FRIDAY 7 APRIL 2017
00
Sky-high policies
Air traffic control may be one reform
Trump gets to fly — GILLIAN TETT, PAGE 9
Thai king
signs new
constitution
Thailand’s King Maha Vajiralongkorn
pays his respects yesterday at the mon-
ument of King Rama I, first monarch of
the Chakri dynasty, on the day he signed
into law a military-backed constitution
presented as paving the way for a return
to democracy.
“May the Thai people be united in
following and protecting the constitu-
tion to maintain democracy and their
sovereignty,” an officer with the Royal
Scribes Bureau said on behalf of the king
at a glittering palace ceremony.
The new constitution is the country’s
20th since the end of absolute monar-
chy in 1932. Critics say it will still give
the generals a powerful say over Thai
politics for years, if not decades.
Full story page 4
Investors hail Unilever revamp
spurred by failed Kraft Heinz bid
3 Multinational’s shares edge higher 3 Sale of margarine unit and $5bn buyback planned
SCHEHERAZADE DANESHKHU — LONDON ures were “a proportionate response” to
the aborted bid. “We would expect these
Investors broadly welcomed measures actions to improve the outlook on future
unveiled by Unilever yesterday to boost returns for shareholders,” he said.
returns after the multinational rejected Unilever’s shares closed 1 per cent
a $143bn takeover approach from Kraft higher at £39.78 — above the £39.50
Heinz. informal offer in February from Kraft
Following a wide-ranging review, the Heinz. The US food group, backed by
Anglo-Dutch consumer goods group Warren Buffett and 3G Capital, the pri-
plans to sell its margarine unit, launch a vate equity group co-founded by three
€5bn share buyback and set targets for Brazilian billionaires, quickly dropped
substantially higher profit margins. its bid in the face of Unilever opposition.
The company said that it would dou- Céline Pannuti, an analyst at JPMor-
ble savings expected from an existing gan, said the review’s outcome was in
three-year cost-cutting programme, to line with expectations, but she added:
€2bn. “Management reached out . . . by rein-
Mike Fox, head of sustainable invest- forcing its steady growth-driven model
ments at Royal London Asset Manage- and accelerating short-term value thro-
ment, a top 40 investor, with 0.7 per ugh faster margin [growth] and cash.”
cent of Unilever shares, said the meas- The FTSE 100 company has been
World’s biggest wealth fund presses for
CEO incentive schemes to be ditched
RICHARD MILNE — OSLO
The world’s largest sovereign wealth
fund is pushing for a radical overhaul of
chief executives’ pay, arguing that the
long-term incentive schemes favoured
Iranian hardliners join
by many companies are flawed and
forces ahead of election
should be scrapped.
Iran’s hardliners have adopted a new Norway’s $910bn oil fund, which owns
approach to next month’s presidential the equivalent of 1.3 per cent of each
elections. Four years ago, Hassan listed company in the world, will start
Rouhani, the centrist president, above, pressing companies to end such incen-
won after several hardline candidates tives and instead force chief executives
ran against each other. This time, the to own substantial stakes in their groups
hardliners are forming a united front to for periods of at least five, and prefera-
challenge Mr Rouhani if he seeks a bly 10, years. It will also urge boards to
second term as expected: having name a ceiling for possible pay.
nominated five candidates, four will “We are signalling that we expect
withdraw when a frontrunner emerges change in the way remuneration is con-
in the final days ahead of the vote. structed. Over time, we expect long-
Report i PAGE 2 term incentive plans to be gradually
phased out, particularly with regards to
Subscribe In print and online
www.ft.com/subsusa
STOCK MARKETS
Tel: 1 800 628 8088
For the latest news go to Apr 6 prev %chg
www.ft.com S&P 500 2359.81 2352.95
Nasdaq Composite 5881.36 5864.48
© THE FINANCIAL TIMES LTD 2017 Dow Jones Ind 20706.32 20648.15
No: 39,441 ★ FTSEurofirst 300 1499.94 1497.61
Euro Stoxx 50 3492.51 3472.58
Printed in London, Liverpool, Glasgow, Dublin,
FTSE 100 7303.20 7331.68
Frankfurt, Brussels, Milan, Madrid, New York,
Chicago, San Francisco, Washington DC, Orlando, FTSE All-Share 3986.22 3996.54
Tokyo, Hong Kong, Singapore, Seoul, Dubai CAC 40 5121.44 5091.85
Xetra Dax 12230.89 12217.54
Nikkei 18597.06 18861.27
Hang Seng 24273.72 24400.80
FTSE All World $ 296.10 296.12
WORLD BUSINESS NEWSPAPER USA $2.50 Canada C$3.
Brand damage Tech testosterone
Avoiding marketing disasters, from Airbnb shows way to fight sexism in
Tronc to Pepsi — INSIDE BUSINESS, PAGE 12 Silicon Valley — COMPANIES, PAGE 13
Briefing
i Fifa secures China’s Hisense as sponsor
Electronics group Hisense has become the latest
Chinese sponsor of the football World Cup, providing
respite for Fifa as it struggles to secure commercial
partners after a corruption scandal.— PAGE 11
i Filibuster overturned over Gorsuch
Republicans have overhauled laws via a rule change
so drastic it is known as “the nuclear option”, to push
through Neil Gorsuch’s Supreme Court move after
Democrats tried to block his appointment.— PAGE 2
i Facebook reacts to fake news criticisms
Facebook plans to pay fact-
checkers to monitor news on its
platforms in response to
sustained criticism that it has
not been doing enough to crack
down on fake stories. — PAGE 12
i China rails at India over Dalai Lama visit
China has lashed out at India for permitting the Dalai
Lama to visit a key Buddhist monastery in a disputed
Athit Perawongmetha/Reuters Himalayan province, warning that it will “severely
hurt” the countries’ bilateral relations.— PAGE 3
i Koruna rises after currency peg ends
The Czech koruna rose almost 2 per cent against the
euro after the scrapping of a cap on the currency’s
strength. The move showed how regional inflation is
forcing policy rethinks.— PAGE 20; SHORT VIEW, PAGE 11
i Draghi quashes monetary easing talk
Mario Draghi and the ECB have moved to end talk
that they will start to dismantle their experiment
with negative interest rates this year.— PAGE 4
......................................................................................
i Financial Times scoops press awards
The FT has won the UK News Awards 2017 news
website of the year award, cited as the industry’s
‘gold standard’. How to Spend It magazine won the
under pressure to boost profitability be interested in acquiring Reckitt supplement of the year category for the 15th time.
and speed up the pace of growth since Benckiser’s food business, which
rebuffing the Kraft Heinz approach. includes French’s mustard. Reckitt said
Paul Polman, Unilever chief execu- on Monday that it had begun a review of Datawatch
tive, said that although the Kraft Heinz the business, since it was non-core.
bid had been “shortlived and opportun- Unilever said it would examine its
istic, it did raise expectations”. Paul Polman, dual-headed legal structure — the group Implied probability of Fed
3G has set new standards of profitabil- Unilever’s chief is listed in both Rotterdam and London Funds being 1% - 1.25% Interest rate
ity in the consumer goods industry executive, said and has headquarters in both cities. in June futures put the
through aggressive cost-cutting, ignit- that while Simplifying the structure could make it Per cent 60 chances of the US
Federal Reserve
ing an argument over the balance Kraft Heinz’s easier to demerge businesses or make 50 central bank
between investing for growth and boost- bid had been sizeable acquisitions, analysts said.
ing profits. short lived, it In a radical departure it also said that 40 raising its
benchmark
Ulf Mark Schneider, Nestlé’s new had nonetheless it would gear up its balance sheet and 30 Federal funds rate
chief executive, told shareholders yes- increased targeted a ratio of two times net debt to 20 again in June to
terday: “Many companies are focusing expectations earnings before interest, tax, deprecia- almost 60 per
on radical cost-cutting to deliver higher tion and amortisation. Net debt to 10 cent, up from 30
profits in the short term. This approach ebitda at the end of 2016 was 1.3 times. Jan Feb Mar Apr per cent at the
is not sustainable.” Lex page 10 Source: Bloomberg 2017 end of February.
Unilever also indicated that it might Analysis page 12
the recruitment of new chief execu- Mr Slyngstad said.
tives,” Yngve Slyngstad, the head of the Long-term incentive plans have
oil fund, said. become important for the pay of many
The oil fund’s intervention is highly chief executives. They account for 57
significant as it is one of the most influ- per cent of total pay for chief executives
ential investors, especially on responsi- in the US, while they are double the level
ble investing. But it has shied away from of base salary in the UK, according to
speaking out about pay because of a fear research cited by the fund.
of being seen as moralising from the The oil fund will meet chairmen and
safety of the egalitarian Nordic region. other investors after publicly revealing
Mr Slyngstad said that the issue of its new pay policy today.
how much a chief executive was paid It is keen not to set a specific level for
was crucial for ensuring that a company acceptable pay, but will ask boards
focused on long-term value creation. themselves to set the maximum that a
“In our opinion, neither society at chief executive can earn each year.
large, nor regulators, investors, boards The fund already votes against pay
or even CEOs are comfortable with policies of some of the biggest compa-
where we are at the moment. Most nies in the world. Last year, for instance,
people recognise there is a need for it voted against the pay schemes of com-
change,” he added. panies including Alphabet, Goldman
The oil fund believed that pay should Sachs, JPMorgan and Sanofi.
be “long term, simple and transparent”, Norwegian oil fund wades in page 14
World Markets
CURRENCIES INTEREST RATES
Apr 6 prev Apr 6 prev price yield chg
0.29 $ per € 1.066 1.066 € per $ 0.938 0.938 US Gov 10 yr 99.05 2.36 0.02
0.29 $ per £ 1.250 1.248 £ per $ 0.800 0.802 UK Gov 10 yr 100.69 1.18 0.01
0.28 £ per € 0.853 0.855 € per £ 1.173 1.170 Ger Gov 10 yr 99.90 0.26 0.00
0.16 ¥ per $ 110.885 111.185 ¥ per € 118.175 118.557 Jpn Gov 10 yr 100.43 0.06 0.00
0.57 ¥ per £ 138.568 138.726 £ index 77.515 77.306 US Gov 30 yr 99.75 3.01 0.03
-0.39 € index 88.377 88.379 $ index 105.005 104.866 Ger Gov 2 yr 102.62 -0.78 0.00
-0.26 SFr per € 1.070 1.071 SFr per £ 1.255 1.253 price prev chg
0.58 COMMODITIES Fed Funds Eff 0.82 0.66 0.16
0.11 Apr 6 prev %chg US 3m Bills 0.80 0.79 0.01
-1.40 Oil WTI $ 51.73 51.15 1.13 Euro Libor 3m -0.36 -0.36 0.00
-0.52 Oil Brent $ 54.93 54.36 1.05 UK 3m 0.34 0.34 0.00
-0.01 Gold $ 1252.50 1245.80 0.54 Prices are latest for edition Data provided by Morningstar
2 ★ FINANCIAL TIMES Friday 7 April 2017

INTERNATIONAL

Supreme Court US election

‘Nuclear option’ opens way for Gorsuch Nunes steps

down from
Change to US Senate rules nuclear option came after 45 Democrats
refused to end a debate over Judge Gor-
can leaders could do away with the fili-
buster for all Senate legislation, allowing
dential cabinet appointments could be
confirmed by a simple majority as
tions yesterday, blaming the other side
for pushing the Senate to the brink.
inquiry into
ends Democratic delaying
tactics over senior judge
such’s appointment, blocking his confir-
mation through a filibuster.
the ruling party to pass bills without
bipartisan consent.
opposed to three-fifths of the Senate.
Mr McConnell said that Democrats
“The only way that Trump wins today
is by changing and wrecking the rules,”
Russia links
Following the Senate rule change, a “The 60-vote bar in the Senate is the had boxed Republicans into a corner by Senator Richard Blumenthal, a Demo-
COURTNEY WEAVER — WASHINGTON president will be able to appoint a judge guardrail of our democracy,” Chuck refusing to confirm Judge Gorsuch, crat, told the Financial Times.
to the Supreme Court with just 51 Senate Schumer, the Democratic minority which he claimed was solely motivated “The Supreme Court is different. The BARNEY JOPSON — WASHINGTON
Republican lawmakers have overhauled votes as opposed to the 60 votes that leader, said ahead of the rule change. by the fact that Mr Gorsuch had been Supreme Court is the nation’s highest
Devin Nunes, the Republican law-
Senate rules, pushing through a vote to were required until yesterday. Mitch McConnell, the Republican nominated by Mr Trump — and that court and the justices serve lifetime
maker leading a probe into Moscow’s
confirm Neil Gorsuch to the US The rule change will speed through Senate majority leader, has pushed back Democratic lawmakers were appealing appointments, and the power of every
interference in the US election, is
Supreme Court after Democrats the appointment of Mr Trump’s nomi- against allegations that Republicans to their liberal base. justice is greater than anyone except
stepping down from the investigation,
attempted to block his appointment. nee, who is expected to be confirmed may next try to do away with the legisla- “There is simply no principled reason maybe the president. There ought to be
adding a new twist to the Russian
Under rules passed by the Senate yes- today. But it will have long-lasting tive filibuster. to vote No on Judge Gorsuch’s nomina- more than a razor thin majority if the
intrigue swirling around the Trump
terday, lawmakers in the minority party effects on the Supreme Court, raising “There’s not a single senator in the tion, even less of one to block that vote nominee is confirmed.”
administration.
will no longer be able to block presiden- concerns that the top court will increas- majority who thinks we ought to change from occurring at all,” Mr McConnell In the end, only four Democratic sen-
tial appointments to the Supreme ingly be filled with ideologues as the legislative filibuster,” he said this said on the Senate floor. ators declined to filibuster Mr Gorsuch’s Mr Nunes announced his move
Court, a move so extreme it had been opposed to moderate justices who are week. “Not one.” While senators on both sides of the nomination: Michael Bennet of Colo- yesterday having been engulfed in
known colloquially as “the nuclear confirmed with bipartisan support. Republicans note that Senate Demo- aisle have lamented the elimination of rado, Joe Donnelly of Indiana, Heidi accusations that he improperly briefed
option”. The rule change has raised concerns crats first employed the nuclear option the filibuster, both Republicans and Heitkamp of North Dakota and Joe President Donald Trump on informa-
Republicans’ decision to invoke the among Democrats that Senate Republi- in 2013, changing the rules so that presi- Democrats clung fiercely to their posi- Manchin of West Virginia. tion that the Trump team had been
“incidentally” swept up in foreign sur-
veillance by US spy agencies.
The credibility of the House probe
had been damaged by Mr Nunes’ deci-
Presidential election. Umbrella group sion to brief the president, using intelli-
gence it later emerged he had received

Iran hardliners rally in bid to oust Rouhani from Trump administration officials on
a late night visit to the White House.
Moments after Mr Nunes’ announce-
ment, the House ethics committee said
it was investigating allegations he had
engaged in the unauthorised disclosure
Leader to face multipronged of classified information. It did not say
conservative challenge whether the investigation related to Mr
Nunes’ White House visits or something
before frontrunner emerges else, but said its announcement should
not be taken as a sign that any wrong-
doing had occurred.
NAJMEH BOZORGMEHR — TEHRAN
Mr Nunes, who chairs the House of
Iran’s hardliners have nominated five Representatives intelligence commit-
candidates, including Ibrahim Raeisi, a tee, attributed his decision to stand
powerful cleric, to contest next month’s aside to “entirely false” complaints filed
crucial presidential election as they with the Office of Congressional Ethics
attempt to put on a united front to by “leftwing activist groups”.
defeat Hassan Rouhani, the centrist Democrats have demanded an inde-
incumbent. pendent inquiry to replace the House
The Islamic Revolution Forces Popu- probe, saying Mr Nunes used the infor-
lar Front, a new umbrella group, said mation to back Mr Trump’s unsup-
the nominees would be committed to ported claim he had been wiretapped
withdrawing from the contest when a by his predecessor Barack Obama.
frontrunner emerged in the days ahead The Senate intelligence committee
of the May 19 vote, Iranian media has launched its own bipartisan probe
reported. Hardliners hope the tactic will into Russian interference, seeking to
enable them to launch a multipronged keep a safe distance from the political
challenge to Mr Rouhani on the cam- ructions derailing the House inquiry.
paign trail, but also avoid a repeat of the Mr Nunes said in a statement: “Sev-
2013 presidential election when several eral leftwing groups have filed accusa-
hardline candidates ran against each tions against me with the Office of Con-
other, diluting their support. gressional Ethics. The charges are
The standout among the five nomi- entirely false and politically motivated,
nees is Mr Raeisi, who was last year and are being levelled just as the Ameri-
appointed custodian of the shrine of can people are beginning to learn the
Imam Reza in Mashhad, Iran’s second truth about the improper unmasking of
city. He also controls what is believed to the identities of US citizens and other
be the Islamic republic’s wealthiest hardliners’ meeting in Tehran, saying Selection: weaken reformers who backed the abuses of power.”
institution — Astan-e Qods Razavi, a Ibrahim Raeisi, 56, was born in the holy “it is necessary to be with the religious the general accord and have pushed for greater Paul Ryan, the Speaker of the House,
religious foundation that owns proper- Profile city of Mashhad to a clerical family. He people of this land” — Mashhad was hit assembly of engagement with the west after years of issued a statement supporting Mr
ties and land across the country. attended religious schools and entered by an earthquake this week, in which conservatives isolation. Nunes: “He continues to have [my]
It would be highly unusual for some- the Qom Seminary, Iran’s top school for one person died. meets in Tehran The Guardian Council, a powerful trust, and I know he is eager to demon-
one appointed to such a senior position Shia clerics, when he was 15. “Mr Raeisi, being a senior cleric and yesterday to body that is close to hardliners, will strate to the Ethics Committee that he
by Ayatollah Ali Khamenei, the repub- Custodian There are no known records of him having no record of political machina- decide on a announce later this month which candi- has followed all proper guidelines and
lic’s ultimate decision maker, to leave taking part in the 1979 Islamic tions, has the potential to address the shortlist of five dates, both reformers and hardliners, laws.” He added: “In the meantime, it
the post to become president, fuelling
of shrine is Revolution. But shortly after the Shah immediate demands of the people for candidates for are qualified to contest the election. is clear that this process would be a
speculation that he may be a favoured standout was ousted, he became prosecutor in economic improvement and job crea- the presidential All contenders must be deemed loyal distraction for the House intelligence
candidate of the supreme leader. His candidate the cities of Karaj and Hamedan. tion,” said Hamid-Reza Taraghi, a sen- election to the Islamic republic and reformers committee’s investigation into Russian
nomination also indicates that Mr Rou- In 1985, he became a deputy to the ior politician close to hardliners. “His STR/AFP/Getty Images fear that if Mr Rouhani decides to run he interference in our election.” The
hani can expect a fierce battle if, as prosecutor of Tehran’s Revolutionary chance of becoming Iran’s next presi- may be disqualified. House inquiry will continue under
expected, he seeks a second term. Court at a time when thousands of dent is more than 70 per cent.” “The reformists’ situation is like a Mike Conaway, a senior Republican
Mr Raeisi has not previously shown a political prisoners were sentenced to The two other high-profile candidates team that is allowed to enter the football member of the intelligence committee.
desire to be actively involved in politics. death. He was prosecutor-general, are Mohammad Baqer Qalibaf, the pow- match only in the 83rd minute when Mr Nunes said he would continue to
The 56-year-old cleric has held senior one of the top judicial erful mayor of Tehran who came second their opponents have already scored carry out his other duties as chairman
judicial positions, including prosecutor- posts, until last year to Mr Rouhani in the 2013 election, and three goals,” said a pro-reform analyst. of the intelligence committee, adding
general. Reformists accuse him of when he was appointed Alireza Zakani, a former MP and vocal “It is not new that hardliners are play- he was seeking to speak to ethics offi-
authorising a brutal crackdown against custodian of the holy critic of the nuclear agreement. ing another unfair game, but we can win cials “at the earliest possible opportu-
opposition in the 1980s. Imam Reza shrine in Hardliners, which include the elite if Mr Rouhani runs and if there is not nity in order to expedite the dismissal of
Now he is portraying himself as a man Mashhad. Revolutionary Guards, conservative massive fraud.” these false claims”.
of the people, with hardliners expected Ibrahim He has been a clerics and the judiciary, will go into the The power struggle between hardlin- Mr Trump came under scrutiny for
to target what they say is Mr Rouhani’s Raeisi member of the Experts election emboldened by US president ers and reformers is complicated by claiming Mr Obama ordered surveil-
failure to translate the nuclear deal Assembly, the body Donald Trump’s tirades against the rival political groups trying to position lance on his presidential campaign.
Tehran signed with world powers into that will decide who nuclear deal. themselves in the regime’s power cen- Shortly after receiving the briefing from
economic benefits for Iranians. succeeds Ayatollah Ali They hope the escalating tensions tres in preparation for the day Mr Mr Nunes last month, Mr Trump said
Mr Raeisi cancelled his visit to the Khamenei, since 2006. between Washington and Tehran will Khamenei, 77, dies. he felt “somewhat” vindicated.

US-China summit
MAKE A SMART INVESTMENT
Subscribe to the FT today at FT.com/subscription North Korea and trade pose early tests for Trump-Xi ties
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00
DEMETRI SEVASTOPULO — WASHINGTON would be “a test of the relationship”. Wilbur Ross, commerce secretary, has be “denied access” to the new island for-
TOM MITCHELL — BEIJING
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
Beijing has sought to position itself as an hinted that tough measures are needed tifications, suggesting a tougher line.
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

Xi Jinping arrived in Florida yesterday “honest broker” over the issue. to combat what Washington sees as However, James Mattis, defence sec-
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

This week North Korea fired another unfair trade practices. retary, played down these tensions on
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the
HOW DRIVERLESS
OF THE
for his first summit with Donald
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

missile into the Sea of Japan. In an effort to forestall trade friction, his first visit to Asia in February, and
i Emerging nations in record debt sales Warning: this article may be

Trump, with trade and North Korea

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
Mr Xi could promise more investment Chinese officials hope Mr Trump will
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

likely to be on the agenda.

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

engulfed in
EU, a Whitehall official said. “If running almost one tower a week

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
Taiwan
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

leaves the EU, customs authorities have
admitted to MPs.
HM Revenue & Customs told a parlia-
mentary inquiry that the new system
needed urgent action to be ready by
March 2019, when Brexit is due to be
completed, and the chair of the probe
said confidence it would be operational
in time “has collapsed”.
in US infrastructure and manufactur- not repeat his criticisms.
In a letter to Andrew Tyrie, chairman tensions after talks in Ankara with President Recep
of the Commons treasury select com-
mittee, HMRC said the timetable for
Tayyip Erdogan on issues including Syria and the
extradition of cleric Fethullah Gulen.— PAGE 9
Chic new lodgings
delivering CDS was “challenging but
achievable”. But, it added, CDS was “a i Toshiba investors doubt revival plan
in Scotland
complex programme” that needed to be In a stormy three-hour meeting, investors accused MAGAZINE
linked to dozens of other computer sys- managers ofhaving an entrenched secrecy culture
tems to work properly. In November, 3 UK, France and Netherlands swoop
and cast doubt on a revival plan after Westinghouse
HMRC assigned a “green traffic light” to filed for Chapter 11 bankruptcy protection.— PAGE 16
3 Blow for bid to clean up Swiss image

Setting up a digital customs system
has been at the heart of Whitehall’s
Brexit planning because of the fivefold
increase in declarations expected at
US officials have played down the poten- Chinese officials were shocked when Mr ing. But China’s preference for multibil-
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
Ms, in a move to embrace diversity and cater togather the information about the probes.

Mar-a-Lago theatre
British ports when the UK leaves the EU. means there are “major risks or issues

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,
tial for breakthroughs between the Chi- Trump broke with four decades of prec- lion-dollar investments by government-
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

Published daily except Sundays, New Year’s Day,

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

whether Whitehall can implement a
host of regulatory regimes — in areas
ranging from customs and immigration
to agriculture and fisheries — by the
time Britain leaves the EU.
Problems with CDS and other projects
caused by Mrs 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-
nese and US presidents, and stressed edent in December by speaking to controlled companies would be politi- China appreciated the decision to host
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.

Day, Martin Luther King Day, Thanksgiving,

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

City watchdog sends a clear message as

that the meeting is aimed at starting a Taiwan’s president and later suggesting cally controversial in the US. Mr Xi at Mar-a-Lago, particularly after
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

Christmas Day and the day after Christmas Day.

evade tax. It agreed to fines of $2.6bn.
Additional reporting by Laura Noonan in
cent yesterday, identified itself as the Dublin, Caroline Binham and Vanessa
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

relationship. he might not abide by the “One China” the US president hosted Japan’s Shinzo
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
Christopher Niehaus, a former Jeffer- ban people from installing apps on their
ies banker, passed confidential client private phones.
Brussels takes tough stance on Brexit
information to a “personal acquaint- Andrew Bodnar, a barrister at Matrix

South China Sea

and a £37,000 fine in the first case of ance and a friend” using WhatsApp, Chambers, said the case set “a precedent
Shutdown risk as border according to the FCA. The regulator said in that it shows the FCA sees these mes-
with Spain handed veto over Gibraltar
regulators cracking down on commu- 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
But as Mr Trump told the Financial policy under which Washington recog- Abe for three days at the resort.
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
Times in an interview last week, he nises Beijing as the sole seat of Chinese Mr Trump has followed Barack Obama While Mr Trump and Mr Abe
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.

Advertising: Subscribe In print and online World Markets

will pile pressure on English councils,
which will have to pay care workers a
lot more. Some 43 per cent of care
staff — amounting to 341,000 people
aged 25 and over — earn less than the
mailing offices; Post-Master. Send address changes
the road to Brexit, sought to damp Brit-
ain’s expectations by setting out a
“phased approach” to the divorce proc-
ess that prioritises progress on with-
drawal terms.
that the EU negotiating stance was
largely “constructive”, with one saying it
was “within the parameters of what we
were expecting, perhaps more on the
upside”.
Boris Johnson, the foreign secretary,
reassured European colleagues at a
Nato summit in Brussels that Mrs May
had not intended to “threaten” the EU
when she linked security co-operation

“would not be at all surprised if we did government. Mr Trump later backed in being highly critical of Beijing’s terri- appeared to hit it off, US and Chinese
www.ft.com/subscribenow new living wage and the increase is The decision to add the clause giving British officials admitted that the EU’s after Brexit with a trade deal.
STOCK MARKETS CURRENCIES INTEREST RATES
Tel: 0800 298 4708 expected to cost councils’ care services Spain the right to veto any EU-UK trade insistence on a continuing role for the Reports & analysis page 3
Mar 30 prev %chg Mar 30 prev Mar 30 prev price yield chg

Tel: +1 917 551 5040 to F.T. Publications Inc., PO Box 469, Newburgh, NY
£360m in the coming financial year. deals covering Gibraltar could make the European Court of Justice in any transi- Jonathan Powell, Tim Harford &
For the latest news go to S&P 500 2365.93 2361.13 0.20 $ per € 1.074 1.075 € per $ 0.932 0.930 US Gov 10 yr 98.87 2.38 0.00
Analysis i PAGE 4 300-year territorial dispute between tion deal could be problematic. Man in the News: David Davis page 11
www.ft.com Nasdaq Composite 5902.74 5897.55 0.09 $ per £ 1.249 1.241 £ per $ 0.801 0.806 UK Gov 10 yr 100.46 1.21 -0.03
Madrid and London an obstacle to Brussels sees little room for compro- Henry Mance page 12
Dow Jones Ind 20703.38 20659.32 0.21 £ per € 0.859 0.866 € per £ 1.164 1.155 Ger Gov 10 yr 98.68 0.39 -0.01
© THE FINANCIAL TIMES LTD 2017 FTSEurofirst 300 1500.72 1493.75 0.47 ¥ per $ 111.295 111.035 ¥ per € 119.476 119.363 Jpn Gov 10 yr 100.45 0.06 0.00
No: 39,435 ★ Euro Stoxx 50 3481.67 3475.27 0.18 ¥ per £ 139.035 137.822 £ index 76.705 76.951 US Gov 30 yr 100.14 2.99 0.01
Printed in London, Liverpool, Glasgow, Dublin, FTSE 100 7369.52 7373.72 -0.06 € index 89.046 89.372 $ index 104.636 103.930 Ger Gov 2 yr 102.58 -0.75 0.00 Subscribe In print and online World Markets

something that would be very dramatic down, but any sign of another switch torial claims in the South China Sea. Rex officials are nervous about the
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 4011.01 4011.80 -0.02 SFr per € 1.069 1.072 SFr per £ 1.244 1.238 price prev chg

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

Tokyo, Hong Kong, Singapore, Seoul, Dubai
CAC 40
Xetra Dax
Nikkei
Hang Seng
FTSE All World $
5089.64 5069.04 0.41 COMMODITIES
12256.43 12203.00 0.44
19063.22 19217.48 -0.80 Oil WTI $
24301.09 24392.05 -0.37 Oil Brent $
297.99 297.73 0.09 Gold $
Mar 30
50.22
52.98
1248.80
prev
49.51
52.54
1251.10
Fed Funds Eff
%chg US 3m Bills
1.43 Euro Libor 3m
0.84 UK 3m
-0.18 Prices are latest for edition
0.66
0.78
-0.36
0.34
0.66
0.78
-0.36
0.34
0.00
0.00
0.00
0.00
Data provided by Morningstar
www.ft.com/subscribenow
Tel: 0800 298 4708

For the latest news go to

www.ft.com
© THE FINANCIAL TIMES LTD 2017
12551; USPS number, 190640; ISSN# 09159460.
STOCK MARKETS

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

2368.06 -0.04 $ per €

5918.69 5914.34 0.07 $ per £
20689.64 20728.49 -0.19 £ per €
Mar 31
1.070
1.251
0.855
prev
1.074 € per $
1.249 £ per $
0.859 € per £
Mar 31
0.935
0.800
prev
INTEREST RATES

0.932 US Gov 10 yr
0.801 UK Gov 10 yr
1.169 1.164 Ger Gov 10 yr
price
98.63
100.35
99.27
yield
2.41
1.22
0.33
chg
-0.01
0.02
-0.01
FTSEurofirst 300 1503.03 1500.72 0.15 ¥ per $ 111.430 111.295 ¥ per € 119.180 119.476 Jpn Gov 10 yr 100.36 0.07 0.00
No: 39,436 ★

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

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

and good for both countries”. would be embarrassing for his guest. Tillerson, secretary of state, said in Jan- Trump-Xi relationship. Mr Xi is also
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 3990.00 4011.01 -0.52 SFr per € 1.071 1.069 SFr per £ 1.252 1.244 price prev chg
Chicago, San Francisco, Washington DC, Orlando, CAC 40 5122.51 5089.64 0.65 COMMODITIES Fed Funds Eff 0.66 0.66 0.00
Tokyo, Hong Kong, Singapore, Seoul, Dubai Xetra Dax 12312.87 12256.43 0.46 Mar 31 prev %chg US 3m Bills 0.78 0.78 0.00
Nikkei 18909.26 19063.22 -0.81 Oil WTI $ 50.46 50.35 0.22 Euro Libor 3m -0.36 -0.36 0.00
Hang Seng 24111.59 24301.09 -0.78 Oil Brent $ 53.35 53.13 0.41 UK 3m 0.34 0.34 0.00

