 119 662.43 -1.1 -1.1 -17.8 1052.13 -15.7 2.9 Easyjet PLC 1051.5 -50.50 Schroders PLC 2366 -23.00
Aerospace & Defense (9) 4491.28 -0.27 3888.76 4503.22 4527.30 5039.78 2.80 3.46 10.34 110.59 4965.87 FTSE All-World 3203 309.38 -1.6 -3.2 -6.7-8.8 480.98
2.7 Forestry & Paper 18 253.83 -0.5 -0.5 -17.6 449.50 -15.0 3.9 Evraz PLC 464.20 -0.20 Scottish Mortgage Investment Trust PLC 479.70 -8.65
General Industrials (8) 4042.10 -0.44 3499.84 4059.84 4103.61 5087.75 3.78 1.20 22.09 148.48 4807.12 FTSE World 2613 548.69 -1.6 -3.5 -6.3-8.4 1145.17
2.7 Industrial Metals & Mining 66 365.45 -1.1 -1.1 -25.1 580.79 -22.6 4.2 Experian PLC 1874.5 -21.00 Segro PLC 595.00 -8.60
Electronic & Electrical Equipment (10) 7176.00 -1.06 6213.32 7253.21 7318.72 8059.00 1.94 2.23 23.11 124.26 6709.94 FTSE Global All Cap ex UNITED KINGDOM In 7538 551.29 -1.6 -3.1 -6.7-8.7 797.24
2.5 Mining 54 572.68 -1.5 -1.5 -12.8 920.88 -9.0 4.3 Ferguson PLC 4885 -58.50 Severn Trent PLC 1870.5 -9.00
Industrial Engineering (11) 11277.90 -1.69 9764.94 11471.99 11723.39 13497.90 2.66 1.70 22.11 296.98 14186.82 FTSE Global All Cap ex USA 5999 445.67 -1.2 -2.7 -13.1-15.5 706.57
3.3 Industrials 577 358.92 -1.5 -1.5 -13.5 531.58 -11.8 2.3 Fresnillo PLC 819.00 -14.60 Shire PLC 4532.5 -140.50
Industrial Transportation (6) 3458.44 -2.24 2994.48 3537.76 3566.54 5207.66 6.29 0.78 20.27 210.23 3307.27 FTSE Global All Cap ex JAPAN 6518 540.84 -1.6 -3.4 -6.8-8.9 803.04
2.6 Construction & Materials 117 442.64 -1.0 -1.0 -20.4 684.78 -18.8 2.6 Glaxosmithkline PLC 1467.6 -12.40 Smith & Nephew PLC 1467 -18.50
Support Services (45) 6985.71 -1.34 6048.56 7080.46 7147.92 7732.26 2.76 1.98 18.32 177.38 7505.45 FTSE Global All Cap ex Eurozone 7171 550.73 -1.6 -3.2 -6.3-8.3 793.96
2.5 Aerospace & Defense 28 738.05 -1.4 -1.4 -4.0 1081.05 -2.3 2.1 Glencore PLC 292.95 3.30 Smith (Ds) PLC 307.10 -4.20
FTSE Developed 2185 499.89 -1.6 -3.6 -6.0-8.1 741.20
2.6 General Industrials 58 192.32 -1.4 -1.4 -19.9 309.27 -18.0 2.9 Gvc Holdings PLC 686.00 -35.50 Smiths Group PLC 1384 12.00
Consumer Goods (42) 17673.19 -1.47 15302.29 17936.09 18122.17 22087.39 4.14 4.51 5.35 724.90 13784.28
FTSE Developed All Cap 5744 523.51 -1.6 -3.8 -6.5-8.5 766.16
2.6 Electronic & Electrical Equipment 78 380.86 -1.7 -1.7 -17.4 514.15 -16.2 1.8 Halma PLC 1297 -4.00 Smurfit Kappa Group PLC 2002 -6.00
Automobiles & Parts (1) 6706.80 -0.48 5807.06 6739.31 6775.90 7000.83 2.33 0.00 0.00 291.29 6715.78
FTSE Developed Large Cap 926 464.19 -1.7 -3.4 -5.2-7.4 699.57
2.7 Industrial Engineering 108 670.15 -1.4 -1.4 -22.4 980.22 -20.7 2.7 Hargreaves Lansdown PLC 1814 -17.50 Sse PLC 1055 -34.50
Beverages (5) 22391.43 -0.68 19387.56 22543.76 22695.31 21391.75 2.34 1.84 23.29 524.20 16419.85
FTSE Developed Europe Large Cap 245 326.14 -1.1 -3.7 -12.5-15.5 571.33
3.8 Industrial Transportation 103 635.02 -1.9 -1.9 -11.5 943.44 -9.6 2.4 HSBC Holdings PLC 648.80 -4.70 St. James's Place PLC 926.20 -10.00
Food Producers (12) 6593.63 -2.89 5709.08 6789.78 6772.63 8385.63 2.76 2.08 17.40 171.18 5888.54
FTSE Developed Europe Mid Cap 345 523.56 -1.1 -6.6 -15.6-17.9 813.89
3.3 Support Services 85 381.70 -1.8 -1.8 -0.4 539.03 1.3 1.7 Imperial Brands PLC 2335 -36.50 Standard Chartered PLC 590.00 -14.70
Household Goods & Home Construction (15)12403.01 -1.70 10739.11 12617.55 12791.03 15289.65 4.85 2.23 9.24 596.74 9322.00
FTSE Dev Europe Small Cap 738 722.29 -1.3 -6.9 -18.4-20.5 1084.53
3.2 Consumer Goods 432 438.01 -1.3 -1.3 -14.0 671.10 -12.0 2.8 Informa PLC 637.40 -12.40 Standard Life Aberdeen PLC 240.90 -5.25
Leisure Goods (2) 8609.04 -5.84 7454.11 9143.46 9082.15 9629.38 5.57 1.29 13.86 407.87 8401.64
FTSE North America Large Cap 288 558.78 -1.9 -3.6 -0.7-2.6 783.55
2.2 Automobiles & Parts 109 348.31 -1.2 -1.2 -22.6 517.66 -20.5 3.3 Intercontinental Hotels Group PLC 4178 -23.00 Taylor Wimpey PLC 131.00 -1.30
Personal Goods (5) 31305.58 -2.02 27105.85 31951.64 32120.41 32053.59 3.09 2.82 11.48 941.32 22107.21
FTSE North America Mid Cap 399 775.61 -1.4 -4.5 -6.1-7.6 1007.41
1.9 Beverages 45 616.38 -1.5 -1.5 -8.5 956.88 -6.4 2.6 International Consolidated Airlines Group S.A. 597.40 -21.20 Tesco PLC 190.25 -2.65
Tobacco (2) 30964.15 -1.29 26810.23 31370.06 31907.80 53758.94 6.17 7.72 2.10 1910.70 21457.69
FTSE North America Small Cap 1379 786.15 -1.5 -5.2 -7.3-8.6 989.52
1.7 Food Producers 106 582.09 -1.3 -1.3 -8.1 913.68 -5.7 2.6 Intertek Group PLC 4602 -33.00 Tui AG 1138 -31.50
Health Care (21) 10504.00 -1.50 9094.86 10663.44 10650.26 9269.33 3.27 1.08 28.32 340.44 8522.19
FTSE North America 687 369.43 -1.8 -3.8 -1.6-3.5 529.75
2.2 Household Goods & Home Construction 44 414.45 -0.8 -0.8 -12.0 632.36 -9.5 2.9 Itv PLC 130.00 0.15 Unilever PLC 4230 -90.00
Health Care Equipment & Services (9) 7043.51 -1.80 6098.60 7172.73 7244.60 7706.08 1.86 2.84 18.98 129.56 6250.84
FTSE Developed ex North America 1498 234.50 -1.2 -3.3 -12.5-15.1 399.99
3.4 Leisure Goods 31 191.30 -1.6 -1.6 -20.1 256.85 -19.1 1.2 Johnson Matthey PLC 2688 -30.00 United Utilities Group PLC 756.00 -0.20
Pharmaceuticals & Biotechnology (12)14406.62 -1.46 12473.94 14620.52 14585.11 12390.44 3.42 0.98 29.87 488.07 10458.86
FTSE Japan Large Cap 197 348.31 -1.3 -2.6 -10.1 2.4 Personal Goods
-11.9 464.88 84 724.84 -1.3 -1.3 -4.0 1043.73 -2.1 2.1 Just Eat PLC 579.00 2.00 Vodafone Group PLC 160.70 0.02
Consumer Services (91) 4709.56 -1.62 4077.76 4787.00 4797.26 5082.12 3.17 1.90 16.64 140.92 4603.54 FTSE Japan Mid Cap 322 570.96 -1.3 -2.5 -12.3-13.7 726.88
2.0 Tobacco 13 979.55 -1.9 -1.9 -30.4 2144.27 -27.7 5.6
Food & Drug Retailers (6) 3434.61 -2.29 2973.85 3515.25 3581.76 3327.77 2.17 2.07 22.33 73.06 4126.48 Kingfisher PLC 216.00 -9.40 Whitbread PLC 4451 -47.00
FTSE Global wi JAPAN Small Cap 818 613.29 -1.5 -3.7 -16.2-17.6 808.06
2.0 Health Care 202 520.78 -2.7 -2.7 3.5 771.01 5.6 2.0 Land Securities Group PLC 827.60 -13.00 Wood Group (John) PLC 534.00 -33.80
General Retailers (27) 1823.04 -3.57 1578.48 1890.53 1917.83 2405.90 4.41 1.27 17.78 77.62 2196.64
FTSE Japan 519 147.74 -1.3 -2.6 -10.5 2.3 Health Care Equipment & Services
-12.3 220.98 78 961.97 -2.5 -2.5 9.4 1137.25 10.4 1.0 Legal & General Group PLC 224.10 -5.10 Wpp PLC 870.80 1.40
Media (19) 7795.81 -0.38 6749.98 7825.78 7813.65 7679.61 3.23 2.12 14.64 212.53 5005.05
FTSE Asia Pacific Large Cap ex Japan 530 629.26 -1.4 0.2 -13.2-15.5 1029.61
3.2 Pharmaceuticals & Biotechnology 124 356.60 -2.7 -2.7 1.0 555.37 3.5 2.4 Lloyds Banking Group PLC 51.90 -0.80
Travel & Leisure (39) 8720.80 -1.68 7550.88 8869.93 8830.12 9707.71 3.03 1.98 16.68 267.07 8606.36
FTSE Asia Pacific Mid Cap ex Japan 477 807.84 -1.0 0.6 -14.7-17.2 1268.70
3.4 Consumer Services 399 461.76 -1.7 -1.7 -2.5 630.55 -1.0 1.6
Telecommunications (6) 2548.05 -0.13 2206.22 2551.31 2550.03 3349.17 7.36 0.77 17.56 171.77 3160.56 FTSE Asia Pacific Small Cap ex Japan 1465 503.67 -1.2 0.9 -16.3-18.3 774.40
3.1 Food & Drug Retailers 58 276.04 -1.9 -1.9 -5.6 397.58 -3.4 2.4
Fixed Line Telecommunications (4) 2945.05 -0.43 2549.97 2957.74 2956.03 3231.34 5.97 1.44 11.61 122.25 2923.14
Mobile Telecommunications (2) 3561.81 0.03 3083.98 3560.87 3559.22 5075.29 8.07 0.52 23.74 287.32 4009.03
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
1007 495.52
2111 681.28
-1.4
-1.1
0.3
0.7
-13.4
-13.2
-15.7 861.31
3.3 General Retailers
-15.6 1058.84
3.1 Media
131 714.85
78 320.91
-2.4
-0.9
-2.4
-0.9
3.3 945.62
-6.4 440.05
4.4
-4.9
1.2
1.7
UK STOCK MARKET TRADING DATA
Utilities (8) 6731.40 -1.33 5828.37 6821.81 6878.73 7302.63 6.43 1.27 12.26 423.31 8375.33 FTSE Emerging Large Cap 513 652.09 -1.2 0.7 -12.5-14.9 1020.48
3.0 Travel & Leisure 132 447.14 -0.9 -0.9 -6.6 619.73 -4.9 2.0 Dec 17 Dec 14 Dec 13 Dec 12 Dec 11 Yr Ago
Electricity (3) 6436.73 -2.73 5573.22 6617.22 6659.94 7683.49 8.20 0.38 31.87 532.33 10276.34 FTSE Emerging Mid Cap 505 831.04 -1.0 0.4 -13.5-16.2 1286.03
3.7 Telecommunication 89 147.12 -0.4 -0.4 -11.4 293.26 -7.5 4.8 - - - - - -
Gas Water & Multiutilities (5) 6445.17 -0.96 5580.53 6507.53 6565.05 6808.26 5.97 1.58 10.59 373.00 7991.80 FTSE Emerging Small Cap 1093 670.01 -0.9 1.3 -17.9-20.1 998.11
3.3 Fixed Line Telecommuniations 38 122.34 0.1 0.1 -9.4 270.21 -4.8 5.4 Order Book Turnover (m) 66.67 36.80 36.80 58.24 86.42 134.19
Financials (303) 4493.38 -1.22 3890.58 4549.10 4570.45 5326.96 4.38 1.73 13.16 193.41 4400.96 FTSE Emerging Europe 86 338.05 -1.1 -0.1 -13.2 565.69
-9.0 5.7 Mobile Telecommunications 51 156.17 -1.1 -1.1 -14.2 277.11 -11.0 4.0 Order Book Bargains 893934.00 857235.00 857235.00 903016.00 1007253.00 1002681.00
Banks (10) 3654.69 -1.38 3164.40 3706.01 3722.06 4502.50 4.97 1.34 15.00 182.70 2879.48 FTSE Latin America All Cap 239 833.92 -0.8 -1.3 -10.1 1337.88
-7.5 3.2 Utilities 165 279.76 -0.3 -0.3 1.4 572.43 5.1 3.5 Order Book Shares Traded (m) 1246.00 1179.00 1179.00 1233.00 1674.00 1363.00
Nonlife Insurance (10) 3420.20 -1.00 2961.37 3454.81 3460.53 3552.64 3.67 1.46 18.68 124.49 6324.97 FTSE Middle East and Africa All Cap 258 635.51 -1.3 -1.4 -16.7 3.6 Electricity
-19.0 1031.98 110 311.42 -0.2 -0.2 3.0 628.83 6.6 3.4 Total Equity Turnover (£m) 4030.54 3619.49 3619.49 4235.50 4321.16 5557.48
Life Insurance/Assurance (7) 6751.81 -1.80 5846.03 6875.61 6925.47 8933.43 5.21 1.47 13.05 345.84 6995.52 FTSE Global wi UNITED KINGDOM All Cap In 317 302.50 -1.0 -6.7 -14.9 4.4 Gas Water & Multiutilities
-18.2 536.27 55 286.26 -0.4 -0.4 -1.6 603.39 2.3 3.7 Total Mkt Bargains 1024229.00 990174.00 990174.00 1040559.00 1156620.00 1152908.00
Real Estate Investment & Services (18) 2358.88 -1.12 2042.43 2385.66 2389.12 2775.88 2.85 2.86 12.29 67.58 6548.97 FTSE Global wi USA All Cap 1856 636.04 -1.8 -3.9 -1.7 2.0 Financials
-3.4 863.46 728 222.82 -1.0 -1.0 -13.8 379.47 -11.2 3.5 Total Shares Traded (m) 3389.00 3722.00 3722.00 3635.00 3977.00 3455.00
Real Estate Investment Trusts (39) 2445.70 -1.14 2117.60 2473.78 2475.85 2804.15 4.66 1.59 13.49 112.93 3245.62 FTSE Europe All Cap 1483 381.72 -1.1 -4.4 -13.6 3.8 Banks
-16.4 644.33 244 187.58 -1.0 -1.0 -19.1 345.63 -16.2 4.3 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.
General Financial (38) 7784.77 -1.05 6740.42 7867.07 7919.11 9301.72 4.49 2.15 10.37 300.68 9373.59 FTSE Eurozone All Cap 684 369.74 -1.1 -4.4 -15.2 3.5 Nonlife Insurance
-17.6 625.53 72 254.40 -0.9 -0.9 -6.6 380.46 -4.4 2.5 (c) Market closed.
Equity Investment Instruments (181) 9629.60 -0.69 8337.77 9696.09 9746.65 9976.66 2.67 3.33 11.23 252.53 5468.56 FTSE RAFI All World 3000 3158 6259.25 -1.3 -4.0 3.4 Life Insurance
-11.6 8620.17
-9.0 55 200.97 -1.1 -1.1 -20.4 335.45 -17.8 3.7
Non Financials (330) 4396.52 -1.03 3806.71 4442.42 4466.74 4827.58 4.28 2.05 11.40 183.99 6888.12 FTSE RAFI US 1000 1025 10757.67 -1.6 -4.9 -4.6 2.7 Financial Services
-6.8 14602.48 164 283.08 -1.3 -1.3 -7.9 400.38 -6.2 2.1
Technology (15) 1719.24 -2.13 1488.60 1756.57 1773.47 2271.58 3.09 1.64 19.67 49.85 2289.89 FTSE EDHEC-Risk Efficient All-World 3203 369.27 -1.3 -3.3 -6.9 2.6 Technology
-9.0 530.60 206 261.13 -2.2 -2.2 -2.7 326.52 -1.3 1.6 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Software & Computer Services (13) 1916.93 -2.08 1659.77 1957.74 1978.43 2621.21 3.12 1.67 19.24 57.33 2699.41 FTSE EDHEC-Risk Efficient Developed Europe 590 290.00 -1.0 -5.1 -11.9 3.3 Software & Computer Services
-14.3 458.87 105 466.52 -2.2 -2.2 0.7 551.07 1.6 0.9 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Technology Hardware & Equipment (2) 2395.97 -3.11 2074.54 2472.87 2439.57 1845.24 2.37 0.94 44.87 39.43 2873.49 Oil & Gas 148 349.26 -1.6 -4.4 -10.7 593.01
-7.6 4.0 Technology Hardware & Equipment 101 188.51 -2.2 -2.2 -6.6 247.71 -4.7 2.5 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Alternative Energy 7 100.21 -0.9 -0.9 4.1 138.39 5.9 1.9 liable for any loss arising from the reliance on or use of the listed information.
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Real Estate Investment & Services 115 328.44 -0.8 -0.8 -10.8 569.11 -8.2 3.1 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 6150.49 6157.87 6148.07 6142.52 6152.05 6148.41 6138.03 6117.64 6112.07 6159.75 6100.55 The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/
FTSE 250 17237.54 17267.64 17272.58 17222.39 17201.98 17198.76 17202.15 17200.45 17190.34 17273.30 17174.94 mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC
(US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,
Data provided by Morningstar | www.morningstar.co.uk
FTSE SmallCap 4521.55 4532.71 4535.37 4533.99 4533.36 4535.15 4533.92 4535.86 4533.96 4539.04 4521.40
FTSE All-Share 3394.59 3399.14 3395.09 3390.92 3394.38 3392.73 3388.27 3379.37 3376.53 3399.58 3371.58 WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
Time of FTSE 100 Day's high:08:46:45 Day's Low15:54:30 FTSE 100 2010/11 High: 7103.98(27/04/2015) Low: 5874.06(14/12/2015) www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock Exchange
Time of FTSE All-Share Day's high:08:59:00 Day's Low16:21:00 FTSE 100 2010/11 High: 3834.45(27/04/2015) Low: 3245.99(24/08/2015) 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 APC Technology Group Pre 17.149 15.564 0.555 0.166 0.500 0.100 0.00000 0.00000 - 0.000 0.000 date price(p) Sector code Stock price(p) +/- High Low Cap (£m)
price up date High Low Stock Price p +or- Finsbury Growth & Income Trust Pre 156.009 135.965 93.600 89.600 8.10000 7.40000 Nov 9 15.300 14.200 12/14 175.00 AIM MANO Manolete Partners PLC 195.50 0.65 215.00 190.00 8518.2
There are currently no rights offers by any companies listed on the LSE. Invesco Asia Trust Int 23.847L 34.471 34.110L 43.820 0.00000 0.00000 - 5.500 4.300 12/11 100.00 SDCL Energy Efficiency Income Trust PLC 100.39 -0.39 103.00 100.00 10039.0
Kazera Global Pre 0.000 0.000 2.538L 1.098L 0.810L 0.510L 0.00000 0.00000 - 0.000 0.000 12/11 100.00 SEIT SDCL Energy Efficiency Income Trust PLC 100.39 -0.39 103.00 100.00 10039.0
Safeland Int 1.964 2.846 0.472L 0.224L 3.170L 1.490L 0.00000 0.00000 - 1.000 1.000 12/07 160.00 AJB AJ Bell PLC 231.90 -6.96 248.00 162.00 94396.3
Vordere Int 0.081 0.000 1.291L 0.504L 0.600L 0.500L 0.00000 0.00000 - 0.000 0.000 12/07 1.00 HOYE Honye Financial Services Ltd 14.50 - 0.00 0.00 357.3
12/05 28.00 AIM FCAP FinnCap Group PLC 28.25 -0.25 28.20 27.66 4752.5
11/30 40.00 AIM KRPZ Kropz PLC 42.00 0.00 45.00 42.00 10999.0
11/26 10.00 HERT Hertsford Capital PLC 11.75 0.00 12.50 10.75 376.0
11/22 0.75 GST Golden Saint Technologies Ltd 0.68 -0.05 0.90 0.60 672.0
11/14 100.00 MGCI M&G Credit Income Investment Trust PLC 103.00 -0.28 103.75 101.03 10300.0
11/06 121.00 AIM RENX Renalytix AI PLC 107.50 0.00 122.40 85.00 5785.2