Fax: +44 20 7873 5938, © Copyright The Financial Times Limited 2017. All
FTSE All World $ 297.38 298.11 -0.24 Gold $ 1244.85 1248.80 -0.32 Prices are latest for edition Data provided by Morningstar

letters.editor@ft.com rights reserved. Reproduction of the contents of this Some likely discussion points are: uary Chinese ships and aircraft should getting the red carpet, although he is not
Executive appointments: newspaper in any manner is not permitted without Trade and investment receiving the same treatment as Mr Abe,
www.exec-appointments.com the publisher’s prior consent. ‘Financial Times’ and North Korea During his election campaign Mr who dined with Mr Trump on at least
‘FT’ are registered trade marks of The Financial
Published by: Times Limited. Mr Trump has made North Korea his Trump talked tough about China and four occasions.
F.T. Publications Inc. 330 Hudson St, New York, most pressing national security issue trade. But so far he has not followed He will also not enjoy one of the pleas-
NY 10013, USA; The Financial Times and its journalism are subject to amid fears about progress Pyongyang through on a threat to declare China a ures that Mr Abe had in West Palm
Tel: +1 917-551-5000; a self-regulation regime under the FT Editorial Code
Editor: Lionel Barber of Practice: www.ft.com/editorialcode had made towards a nuclear-armed “currency manipulator” and to slap Beach. “I think it’s safe to say there’s not
missile that could reach the US. punitive tariffs on imports, suggesting going to be any golf,” said a US official.
Printed by: Reprints are available of any FT article with your He told the FT he would urge Mr Xi to that less hawkish members of his Mr Xi has cracked down on party offi-
Blue Island Newspaper Printing, Harvey, IL company logo or contact details inserted if required
Comprint Printing, Laurel, MD (minimum order 100 copies). One-off copyright put more pressure on North Korea to administration have exerted influence. cials playing golf as part of his anti-cor-
Evergreen Printing Company, Bellmawr, NJ licences for reproduction of FT articles are also halt its nuclear programme but said he Mr Trump told the FT he wanted ruption campaign.
Southwest Offset Printing, San Jose, CA available. For both services phone +44 20 7873 4816, was prepared to act unilaterally. China to cut its tariffs but would not Kim Jong Un, North Korea leader, is Philip Stephens page 9
Sun Publication Inc, Lakeland, FL or alternatively, email syndication@ft.com
One US official said Mr Xi’s response raise the issue in the first summit. But shown on television in the South Beijing warns Google page 14
Friday 7 April 2017 ★ FINANCIAL TIMES 3

INTERNATIONAL
GLOBAL INSIGHT

China picks sleepy village as ISTANBUL

David

hub of financial and tech zone Gardner

Turkey can expect

Speculators race to cash in on new economic area to rival Shenzhen and Shanghai skirmishes with EU
on road to autocracy

CHARLES CLOVER AND SHERRY FEI JU
QUANTOU, HEBEI PROVINCE
Since the time of the Ming dynasty five
centuries ago, the village of Quantou has
stood amid the wetlands on Bayang
Lake, one of the largest in northern
China.
Roughly 50km south of Beijing, its
main industry is tourism, catering to
urbanites seeking a lazy day catching
crayfish among the reed marshes.
But on Saturday this sleepy corner of
Hebei province was catapulted into con-
fusion by news of its imminent transfor-
mation into “Xiongan New Area”,
a global financial and technology centre
to rival Shenzhen and Shanghai.
Official news agency Xinhua said
Xiongan county would become
“another new area with national MONGOLIA
signifi-
cance”.
Shenzhen special economic zone and
the Shanghai Pudong new area, two of
China’s most vibrant areas sprang up
from farmland in the space of a few
years in the 1980s and 1990s.
Xinhua described the initiative as a
“major historic and strategic choice” by
China’s president, Xi Jinping.
The announcement has put sleepy
Xiongan on the map. Such is the
demand for Xiongan residence per-
mits, or hukou, that the local govern-
ment announced a temporary halt to
registering marriages in the county.
Shares in stocks related to Hebei
province have soared. Meanwhile, the
government has clamped down on spec-
ulators in the middle of a property
boom, as out-of-towners flock to the
county’s real estate developments
with suitcases full of cash to buy apart-
ments.
The state-run China Daily yesterday
reported that seven people had been
arrested for breaking real estate rules,
while 71 sales offices had been closed.
Quantou residents say they should
have seen it coming.
An announcement at the start of the
year prohibiting the building of homes
in Quantou and surrounding villages
was a sure sign, they say, that their town
would be razed like many a village in
CH INA
Beijing
Xiongan New Area
Tianjin
HEBEI
200kms
China to make way for urban progress.
They are likely to receive new apart-
ments and compensation but have not
been told where or how much.
“What else can we do other than going
where the government tells us to?” says
a Quantou resident in his 70s who asks
to be identified only as Mr Chen.
“The decision has been made, so our
only option is to go along and follow the
order when it comes.”
The fate of Xiongan offers a microcos-
mic glimpse of the rapid urban develop-
ment in China, in which a few words
from a political leader can be enough to
send property developers, financiers
and speculators racing to make a fast
buck on the next boom.
The government has created dozens
of “new areas” as part of a huge urbani-
sation drive that has swelled cities’ pop-
ulations by hundreds of millions.
Now, as Beijing suffers overcrowding,
Xiongan New Area is among a planned
constellation of megacities uniting the
capital with neighbouring Tianjin and
Hebei province, aimed at attracting
overflow population and commerce
from the capital.
“The move will help phase out
non-capital functions from Beijing,
explore a new model of optimised devel-
opment in densely populated areas,
and restructure the urban layout in the
Beijing Tianjin Hebei region,” said
I
On the map: Xinhua, quoting the government.
Baiyang lake in Most property developments in the
Xiongan New county are ringed by police and security
Area, Hebei guards prohibiting non-residents from
province. The entering. In the parking lot of the Wen-
area will be quan Xiaozhen (Hot Spring Town) com-
transformed by pound, a loudspeaker broadcasts a
development looped message exhorting people to
ordered by the avoid speculators.
government That did not stop the owner of a small
VCG via Getty Images dumpling restaurant in the compound,
who gave her name as Ms Zheng.
She bought a 120 sq m apartment in
one of the county’s top compounds. “It
was newly renovated and I’m willing to
sell it now,” she tells customers.
A real estate buyer who gave her
name only as Ms Sun said she had sold
16 apartments in a few days despite
a government ban on new sales, and that
housing prices had quintupled.
“There have been rumours about the
new area since the end of last year and
housing prices have been skyrocketing
since then,” she says.
But back in Quantou, the villagers are
not expecting to get rich.
“We don’t have any real estate here,”
says Mr Chen’s daughter, who owns a
restaurant in town.
But she is looking forward to having a
flat somewhere else.
“The government should have rea-
sonable arrangements in place for us vil-
lagers,” she says confidently.
f Turks voting in next week’s referendum grant Presi-
dent Recep Tayyip Erdogan his wish to rule
unchecked by an independent judiciary, alongside a
toothless parliament and unmolested by a prime min-
ister — a job which would be abolished — a lot more
than Turkey’s chequered democratic history will have
been transformed. This apotheosis of the country’s tower-
ing modern figure, in power now for almost 15 years at the
head of a neo-Islamist party that once looked like a Muslim
brand of Christian Democracy that Europe could embrace,
means a new relationship with the EU.
Negotiations on EU membership that began amid fan-
fare in 2005 soon stalled and have long lain moribund but
neither side has wanted to bury them. Now Mr Erdogan,
barnstorming across Turkey to eke out every referendum
vote, talks of another plebiscite to decide whether to con-
tinue or scrap accession talks. Last month, he burnt many
bridges with Europe, accusing Germany and the Nether-
lands of “Nazi” behaviour for barring his ministers from
holding rallies to attract Turkish diaspora votes.
These insults drew on nationalist antagonism towards
Europe. Asked if Turkey intends to try to rebuild those
bridges, Mustafa Sentop, an Istanbul MP, says: “Whoever
calls our elected President Erdogan a dictator, we call them
Nazis.” Mr Sentop also confirms the government intends to
call on Turks to vote, after the constitutional poll, on
whether to switch horses from accession and push for an
updated customs union with the EU, “but on our terms”.
That assumes Mr Erdogan will win on April 16. Yet,
either way, EU officials say they would prefer him to make
the break. The EU has so
far reacted perfunctorily
to the report last month
‘A political alliance
from the Council of is in deep coma . . .
Europe’s Venice Commis-
sion — the custodian of
modernising the
constitutional probity customs union may
across all Europe — that
Turkey’s new order is
well suit both sides’
incompatible with demo-
cratic norms and the rule of law: “a dangerous step back-
wards in the constitutional democratic tradition of Tur-
key”. The message is clear. This road to autocracy makes
Turkey ineligible for EU membership anyway.
The European Commission had already secured a man-
date from member states to upgrade and modernise the
customs union the EU has operated with Turkey since
1995. In light of last month’s exchange of rhetorical shells,
that has been postponed until after September’s German
elections. Both sides accept a rupture is coming and are
focused on what should replace it.
“The notion of a political alliance is now in deep coma,”
says Marc Pierini, former EU ambassador to Ankara now
at the Carnegie Foundation in Brussels. “In this tense con-
text, the more transactional avenue of modernising the
customs union may well suit both sides.” But, he adds, the
revamp would need “a functioning judiciary, and similar
rules on public procurement or competition policy, which
in turn will need a degree of political negotiations”.
Sinan Ulgen, who heads the independent EDAM think-
tank in Istanbul, says an enhanced customs union is “going
to be the new anchor for Turkey and Europe”.
Mr Erodgan’s preference is to keep economic ties with-
out bothersome political constraints. Yet any feasible cus-
toms union 2.0 would embody a new disputes settlement
mechanism to strengthen a crumbling rule of law, and
public procurement rules for more transparent tenders;
the present discretionary system is “central to how politics
is financed in Turkey”, one analyst says. Turkey’s long-
running skirmishes with Europe have a long way to go yet.
david.gardner@ft.com

Uttar Pradesh Holy site Economic outlook

India central bank governor Beijing warns New Delhi over Asia tipped to drive global
hits at debt waiver for farmers Dalai Lama’s regional visit growth despite China’s decline
AMY KAZMIN — NEW DELHI
India’s central bank governor has
strongly criticised a $5.6bn farm loan
waiver granted by a Hindu cleric and
politician, warning that exempting
more than 20m farmers from repaying
their debts would “undermine” India’s
credit culture.
Yogi Adityanath, the Hindu priest newly
installed as chief minister of Uttar
Pradesh, India’s biggest state, this week
approved the scheme, which will see the
cash-strapped state government shoul-
der the burden of repaying loans owed
by small and medium-sized farmers.
Mr Adityanath’s scheme, announced
this week at his first cabinet meeting,
will benefit 21.5m farmers who each
owe less than Rs100,000 ($1,549) to
banks, and 700,000 farmers with com-
bined loans of Rs56bn, all classified as
non-performing.
The farm debt waiver was one of the
campaign promises that helped Prime
Minister Narendra Modi’s Bharatiya
Janata party win a landslide victory in
Uttar Pradesh’s recent state elections,
seen as crucial for Mr Modi’s own re-
election prospects nationally in 2019.
However, Urjit Patel, governor of the
Reserve Bank of India, said the move
would inflict long-term damage on
India’s economy, eroding public
finances and raising expectations of
future loan write-offs in other states.
“It undermines an honest credit cul-
ture, it impacts credit discipline,” Mr
Patel said yesterday after an RBI mone-
tary policy committee meeting, at
which interest rates were held. “Waivers
engender moral hazard.”
“We need to create consensus such
that loan waiver promises are
eschewed,” he said. “Otherwise, sub-
sovereign fiscal challenges in this con-
text could eventually affect the national
balance sheet.”
The debt waiver in Uttar Pradesh —
one of India’s poorest and least devel-
oped states — will cost the administra-
tion about 2.6 per cent of gross state
domestic product for the current finan-
cial year, Nomura, the investment bank,
has estimated.
With India already gearing up for
national elections in 2019, the risk is
growing that other states will follow the
precedent. The BJP-led government in
Maharashtra has already suggested it
may consider a similar move for its
farmers, who have been hit by several
consecutive years of drought, and the
new administration in Punjab state is
also thought to be doing so.
But while Mr Adityanath’s loan
waiver is likely to boost his popularity,
analysts say it could backfire in terms of
hurting the very farmers it claims to
help by reducing availability of credit.
AMY KAZMIN — NEW DELHI
China has lashed out at India for per-
mitting the Dalai Lama to visit an
important Buddhist monastery in a
disputed Himalayan border province,
warning that the Tibetan spiritual
leader’s trip will “severely hurt” rela-
tions between the Asian neighbours.
The Dalai Lama, who has lived in exile
in India since 1959, is on an eight-day
visit to India’s north-eastern state of
Arunachal Pradesh, a region Beijing
claims is part of Tibet, invaded in 1959
and has controlled ever since.
The Dalai Lama has visited the state —
site of the sacred Buddhist pilgrimage
centre Tawang — six times before,
mostly recently in 2009 when Beijing
also publicly objected.
However, Beijing on Wednesday sum-
moned Vijay Gokhale, India’s ambassa-
dor to China, for an unusually sharp
rebuke over the trip, adding to its public
expressions of displeasure.
“The Chinese side will take necessary
means to defend its territorial sover-
eignty and legitimate rights and inter-
ests,” Hua Chunying, a Chinese foreign
ministry official, told media. She said
India should “immediately stop its erro-
neous move of using the Dalai Lama to
undermine China’s interests”, and
warned it had “escalated the boundary
dispute” by permitting the visit.
The Dalai Lama, whom Beijing
accuses of being a “splittist” seeking to
prise Tibet from China’s control, denied
any political agenda behind his trip to
Tawang, Tibetan Buddhism’s holiest site
after Lhasa. “India has never used me
against China,” he told reporters.
New Delhi has also rejected Beijing’s
assertion that the Dalai Lama’s visit to
Arunachal Pradesh has political signifi-
cance, despite the backdrop of Indian
unease over China’s activity in countries
The Dalai Lama:
the Tibetan
spiritual leader
denies any political
agenda behind his
trip to the state
it considers part of its own strategic
backyard.
Instead, India’s foreign ministry said
the Tibetan monk was a “revered spirit-
ual leader” who was pursuing “religious
and spiritual activities”. It advised that
“no artificial controversy should be cre-
ated” over his travels in India.
The tensions come at a time of rising
uncertainty in Asia, as countries are
braced for the fallout from potential US
disengagement from the region under
President Donald Trump.
Additional reporting by Tom Hancock in
Shanghai
MICHAEL PEEL — BANGKOK
Asian economies will drive global
growth this year as rising external
demand and commodity prices help
counter a gradual slowdown in China,
according to the Asian Development
Bank.
In its annual outlook published yester-
day, the multilateral lender said Asia
excluding Japan would deliver 60 per
cent of worldwide economic expansion
as the region’s less industrialised econo-
mies halted several years of slowdown.
The bank’s research shows growth
picking up in two-thirds of Asian coun-
tries, countering a slide in mainland
China’s expansion from 6.7 per cent in
2016 to 6.2 per cent next year. It predicts
that growth across the region will far
outstrip the collective annual figure of
1.9 per cent for the US, Japan and the
euro area in 2017 and 2018.
“Developing Asia continues to drive
the global economy even as the region
adjusts to a more consumption-driven
economy in the People’s Republic of
China, and looming global risks,” said
Yasuyuki Sawada, the ADB’s chief econ-
omist. “While uncertain policy changes
in advanced economies do pose a risk to
the outlook, we feel that most econo-
mies are well positioned to weather
potential short-term shocks.”
Domestic reforms and a recovery in
global food and fuel prices will help
Asia’s less industrialised economies
match last year’s average expansion of
6.3 per cent, the ADB forecasts. China’s
downward trend will pull growth for the
region excluding Japan down to 5.7 per
cent this year, compared with 5.8 per
cent last year and 6.5 per cent in 2013.
South Asia is forecast to drive expan-
sion in the wider region, notching a 7 per
cent rise this year, thanks mainly to a 7.4
per cent climb in India. Southeast Asia is
predicted to average 4.8 per cent over-
all, with growth above 6 per cent in the
Philippines and Vietnam offset by a 3.5
per cent figure for Thailand, the region’s
second-largest economy. Indonesia,
Southeast Asia’s most populous country
by far, is forecast to notch 5.1 per cent
growth this year and 5.3 per cent next.
External risks for Asia flagged by the
ADB include capital being sucked from
the region by US interest rate rises,
although the bank expects the process
to be gradual rather than a sudden
shock. Inflation is forecast to tick up
from 2.5 per cent in 2016 to 3 per cent
this year and 3.2 per cent in 2018 — still
below the 10-year regional average of
3.9 per cent.
A main domestic hazard is rising
household debt in some countries,
which the ADB says may require coun-
tries to enforce tighter rules on how
much people are allowed to borrow.
4 ★ FINANCIAL TIMES Friday 7 April 2017

INTERNATIONAL

Eurozone Political dispute

ECB dashes hopes of end to negative rates Fears grow for

Banks bear most of burden
of policy that takes chunks
from their profit margins
CLAIRE JONES — FRANKFURT
Mario Draghi and the European Central
Bank have moved to end speculation
they will start to dismantle their experi-
ment with negative interest rates this
year, disappointing bankers who say the
policy is eating into their profit margins.
Mr Draghi, ECB president, tried to
dispel rumours that the eurozone’s
monetary policymakers would start to
raise their deposit rate, which stands at
minus 0.4 per cent, in the autumn, say-
ing the negative side-effects of the pol-
icy “have so far been limited”.
Peter Praet, ECB chief economist, said
raising the deposit rate too early would
render its other policies less effective.
The intervention from two of the
ECB’s most senior officials markedly
lessens the chances of a higher deposit
rate before the second half of 2018. The
euro fell on the back of Mr Draghi’s
remarks yesterday.
Speculation mounted in recent weeks
that the ECB could renege on a commit-
ment to keep interest rates at current, or
lower, levels until the end of its pro-
gramme of mass bond buying, known as
quantitative easing. QE purchases are
planned until the end of 2017, with the
ECB buying €60bn a month of financial
assets until December. The programme
is expected to continue into the first half
of 2018, though the pace may slow.
“The impact [of negative rates] on
bank profitability has been offset by the
positive side-effects of easier financial
conditions,” Mr Draghi said at a confer-
ence in Frankfurt, adding that the ECB’s
commitment to low interest rates
“reflects exactly this assessment of side-
effects”.
The ECB entered the world of nega-
tive interest rates in the summer of 2014
and in effect imposes a levy of 0.4 per
cent on reserves that private lenders
park at central banks in the euro area.
Unable to pass on the cost of the levy
to most of their retail customers, banks
have had to bear much of the burden of
the policy, which was introduced to
increase the impact of the QE pro-
gramme and help to weaken the single
currency.
Jens Weidmann, president of the Ger-
man Bundesbank and one of the coun-
cil’s main hawks, said yesterday that low
interest rates were harming banks’ prof-
itability.
He said it was “legitimate” for the ECB
to begin to head for the exit and “con-
sider monetary policy normalisation”,
including “how it could adapt its com-
munication in advance”.
However, Mr Draghi said low rates
had allowed banks to raise the volume
of lending and meant fewer loans had
turned sour.
The ECB’s governing council has said
it will keep its key interest rates, includ-
ing the deposit rate, at current record
low levels at least until it ends QE.
Mr Draghi said yesterday: “I do not
see cause to deviate from the indications
stability of
we have been consistently providing in
the introductory statement to our press
Italy’s ruling
conferences.”
Mr Praet said without promises that
coalition after
interest rates would remain low for the
duration of QE, “the impact of asset pur-
chases may be partly neutralised”. He
Senate friction
said that while rates could rise soon
after bond buying ends, the sequencing JAMES POLITI — ROME
of the ECB’s exit from its extraordinary
Defeat for Italy’s ruling Democratic
monetary easing should remain.
party in a Senate committee vote has
Some of the 25 members of the coun-
exposed tensions in the parliamentary
cil, including the heads of the French
majority and raised concerns about the
and Austrian central banks, have
stability of the centre-left government
pushed for Mr Draghi to reconsider the
led by Paolo Gentiloni.
sequencing of its exit from its aggressive
monetary easing. Minutes of the March Any prospect of a political crisis in the
9 policy vote, published yesterday, eurozone’s third-largest economy will
showed the council is yet to discuss rais- unsettle investors and policymakers,
ing the deposit rate. who are relying on Mr Gentiloni remain-
ing in place until elections are due in
early 2018.
The possibility that Mr Gentiloni’s
position could be in jeopardy was raised

Greek deal Slide back towards recession underlines urgency
KERIN HOPE — ATHENS
As talks between Greece and its credi-
tors over the next stage of the country’s
international bailout programme con-
tinue at today’s EU finance ministers
meeting in Malta, Donald Tusk, Euro-
pean Council president, has warned it is
“no success story” yet.
Yet while Greece tussles over the
reforms required to unlock the next
tranche of bailout aid, its economy is
sliding back towards recession, making
further funding all the more urgent.
Forecasts revised down
In December, Greece looked set for a
strong recovery with the country’s cen-
tral bank and the International Mone-
tary Fund both forecasting the economy
would grow by at least 2.5 per cent in
2017. Their projections were markedly
more optimistic than those of a consen-
sus of leading international economists.
But a return to contraction in the
fourth quarter of last year and Athens’
failure to complete the latest bailout
process within 2016, as Greek prime
minister Alexis Tsipras had promised,
brought a downward revision. The cen-
tral bank last month cut its 2017 growth
projection to 1.5 per cent.
“There was no positive carry-over
effect from last year as expected, and
growth projections for the first quarter
ranged from negative to flat,” said
George Pagoulatos, a professor at Ath-
ens university.
Meanwhile, business confidence has
fallen sharply as fears grow of a pro-
longed stalemate with creditors. Hopes
of reaching a deal have been hit by polit-
ical wrangling in Mr Tsipras’s Syriza
party over pension and labour reforms.
A meeting of eurozone finance minis-
ters in May is seen by analysts as a key
moment for Greece’s presumed recov-
ery. “If there is no conclusion [on the
bailout] next month, you could see even
more subdued growth this year,” Prof
Pagoulatos warns.
Unemployment still high
Greece’s unemployment rate has
crept up over the past few
months to 23.5 per cent in Janu-
ary from 23.2 per cent in Sep-
tember, reversing a slight
decline from the end of 2015.
Unofficial figures from Greece’s
state employment agency
also show a sharp rise
in jobless registra-
tions in the first two
months of the year.
Athens lies far
behind its EU-28
partners, where
Short change
Revised down: Greece’s growth forecast for 2017
Jan 2017
Analysts’ concensus
forecast by date
(annual % change)
Jan 2016
1.1
Aug 2016
0.7
FT graphic Sources: Thomson Reuters Datastream; Consensus Economics; OECD; EU; European Central Bank
Greek prime average unemployment has fallen to a
minister Alexis four-year low of 8 per cent. Still, ana-
Tsipras had lysts said the jobless rate could be even
promised higher were it not for labour market
Athens would reforms implemented under the two
complete the previous bailout deals.
latest bailout “The reforms helped remove rigidi-
process within ties that prevented wages from adjust-
2016 ing to economic conditions, through a
sharp reduction in minimum wages and
the suspension of automatic salary
increases due to seniority,” says
Miranda Xafa, senior researcher at the
Centre for International Governance
Innovation.
About half of Greece’s registered
unemployed have been without a job for
more than a year, while many have sim-
ply given up searching for work. Labour
force participation has fallen to about 52
per cent, the lowest in the EU-28 except
for Croatia. Some 300,000 skilled young
Greeks have left the country since 2011
for jobs elsewhere.
Revenues: a bright spot
Greece has beaten the 2016 primary
budget surplus target by a wide mar-
Greece continues to struggle
with high unemployment …
1.7 Mar 2017 Unemployment rate (%)
1.5 Greek bailouts
May 2010 Mar 2012
First Second
2007 09 11
Source: Thomson Reuters Datastream
… yet renewed outflows of bank deposits have worried investors
Monthly deposit flows (€bn)
2014
gin, thanks partly to an unexpected
improvement in tax revenues. But the
exact amount of the surplus — which
strips out debt repayments — will not be
announced until the end of April.
The primary surplus is a bright spot in
an otherwise gloomy outlook. Athens-
based economists had predicted a 2016
surplus of about 2 per cent, but EU
budget chief Pierre Moscovici this week
told the European Parliament it had
exceeded 3 per cent of national output
last year, double the 1.5 per cent target.
Analysts say the overshoot came from
tax rises, better tax collection, and fur-
ther cuts in public spending.
Mr Moscovici said the surplus would
probably fall this year to 1.75 per cent
and then rebound to 3.5 per cent in
2018, ahead of the bailout target of 3 per
cent.
But some economists are sceptical
about Greece’s chances of maintaining
high primary surpluses over the
medium term as required by the credi-
tors. “The government did very well on
revenue collection last year basically
because everyone was overtaxed,” says
this week after the PD’s candidate to
lead the constitutional affairs commit-
tee in the Senate lost to a rival from the
centrist Alleanza Popolare party, an ally
in the governing coalition.
Loss of the committee leadership was
seen within the PD — and especially
among allies of Matteo Renzi, the
… but its budget balance is former prime minister who is attempt-
expected to improve … ing to mount a political comeback — as
Primary budget balance as % of GDP akin to a fratricidal coup.
Jul 2015
Latest EU forecasts 4 The committee role will be pivotal
because the committee has to craft a
Third 2 new electoral law for the country.
25 Matteo Orfini, president of the PD and
Greece 0 a close ally of Mr Renzi, said the coali-
20 -2
tion “should be based on mutual loyalty,
not on creating accidents”.
-4 Mr Renzi, who stepped down as prime
15
minister last year after losing an elec-
-6 tion on constitutional reform, faces pri-
10
-8
EU 28
‘Renzi is arguably playing
5 -10
13 15 17 2000 04 06 08 10 12 14 16 18
a dangerous game, putting
Sources: Thomson Reuters Datastream, OECD, EU
the whole country’s
position on the line’
5 mary elections to see if he retains lead-
ership of the PD on April 30.
He is expected to win and launch a
0 fresh bid for the premiership after
Italy’s next election.
Opponents of Mr Renzi are accusing
-5 him of purposely over-reacting to the
defeat to bring down the government or
Households
Businesses
-10
at least show that he could do so. That
would trigger early elections.
Angelino Alfano, the foreign minister
and leader of AP, sought to limit the
-15
damage by asking Salvo Torrisi, the can-
15 16 17 didate who won the Senate committee
Photo: Dreamstime vote, to step down.
But he said: “We were not born yester-
‘If there Gikas Hardouvelis, professor at Piraeus day. If someone is trying to create a
university. frenzy within the legislature and the
is no More deposit outflows
government and go to early elections,
conclusion they should say it clearly.”
Renewed outflows of bank deposits in Francesco Galietti, an analyst at Pol-
next month, January and February have made cen- icy Sonar in Rome, said: “Renzi is argua-
you could tral bank officials jittery. Less than two bly playing a dangerous game, as he is
years have passed since Greece’s central putting the whole country’s position on
see even bank closed lenders for three weeks and the line at a hugely sensitive political
more imposed capital controls to avoid a sys- junction.”
temic collapse. The controls have only Mr Renzi sought to portray himself
subdued been partially relaxed. as the responsible party in the stand-
growth Some €1.5bn of deposits left the banks off. “Yesterday’s episode is serious and
in January and €1bn in February. The unpleasant . . . but we don’t want to use
this year’ bulk on the business side was with- the word government crisis,” he said
drawn by owners of small and medium yesterday. “The work of the govern-
companies concerned that bailout talks ment needs to be defended and encour-
might be suspended, triggering a bank aged.”
crisis. The central bank has stressed the Mr Gentiloni yesterday indirectly
situation is very different from 2015, sought to lower the political tempera-
when government was locked in a ture in Rome. “In this delicate moment
stand-off with creditors and an involun- for our country and the world, citizens
tary exit from the euro looked possible. want institutions to be reassuring. This
But some Greek businesspeople is what the institutions need to be
worry that under current EU banking doing.”
rules, deposits over €100,000 would be Friction within the coalition may
bailed in following a bank collapse, increase further as Mr Gentiloni tries to
which would hit wealthier Greeks hard. craft a budget to fit EU budget rules.

Southeast Asia Suspected gas attack

Thai constitution solidifies power of generals
MICHAEL PEEL — BANGKOK
Thailand’s king has put his seal on a
new constitution that opens the way to
long-delayed elections but entrenches
the authority of the ruling generals and
monarchy.
King Maha Vajiralongkorn signed the
nation’s 20th constitution in 85 politi-
cally turbulent years at a palace cere-
mony yesterday, launching a process
that could lead to polls next year.
Critics say the elections have already
been neutered because the constitution
gives the military the means to control
any successive government as part of a
20-year plan it has announced for
Southeast Asia’s second-largest econ-
omy.
Among its provisions, the charter
makes parliament’s upper house fully
appointed and gives the generals con-
trol of the process. Some seats are
reserved directly for military officers
and other security agency members.
After the ceremony, General Prayuth
Chan-ocha, prime minister and leader
of the 2014 coup against Thailand’s
elected government, warned his admin-
istration would not permit any acts that
would “lead to any disturbance or
[harm] the atmosphere and good inten-
tions of the Thai people”.
The signing event on the 235th anni-
versary of the establishment of the
Chakri royal dynasty also highlighted
the power of the new king.
The palace had asked for changes to a
draft constitution approved in a tightly
controlled referendum last August.
King Vajiralongkorn took the throne
after the death in October of his father
Bhumibol Adulyadej, who ruled for
more than 70 years. Debate and report-
ing on the Thai monarchy is curbed by
harsh lèse majesté laws that carry jail
sentences of up to 15 years per offence.
The changes were revealed when the
constitution was published in the Royal
Gazette after the signing ceremony.
They included the removal of a draft
provision to give the constitutional
court and other institutions more pow-
ers to deal with political troubles.
That amendment underscores the
traditional role of the king as arbiter in
times of national crisis.
Another amendment allows the king
to travel outside the country without
having to appoint a regent to rule on his
behalf. King Vajiralongkorn has spent
much time in the past few years in Ger-
many, where his son is at school.
The constitution also sets out a
number of bureaucratic steps before an
election can be held. They mean polls
are unlikely to take place until the end of
next year — and few would rule out fur-
ther delays to a ballot originally prom-
ised by the end of 2015.
Thailand has been hobbled by a politi-
cal power struggle since a 2006 coup —
the 11th successful putsch since 1932 —
against Thaksin Shinawatra, whose par-
ties have won every election since 2001.
Putin accuses US of unfair Syria criticism
KATHRIN HILLE — MOSCOW
MEHUL SRIVASTAVA — ISTANBUL
Russian president Vladimir Putin hit
back at the international outcry
against Bashar al-Assad’s regime over a
suspected gas attack that killed more
than 70 people, and accused the US of
unfairly blaming the Syrian govern-
ment for the atrocity.
“It is unacceptable to make groundless
accusations against any party until a
thorough and objective international
investigation has been conducted,” Mr
Putin told Israeli prime minister Ben-
jamin Netanyahu in a phone call yester-
day, according to the Kremlin.
Mr Putin’s spokesman called the
attack in Khan Sheikhoun in northern
Syria a“monstrous crime” but said the
Trump administration had unfairly
“labelled” the Syrian government.
Moscow has insisted that the poison-
ing was the result of an air strike hitting
a depot holding chemical weapons that
were produced by rebels fighting Mr
Assad. Washington has dismissed the
claim as “false facts”.
Moscow, which intervened militarily
to tip the balance of Syria’s six-year war
in Mr Assad’s favour, has been roundly
condemned for backing the regime. The
gas attack threatens to raise tensions
‘It is unacceptable to make
groundless accusations
until an investigation
has been conducted’
between Washington and Moscow and
could signal a shift in US president Don-
ald Trump’s stance towards the Syrian
conflict. He said on Wednesday the gas
attack had crossed “many, many lines —
beyond a red line,” adding it had
changed his attitude to Mr Assad and
Syria.
Nikki Haley, the US ambassador to
the UN, blamed Russia and Iran, Mr
Assad’s other key backer, for the vio-
lence in Syria. “How many more chil-
dren have to die before Russia cares?”
Ms Haley said on Wednesday.
Washington’s tough stance has trou-
bled Moscow, which hoped that a visit
by Rex Tillerson, US secretary of state,
next week — the first substantive con-
tact with the Trump administration —
would mark the beginning of improved
relations between the two powers.
Turkey said yesterday that autopsies
carried out on some of the victims of the
attack revealed they had been subject to
chemical weapons.
A Turkish official said at least some of
the autopsies were carried out in the
presence of the World Health Organiza-
tion in the southern Turkish city of
Adana. As many as 60 of the victims of
the attack were brought to the Turkish
border for treatment. The UN has called
for an international investigation.
Comment page 9
Friday 7 April 2017 ★ FINANCIAL TIMES 5
6 ★ FINANCIAL TIMES Friday 7 April 2017

ARTS

Visionary spirit of
unfinished book about three freedom-
campaign martyrs (Martin Luther King,
Malcolm X, Medgar Evers), and the
lion’s share of the on-screen imagery is

a passionate misfit
from the Baldwin era. That, suggests the
film, was the yesterday which helped to
form today. The 1960s and 1970s were
that divisive yet decisive interregnum
between slavery’s unspoken continu-
ance, in civil inequality, and the first
true stirrings of bi-racial indignation
A Quiet Passion and race relations reform.
FILM Terence Davies Peck might have made more of Bald-
AAAAE win’s homosexuality, surely a compo-
Nigel nent of his identity as a misfit mission-
ary. The movie shows scant respect, too,
Andrews Neruda
Pablo Larraín for the Kennedys, who in the New Testa-
AAAAE ment era of civil rights legislation played
— it could be argued — John the Baptist
I Am Not Your Negro to Lyndon Johnson’s reforming messiah.

B
e in tune with your inner
scream. The closest artistic
cousin to Terence Davies’s
A Quiet Passion is surely
Edvard Munch’s famous
painting. The figure going howl on the
bridge is so like the British filmmaker’s
portrait of American poet Emily Dickin-
son. Davies made Distant Voices, Still
Lives and The Neon Bible. He excels in
stories where passion, emotion and
imagination roil or anguish interiorly,
like an antic baby in the womb.
Cynthia Nixon, starring as the Massa-
chusetts bard, exchanges Sex in the City
for psychosis in the country — or some-
thing close. This period film is dressed
with an almost deranged fastidiousness.
Oil lamps flicker; paintings glower; the
constricting dresses embrace their
women like succubi. There in the midst
is Emily, who in the gospel according to
Terence was a messiah of sensibility
crucified by her own sensitivity — with
help from the croaking philistinism of a
new world un-tuned to old or eternal
truths. And that doesn’t mean the eter-
nal truths of Emily’s parents, the repres-
sive verities of the Bible.
For nearly an hour I screamed
inwardly myself. Davies depicts suffoca-
tion near-suffocatingly. To love the film
you just have to spend time in the pres-
sure chamber of its singularity. The dia-
logue has the stiff throb of recitative; the
images are like tableaux vivants, or mour-
ants once the death scenes get under
way. Emily herself ebbs slowly, harrow-
ingly. She had a history of “the shakes”
and for Davies her vividness as a word-
shaman is intimate with this involun-
tary body language. Jennifer Ehle’s
kindly sister bustles around like Olivia
Raoul Peck
AAAAE
Aftermath
Elliott Lester
AAAEE
Raw
Julia Ducournau
AEEEE
A Dark Song
Liam Gavin
AAAEE
de Havilland to Vivien Leigh’s Scarlett.
And this Emily is a bit of a Scarlett: a
part-tomboyish rebel, a passionate
misfit, wedded to the fires of her art.
Two sequences in the movie are tran-
scendent. In one the family ages, face by
face. We watch their features morph
with time — each in a single shot — while
they pose in turn, seemingly, for a studio
photographer. Near the end, the camera
prowls the frugally decorated walls of
Emily’s home, the family house where
she spent effectively her life. It’s as if the
film is groping, abstractly yet expres-
sively, for the suffering, crying, vision-
ary spirit immured in its fabric.
Pablo Larraín’s Neruda starts as polit-
ical cabaret, turns into dark fairytale,
ends as a kind of destiny waltz. Listen to
all that kitschy three-time music. The
rhythms get into your blood (as the
blood gets into the last scenes’ snowy
imagery). Take your partner. He/she
should have fun, especially if previously
convinced that this Chilean director
(Post Mortem, Jackie) was a dyed-
through miserabilist.
Best to mug up first, though, on
the poet/politician’s life and work.
Otherwise it will be: “Oh! Really? Ner-
uda was a communist-sympathising
senator on the run in late-1940s Chile?
Didn’t know that. Unleashing state-of-
nation broadsides as well as the Nobel-
gonged lyrics?”
Non-LatAm viewers, even if partially
lost, will recognise the continent’s best-
known art export — magical realism. It
is there in the way Larraín and scenarist
Guillermo Calderón embolden their
pursuit plot with fantasy. Gael García
Bernal, mad of eye and moustache,
plays the police detective born from
Neruda’s imagination. (He’s an Inspec-
tor Fix, parthenogenesised by para-
noia.) The satirical stylings are broad
throughout, starting in a palatial salon
where guests use open-plan urinals.
Very Buñuel. Yet the tone is magisterial,
sly, at times wickedly sumptuous. And
Luis Gnecco’s Neruda is worthy to stand
beside Philippe Noiret’s in Il Postino: two
seers of podgy, resplendent dignitas,
peering into the privileged eternities of
the exile.
The writer/activist James Baldwin
comments and narrates all through
the documentary I Am Not Your Negro.
Never mind that he’s dead. Samuel L.
Jackson’s voice gives his words sound
and volume, the vivacity of his prose
gives him freshness and relevance.
Haitian director Raoul Peck won an
Oscar nomination for this forcefully
eloquent movie.
The overvoiced words are from
Remember This House, Baldwin’s
But Baldwin too dismissed the
Kennedys. Too much, no doubt, like
Camelot looking down on Cotton Town.
I came out of Aftermath thinking
“good grief” twice over. “Good grief”:
what underdeveloped plotting and
characterisation in this parallel-por-
traits tale of a bereavement victim
(Arnold Schwarzenegger) and remorse-
gnawed flight controller (Scoot
McNairy) after an airliner collision.
But “good grief” too: Arnie and Scoot
lay on the anguish bravely, even
though combating a narrative and
psychological vacuum. The gifted Dar-
ren Aronofsky (The Wrestler, Noah)
Fastidious: found the project, based on a true story,
Cynthia Nixon interesting enough to be a co-producer.
and Jennifer Pity his interest didn’t stretch to writing
Ehle in ‘A Quiet and directing.
Passion’. Below How do you like your body horror?
left: Luis Gnecco Two films jump out at us this week,
in ‘Neruda’ flashing sharp instruments. In only one
is the sharp instrument the filmmaker’s
mind. Julia Ducournau’s Raw is Franco-
Belgian bilge, using life at a veterinary
college as the excuse for a slasher about
sorority cannibalism. The plot lurches
from gross-out to gross-out with little
wit and less logic.
A Dark Song starts at a stumble: awk-
ward scripting, rabbit-in-headlights act-
ing. But this Anglo-Irish film set in
Wales — sort your inner co-ordinates —
grows into a small-scale gobsmacker.
The young mum (Catherine Walker) of
a murdered son hires a troubled occult-
ist (Steve Oram) to lead her through rit-
uals, some nasty, towards a rapport with
the dead. The film becomes hypnotic
even when a little horrible. The climax,
featuring an almost literal deus ex
machina, takes your breath away.

Teenage angst still thrills 30 years on

Implacable:
POP Jim Reid of
The Jesus
The Jesus and Mary Chain and Mary
Shepherd’s Bush Empire, London Chain
aaaae Ross Gilmore/
Redferns
Michael Hann

It’s more than 30 years since The Jesus

and Mary Chain made their name with a
sullen lack of charisma, deflecting their
audience’s rage back from the stage in a
blaze of white noise and chaos. Age has
not withered their teenage angst: their
new album Damage and Joy, their first
for 19 years, still sounds like the work of
East Kilbride teenagers seething at the
world for sending them to their rooms
without any tea, even if their live per-
formances are unlikely to provoke riots
any longer.
The Mary Chain’s rock classicism — a
mixture of the Ramones, Duane Eddy,
girl group pop, the Beach Boys, the
streamlined, unrelenting pulse of Neu!
and an adolescent, new-town version of
the Velvet Underground’s New York
nihilism — has aged well, though Jim
and William Reid have always taken a
fridge-magnet approach to writing
lyrics, rearranging favourite phrases
from rock history. Were one to make a
word-cloud from their songs, “head”
and “dead” would feature prominently.
But the music, implacable and
unrelenting, was thrilling. When
William Reid, the guitar-playing
brother, stepped on his effects pedals for
his solo in “Some Candy Talking”, the
song erupted into light. “The Living
End”, from their still-stunning 1985
debut album Psychocandy, remained the
most convincing biker anthem ever
written by people who had never ridden
motorbikes, let alone hit the open high-
ways. And new songs, too, did not
provoke the traditional race to the bar:
“All Things Must Pass” had even — dare
one say it? — a certain stateliness.
Alongside the stateliness, there was
silliness, albeit inadvertent. Singer Jim
Reid, separated from the musicians at
the back by a ridge of monitors, did not
need an empty stage to stalk around, his
approach to showmanship consisting of
leaning forward or raising one leg awk-
wardly behind him, or, in moments of
high excitement, leaning forward while
raising one leg awkwardly behind him.
And when the sound cut out during the
second verse of “Reverence”, leaving
him drowned out by the crowd bellow-
ing “I want to die just like JFK”, one
couldn’t help but think: honestly, are
you sure?
thejesusandmarychain.uk.com