Figures in £m. Earnings shown basic. Figures in light text are for corresponding period year earlier. §Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/ir
For more information on dividend payments visit www.ft.com/marketsdata For a full explanation of all the other symbols please refer to London Share Service notes.
16 ★ FINANCIAL TIMES Tuesday 18 December 2018

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 30.05 -0.17 39.33 28.85 6.44 5.91 218703.9 Lockheed♦ 285.93 -1.77 363.00 277.20 2.71 28.00 81327.09
ANZ♦ 24.41 -0.39 30.39 24.13 6.39 10.65 50266.09 Nokia 5.22 -0.06 5.39 3.85 3.61 -26.32 33323.76 AstellasPh 1660.5 4.50 2056 1379.5 2.14 18.31 29092.89 AtlasCpcoB 195.48 -1.06 339.70 187.74 5.23 13.18 8436.42 AutomData♦ 135.69 0.87 153.51 107.61 1.88 36.16 59395.92 Lowes 92.79 -0.57 117.70 81.16 1.89 20.89 74506.38
BHPBilltn 33.53 1.13 35.68 28.03 3.81 20.23 77325.41 SampoA 38.87 -0.19 48.92 37.61 6.58 9.19 24418.59 Bridgestne 4539 33.00 5515 3906 3.39 11.49 30589.5 Ericsson 81.26 -0.94 85.66 49.04 1.21 -12.87 27612.24 Avago Tech 259.52 4.69 274.26 197.46 2.32 9.99 107297.7 Lyondell 83.74 1.40 121.95 81.05 4.50 5.78 32127.49
CmwBkAu 69.26 0.45 82.66 65.23 6.10 13.54 88037.85 France (€) Canon 3171 21.00 4422 3102 4.70 15.10 37428 H&M 142.80 -13.32 173.40 117.10 6.56 18.80 23068.98 BakerHu 57.68 3.17 68.59 43.09 - -346.53 24541.87 Marathon Ptl 60.16 0.29 88.45 58.13 2.86 7.88 41561.75
CSL 183.74 3.59 232.69 138.92 1.03 36.27 59760.83 Airbus Grpe 87.65 -1.02 111.16 81.33 1.68 30.30 77143.03 CntJpRwy 23485 590.00 24390 19105 0.57 11.40 42813.36 Investor 383.20 -4.90 419.90 348.00 2.05 7.13 19303.96 BankAm♦ 24.86 0.38 33.05 24.12 1.98 12.18 243980.93 Marsh&M 82.90 -0.10 89.59 77.11 1.36 28.67 41757.4
NatAusBk 23.55 -0.14 30.64 23.28 8.19 11.63 46236.11 AirLiquide 106.35 -0.85 115.25 97.12 2.45 19.98 51642.22 Denso 5091 -41.00 7218 4860 2.55 14.72 35499.36 Nordea Bk 96.86 -0.80 111.30 82.92 7.25 11.87 44109.93 Baxter♦ 65.78 0.08 78.38 61.05 1.03 30.78 35006.52 MasterCard 192.40 -2.93 225.35 149.89 0.50 40.19 196427.22
Telstra 2.90 0.03 3.79 2.60 7.79 9.84 24766.01 AXA 19.02 -0.18 27.69 18.86 6.52 7.89 52608.76 EastJpRwy 10220 150.00 11615 9351 1.36 14.07 34532.95 SEB 88.02 -0.18 102.70 79.16 6.42 8.95 21124.79 BB & T 45.83 0.17 56.31 45.10 3.13 12.77 35317.5 McDonald's 183.36 0.07 190.88 146.84 2.13 28.68 141354.1
Wesfarmers 31.94 0.66 37.87 28.91 6.86 14.14 26004.09 BNP Parib 40.58 -1.02 68.66 40.30 7.32 7.15 57494.9 Fanuc 16910 5.00 33450 16845 3.13 19.15 30533.89 SvnskaHn 102.55 -0.35 118.65 92.84 5.27 11.97 21650.67 BectonDick♦ 229.86 -1.60 264.68 209.91 1.26 396.14 61660.43 McKesson♦ 114.63 -2.03 178.86 114.08 1.19 188.15 22395.98
Westpc♦ 24.65 -0.23 31.74 24.52 7.43 10.99 60795.7 ChristianDior 333.50 -1.10 382.70 291.60 1.47 24.03 68244.61 FastRetail 60990 220.00 61930 38900 0.71 40.71 57251.61 Swedbank 203.00 -2.00 221.70 177.15 6.30 10.85 25415.12 BerkshHat 301000 680.00 335900280427.97 - 8.26 220678.75 Medtronic 92.93 -0.79 100.15 76.41 2.04 56.38 124809.21
Woolworths 28.64 0.33 31.48 26.16 3.19 23.66 27092.55 Cred Agr 9.91 -0.23 14.96 9.85 6.25 8.73 32206.03 Fuji Hvy Ind 2465.5 -15.00 3857 2401 5.62 10.94 16782.33 Telia Co 43.47 -0.01 44.02 35.42 4.86 16.87 20817.75 Biogen 321.91 7.36 388.67 249.17 - 21.54 64858.25 Merck♦ 76.54 0.06 80.19 52.83 2.43 63.32 199032.82
Belgium (€) Danone 63.23 -0.85 72.13 61.81 2.96 15.27 49105.03 Hitachi 3221 -31.00 4721 762.20 1.43 5.83 27555.01 Volvo 116.60 -1.00 167.65 114.55 3.58 8.77 21275.69 BkNYMeln 49.64 0.97 58.99 45.16 1.85 12.49 49082.91 Metlife 39.63 0.74 55.21 38.69 4.00 8.16 39108.4
AnBshInBv 61.07 -1.20 96.70 60.89 6.04 - 117226.08 EDF 14.20 -0.04 15.73 9.83 3.19 18.51 48458.6 HondaMtr 3050 -4.00 4151 2916 3.38 4.98 48892.54 BlackRock♦ 386.15 3.85 594.52 376.31 2.85 11.44 60900.6 Microsoft 105.33 -0.70 116.18 83.83 1.54 44.82 808536.12
Switzerland (SFr)
KBC Grp 58.94 -1.52 78.80 58.62 5.01 10.98 27789.05 Engie SA 12.87 -0.04 14.82 11.31 5.35 27.82 35517.05 JapanTob 2871 12.50 3736 2784.5 4.92 13.79 50814.16 Boeing 326.30 7.55 394.28 293.01 1.94 19.86 185301 Mnstr Bvrg 52.54 -0.15 70.22 47.61 - 32.34 29052.7
ABB 19.25 -0.35 27.24 18.61 4.09 19.06 41967.33
Esslr Intl 128.75 1.30 129.55 100.60 1.18 38.25 32686.21 KDDI 2665.5 26.50 3187 2331.5 3.43 11.33 59726.19 BrisMySq 52.22 0.10 70.05 46.94 2.96 60.67 85225.26 MondelezInt 43.61 0.06 46.54 37.42 2.04 20.13 63394.49
Brazil (R$) CredSuisse 11.08 -0.12 18.81 10.80 2.22 -53.60 28484.4
Hermes Intl 476.80 -9.00 614.60 417.90 0.85 38.40 57062.61 Keyence 57180 -260.00 72400 50780 0.25 32.21 61533.7 CapOne 78.45 -0.28 106.50 77.23 1.97 10.95 37158.35 Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29
Ambev 16.12 0.06 24.56 14.54 3.17 25.41 64826.97 Nestle 82.88 -0.96 86.50 72.92 2.71 32.58 255329.6
LOreal 203.30 -1.00 214.40 170.30 1.72 28.77 129145.17 MitsbCp 3145 -1.00 3638 2776 3.82 8.44 44254.8 CardinalHlth 48.99 -1.07 75.75 48.14 3.71 21.20 14596.15 MorganStly 40.48 0.84 59.38 39.06 2.51 9.99 69631.87
Bradesco 33.50 -0.34 36.80 22.33 1.12 12.56 28790.8 Novartis 85.78 -1.24 92.80 71.84 3.34 15.62 220057.94
LVMH 250.10 -1.85 313.70 232.50 1.97 21.33 143188.15 MitsubEst 1870 23.50 2218 1682 1.39 19.20 23019.83 Carnival 56.88 0.55 72.70 53.47 3.24 13.11 29967.48 MylanNV 29.38 0.33 47.82 28.77 - 29.21 15149.25
Cielo 9.37 -0.07 28.25 8.47 10.27 6.75 6511.47 Richemont 62.58 -0.98 99.02 62.10 2.76 26.38 32855.68
Orange 14.44 -0.11 15.25 13.32 4.43 21.58 43529.62 MitsubishiEle 1306 13.50 2179 1260 2.95 11.50 24816.32 Caterpillar 127.14 0.37 173.24 112.06 2.43 20.97 75026.17 Netflix 271.09 4.25 423.21 185.22 - 100.12 118220.42
ItauHldFin 30.25 -0.19 91.62 29.25 1.24 13.17 38365.07 Roche 248.20 -1.70 260.35 206.35 3.20 21.31 175384.52
PernodRic 146.65 -1.75 150.40 120.05 1.40 25.10 44126.1 MitsuiFud 2753.5 17.50 3082 2395.5 1.47 16.09 24158.3 CBS 47.68 -0.37 61.59 47.34 1.46 13.04 16053.93 NextEraE 178.96 -2.28 184.20 145.10 2.33 10.53 85533.08
Petrobras 26.49 0.16 31.80 15.56 0.19 28.37 50428.58 Swiss Re 88.66 -0.90 98.80 84.20 5.42 183.05 30195.63
Renault 54.66 -0.99 100.80 54.44 6.39 3.25 18324.45 MitUFJFin 583.90 0.80 894.40 579.40 3.46 6.41 71450.84 Celgene 69.46 1.26 110.20 66.62 - 18.23 48570.03 Nike♦ 71.64 -0.89 86.04 60.13 1.08 58.14 91202.49
Vale 51.98 1.10 62.42 36.36 4.90 18.09 37627.41 Swisscom 477.70 -0.10 530.60 427.00 4.40 17.02 24888.9
Safran 107.60 -0.60 122.25 81.04 1.46 22.51 54120.28 Mizuho Fin 179.70 0.40 220.70 177.70 4.02 7.64 40380.93 CharlesSch 41.41 0.22 60.22 40.08 0.96 19.55 55922.25 NorfolkS 148.54 -2.34 186.91 127.79 1.86 7.45 40454.41
Canada (C$) Syngent 453.40 0.90 471.20 402.50 - -437.40 43035.76
Sanofi 77.42 -0.82 80.17 62.88 3.85 30.39 109903.3 Murata Mfg 16340 290.00 20255 13680 1.59 22.18 32574.65 Charter Comms 310.13 0.71 396.64 250.10 - 8.73 70994.24 Northrop♦ 262.04 -0.67 360.88 245.57 1.66 17.34 45495.31
BCE♦ 55.90 -0.32 61.89 50.72 5.34 18.31 37526.65 UBS 12.33 -0.18 19.77 12.15 5.19 28.46 47792
Sant Gbn 29.00 -0.60 48.60 28.82 4.41 8.03 17969.38 NipponTT 4727 31.00 5451 4050 3.26 10.65 81588.63 Chevron Corp 114.70 0.87 133.88 107.54 3.74 15.96 219165.82 NXP♦ 77.80 0.23 125.93 69.72 0.31 10.23 26917.29
BkMontrl 89.94 0.04 109.00 89.33 4.23 10.95 42983.59 Zurich Fin 291.40 -6.20 321.80 288.70 5.67 14.01 44357.87
Schneider 60.36 -0.64 78.56 57.66 0.31 15.29 39628.6 Nissan Mt 929.90 -2.60 1197 912.10 5.69 5.27 34733.11 Chubb 129.33 1.21 157.50 120.50 2.15 12.20 59595.96 Occid Pet♦ 65.50 0.40 87.67 62.47 4.56 13.31 49457.07
BkNvaS 71.91 -0.09 83.22 69.02 4.59 10.49 65958.18 Nomura 461.80 0.60 756.50 447.10 2.92 16.05 14890.26 Taiwan (NT$) Cigna 202.53 -2.84 227.13 163.02 0.02 18.63 49322.99 Oracle 46.67 0.07 53.48 42.57 1.58 49.59 176815.74
SFR Group 34.50 - 34.56 21.87 - -23.02 17905.81
Brookfield♦ 54.68 -0.74 59.15 46.71 1.40 16.58 40615.22 Nppn Stl 1991 -5.50 3132 1923 3.87 7.70 16744.16 Chunghwa Telecom 107.50 - 115.00 104.50 4.36 23.80 27017.17 Cisco 45.33 -0.50 49.47 37.35 2.79 148.14 203779.47 Pepsico♦ 114.52 0.57 122.51 95.94 2.93 34.03 161652.77
SocGen 29.03 -0.83 47.51 28.93 7.46 9.22 26583.77
CanadPcR 242.75 -2.46 289.90 212.50 1.00 14.68 25825.93 NTTDCMo 2572 13.00 3095 2406 3.93 12.78 86089.13 Formosa PetChem 112.50 1.50 151.00 106.00 5.47 12.54 34719.55 Citigroup 55.79 0.77 80.70 54.45 2.44 -29.58 140401.42 Perrigo♦ 57.87 0.88 95.93 55.51 1.22 68.78 7862.02
Total 48.62 -0.49 56.82 43.09 5.21 13.54 145413.76
CanImp 106.57 -0.63 125.21 105.55 5.02 9.10 35282.68 Panasonic 1087 -4.50 1740.5 1048.5 3.10 11.43 23597.07 HonHaiPrc 71.10 -0.40 97.40 68.10 3.44 7.29 31932.98 CME Grp♦ 188.52 0.88 197.08 143.68 1.42 14.71 64252.88 Pfizer 43.71 -0.09 46.47 33.20 2.96 11.44 252664.54
UnibailR 190.00 0.35 236.45 177.35 5.43 8.02 22215.04
CanNatRs♦ 33.47 -0.81 49.08 32.08 3.83 10.93 30175.59 Seven & I 4923 50.00 5203 4275 1.86 22.83 38619.06 MediaTek 235.00 -1.00 374.50 199.50 3.12 13.94 12116.83 Coca-Cola 49.21 -0.13 50.84 41.45 3.03 69.71 209463.05 Phillips66 86.76 -0.07 123.97 85.76 3.34 6.79 40007.23
Vinci 72.36 -1.16 88.80 70.98 3.33 13.65 49012.41