T H E AT R E
The Hypocrite
Swan Theatre, Stratford-upon-Avon
aaaee
Ian Shuttleworth
The Royal Shakespeare Company’s con-
tribution to Hull’s year as UK City of Cul-
ture is this co-production with Hull
Truck Theatre, which opened in the
northern city in March and now trans-
fers to Stratford-upon-Avon.
Native Hullensian Richard Bean’s
play is steeped in Hull. Its subject mat-
ter comes from the city’s status as one of
the initial crucibles of the English civil
war (it housed a strategically vital arms
magazine), and its governor Sir John
Hotham’s 1642-43 change of sides from
parliamentarian to royalist. Bean
ascribes this Janus-facedness to
Hotham’s greed to secure money for
his daughter’s dowry, and proceeds to
cook up a farce on sex, money and
power interspersed with incongruously
earnest protest songs that draw paral-
lels between the “world turned upside
down” of then and now.
It’s packed with local jokes about
everything from road names to rugby
strips and even, if I guess aright, a
mickey-take of Hull Truck’s own appar-
ently platitudinous mission statement.
The gags come thick and fast and are
Caroline Quentin and Neil D’Souza
often brilliant — Hotham, on being
shown a picture of his daughter’s elderly
husband-to-be: “He’s covered in
scars!”; his wife, patiently: “It’s a wood-
cut” — but are, alas, also quite often just
vulgar cracks.
While the source material is fascinat-
ing from all kinds of angles, the play
itself is a mess. Phillip Breen directs, and
Mark Addy and Caroline Quentin lead a
cast who all act with vim and vigour.
However, there are too many plot lines
to keep in focus — it almost feels as if
there’s a separate subplot for every one
of Hotham’s 17 children (although only
three appear onstage) — and only one or
two strands are resolved; a couple more
are entirely unexplained from start to
finish. Farce is a finely engineered
machine; this, far from any kind of
mechanism, is an everything-that’s-left-
in-the-fridge frittata.
As regards parallels with today, the
inadvertently accurate correspondence
is one of information overload leading
us all to miss the real point.
To April 29, rsc.org.uk
Friday 7 April 2017
After nearly nine years, two recessions and billions in bailouts the economy is set to return to its pre-crisis size.
Reformers say the ordeal has created a new-look country but critics argue it has come at too high a price.
A
s you leave Valencia’s old
town and head east towards
the port, you come face to
face with two decades of
Spanish economic history
frozen in concrete, steel and glass.
First come the gleaming spikes and
waves of the City of Arts and Sciences, a
€1.3bn complex that includes an opera
house, museum and Europe’s largest
oceanographic aquarium. Built at the
height of Spain’s property boom, the
project symbolises the reckless ambi-
tion of the time. Vastly exceeding its
€300m projected cost, it blew a hole in
the regional budget that haunts Valen-
cia to this day.
Next up is the Formula One racetrack,
built during the same period, but aban-
doned after just five races. It runs past
another relic of Valencia’s great sporting
ambitions: a string of buildings that
housed the America’s Cup regatta in
Boom to bust
and back again
2007 and 2010. Despite their enviable
location overlooking the yacht harbour,
most fell into disuse once the event was
over. Now, at last, there are signs of life:
one building houses a business school.
Another serves as a gastronomic centre.
Boom and bust, recession and recov-
ery — Valencia embodies the recent
story of Spain like no other place. When
times were good, this was the city that
borrowed more rashly, built more lav-
ishly, and invested more foolishly, than
any other. When the property bubble
burst, Valencia fell hard.
“The entire economy was built on
bricks and mortar,” recalls Mónica
Oltra, an opposition leader during the
boom years, and now vice-president
of the Valencia regional government. “It
w a s l i ke b e i n g a t a p a r t y o f
drunks . . . People thought it would
never end.”
Today, the hangover from that party
is receding — both in Valencia and the
rest of the country. After three years of
impressive economic growth, Spain is
about to pass a crucial milestone on the
road to recovery: according to official
calculations, the country will exceed its
pre-crisis level of gross domestic prod-
uct any day now. Nine years after Spain
slid into a long and bitter recession, the
country is back where it was in 2008.
For some, not least the Spanish gov-
ernment and Europe’s political estab-
lishment, this is a moment of relief and
vindication. In their view, the recovery
of the eurozone’s fourth-largest econ-
omy shows that the unpopular policies
pushed through at the height of the cri-
sis worked. Despite causing initial pain,
Spain’s decision to reform the labour
market, overhaul the banking system
and cut the deficit paved the way for a
return to growth. It is a message Madrid
would like to resonate beyond Spain’s
borders: countries can reform their way
out of an economic crisis, even while
being locked into the single currency.
There is, however, another view. Crit-
ics, mainly from the left but also from
parts of academia, argue that the coun-
try’s recovery is not just incomplete but
that the price of austerity and reform
was too high. The unemployment rate
may have fallen sharply, but at 18.6 per
cent it remains far above the pre-crisis
level and almost double the eurozone
average. Ms Oltra is one of many who
bemoans the creation of a new class of
“working poor” in Spain. Inequality has
increased dramatically and public
finances continue to bear the scars of
the crisis: Spanish government debt is
100 per cent of GDP, up from 40 per cent
before the crisis.
The lost decade, and debt accumu-
lated along the way, will weigh heavily
on Valencia as well. Almost a quarter of
the government’s annual €4bn budget is
used to service the region’s vast debt
pile. “We are paying for a lot of broken
plates,” says Vicent Soler, the regional
budget minister since 2015.
Crucial vulnerabilities
Amid the debris of the downturn, how-
ever, some sense that the outlines of a
new economic model for Spain are
beginning to move into view. Analysts
caution that crucial vulnerabilities
remain — from the low productivity of
Spain’s private sector to the still-tower-
ing unemployment rate and the poor
state of the country’s education system.
There are also lingering concerns
about the health of the eurozone, which
Madrid feels needs further reforms and
more aggressive instruments to help
★ FINANCIAL TIMES
FT BIG READ. SPAIN
By Tobias Buck
Anti-austerity street protests in deal with future crises. But a deeper
Valencia in 2012 (top left); look at the origins and causes of the
construction of a new football post-2007 downturn suggests that Spain
stadium (top right) was halted in has tackled some of the country’s old
2009 and although the City of Arts weaknesses. The once decrepit banking
and Sciences (centre and bottom system is on a sound footing, companies
left) was completed it was €1bn over have become more competitive and the
budget. The city’s Ford plant over-reliance on construction is gone.
(bottom right) has added jobs and “It’s too early to declare victory,” says
production since the crisis — AP; Getty Javier Andrés, a professor of economy at
Images; Dreamstime; Eduard Bezembinder/Flickr
Valencia University. “[But] Spain is
growing again, and it is creating jobs. It
has shown that it can change.”
The origins of the crisis are today
broadly understood: when Spain joined
the European single currency in 1999, it
seemed like the gates to economic
heaven had opened. A country with a
history of high inflation and high inter-
est rates was suddenly able to borrow at
dramatically reduced rates. The arrival
Signs of a Spanish recovery
GDP is set to return to 2008 levels ‘It’s too early to declare
Real levels, rebased to Q2 2008
110 victory. [But] Spain is
growing again, and it is
105 creating jobs. It has
shown that it can change’
100
of the euro sparked a credit and prop-
erty boom that neither the European
95 Central Bank nor the Spanish govern-
ment were able, or willing, to stop.
90 That boom coincided with the arrival
of millions of migrants from Latin
2006 08 10 12 14 16
America, eastern Europe and north
Spain Germany Italy Africa, fuelling demand for homes that
UK France eventually reached fantastical propor-
The current account is in surplus tions. In 2007, Spain accounted for more
% of GDP housing starts than Germany, France,
10 Britain and Italy combined and 2.7m
Spanish workers were active in the con-
struction sector — equivalent to 13 per
5 cent of the national workforce.
In Valencia, the boom was even more
pronounced, helped by two factors that
0 had nothing to do with central bankers
in Frankfurt. One was the decision by
the regional and local government to
-5 sink billions of euros into one-off events
and pharaonic architectural designs.
The other was the proximity between
-10 political leaders and the cajas, or
2006 08 10 12 14 17* regional savings banks, under their con-
Source: Thomson Reuters Datastream, OECD * Forecast
trol. Poorly run and poorly supervised,
the cajas provided the rocket fuel for
Spain’s housing boom, dutifully funding
one unviable project after another.
Despite swallowing more than €17bn in
public rescue aid, not one of the three
main cajas from the region of Valencia
survived the crash.
Local politicians had little incentive to
urge restraint, if only because so many
of them stood to benefit personally from
the boom. For more than two decades,
the city and the region were in the grip of
Spain’s centre-right Popular party. With
few checks on their power, and a com-
pliant local business scene, PP mayors,
ministers and presidents engaged in an
orgy of waste, corruption, embezzle-
ment and illegal party funding. Since
2011, prosecutors have charged dozens
of PP leaders in Valencia and beyond in
multiple cases of fraud and misconduct.
Some are serving long prison sentences.
There was nothing that Valencia, or
Madrid, could do about the low interest
rates. But the combination of misman-
agement, hubris and greed, coupled
with a banking system that lent accord-
ing to political not financial criteria,
proved disastrous. As the bubble contin-
ued to inflate, it touched on the lives of
more and more people: teenagers left
school without any qualifications to
work on building sites. Orange farmers
pulled up their groves to build apart-
ment blocks. Owners of family compa-
nies abandoned them to sell real estate.
A region that once prided itself on its
manufacturing industry succumbed to
the dream of dinero fácil or easy money.
A changing economy
Today, growth rates are nearly back to
levels during the boom years. The Span-
ish economy expanded by more than 3
per cent in both 2015 and 2016, far
ahead of its European peers. That is
expected to continue this year, with
GDP forecast to rise at least 2.5 per cent.
More important than the headline fig-
ure, however, is the composition of
Spanish output. In the years before the
crisis, the volatile construction sector
accounted for more than 10 per cent of
GDP. Today, that share has fallen to 5
per cent. At the same time, Spanish
exports of goods and services have risen
from 25 per cent of GDP to 33 per cent.
7
The country’s exports are also more
diversified, with more companies in
more sectors selling to more markets.
The export boom reflects, among
other things, the country’s recent com-
petitiveness gains. Spanish unit labour
costs have fallen 14 per cent since 2010,
in response to long years of wage
restraint as well as the new flexibility
granted to companies by the 2012
labour market reform.
The vast Ford plant outside Valencia
is one of several car factories that have
added jobs and production lines since
the recession.
Another important sign of progress
shows up in the current account, the
measure of a country’s trade position
with the rest of the world. In the boom
years, Spain ran annual current account
deficits of as much as 10 per cent of GDP
— a level economists regard as a sign of
acute vulnerability. Today, the numbers
tell a different story.
“For the first time in recent history,
we have a recovery that is not associated
with a deficit in the current account.
The economy has been growing strongly
for more than two years and still we
have a significant surplus,” says Ray-
mond Torres, chief economist at Fun-
cas, Spain’s savings banks foundation.
Possibly the most important break
with the past has come in banking.
Messy and costly as it seemed at the
time, Spain’s 2012 banking bailout and
recapitalisation package turned out to
be vital for the country’s recovery.
“Spain did a textbook bank rescue,”
says Angel Ubide, a managing director
at Goldman Sachs and until recently a
senior fellow at the Peterson Institute
for International Economics. “It shut
down the banks that couldn’t survive
and recapitalised the ones that could.
‘The entire economy
was built on bricks
and mortar. People
thought it would
never end’
And then it moved all the bad assets into
a bad bank.”
The overhaul killed off the cajas,
which were either folded into larger pri-
vate banks or forced to become normal
lenders, free from political influence.
But it also meant that markets regained
trust in the broader banking system rel-
atively quickly. Balance sheets were
cleaned up, bad loan ratios fell and loan
loss provisions started to decline.
Most importantly, credit started flow-
ing to the private sector and to house-
holds once again. Analysts seeking to
Spain’s economic concerns explain the difference between Spain
Gross public debt has more and Italy in terms of recent economic
than doubled (% of GDP) performance usually cite credit flow
150 and the banking system as key factors.
“The banking issue was crucial, and it
was the root of the crisis,” says Luis Gari-
cano, a professor at the London School
100 of Economics, and an adviser to Ciu-
dadanos, the centrist Spanish party. “If
you don’t restructure the financial sys-
50 tem, as Spain and Ireland did, it is very
difficult to have a real recovery.”
The big losers
0 Away from hard economics, there are
2006 08 10 12 14 17* other signs of change in Spain. Recent
Spain Germany Italy
election results show that voters are less
UK France tolerant of political corruption, and
more reluctant to hand the country’s
Unemployment is twice the
eurozone average (%) establishment parties the huge majori-
30 ties they were accustomed to. Spain has
a minority government at the national
25 level, forced to build consensus even for
marginal issues. Elsewhere, the PP and
20 the Socialists have had to take on coali-
tion partners, limiting the scope for
abuses of power. Some of the country’s
15
darkest corruption black spots, such as
Valencia, are under new management.
10
Political rhetoric has changed accord-
ingly, as have priorities. Before the bust,
5
the talk among Valencia’s leading politi-
0 cians was all about “putting the city on
the map”. Today, regional ministers
2006 08 10 12 14 17
Sources: Thomson Reuters Datastream; OECD * Forecast
speak in low-key terms about the need
to strengthen the industrial base, and
ways to help small and medium-sized
companies tap into foreign markets and
access new technologies.
Some believe the changes go even
deeper. Sandra Gómez, a 31-year-old
Socialist who became deputy mayor of
Valencia two years ago, argues that her
generation has learnt a bitter lesson.
Too young to carry any blame for the
bubble, but not young enough to escape
Housing bubble At the height of the the bust, young Spaniards have been the
boom 2.7m people were employed in big losers of the lost decade.
construction — 13% of the workforce “There is more awareness of how dif-
ficult it is to find work if you are not pre-
Selling more Exports of goods and pared. Everyone knows that you have to
services have risen from 25 per cent of study, that you have to train and that
GDP to 33 per cent since the crisis you have to work hard. And that you
must never choose the easy path,” says
Political impact Recent election results Ms Gómez. “I think my generation, the
suggest that Spain’s traditional parties one that lived through all of this, we will
will struggle to recover lost support not make the same mistakes.”
8 ★
FRIDAY 7 APRIL 2017
As Trump blusters on
trade, Brussels leads
The EU’s calmer approach to negotiations gives it an edge
When Donald Trump reached the
White House in January, one of the big-
gest threats that his administration
posed to the status quo was in trade.
Saying that trade deals in general, and
the North American Free Trade Agree-
ment in particular, had cheated the US
out of jobs and exports, he vowed to
rewrite them, if necessary by unilateral
diktat.
More than two months in, the pre-
vailing attitude in the community of
trade policymakers is bemusement.
True to his word, Mr Trump immedi-
ately pulled the US out of the regional
Trans-Pacific Partnership and
demanded a renegotiation of Nafta
with its other two members, Mexico
and Canada. But it is unclear to what
extent he wishes to destroy and rebuild
the architecture of trade governance
rather than give it a judicious redesign.
Mr Trump sees China as the main
rival to the US in determining the rules
of world trade. But across the Atlantic,
the EU is quietly going about the busi-
ness of signing trade deals and extend-
ing its standards around the world.
Even without the formal imprimatur of
agreements, EU regulation has increas-
ingly become the norm in large econo-
mies, including, at times, the US.
The White House’s policy on rewrit-
ing Nafta is unclear. A policy document
circulated recently seemed to suggest it
wanted only minimal tweaks. Indeed,
since the agreement dates from 1994,
economies and technology have moved
on, and such a development might well
be welcomed by Mexico and Canada.
But the White House has since sug-
gested that was an outdated paper, and
that its actual proposals will be much
more radical, designed to force the
reshoring of production to the US. That
would be foolish. Nafta has facilitated
the creation of highly efficient supply
chains, not least for autos. Frequently,
that involves moving the labour-inten-
Crunch the data and take
action on gender equality
Companies can do a great deal to level the playing field, if they choose
Uber’s management has spent the past
two months struggling to contain a rep-
utational crisis that began with a
former employee’s description of ram-
pant sexism inside the company. Air-
bnb, in contrast, has been quietly over-
hauling its hiring practices to attract
more women — proving that it is not
impossible to overcome the gender
imbalances prevalent in Silicon Valley.
Its experience should serve as an exam-
ple — and not just for the tech industry.
As Uber has discovered to its cost,
consumer-facing companies have good
reason to pay attention to gender diver-
sity. Airbnb saw it as a priority because
more than half of its hosts are female.
In other parts of the service sector —
wealth management, for example,
where many clients are female — there
is increasing awareness that the image
a company presents to the outside
world will affect its bottom line.
Activist shareholders are now step-
ping up the pressure on US financial
groups to address the issue. All compa-
nies, however, should care about
whether they are able to recruit and
retain the best staff, and make the best
use of their talents. And while worrying
about diversity has often been seen as
an unaffordable luxury for small com-
panies, it is much easier to establish a
good balance at the outset than it is to
change corporate culture once it has
become entrenched.
This does not make it straightfor-
ward to address the scarcity of women
in the senior ranks of business and
finance, or the frequent concentration
of women in lower paid roles. Harass-
ment and overt discrimination are now
the exception rather than the norm.
Managers are increasingly aware of the
pitfalls of unconscious bias. Yet in a sec-
tor such as financial services, where
companies have ploughed money into
diversity training and other initiatives,
data collected by the Financial Times
sive parts of production to Mexico and
having the US specialise in higher-val-
ue-added stages.
Trying to bring manual work back to
the US is likely to be counterproduc-
tive. Much of Mexico’s car production is
traded outside Nafta, partly thanks to
its bilateral trade deals with other
countries. It will be capable of knitting
into non-Nafta supply networks if nec-
essary.
As it happens, Mexican officials are
in Brussels this week to update an EU-
Mexico bilateral trade deal, dating
from 2000, in a considerably less con-
frontational atmosphere. The EU is
never going to replace the US as Mex-
ico’s main trading partner, not least
because of geography. But the episode
does show that Brussels’ more method-
ical approach can achieve useful incre-
mental benefits. While Mr Trump pulls
America out of the TPP, the EU is get-
ting close to sealing a trade deal with
Japan, by far the pact’s largest economy
outside the US.
It has long been noted that, even
without being enshrined in formal
trade deals, the EU’s more comprehen-
sive and rigorous rules are often
adopted around the world. Even Amer-
ican multinationals comply with, for
example, the EU Reach regulatory
regime for chemicals wherever they
operate.
If Mr Trump’s aggressive mercantil-
ism goes global and starts a worldwide
trade war, the future for the interna-
tional governance of commerce
becomes more uncertain. But if the EU
can make achievements in calm, rea-
soned negotiations with trading part-
ners, European regulatory creep is only
likely to accelerate.
While Mr Trump and his officials
complain about lost jobs, their combat-
ive and self-destructive approach is
ceding ground not just to Beijing but
also to Brussels.
for a series on gender equality shows
progress has been incremental.
The obstacles are well known. There
is a dearth of female applicants for
technical roles, reflecting the lack of
women studying for science, engineer-
ing and IT qualifications. At senior lev-
els, it remains difficult to combine a
career with flexible working. Lower
down the hierarchy, childcare costs are
often incompatible with salaries.
Yet the policies required to overcome
these obstacles are also increasingly
well understood. The question is
whether companies and governments
will consider it enough of a priority.
The causes and remedies of gender
inequality will vary from one organisa-
tion to another, however. That is why
there is a strong case for collecting and
reporting detailed data on pay, includ-
ing bonuses — as will be mandatory for
larger UK companies from this week.
The value lies not so much in shaming
companies into action (although that
may in a few cases be a happy conse-
quence) but in helping them identity
the most effective steps to take.
Companies that have already carried
out the exercise show how it can focus
their efforts. An airline, for example,
decided to set aside places for women
on its pilot training course. A car hire
company discovered its female staff
needed encouragement to apply for
promotion. An employer struggling to
recruit women in a traditionally male-
dominated sector now pays for ante-
natal classes and offers on-site child-
care. Professional services firms might
develop forms of flexible working such
as job-sharing or compressed hours, as
well as part-time roles.
It may prove impossible to level the
playing field without further action by
government. But there is a great deal
that companies can do now on their
own initiative, if they choose to. They
would be the first to feel the benefits.
FINANCIAL TIMES
Trump must look closer to home on productivity
Sir, How appropriate that US
commerce secretary Wilbur Ross’s op-
ed “Trump will make trade fair again”
appeared immediately above Martin
Wolf’s column “Chinese finance is
storing up trouble” (April 5). Mr Wolf
rightly states that the US president’s
views are “mistakenly fixated on
bilateral imbalances”. Mr Ross’s
bombastic opening sentence both
validates Mr Wolf’s claim and misses
the mark by stating that “the US has
the lowest trade barriers and the
largest trade deficit in the world”.
Actually the US weighted-mean tariff
rate on manufactured goods is only the
23rd lowest, higher than countries such
as Canada and Japan. One should also
note that, in spite of a large deficit
It is vital that we read,
study, compare and
understand holy books
Sir, Jem Eskenazi’s letter (April 4)
to me shows the danger of not
understanding the Christian faith. The
letter solely quotes a passage from the
Old Testament chapter of Leviticus
24:16, that “anyone who blasphemes in
the name of the Lord is to be put to
death”. What is not made clear is that
Christ came to fulfil not only the
prophesies of the Old Testament but
also radically to challenge the mindset
of the Jewish leaders and their
followers.
We are celebrating this year the
500th anniversary of the Reformation
started by Martin Luther in Germany
which gave us the wonderful privilege
of being able to read the Bible in
English not Latin. If one reads and
studies the Bible carefully one rapidly
appreciates the overriding message is
one of love as shown by Matthew 22:39:
“You shall love your neighbour as
yourself.” When one considers the
extreme violence that continues to take
place in the name of religion,
understanding and comparing holy
books is of the utmost importance.
Timothy Ward
New Malden, Surrey, UK
Tax is, as always, the fly
in the ointment
Sir, Diane Coyle is rightly concerned
with the implications for a large part of
rich countries’ labour forces as they
brace for the wave of automation
looming in the large service sector
(“Universal basic services are more
important than income”, April 5). Her
first antidote — simply giving people
jobs — falls short because it will lead to
a result similar to the amusing story
that involved Professor Milton
Friedman when he visited a huge
government project in China, where
thousands of workers were building a
road using shovels. Friedman asked his
host: “Why weren’t they deploying
modern earthmoving equipment”?
After his host explained that using
shovels created more jobs, Friedman
responded: “Then why not give them
spoons instead of shovels?”
Professor Coyle’s proposal to provide
universal basic services in place of
income could be extended to
“21st- century basics” that would
include modern communications
technologies (such as WiFi) and higher
education supplementing 20th-century
Arts education
deserves to be
centre stage
Notebook
by Miranda Green
Letters
measured in absolute value, US
imports of goods and services as a
percentage of gross domestic product is
one of the lowest in the world at 15.4
per cent (compared with 28.2 per cent
for OECD economies).
For more than 200 years, basic
economics has informed us that
countries will export the goods and
services that they are relatively more
efficient at producing and import those
in which they are not. Hence, first-best
policymaking starts with the question
of efficiency and productivity. Is a
deficit industry less efficient than its
foreign competition, and if so, why?
Is it poor infrastructure, inadequate
education of workers, or fiscal drags
on business?
amenities such as free basic radio and
television broadcasts and public
education through high school, and
reclassifying standard healthcare and
financial services as “utility”-like
services, similar to electricity and
water.
Still, the fly in the ointment is
funding these programmes; that would
require adopting 21st-century tax
regimes, which in the case of the US
states is often promised but never
delivered.
Ira Sohn
Professor of Economics and Finance,
Montclair State University,
Upper Montclair, NJ, US
FT has a role to play in
supporting women
Sir, Your front page report “Women
still missing out on most senior jobs in
finance industry” (April 5) struck a
chord. The previous day I had attended
an FT conference in London on Brexit.
Guess what? The panel focused on City
issues was all male. Isn’t it about time
the FT addressed its own role in
helping support and profile women in
finance?
Louise Harvey
Brussels, Belgium
There is also a gender
gap in parliament
Sir, So a committee of MPs thinks half
of the UK’s senior executives should be
female from 2020 (April 5). How long,
I wonder, until parliament meets the
target it is asking business to set? Of
650 MPs just 196 are female.
Guy Dresser
Fislisbach, Switzerland
Constant hubbub is a feature of school
life. This week the shouts, taunting
and bells were imported into the Tate
Modern art gallery, where trainees
and professors at London’s Institute of
Education staged an “occupation”,
aimed at exploring imaginative ways
of teaching visual arts.
Along with the soundtrack of the
school day there were workshops,
installations, and a performance piece
based on a parents’ evening.
This self-conscious provocation
came in the middle of an ongoing
battle over how best to prepare
students for the challenges of the 21st
century’s changing employment
landscape.
The debate goes like this: in a
ruthless world of greater automation
and declining job security, should
education systems be straining to
catch up with East Asian economies,
for example by teaching excellent
maths to all students, not just the
most able? Or does this cause a decline
in creative subjects at the moment
when the experimentation, and the
love of design and making, nurtured
by the arts, are coming into their own
as workplace skills?
Generalised panic about lack of
numeracy has led schools in the UK,
US and Canada towards imitations of
Asian methods of maths teaching,
known as “mastery”.
The Shanghai region, meanwhile,
realising that critical thinking is as
important as the world-beating
arithmetic that propelled it to the top
of global education league tables, has
Indeed, the most recent Global
Competitiveness Report from the
World Economic Forum indicates that,
even though the US ranks third in
overall competitiveness, it is 18th in
primary education and a woeful 44th
in quality of maths and science
education. It notes that “infrastructure
quality deteriorated” in the US, and
highlights the need to address high
health and social security costs.
I suggest that commerce and the
Trump administration take a close
look at productivity issues at home
before pointing fingers abroad.
Joseph Daniels
Chair, Economics Dept,
Marquette University,
Milwaukee, WI, US
Link between elite and
population is key
Sir, The term “elite” is often used in a
disparaging context but it is interesting
to note that the original meaning
comes from the Latin, meaning “to
choose, elect” (“Angry voters are
nostalgic for powerful elites”, Janan
Ganesh, April 4). The key factor is the
connection linking the elite to the
population, or the governors to the
governed. It is clear that, in many
western societies, this is ruptured.
The Italian thinker Vilfredo Pareto
first used the term “elite” in this
context, when he developed his idea of
the “circulation of elites” in a book
published in 1902. The classical Greek
philosopher Plato, another renowned
thinker, talked about philosopher
kings, who were intelligent,
dependable and humble. We need
more of these characters in the so-
called elite in 21st-century society,
whether in business, politics or
elsewhere.
Zaki Cooper
London NW4, UK
The architecture of words
has been ousted by maths
Sir, I was delighted to read Michael
Skapinker’s article “Missing Oxford
comma shows why writing skills
matter” (FT.com, March 29), especially
the penultimate paragraph where he
attributes the problem to the fact that
people are not doing enough writing. In
my particular field of economics, I have
been arguing for some time that the
reason economics graduates find it so
difficult to write a simple sentence is
because the syllabus in most
universities has become very
mathematical. When I was a student
many, many years ago we had to write
essays. Now students are expected to
solve differential equations and answer
multiple choice questions.
Dr George M Georgiou
Head of Publications, Library & Records
Management,
Central Bank of Cyprus
Office silence broken only
by a new species of cricket
Sir, I have just read Lucy Kellaway’s
column “The dedicated office chatters
are being forced out” (April 3). Where I
am, it is mostly silent. The air vents are
making the most noise. Corporate
“crickets”?
Steve Eisenberg
New York, NY, US
— according to Lucy Crehan’s book
Cleverlands, a tour of the globe’s most
successful education systems —
introduced a new mantra: “To every
question there should be more than a
single answer.” In the UK, Cambridge
university has a new professorship of
play, sponsored by toymaker Lego, to
study “21st century skills like problem
solving, teamwork and self-control”.
At the chalkface, however, things
are going the other way: lofty arts-
world figures, along with teachers and
parents, complain that the recent
emphasis on so-called core learning is
squeezing out creativity in English
schools. Relegating the arts to an
extracurricular CV decoration is a
huge risk. Creative industries, and
culture both high and low, are major
UK exports — Britain could be
endangering one of its strengths by
leaving it out of school performance
measures.
“As a nation we desperately need to
be encouraging curiosity and
encouraging self-starters who are
brave and entrepreneurial,” argues
Henry Ward of the Freelands
Foundation, the art charity
responsible for the Tate event. And
the real problem is lack of equity.
While more academically successful
pupils tend to study arts subjects,
more than half of 16-year-olds do not
sit exams in any arts subjects.
Funding pressures on schools will
make the trade-off between academic
and arts subjects more brutal,
especially where arts teaching is
unimaginative. So the issue around
Friday 7 April 2017
Email: letters.editor@ft.com
Fax: +44 (0) 20 7979 7790
Include daytime telephone number and full address
Corrections: corrections@ft.com
Iceland, beware the risks
to financial sovereignty
of pegging the krona
Sir, I read Richard Milne’s report
“Iceland eyes currency peg as free float
is ‘untenable’” (April 3) and I find it
troubling that a country would
voluntarily sacrifice part of its
monetary sovereignty for the sake of
exchange rate stability.
The claims of Benedikt Johannesson,
Iceland’s finance minister, that the
country could not maintain a free
floating currency due to the lifting of
capital controls that were put in place
in the wake of the 2008 financial crisis
appear untenable. What Mr
Johannesson does not realise is that by
pegging the krona, Iceland has to keep
a very large amount of foreign
currency reserves so that it can absorb
the excess supply of krona in the
foreign exchange market. In addition,
it would definitely hurt Iceland’s
current account since the krona would
not be able to appreciate or depreciate.
Last, but not least, since Iceland lifted
its capital controls recently, the
attempts to stabilise the krona by
pegging it to another currency would
actually leave it vulnerable to
speculative attacks that target fixed
exchange rate regimes, which could
disrupt the stability of the currency
and the Icelandic economy.
If Iceland pegs its currency, it would
be giving up its financial sovereignty,
which would significantly reduce its
monetary policy options.
Barkin Cihanli
Denison University,
Granville, OH, US
Metrics to judge
Exor’s performance
Sir, Your Big Read article “Agnelli heir
makes bet on family fortune” (April 5),
describing the transformation in recent
years of the fortunes of Exor, the listed
family-controlled holding company,
dismisses Exor’s net asset value per
share metric as “odd” compared with
other allegedly superior metrics such
as simple share price movement.
However, I can confirm that the most
widely adopted metric worldwide to
measure holding company
performance is indeed NAV per share.
This said, I’m happy to let you know —
as we did the authors — that Exor’s
total shareholder return (share price
increase with reinvested dividends)
for the period of 2009 to 2016 was
+752 per cent, beating all the
comparable peers.
Your article also states that Exor’s
NAV per share missed “spectacularly”
its target (of beating the MSCI World
Index) in the first nine months of 2016,
but then strangely omits to report the
spectacular final quarter in which we
not only made up the gap, but went on
to outperform the index by 4.3
percentage points (this figure was
available to the authors).
As one old football saying goes,
“never leave the stadium before the
final whistle . . . you risk missing the
best part!”
Andrea Griva
On behalf of Exor,
Amsterdam, The Netherlands
COMMENT ON FT.COM
Martin Sandbu’s Free Lunch
As the robots march in, which is more use: an
unconditional income or a guaranteed job?
www.ft.com/free-lunch
access to creative subjects and to
effective maths teaching turns out to
be similar: how best to equip all
children for a stimulating career.
Top jobs demand a mix of skills.
While the elite Russell group of UK
universities has a list of academic
subjects that will help applicants to
maximise their chances of a place, all
may not be quite as it seems.
Drama, according to a study of
admissions data by LKMco, a think-
tank, is quite an effective passport to
an undergraduate law course — the
courts offer a perfect platform for
someone whose flair for oratory and
performance have already had an
outlet at school. Will it help social
mobility in the legal profession to
limit or discourage drama as a subject
choice for state school pupils?
“Focus on growing your nation’s
talent in the things that the Chinese
aren’t winning at (yet),” Crehan
advises other school systems — but we
should try to improve our maths
scores too. According to the OECD, the
Paris-based club of mostly rich
nations, one in 10 undergraduates in
England has low numeracy skills, one
of the worst rates among advanced
economies. Disputes about whether
academic or creative subjects have
greater utility may be best treated as
the equivalent of mayhem in the
corridor after the bell. It obscures
what really matters: spreading access
to excellent teaching in both.
The writer is a former FT education
correspondent
Friday 7 April 2017
Canada inspires US reform plans to take off
FINANCE
Gillian
Tett
T
hirty six years ago, the
phrase “air traffic control”
aroused strong passions.
The reason? In 1981, just
after Ronald Reagan
became president, thousands of air traf-
fic controllers went on strike. But Rea-
gan broke the unions in a move that
became a powerful symbol of the new
free-market, deregulated era.
The air traffic control issue could
become symbolic again — with a 21st-
century twist. This week, Donald
Trump summoned business leaders to
the White House, where he reiterated
his pledge to create a trillion-dollar
infrastructure plan to unleash economic
growth. The US president seems to visu-
alise this in terms of concrete; or, more
accurately, bridges, roads and that (in)
Trump, Xi
and a great
power bargain
GLOBAL POLITICS
Philip
Stephens
A
mong the few winners from
Donald Trump’s election
victory was China’s Xi Jin-
ping. This may not seem
obvious as the two leaders
meet at the so-called winter White
House in Mar-a-Lago, Florida. Mr
Trump has things to get off his chest —
about trade, North Korea and, probably,
the South China Sea. Any short-term
discomfort for the Chinese president,
however, should be measured against
Beijing’s long-term strategic gain.
For a US president who is nothing if
not a narcissist, this first meeting with
his Chinese counterpart is a moment to
show he can play tough. Bluster has its
downsides. He has been obliged to step
back from an early challenge to China’s
claim on Taiwan. A campaign promise
to charge Beijing with currency manipu-
lation in building its huge trade surplus
has also been put to one side. But Mr
Trump needs to get something on trade.
The smart move for Mr Xi would be to
offer him at least a modest win.
Canvassed before November’s US
presidential election, Chinese officials
seemed to favour a victory for Hillary
Clinton. They had no love for the Demo-
cratic party contender. On the contrary,
Britain’s dismal productivity is its biggest policy challenge
ECONOMICS
Martin
Wolf
T
he UK’s recent productivity
performance has been
calamitous. True, the pro-
ductivity slowdown has
been a widespread phe-
nomenon among high-income coun-
tries. But Britain’s slowdown is remark-
ably bad even by these standards. The
question is why. Recent research sheds
light on this vital economic question.
Why is it vital? The answer is that if
recent performance continued, the
economy would no longer generate ris-
ing real incomes per head. That would
change everything for the worse.
Since the financial crisis of 2007-08,
the UK’s growth of labour productivity
has been about the same as Italy’s, in the
performance basement of the high-in-
come countries. Yet the UK suffered
famous wall. But Gary Cohn, head of the
Council of Economic Advisers, has a dif-
ferent spin: his first priority is to take
the air traffic control system away from
the Federal Aviation Administration
and place it in a non-profit entity,
funded by public and private finance.
The hope is that this will unleash
investment, such as the adoption of GPS
technology to replace the land-based
system. “Air traffic control is probably
the single most exciting thing we can
do,” Mr Cohn declared, arguing that
embracing GPS and digital technologies
could slash US flight times so dramati-
cally that “we will save over 25 per cent
of the jet fuel in this country”.
This initiative might show how the
White House is being forced to scale
back reform ambitions in the face of
Congressional opposition towards
measures such as healthcare reform. It
would be hard to persuade Trump vot-
ers that air traffic control reform is “the
single most exciting” infrastructure
pledge on the table.
But another way to interpret Mr
Cohn’s comments is that it confirms that
some in the White House are trying to
Mrs Clinton’s role in Barack Obama’s
Asian “pivot” aroused considerable hos-
tility, as did her insistence on raising
human rights. But she was judged pre-
dictable. The Beijing leadership values
predictability — this year more than
most as Mr Xi seeks to tighten his grip
on power at the Communist party’s 19th
National Congress.
So Mr Trump’s victory on a platform
of economic nationalism and an appar-
ent willingness to throw overboard past
Sino-American understandings initially
saw Beijing scramble to adjust. It was Mr
Trump, though, who blinked. His rein-
statement of the “One China” policy
towards Taiwan has since seen Beijing
build relationships with the White
House, in particular with his son-in-law
Jared Kushner. Given the work that
China puts into such summits, it would
be a surprise if Mr Xi did not suggest
some way forward on trade.
Beyond the avoidance of short-term
turbulence, Beijing has much to gain
from an amicable outcome. For all the
America-first rhetoric, Mr Trump’s
worldview is not very different from
that of his guest. Not so long ago, the US
was pressing Beijing to become a
responsible stakeholder in an interna-
tional system designed and led by Wash-
ington. But Mr Trump, like Mr Xi, is a
nationalist, disavowing “globalism” in
favour of Americanism.
True, pressure from the grown-ups in
his cabinet has persuaded him to tem-
per some of the disdain for Washington’s
traditional alliances. The pivotal figure
has been James Mattis, the former gen-
much the largest deterioration in pro-
ductivity growth of any of the large
high-income countries since the crisis.
Its productivity levels are also among
the lowest of the high-income countries,
which indicates room for fast catch-up
growth. This makes recent performance
even more disturbing.
Even I had not realised how bad per-
formance has been until I read a recent
speech on productivity by the Bank of
England’s Andy Haldane. “For the past
decade, average productivity growth
has been negative,” he said, adding “you
would have to go right back to the 18th
century to see a similarly lengthy period
of stagnant productivity.”
One reason why things might not be
quite as bleak as this is laid out in a
recent paper by Harvard’s Marty Feld-
stein. He argues that we tend to exagger-
ate inflation and so underestimate eco-
nomic growth, because of growing diffi-
culties in measuring quality improve-
ments in the modern economy. In all
probability, real incomes are rising
more than statistics indicate. While
plausible, this does not explain the vir-
tually universal productivity slowdown.
★ FINANCIAL TIMES
Comment
turn Mr Trump’s grandiose promises
into practical policy. And investors and
business leaders (not to mention vot-
ers) should welcome reform.
The current system is desperately
old-fashioned, so much so that industry
studies suggest that introducing GPS
might deliver a $30bn annual efficiency
boost to the economy. Second, shifting
the discussion about infrastructure
Some in the White
House are trying to turn
Trump’s grand promises
into practical policy
away from Mr Trump’s obsession with
concrete towards digital technology is
welcome — and overdue.
Third, the initiative is something that
might win wide support. Most Republi-
cans love the idea. So do business lead-
ers: Doug Parker, chief executive of
American Airlines, for example, said
this week that wants an overhaul of the
“antiquated” system, and suggested
eral turned defence secretary. It was Mr
Mattis who travelled to Tokyo and Seoul
to reassure Japan and South Korea of an
enduring commitment to the bilateral
alliances. He was also instrumental in
persuading the president that Nato is
not obsolete. The defence secretary is as
irritated as anyone by Europe’s failure
to pay its way. He understands, though,
that the alliance system has been an
enduring source of US strength. It sets
the US apart from China and Russia.
The problem lies in Mr Trump’s trans-
actional view of the world. He prefers
deals to something as necessarily ill-de-
fined as global leadership. Hence the
decision to repudiate the Trans-Pacific
Partnership, a trade agreement that
would have checked Beijing’s advancing
economic influence in the western
The singular threat to Sino-
American relations comes
from North Korea’s nuclear
and missile programmes
It certainly does not explain the UK’s
exceptionally large slowdown.
Mr Haldane suggests another expla-
nation: the huge lag between the pro-
ductivity frontrunners and the laggards.
He also shows that the dispersion in pro-
ductivity performance is larger in the
UK and has widened more than in other
countries. Evidently, the UK economy
contains many duff companies.
One explanation is growth
has not so much slowed as
never reached the heights
estimated before the crisis
This analysis helps explain the UK’s
low average level of productivity. But it
does not appear to explain the sharp
slowdown. Mr Haldane’s data show that
the dispersion in productivity among
British companies is exceptional, but
not that it has grown faster since the cri-
sis than before it. Indeed, he notes that
“the tail of low-productivity companies
today is, if anything, smaller than it was
that a new non-profit entity should do
this by issuing bonds. And he pointed
out that a flight from Dallas Fort Worth
to Philadelphia takes about 30 minutes
longer than it did in 1979 because the US
air traffic system has not kept pace with
the rest of the world.
Even unions may get on board, not-
withstanding their previous opposition.
This is because the FAA’s budget has
been so unstable in recent years that it
has hit air traffic controllers too.
Then there is a fourth factor: the
reforms show that parts of the adminis-
tration are ruthlessly non-ideological
about the sources of their reform ideas.
In this case the inspiration partly comes
from Canada. “We lost control of the
skies over the Atlantic and Pacific Ocean
because Canada has adopted a GPS sys-
tem,” Mr Cohn laments.
There is so much fascination (or
wounded pride) about Ottawa’s experi-
ence, that Elaine Chao, transportation
secretary, has visited Canada to study
the system. And that may pave the way
for the import of other Canadian ideas.
Notably, Ottawa has launched a
C$130bn infrastructure initiative, fea-
Pacific and handed Washington impor-
tant strategic leverage. Mr Trump has
no time for the geopolitics that offers
choices to nations such as Vietnam,
Malaysia, Thailand and Singapore.
The opening here for Mr Xi is obvious
enough — a US president receptive to
the idea of replacing the rules-based
international system with one based on
bilateral bargains struck between the
most powerful nations. Smaller states
are left to fend for themselves. Mr Xi
coined a phrase for the construct some
years ago — “a new model of great power
relations”. The ambition is to replace US
with Chinese leadership in the western
Pacific. The logic of Mr Trump’s bellig-
erent isolationism runs in the same
direction.
The strategic prize may be in sight but
it is not yet within Beijing’s grasp. China
will have to be flexible on trade — to give
Mr Trump the favourable headlines he
craves. A more dangerous obstacle
to Mr Xi’s new international order,
however, sits in Pyongyang. The
singular threat to Sino-American
relations comes from North Korea’s
pre-crisis”. So that cannot explain the
productivity slowdown.
Another hypothesis is that loose mon-
etary policy explains the slowdown. But
UK policy has not been exceptionally
loose and so cannot explain its excep-
tional slowdown. Mr Haldane’s analysis
does show that tighter monetary policy
might have raised productivity levels by
a modest 1-2 per cent, but at the cost of
some 1.5m jobs. Inflicting that would
have been grossly irresponsible.
There is another explanation.
Research by my colleagues Chris Giles
and Gemma Tetlow shows that the slow-
down is mainly in banking, telecommu-
nications, utilities, management consul-
tancy and legal and accounting services.
These sectors comprise 11 per cent of
the economy, yet account for two-thirds
of the slowdown. Many of these sectors
were profoundly affected by the boom
and bust of global finance. Indeed, one
possibility is productivity growth has
not so much slowed as never reached
the heights estimated before the crisis.
Surging real rewards might have been
confused with booming output. If so, the
slowdown is a return to normality.
turing a new $35bn infrastructure bank
that is supposed to use public funds to
catalyse private sector investment into
infrastructure projects. “We think we
will raise $4 to $5 in private capital for
every tax dollar invested,” Bill Morneau,
Canadian finance minister, told inves-
tors in New York this week. This idea
may be emulated, not least because
many Republicans are opposed to using
too much public debt to fund Mr
Trump’s infrastructure plans.
It would be premature to get too opti-
mistic about the economic impact of
these ideas. Canada’s system of govern-
ment embraces sensible bipartisan poli-
cymaking. But even Ottawa has found it
hard to turn its infrastructure promises
into tangible projects as quickly as it
hoped. It will be far harder in the US’s
fractured — and fractious — system.
If Mr Cohn can make his air traffic
control plans fly, that would create a
symbolic victory of sorts. And, as Rea-
gan knew, symbolism sometimes mat-
ters; particularly with that tricky issue
of business mood.
gillian.tett@ft.com
nuclear and missile programmes. There
is more than the usual bluster to Mr
Trump’s warning that the US would act
unilaterally in the absence of Chinese
pressure on North Korean president
Kim Jong Un. Had she been elected, Mrs
Clinton would have been saying much
the same. The fear that Pyongyang is
only a few years away from putting a
nuclear warhead on a missile capable of
reaching America’s west coast is widely
shared in Washington’s foreign policy
and defence establishments. So, too, is
the view that no US president could
accept such a risk.
It is not obvious just how much lever-
age Beijing has over the wayward Mr
Kim. Nor that the US would risk war on
the Korean peninsula to pre-empt the
nuclear threat. And there is much whis-
pering in Washington about alternatives
to bombing Pyongyang’s nuclear instal-
lations. But if Mr Xi is serious about
establishing his new model of great
power relations, North Korea presents
the unavoidable test.
philip.stephens@ft.com
It should be noted that none of these
explanations is comforting. Eliminating
the dispersion in productivity among
companies would be desirable in itself
and also raise productivity growth. But
the question is why an economy that is
open to the world, went though the
Thatcher revolution and is among the
least regulated of all the high-income
countries, should show such a big dis-
persion in productivity. This suggests
bad management is both rife and per-
sistent. Again, while the Financial
Times research clarifies where the slow-
down has occurred, it does not explain
why productivity growth is so perva-
sively low. One reason could be the
exceptionally weak investment, by
international standards. This would be
another corporate governance failure.
Rectifying this disaster is the UK’s
most important policy challenge, far
more so than Brexit. The government
should finance a high-level effort aimed
at working out what has gone wrong,
why and what (if anything) to do about
it. The country’s very future is at stake.
martin.wolf@ft.com
9
History has
served up a rare
second chance
on Assad
OPINION
Richard
Haass
I
n the summer of 2013 the Syrian
government employed chemical
weapons against its own civilians,
killing an estimated 1,500 men,
women and children in the process.
It did so in defiance of international
warnings that such action would be met
with severe consequences. As it turned
out, the Cameron government in the
UK, followed by the Obama administra-
tion in the US, decided not to make good
on these threats, fearing that to do so
would embroil them in a messy and
costly conflict in Syria.
It is rare that history serves up second
chances, but the US and others find
themselves in precisely such a situation.
Once again the regime of Bashar al-As-
sad has appeared to use chemical weap-
ons against its own people with devas-
tating results. Why Mr Assad chose to
order such a strike now, at a time when
his domestic position looked unassaila-
ble and just days after the Trump
administration signalled it had accepted
the reality of his rule, is something of a
mystery. It may be that he is not as con-
fident of his position as outsiders
judged, or possibly that he wanted to
discourage anyone opposing his taking
control of territory liberated from Isis.
It is important that he not be allowed
to escape without paying a price. The
norm against the use of chemical or any
weapon of mass destruction was weak-
ened by global inaction four years ago. It
is essential that it be strengthened now,
not just for the future of Syria, but also
because policies will be influenced in
both Tehran and Pyongyang by what is
decided and done here.
Policies will be influenced
in both Tehran and
Pyongyang by what is
decided and done now
One option is to attack Syrian military
positions, above all airfields and aircraft
associated with chemical weapons. This
could be done from afar by using cruise
missiles and drones. It could be done
more effectively by US and European
aircraft, but this would increase the risk
of a confrontation with Russia which,
along with Iran, is the principal reason
the Assad regime remains in power.
Russian military action should not,
however, be assumed as automatic.
President Vladimir Putin may hesitate
to assume a posture of risky defiance
given his shrinking economy and the
revival of political protest at home. He
might see it in his interest not to alienate
the new US president, especially if it
were communicated that any attack
would be limited and not threaten the
viability of the Assad regime.
Diplomacy might also have a role,
although it is difficult to be optimistic
given Moscow’s statements blaming
anti-government rebels for the recent
apparent chemical incident. Still, Mr
Putin could be given a choice: work with
the US and the UN to bring about a post-
Assad transitional government or see
Assad’s military attacked.
Another approach would be to pro-
vide enhanced air defence capabilities
to the Syrian Kurds and select Sunni
Arab opposition groups. Neither of
these options is risk-free, however, as
the former could further alienate Tur-
key while the latter could result in
weapons falling into the wrong hands.
It is worth noting that more will have
to be done in coming months to
strengthen the hands of local Sunnis
who must be able to provide security for
those areas of Syria to be liberated from
terrorist groups. Providing more
advanced arms thus will be essential if
the Syrian people are to be able to stay in
or return to their homes.
There is no simple or easy option. This
is nothing new. But not acting can be
every bit as consequential as acting. For
many in the Middle East and beyond,
inaction in the face of chemical weapons
use became the defining moment of the
Obama presidency, raising fundamental
questions about its credibility. Mr
Trump has an opportunity to differenti-
ate himself from his predecessor and
show there is a new sheriff in town;
Theresa May, UK prime minister, has a
similar opportunity. History rarely pro-
vides second chances. This one should
not be squandered.
The writer is president of the Council on
Foreign Relations and author of ‘A World in
Disarray’
10 ★ FINANCIAL TIMES Friday 7 April 2017

Suspiciously prescient
Official statistics for UK retail sales in January showed a surprise fall in spending. On the day of release in
February currency markets appeared to anticipate the outcome minutes before data were publicly available,
leading market watchers to question the practice of pre-releasing data