CanNatRy♦ 101.87 -1.69 118.62 90.84 1.75 13.10 55453.21 ShnEtsuCh 9149 102.00 13175 8100 1.84 12.91 34621 TaiwanSem 223.50 1.00 268.00 210.00 3.50 16.82 187758.26 Cognizant 66.08 -1.69 85.10 65.14 1.10 27.78 38262.17 PhilMorris 82.47 -0.04 111.25 76.21 5.18 19.83 128193.81
Vivendi 21.03 -0.26 24.87 20.26 2.11 22.73 31137.62
Enbridge 42.75 -0.02 51.04 37.36 6.14 45.93 58429.09 Softbank 8540 44.00 11500 7540 0.50 5.63 83182.65 Thailand (THB) ColgtPlm 63.92 -1.25 77.91 57.41 2.48 27.31 55439.09 PNCFin 120.02 1.52 163.59 116.55 2.58 10.25 55380.17
GtWesLif♦ 27.62 -0.12 35.59 27.61 5.56 10.33 20406.77 Germany (€)
Sony 5839 -16.00 6973 4959 0.49 11.59 65628.61 PTT Explor 48.00 0.25 59.50 43.00 3.94 11.48 41818.51 Comcast 36.73 0.39 44.00 30.43 1.92 7.42 166756.42 PPG Inds 99.94 -0.20 122.07 94.37 1.77 21.00 23974.09
ImpOil♦ 35.57 0.79 44.91 33.43 1.97 21.80 20983.38 Allianz 175.28 -1.56 206.85 170.12 4.49 11.44 84342.42
SumitomoF 3939 22.00 5333 3857 4.27 7.00 48780.91 United Arab Emirates (Dhs) ConocPhil 64.49 -0.06 79.96 50.18 1.68 13.34 74243.59 Praxair♦ 164.50 -0.99 169.75 140.00 1.97 33.57 47306.22
Manulife♦ 19.71 0.02 27.77 19.51 4.39 16.14 29242.21 BASF 59.24 -0.86 98.80 57.35 5.00 9.08 61682.42
Takeda Ph 3943 -38.00 6693 3662 4.39 22.96 27730.18 Emirtestele 16.90 -0.08 18.00 15.80 4.56 17.55 40013.42 Corning 31.74 0.31 36.56 26.11 2.12 -44.35 25404.67 Priceline 1905.64 -1.38 2067.99 1612.41 - 30.70 92937.2
Potash 25.78 -0.05 26.41 20.68 7.65 -47.36 16841.05 Bayer 64.00 0.64 108.47 60.27 4.27 10.66 67659.73
TokioMarine 5383 40.00 5737 4689 3.04 15.78 34284.47 United Kingdom (p) Costco 207.25 0.19 245.16 175.79 1.00 30.13 90818.69 ProctGmbl 94.64 -2.00 96.90 70.73 2.88 25.55 235786.88
RylBkC 94.27 -0.05 108.52 93.13 4.02 11.22 101544.41 BMW 74.00 -0.27 97.50 69.64 5.32 5.81 50501.23
Toyota 6840 11.00 7806 6396 3.09 7.90 197512.4 CrownCstl♦ 113.32 -1.23 117.60 98.85 3.58 110.55 47010.85 Prudntl 82.65 0.28 127.14 81.24 4.04 5.31 34134.45
Suncor En♦ 39.53 -0.09 55.47 39.24 3.54 13.08 47797.93 Continental 122.80 0.15 257.40 120.70 3.61 8.19 27843.16 AscBrFd♦ 2110 -70.00 2905 2092 1.96 16.55 21065.79
Mexico (Mex$) CSX 65.08 -0.75 76.24 48.43 1.28 9.13 54954.88 PublStor♦ 203.18 -0.29 234.90 180.48 3.81 28.32 35427.38
ThmReut 67.74 -0.81 71.54 51.43 2.90 25.84 25569.62 Daimler 47.42 0.05 76.48 45.07 7.63 5.64 57511.75 AstraZen 6043 -87.00 6432 4544.5 3.49 41.15 96513.7
AmerMvl 14.38 0.01 18.20 12.32 3.40 16.09 32117.6 CVS 71.89 0.01 83.88 60.14 2.69 24.53 73241.36 Qualcomm♦ 58.19 0.57 76.50 48.56 3.96 -18.12 70535.74
TntoDom 69.35 -0.23 80.05 69.09 3.78 11.48 95076.06 Deut Bank 7.66 -0.19 17.13 7.24 1.42 -7.29 17947.28 Aviva 368.50 -8.50 554.60 364.00 7.44 13.30 18650.09
FEMSA UBD 166.07 -3.50 189.49 158.17 1.57 15.89 17858.5 Danaher 101.39 0.99 110.86 91.84 0.59 26.95 71064.53 Raytheon 169.88 0.03 229.75 162.31 1.90 20.47 48343.94
TrnCan 53.13 -0.42 62.31 48.92 5.08 14.35 36281.68 Deut Tlkm 15.22 0.11 15.60 12.72 4.20 22.09 82127.64 Barclays 152.84 -5.60 220.10 151.16 2.94 72.78 32889.72
WalMrtMex 48.41 -0.02 57.60 43.58 1.50 22.86 42060.85 Deere 149.58 0.57 175.26 128.32 1.60 24.35 48115.93 Regen Pharm 384.04 2.87 416.49 281.89 - 29.13 40832.37
ValeantPh 30.80 -1.06 36.02 14.01 - -4.99 8158.48 DeutsPost 24.84 -0.25 41.36 24.55 4.55 12.38 34600.1 BP♦ 508.60 -4.10 603.20 452.50 6.05 15.40 127834.03
Delphi 14.89 0.33 60.39 14.23 3.31 4.88 1317.65 S&P Global 166.40 -0.22 217.31 164.99 1.11 25.57 41749.76
E.ON 8.97 -0.26 9.95 7.88 3.29 7.27 22382.54 Netherlands (€) BrAmTob 2628 -32.00 5108 2619 7.52 1.44 76014.99
China (HK$) Delta 53.16 -0.35 61.32 48.52 2.30 10.80 36447.49 Salesforce 135.08 -1.96 161.08 101.32 - 147.16 103333.6
Fresenius Med 59.50 -0.66 93.82 58.94 1.77 9.47 20782.68 Altice 1.99 -0.04 3.63 1.22 - 28.92 3513.03 BSkyB 1727.5 1.50 1740 893.50 0.76 36.60 38843.72
AgricBkCh 3.44 0.01 5.02 3.35 5.75 5.22 13535.84 Devon Energy 26.44 0.60 46.54 25.36 1.02 -66.67 12376.87 Schlmbrg♦ 39.71 0.61 80.35 38.81 4.87 -87.37 54990.48
Fresenius SE 42.00 -0.01 71.36 38.28 1.76 11.93 26414.51 ASML Hld 144.48 0.40 189.50 138.70 0.96 25.49 70002.41 BT 250.05 -1.50 278.50 201.25 6.16 11.02 31287.43
Bk China 3.32 0.01 4.96 3.20 5.91 5.12 35537.79 DiscFinServ 60.86 -0.96 81.93 60.54 2.30 9.30 20446.81 Sempra Energy 117.83 -0.66 127.22 100.49 2.88 -69.23 32245.38
HenkelKgaA 86.05 -2.70 105.10 82.45 2.02 15.62 25343.14 Heineken 79.00 -1.32 93.54 75.44 1.83 22.75 51585.64 Compass 1663.5 -19.50 1722 1396.5 2.04 23.27 34500.8
BkofComm 5.82 0.01 7.13 5.33 5.47 3.35 26083.84 Disney♦ 112.42 0.22 120.20 97.68 1.45 13.91 167356.39 Shrwin-Will 385.69 -0.31 479.64 355.28 0.86 19.91 36110.73
Linde 139.95 0.65 146.50 132.45 - 33.28 88552.14 ING 9.91 -0.31 16.69 9.74 6.65 7.69 43729.6 Diageo 2809 -16.00 2885 2345.5 2.26 23.54 88030.85
BOE Tech 0.87 -0.03 1.78 0.83 - 20.78 22.16 DominRes♦ 75.36 -1.57 85.30 61.53 4.20 16.13 49468.55 SimonProp 180.20 -2.46 191.49 145.78 4.16 25.18 55735.21
MuenchRkv 187.20 -1.00 200.30 174.85 4.52 42.10 31734.82 Unilever 48.50 -0.97 50.16 42.13 2.97 22.72 94269.11 GlaxoSmh♦ 1467.6 -12.40 1648.8 1236.4 5.45 38.77 91019.03
Ch Coms Cons 7.69 0.11 9.78 6.96 3.63 5.47 4358.34 DowDupont 53.24 0.46 77.08 51.32 2.76 148.79 122145.54 SouthCpr 32.17 0.47 58.09 31.11 3.76 26.61 24868.84
SAP 88.66 -1.28 108.52 82.05 1.56 25.21 123475.74 Norway (Kr) Glencore 292.95 3.30 416.90 268.35 3.52 9.21 53290.62
Ch Evrbrght 3.48 0.07 4.76 3.14 5.86 5.66 5648 DukeEner 89.44 -1.31 91.35 71.96 3.89 22.50 63759.77 Starbucks 65.46 0.12 68.98 47.37 1.86 20.89 81209.68
Siemens 99.58 -0.62 125.70 96.51 3.66 13.04 95955.16 DNB 143.55 -1.95 174.20 138.90 5.07 9.83 26700.08 HSBC 648.80 -4.70 798.60 596.40 5.98 15.80 164106.45
Ch Rail Cons 11.06 0.16 11.12 7.53 1.90 8.26 2939.54 Eaton 70.64 0.06 89.85 69.45 3.53 14.94 30615.38 StateSt 64.92 1.39 114.27 62.16 2.58 10.71 24639.46
Volkswgn 146.00 -0.50 191.80 129.60 2.63 6.50 48840.98 Equinor 190.35 -4.00 234.60 169.20 3.94 11.24 73676.81 Imperial Brands 2335 -36.50 3193.5 2298 7.53 16.31 28084.34
Ch Rail Gp 7.39 - 8.01 5.25 1.77 8.64 3980.06 eBay 28.94 0.03 46.99 26.36 - -46.04 27864.22 Stryker 164.29 -2.27 179.84 146.80 1.11 52.43 61475.23
Hong Kong (HK$) Telenor 170.40 0.30 191.70 148.10 4.63 17.26 29068.54 LlydsBkg 51.90 -0.80 72.68 51.54 6.01 9.27 47170.67
ChConstBk 6.45 0.01 9.39 6.02 5.10 5.76 198500.56 Ecolab♦ 152.29 -1.72 162.91 125.74 1.04 28.84 43992.48 Sychrony Fin 23.99 -0.11 40.59 23.71 2.66 7.88 17242.37
AIA 63.75 -0.30 75.00 58.20 1.31 17.18 98554.52 Natl Grid♦ 835.30 -8.20 895.10 733.00 5.50 8.50 35415.29
China Vanke 27.85 -0.35 42.85 21.50 3.64 9.05 4687.83 Qatar (QR) Emerson 59.97 -0.48 79.70 59.35 3.13 17.92 37547.6 Target 66.15 -1.02 90.39 62.35 3.73 11.17 34519.29
BOC Hold 29.85 -0.05 42.15 28.90 4.15 10.67 40398.8 Prudential 1394 -21.50 1992.5 1384 3.37 15.95 45483.67
ChinaCitic 4.82 0.03 6.82 4.61 5.98 4.99 9182.29 QatarNtBk 198.00 2.00 200.50 116.66 2.72 15.74 50228.31 EOG Res 99.47 -0.62 133.53 96.54 0.69 12.03 57680.06 TE Connect 73.52 0.52 108.23 72.07 2.21 10.39 25220.96
Ch OSLnd&Inv 27.25 0.05 32.20 22.35 2.79 7.42 38217.42 RBS 208.20 -3.40 304.20 200.10 0.96 33.56 31418.02
ChinaLife 16.50 -0.06 27.20 15.44 2.82 11.54 15716.65 Russia (RUB) EquityResTP 69.31 -0.63 72.75 54.97 2.96 39.82 25536.62 Tesla Mtrs 361.82 -3.89 387.46 244.59 - -35.33 62136.75
ChngKng 57.50 0.05 75.30 50.30 2.81 5.60 27184.98 ReckittB 6176 -88.00 7174 5255 2.66 12.66 54847.27
ChinaMBank 31.70 -0.25 39.50 26.40 2.96 9.28 18629.1 Gzprm neft 153.53 -1.87 176.95 128.19 5.16 3.00 54491.22 Exelon 46.34 -0.72 47.40 35.57 2.84 12.38 44811.23 TexasInstr 94.48 0.22 120.75 87.90 2.54 20.92 90752.13
Citic Ltd 13.02 0.08 13.28 10.22 2.63 9.44 48483.58 RELX 1639 10.00 1750.5 1399 2.40 19.96 40695.17
ChinaMob 75.25 0.30 84.05 67.85 3.98 11.66 197231.11 Lukoil 5100 - 5342 3262.5 4.15 6.36 57345.77 ExpScripts 97.61 -0.61 101.73 66.93 - 11.79 55038.37 TheTrvelers♦ 121.41 0.86 150.55 119.67 2.37 14.01 32159.42
Citic Secs 14.50 -0.08 22.95 11.62 3.10 14.84 4228.83 RioTinto 3762.5 87.00 4541 3460.5 5.79 7.80 63639.15
ChinaPcIns 26.40 - 42.40 26.15 3.44 13.28 9378.82 MmcNrlskNckl 13349 189.00 13490 8824 1.85 11.45 31670.14 ExxonMb 75.43 -0.15 89.30 72.16 4.08 14.34 319356.07 ThrmoFshr♦ 234.49 0.30 253.91 189.09 0.27 38.25 94400.14
CK Hutchison 79.65 0.45 107.00 75.05 3.40 8.69 39317.42 RollsRoyce♦ 807.80 -0.80 1104.5 750.00 1.45 7.16 18946.48
ChMinsheng 5.58 0.02 7.79 5.29 1.51 4.33 5943.02 Novatek 1117.1 -6.70 1215 656.30 1.32 20.66 50851.93 Facebook 144.44 0.38 218.62 126.85 - 22.49 347022.79 TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69
CNOOC 12.68 -0.12 15.78 10.68 3.68 14.81 72468.63 RylDShlA♦ 2322 -20.50 2755 2168.5 6.22 11.90 134616.51
ChMrchSecs RMB 13.86 -0.03 20.69 11.13 2.42 24.22 9848.89 Rosneft 416.00 -2.00 522.80 281.65 2.56 9.51 66098.93 Fedex♦ 185.56 1.45 274.66 181.60 1.46 10.80 48898 TJX Cos 44.88 -0.35 56.37 36.41 1.55 18.63 55337.39
HangSeng 177.80 -0.40 216.80 174.60 3.64 15.88 43512.99 Shire 4532.5 -140.50 4780 2940.5 0.60 11.24 52216.53