Twitter: @FTLex Email: lex@ft.com

Unilever:
divided we stand
I can’t believe it’s still Unilever. The
consumer products group plans to
double its leverage, restructure into
three divisions and spin off a spreads
business whose brands include “I Can’t
Believe It’s Not Butter”. The reshaped
company will continue to be
“sustainable”, says chief executive Paul
Polman. The fortress, while tougher for
leveraged predators to assail, will have
vulnerabilities all its own.
Kraft Heinz only abandoned its
£114bn approach last month because
one of its backers was an old-fashioned
Nebraskan gent who preferred not to
go hostile. Unilever cannot rely on
Warren Buffett and his ilk to stay the
hands of all aggressors. So it is building
financial ramparts.
First, the Anglo-Dutch group will
double net debt to earnings before
interest, tax, depreciation and
amortisation. A ratio of two times is
unexceptionable and should raise
about €11bn. Second, it hopes to sell
spreads, for which it might get €7bn. It
will spend €5bn on share buybacks this
year and raise the dividend 12 per cent.
That might leave just over €11bn for
takeovers or more stock repurchases.
Third, Unilever aims to increase cost
cuts from €4bn to €6bn. Trendy
Adland types will see less spending on
chirpy television commercials. Two-
thirds of savings would be spent on
product investment. The remaining
€2bn would help bolster previously
sluggish operating margins by one-
third to about 20 per cent.
That requires the foods and
homecare divisions to lift weak
margins towards the 20 per cent
boasted by personal care. An ice-
creams business will melt into foods,
which will be Netherlands-based. The
other two units will have UK
headquarters.
Unilever would be easier to split,
pending a review of a dual structure
involving London and Amsterdam
listings. Then the 1929 merger of Lever
Brothers and Margarine Unie might as
well never have happened.
Unilever shares are trading at about
20 times forward earnings, in line with
sharper rival Reckitt and only a shade
below Kraft’s mooted bid at £40 a
share. Investors recognise the revamp
is achievable. They also know any
serious signs of failure would trigger
demands for a break-up. The burden of
that contingency should perhaps fall to
a new chief. Having seen off Kraft, Mr
Polman, who is eight years into the job,
might consider retiring on his laurels.
Taser International:
prepare to be stunned
Taser International is distancing itself
from its products, as those on the
receiving end wish they had. On
Wednesday, the maker of the electric-
shock device announced it was
changing its name to Axon.
Similarly, Corrections Corporation of
America last year switched to
CoreCivic, a name that, like Axon,
means very little corporately.
At least CoreCivic’s move made
political sense. When the Obama
administration said that it would no
longer use private prison operators, it
was time to de-emphasise its main
business.
Taser has no equivalent excuse.
Axon is Taser’s existing division
making body-worn cameras, which
appear to reduce police violence. On
Wednesday, Taser/Axon announced it
would offer free cameras for a year to
all police officers in the US.
President Donald Trump, however, is
not trying to rein in the police —
precisely the opposite. Investors were
unimpressed by the handout and the
brand switch; shares fell 0.5 per cent.
The rebranding is a bad idea but the
business pivot is not. Weapons are 75
per cent of Taser/Axon’s revenues but
are declining. Taser is trying to move
police to monthly subscriptions to
boost recurring revenues and foster
faster upgrades.
The stronger move is boosting
software. With the cameras, Taser-
Axon offers cloud storage and software
tools to quickly recover evidence. Like
other cloud businesses, these
subscriptions are more naturally
recurring. Weak operating margins of
just 10 per cent, compared with 30 per
cent for weapons, should improve fast.
In five years, the stock has risen
fivefold, giving the company an
enterprise value of $1bn on revenues
that are expected to be $320m this year
and earnings before interest, tax,
depreciation and amortisation of
$40m. Revenue growth of 20 per cent a
Sterling movement during ONS January retail sales release
Against the dollar ($ per £)
1.248
Official release time
of ONS January retail
sales data
1.246
Sterling pre-release 1.244
decline
1.242
1.240
9am 05 10 15 20 25 9.30 35 40 45 50 55 10am
Feb 17, 2017
FT graphic Sources: Thomson Reuters Datastream; FT Research
The standard the UK’s Office for metrics to satellite imagery in an
National Statistics hopes to better in attempt to second guess
spotting economic slowdowns is both macroeconomic developments and
low and yet hard to beat. As an old financial market reaction.
joke puts it, markets identified nine Sometimes, however, investors’ take
of the last five recessions. With such a on the economy may have been good
poor hit rate, the UK’s public sector for less reputable reasons. In both the
statisticians would do better to focus US and UK, research suggests that
on stemming market-sensitive leaks some traders are gaining early access to
of their data instead. information about economic data and
Stung by criticism that its models are using it to correctly predict the way
failed to identify the start of the markets will react once it is published.
slowdown in 2008, the ONS has Research by Alexander Kurov,
announced plans to include numbers associate professor of finance at West
from value added tax returns to get a Virginia University, first reported in
clearer picture of the economy. the Wall Street Journal, showed that
In the era of big data, such plans gilt futures predicted the way the
look parochial. Those with real market would move in more than half
money at stake have been using of consumer-price inflation, industrial
everything from Google search production and employment data
year makes that bearable for investors consequence, the Stoxx 600 insurance
— as long as they can remember the index has outperformed the equivalent
name. for banks by 75 per cent since 2009.
The UFR seeks to claw back some of
the gains in the cause of prudence. Set
European insurance: by regulators, it is a theoretical rate
insurers use to calculate the discount
boring and chiselling rate applied to liabilities longer than 20
years. An example would be a pension
Insurance regulations are important in product bought today by a 24-year-old
inverse proportion to their dullness. of the kind who attends few wild
The EU proposals regarding the long- parties and works in insurance.
term “ultimate forward rate” could be By lowering the UFR from 4.2 per
prescribed as a cure for insomnia. They cent to 3.65 per cent, to reflect the
could also determine insurers’ future greater probability of slimmer long-
solvency — and affect longer-term term real interest rates, the discount
payouts to shareholders. rate will also be lowered. This will raise
Solid balance sheets and a steady the value of liabilities. Insurers will
stream of juicy payouts. These are the therefore have to hold more capital, in
characteristics that have attracted the form of retained earnings, to cover
investors to European insurers. As a prospective losses. In turn, potential
Number of people with
pre-release access to official
statistics
0 20 40 60 80 100 120
Labour
market
Inflation
GDP
Retail sales
Industrial
production
releases over the past five years, even
when the data were unexpected. The
pound has also showed suspicious
movements against the US dollar in
recent months ahead of official retail
sales data by the ONS. In the US, Mr
Kurov estimates that information
leaks helped traders pocket about
$160m between 2008 and early 2014.
Nine of the 20 macroeconomic
announcements that move markets
showed evidence of informed trading
before the release time, including the
Federal Reserve’s industrial
production figures.
While the Fed’s watchdog is
pushing for new safeguards, no such
plan has been announced in the UK.
It is high time that abacus rattlers
and politicians there followed suit.
payouts to equity holders could be hit.
Solvency II already makes
conservative assumptions on the
amount of capital insurers must hold.
Moreover, the average discount rate for
50-year liabilities is 2.7 per cent,
according to industry body Insurance
Europe, already lower than the UFR.
The European Insurance and
Occupational Pensions Authority has
predicted that the new measure would
shave an average of only 5 percentage
points off solvency ratios, which stand
at about double the minimum. Insurers
will remain resilient even if ultra-low
rates persist. But the change remains a
melancholy reminder that regulators in
insurance, as in banking, have a
penchant for absorbing surplus capital
over and above regulatory minima
before shareholders can snaffle it.
7-Eleven/Sunoco:
station in life
Leaving a dead-end job at a petrol
station should be cause for celebration.
Joy was thus unconfined among
investors at Sunoco LP as the US
energy partnership sold most of its
convenience store business to Japan’s 7-
Eleven Inc for $3.3bn. Sunoco shares
popped nearly 15 per cent. A fair
response, given that disposing of 1,100
locations along the East Coast and in
Texas could save Sunoco’s dividend.
The company’s yield has been near a
whopping 15 per cent of late. Its shares
have fallen because its cash flow to
dividend ratio has reached a precarious
one times, hinting that the payout was
unsustainable. The sale will reduce
capital expenditure needs and the
proceeds will take down debt from
near seven times cash flow to under
five times. Sunoco’s remaining business
supplies fuel to petrol stations
including those bought by 7-Eleven.
Sunoco says the fixed margins of
supply contracts make its reshaped
business more stable. But even after
the deal, the dividend coverage ratio
only inches up to 1.1 times.
The company is part of the tangled
web of the Energy Transfer oil and gas
distribution empire which includes
four different listed companies.
The master limited partnership
(MLP) structure of Energy Transfer
has been under strain for years,
plagued by complexity and high
leverage. A blowout Japanese bid
falling from the sky is just the gift that
Energy Transfer needed. The broader
pressure on the Energy Transfer family
remains. Rivals like Kinder Morgan
have simplified their structures.
Energy Transfer, despite this Japanese
gift, still has tough questions to answer.
Meanwhile, 7-Eleven gets closer to its
goal of 10,000 locations in the US. As a
pure retailer, its appetite and acumen
for operating convenience stores
makes it a better owner of the Sunoco
assets. Pumping petrol may not seem
like fulfilling work. But one person’s
toil is another’s métier. And simplicity
has much to recommend it, as Energy
Transfer should ruefully reflect.
Lex on the web
For notes on today’s breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
1 American could be someone
4 Great tie, unusually decorative
item (8)
No. 15,518 Set by BRADMAN arriving at JFK by Virgin (10) 5 Maybe one could actually sell
7 Enchanting Liberal – just a bit ice to an Eskimo! (7,8)
        smooth-tongued (4) 6 Hill going up given X – bad! (6)
9 The old woman backing firm in 7 Lake surrounded by cunning
an unhealthy state (4) ornamental borders (9)
  10 Sight least awful or most awful? 8 Heron is flying away from the
(10) water (7)
11 Intended to join female at the 14 Daughter needs to put a bit
match? (6) of weight on, woman at first
 
12 Neglect sees maiden maybe left declared (9)
with nothing, all right? (8) 16 Church books badly produced
13 Socialist took steps, being blue- with staplers (8)
   pencilled? (8) 18 Wild animal getting eggs on
15 Dear French instructor spilling grass turned over (3,4)

drink (4) 20 Alluring female terribly
   
17 Relation called, last character to rebellious, putting off characters
come forward (4) in bus (7)
 19 Wind first thing in the morning? 21 Scheme artist set up in flat (6)
Set to swirl in (8) 24 Astrophysicist gives indication
   22 Hesitation about open country of unknown quantity in space
(8) (5)
23 Stories about a hospital in Asian
  city (6)
25 Returning agent gets a bit Solution 15,517
of money – time for share of
$ 6 6 , 6 7 $ 1 & ( . , 1 *
 
profits? (10) 5 ( 7 7 5 1 2
26 Inventor making contribution to 0 2 1 ' ( * 5 ( ( 1 7 , ) )
security in university (4) < ' ( , 6 7 7 2
6 3 ( $ 5 & $ 5 5 , ( 5
27 Push only half the things made 7 6 / ( $ $ $
JOTTER PAD for sale (4) , 1 7 + ( 0 $ , 1 , 1 7 ( 5
28 Restaurant serving rubbish is by 1 2 & 6 ' 1 , ,
: 2 5 7 + & 5 2 6 6 : 2 5 '
southern lake (10) + < $ ( 3 1 (
DOWN , / / 8 6 7 5 $ 7 , 2 1
2 A notice about poison (7) 6 , ( 7 5 7 ) %
3 Long time before start of night 7 2 1 (
/ (
7 $ 5 $ 1 7 (
, 0 (
/ / $
2 5
(5) ( $ 6 < 6 1 $ 3 ' 5 $ * 2 1
Friday 7 April 2017 ★ 11

easyJet British Land Shire Dollar/yen Brent oil FTSE 100 CBoE Vix Gold
Piping hot Shale oil recovery index
boosts natural gas production 4.23% 2.25% 1.91% 0.2% 1.1% 0.4% 6.4% $2
ANALYSIS, PAGE 20
£10,60 636p £46.03.5 ¥110.88 $54.93 7303.20 12.07 $1252

Silicon Valley Last in Libor saga Former Barclays traders

acquitted of rigging rates in fraud office case
Short
View
starts off on Katie
Martin
wrong foot for The Czech National Bank can teach the world’s heavy-
hitting central banks a thing or two, it seems.

gender parity
Yesterday, it took the dramatic step of scrapping the
upper limit on its currency, the koruna, in a step dubbed
by portmanteau addicts as Czexit.
Europe’s recent history of this kind of thing has been
pretty brutal. Ask any trader, any investor, and you can be
sure they will be able to tell you where they were when the
Swiss National Bank pulled the plug on its currency limit
3 Small companies’ staff only 23% female back in 2015.
Likewise, seasoned traders who made it through 2008
3 Equality question being left too late still shudder at the thought of that dark day when the euro
sank by about 30 per cent in seconds against the rocketing
franc.
TIM BRADSHAW AND ROBIN KWONG and Uber. “Even things like sexual Now, the Swiss franc is a much bigger currency than the
SAN FRANCISCO
harassment training, oftentimes these koruna, with much greater capacity for unsettling global
Men dominate the workforce at Silicon are matters that tech start-ups tend to markets, as we saw on that eventful January day.
Valley start-ups to an even greater think of as issues for bigger companies, Still, the scale of the koruna’s rally has been impressively
extent than in the biggest tech groups, a not a few engineer friends sitting in limited. The euro “collapsed” against the koruna by all of,
study of hundreds of such companies someone’s house pulling together their well, 1.7 per cent. Jaws dropped by a similar degree.
shows, suggesting a long struggle ahead first company.” Analysts and investors broadly agree that this is because
for an industry in urgent need of Aaron Levie, chief executive of Box, the Czech central bank has played its hand well.
improving gender equality. the online collaboration company Unlike the Swiss, the Czechs prepared the groundwork,
According to an Financial Times founded in 2005, said that companies guiding that the break would come around the middle of
analysis of 500 tech start-ups in the San needed to think about diversity on “day the year but (hint) not before the end of the first quarter.
Francisco Bay area with fewer than 100 one”: “The sooner you do this, the more Lessons learnt, perhaps.
employees, only 23 per cent of staff you pay attention to it early on, the The snap in the limit was a surprise, a big moment for a
members are female, compared with 36 more you can get dividends later on.” small currency, one that followed some serious heavy lift-
per cent at 10 top tech companies Start-ups face what seem like more ing by the central bank to absorb huge speculative inflows.
including Apple, Amazon, Oracle, immediate existential issues daily and a But it was not a career-ending moment for anyone. That
Airbnb and Twitter. small unproven company can find it helps to give confidence that the central bank can still be
The staffing data were compiled by more difficult to attract the best taken at its word.
Craft.co, which provides information employees, let alone ensuring that they So, even though there is good reason to get into the
and analytics on private and public have the right mix of candidates. koruna — rising inflation pointing to a potentially rapid
companies, drawing on publicly availa- “At every start-up there is an opportu- rise in interest rates, decent growth and the lowest
ble information posted by employees to nity — a short window of time as a com- unemployment in the EU — speculators are likely to
social media and professional network- pany growing at that pace to define your believe the central bank when it says it won’t let the
ing sites such as LinkedIn. culture,” said Ann Toth, a former vice- currency shoot to the moon before it fires back.
Silicon Valley has struggled for years president of people and policy at Slack, Speculators can be expected to try to see how far they
to attract female workers and faced alle- the corporate messaging company. “It can push the central bank from here. But so far, policy-
gations of sexism, particularly among has to be a very proactive process. Cul- makers have spoken quietly while holding a big stick.
engineers and in other technical roles. tures that just sort of happen are typi- Ryan Reich, left, and Stylianos Contogoulas outside court in London yesterday — Nick Edwards
The start-up study suggests that the cally not the healthiest ones.” Czech please
next generation of companies is strug- Issues of diversity and gender equal- Against the euro (CKr per €)
gling to avoid the same problems. ity have again come to the fore in Silicon JANE CROFT AND Court in London. A jury in a US trader, had each faced one 26.6
CAROLINE BINHAM — LONDON
In theory, it should be easier for young Valley in recent months after high- separate trial last year failed to count of conspiracy to defraud 26.7
companies to address gender imbalance profile companies such as Uber were Two former Barclays bankers reach a verdict on the two men with others at Barclays in order 26.8
when they have only dozens of staff, criticised by female employees past and have been cleared of conspir- but convicted three of their to manipulate the rate for
compared with more established present for ignoring women’s issues in former Barclays colleagues for more than two years until Sep- 26.9
ing to manipulate a key inter-
employers of thousands of people, but the workplace. est rate in a retrial that brings conspiring to rig dollar-denom- tember 2007. They had denied 27.0
experts say too many put aside equality “Companies that have these kinds of to a close the three Libor pros- inated Libor, which measures wrongdoing. 27.1
issues until it is too late. problems are not accidental,” said Ms ecutions brought by the UK’s the rate at which banks can The acquittals do not signal 27.2 The snap in the
“Start-ups are not looking into these Toth. “They are very male-driven, Serious Fraud Office. borrow from one another. the end of the benchmark- limit was a
matters early enough,” said Minal testosterone-fuelled environments. We Greek-born Mr Contogoulas, rigging saga, however: another Jan Feb Mar Apr surprise, a big
Hasan, founder of K2 Global, an inter- are seeing some blowback now.” Traders Stylianos Contogoulas 45, a former trader on Barclays’ SFO trial alleging six traders 2017 moment for a
Source: Thomson Reuters Datastream
national venture capital firm, and Additional reporting by Leslie Hook and Ryan Reich were unani- swaps desk in London, was in manipulated Euribor, the Brus- small currency
former corporate attorney representing Editorial Comment page 8 mously acquitted yesterday by tears after the verdict was sels version of Libor, begins in
tech companies including Twitter Analysis page 13 a jury at Southwark Crown given. He and Mr Reich, 35, a September. katie.martin@ft.com

Chinese chip in as substitute sponsors

after Fifa scandal hits World Cup deals
FT REPORTERS previous arrangements Fifa has sought, prosecutors files from its internal inves-
however. At a press conference in Bei- tigation as part of its efforts to reform.
Hisense, the consumer electronics
jing, Hisense and Fifa executives said According to Fifa’s annual reports,
group, has become the latest Chinese
the deal’s value was “near $100m” but revenues from commercial and market-
sponsor of the World Cup, providing
that the specific figure was confidential. ing deals related to the 2018 World Cup
respite for Fifa as it struggles to secure
Hisense is the second big Chinese were $246m in 2015, down from $404m
commercial partners after a corrup-
sponsor to sign up to the next World in 2013. The lack of sponsors was partly
tion scandal.
Space X recycled rockets Cup. Last year Wanda, the real estate to blame for Fifa making a $122m loss
idea feels heat from rival World football’s governing body has and leisure conglomerate, signed a deal last year.
been racing to find sponsors in time for for the next four World Cups. Liu Hongxin, Hisense’s president,
Elon Musk’s Space X believes that next year’s World Cup in Russia. It lost Fifa has secured only one Russian said the group had gained “a lot of expe-
reusing a rocket with recycled boosters several big names, including Sony and sponsor for the tournament, Alfa-Bank, rience” from previous sporting sponsor-
heralds a new era of low-cost space Emirates Airline, when their deals which is paying for the lowest “tier” of ships, such as the Australian Open ten-
launches, but its main rival, the ended after the last tournament in 2014. support. Gazprom, the state-run Russia nis championships and Red Bull Racing
Boeing-Lockheed Martin joint venture Yesterday Hisense announced it had group, became a Fifa partner in 2013. Formula 1 team. Sales in Europe rose 65
ULA, says it will take more than that become a “top tier” sponsor for Fifa’s Fifa is the subject of inquiries by US per cent after its sponsoring of football’s
to bring significant savings. Confederations Cup this year and the and Swiss authorities into alleged crimi- 2016 European Championship.
Analysis i PAGE 15 2018 World Cup. nal misconduct and bribery. Last week Reporting by Murad Ahmed, Sherry Fei Ju
The 15-month deal is far shorter than the organisation handed Swiss public and Max Seddon

Companies / Sectors / People

Companies
AOL..................................................................12
AT&T..............................................................15
Airbnb....................................................8,11,13
Airbus.............................................................15
Albemarle.....................................................14
Alfa-Bank.......................................................11
Allied Minds................................................19
Alphabet....................................................1,15
Amazon...............................................11,13,15
Andreessen Horowitz...........................18
Apple..........................................................11,13
Archer Daniels Midland.......................18
Asian Development Bank.....................3
Asos.................................................................19
Atlético Madrid..........................................11
Axon................................................................10
BHP Billiton................................................18
BYD..................................................................14
Baidu...............................................................15
Barclays..........................................................11
Barrick Gold................................................14
Boeing............................................................15
Bremer Landesbank..............................14
Cargill.............................................................18
Cheniere Energy.....................................20
Cisco................................................................13
Codelco..........................................................14
Codewise.......................................................12
Comcast.........................................................15
Commerzbank...........................................18
Constellation Brands.............................19
CoreCivic......................................................10
Crédit Agricole..........................................18
Deutsche Bank..........................................14
EasyJet..........................................................19
eBay.................................................................13
Emirates Airline.........................................11
Enterprise Products Partners.........20
Exor...................................................................8
Facebook.................................................12,13
Fiat Chrysler...............................................15
Fifa....................................................................11
Ford...................................................................7
Fromageries Bel.......................................18
Ganfeng Lithium......................................14
Gazprom........................................................11
General Motors.........................................15
Glencore..................................................14,18
Goldman Sachs......................................1,14
Google......................................................14,15
HelloFresh....................................................12
Hisense...........................................................11
Intel..................................................................13
Ionis Pharmaceuticals...........................12
JPMorgan........................................................1
Kinder Morgan...................................10,20
Kraft Heinz............................................10,12
L Brands.......................................................19
Lego..................................................................8
Lockheed Martin......................................15
Manchester City........................................11
Microsoft.......................................................13
Mobvoi...........................................................15
Morgan Stanley........................................14
NordLB..........................................................14
Norges Bank Invest Managemnt...14
Oracle..............................................................11
Peabody........................................................18
Pearson..........................................................19
Pepsi................................................................12
Pioneer Natural Resources..............20
Point72...........................................................18
Qualcomm....................................................13
Quantopian.................................................18
Reckitt Benckiser....................................14
Rolls-Royce..................................................15
SAP..................................................................14
Salesforce.....................................................13
Sanofi.................................................................1
Sequoia Capital.........................................15
Shandong Gold.........................................14
Siemens.........................................................15
Sky....................................................................19
Slack.................................................................11
Sociedad Química y Minera..............14
Sony..................................................................11
SpaceX...........................................................15
Sprint..............................................................15
Stratasys.......................................................15
Taser International...........................10,12
Tencent.........................................................15
Tesla................................................................15
Tianqi Lithium...........................................14
Tronc...............................................................12
Tullow Oil.....................................................19
Twitter.......................................................11,13
Uber........................................................8,11,13
Unibel.............................................................18
Unilever................................................1,10,12
United Launch Alliance.......................15
Verizon.....................................................12,15
Volkswagen.................................................15
Wanda.............................................................11
Waymo...........................................................15
Yahoo..............................................................12
Yum Brands................................................19
Zijin Mining.................................................14
Sectors
Aerospace & Defence...........................15
Airlines............................................................11
Automobiles..........................................14,15
Banks............................................3,7,11,14,18
Basic Resources.................................14,18
Chemicals.....................................................14
Energy.......................................................11,14
Financial Services....................................18
Financials................................................14,18
Food & Beverage.........................10,12,18
Healthcare..............................................12,14
Insurance......................................................10
Media...................................................12,13,15
Mining.......................................................14,18
Oil & Gas..............................................1,11,20
Personal & Household Goods.........10
Property...................................................11,18
Retail & Consumer.......................11,14,18
Technology........................8,11,12,13,14,15
Telecoms......................................................15
Travel & Leisure......................11,12,13,15
People
Bezos, Jeff....................................................15
Buffett, Warren.........................................14
Butz, Greg....................................................15
Bürkle, Thomas........................................14
Cohen, Steven...........................................18
Dunkel, Gunter..........................................14
Emerson, Joelle.........................................13
Fawcett, John............................................18
Heizmann, Jochem.................................15
Hongxin, Liu................................................11
Hornsey, Liane..........................................13
Jianlin, Wang...............................................11
Musk, Elon...................................................15
Ni, Fred..........................................................14
Polman, Paul........................................10,12
Schmidt, Roman.......................................18
Sheffield, Scott.........................................20
Shotwell, Gwynne....................................15
Slyngstad, Yngve.................................1,14
Thornton, John.........................................14
Zhifei, Li........................................................15