Chna Utd Coms RMB 5.26 0.02 7.42 4.63 0.37 76.12 16156.68 Sberbank 182.30 -2.63 285.00 166.00 6.48 4.76 58999.5 FordMtr 8.67 0.15 13.48 8.17 6.69 5.78 33941.96 T-MobileUS 65.69 0.04 70.94 55.09 - 11.88 55730.94
HK Exc&Clr 231.20 -1.00 18396.39 195.60 2.22 33.62 37012.83 StandCh 590.00 -14.70 864.20 514.20 1.42 22.71 24529.64
ChShenEgy 18.16 -0.02 25.75 16.04 5.76 7.36 7900.38 Surgutneftegas 28.10 0.10 30.92 26.04 2.17 2.52 15051 Franklin 31.58 0.21 45.96 28.12 2.82 23.49 16174.45 UnionPac♦ 140.29 -2.28 165.63 121.22 2.02 9.74 103362.3
MTR 41.20 0.15 7466.04 37.50 2.59 15.81 32375.22 Tesco 190.25 -2.65 266.80 190.05 1.58 16.81 23431.71
ChShpbldng RMB 4.23 0.02 6.45 3.81 0.25 79.29 11255.15 GenDyn 166.61 -2.36 230.00 164.76 2.11 16.78 49341.51 UPS B 98.66 0.00 135.53 97.10 3.49 16.32 68588.35
SandsCh 34.80 -0.50 49.35 29.85 5.45 19.79 35996.21 Saudi Arabia (SR) Vodafone♦ 160.70 0.02 239.65 142.60 8.40 -31.38 54056.6
ChStConEng RMB 6.32 0.15 7.75 4.91 2.36 8.46 38121.28 GenElectric 7.23 0.13 19.39 6.66 6.42 -2.15 62876.93 USBancorp 48.84 0.09 58.50 48.31 2.51 12.63 78929.98
SHK Props 113.90 0.40 139.60 99.50 3.51 6.95 42240.69 AlRajhiBnk 87.10 0.90 92.40 63.90 4.39 15.32 37735.28 WPP 870.80 1.40 1474 802.60 6.89 5.84 13903.98
ChUncHK 8.68 -0.01 11.94 8.10 0.66 41.94 33997.58 GenMills 37.58 0.20 60.69 37.22 5.06 10.76 22406.32 UtdHlthcre 262.64 -2.38 287.94 208.48 1.22 21.30 252668.66
Tencent 308.80 - 476.60 251.40 0.26 31.54 376323.43 Natnlcombnk 48.45 0.95 49.95 33.67 1.18 15.40 38751.72 United States of America ($)
CNNC Intl RMB 5.38 0.05 7.73 5.19 2.02 19.92 12135.12 GenMotors♦ 35.38 0.28 45.52 30.56 4.15 38.92 49935.46 UtdTech 118.17 -0.63 144.15 115.40 2.29 19.65 94652.3
SaudiBasic 123.80 2.80 131.40 100.80 3.24 17.92 99018.87 21stC Fox A 49.25 0.19 50.15 34.12 0.71 19.22 52055.9
CSR 7.81 - 8.82 5.81 2.11 18.24 4369.93 India (Rs) GileadSci♦ 66.94 1.37 89.54 64.27 3.11 41.71 86590.63 ValeroEngy 74.01 0.71 126.98 71.25 3.87 7.52 31403.05
SaudiTelec 90.50 2.80 93.50 66.90 4.22 18.47 48256.38 3M 197.69 1.59 259.77 181.98 2.57 27.40 115113.74
Daqin RMB 7.98 0.02 10.48 7.51 5.71 8.57 17191.81 Bhartiartl 315.20 - 547.50 276.85 1.62 218.65 17602.39 GoldmSchs♦ 170.63 -2.14 275.31 168.06 1.76 12.50 63469.88 Verizon 56.71 -0.37 61.58 46.09 4.05 7.47 234326.58
Gree Elec Apl 0.02 0.00 0.08 0.02 - -0.32 36.68 HDFC Bk 2130.2 - 2220 1809.3 0.61 30.15 80901.56 Singapore (S$) AbbottLb 70.58 -0.18 74.92 54.84 1.51 162.18 123954.61 Halliburton♦ 29.35 0.35 57.86 28.17 2.37 151.75 25711.96 VertexPharm 170.87 0.81 194.92 142.05 - 70.39 43667.2
GuosenSec RMB 8.77 - 14.13 6.71 1.66 25.83 10421.13 Hind Unilevr 1850.7 - 1869.5 1281.1 0.96 77.93 55966.98 DBS 23.94 0.25 31.28 22.65 4.87 10.94 44518.89 Abbvie 86.51 0.90 125.86 77.50 3.66 18.56 130129.75 HCA Hold♦ 124.10 -2.63 147.42 84.72 0.82 14.32 42710.32 VF Cp♦ 74.51 -0.64 97.00 72.09 2.15 44.65 29566.04
HaitongSecs 8.13 -0.06 13.58 6.31 3.20 14.24 3548.34 HsngDevFin 1960.35 - 2052.95 1644.5 0.93 20.09 47080.78 JardnMt US$ 67.40 0.95 67.90 55.80 2.25 16.41 49654.77 Accenture 154.52 -1.01 175.64 146.05 1.67 25.12 102837.21 Hew-Pack♦ 22.23 0.22 27.08 19.31 2.47 6.91 34534.18 Viacom♦ 28.62 0.05 35.55 26.56 2.70 7.06 10115.4
Hngzh HikVDT RMB 27.74 -0.23 44.59 22.32 1.75 24.72 31784.98 ICICI Bk 358.45 - 375.30 256.50 0.80 57.48 32247.31 JardnStr US$ 37.03 0.45 41.49 31.55 0.84 13.37 41027.43 Adobe 228.72 -1.29 277.61 172.92 - 48.70 111643.46 HiltonWwde♦ 72.48 0.62 88.11 66.01 0.80 16.54 21495.39 Visa Inc 134.02 -1.08 151.56 111.02 0.60 31.35 235496.85
Hunng Pwr 4.82 -0.03 6.18 4.04 2.29 22.53 2900.14 Infosys 694.40 - 754.90 499.20 2.48 17.60 42379.97 OCBC 11.34 0.22 14.04 10.36 3.34 10.51 34580.77 AEP 78.82 -1.19 81.05 62.71 3.04 20.53 38866.84 HomeDep 171.80 -0.49 215.43 167.00 2.29 19.00 194050.61 Walgreen 77.99 -0.75 86.31 59.07 2.04 15.92 73762.17
IM Baotou Stl RMB 1.57 0.01 2.59 1.44 0.31 24.95 7206.88 ITC 279.85 - 322.95 252.50 1.67 30.83 47873.41 SingTel 3.06 0.02 3.66 3.02 5.56 16.06 36370.26 Aetna 212.70 0.70 213.36 166.89 0.92 19.50 69637.98 Honywell 137.14 0.70 166.76 134.42 2.10 39.95 101523.14 WalMartSto♦ 91.88 0.03 109.98 81.78 2.22 53.50 266935.29
In&CmBkCh 5.54 0.04 7.64 5.10 4.85 6.15 61550.86 L&T 1408 - 1470 1175 1.96 27.19 27580.01 UOB 24.92 0.64 30.37 23.80 3.71 11.10 30449.91 Aflac 44.83 0.22 48.19 41.41 2.17 7.32 34128.15 HumanaInc 304.32 4.39 355.88 242.00 0.60 28.74 41748.71 WellsFargo 47.13 0.59 66.31 46.12 3.16 12.55 221852.42
IndstrlBk RMB 15.86 0.07 19.98 13.73 3.97 5.76 43787.61 OilNatGas 148.25 - 212.85 134.75 4.03 8.72 26579.04 South Africa (R) AirProd 157.17 1.76 175.17 148.44 2.62 24.66 34504.09 IBM 118.10 -1.80 171.13 114.09 5.03 19.51 107326 Williams Cos♦ 23.65 0.20 33.67 23.32 5.40 9.82 28629.32
Kweichow RMB 590.52 -2.44 803.50 509.02 1.81 24.03 107496.24 RelianceIn 1129.9 - 1329 862.65 0.51 18.52 100054.5 Firstrand 64.50 -1.20 77.25 55.00 4.13 13.62 25106.22 Alexion 113.78 4.35 140.77 102.10 - 170.51 25382.82 IllinoisTool 129.90 -1.14 179.07 119.38 2.49 24.16 43101.01 Yum!Brnds 90.34 -1.36 94.13 75.88 1.48 19.10 28213.35
Midea 1.60 - 1.90 1.40 2.97 28.05 44.04 SBI NewA 289.50 - 332.75 232.35 - -19.93 36094.87 MTN Grp 86.01 1.06 140.00 69.07 8.14 46.73 11245.79 Allegran 150.24 2.01 197.00 142.81 1.84 20.07 50673.84 Illumina 323.43 -3.03 372.61 207.51 - 72.39 47544.21 Venezuela (VEF)
New Ch Life Ins 33.30 -0.05 57.70 30.25 1.80 11.76 4408.04 SunPhrmInds 420.95 - 679.30 390.60 0.45 43.43 14110.04 Naspers N 2818.27 -1.74 3790 2362.66 0.20 8.36 85783.76 Allstate♦ 81.12 1.82 105.36 78.86 2.09 8.27 27941.16 Intcntl Exch♦ 77.36 0.26 82.65 66.92 1.15 18.06 44063.01 Bco de Vnzla 11.20 -1.30 17.60 0.02 553.95 - 135.71
PetroChina 5.31 -0.06 6.74 5.21 1.92 16.79 14341.34 Tata Cons 1994.3 - 2275.95 1247.18 1.22 27.88 104545.68 Alphabet 1059.53 7.82 1291.44 984.00 - 41.11 316768.94 Intel 48.34 0.48 57.60 42.04 2.35 15.52 220613.26
South Korea (KRW) Bco Provncl 920.00 10.00 1200 0.95 - 8.23 329.58
PingAnIns 73.35 -0.70 98.85 67.15 2.43 11.68 69927.83 Altria 53.35 0.62 74.38 52.45 5.18 9.83 100237.68 Intuit 200.78 -0.15 231.84 150.43 0.81 42.56 52104.13
Indonesia (Rp) HyundMobis 201000 2000 276500 165000 1.72 14.71 17293.72 Mrcntl Srvcs 2400 - 2650 1.30 0.01 10.73 485.44
PngAnBnk RMB 10.29 0.12 15.13 8.45 1.28 7.69 25603.07 Amazon 1568.87 -23.04 2050.5 1160.55 - 90.83 767128.21 John&John 129.27 -3.73 148.99 118.62 2.60 226.56 346697.41
Bk Cent Asia 22300 200.00 24700 16800 - - 38879.26 KoreaElePwr 32950 350.00 39450 23850 2.32 -19.44 18696.05
Pwr Cons Corp RMB 5.02 0.07 7.85 4.56 1.79 10.70 8107 AmerAir 32.67 0.26 59.08 30.24 1.18 13.62 15044.89 JohnsonCn♦ 32.08 0.11 41.53 30.60 3.14 14.30 29643.81
Israel (ILS) SK Hynix 62200 400.00 97700 61000 1.59 2.89 40022.76 Closing prices and highs & lows are in traded currency (with variations for that
SaicMtr RMB 25.11 0.38 37.66 24.13 7.07 8.08 41857.66 AmerExpr 103.67 -2.04 114.55 87.54 1.34 25.34 88557.05 JPMrgnCh 100.15 -0.14 119.33 99.09 2.39 12.80 333039.88
TevaPha 69.84 -2.56 94.75 57.75 0.44 -1.77 18864.08 SmsungEl 39150 200.00 54140 38650 3.76 5.68 206573.28 country indicated by stock), market capitalisation is in USD. Highs & lows are
ShenwanHong 0.11 -0.02 0.22 0.09 - 3.44 117.72 AmerIntGrp♦ 38.12 0.63 65.05 36.16 3.25 -6.14 33718.38 Kimb-Clark♦ 116.26 -1.16 123.50 97.10 3.30 26.19 40260.94
Italy (€) Spain (€) AmerTower 164.00 -2.60 168.58 130.37 1.77 63.75 72240.01 based on intraday trading over a rolling 52 week period.
ShgPdgBk RMB 10.78 0.16 14.00 9.17 0.90 6.07 43902.01 KinderM 16.29 0.12 19.83 14.69 3.86-841.87 35943.72 ♦ ex-dividend
Enel 5.01 0.00 5.48 4.22 3.83 13.07 57788.43 BBVA 4.71 -0.01 7.73 4.52 3.16 9.15 35572.77 Amgen 194.10 2.03 210.19 163.31 2.55 52.27 123684.26
Sinopec Corp 6.46 -0.02 8.35 5.45 9.52 9.94 21097.83 Kraft Heinz 47.85 0.39 80.67 47.18 5.05 5.86 58349.96 ■ ex-capital redistribution
ENI 13.96 -0.19 16.89 13.22 5.82 8.81 57513.49 BcoSantdr 4.03 -0.03 6.09 3.87 5.54 9.84 74123.04 Anadarko♦ 51.04 0.09 76.70 47.39 1.52 19.26 25738.5
Sinopec Oil RMB 1.89 -0.01 3.09 1.82 - -3.98 3298.24 Kroger 29.36 -0.20 32.74 22.85 1.64 6.92 23408.23 # price at time of suspension
Generali 14.32 -0.07 17.13 13.63 5.84 9.77 25345.23 CaixaBnk 3.36 -0.03 4.45 3.30 4.43 10.30 22763.26 Anthem♦ 271.24 -4.34 300.57 215.52 1.05 16.28 70154.08
Denmark (kr) Iberdrola 7.10 0.07 7.17 5.71 4.55 17.37 51479.29 L Brands 30.54 -0.29 63.10 25.89 7.76 11.55 8402.32
IntSPaolo 1.97 -0.04 3.35 1.86 10.12 8.76 39162.83 Aon Cp 153.80 -0.03 166.55 130.87 0.96 49.39 37041.82 LasVegasSd♦ 54.14 0.05 81.45 48.64 5.32 11.66 42421.63
DanskeBk 135.40 -2.65 251.90 123.80 7.28 6.30 18416.9 Inditex 23.60 -0.95 30.59 23.00 2.25 21.72 83383
Luxottica 51.80 -0.04 59.54 47.89 1.92 25.07 28492.03 Apple 168.04 2.56 233.47 150.24 1.57 14.59 797416.68 LibertyGbl 23.33 0.22 39.73 22.21 - -13.70 4767.8
MollerMrsk 8700 -188.00 11865 7520 1.76 -65.84 13287.72 Repsol 14.71 -0.08 17.51 13.67 5.88 8.50 26617.67
Unicred 10.55 -0.26 18.25 10.38 2.98 6.96 26667.76 ArcherDan 44.36 -0.25 52.07 39.28 2.89 11.41 24870.18 Lilly (E) 109.66 -2.27 119.84 73.69 1.95 241.27 116165.28
NovoB 305.00 -5.00 354.80 265.15 2.55 19.51 88558.06 Telefonica 7.83 0.04 8.60 6.59 5.06 13.62 46069.99

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
HyundMobis 201000.00 199000.00 2000.00 1.01 20000.00 11.0 3.88 Inditex 23.60 24.55 -0.95 -3.87 -3.01 -11.3 -9.61 Dec 17 date Coupon S* M* F* price yield yield yield US Dec 17 date Coupon S* M* F* price yield yield yield US
Ch Rail Cons 11.06 10.90 0.16 1.47 1.04 10.4 1.47 John&John 129.27 133.00 -3.73 -2.81 -15.99 -11.0 -11.56 High Yield US$ US$
CSR 7.81 7.81 0.00 0.00 0.62 8.6 6.84 H&M 142.80 156.12 -13.32 -8.53 -15.30 -9.7 -10.38 Qwest Capital Funding, Inc. 08/21 7.63 B+ WR BB 101.75 6.88 0.00 -0.01 - Barclays plc 01/28 4.34 BBB Baa3 A 91.84 5.49 -0.02 -0.02 2.58
Avago Tech 259.52 254.83 4.69 1.84 20.27 8.5 9.20 Mnstr Bvrg 52.54 52.69 -0.15 -0.28 -4.41 -7.7 -5.88 High Yield Euro Barclays plc 01/28 4.34 BBB Baa3 A 91.84 5.49 -0.02 -0.02 2.58
WPP 870.80 869.40 1.40 0.16 65.80 8.2 -99.00 CardinalHlth 48.99 50.06 -1.07 -2.14 -4.06 -7.7 -11.65 Aldesa Financial Services S.A. 04/21 7.25 - - B 49.20 45.13 0.75 5.96 42.38 Goldman Sachs Group, Inc. (The) 02/28 5.00 BBB+ A3 A 98.07 5.27 -0.02 0.23 2.36
Iberdrola 7.10 7.03 0.07 0.97 0.53 8.1 7.38 HCA Hold 124.10 126.73 -2.63 -2.08 -10.02 -7.5 -11.71 Southern California Edison Company 04/29 6.65 BBB+ A3 A- 109.72 5.40 -0.02 -0.14 2.49
BHPBilltn 33.53 32.40 1.13 3.49 2.35 7.5 3.92 CanNatRs 33.47 34.28 -0.81 -2.36 -2.51 -7.0 -6.30 Emerging US$ Southern California Edison Company 04/29 6.65 BBB+ A3 A- 109.72 5.40 -0.02 -0.14 2.49
Engie SA 12.87 12.91 -0.04 -0.31 0.88 7.3 5.45 Costco 207.25 207.06 0.19 0.09 -15.41 -6.9 -10.26 Peru 03/19 7.13 BBB+ A3 BBB+ 104.40 2.60 - - 0.34 Westpac Banking Corporation 11/31 4.32 BBB Baa1 A+ 93.48 5.34 -0.02 0.11 2.43
SvnskaHn 102.55 102.90 -0.35 -0.34 6.53 6.8 5.01 SK Hynix 62200.00 61800.00 400.00 0.65 -4600.00 -6.9 -11.27 Brazil 01/23 2.63 BB- Ba2 BB- 93.75 4.33 0.07 -0.17 1.57
Colombia 03/23 2.63 BBB- Baa2 BBB 94.50 4.05 0.00 -0.22 1.29 Euro
Glencore 292.95 289.65 3.30 1.14 18.45 6.7 -99.02 McKesson 114.63 116.66 -2.03 -1.74 -8.47 -6.9 -7.48 Barclays plc 08/29 2.29 BBB Baa3 A 84.16 4.16 -0.03 -0.07 1.25
PernodRic 146.65 148.40 -1.75 -1.18 9.20 6.7 4.45 Sberbank 182.30 184.93 -2.63 -1.42 -12.71 -6.5 -8.51 Poland 03/23 3.00 A- A2 A- 98.04 3.50 -0.04 -0.13 0.74
Turkey 03/23 3.25 - Ba3 BB 87.69 6.61 -0.10 -0.55 3.85 AT&T Inc. 12/29 2.60 BBB Baa2 A- 100.35 2.56 -0.03 -0.02 -0.35
RioTinto 3762.50 3675.50 87.00 2.37 235.50 6.7 -99.04 Adobe 228.72 230.00 -1.29 -0.56 -15.38 -6.3 -4.46 AT&T Inc. 12/29 2.60 BBB Baa2 A- 100.35 2.56 -0.03 -0.02 -0.35
RollsRoyce 807.80 808.60 -0.80 -0.10 48.60 6.4 -99.00 DiscFinServ 60.86 61.82 -0.96 -1.55 -3.88 -6.0 -14.01 Mexico 10/23 4.00 BBB+ A3 BBB+ 99.15 4.20 -0.01 -0.14 1.44
Turkey 03/27 6.00 - Ba2 BB+ 101.26 5.82 0.00 0.17 3.07 HBOS plc 03/30 4.50 BBB- Baa1 A- 104.25 2.50 0.00 0.03 -0.41
ChStConEng 6.32 6.17 0.15 2.43 0.38 6.4 14.70 Telstra 2.90 2.87 0.03 1.05 -0.18 -5.8 -4.61
Peru 08/27 4.13 BBB+ A3 BBB+ 103.50 3.66 0.01 -0.02 0.80 Yen
OilNatGas 148.25 148.25 0.00 0.00 8.85 6.3 -5.18 Gzprm neft 153.53 155.40 -1.87 -1.20 -9.47 -5.8 0.24
Russia 06/28 12.75 BBB- Ba1 BBB- 158.09 5.00 -0.01 -0.13 2.09 Poland 11/27 2.50 - A2 A- 109.69 1.34 -0.01 -0.04 -
EDF 14.20 14.24 -0.04 -0.28 0.80 6.0 -5.36 Delphi 14.89 14.56 0.33 2.27 -0.89 -5.6 -11.59
Enel 5.01 5.02 0.00 -0.08 0.27 5.7 11.42 Delta 53.16 53.51 -0.35 -0.65 -3.16 -5.6 -4.94 Brazil 02/47 5.63 BB- Ba2 BB- 93.80 6.09 0.02 -0.29 - £ Sterling
BMW 74.00 74.27 -0.27 -0.36 3.90 5.6 5.56 UPS B 98.66 98.66 0.00 0.00 -5.74 -5.5 -10.47 Emerging Euro Cooperatieve Rabobank U.A. 05/29 4.63 BBB+ Baa1 A 107.64 3.73 -0.05 -0.12 0.82
KoreaElePwr 32950.00 32600.00 350.00 1.07 1700.00 5.4 17.89 Schlmbrg 39.71 39.10 0.61 1.56 -2.26 -5.4 -17.60 Mexico 04/21 2.38 BBB+ A3 BBB+ 104.75 0.31 -0.01 -0.03 -2.44 innogy Fin B.V. 06/30 6.25 BBB Baa2 A- 129.21 3.17 -0.01 -0.09 0.26
Nokia 5.22 5.28 -0.06 -1.21 0.26 5.3 2.11 Suncor En 39.53 39.62 -0.09 -0.23 -2.22 -5.3 -9.48 Brazil 04/21 2.88 BB- Ba2 BB- 104.60 0.84 -0.04 -0.14 -1.91 Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other London
Mexico 04/23 2.75 BBB+ A3 BBB+ 106.00 1.32 -0.02 0.01 -1.44 close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.
Based on the FT Global 500 companies in local currency Based on the FT Global 500 companies in local currency
Bulgaria 03/28 3.00 BBB- Baa2 BBB 112.13 1.58 0.00 -0.02 -1.33
Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all
other London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Dec 17 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Dec 17 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 2.00-2.25 27-09-2018 1.75-2.00 1.75-2.00 1.25-1.50 Index change change change 1 month 1 year VIX 22.61 0.98 21.63 50.30 8.90 Dec 17 Price £ Yield Day Week Month Year High Low £m
US Prime 5.25 27-09-2018 5.00 5.00 4.25 Markit IBoxx VXD 22.47 0.57 21.90 40.21 4.07 - - - - - - - - -
US Discount 2.75 27-09-2018 2.50 2.50 1.75 ABF Pan-Asia unhedged 188.68 -0.31 0.34 -0.92 1.84 0.07 VXN 28.00 0.38 27.62 38.11 11.67 - - - - - - - - -
Euro Repo 0.00 16-03-2016 0.00 0.00 0.00 Corporates( £) 339.68 0.28 1.32 -2.02 0.51 -1.83 VDAX - - - - - Tr 4.5pc '19 100.82 0.72 4.35 16.13 12.50 80.00 104.97 100.82 36.35
UK Repo 0.75 02-08-2018 0.50 0.50 0.25 Corporates($) 271.93 0.08 0.88 -2.76 0.88 -2.76 † CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 104.84 0.75 4.17 13.64 8.70 78.57 109.55 104.84 33.70
Japan O'night Call 0.00-0.10 01-02-2016 0.00 0.00--0.10 0.00--0.10 Corporates(€) 223.52 0.12 0.14 -1.33 -0.33 -1.86 ‡ Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 101.58 0.74 4.23 12.12 5.71 37.04 102.98 101.24 32.84
Switzerland Libor Target -1.25-0.25 15-01-2015 -0.75--0.25 -1.25--0.25 -1.25--0.25 Eurozone Sov(€) 234.41 0.02 0.62 0.66 1.55 -0.37 Tr 4pc '22 110.21 0.78 4.00 13.04 4.00 30.00 114.15 109.81 38.39
Gilts( £) 326.74 0.33 2.85 1.04 2.76 0.79 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 124.26 0.97 3.19 12.79 -5.83 7.78 128.62 122.06 35.49
INTEREST RATES: MARKET Global Inflation-Lkd 259.21 0.09 1.63 -3.57 0.85 -2.80 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 100.70 1.16 2.65 8.41 -8.66 -2.52 101.52 96.41 23.73
Over Change One Three Six One Markit iBoxx £ Non-Gilts 335.92 0.25 1.21 -1.34 0.68 -1.24 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 134.04 1.46 1.39 10.61 -8.75 -0.68 136.24 128.48 35.86
Dec 17 (Libor: Dec 14) night Day Week Month month month month year Overall ($) 236.73 0.00 0.85 -1.31 0.85 -1.31 Australia 11/20 1.75 99.55 1.99 -0.01 0.07 -0.02 -0.08 Tr 4.25pc '36 139.08 1.64 1.23 8.61 -7.87 1.23 141.54 133.08 30.11
US$ Libor 2.18475 0.000 1.259 0.000 2.45500 2.80069 2.90056 3.09769 Overall( £) 326.40 0.30 2.35 0.32 2.12 0.17 11/28 2.75 102.42 2.47 -0.01 0.02 -0.13 -0.16 Tr 4.5pc '42 153.18 1.77 1.14 8.59 -7.33 2.31 156.90 145.84 26.95
Euro Libor -0.45857 -0.001 -0.033 0.004 -0.40971 -0.35571 -0.32486 -0.21229 Overall(€) 229.68 0.05 0.40 0.14 0.89 -0.67 Austria 10/23 1.75 109.28 -0.16 -0.03 -0.01 -0.03 -0.07 Tr 3.75pc '52 151.12 1.74 1.16 8.75 -7.94 6.75 156.17 141.38 23.87
£ Libor 0.68500 0.001 0.461 0.000 0.73000 0.90088 1.02613 1.16100 Treasuries ($) 223.32 -0.06 0.85 -0.60 0.85 -0.60 02/47 1.50 102.95 1.37 0.00 0.04 -0.03 -0.03 Tr 4pc '60 168.47 1.68 0.60 9.09 -9.68 8.39 176.65 156.07 23.89
Swiss Fr Libor 0.003 -0.82180 -0.73220 -0.65260 -0.52420 FTSE Belgium 06/21 1.50 104.76 -0.42 -0.01 0.00 0.01 0.01 Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per £100 nominal of stock.
Yen Libor 0.027 -0.14767 -0.10367 -0.00033 0.11317 Sterling Corporate (£) 110.21 -0.02 - - -0.67 -5.40 03/28 5.50 143.32 0.67 -0.01 0.02 0.01 0.21
Euro Euribor
Sterling CDs
0.000
0.000
-0.31100
0.80000
-0.12800
0.93000
-0.24800
1.04500
-0.14300 Euro Corporate (€) 103.97 -0.01 - - -0.21 -3.60 Canada 02/20 1.25 99.22 1.96 -0.02 0.04 -0.12 0.36 GILTS: UK FTSE ACTUARIES INDICES
Euro Emerging Mkts (€) 365.31 -7.32 - - -1.44 -45.48 06/28 2.00 99.17 2.10 -0.04 0.02 -0.18 0.19
US$ CDs 0.000 2.29000 2.60000 2.87000 Eurozone Govt Bond 109.49 -0.05 - - 1.34 -3.01 Denmark 11/20 0.25 101.64 -0.60 0.00 0.00 0.01 -0.12 Price Indices Day's Total Return Return
Euro CDs - - - - 11/23 1.50 108.64 -0.25 -0.02 -0.01 -0.02 -0.16 Fixed Coupon Dec 17 chg % Return 1 month 1 year Yield