© The Financial Times Limited 2017 Week 14

12
Technology
Facebook fights back against fake news
Social network increases
monitoring of platforms
in response to criticism
MADHUMITA MURGIA — EUROPEAN
TECHNOLOGY CORRESPONDENT
Facebook plans to pay fact-checkers to
monitor news on its platforms in
response to sustained criticism that it
has not been doing enough to crack
down on fake stories.
The move will mark Facebook’s first
effort to formalise its relationship with
third-party fact-checkers, including
news organisations active in the US,
France, Germany and the Netherlands.
Critics had questioned why Facebook
should receive the services for free.
“A commercial relationship is some-
thing that’s on the table and that we are
Unilever cuts costs and lines up share buyback
Consumer goods group aims
to be ‘ambitious without being
aggressive’ with shake-up
SCHEHERAZADE DANESHKHU
CONSUMER INDUSTRIES EDITOR
The big question for Unilever investors
yesterday was whether its response to
Kraft Heinz’s $143bn unwelcome takeo-
ver approach last month goes far
enough to unlock the potential value in
one of the world’s biggest consumer
goods groups.
Initial reaction appeared muted, with
Unilever’s shares rising only 1 per cent
to £39.78. But they have risen 19 per
cent since Unilever rejected the offer
seven weeks ago. One top 15 investor
said: “The best defence to any bid is to
have a higher share price. [The meas-
ures] have to result — certainly over the
next 12 months — in the share price
remaining at fair value. For us, that’s
consistently above £40 a share.”
Unilever had dismissed an offer
equating to £39.50 a share from the US
food group, controlled by 3G Capital and
US investor Warren Buffett, as “funda-
mentally” undervaluing the company.
After the shock of that approach, Uni-
lever launched a root-and-branch
review, resulting in yesterday’s sweep of
measures. The group said it had con-
sulted its top 50 investors. The initia-
tives include a doubling of targeted cost
cuts to €2bn by 2020, a €5bn share buy-
back this year and a 12 per cent dividend
hike, as well as the sale of its margarine
and spreads business.
A commitment to boosting operating
profit margins by about a quarter to 20
per cent by 2020, was a response to
investor concerns about below-par prof-
itability in two of the group’s four main
businesses. Refreshments — comprising
tea and ice cream — and homecare,
which includes brands such as Domes-
tos and Surf, both have margins of just
under 10 per cent.
Mark Nichols, European equities
manager at Columbia Threadneedle, a
top 10 shareholder, summed up the
mood, saying Unilever had been “ambi-
tious without being aggressive”.
Dutchman Paul Polman, Unilever’s
chief executive since 2009, emphasised
that Unilever would continue to invest
in its brands for long-term growth. Two-
thirds of planned savings of €6bn by
2019 — up from €4bn before yesterday’s
announcement — will be reinvested.
Explaining how Unilever had man-
aged to find the additional savings since
last year, Graeme Pitkethly, finance
director, said: “There is no doubt that
we erred on the cautious side. It’s in the
nature of a Scotchman and a Dutchman,
I think, to do that.”
The savings include making 30 per
Healthcare
FDA approves personal saliva test for diseases London emerges as European growth hub
DAVID CROW — NEW YORK
Health regulators in the US have
approved the first ever direct-to-con-
sumer genetic test that will inform
patients whether they are predisposed
to diseases such as Alzheimer’s.
In a major victory for 23andMe, the US
Food and Drug Administration gave the
green light to the Silicon Valley com-
pany’s personal genome service, which
analyses DNA from a swab of saliva to
assess whether a person is at risk of
developing a range of illnesses, includ-
ing Parkinson’s and Coeliac disease.
Patients can already order hereditary
risk tests through a doctor, most com-
very open to,” said Adam Mosseri, Face-
book vice-president of product manage-
ment for news feed. “It could depend on
individual organisations, but we want to
engage responsibly and if that means a
financial arrangement, we are very
open to it.”
So far, Facebook has formed partner-
ships with third parties such as Politi-
fact, Snopes, AFP, BFMTV, L’Express, Le
Monde and Berlin-based non-profit
Correctiv.
“This is a good positive step, because
the idea that civil society groups should
be fact-checking on Facebook content is
ridiculous, from my point of view,” said
Philip Howard, a professor and director
of research at the Oxford Internet Insti-
tute.
“[Facebook] tends to prefer ideas that
put costs on to other organisations . . .
why should the public bear the costs of
Personal & household goods. Review
Margins at cent fewer advertisements and halving
Unilever’s its 3,000-strong roster of creative agen-
refreshments cies. Mr Pitkethly said the group would
business, which also cut the number and cost of consul-
includes ice tancies it uses by 40 per cent. “Not so
cream brands, good for the consultants but they can
are just under probably afford it.”
10 per cent Yesterday’s share price rise may have
Philippe Wojazer/Reuters
seemed modest but it indicated that
investors’ expectations had been met.
Warren Ackerman, an analyst at Société
Générale, says: “Expectations were very
elevated and to keep the shares up today
Unilever operating profit by product area
As % of total
Personal care Foods
50
40
30
20
10
0 0
2010 2016 2010
Source: company
monly to see if they are predisposed to
different types of cancer. The largest
test of its kind, Myriad Genetics’s
myRisk, generated $632m in revenues
last year.
The 23andMe approval marks the
first time the FDA has allowed patients
to bypass their doctors. Customers will
be able order the test kit online for $199
and must return their spit sample in the
mail. They then receive a test report
around six weeks later. “This is an
important moment for people who want
to know their genetic health risks and be
more proactive about their health,” said
Anne Wojcicki, 23andMe chief execu-
tive and co-founder.
★ † FINANCIAL TIMES
COMPANIES
doing fact-checking on Facebook?”
In addition to expanding its fact-
checking programme, Facebook will
also roll out a large-scale fake-news-
spotting tool to hundreds of millions of
its users, starting today.
For three days, users in 14 countries
across Europe, Asia and the Americas
will see a message at the top of their
newsfeeds, directing them to a list of 10
tips on identifying false news stories,
including dodgy web addresses, mis-
spellings or manipulated photos.
“The most effective thing we can do to
disrupt financial incentives [for fake
news] is to disrupt its distribution,
which makes the size of the pie smaller,”
Mr Mosseri said.
Facebook has stepped up its efforts
just as German ministers approved
plans to fine social media firms up to
€50m if they do not proactively remove
is a good performance. It buys them
time to deliver further value creation
down the line.”
The decision to review the Anglo-
Dutch company’s cumbersome dual-
headed legal structure, straddling Rot-
terdam and London, could make it eas-
ier to pursue large acquisitions, even if
for now, the emphasis continues to be
bolt-ons. Mr Polman says Unilever’s
structure, the result of 1929 merger of
the UK’s Lever Brothers and the Dutch
food company Margarine Unie, “can
Refreshment Homecare
50 50
40 40
30 30
20 20
10 10
0 0
2016 2010 2016 2010
She added: “The FDA has embraced
innovation and has empowered individ-
uals by authorising direct access to this
information.”
The approval represents a comeback
for 23andMe, which was banned from
selling its genetic tests by the FDA in
2013. At the time the agency said that it
had intervened because imprecise
results could mislead customers into
pursuing unnecessary treatments
The FDA’s Jeffrey Shuren said con-
sumers would now be able “to have
direct access to certain genetic risk
information”, but added: “It is impor-
tant people understand that genetic risk
is just one piece of the bigger puzzle.”
‘The most hate speech and fake news within seven
days of posting.
effective
thing we can
Justice minister Heiko Maas said in a
statement that there should be “just as
little tolerance for criminal rabble-
do to disrupt
financial rousing on social networks as on the
street”, adding that he would push to
incentives
is to
apply these rules at a European level.
Last month, Mr Maas said the bill was
aimed primarily at hate speech but also
disrupt its at fake news, particularly items that
distribution’ were potentially defamatory.
D
“As experts have pointed out, German
legislation forces private companies like
Facebook, rather than courts, to be the
judge of what is illegal, and that is some-
what concerning,” Mr Mosseri said, add-
ing that Facebook would abide by any
local law. “I think, fundamentally,
courts are better suited to decide what is
illegal and what is not in their countries,
rather than private companies.”
add complexity during a sizeable trans-
action. That could be an impediment to
the event of a potential future sale,
demerger or strategic acquisition”.
Some analysts and investors hope
Unilever will eventually sell its foods
and refreshment units to become a pure
home and personal care company, per-
haps through a major acquisition, such
as buying Colgate or Reckitt Benckiser.
The consolidation of food and refresh-
ments into one unit announced in the
review, could make a demerger easier
were Unilever to decide on a more radi-
cal restructuring in future.
Mr Nichols says: “The mantra has
been bolt-on acquisitions but the deci-
sion to look at the dual listing has the
50 potential to open the door to bigger
deals. So this is not necessarily the end
40 to what they can do in terms of creating
value.”
30 One top 15 investor says it is impor-
tant for Unilever to deliver on its prom-
20 ises and keep up the pressure on itself.
Asked whether he would stay to see
10 through the changes to 2020, Mr Pol-
man, says he had been “energised” by
the experience. “It’s the board’s deci-
sion . . . my energy is there to do this as
2016 long as it may last.”
See Lex
FT 1000
OWEN WALKER London’s equivalent of Silicon Valley] to
see them,” said Henry Lowson, manager
London has emerged as Europe’s capi-
of Royal London’s UK smaller compa-
tal for fast-growing companies — ahead
nies fund. He added that access to capi-
of Paris, Milan and Berlin — highlight-
tal, in particular the London Stock
ing its importance as a hub for innova-
Exchange’s AIM, helped fuel corporate
tion and commerce in the EU, even as
growth.
the UK prepares to leave the bloc.
The inaugural ranking of 1,000 com-
The new FT 1000 list of European com- panies from 24 countries was compiled
panies with the strongest sales growth by Statista, a market research
between 2012 and 2015, shows that 78
are based in London. Behind the British
FT 1000
capital are Paris with 45 companies,
Special report on the fastest
Milan with 34 and 32 in Berlin. growing companies in Europe,
“There are lots of young dynamic to be published on 24 April
companies in London, you only have to ft.com/ft1000
walk around Old Street [the heart of
Friday 7 April 2017
INSIDE BUSINESS
MEDIA
Matthew
Garrahan
Beware protests and
online ridicule when
pepping up your brand
o brands matter? Talk to anyone in the adver-
tising world and they will answer with an
emphatic “yes”. Brands are the connection
consumers have with a particular product or
service. They are a company’s public face, its
heart and soul wrapped up in a single word, logo or slogan.
With this in mind, it would make sense for marketing
departments to pay attention to protecting their brands —
and take care when they launch new ones. Yet even the
most considered brand strategy can go awry, whether it is
coming up with a new name or trying to make a statement
on the brand’s values — such as the ill-considered Kendall
Jenner protest march ad that Pepsi had to pull this week.
On Tuesday, Verizon revealed it had created a new
brand to house its internet companies. Oath, as the group
will be known, will be the home of once mighty internet
properties Yahoo and AOL, as well as the Huffington Post,
which Verizon has snapped up in recent years.
The company explained on its website how it came up
with the new brand. “We wanted a name that was values
led — one that honoured our ultimate commitment of
Building Brands People Love (sic),” it said.
The dictionary definition of Oath is “a solemn promise”,
which sounds suitably
weighty, if a little dull. But it
can also be “a profane or
Pepsi must have
offensive expression used to thought it was on
express anger or other strong
emotions”.
a roll when it
Verizon was presumably premiered its
going for the first definition,
but it missed the more
new commercial
important rule on corporate
rebranding campaigns: think twice. In the social media
age, earnest attempts at corporate repositioning never
have the desired effect, especially if they involve the use of
an unusual, abstract name that bears no relation to the
product or service. They always end in mockery.
This was the case last summer, when the management of
Tribune Publishing, which owns a portfolio of grand US
newspapers, including the Los Angeles Times and Chicago
Tribune, bafflingly renamed the company Tronc. In a
press release that used the word “technology” nine times,
the 169-year-old group said it would be transformed into a
“content curation and monetisation company” that would
specialise in “creating and distributing premium, verified
content across all channels”. The Washington Post called
the rebranding announcement the “worst press release in
the history of journalism”, while the new name was
greeted with much hilarity on social media. The peals of
laughter have echoed across the Twittersphere ever since.
Some companies have valid reasons to change their
brands, because the names have taken on negative associ-
ations. Isis Pharmaceuticals,
a California biotech com-
pany, retitled itself Ionis
Biotech Isis
Pharmaceuticals two years Pharmaceuticals,
ago, for obvious reasons.
Taser, the maker of police
retitled itself two
stun guns, this week changed years ago, for
its name to Axon to reflect a
broader product portfolio
obvious reasons
that includes wearable body
cameras, “connected devices” and “cloud solutions”. Given
the evolution of its product line, it is probably a good idea
for the company to ditch a name inextricably linked to the
act of shooting (or being shot by) a 50,000-volt charge.
Pepsi must have thought it was on a roll this week when
it premiered its latest commercial, featuring the model
and reality star Ms Jenner and a diverse cast of attractive
millennials taking part in the most good humoured protest
march in history. In the ad, it is unclear what the marchers
are protesting about, some carry signs saying “Love” and
“Join the conversation”. Ms Jenner, who is modelling for a
photo shoot, joins the march, which includes a handsome
Asian musician and a woman wearing a hijab. She then
hands a Pepsi to a nearby policeman who opens it and
smiles, to cheers from the crowd.
Online condemnation of the ad was swift and merciless
from those who believed it was appropriating civil rights
protests to sell fizzy drinks. Within hours Pepsi had
yanked the ad from the internet. “Clearly we missed the
mark, and we apologise,” it said in a statement yesterday.
“We did not intend to make light of any serious issue.”
Such experiences will not deter companies from ambi-
tious advertising campaigns or splashy, if ill-advised, cor-
porate rebranding exercises. Products have to be sold and
marketing budgets have to be spent, after all. But in a
world of instant internet feedback and legions of sharp-
tongued online critics, sometimes not doing anything
might be a safer bet.
matthew.garrahan@ft.com
company, in collaboration with the FT.
The two fastest-growing companies
— HelloFresh, a food delivery business
headquartered in Berlin, and Codewise,
a technology company based in Krakow,
Poland — increased revenues by more
than 13,000 per cent over the period.
Each was founded in 2011, while the
average company in the list started in
2004.
Companies from Germany and the
UK dominated the rankings, with the
two countries accounting for a com-
bined 47 per cent of businesses. Italian
companies made up 19 per cent, with 14
per cent from France and 10 per cent
from Spain.
Friday 7 April 2017
Airbnb diversity policy leaves Uber in slow lane
Online accommodation group’s effort to improve gender balance in technology sector appears to be paying off
HANNAH KUCHLER — SAN FRANCISCO
When Airbnb’s data science team real-
ised that only 10 per cent of new recruits
were women, the online accommoda-
tion company decided to apply its
expertise in matching guests and hosts
to a bigger problem: how to entice
women into the tech industry.
By digging into data and finding when
and where female applicants were being
excluded, the team doubled its propor-
tion of women from 15 per cent to 30 per
cent in a year, showing that progress can
be made in tackling the tech industry’s
gender diversity problem.
The company’s efforts contrast with
what Susan Fowler says happened to her
at Uber. The former engineer at the car-
hailing app wrote an exposé of a differ-
ent side of Silicon Valley: one where
there are few women with technical
skills, and where those who have them
are made to feel unwelcome.
Ms Fowler wrote that Uber’s human
resources department ignored her alle-
gations of sexual harassment. She also
said that when she joined the company
in November 2015, her part of the
organisation was made up of 25 per cent
women, but that that figure later
dropped to 6 per cent.
“Women were transferring out of the
organisation, and those who couldn’t
transfer were quitting or preparing to
quit,” she wrote.
Uber has come to symbolise many of
the worst excesses of male-dominated
tech culture. But after Ms Fowler’s
account and the departure of several
senior executives, the company has
vowed to turn over a new leaf.
Uber is searching for a new chief oper-
ating officer who will help the company
create a culture that is fairer to women,
and it has launched an investigation into
the harassment described by Ms Fowler.
Liane Hornsey, Uber’s head of human
resources, admitted that part of the
problem was that Uber grew too fast,
doubling its headcount last year.
Her goal was to “change the culture
and the workplace environment at
Uber,” she said in a recent press call.
“The focus of the company has been on
the business, not the employees, and too
little attention was being paid to the way
things were operating internally.”
Uber’s first diversity report, pub-
lished last week, shows how far there is
to go: women held 15 per cent of techni-
cal jobs, lower than many peers, and 22
per cent of management roles. Uber has
a higher share of white people in leader-
ship than nine other major tech compa-
nies surveyed by the FT.
To make the changes that it seeks,
Uber could look down the street for
guidance from Airbnb, where execu-
tives met every week for a year to dis-
cuss increasing diversity. The FT’s sur-
vey of 10 tech companies found that Air-
bnb had the highest proportion of
women in technical roles among the
Slow progress for women in Silicon Valley
Share of female employees in technology companies (%), 2014 and 2016
50
GENDER EQUALITY
40
30
2016
20 2014
10
0 0
Apple Microsoft Facebook
FT graphic Sources: company; disclosures
Technology
Programmer pay gap underlines challenge
LESLIE HOOK — SAN FRANCISCO
towards more transparency around
diversity figures, a growing number
have also lifted the lid on an even more
sensitive subject — the gender pay gap.
Those figures can be controversial
because the biggest pay gap between
men and women is found in the role of
computer programmer, a job that domi-
nates many tech companies.
Male computer programmers make
28 per cent more than their female
counterparts, after adjusting for differ-
ences between jobs and workers. That
gap is four times larger than the US
national average, according to a recent
study from Glassdoor.
Despite, or perhaps because of, these
differences, an increasing number of
tech companies have started to conduct
pay-gap audits, ranging from industry
giants such as Microsoft and Intel, to
newer companies such as Facebook and
Airbnb.
The elephant in the Valley
Diversity problem of start-ups
Share of male employees (%)
100
75
50 EQUALITY
25
0 Number of employees (log scale)
10 100
FT graphic: Lauren Leatherby Source: Craft.co
companies, as its efforts to improve gen-
der balance appear to be paying off.
The survey found that on average,
women occupied only 18.3 per cent of
technology roles in the companies. The
laggard groups included Uber, Cisco and
Twitter, where women make up 15 per
cent of tthe technical teams.
The ramifications extend far beyond
the treatment of tech workers: the apps
and devices that shape consumers’ lives
across the world are expressions of the
culture of the Silicon Valley companies
that design them.
Joelle Emerson, a women’s rights law-
yer who founded start-up Paradigm to
help tech companies improve their
diversity, said: “If you are in the tech
sector, you have a unique and significant
50
Overall
Technical roles
40
30
20
10
Yahoo Twitter Cisco
Some of them, such as Salesforce and
Cisco, have publicly committed to
spending millions of dollars to adjust
pay discrepancies uncovered during
their audits. Last year, Salesforce said it
had spent $3m on adjustments, and the
company expected to spend a similar
amount in a new review this year, fol-
lowing several acquisitions.
One of the reasons companies have
started to publish their pay analysis
data, besides to attract women and to be
more equitable, is in response to share-
holder activism.
A number of sustainable investment
companies have filed shareholder reso-
lutions demanding pay audits at large
tech groups, including Apple, Amazon,
eBay and Qualcomm.
Investors have
demanded pay
audits at
companies
including eBay
and Qualcomm
★ FINANCIAL TIMES 13
MANAGEMENT’S MISSING WOMEN
there’s an obvious connection between
our mission and our diversity.”
Silicon Valley companies started pub-
lishing diversity figures on women and
ethnic minorities in 2014, hoping that
transparency would lead to an improve-
ment in the numbers.
So far, change has been slow. Many
companies cite a lack of technical talent:
just 16 per cent of US computer science
undergraduates in 2015 were female,
according to the Computing Research
Association. But the industry also strug-
gles to retain women, who are twice as
likely to leave as men, a report by the
Center for Talent Innovation found.
Most large tech companies offer bene-
fits far beyond the average in other
industries, most notably months of paid
parental leave in the US, where many
workers get none. But for many women
in tech, the bigger issue is the experi-
ence of sexual harassment or consistent
undermining at work.
In last year’s Elephant in the Valley
Women in business
Join FT commentators in
London on April 19 for a talk
about women in the corporate
world. Tickets available from
www.eventbrite.com
Getty
Women are under-represented in Silicon Valley, survey, 60 per cent of the 200 women
especially in tech roles surveyed said they had experienced
Share of female employees in technology companies in 2016 (%) unwanted sexual advances. 60 per cent
of those who reported harassment were
MORE MALE EMPLOYEES Women in tech roles Women in company overall
dissatisfied with the group’s response.
Deborah Rhodes, a law professor at
Established Silicon Valley companies Microsoft Airbnb Stanford University, said that the two
Facebook Apple problems — lack of available talent and
Google Apple Amazon
GENDER EQUALITY
Slack Google retention — were linked.
Airbnb Microsoft “Tech companies are the first to tell
Yahoo you there is a pool issue here — the
Facebook number of qualified women who want
Uber jobs in high-tech fields especially in
Twitter
engineering, is very limited,” she said.
MORE FEMALE EMPLOYEES
“One way they can enhance the number
Cisco
of applicants is by creating a culture that
Amazon* is accepting and inclusive. As the Uber
0 10 20 30 40 50 case demonstrates, a lot of companies
1,000 10,000 100,000 1m *No data on women in tech roles available are not there yet.”
FT graphic Sources: company; disclosures See Editorial Comment
role in designing what our future looks
like. Having only some communities of
people represented in that process feels
problematic. What kind of world do I
want to live in?”
Jill Macri, director of global recruit-
ing, said that at Airbnb, one decision
was prioritising diverse teams over hit-
ting hiring targets. When start-ups were
growing fast, hiring friends from previ-
ous companies often seemed the easiest
way to recruit enough people, but could
result in homogenous cultures.
“You can’t have two number-one pri-
orities,” Ms Macri said.
That decision led to many practical
changes at the company: the data sci-
ence team started by removing candi-
dates’ names and had several people
grade the same technical challenges
using a binary scoring system.
When applicants came for interview,
the group made them feel comfortable
by meeting for an informal one-on-one
coffee first, and having a panel of inter-
viewers that was at least half women.
To broaden the applicant pool, the
team held events for women across the
industry. To improve diversity beyond
its walls, Airbnb is hiring a manager to
ensure it signs contracts with suppliers
owned by women and under-repre-
sented groups.
“There is widespread acknowledg-
ment of the fact that we will be a better
company and have a better product if
we have diverse teams,” Ms Macri said.
“Our hosts are 55 per cent women, so
“A lot of times this is sort of the first
time that it has been brought to their
attention, that this is an area that inves-
tors are interested in,” says Heather
Smith, an analyst at Pax World Manage-
ment, a mutual fund focused on sustain-
able investment strategies.
Pax led a shareholder resolution in
2015 asking Apple to conduct
a pay audit, a request the company
agreed to. It has filed or co-filed half a
dozen similar requests with other tech
companies.
When this happens, most companies
agree to conduct a pay audit before the
matter comes to a vote.
In the tech industry overall, the gen-
der pay gap is about 6 per cent, once
adjusted for different types of jobs and
experience levels, a level that is similar
to the US overall, according to
Glassdoor.
However, the tech companies that
have published the results of their pay-
gap data report very small gaps of 0.1
per cent to 0.2 per cent, or no gap at all.
14 ★ FINANCIAL TIMES Friday 7 April 2017

COMPANIES

Technology Banks

Beijing warns Google over blocked service ‘Painful’ hit

Timeline to re-enter
China faces delay if
Trump-Xi talks go badly
YUAN YANG — BEIJING
A senior Chinese official has warned
Google’s chances of re-entering China
could be scuppered if talks between US
president Donald Trump and his coun-
terpart, Xi Jinping, go badly today.
The internet search company had
been making progress in mending rela-
tions with China after an almost
total block on its services since 2014.
“China’s relationship [with Google] is
improving, and both sides’ leaders have
met on several different occasions,” Liu
Binjie, a senior parliamentarian with
knowledge of China’s dialogues with
Google, told the Financial Times.
But when asked about the timeline for
Google’s services being unblocked
in China, Mr Liu warned that “this
depends on the bigger premise of Sino-
American relations”.
“Trump has said some very severe
things about Chinese trade. If this con-
tinues, [Google’s] progress will be
affected,” Mr Liu said, adding that con-
tinued unpredictability and conflict in
the relationship between the US and
China would slow things down.
Financials. Boardroom pressure
Google pulled its search engine serv-
ice from China in 2010 after clashing
with the government over its decision
to stop censoring searches involving
politically sensitive keywords.
But with more than a billion mobile
internet users, and a third of the world’s
users of Google’s Android smartphone
operating system, China’s mobile mar-
ket has become too big an opportunity
to miss, analysts say, forcing Google to
renew its efforts to participate.
China generates the most mobile app
store revenue of any country, according
to App Annie, the analytics company.
However, the Google Play app store is
blocked there, meaning the company
got nothing of the $19.1bn the Chinese
spent on mobile apps last year.
“The main things that have changed
for Google are the size of what they’re
missing out on and the management
team,” said Duncan Clark, a China tech
specialist and founder of BDA, a consul-
tancy.
While Mr Liu acknowledged the cen-
sorship of politically sensitive keywords
remained the main issue facing the
unblocking of Google’s services in
China, he added that Google “better
understands the issue now”.
Last week, Google relaunched its
Google Translate mobile app in China,
which had been blocked, by working
on shipping
with a Chinese partner to provide a
China-based server and the licence
loans leaves
required for providing internet content.
In Google’s absence, the Android app
market has fragmented into many dif-
NordLB with
ferent app stores run by local tech com-
panies. Analysts and developers see
€2bn net loss
this fragmentation as a big obstacle for
the possible entry of Google Play.
A big challenge for Google is the “fine JAMES SHOTTER — FRANKFURT
balance between acceding to China’s
The chief executive of NordLB insisted
censorship requests and the need to be
yesterday that it remained adequately
seen as an independent global media
capitalised, after large losses on its
brand”, said Lawrence Cheok of IDC, a
shipping loan portfolio drove the
market research firm.
Landesbank to a €1.96bn net loss
Additional reporting by Xinning Liu
for 2016.
Philip Stephens See Comment
Before the financial crisis, lending to the
shipping industry was a money-spinner
for many German banks. But during the
past eight years they have suffered big
losses as the shipping industry has
buckled under a combination of chronic

Norwegian oil fund wades in to executive pay debate
World’s biggest sovereign
investor takes aim at
long-term incentive plans
RICHARD MILNE — OSLO
Norway’s oil fund is one of the most
influential shareholders in the world.
But while it garnered a reputation as a
responsible investor when it sold out of
coal and tobacco producers, there has
been one topic where it has been reluc-
tant to voice an opinion: executive pay.
That is set to change. In a significant
departure, the world’s largest sovereign
wealth fund will today lay out its views
on how chiefs should be rewarded.
Furthermore the plans — seen by the
Financial Times — provide detail on
what the fund expects.
Out go the long-term incentive plans
that have often appeared geared to ben-
efit chiefs almost come what may. In
comes the idea of a large amount of pay
coming as shares to be locked up for five
to 10 years. Boards would also have to
specify the maximum an executive
could earn in a year, in an attempt to end
excessive pay.
Yngve Slyngstad, chief executive of
Norges Bank Investment Management,
says not having a stance on salaries had
become untenable given the growing
number of countries where investors
have a say on pay. “We are not in a posi-
tion any longer as investors to say that
this is an issue we are not going to have a
view on,” he says.
It is important for chiefs to have the
right incentives, the fund chief adds.
“We will remain shareholders in the
majority of the largest companies in the ‘We want
world for many decades, and we want
the CEO to be clearly focusing on long- the CEO to
term value creation.” be clearly
What is clear is the level of dissatisfac-
tion at many of the current incentives. focusing on
Long-term incentive plans set targets long-term
for executives — often relative to the
performance of competitors — on every- value
thing from share price performance and creation’
earnings to industry specifics and sus-
tainability. Yngve
Mr Slyngstad has a multitude of criti- Slyngstad
cisms of such arrangements. Perhaps
most notable is the sense that plans can
be “managed” to ensure that a CEO
receives his extra pay almost no matter
what — and that despite their name they
are, above all, short-term focused.
The Norwegian fund holds that
such outcomes undermine public trust
in business.
It is also nervous about the complex-
ity of many schemes, with bewildering
calculations of how much executives
could be paid. “Most investors globally
are invested in thousands and thou-
sands of companies,” says Mr Slyngstad.
“If it is difficult to calculate . . . and
you roll that out for many thousands
of companies, you realise it is not practi-
cal from the perspective of universal
owners.”
All this creates a distraction for chief
executives, boards and investors alike,
he adds.
Instead the fund would like to see
something “long term, simple and
transparent”. Its main idea is that a sub-
stantial part of total pay should be pro-
vided as shares that are locked in for five
to 10 years, including if the chief execu-
tive resigns or retires.
“The easiest way to do that in a simple
way is to make sure the CEO also
remains an owner in the way he or she is
thinking about the company, and not
just an owner today but over a longer
time period,” says Mr Slyngstad.
Transparency comes about by the
board disclosing a ceiling for next year’s
total pay in order to avoid “unaccepta-
ble outcomes”. In this way the fund
would avoid having to take an explicit
stance on whether a pay package was
excessive or not.
The fund is going to start slowly, using
its new principles as a basis for discus-
sions with chairmen and other inves-
tors. However, if companies insist on
Still waters: keeping long-term incentive plans, they
traditionally the can expect to be sanctioned.
Norwegian fund, “That is fair to say. We like to enter
which invests these discussions with a reasonable
the country’s oil voice,” says Mr Slyngstad.
wealth in But he hopes that a change can take
thousands of place within a few years if other inves-
companies, has tors decide to follow suit.
been silent on In any case, the fund has started vot-
the question of ing against some high-profile compa-
high-level pay nies, particularly when it thinks the
Alamy
terms of long-term incentive plans are
being changed.
Pay policies of Deutsche Bank, Gold-
man Sachs, Morgan Stanley, Reckitt
Benckiser and SAP have been rejected
by the oil fund in the past year.
Judging by the new stance, more com-
panies can expect negative votes from
the powerful sovereign wealth fund.
overcapacity, poorly timed investments
and cooling growth in China.
The north German lender warned in
November that it would make a loss of
“more than €1bn” for 2016, having
made a loss of €736m in the first nine
months of the year.
But its loss reached almost €2bn,
after the bank took €1.3bn of loan loss
provisions in the fourth quarter, bring-
ing its provisions for the full year to
€2.96bn and driving the lender to a
€1.2bn loss for the last three months of
the year.
The fourth-quarter loss drove Nor-
dLB’s core capital ratio — a closely
watched measure of financial strength
€16.8bn 11.3%
Value of the Core capital ratio
Landesbank’s at end December,
shipping loan against 13.1%
portfolio at end 2015
— to 11.3 per cent at the end of Decem-
ber, down from 11.5 per cent at the end
of September and 13.1 per cent at the
end of 2015.
Despite the scale of the loss, Thomas
Bürkle, who succeeded Gunter Dunkel
as chief executive in January, said the
bank did not need to seek help from its
owners to digest it.
“The loss . . . is painful, especially
given its scale,” he said.
“But we can deal with this negative
result on our own. Apart from ship
financing, NordLB is a profitable bank,
as our successes in our other business
fields show.
“Thanks to the significant strengthen-
ing of our capital in recent years, Nor-
dLB remains sufficiently capitalised.”
Mr Bürkle reiterated NordLB’s inten-
tion to cut its €16.8bn shipping loan
portfolio — 56 per cent of which is non-
performing — to between €12bn and
€14bn by the end of 2018, and said he
was aiming to achieve €3bn of that
reduction this year.
He announced a cost-cutting plan,
which he said would aim to reduce the
bank’s €1.1bn cost base by between
€150m and €200m by 2020.
Although he conceded that the bank
would face further pressures from
its exposure to the shipping industry in
2017, as well as from integrating
smaller peer Bremer Landesbank (of
which NordLB took full control this
year), Mr Bürkle said that it was still
“realistic” for NordLB to make a profit
in 2017.
“From an earnings point of view, 2017
has started very well,” he said.
“It looks like we will end the first
quarter with a good result.”