CREDIT INDICES Day's Week's Month's Series Series 1 Up to 5 Years 92.06 -0.07 2427.63 0.02 0.33 0.80
Short 7 Days One Three Six One Index change change change high low Finland 09/20 0.38 101.58 -0.53 -0.01 -0.01 0.01 0.04
07/28 2.75 120.93 0.50 -0.02 0.01 -0.03 -0.01 2 5 - 10 Years 180.72 -0.22 3529.84 0.67 0.99 1.09
Dec 17 term notice month month month year Markit iTraxx 3 10 - 15 Years 209.88 -0.26 4334.63 1.25 1.41 1.42
Euro -0.62 -0.32 -0.62 -0.32 -0.70 -0.40 -0.48 -0.18 -0.46 -0.16 -0.38 -0.08 Crossover 5Y 342.22 8.05 -14.05 - 356.27 316.10 France 11/20 0.25 101.45 -0.49 0.00 0.03 0.05 -0.02
4 5 - 15 Years 187.22 -0.23 3728.43 0.87 1.11 1.21
Sterling 0.45 0.55 0.75 0.85 0.88 0.98 0.97 1.12 1.13 1.28 Europe 5Y 81.69 1.07 -6.38 4.35 88.07 66.84 05/23 1.75 108.42 -0.14 -0.02 0.01 0.02 0.00
5 Over 15 Years 333.28 -0.27 5241.50 3.37 -0.08 1.72
Swiss Franc - - - - - - - - - - - - Japan 5Y 76.64 1.69 -6.73 14.47 83.92 55.54 05/28 0.75 100.90 0.65 -0.01 0.03 0.03 0.00
7 All stocks 177.24 -0.20 3619.74 1.68 0.39 1.58
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 104.05 1.21 -7.54 4.49 111.59 77.83 Germany 10/20 0.25 101.65 -0.64 -0.02 -0.02 -0.01 0.01
US Dollar 2.11 2.41 2.21 2.51 2.43 2.73 2.56 2.86 2.68 2.98 2.91 3.21 08/23 2.00 111.04 -0.35 -0.03 0.00 -0.03 -0.13 Day's Month Year's Total Return Return
Markit CDX 07/28 4.75 143.04 0.19 -0.02 0.00 -0.04 -0.19
Japanese Yen -0.15 0.05 -0.40 -0.10 -0.75 -0.25 -0.20 -0.10 -0.10 0.20 0.00 0.30 Index Linked Dec 17 chg % chg % chg % Return 1 month 1 year
Emerging Markets 5Y 198.85 1.12 -7.95 -2.58 219.33 186.13 08/48 1.25 109.40 0.89 0.00 0.00 -0.09 -0.17
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: 1 Up to 5 Years 309.86 -0.09 0.07 -0.31 2492.07 0.07 1.33
Nth Amer High Yld 5Y 416.53 10.73 -5.26 17.03 425.15 325.08 Greece 01/23 3.50 100.81 3.29 0.00 0.01 0.06 -0.26
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 2 Over 5 years 736.81 -0.32 3.93 2.51 5525.86 3.93 3.00
Nth Amer Inv Grade 5Y 79.19 2.38 -3.58 4.84 82.77 57.99 01/28 3.75 96.30 4.25 0.02 0.02 -0.02 0.13
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 3 5-15 years 494.31 -0.30 1.40 2.94 3874.44 1.40 3.90
Ireland 10/20 5.00 110.11 -0.48 0.00 0.00 0.00 0.09 4 Over 15 years 946.47 -0.33 4.83 2.36 6930.81 4.83 2.69
05/30 2.40 112.97 1.18 0.00 0.06 0.05 0.22 5 All stocks 663.73 -0.30 3.60 2.27 5058.87 3.60 2.87
Italy 06/20 0.35 99.82 0.47 0.01 -0.12 -0.18 0.57
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED 10/23 0.65 94.26 1.90 -0.01 -0.23 -0.32 1.01 Yield Indices Dec 17 Dec 14 Yr ago Dec 17 Dec 14 Yr ago
09/28 4.75 116.29 2.82 -0.02 -0.19 -0.26 0.91 5 Yrs 0.82 0.79 0.65 20 Yrs 1.77 1.76 1.73
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
03/48 3.45 97.93 3.57 -0.01 -0.14 -0.23 - 10 Yrs 1.28 1.26 1.21 45 Yrs 1.69 1.68 1.52
Crude Oil† Jan 51.66 0.51 Corn♦ Mar 385.00 0.25 Dec 14 Dec 14 Prev return stock Market stocks
Japan 06/21 0.10 100.65 -0.16 -0.01 -0.01 -0.03 -0.03 15 Yrs 1.63 1.61 1.58
Brent Crude Oil‡ 59.84 -0.41 Wheat♦ Mar 535.50 5.50 Can 4.25%' 21 110.26 0.737 0.768 0.25 5.18 74300.52 8
12/23 0.60 103.69 -0.14 -0.02 -0.01 -0.04 -0.05
RBOB Gasoline† Dec 1.45 0.01 Soybeans♦ Jan 905.25 5.25 Fr 2.25%' 20 106.20 -1.525 -1.520 0.00 20.31 246919.35 15
12/28 1.90 118.39 0.06 -0.01 -0.02 -0.04 -0.04 inflation 0% inflation 5%
Heating Oil† Dec 1.61 0.00 Soybeans Meal♦ Jan 308.70 1.30 Swe 0.25%' 22 115.01 -2.007 -2.012 -0.06 33.80 234910.91 7
09/47 0.80 100.56 0.78 -0.01 -0.02 -0.03 -0.03 Real yield Dec 17 Dur yrs Previous Yr ago Dec 17 Dur yrs Previous Yr ago
Natural Gas† Dec 3.69 -0.11 Cocoa (ICE Liffe)X Mar 1658.00 -7.00 UK 2.5%' 20 359.88 -2.285 -2.240 0.16 6.58 689027.39 29
Netherlands 01/20 0.25 101.01 -0.68 -0.02 0.00 0.01 0.01 Up to 5 yrs -2.10 2.32 -2.14 -2.00 -2.56 2.34 -2.60 -2.45
Ethanol♦ - - Cocoa (ICE US)♥ Mar 2260.00 30.00 UK 2.5%' 24 368.53 -2.245 -2.182 0.97 6.82 689027.39 29
01/28 5.50 146.77 0.28 -0.02 0.00 -0.03 -0.12 Over 5 yrs -1.71 24.10 -1.73 -1.65 -1.73 24.17 -1.74 -1.68
Uranium† Dec 29.80 0.05 Coffee(Robusta)X Jan 1450.00 8.00 UK 2%' 35 281.77 -1.928 -1.888 4.73 9.08 689027.39 29
Carbon Emissions‡ - - Coffee (Arabica)♥ Mar 101.55 -0.65 New Zealand 05/21 6.00 108.54 2.33 0.00 0.03 -0.02 -0.32 5-15 yrs -2.06 8.64 -2.09 -1.77 -2.15 8.66 -2.19 -1.90
US 0.625%' 21 98.79 1.103 1.113 -0.10 35.84 1303786.14 39
White SugarX 339.70 -4.00 04/23 5.50 114.65 1.95 -0.03 0.02 -0.07 -0.42 Over 15 yrs -1.68 29.13 -1.69 -1.64 -1.69 29.16 -1.70 -1.66
Diesel† - - US 3.625%' 28 122.05 1.129 1.113 -0.06 16.78 1303786.14 39
Sugar 11♥ 12.65 -0.02 Norway 05/21 3.75 106.08 1.20 -0.01 0.05 0.04 0.32 All stocks -1.72 22.28 -1.73 -1.66 -1.74 22.37 -1.75 -1.69
Base Metals (♠ LME 3 Months) Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total market
Aluminium 1931.50 6.00 Cotton♥ Mar 79.43 -0.17 05/23 2.00 102.39 1.44 -0.01 0.04 0.03 0.28 See FTSE website for more details www.ftse.com/products/indices/gilts
value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
Aluminium Alloy 1400.00 -10.00 Orange Juice♥ Jan 140.00 0.50 Portugal 06/20 4.80 107.68 -0.33 -0.03 -0.11 -0.13 -0.28 ©2018 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSE
amount.
Copper 6091.00 -49.50 Palm Oil♣ - - 10/23 4.95 121.70 0.42 -0.02 -0.14 -0.19 -0.43 Gilt Closing Prices information contained herein is proprietary to
Lead 1931.50 -22.50 Live Cattle♣ Dec 119.75 0.00 BONDS: TEN YEAR GOVT SPREADS Spain 01/21 0.05 100.35 -0.11 -0.01 -0.02 -0.02 -0.10 Tradeweb; may not be copied or re-distributed; is not warranted to be
Nickel 11095.00 55.00 Feeder Cattle♣ Jan 147.45 -0.55 10/28 5.15 134.27 1.41 -0.01 -0.04 -0.08 -0.18 accurate, complete or timely; and does not constitute investment advice.
Tin 19450.00 60.00 Lean Hogs♣ Feb 64.78 0.00 Spread Spread Spread Spread Sweden 12/20 5.00 110.74 -0.46 0.00 -0.03 -0.01 0.01 Tradeweb is not responsible for any loss or damage that might result from the use of this information.
Zinc 2539.00 6.00 Bid vs vs Bid vs vs 12/26 9.41 170.07 0.48 -0.02 0.00 -0.02 -0.06
% Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds Switzerland 04/21 2.00 106.57 -0.75 -0.04 -0.03 0.00 -0.11 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Precious Metals (PM London Fix)
Gold 1235.35 -7.40 Dec 14 Month Year 04/28 4.00 138.66 -0.13 -0.02 0.00 -0.03 -0.02 at the time of publication. No offer is made by Morningstar, its suppliers, or the FT. Neither the FT, nor
Australia 2.47 2.28 -0.44 Italy 2.82 2.63 -0.09
Silver (US cents) 1458.00 -10.00 S&P GSCI Spt 402.60 -6.91 -4.10 United Kingdom 01/21 1.50 101.62 0.72 -0.06 -0.02 -0.04 0.18 Morningstar’s suppliers, warrant or guarantee that the information is reliable or complete. Neither the FT nor
Austria -0.16 - - Japan 0.06 -0.14 -2.85
Platinum 784.00 -10.00 DJ UBS Spot 80.61 -3.97 -4.13 Belgium 0.67 0.47 -2.24 Netherlands 0.28 0.08 -2.64 07/23 0.75 99.47 0.87 -0.04 -0.01 -0.07 0.01 Morningstar’s suppliers accept responsibility and will not be liable for any loss arising from the reliance on the
Palladium 1233.00 -29.00 TR/CC CRB TR 185.04 -4.38 - Canada 2.10 1.91 -0.81 Norway 1.44 - - 12/27 4.25 126.76 1.11 -0.04 -0.02 -0.10 -0.07 use of the listed information. For all queries e-mail ft.reader.enquiries@morningstar.com
Bulk Commodities M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark -0.25 - - Portugal 0.42 - - 07/47 1.50 93.46 1.79 -0.04 -0.04 -0.27 0.06
Iron Ore 70.55 0.65 UBS Bberg CMCI TR 14.17 -3.15 -2.89 Finland 0.50 0.31 -2.41 Spain 1.41 1.21 -1.50 United States 11/20 1.75 98.15 2.75 -0.03 0.02 -0.08 0.83 Data provided by Morningstar | www.morningstar.co.uk
GlobalCOAL RB Index 98.50 0.50 LEBA EUA Carbon 23.76 20.67 229.54 France 0.65 0.46 -2.26 Switzerland -0.13 -0.32 -3.04 12/23 2.25 97.63 2.76 -0.03 0.03 -0.12 0.55
Baltic Dry Index 1406.00 5.00 LEBA CER Carbon 0.26 -3.70 52.94 Germany 0.19 0.00 -2.72 United Kingdom 1.11 0.92 -1.80 11/28 5.25 120.02 2.91 -0.02 0.04 -0.11 0.55
LEBA UK Power 1620.00 -31.36 12.89 Greece 4.25 4.05 1.34 United States 2.91 2.72 0.00 11/47 2.75 92.41 3.15 -0.02 0.00 -0.17 0.44
Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $ Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.
unless otherwise stated.
Tuesday 18 December 2018 ★ FINANCIAL TIMES 17

MARKETS & INVESTING

Tail Risk
Analysis. Cross asset
End of easy money
European investors braced era heralds a grim
global outlook

for turbulent year ahead COLBY SMITH

In the decade since the

Political tensions, the end of
QE and economic downgrades
are pointing to testing times
KATE ALLEN, EVA SZALAY
AND LAURENCE FLETCHER
With politics souring, the economic
outlook darkening and the European
Central Bank nonetheless switching off
its long-running bond-buying stimulus
programme, investors are braced for a
rough ride in European markets in the
opening months of next year.
The ECB is likely to keep the option
open for further potential support if
needed, most likely in the form of cheap
funding for banks.
Still, 2019 will be a big challenge,
throwing up a test for active managers
to prove their credentials. The euro,
government bonds and bank stocks are
all in line for a shake-up.
“When you remove the crutch, the
unsteady walker will be more likely to
be shakier or fall, unless they’ve recov-
ered from the underlying problem,” said
Cutler Cook, head of European equity
investing at Californian investment
house PAAMCO.
Politics is a prominent concern. With
this year’s heavy drop in Italian govern-
ment bonds still fresh in the mind,
investors fear that Rome’s budgetary
battle with Brussels may be merely the
precursor for a wider controversy about
debt sustainability as political rhetoric
ramps up ahead of the European Parlia-
ment elections in May.
France’s President Emmanuel
Macron promised last week to boost
public spending in a bid to assuage pop-
ulist protests, showing that Europe’s fis-
cal challenge can spread to key euro-
zone states.
“Representative democracies find
themselves under serious pressure and
increasingly bypassed by the direct —
and frequently confrontational —
expression of political and social discon-
tent,” said Didier Saint-Georges, manag-
ing director at French asset manager
Carmignac.
The impact, assuming a boost to fiscal
spending, is a blow to bond markets, he
added.
Chris Iggo, fixed income chief invest-
ment officer at Axa Investment Manag-
ers, echoed that view. “Fiscal slippage in
a period of slowing growth with con-
cerns about the lack of structural
reform at the member state and com-
munity level pose the risk of wider sov-
ereign spreads,” he warned.
Falling bond prices also feed through
into European banks’ balance sheets in
the so-called ‘doom loop’, weighing on
the outlook of a sector that is still suffer-
ing lingering problems after the 2012-14
debt crisis.
For the euro, it is a complex picture.
Typically, a shift to tighter policy would
boost the currency but the negative
risks to the region’s growth, also noted
by ECB President Mario Draghi, and the
lower projections for economic expan-
sion by the central bank for both next
year and 2020 could exert a greater
drag.
A strong sensitivity to global trade
tension and to potential Brexit fallout
also pose a risk.
However, looking beyond the early
months of next year, the euro might
benefit from a waning US dollar.
US growth is slowing and inflation
reduced in November while the US Fed-
eral Reserve has signalled it is closer to
reaching the point where no further
rises are needed to balance the econ-
omy.
“It is possible that, as early as mid-
2019, the relative growth support to the
dollar may be perceived to be fading,”
said Citi in its global FX outlook for
2019.
The midpoint consensus is for the
euro to trade at $1.20 by the end of next
year, up from its current level of around
$1.13, and after a period of weakness in
the first six months of 2019.
“We see the euro trading at $1.30 by
the end of next year as we have a very
bearish view on the dollar for 2019,” said
Bilal Hafeez, head of European fixed
income research at Nomura.
Fund managers are reluctant to pre-
dict which way asset prices will head as
large-scale bond purchases cease, not
least because there are so many eco-
nomic and political factors also buffet-
ing markets.
But, despite a sell-off in equities and
credit markets in recent months, it
seems unlikely that the full effect of
Economists’ EU GDP forecast
for 2019 pared back
Annual % change
Jan 2018
European Central Bank
balance sheet
As % of GDP
2005 10 15
Italy financial stocks fall
FTSE Italia All-Share Banks
Sector index
Jan 2018
Sources: Consensus Economics; Refinitiv
The European quantitative easing’s withdrawal is yet
Central Bank is priced into assets.
forecasting That could mean further falls and vol-
lower growth in atility ahead. “Taper is in the market
the region but the [QE] flows are too big to say
Arne Dedert/dpa/AP
[taper] is in the price,” said Michael
Hintze, head of London-based hedge
fund CQS.
Sir Michael, whose firm runs $18bn in
assets, added that the ending of QE
would put pressure on European invest-
ment grade bonds, which should pro-
vide attractive investment opportuni-
ties in time.
Whichever way markets move, the
ending of QE is likely to be welcomed by
active fund managers, who have long
complained about the impact of central
bank stimulus.
QE has provided an ideal environ-
ment for many passive funds such as
index trackers with the S&P 500 equi-
ties index in particular offering a long
and relatively smooth ascent for inves-
tors who simply buy the market and
hold on for the ride.
Active managers, in contrast, have
‘Taper is in often struggled, blaming QE for causing
assets to move in unison with insuffi-
the market cient differentiation between cheap and
but the expensive or good and bad ones.
Mr Hintze said he expected valuation
QE flows dispersion in credit as QE ends. “That
are too will provide opportunity for active man-
agers,” he said.
big to say His fund is betting on Italian senior
taper is in credit and some EU bank and insurance
companies to perform well, relative to
the price’ the region’s high-yield bonds.
financial crisis, central
bankers have taken on the
task of reinvigorating the
global economy.
By keeping interest rates low and
buying up trillions of dollars’ worth of
government bonds and other assets,
2.0 these institutions helped to prop up
1.9 growth at a time when the world
desperately needed it.
1.8 Of course, that era of easy monetary
1.7 policy is coming to a close.
1.6 Last week, the European Central
Bank said it would end its crisis-era
1.5 stimulus programme this month,
Dec
although it would still reinvest in the
region’s bond markets.
Ahead of this week’s meeting on
monetary policy, the Federal Reserve is
gearing up for its ninth interest rate
40
increase since it began normalising
rates in December 2015. And the Bank
30 of Japan is considering the same,
although in fits and starts.
20 As central banks turn off their
spigots of easy money, governments
around the world are stepping in to fill
10 the void. But even with these
18
measures, the global economy is set to
slow in the coming years.
Donald Trump, US president,
spearheaded this fiscal loosening in
early 2017 with a large corporate tax
200 cut, which Republican-controlled
180 Congress followed up with a $1.3tn
spending bill.
160 To grapple with its own domestic
slowdown, China has instituted
140 stimulus measures that include tax
cuts.
120 In Europe, Germany is (finally)
Dec
planning to spend a bit more next year,
with fiscal easing of about 0.75 per
cent of gross domestic product,
according to Citi’s Giada Giani.
Canada is increasing tax incentives
for businesses and Japan’s Shinzo Abe
has announced “policy offsets” to ease
pressure on households as a result of a
planned tax increase.
But despite governments’ best
efforts, the outlook through 2020
looks grim.
A synchronised, global fiscal
expansion may be able to moderate
the pace of an eventual slowdown by
some degree or put it off longer than
otherwise would have been the case.
But with a trade war between the US
and China unresolved, Brexit political
chaos, riots in France and an Italian
debt crisis, there is certainly no
shortage of strife weighing on global
sentiment.
In the words of David Lipton, a top
IMF official, “storm clouds” are
gathering. Time to grab that umbrella.
FastFT
Our global
team gives you
market-moving
news and views,
24 hours a day Political upsurges in France have
ft.com/fastft added to storm clouds for markets