Automobiles Mining

China’s BYD in talks over Chile lithium supply Shandong Gold snaps up half of Barrick mine
HENRY SANDERSON — SANTIAGO
BYD, the Chinese electric car and bus
company part-owned by Warren Buf-
fett, is talking to lithium producers in
Chile about securing supplies.
Fred Ni, vice-president of BYD America,
said the company was considering
options including partnerships, supply
agreements and direct investments.
“It’s still in negotiation stage. We
haven’t defined which model it will be,”
he said at the CRU world copper confer-
ence in Santiago.
“We consume 20 per cent of the lith-
ium supply in the world — that means
we have a strong interest to secure sta-
ble supply.”
Chile is one of the largest sources of
lithium. The battery ingredient is
extracted from brine trapped beneath
the Atacama Desert.
Sociedad Química y Minera de Chile
(SQM) and US-based Albemarle are two
of the largest producers in Chile, and
Codelco, the state-owned copper com-
pany, has been looking at developing
deposits.
China wants to double its capacity for
electric vehicle batteries by 2020, and
has encouraged producers to invest
overseas. Chinese companies have
sought positions in the lithium-ion sup-
ply chain by buying mining assets.
Ganfeng Lithium, one of China’s larg-
est producers, bought a 19.9 per cent
stake in an Argentine project this
year. The deal followed the purchase
by Tianqi Lithium of a 2.1 per cent stake
in SQM.
Mr Ni said BYD was also worried
about the price of cobalt, another metal
Evaporation pools operated by SQM,
in which Tianqi Lithium has a stake
used in batteries. Most of the world’s
cobalt is produced in the Democratic
Republic of Congo by Glencore, the
miner and commodities group.
BYD has started to use cobalt in the
batteries for its new Tang and Qin pas-
senger vehicles. Cobalt-containing bat-
teries typically have a higher energy
density and so store more power per kil-
ogramme.
Cobalt prices have more than doubled
since last year because of strong
demand from battery makers and as a
group of hedge funds stockpiled the
metal in warehouses.
“The price of cobalt is very volatile.
That is the material that manufacturers
are trying to reduce,” Mr Ni said.
“When we were doing rechargeable
batteries for cell phones and notebook
computers the cobalt price increased
four times within a year. We can imagine
if we have so many electric cars on
the street how much cobalt we are going
to use.”
Sales of BYD electric vehicles rose
70 per cent last year to 96,000 units.
Although growth is likely to slow this
year after Beijing reduced subsidies for
buyers, the company is targeting sales of
150,000 cars and buses.
NEIL HUME AND DON WEINLAND
Barrick Gold, the world’s largest pro-
ducer of the precious metal, has agreed
to sell a 50 per cent stake in one of its
biggest mines to a state-backed Chi-
nese company as part of a wider deal
aimed at tapping mineral wealth else-
where in South America.
Shandong Gold will pay almost $1bn for
half of the Veladero mine in Argentina,
which is expected to produce as much as
830,000 ounces of gold this year. Pro-
ceeds from the sale will be used to pay
back debt and to fund investments, Bar-
rick said.
The two companies will also look at
options for developing Pascua Lama, an
unfinished project that Barrick put on
hold in 2013, and joint investments in a
gold-rich region that straddles the bor-
der of Argentina and Chile.
“The valuation appears to be the mid
to mid-upper range of broker estimates
for Veladero,” said analysts at Numis
Securities.
The deal between Barrick and Shan-
dong — a year in the making — shows
how mining companies are turning their
attention to growth after a multiyear
downturn in the industry.
But instead of developing new mines
and projects on their own, companies
are looking to spread costs and risks
through partnerships and joint ven-
tures.
Barrick was badly hit by massive cost
overruns at Pascua-Lama, one of the
world’s largest undeveloped gold and
silver deposits. The company took more
than $5bn of charges on the project,
which came to symbolise the profligate
spending of the mining industry during
the boom times.
The agreement with Shandong adds
to the list of mining-related transactions
leading China’s outbound investments
this year.
At a time when China’s regulators are
scrutinising cross-border transactions,
mining and raw material deals have
been deemed safer bets, according to
industry executives.
“Shandong is an ideal partner to help
The state-backed Chinese
company will pay almost
$1bn for a 50% holding in
Argentina’s Veladero mine
us unlock the untapped mineral wealth
of the El Indio belt over the long-term,
while working with us to generate more
value from the Veladero mine today,”
said Barrick’s executive chairman, John
Thornton.
Mr Thornton, who is well connected
in Beijing, has been looking to forge
stronger ties in China. Two years ago,
Barrick sold a near 50 per cent stake in
its Porgera gold mine in Papua New
Guinea to Zijin Mining, one of China’s
largest miners. Mr Thornton said he
wants Barrick to have a “distinctive,
enduring and trust-based relationship
with China”.
Shandong, which is listed in Shanghai
and has a market value of $9bn, pro-
duced 1.2m ounces of gold last year. Its
flagship project is an underground mine
called Sanshandao, which touches
depths of 1.1km.
A team of underground mining engi-
neers from the company will be embed-
ded with Barrick’s development team at
Pascua-Lama, which is situated high in
the Andes.
In February, Barrick said it was in the
early stages of evaluating the construc-
tion of an underground mine on the
Argentine side of the stalled project.
Friday 7 April 2017
Industrials
McLaren-Honda puts 3D printing into the fast lane
F1 team to use portable
machine from Stratasys
at Bahrain Grand Prix
MICHAEL POOLER
As race cars speed by at the Bahrain
Grand Prix this month, McLaren-
Honda will have a new trackside addi-
tion among its engineers and mechanics
— a 3D printer.
The Formula One team is taking a
SpaceX rival blasts claims for reusable rockets
It will take more than recycled
boosters to bring significant
savings, says ULA chief
RICHARD WATERS — COLORADO SPRINGS
The breakthrough by SpaceX in sending
the same rocket into orbit a second time
does not signal the new era of low-cost
launches that has been claimed, accord-
ing to the head of the US company’s
main competitor.
Tory Bruno, chief executive of United
Launch Alliance, (ULA) a joint venture
between Boeing and Lockheed Martin,
said that reusing a rocket was only likely
to shave about 10 per cent from launch
costs.
In an interview at the annual Space
Symposium in Colorado Springs, he said
salvaging rockets was “not necessarily a
giant game-changing alteration to the
cost basis . . . not all by itself”.
Last week, SpaceX successfully
launched one of its Falcon 9 rockets with
a main booster it had employed in a
launch nearly a year before.
Speaking at the same event, Gwynne
Shotwell, chief operating officer at
SpaceX, called the feat “historic”, and a
goal the company had been pursuing for
15 years. “I think it ushers in a new era
for all of us: lots more enterprise in
space,” she said.
Ms Shotwell has suggested in the past
Tory Bruno said
that reusing a
rocket was only
likely to shave
about 10% from
launch costs
that spreading the cost of a rocket over
more launches could cut 30 per cent off
the cost of sending a payload into space.
Lt Col Tommy Schilling, who has
studied new ways of accessing space for
the US Air Force, called rocket reusabil-
ity “paradigm shifting”, and a big step
towards opening space to many new
businesses. He said competition
between a number of companies with
reusable rockets would be needed
before customers saw lower prices.
However, Mr Bruno said that the
value of the main booster, or first stage
— the part of the rocket that SpaceX had
succeeded in reusing — was not great
enough to produce big savings on its
own. Building a rocket accounts for
about half the total cost of a launch, with
the lower stage accounting for half of
that, he said.
Taking account of the extra costs of
equipping the booster so that it can fly
back to earth and then refurbishing it,
along with other operational costs, fur-
ther reduces the benefits of reuse, he
added.
Telecoms
Comcast launches ‘piggyback’ mobile service
DAVID CROW — NEW YORK
Comcast launched a new mobile tele-
coms operator yesterday, as the largest
cable group in the US sought to boost
customer loyalty by offering wireless
services, in addition to television,
internet and landlines.
The offering, called Xfinity Mobile, will
piggyback on mobile infrastructure
operated by Verizon, the wireless tele-
coms group that is credited with having
one of the largest and more reliable net-
works in the US.
Comcast said it planned to market the
wireless product to the company’s
almost 30m cable customers, offering
savings over rivals that would run to
hundreds of dollars a year for some.
Comcast hopes the addition of a
mobile phone product will make its
existing customers less likely to switch
and reduce the company’s “churn”, the
industry term for the rate at which peo-
ple cancel their services.
“If we can improve loyalty by offering
portable device to an event for the first
time, to give it the capability to produce
modified small plastic parts during
practices ahead of qualifying sessions
and the race in the Gulf kingdom in
about a week’s time.
Although McLaren-Honda’s vehicles
have used a limited number of small 3D-
printed components for about six years,
it is expanding its use of the technology
with machines supplied by US-based
Stratasys.
Neil Oatley, director of design and
Aerospace & defence. Cost-cutting
A SpaceX Falcon 9 lifts off on a supply mission to the International Space Station from Kennedy Space Center, Cape Canaveral, in February — Joe Skipper/Reuters
Outer limits
Bezos spends $1bn a year
to fulfil cosmic ambition
Jeff Bezos has revealed he has been
spending around $1bn a year of his
own money on space development as
he took the wraps off the craft he
hopes will provide the first step in
preparing for a human civilisation
beyond Earth.
The Amazon founder showed off a
pilotless capsule designed to take its
first six well-heeled tourists for a brief
trip to the edge of space before the
end of 2018. However, he backed off
an earlier timetable to test the
spacecraft with human passengers
this year, and said he was prepared to
keep investing over the long term to
reach his goal.
The unveiling of the capsule, which
was shown off at the annual Space
packages with great value, then it’s good
for the customer, but it’s also a good
business decision for us,” said Greg Butz,
president of Comcast Mobile.
The company is trying to succeed
where other new entrants in the fiercely
competitive US wireless market have
struggled. In June, Cablevision closed its
mobile network Freewheel, which oper-
ated exclusively over WiFi hotspots,
after it failed to lure enough customers.
Comcast’s product, which is known as
a mobile virtual network operator, or
MVNO, because it operates over a rival
company’s towers, will also rely on its
own WiFi hotspots for most data trans-
fer. But customers will be automatically
switched to Verizon’s network for voice
calls or when they are out of range.
Xfinity Mobile will offer best-selling
smartphones from Apple, Samsung and
LG, rather than a less-popular suite of
specially adapted devices, as Google
does to customers who sign up to its
MVNO, Project Fi.
Mr Butz said he believed the company
★ FINANCIAL TIMES
COMPANIES
development at McLaren Racing, said
having a printer trackside will allow its
aerodynamics engineers to make
tweaked parts overnight, cutting pro-
duction times.
“The time from idea to racetrack is so
important to us, as all the F1 teams are
trying to do things as quickly as possi-
ble,” he said. “If you can get the capacity
to reduce [production] by a few
days . . . it can make a difference of get-
ting a part a race early.”
Shaving fractions of a second off race
Symposium in Colorado Springs, sets
up a race between Mr Bezos’s private
space company, Blue Origin, and Sir
Richard Branson’s Virgin Galactic to
turn the long-held dream of space
tourism into reality. Mr Bezos has
described this as the first step in
making travel to space commonplace,
bringing down the cost to a level
where it can become a springboard for
eventual space-borne colonies.
Mr Bezos said his plan was to make
Blue Origin a profitable, self-sustaining
business that could drive down the
cost of a trip to space by a factor of 10
and, eventually, by as much as 100.
For now, though, he said the
company’s “business plan” relied on
him selling around $1bn of his own
Amazon stock a year to fund
development of its rockets.
New Shepard, the company’s first
rocket, would end up costing around
$2.5bn, he said.
would be able to attract new users with a
pricing plan that undercut competitors.
Unlimited plans will be $45 a month for
customers already subscribing to Com-
cast’s premium TV packages, and $65
for those who take its internet product.
There will also be a free plan where
data usage is charged at $12 per giga-
byte, which is aimed at customers who
tend not to browse the internet, watch
video, or listen to audio when they are
out of their home.
Comcast said it would be able to use
its existing stores, call centres and web-
site to attract subscribers and offer
them customer support.
The cable group has been touted by
analysts as a buyer for T-Mobile USA,
the country’s fastest-growing mobile
phone network, but Sam Schwartz,
chief business developer at Comcast,
said the group did not “intend to get into
a wireless fight” with incumbent opera-
tors such as AT&T, Verizon and Sprint.
“We are interested in this for what it
does for our core business,” he said.
15
times can prove critical to the standings ing or cutting from a larger object. tured moulds. But for now it was not
in F1, where a car undergoes an upgrade Goods ranging from medical implants suitable for pieces exposed to high aero-
every 15 to 17 minutes on average during to jet engine parts are already produced dynamics forces, said Mr Oatley.
a season, according to McLaren. this way by companies such as Rolls- Andy Middleton, president of Europe,
The motorsport is among a number of Royce and Siemens, though adoption is Middle East and Africa at Stratasys, said
sectors embracing 3D printing, which still largely restricted to prototyping, the company hoped to learn from its
proponents say has the potential to be design and tooling rather than mass partnership with McLaren, with the
quicker and produce more complex and manufacturing due to its expense. intention of eventually being able to
lightweight structures than traditional 3D-printed parts on McLaren’s For- print structural parts on demand.
manufacturing methods. mula One MCL32 car include a hydrau- But he said that widespread adoption
The technology is also known as addi- lic line bracket and a flexible radio har- of additive manufacturing in mass auto-
tive manufacturing because it builds ness assembly, while other components motive production was still some way
parts up in layers rather than by mould- are produced from additively manufac- off.
Automobiles
VW in tie-up
with Mobvoi
on artificial
intelligence
HENNY SENDER — HONG KONG
PETER CAMPBELL — LONDON
Volkswagen is setting up a joint ven-
ture with a Beijing-based technology
company to develop artificial intelli-
gence for its next generation of cars.
The German group’s China unit is
investing $180m in Mobvoi, which is
backed by Google and Sequoia Capital,
as part of a deal that values the Beijing
start-up at almost $1bn.
Mobvoi will provide VW with voice-
recognition and language-processing
technologies, while the German car-
maker will provide it with a platform for
its technology.
“All cars will soon be digitalised,” said
Li Zhifei, Mobvoi’s founder. “They will
become like mobile computers.”
Voice interaction and “personalised
services” would accelerate the develop-
ment of driverless cars, he added. “The
technology incubated in China will be
adopted in Germany.”
Chinese tech groups are closing the
gap with rivals elsewhere. VW and Mob-
voi hope to sell products to Chinese
equipment manufacturers. Mr Li said
his countrymen were more likely to
embrace autonomous vehicles given the
congested roads.
Mobvoi has developed a “smart” rear-
view mirror that provides navigation,
instant messaging and infotainment in
response to voice commands.
“We are impressed by Mobvoi’s inno-
vative approach of AI technologies, and
we are pleased to form this joint venture
to explore the next generation of smart
SpaceX said last week that the main selves back to land. ULA planned to use mobility,” said Jochem Heizmann, chief
booster accounted for 80 per cent of the parachutes to return the engines of its executive of VW China.
cost of one of its rockets. forthcoming Vulcan rockets back to Mr Li worked for Google in California
Cost is only one reason that SpaceX earth, helping it recoup equipment that after obtaining a PhD from Johns Hop-
has pursued the idea of recovering its accounts for about two-thirds of the cost kins University. When he returned to
rockets. Elon Musk, the company’s of the main rocket booster, Mr Bruno China, he sold Google a minority stake
founder, identified it as a key technique said. in Mobvoi. The two groups have a
before it reaches its ultimate goal of Perfecting rocket reusability has smartwatch partnership.
landing people on Mars and then bring- raised the prospect of SpaceX gaining a “There is a tech arms race to get to
ing them back to Earth. new cost advantage over ULA, which autonomous driving,” said Robin Zhu,
“The only way we’re going to be charges more for its launches but argues Hong Kong-based analyst for Bernstein.
exploring the solar system, and be able that higher reliability makes up much of “[Manufacturers] are confused about
to return, is if these systems are reusa- the difference. what the ultimate technology solution
ble. Otherwise it’s a one-way trip,” Ms Mr Bruno said that the joint venture will be, and they are buying whatever
Shotwell said. Recovering the rocket had taken a third out of the cost of its they think has the potential”
booster also makes it easier to study Atlas rockets by speeding up its produc- Fiat Chrysler has a partnership with
how the equipment performs and can tion time, consolidating its supply chain Waymo, the driverless car unit of
be improved, she said. around a smaller number of key suppli- Google’s parent company Alphabet.
Since SpaceX and Blue Origin, Jeff ers, and cutting headcount. General Motors has said it is acquiring
Bezos’s privately funded space com- The company had almost exhausted Cruise, a driverless tech group.
pany, began actively pursuing rocket the potential for further cost cutting In China Baidu is developing self-driv-
reuse, the idea has become mainstream with Atlas, though the current cost ing cars and fellow tech group Tencent
among rocket companies. Airbus has makes it “cost competitive with has stakes in US electric carmaker Tesla.
proposed a system for the European SpaceX” for US national security mis- VW is the biggest foreign carmaker in
Space Agency’s Ariane rocket that sions that require higher levels of relia- the Chinese mainland with a 16.4 per
would enable the engines to fly them- bility, he added. cent share.
Contracts & Tenders
Notice to Advertisers
Calls to the Financial Times Advertising Department may be
monitored.
Acceptance of any advertisement for publication will be subject
to the then current terms and conditions of insertion of
advertisements in FT publications.
A copy of the terms and conditions of insertion of
advertisements in FT publications can be obtained from
+44 (0)20 7873 3000, or viewed at www.FT.com/advertising
Businesses For Sale
Business for Sale, Business Opportunities, Business Services,
Business Wanted, Franchises
Runs Daily
.....................................................................................................................................................................................................................................................................................................................................................................................................................
Classified Business Advertising
UK: +44 20 7873 4000 | Email: acs.emea@ft.com
16 FINANCIAL TIMES Friday 7 April 2017

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 $

-0.39% -1.40% -0.52% -0.01% -0.270% -0.234%

No change
0.29% 0.29% 0.28% 0.16% 0.160% 1.10% 0.54%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Mar 07 - - Index All World Mar 07 - Apr 06 Index All World Mar 07 - Apr 06 Index All World Mar 07 - Apr 06 Index All World Mar 07 - Apr 06 Index All World Mar 07 - Apr 06 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
15,714.51 12,230.89 2,152.75
19,344.15
15,496.98
2,362.98 2,359.81 7,338.99 7,331.68 11,967.31
18,597.06 2,095.41
Day 0.29% Month -0.96% Year 15.40% Day 0.46% Month 0.54% Year 17.73% Day -0.39% Month -0.59% Year 18.59% Day 0.11% Month -0.21% Year NaN% Day -1.40% Month -4.48% Year 18.21% Day -0.37% Month 3.56% Year 9.68%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
10,518.90
48,951.05 1,499.94 24,273.72
5,881.36 3,175.59
5,837.55 3,145.29
47,419.16 1,469.17 23,681.07
9,850.50
Day 0.29% Month 0.16% Year 21.40% Day -0.52% Month 2.23% Year 8.11% Day 0.16% Month 1.83% Year 15.54% Day 1.12% Month 7.35% Year 25.41% Day -0.52% Month 3.06% Year 20.30% Day -0.03% Month 1.71% Year 13.38%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
5,121.44 3,281.00 29,927.34
64,868.55 20,296.97
20,855.73 64,718.02 3,240.66
20,706.32 29,048.19
4,960.48 19,482.39
Day 0.28% Month -1.39% Year 17.67% Day 0.14% Month -2.20% Year 34.90% Day 0.58% Month 2.53% Year 20.50% Day 0.22% Month 4.36% Year 17.73% Day 0.33% Month 1.95% Year 7.47% Day -0.16% Month 3.80% Year 20.27%