Equities Equities

US financial stocks slide into bear
territory as growth worries intensify
PETER WELLS — NEW YORK
Mounting investor concerns about the
outlook for economic growth and a less
benign backdrop for profits has pushed
US financial stocks into a bear market.
The S&P 500 financial sector index fell
as much as 0.9 per cent yesterday in
volatile trading, leaving it down almost
21 per cent from a late January peak.
Crossing the 20 per cent retreat
threshold from a most recent high typi-
cally defines the start of a bear market,
which the sector first entered on Friday
as US stocks swooned.
A multi-month sell-off has left large
institutions including Goldman Sachs,
Citigroup, Morgan Stanley and Wells
Fargo nursing declines of more than
20 per cent each for 2018.
Although the US economy has
remained in robust shape, the bond
market has already begun to anticipate
a weaker picture for both growth and
inflation. Central to banks’ fortunes is
the yield curve, which illustrates the dif-
ferences between short-term and long-
term borrowing costs.
The yield on the benchmark 10-year
US government bond has fallen from
3.25 per cent in early November to
2.87 per cent while the drop in the
yield on the two-year Treasury has
been cushioned by expectations that
the US Federal Reserve will tomorrow
raise its official interest for a fourth time
this year.
The narrow gap between short-term
and long-term rates squeezes banks’
profits if they are borrowing over a
shorter time horizon and then lending
over a longer period. The gap between
two-year and 10-year Treasury yields
this month hit its narrowest since 2007.
At the same time, there has also been
Citi is among a group of banks hit by
falls of more than 20% each for 2018
concern about loan demand in the US
and credit quality — particularly in the
$1.3tn leveraged loan market, which has
sold off sharply in recent weeks.
According to the Fed’s October survey
of loan demand in the US, banks indi-
cated demand for commercial and
industrial loans, as well as residential
real estate loans, had been weak.
“Demand for loans for both small and
large business has tapered off while sup-
ply has increased,” said Max Gokhman,
head of asset allocation at Pacific Life
Fund Advisors. “That is a bad recipe for
any business if demand for your prod-
ucts is diminishing.”
The S&P 500 financials index was last
briefly in bear market territory in Feb-
ruary 2016. However, some analysts
said history suggested that bank stocks
might be at an inflection point.
“Once you have that maximum pain,
after the curve has inverted or flattened,
the next six months tend to be much
better,” said Christopher Harvey, head
of equity strategy at Wells Fargo Securi-
ties, citing figures dating back to 1994.
“On average, we have seen bank outper-
form by about 8 per cent over that next
six-month time period.”
Additional reporting by Nicole Bullock
Brussels set to extend access to Swiss
exchanges for another six months
JIM BRUNSDEN AND PHILIP STAFFORD
Brussels has delayed a threat to isolate
the Swiss stock market from the rest of
the continent.
It represents a reprieve for global inves-
tors concerned that they would only be
able to buy shares in some of Switzer-
land’s biggest companies through local
institutions.
Swiss stocks have become an unlikely
bargaining chip in a battle between the
Swiss government and the EU over the
“institutional agreement” that will gov-
ern their future relationship, which saw
Brussels threaten to cut off market
access rights by the end of the year.
The Swiss government postponed a
decision this month on the agreement
and decided to hold a public consulta-
tion, leaving Brussels to choose whether
to follow through with its threat.
Valdis Dombrovskis, the EU commis-
sion’s vice-president for financial serv-
ices policy, said yesterday that it would
extend so-called “equivalence” arrange-
ments with Switzerland to “ensure con-
tinuity for portfolio managers and bro-
kers active in Swiss equities”.
Without an equivalence deal for Swiss
exchanges, Europe’s integrated cross-
border market for share trading would
have fragmented from January.
EU institutions would have needed to
use a local broker to access some of
Europe’s most actively traded stocks,
such as Nestlé, Novartis and Roche,
while Swiss investors would have to go
through EU banks and brokers to buy
and sell stock such as Deutsche Bank or
Telefónica.
Mark Hemsley, chief executive of
‘In theory, it was going to
cause the Swiss problems
but it was EU customers
that would have suffered’
Cboe Europe, the largest trader of Swiss
shares in the EU, said the decision from
Brussels had avoided a “major incon-
venience” for many of its customers.
“In theory, it was going to cause the
Swiss problems but in the end it was EU
customers that would have suffered,” he
said. “The Swiss market probably would
have liked to take all the business back.”
The new institutional agreement for
EU-Swiss relations is a priority for the
commission, which has long com-
plained that current arrangements
allow Switzerland extensive access
without following the bloc’s rules. Fix-
ing the gaps has become even more of a
priority for the bloc in the light of Brexit.
Market access rights to Swiss equities
are one of the main levers at Brussels’
disposal to pressure the country to rat-
ify the deal. Around a third of Swiss
blue-chips are traded on London-based
venues. Six, the Swiss exchange,
declined to comment. It has previously
described achieving unlimited equiva-
lence as “our highest priority”.
The six-month extension is set to
legally take effect before the end of the
year, once EU national governments
have had a chance to review the plan.
However, Markus Ferber, vice-chair
of the EU parliament’s economics com-
mittee, criticised the decision to grant
only a six-month extension. “Either
Switzerland fulfils the equivalence cri-
teria and then equivalence should be
granted indefinitely or it does not and
then there should not be any equiva-
lence. Given that Switzerland already
enjoys equivalence status, the matter
could not be clearer in the Swiss case.”
Additional reporting by Ralph Atkins in
Zurich
18 ★ Tuesday 18 December 2018

The day in the markets A dovish hike by Fed

What you need to know
will face a struggle to
3 Global growth concerns keep world
calm investor nerves
US tech stocks extend losses as global growth worries linger
stock markets under pressure
Nasdaq Composite index
3 All eyes turn to US Federal Reserve
rate decision tomorrow 8,500
3 Dollar index slips from 16-month high
3 Brent oil dips below $60 a barrel
Mohamed El-Erian
8,000
Persistent concerns about the health of
the global economy made for another Markets Insight
nervous session for world stock markets,
7,500
although Wall Street managed to pare

T
early losses and European indices pulled his week’s meeting of the the synchronised pick-up in global this camp is that a significant policy
off the day’s lows. US Federal Reserve was growth that characterised 2017, eco- U-turn would solidify investors’ percep-
The dollar eased back from a 16-month 7,000 supposed to be something nomic momentum was decelerating. tion of a “Powell Put” — or that the cen-
high touched on Friday against a basket of a non-event. Instead, the It is a phenomenon that has wors- tral bank can be easily deterred by an
of currencies, with the yen and Swiss central bank’s top policy- ened, according to last week’s estimates eruption of market volatility — and, in
franc in particular gaining ground, while 6,500 making committee will find itself for Chinese industrial production and putting off rate rises now, increase the
the nervous mood across equity markets Jan 2018 Dec gathering against a backdrop of growing retail sales, as well the latest GDP num- probability of much worse economic
helped fuel demand for US Treasuries. Source: Refinitiv
economic uncertainty, volatile markets bers out of Europe and Japan. and financial dislocations in the future.
The big focus this week will be the US and contradictory policy signals. Last week was capped by the Euro- Nor do they want to see a softening of
Federal Reserve’s decision on interest Instead of simply delivering a well- pean Central Bank confirming its inten- Fed policy misinterpreted as evidence
rates tomorrow — a 25 basis point rise is telegraphed interest rate rise to cap tion to terminate its own QE pro- that the central bank is buckling to pres-
widely expected — and whether the down from three — but for 2020 to be sentiment among US homebuilders fell another year of progress in the “beauti- gramme at the end of year, deepening sure from Donald Trump.
central bank signals fewer increases next unchanged at one rate hike.” this month to its lowest level since 2015. ful normalisation” of monetary policy, the shift away from the global regime of The most likely outcome this week is a
year via its “dot plot” projections, “We also expect some tweaks to the Global growth worries also kept oil opinion on what the Fed should do is all ample and predictable liquidity. compromise — or what is called a
particularly given a more dovish shift in statement, particularly regarding the prices under pressure with Brent crude over the place. Given the weaker global economic “dovish hike”. In this scenario, the Fed
its communications. need for ‘further gradual increases’ in dipping back below the $60-a-barrel Furthermore, rather than damp picture and central bank liquidity thin- would raise rates tomorrow but at the
“Markets will struggle to make much rates, which was hinted at in the mark and West Texas Intermediate unsettled markets, there is a risk that same time markedly reduce its guid-
the central bank may inadvertently fuel ance for future increases.
progress ahead of the Fed decision but,
even after it, there seems little to cheer
November minutes.
“We expect some qualifiers to be added
testing $50.
The losses came in spite of hopes that future financial volatility as well as the
A U-turn would solidify This move would be wrapped in a
investors, given slowing economic growth to this statement to suggest we are the market was rebalancing following risks to the real economy that follow. the perception that the message that the Fed is now even more
This year has been marked by a US dependent on the incoming economic
and the constant presence of trade wars,”
said Chris Beauchamp, chief market
approaching the end of the rate hike
cycle but that the tightening bias will
agreed output cuts by Opec and its allies.
Sterling managed to inch higher economy continuing on a solid growth
Fed can be deterred by a data to set policy, returning to the play-
analyst at IG. nonetheless remain.” against the soft dollar — but lost ground path, underpinned by a robust labour market volatility eruption book heavily used by the Fed under Ben
Recent data releases in China and the President Donald Trump yesterday against the euro — as the markets kept a market and higher business invest- Bernanke and Janet Yellen.
eurozone have highlighted the darkening renewed his criticism of the Fed, saying it wary eye on Brexit developments. ment. While such a move would be an
outlook for global growth while an was “incredible” that the central bank was Theresa May, the UK prime minister, Progress towards fully meeting the ning, markets have in recent weeks understandable reaction, whether it
inversion across part of the US Treasury considering raising rates this month, said MPs would vote on the Brexit deal in Fed’s dual mandate — full employment repriced a host of risks. calms financial markets is questionable.
yield curve has been viewed by some as a given low inflation and a strong dollar. the third week of January as she fended and a stable inflation rate around 2 per That has produced higher and, at Having distanced himself from the
warning that recession may not be too far The mood in the markets was not off opposition calls to hold the vote cent — has allowed the central bank to times, unsettling volatility. The sharp heavy codependency of markets and
away. helped by the latest US data releases. before Christmas. add three interest rate increases this sell-off has even spread to the once- monetary policy at the outset of his ten-
Bill Diviney, senior economist at ABN The New York Fed’s Empire State Analysts warned, however, that it still year and contract its balance sheet, per- impressively decoupled US markets. ure, Fed chair Jay Powell may now find
Amro, said: “We expect a fall in the ‘dots’ business index tumbled to its lowest level remained extremely unlikely the deal severing with the removal of monetary This rather disconcerting configura- himself having to return to it.
to signal two further rate hikes in 2019 — for 19 months in December while would be approved. Dave Shellock stimulus that started with the halt of its tion of divergent economic perform- Rather than repress volatility and
asset purchase programme. ance and broad-based market instabil- provide a platform for higher economic
The window for doing this without ity is why market opinions now vary a growth, a policy flip-flop could end up
Markets update derailing the economy or profoundly great deal as to what the Fed should do. accentuating future market instability.
destabilising markets was opened wider Some urge policymakers to refrain Should that, in turn, sour the senti-
by the US government’s decision to cut from hiking and also to downplay previ- ment of US households and businesses,
taxes and lift fiscal spending. ously signalled intentions for higher it may deliver the worse type of conver-
US Eurozone Japan UK China Brazil With everything seemingly going rates next year. Their rationale is that gence — a US economy being pulled
Stocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp Bovespa their way, Fed officials had felt embold- the US economy faces the risk of a downwards to more sluggish global
Level 2598.19 1355.76 21506.88 6773.24 2597.97 87284.42 ened enough earlier this year to signal weaker international economy spilling rivals.
% change on day -0.07 -1.15 0.62 -1.05 0.16 -0.19 an acceleration in how quickly policy back into the domestic picture.
Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $ would be tightened. Others advocate the Fed should stick Mohamed El-Erian is chief economic
Level 97.195 1.134 113.000 1.261 6.901 3.910 Yet something different was happen- to its previously signalled path of inter- adviser to Allianz and author of the book
% change on day -0.255 0.354 -0.366 0.398 0.036 0.435 ing elsewhere in the world. Rather than est rate rises next year. The worry for ‘The Only Game in Town’
Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bond
Yield 2.872 0.256 0.031 1.132 3.374 9.661
Basis point change on day -0.540 0.400 0.160 2.700 0.400 -6.900
World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX)
Level 308.47 59.84 50.62 1235.35 14.58 2875.50
% change on day -0.29 -0.68 -1.07 -0.60 -0.68 -0.28
Yesterday's close apart from: Currencies = 16:00 GMT; S&P, Bovespa, All World, Oil = 17:00 GMT; Gold, Silver = London pm fix. Bond data supplied by Tullett Prebon.

Main equity markets

S&P 500 index Eurofirst 300 index FTSE 100 index
2880 1480 7200

2800 1440 7040

2720 1400 6880

2640 1360 6720

| | | | | | | | |
2560 | | | | | | | | | | | | | | | | | | | |
1320 | | | | | | | | | | | | | | | | | | | | 6560 | | | | | | | | | | |

Oct 2018 Dec Oct 2018 Dec Oct 2018 Dec

Biggest movers
% US Eurozone UK
Alexion Pharmaceuticals 3.97 Kerry Grp 1.89 Bhp 2.67
Applied Materials 3.31 Brenntag 1.24 Rio Tinto 2.37
Ups

Stanley Black & Decker 3.28 Reed Elsevier 1.08 Antofagasta 2.31
Leggett & Platt 3.04 Bayer 1.01 Glencore 1.14
Freeport-mcmoran 2.89 Iberdrola 0.97 Smiths 0.87
%
Xerox -5.46 Saipem -6.55 Wood (john) -5.95
Pacific Gas & Electric Co -5.31 Adidas -4.42 Nmc Health -4.96
Downs

Westrock -5.23 Commerzbank -4.19 Gvc Holdings -4.92

Centene -5.21 Inditex -3.87 Next -4.63
Packaging Of America -4.64 Evonik Industries -3.81 Marks And Spencer -4.59
Prices taken at 17:00 GMT Based on the constituents of the FTSE Eurofirst 300 Eurozone
All data provided by Morningstar unless otherwise noted.

Wall Street Eurozone London

Jack in the Box, the burger chain, gained European retailers took a hit yesterday on The decision to scrap plans to combine
after revealing it was exploring strategic concerns of contagion after British online SSE’s retail arm with Npower, the UK
alternatives, including a possible sale of fashion retailer Asos declined as much as retail business of Germany’s Innogy, saw
the company, less than a month after 40 per cent. both energy groups’ share slide with SSE
reporting a fall in full-year sales and Berlin-based online fashion retailer falling 3.2 per cent and Innogy down 0.8
earnings. Zalando fell as much as 16 per cent at one per cent.
The group said yesterday it had held stage, and Swedish fashion retailer H&M “We closely monitored the impact of all
discussions with potential buyers but dropped up to 7 per cent. developments and continually reviewed
stressed there was no guarantee that a Concerns grew over their traditional whether this remained the right deal to
deal would take place. Its shares rose 3.5 bricks-and-mortar stores as well, after do for our customers, our employees and
per cent in early New York trading. data from retail research group our shareholders,” said Alistair Phillips-
Boeing and Embraer announced they Springboard showed that footfall — Davies, SSE chief. “Ultimately, we have
had approved the terms of a joint venture which represents the number of shoppers now concluded that it is not.”
that would give the US aircraft maker visiting stores — was expected to decline Off the back of Asos’ sudden profit
80 per cent control over the Brazilian 4.2 per cent in December compared with warning, both JD Sports and Next were
company’s commercial aircraft and the same month last year. among the FTSE 100’s largest fallers,
services operations for $4.2bn. “Everyone knew bricks-and-mortar dropping 7.1 per cent and 4.6 per cent,
The companies said the long-awaited retail was in trouble,” said investment respectively.
transaction only needed the approval of research group AJ Bell. “This will strike Online retailer Boohoo also felt
the Brazilian government and regulatory fear into other internet-based retailers shockwaves from the news, sliding 13.7
authorities. Boeing rose 2.4 per cent and and more traditional rivals who were per cent. Reflecting gloom in the sector,
Embraer was up 4.9 per cent in early banking on their web-based portals to the FTSE 350 General Retail index ended
trade. FT reporters get them out of trouble.” FT reporters the day 3.5 per cent lower. FT reporters