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 20911.94 20683.02 Cyprus CSE M&P Gen 67.93 67.99 Italy FTSE Italia All-Share 22402.91 22355.39 Philippines Manila Comp 7565.32 7584.21 Taiwan Weighted Pr 9897.80 9949.48 Cross-Border DJ Global Titans ($) 266.72 266.85
Australia All Ordinaries 5897.30 5915.90 Czech Republic
PX 979.97 980.78 FTSE Italia Mid Cap 38028.35 37948.63 Poland Wig 59347.57 59369.66 Thailand Bangkok SET 1582.12 1583.82 Euro Stoxx 50 (Eur) 3492.51 3472.58
S&P/ASX 200 5856.30 5876.20 Denmark OMXC Copenahgen 20 922.79 925.74 FTSE MIB 20296.97 20253.37 Portugal PSI 20 4999.09 4979.91 Turkey BIST 100 89037.45 88612.55 Euronext 100 ID 986.47 982.10
S&P/ASX 200 Res 3456.20 3468.80 Egypt EGX 30 13264.75 13061.07 Japan 2nd Section 5785.37 5931.98 PSI General 2737.36 2726.77 UAE Abu Dhabi General Index 4640.74 4548.87 FTSE 4Good Global ($) 5880.78 5880.81
Austria ATX 2897.08 2885.13 Estonia OMX Tallinn 1115.24 1109.24 Nikkei 225 18597.06 18861.27 Romania BET Index 8185.49 8201.83 UK FT 30 3216.40 3228.50 FTSE All World 296.10 296.12
Belgium BEL 20 3820.80 3808.74 Finland OMX Helsinki General 9131.83 9089.47 S&P Topix 150 1209.25 1228.00 Russia Micex Index 2054.06 2056.32 FTSE 100 7303.20 7331.68 FTSE E300 1499.94 1497.61
BEL Mid 6624.50 6622.57 France CAC 40 5121.44 5091.85 Topix 1480.18 1504.66 RTX 1148.80 1152.49 FTSE 4Good UK 6457.38 6479.31 FTSE Eurotop 100 2947.06 2943.82
Brazil Bovespa 64868.55 64774.77 SBF 120 4061.98 4040.38 Jordan Amman SE 2236.93 2237.95 Saudi-Arabia TADAWUL All Share Index 7050.91 6986.19 FTSE All Share 3986.22 3996.54 FTSE Global 100 ($) 1450.01 1450.06
Canada S&P/TSX 60 926.69 921.55 Germany M-DAX 24110.53 24010.40 Kenya NSE 20 3101.12 3096.83 Singapore FTSE Straits Times 3175.59 3176.55 FTSE techMARK 100 4406.60 4414.09 FTSE Gold Min ($) 1577.01 1572.61
S&P/TSX Comp 15714.51 15642.99 TecDAX 2034.42 2041.69 Kuwait KSX Market Index 7059.61 7015.78 Slovakia SAX 306.34 308.88 USA DJ Composite 7180.87 7159.99 FTSE Latibex Top (Eur) 4300.10 4363.50
S&P/TSX Div Met & Min 873.12 875.93 XETRA Dax 12230.89 12217.54 Latvia OMX Riga 781.91 776.75 Slovenia SBI TOP 779.29 786.24 DJ Industrial 20706.32 20648.15 FTSE Multinationals ($) 1684.76 1688.14
Chile IGPA Gen 24444.38 24158.33 Greece Athens Gen 671.15 669.97 Lithuania OMX Vilnius 563.15 561.89 South Africa FTSE/JSE All Share 52918.42 52990.08 DJ Transport 9153.18 9095.98 FTSE World ($) 523.80 523.79
China FTSE A200 8923.25 8900.47 FTSE/ASE 20 1791.27 1793.82 Luxembourg LuxX 1788.29 1789.80 FTSE/JSE Res 20 34419.98 34393.64 DJ Utilities 702.48 704.17 FTSEurofirst 100 (Eur) 4272.35 4266.44
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 24273.72 24400.80 Malaysia FTSE Bursa KLCI 1739.56 1744.67 FTSE/JSE Top 40 46170.10 46149.85 Nasdaq 100 5428.73 5418.52 FTSEurofirst 80 (Eur) 4772.93 4751.51
Shanghai A 3435.87 3424.61 HS China Enterprise 10276.41 10365.32 Mexico IPC 48951.05 49207.61 South Korea Kospi 2152.75 2160.85 Nasdaq Cmp 5881.36 5864.48 MSCI ACWI Fr ($) 447.76 448.43
Shanghai B 345.00 345.30 HSCC Red Chip 4002.21 4021.84 Morocco MASI 11330.61 11321.57 Kospi 200 279.47 280.74 NYSE Comp 11465.97 11423.36 MSCI All World ($) 1845.95 1850.02
Shanghai Comp 3281.00 3270.31 Hungary Bux 32553.53 32405.13 Netherlands AEX 516.30 514.89 Spain IBEX 35 10518.90 10402.70 S&P 500 2359.81 2352.95 MSCI Europe (Eur) 1542.53 1543.41
Shenzhen A 2122.82 2116.53 India BSE Sensex 29927.34 29974.24 AEX All Share 781.09 779.40 Sri Lanka CSE All Share 6250.04 6198.32 Wilshire 5000 24559.44 24476.06 MSCI Pacific ($) 2488.34 2492.14
Shenzhen B 1154.37 1152.35 Nifty 500 8092.10 8095.10 New Zealand NZX 50 7289.52 7265.05 Sweden OMX Stockholm 30 1564.05 1558.56 Venezuela IBC 45494.90 45739.70 S&P Euro (Eur) 1587.06 1580.39
Colombia COLCAP 1371.46 1368.12 Indonesia Jakarta Comp 5680.24 5676.98 Nigeria SE All Share 25266.15 25273.03 OMX Stockholm AS 558.64 556.72 Vietnam VNI 723.22 724.14 S&P Europe 350 (Eur) 1542.71 1540.42
Croatia CROBEX 1946.65 1981.69 Ireland ISEQ Overall 6679.52 6650.63 Norway Oslo All Share 762.89 765.03 Switzerland SMI Index 8638.37 8640.51 S&P Global 1200 ($) 2056.91 2057.31
Israel Tel Aviv 100 12.54 12.52 Pakistan KSE 100 47356.60 47577.31 Stoxx 50 (Eur) 3160.48 3156.23
(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 Apr 06 %Chg %Chg Apr 06 %Chg %Chg Apr 06 %Chg %Chg Apr 06 %Chg %Chg
ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's FTSE 100 price(p) week ytd FTSE 250 price(p) week ytd FTSE SmallCap price(p) week ytd Industry Sectors price(p) week ytd
traded m's price change traded m's price change traded m's price change traded m's price change Winners Winners Winners Winners
Amazon.com 29.1 900.55 -8.73 Glaxosmithkline 227.1 1633.50 -23.71 Iberdrola 831.4 6.76 0.08 Softbank . 570.3 7903.00 -57.00 British Land 636.00 7.6 1.3 Atkins (ws) 1984.00 31.5 36.5 Lonmin 116.25 29.5 -19.4 Real Estate Investment Trusts 2993.62 4.7 2.7
Apple 14.5 144.07 0.05 Rio Tinto 195.6 3257.50 8.71 Nestle N 341.0 71.58 0.09 Mitsubishi Ufj Fin,. 557.9 665.40 -11.40 Provident Fin 3141.00 7.0 10.3 Sophos 318.90 14.5 20.4 Hostelworld 272.50 16.8 21.8 Industrial Metals 2531.55 3.5 12.6
Tesla 10.2 299.83 4.83 Hsbc Holdings 188.0 651.80 -2.86 Total 284.5 48.53 0.53 Toyota Motor 525.8 5810.00 -99.00 Micro Focus Int 2397.00 5.8 10.0 Shawbrook 340.00 11.7 25.0 Ite 176.50 13.9 14.4 Real Estate & Investment Servic 2672.35 3.4 7.8
Bank Of America 10.0 23.29 0.12 Reckitt Benckiser 168.3 7240.00 -15.65 Santander 275.7 5.76 0.06 Mizuho Fin,. 348.2 193.10 -4.10 Land Securities 1089.00 5.4 1.5 Homeserve 632.50 9.5 -0.9 Luceco 215.25 11.0 11.6 Software & Computer Services 1962.33 2.3 3.7
Nvidia 9.5 100.69 0.66 Bhp Billiton 159.5 1274.00 -0.48 Allianz Se Na O.n. 255.1 173.15 1.05 Sumitomo Mitsui Fin,. 343.9 3895.00 -52.00 Easyjet 1060.00 5.3 5.5 Countryside Properties 260.40 7.0 2.7 Liontrust Asset Management 424.50 10.1 10.4 Gas Water & Multiutilities 6329.00 1.1 4.8
Facebook 8.7 141.71 -0.14 Bp 159.5 464.45 -3.44 Intesa Sanpaolo 249.2 2.53 0.02 Fanuc 303.4 22815.00 -370.00 Intu Properties 284.30 4.5 1.1 Capital & Counties Properties 307.80 6.4 1.7 Motorpoint 146.50 8.9 16.5 Electricity 8719.79 1.0 -5.5
Constellation Brands 5.8 172.68 11.28 Shire 153.4 4603.50 -4.23 Roche Gs 245.6 239.99 -1.03 Toshiba 273.4 214.80 -0.10 Hammerson 582.00 3.4 1.3 P2p Global Investments 835.00 6.4 2.6 Chesnara 380.75 8.8 4.2 Industrial Engineering 11445.58 0.8 11.7
J P Morgan Chase & Co 5.4 86.46 0.27 Lloyds Banking 147.3 63.59 -1.80 Bnp Paribas Act.a 237.4 60.75 0.65 Fast Retailing Co., 263.9 34760.00 140.00 Worldpay 300.70 3.2 11.4 Card Factory 292.30 5.8 15.0 Mj Gleeson 665.00 7.5 23.9 Support Services 7519.35 0.6 6.9
Microsoft 5.2 65.92 0.36 British American Tobacco 133.4 5291.00 -19.16 Novartis N 236.6 69.30 -0.42 Nippon Telegraph And Telephone 257.1 4862.00 -27.00 Barratt Developments 559.00 2.6 20.9 Riverstone Energy 1294.00 5.5 -5.0 Petropavlovsk 7.52 6.8 8.2 Nonlife Insurance 2858.35 0.6 3.9
Alphabet 4.3 849.08 0.17 Unilever 126.7 3978.00 34.35 Daimler Ag Na O.n. 236.1 67.12 0.06 Sony 251.6 3555.00 -100.00 Fresnillo 1594.00 2.5 30.5 Bgeo 3383.00 5.5 13.4 Menzies(john) 678.00 6.8 13.8 Equity Investment Instruments 8973.97 0.2 5.5
Antofagasta 861.00 2.4 27.4 Evraz 238.60 5.4 7.6 Jpmorgan Global Convertibles ome Fund 96.38 6.5 5.0 Tobacco 59740.62 0.2 13.2
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
Convatec 279.20 2.2 19.3 St.modwen Properties 338.50 5.2 10.5 Xaar 377.75 6.3 -5.6 Mining 15906.28 0.1 7.5
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
L Brands 47.40 4.30 9.98 Homeserve 632.50 48.02 8.48 Bk Of Ireld Cap.st.eo-,05 0.24 0.01 3.40 Sumco 1834.00 32.00 1.78 Old Mutual 189.90 -12.5 -8.4 Allied Minds 175.00 -42.2 -60.5 Imagination 105.25 -63.0 -60.1 Automobiles & Parts 8248.70 -3.8 6.5
Constellation Brands 172.68 11.28 6.99 Countryside Properties 260.40 11.07 4.53 Inditex 33.68 0.80 2.43 Advantest 2038.00 23.00 1.14 Mediclinic Int 683.50 -10.0 -11.4 Investec 538.50 -10.9 0.5 Nanoco 31.00 -13.7 -30.0 General Industrials 5776.25 -2.7 4.7
Kohl's 39.84 2.33 6.21 Easyjet 1060.00 42.90 4.22 Acs Const. 33.43 0.79 2.41 Otsuka Holdings Co., 5113.00 41.00 0.81 Barclays 216.40 -5.7 -3.8 Tullow Oil 212.20 -10.7 -32.3 Hss Hire 61.00 -11.8 -26.4 Pharmaceuticals & Biotech. 14035.74 -2.5 4.4
Gap 24.05 1.15 5.00 Cls Holdings 1931.00 71.00 3.82 Ryanair Holdings 15.14 0.34 2.30 Concordia Fin Ltd 498.40 3.00 0.61 Next 4042.00 -5.1 -18.9 Jrp 125.20 -7.6 -16.2 Gem Diamonds 89.25 -8.9 -18.9 Food & Drug Retailers 2947.89 -2.4 -4.3
Nordstrom 45.53 2.09 4.81 Ip 144.50 5.20 3.73 Erste Bank Ag 30.75 0.66 2.19 Ube Industries, 247.00 1.00 0.41 Smurfit Kappa 2065.00 -4.8 10.0 Ip 144.50 -7.1 -19.2 Town Centre Securities 270.75 -8.5 -0.5 Life Insurance 7995.71 -2.3 1.0
Morrison (wm) Supermarkets 230.70 -4.8 0.0 Virgin Money Holdings (uk) 302.20 -4.8 0.3 Cmc Markets 113.50 -7.9 4.0 Mobile Telecommunications 4641.14 -2.1 2.7
Downs Downs Downs Downs
Hikma Pharmaceuticals 1899.00 -4.7 1.2 Petrofac 896.50 -4.7 3.2 Laird 143.00 -6.8 -6.8 Food Producers 7786.24 -2.1 -3.1
yte 135.46 -2.97 -2.15 Tullow Oil 212.20 -20.13 -8.68 Svenska Cellulosa Ab Sca Ser. B 28.94 -0.52 -1.77 Yaskawa Electric 2093.00 -110.00 -4.99
Pearson 637.00 -4.6 -22.2 Ao World 135.20 -4.3 -25.6 Hansard Global 86.00 -5.2 -18.5 Banks 4170.87 -1.9 0.9
Shire 172.22 -2.85 -1.63 Allied Minds 175.00 -14.20 -7.68 Altice 20.39 -0.35 -1.71 Taiyo Yuden Co., 1296.00 -56.00 -4.14
Sainsbury (j) 254.40 -4.5 1.6 Smith (ds) 421.90 -4.1 3.4 Severfield 79.63 -4.5 6.3 Chemicals 12545.69 -1.7 2.1
Hp 17.49 -0.20 -1.13 Pearson 637.00 -45.56 -6.68 Peugeot 18.16 -0.31 -1.71 Furukawa Co., 194.00 -8.00 -3.96
Lloyds Banking 63.59 -4.4 1.9 Ultra Electronics Holdings 2070.00 -4.0 4.6 Value And ome Trust 249.13 -4.2 -1.4 Forestry & Paper 20939.52 -1.6 16.8
T-mobile Us 62.80 -0.70 -1.10 Aviva 514.50 -19.19 -3.62 Novo Nordisk B A/s 33.30 -0.47 -1.39 Pioneer 203.00 -8.00 -3.79
Gkn 352.80 -3.9 6.4 Imi 1180.00 -3.9 13.5 Lsl Property Services 205.00 -4.1 -11.5 Construction & Materials 6776.36 -1.5 -0.7
Alexion Pharmaceuticals 114.93 -1.28 -1.10 Berendsen 748.50 -21.57 -2.80 Altice B 20.37 -0.28 -1.36 Mitsui Mining And Smelting , 353.00 -13.00 -3.55
Associated British Foods 2502.00 -3.7 -8.9 Thomas Cook 84.50 -3.9 -3.9 London & St Lawrence Investment 375.25 -4.1 3.3 Aerospace & Defense 4980.12 -0.8 7.5
Based on the constituents of the S&P500 and the Nasdaq 100 index Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index
Based on last week's performance. †Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Apr 6 Currency Mid Change Mid Change Mid Change Apr 6 Currency Mid Change Mid Change Mid Change Apr 6 Currency Mid Change Mid Change Mid Change Apr 6 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 15.3780 0.0225 16.3890 0.0154 19.2172 0.0580 Indonesia Indonesian Rupiah 13335.5000 14.5000 14212.2572 8.0346 16664.8058 44.0954 Poland Polish Zloty 3.9649 0.0002 4.2255 -0.0020 4.9547 0.0080 ..Three Month 0.8005 -0.0012 0.8527 -0.0018 - -
Australia Australian Dollar 1.3242 0.0048 1.4112 0.0044 1.6547 0.0086 Israel Israeli Shekel 3.6444 -0.0071 3.8840 -0.0096 4.5542 -0.0018 Romania Romanian Leu 4.2442 0.0001 4.5232 -0.0023 5.3038 0.0084 ..One Year 0.8016 -0.0013 0.8521 -0.0018 - -
Bahrain Bahrainin Dinar 0.3770 - 0.4017 -0.0002 0.4711 0.0007 Japan Japanese Yen 110.8850 -0.3000 118.1752 -0.3816 138.5681 -0.1582 Russia Russian Ruble 56.3275 0.1618 60.0308 0.1412 70.3900 0.3117 United States United States Dollar - - 1.0657 -0.0006 1.2497 0.0019
Bolivia Bolivian Boliviano 6.9100 - 7.3643 -0.0038 8.6351 0.0135 ..One Month 110.8849 -0.3002 118.1753 -0.3816 138.5681 -0.1583 Saudi Arabia Saudi Riyal 3.7501 -0.0003 3.9966 -0.0024 4.6863 0.0069 ..One Month - - 1.0656 -0.1820 1.2497 0.0019
Brazil Brazilian Real 3.1182 0.0234 3.3232 0.0233 3.8967 0.0353 ..Three Month 110.8846 -0.3008 118.1753 -0.3815 138.5680 -0.1585 Singapore Singapore Dollar 1.4015 0.0007 1.4936 0.0000 1.7514 0.0037 ..Three Month - - 1.0653 -0.1820 1.2500 0.0020
Canada Canadian Dollar 1.3413 -0.0001 1.4294 -0.0009 1.6761 0.0025 ..One Year 110.8830 -0.3040 118.1754 -0.3813 138.5681 -0.1592 South Africa South African Rand 13.8163 0.0438 14.7246 0.0390 17.2656 0.0815 ..One Year - - 1.0636 -0.1820 1.2510 0.0019
Chile Chilean Peso 656.3500 -0.9950 699.5023 -1.4264 820.2120 0.0378 Kenya Kenyan Shilling 103.4000 0.1900 110.1981 0.1450 129.2145 0.4386 South Korea South Korean Won 1133.3000 8.9500 1207.8098 8.9124 1416.2356 13.3758 Venezuela Venezuelan Bolivar Fuerte 9.9900 0.0200 10.6468 0.0158 12.4841 0.0444
China Chinese Yuan 6.9002 0.0043 7.3539 0.0007 8.6229 0.0188 Kuwait Kuwaiti Dinar 0.3051 0.0001 0.3251 -0.0001 0.3812 0.0007 Sweden Swedish Krona 9.0024 0.0295 9.5943 0.0265 11.2499 0.0544 Vietnam Vietnamese Dong 22690.0000 - 24181.8085 -12.6374 28354.7175 44.2307
Colombia Colombian Peso 2856.0800 -0.5300 3043.8556 -2.1557 3569.1188 4.9053 Malaysia Malaysian Ringgit 4.4365 0.0055 4.7282 0.0034 5.5441 0.0155 Switzerland Swiss Franc 1.0041 0.0001 1.0701 -0.0005 1.2547 0.0020 European Union Euro 0.9383 0.0005 - - 1.1726 0.0024
Costa Rica Costa Rican Colon 562.4650 0.6700 599.4448 0.4012 702.8880 1.9322 Mexico Mexican Peson 18.7763 0.0448 20.0107 0.0373 23.4639 0.0924 Taiwan New Taiwan Dollar 30.5410 0.1845 32.5489 0.1797 38.1658 0.2897 ..One Month 0.9382 0.0005 - - 1.1725 0.0024
Czech Republic Czech Koruna 24.9670 -0.4044 26.6084 -0.4452 31.2001 -0.4560 New Zealand New Zealand Dollar 1.4333 -0.0041 1.5275 -0.0052 1.7911 -0.0023 Thailand Thai Baht 34.5380 - 36.8087 -0.0192 43.1606 0.0673 ..Three Month 0.9378 0.0005 - - 1.1724 0.0024
Denmark Danish Krone 6.9766 0.0032 7.4353 -0.0005 8.7184 0.0176 Nigeria Nigerian Naira 306.7500 0.7000 326.9175 0.5756 383.3321 1.4713 Tunisia Tunisian Dinar 2.2881 0.0061 2.4385 0.0052 2.8593 0.0121 ..One Year 0.9362 0.0005 - - 1.1718 0.0025
Egypt Egyptian Pound 18.0505 0.0810 19.2372 0.0763 22.5569 0.1362 Norway Norwegian Krone 8.6024 0.0054 9.1680 0.0010 10.7500 0.0235 Turkey Turkish Lira 3.7110 0.0175 3.9550 0.0166 4.6375 0.0291
Hong Kong Hong Kong Dollar 7.7699 0.0008 8.2807 -0.0035 9.7096 0.0161 Pakistan Pakistani Rupee 104.8250 -0.0100 111.7168 -0.0690 130.9952 0.1918 United Arab Emirates UAE Dirham 3.6729 -0.0001 3.9144 -0.0021 4.5899 0.0071
Hungary Hungarian Forint 291.0955 0.2815 310.2338 0.1380 363.7693 0.9185 Peru Peruvian Nuevo Sol 3.2465 -0.0020 3.4599 -0.0039 4.0569 0.0038 United Kingdom Pound Sterling 0.8002 -0.0013 0.8528 -0.0018 - -
India Indian Rupee 64.6400 -0.2750 68.8898 -0.3292 80.7778 -0.2171 Philippines Philippine Peso 50.1800 0.0355 53.4791 0.0099 62.7078 0.1421 ..One Month 0.8003 -0.0013 0.8528 -0.0018 - -
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 Apr 06 Apr 05 Apr 04 Apr 03 Mar 31 Yr Ago High Low Year to date percentage changes Closing Day's Closing Day's
£ Strlg Day's Euro £ Strlg £ Strlg Year Div P/E X/D Total FT 30 3216.40 3228.50 3228.20 3221.70 3240.90 0.00 3275.20 3060.90 Personal Goods 17.87 Basic Materials 5.35 Utilities 2.04 FTSE 100 Price Change FTSE 100 Price Change
Apr 06 chge% Index Apr 05 Apr 04 ago yield% Cover ratio adj Return FT 30 Div Yield 1.53 1.53 1.53 1.54 1.53 0.00 3.93 2.74 Forestry & Paper 15.67 Equity Invest Instr 5.35 Software & Comp Serv 1.82 3I Group PLC 746.00 0.50 London Stock Exchange Group PLC 3202 3.00
FTSE 100 (100) 7303.20 -0.39 6670.57 7331.68 7321.82 6136.89 3.69 0.88 30.79 90.45 6028.84 P/E Ratio net 29.08 29.15 29.15 29.05 29.23 0.00 19.44 14.26 Tech Hardware & Eq 14.83 Mining 5.02 Construct & Material 1.76 Admiral Group PLC 2005 -1.00 Marks And Spencer Group PLC 335.60 0.80
FTSE 250 (250) 19126.08 0.30 17469.32 19069.33 19020.13 16714.23 2.69 1.84 20.22 110.51 13770.45 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Tobacco 13.11 FTSE 250 Index 4.95 Health Care Eq & Srv 1.15 Anglo American PLC 1245 4.00 Mediclinic International PLC 683.50 4.50
FTSE 250 ex Inv Co (207) 20495.25 0.37 18719.88 20420.11 20364.99 18122.46 2.73 1.89 19.38 116.67 15049.73 FT 30 hourly changes Electronic & Elec Eq 11.72 Real Est Invest & Se 4.88 Industrial Transport 1.10 Antofagasta PLC 861.00 8.00 Merlin Entertainments PLC 475.10 -1.50
FTSE 350 (350) 4043.03 -0.27 3692.81 4054.10 4047.80 3420.46 3.52 1.00 28.29 45.53 6706.19 8 9 10 11 12 13 14 15 16 High Low Consumer Goods 11.55 Industrial Metals & 4.85 Consumer Services 0.80 Ashtead Group PLC 1679 -3.00 Micro Focus International PLC 2397 13.00
FTSE 350 ex Investment Trusts (306) 4010.87 -0.28 3663.44 4021.94 4015.69 3396.69 3.55 1.00 28.23 45.72 3426.91 3228.5 3196.8 3205.2 3207.3 3213 3214.4 3213.2 3215.6 3216.8 3228.5 3193.9 Household Goods & Ho 10.21 Mobile Telecomms 4.67 Oil Equipment & Serv 0.63 Associated British Foods PLC 2502 -31.00 Mondi PLC 1944 4.00
FTSE 350 Higher Yield (122) 3798.95 -0.38 3469.87 3813.62 3804.66 3130.44 4.77 0.69 30.17 60.21 6584.16 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Automobiles & Parts 9.53 Travel & Leisure 4.18 Real Est Invest & Tr 0.32 Astrazeneca PLC 4795 -62.50 Morrison (Wm) Supermarkets PLC 230.70 -1.60
FTSE 350 Lower Yield (228) 3890.27 -0.14 3553.28 3895.59 3893.32 3386.92 2.00 1.90 26.29 22.02 4233.06 Industrial Eng 9.51 Gas Water & Multi 4.16 Media 0.00 Aviva PLC 514.50 -15.00 National Grid PLC 1019.5 7.00
FTSE SmallCap (281) 5414.60 0.14 4945.57 5407.09 5397.64 4525.00 2.80 1.26 28.28 32.55 7691.88 Beverages 8.87 Chemicals 4.05 Food Producers -1.45
FTSE SmallCap ex Inv Co (148) 4817.43 0.32 4400.13 4801.99 4784.17 4121.07 2.91 1.67 20.58 21.74 7179.84 FX: EFFECTIVE INDICES Aerospace & Defense 6.61 Nonlife Insurance 3.27 Telecommunications -1.51
Babcock International Group PLC 879.00 -2.50 Next PLC 4042 -67.00
Bae Systems PLC 634.00 -1.50 Old Mutual PLC 189.90 -0.10
FTSE All-Share (631) 3986.22 -0.26 3640.92 3996.54 3990.30 3370.98 3.50 1.01 28.29 44.13 6685.48
Apr 05 Apr 04 Mnth Ago Apr 06 Apr 05 Mnth Ago Pharmace & Biotech 6.08 Technology 3.10 General Retailers -2.35 Barclays PLC 216.40 -2.20 Paddy Power Betfair PLC 8385 -200.00
FTSE All-Share ex Inv Co (454) 3935.20 -0.26 3594.32 3945.61 3939.31 3333.32 3.54 1.01 28.03 44.32 3416.95 Support Services 5.99 Financials 3.05 Food & Drug Retailer -3.10 Barratt Developments PLC 559.00 10.50 Pearson PLC 637.00 -45.50
FTSE All-Share ex Multinationals (571) 1190.05 -0.13 900.89 1191.62 1189.80 1121.91 3.05 1.44 22.74 8.55 2109.05 Australia 95.56 95.09 96.53 Sweden 77.42 77.26 77.63 Industrials 5.79 FTSE All{HY-}Share Index 3.02 Leisure Goods -3.96 Bhp Billiton PLC 1274 -3.50 Persimmon PLC 2145 45.00
FTSE Fledgling (95) 9647.16 -0.22 8811.49 9667.96 9670.40 7643.00 2.48 1.85 21.84 62.54 17941.31 Canada 87.84 87.71 88.10 Switzerland 161.86 162.19 162.45 Health Care 5.61 NON FINANCIALS Index 3.00 Electricity -5.75 BP PLC 464.45 -0.75 Provident Financial PLC 3141 -3.00
FTSE Fledgling ex Inv Co (46) 13386.63 -0.01 12227.04 13388.24 13399.04 10674.31 2.92 2.96 11.56 84.14 24262.39 Denmark 107.56 107.58 107.52 UK 77.51 77.31 76.74 FTSE SmallCap Index 5.59 Life Insurance 2.77 Oil & Gas -7.91 British American Tobacco PLC 5291 -27.00 Prudential PLC 1675.5 -2.00
FTSE All-Small (376) 3766.63 0.12 3440.35 3762.09 3755.91 3139.05 2.78 1.29 27.86 22.73 6868.91 Japan 141.12 141.95 137.60 USA 105.00 104.87 106.42 Financial Services 5.48 FTSE 100 Index 2.52 Oil & Gas Producers -8.17 British Land Company PLC 636.00 14.00 Randgold Resources LD 7105 10.00
FTSE All-Small ex Inv Co Index (194) 3609.08 0.31 3296.45 3597.99 3585.29 3078.14 2.91 1.72 19.96 16.54 6814.97 New Zealand 117.00 117.14 119.36 Euro 88.38 88.38 88.53 Banks 2.11 Fixed Line Telecomms -12.14 Bt Group PLC 314.20 0.60 Reckitt Benckiser Group PLC 7240 -15.00
FTSE AIM All-Share Index (807) 930.03 -0.03 849.47 930.35 930.91 717.02 1.61 0.80 77.65 3.48 1020.41 Norway 88.64 88.63 90.93
Bunzl PLC 2327 -11.00 RELX PLC 1570 -4.00
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Burberry Group PLC 1727 -7.00 Rentokil Initial PLC 249.70 -1.20
Oil & Gas (16) 8326.05 0.15 7604.82 8313.77 8270.76 6338.92 6.05 0.14 120.83 132.12 7592.72 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Carnival PLC 4578 3.00 Rio Tinto PLC 3257.5 -10.50
Oil & Gas Producers (9) 7945.20 0.13 7256.96 7934.64 7894.77 6039.30 6.13 0.13 125.15 128.27 7499.97 Centrica PLC 217.40 0.20 Rolls-Royce Holdings PLC 784.00 5.50
Oil Equipment Services & Distribution (7)17025.40 0.59 15550.61 16924.97 16759.78 13583.26 3.69 0.46 58.80 128.04 13150.66 FTSE GLOBAL EQUITY INDEX SERIES Coca-Cola Hbc AG 2084 4.00 Royal Bank Of Scotland Group PLC 237.70 -1.80
Basic Materials (28) 5422.06 -0.22 4952.39 5433.79 5416.23 3057.19 2.04 1.43 34.35 70.03 5517.45 Compass Group PLC 1508 -2.00 Royal Dutch Shell PLC 2207.5 5.50
Chemicals (7) 13378.00 -0.27 12219.15 13414.37 13647.44 11413.96 2.24 1.91 23.39 25.92 11850.44 Apr 5 No of US $ Day Mth YTD Total
YTD Gr Div Apr 5 No of US $ Day Mth YTD Total YTD Gr Div Convatec Group PLC 279.20 1.90 Royal Dutch Shell PLC 2115.5 2.00
Forestry & Paper (1) 22848.86 0.21 20869.62 22801.85 23072.18 14962.24 2.36 3.53 12.00 0.00 24515.58 Regions & countries stocks indices % % % retn
% Yield Sectors stocks indices % % % retn % Yield Crh PLC 2765 -20.00 Royal Mail PLC 411.00 -
Industrial Metals & Mining (2) 2726.88 0.57 2490.67 2711.36 2633.29 905.42 0.00 0.00 9.74 0.00 2379.72 FTSE Global All Cap 7739 507.39 -0.2 0.2 5.9
6.6 716.67
2.4 Oil & Gas 146 361.66 0.1 0.1 -3.6 577.96 -2.9 3.5 Croda International PLC 3483 -3.00 Rsa Insurance Group PLC 588.50 -6.00
Mining (18) 15245.59 -0.24 13924.97 15282.34 15193.14 8103.33 2.03 1.19 41.48 226.52 8133.34 FTSE Global All Cap 7079 462.39 0.3 7.3 -0.3
0.2 624.68
2.5 Oil & Gas Producers 109 336.79 0.1 0.1 -4.2 548.92 -3.3 3.6 Dcc PLC 7095 -50.00 Sage Group PLC 624.50 -9.00
FTSE Global Large Cap 1441 446.79 -0.1 0.3 6.2
6.9 647.06
2.5 Oil Equipment & Services 28 341.03 0.1 0.1 -2.5 493.37 -1.9 2.9 Diageo PLC 2292 5.50 Sainsbury (J) PLC 254.40 -1.90
Industrials (112) 5234.87 0.05 4781.41 5232.26 5229.67 4304.19 2.28 0.86 50.88 22.86 5362.01
Construction & Materials (15) 6957.45 -0.44 6354.77 6988.11 7005.03 5289.03 2.13 0.47 99.66 82.79 7371.96 FTSE Global Mid Cap 1647 682.20 -0.2 0.2 5.9
6.4 914.73
2.0 Basic Materials 259 457.88 0.3 0.3 8.5 692.78 9.2 2.2 Direct Line Insurance Group PLC 345.30 -3.60 Schroders PLC 3082 -1.00
Aerospace & Defense (9) 5170.42 0.22 4722.54 5158.86 5152.48 4279.66 2.31 -2.18 -19.81 13.89 5499.83 FTSE Global Small Cap 4651 716.75 -0.4 -0.5 4.3
4.8 931.68
1.9 Chemicals 123 678.39 0.0 0.0 7.6 1030.28 8.1 2.4 Easyjet PLC 1060 43.00 Scottish Mortgage Investment Trust PLC 367.70 -1.80
General Industrials (5) 4704.22 -0.89 4296.73 4746.50 4752.36 3647.11 2.67 1.25 29.90 29.06 5314.33 FTSE All-World 3088 296.12 -0.1 0.3 6.1
6.8 441.69
2.4 Forestry & Paper 15 246.84 -0.3 -0.3 3.7 415.73 4.9 3.4 Experian PLC 1609 5.00 Severn Trent PLC 2388 8.00
Electronic & Electrical Equipment (10) 6991.21 0.81 6385.61 6935.36 6927.19 5393.97 1.78 1.95 28.75 6.30 6333.16 FTSE World 2543 523.79 -0.2 0.1 5.9
6.6 1049.11
2.4 Industrial Metals & Mining 68 400.80 0.7 0.7 10.7 604.44 11.2 1.7 Fresnillo PLC 1594 20.00 Shire PLC 4603.5 -89.50
Industrial Engineering (12) 12547.79 -0.04 11460.86 12552.34 12476.93 7897.37 2.08 1.43 33.68 72.18 15207.37 FTSE Global All Cap ex UNITED KINGDOM In 7411 526.31 -0.2 0.1 6.1
6.7 732.27
2.3 Mining 53 565.51 1.0 1.0 10.2 855.28 11.5 1.8 Gkn PLC 352.80 -4.10 Sky PLC 962.00 -10.00
Industrial Transportation (7) 4746.60 -0.43 4335.44 4766.98 4768.40 4072.39 4.10 1.18 20.61 47.18 4209.10 FTSE Global All Cap ex USA 5828 455.43 0.1 2.1 7.2
8.0 686.91
2.8 Industrials 545 354.27 0.0 0.0 6.9 507.00 7.5 2.1 Glaxosmithkline PLC 1633.5 -29.50 Smith & Nephew PLC 1229 5.00
Support Services (54) 7404.68 0.25 6763.26 7386.23 7382.69 6463.56 2.18 1.84 24.94 18.06 7632.57 FTSE Global All Cap ex JAPAN 6450 519.65 -0.1 0.3 6.1
6.7 740.49
2.4 Construction & Materials 112 495.85 0.0 0.0 7.7 740.26 8.1 2.0 Glencore PLC 319.35 -2.60 Smiths Group PLC 1622 -6.00
FTSE Global All Cap ex Eurozone 7089 525.25 -0.2 -0.2 5.8
6.4 728.44
2.3 Aerospace & Defense 27 603.32 -0.6 -0.6 6.8 855.06 7.3 2.2 Hammerson PLC 582.00 5.00 Smurfit Kappa Group PLC 2065 -21.00
Consumer Goods (38) 21979.93 0.08 20075.95 21962.54 21918.61 19252.85 2.84 1.84 19.17 251.42 16153.40
FTSE Developed 2102 475.11 -0.2 0.0 5.6
6.3 676.64
2.4 General Industrials 57 242.84 -0.1 -0.1 3.2 375.65 4.1 2.5 Hargreaves Lansdown PLC 1315 -15.00 Sse PLC 1483 -2.00
Automobiles & Parts (1) 8290.96 -1.15 7572.77 8387.32 8443.72 6537.83 2.51 1.89 21.05 138.65 7991.84
FTSE Developed All Cap 5683 499.35 -0.3 -0.1 5.4
6.0 702.80
2.3 Electronic & Electrical Equipment 70 381.72 0.5 0.5 11.1 500.92 11.4 1.7 Hikma Pharmaceuticals PLC 1899 -33.00 St. James's Place PLC 1034 -19.00
Beverages (5) 18337.71 0.23 16749.24 18295.48 18283.95 15901.72 2.59 1.54 25.15 170.25 12913.36
FTSE Developed Large Cap 914 438.73 -0.2 0.0 5.7
6.4 634.26
2.5 Industrial Engineering 101 689.33 0.0 0.0 9.4 973.24 10.2 2.0 HSBC Holdings PLC 651.80 -2.80 Standard Chartered PLC 746.20 -2.80
Food Producers (8) 7819.25 -0.62 7141.92 7867.96 7862.67 9137.31 2.08 1.81 26.56 8.78 6693.24
FTSE Developed Europe Large Cap 227 337.23 -0.1 1.9 5.6
6.6 557.05
3.4 Industrial Transportation 99 600.58 -0.1 -0.1 6.6 858.20 7.1 2.2 Imperial Brands PLC 3884 6.00 Standard Life PLC 355.80 1.00
Household Goods & Home Construction (15)14795.44 0.41 13513.81 14734.53 14733.81 13988.73 2.40 2.63 15.87 61.99 10339.34
FTSE Developed Europe Mid Cap 314 532.41 0.2 3.3 8.1
8.5 787.31
2.6 Support Services 79 313.00 0.1 0.1 6.0 428.99 6.6 1.9 Informa PLC 640.50 -4.00 Taylor Wimpey PLC 194.60 1.10
Leisure Goods (1) 5587.10 -0.45 5103.13 5612.57 5604.08 5628.51 3.88 1.34 19.30 104.95 5041.93
FTSE Dev Europe Small Cap 710 748.68 0.5 3.0 7.9
8.4 2.4 Consumer Goods
1074.83 431 450.06 -0.3 -0.3 7.6 660.77 8.3 2.4 Intercontinental Hotels Group PLC 3899 3.00 Tesco PLC 185.20 0.95
Personal Goods (6) 30389.67 0.75 27757.21 30162.05 30177.03 24636.55 2.63 3.14 12.13 179.83 20360.39
FTSE North America Large Cap 295 503.81 -0.3 -1.1 5.3
5.9 682.35
2.1 Automobiles & Parts 105 372.48 -1.3 -1.3 1.2 529.41 2.2 2.7 International Consolidated Airlines Group S.A. 525.50 2.00 Tui AG 1094 10.00
Tobacco (2) 59740.72 -0.33 54565.78 59936.34 59614.08 50238.72 3.42 1.19 24.49 1195.57 38584.33
FTSE North America Mid Cap 389 746.78 -0.4 -1.4 4.0
4.5 942.79
1.7 Beverages 45 591.70 -0.1 -0.1 7.2 880.92 7.8 2.6 Intertek Group PLC 3963 14.00 Unilever PLC 3978 38.50
Health Care (21) 10269.58 -1.39 9380.00 10414.42 10497.63 9339.13 3.44 0.53 55.24 163.49 7895.11
FTSE North America Small Cap 1445 760.44 -0.8 -2.3 1.9
2.3 933.11
1.6 Food Producers 109 592.38 0.0 0.0 4.1 890.21 4.5 2.2 Intu Properties PLC 284.30 2.30 United Utilities Group PLC 997.00 4.50
Health Care Equipment & Services (9) 7542.50 0.28 6889.14 7521.42 7524.69 7334.58 1.49 2.42 27.73 57.30 6539.19
FTSE North America 684 336.90 -0.3 -1.2 5.1
5.7 467.13
2.0 Household Goods & Home Construction 49 435.92 -0.1 -0.1 7.8 634.75 8.5 2.3 Itv PLC 216.70 -0.50 Vodafone Group PLC 204.00 -2.55
Pharmaceuticals & Biotechnology (12)13932.96 -1.56 12726.05 14154.06 14278.11 12583.95 3.64 0.45 61.62 233.79 9545.91
FTSE Developed ex North America 1418 238.26 -0.1 1.8 6.5
7.4 386.42
2.9 Leisure Goods 30 190.60 -0.2 -0.2 19.1 249.89 19.7 1.3 Johnson Matthey PLC 2996 -10.00 Whitbread PLC 3985 -30.00
Consumer Services (94) 4902.94 -0.28 4478.23 4916.75 4913.51 4837.17 2.61 2.06 18.60 25.64 4567.07 FTSE Japan Large Cap 180 336.66 -0.6 -0.6 3.3
4.3 434.92
2.1 Personal Goods 81 638.81 -0.2 -0.2 10.5 887.28 10.8 2.0
Food & Drug Retailers (7) 3076.72 0.13 2810.20 3072.78 3070.41 3104.68 1.41 2.47 28.64 0.00 3570.65 Kingfisher PLC 318.80 0.10 Wolseley PLC 4955 -5.00
FTSE Japan Mid Cap 314 541.37 -0.6 -0.5 4.8
5.6 671.74
1.7 Tobacco 12 1439.19 0.2 0.2 13.6 2951.82 14.8 3.4 Land Securities Group PLC 1089 18.00 Worldpay Group PLC 300.70 1.50
General Retailers (30) 2446.99 0.26 2235.02 2440.54 2443.88 2742.87 3.13 2.18 14.65 2.52 2764.92
FTSE Global wi JAPAN Small Cap 795 589.03 -0.7 -0.6 5.5
6.5 756.53
1.9 Health Care 181 454.24 -0.3 -0.3 7.4 651.31 8.3 2.0 Legal & General Group PLC 245.60 0.40 WPP PLC 1716 -23.00
Media (21) 7830.36 -1.12 7152.07 7918.87 7923.01 7573.55 2.85 1.77 19.84 31.40 4783.18
FTSE Japan 494 142.19 -0.6 -0.6 3.6
4.6 206.14
2.0 Health Care Equipment & Services 68 742.17 -0.2 -0.2 7.9 862.24 8.2 1.0 Lloyds Banking Group PLC 63.59 -1.90
Travel & Leisure (36) 8888.46 0.07 8118.51 8882.25 8860.16 8335.01 2.54 2.19 17.92 84.92 8387.42
FTSE Asia Pacific Large Cap ex Japan 547 639.48 0.7 4.7 12.8
13.4 993.20
2.9 Pharmaceuticals & Biotechnology 113 328.02 -0.4 -0.4 7.2 491.53 8.3 2.4
Telecommunications (6) 3275.58 -0.72 2991.84 3299.41 3299.08 3892.25 5.38 0.33 56.89 0.00 3601.51 FTSE Asia Pacific Mid Cap ex Japan 412 863.61 0.4 4.3 13.5
13.9 1286.89
2.7 Consumer Services 383 418.99 -0.1 -0.1 6.2 556.52 6.6 1.7
Fixed Line Telecommunications (4) 3695.71 0.24 3375.57 3686.87 3690.37 5076.08 4.74 1.48 14.25 0.00 3331.92
Mobile Telecommunications (2) 4634.11 -1.19 4232.69 4689.87 4687.01 5085.62 5.70 -0.15 -120.42 0.00 4575.89
FTSE Asia Pacific Small Cap ex Japan
FTSE Asia Pacific Ex Japan
1448 541.50
959 506.31
0.4
0.7
4.4
4.6
11.4
11.8
12.9
13.4
794.73
2.5 Food & Drug Retailers
835.32
2.9 General Retailers
55 282.66
120 577.49
-0.4
-0.2
-0.4
-0.2
-0.1 391.24
6.1 746.99
0.4
6.5
2.0
1.6
UK STOCK MARKET TRADING DATA
Utilities (7) 8819.74 0.37 8055.75 8787.59 8732.92 8680.20 4.62 1.64 13.17 34.60 9883.91 FTSE Emerging All Cap 2056 699.56 0.5 3.6 11.7
12.2 1031.95
2.8 Media 79 329.53 -0.2 -0.2 8.4 438.52 8.6 1.9 Apr 06 Apr 05 Apr 04 Apr 03 Mar 31 Yr Ago
Electricity (2) 8699.99 -0.16 7946.37 8714.27 8630.34 8723.20 5.66 1.74 10.17 148.19 12429.73 FTSE Emerging Large Cap 527 658.31 0.6 3.7 11.2
11.7 977.99
2.8 Travel & Leisure 129 410.22 0.2 0.2 7.8 551.60 8.4 1.8 SEAQ Bargains 5924.00 5123.00 5688.00 5904.00 5904.00 5904.00
Gas Water & Multiutilities (5) 8364.42 0.50 7639.87 8323.04 8278.30 8193.79 4.36 1.61 14.20 5.75 9366.27 FTSE Emerging Mid Cap 459 896.48 0.3 3.3 12.7
13.2 1312.54
2.7 Telecommunication 94 163.24 -0.1 -0.1 1.4 301.14 2.1 4.1 Order Book Turnover (m) 216.15 607.48 132.07 323.13 323.13 323.13
Financials (292) 4897.15 -0.39 4472.95 4916.46 4902.54 3953.11 3.63 1.15 23.94 70.90 4521.80 FTSE Emerging Small Cap 1070 737.97 0.4 3.5 13.9
14.2 1045.61
2.6 Fixed Line Telecommuniations 43 137.79 -0.3 -0.3 -2.0 279.39 -1.1 4.6 Order Book Bargains 1024116.00 1001309.00 1009378.00 990359.00 990359.00 990359.00
Banks (12) 4118.09 -0.86 3761.37 4153.82 4127.84 2944.19 4.21 0.76 31.03 82.01 3044.03 FTSE Emerging Europe 114 350.52 1.4 2.9 4.3
4.5 537.28
3.8 Mobile Telecommunications 51 170.02 0.1 0.1 6.4 282.33 6.9 3.4 Order Book Shares Traded (m) 1669.00 1510.00 1499.00 1774.00 1774.00 1774.00
Nonlife Insurance (10) 3263.92 -0.48 2981.19 3279.67 3268.96 2831.68 3.02 1.84 17.98 42.60 5731.45 FTSE Latin America All Cap 229 877.12 0.0 2.3 14.2
14.8 1338.78
2.7 Utilities 168 263.69 0.5 0.5 7.0 506.33 7.8 3.8 Total Equity Turnover (£m) 8733.15 9763.25 8601.78 8995.62 8995.62 8995.62
Life Insurance/Assurance (10) 8113.38 -0.71 7410.57 8171.41 8204.41 6829.69 3.77 1.27 20.80 139.87 7902.47 FTSE Middle East and Africa All Cap 242 672.59 -1.0 -2.9 2.3
3.5 3.0 Electricity
1044.62 109 289.94 0.4 0.4 6.6 551.22 7.6 3.8 Total Mkt Bargains 1155496.00 1110711.00 1117203.00 1119490.00 1119490.00 1119490.00
Index- Real Estate Investment & Services (20) 2671.63 1.34 2440.20 2636.18 2611.82 2706.95 2.51 1.97 20.24 13.31 7090.99 FTSE Global wi UNITED KINGDOM All Cap In 328 323.73 0.4 1.4 4.0
5.0 3.5 Gas Water & Multiutilities
536.85 59 276.12 0.5 0.5 7.6 542.98 8.2 3.7 Total Shares Traded (m) 5357.00 4546.00 5614.00 5668.00 5668.00 5668.00
Real Estate Investment Trusts (31) 2723.85 1.60 2487.90 2681.05 2655.36 2758.52 3.49 1.65 17.32 32.63 3379.61 FTSE Global wi USA All Cap 1911 579.11 -0.4 -1.4 4.8
5.4 1.9 Financials
761.72 699 222.59 -0.2 -0.2 4.3 360.14 5.1 2.9 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.
General Financial (32) 8392.86 -0.17 7665.84 8406.75 8428.14 7425.76 3.41 2.10 13.95 39.40 9522.94 FTSE Europe All Cap 1443 393.78 0.1 2.3 6.2
7.0 3.2 Banks
627.97 248 200.71 -0.3 -0.3 4.2 348.55 5.1 3.3 (c) Market closed.
Equity Investment Instruments (177) 9231.81 -0.13 8432.12 9243.88 9237.10 7511.84 2.47 1.13 35.83 61.72 5023.86 FTSE Eurozone All Cap 650 380.93 -0.1 3.6 7.6
8.0 3.0 Nonlife Insurance
610.97 68 238.39 -0.4 -0.4 2.8 342.51 3.4 2.3
Non Financials (339) 4730.31 -0.21 4320.55 4740.36 4735.04 4062.55 3.45 0.96 30.17 46.83 6938.67 FTSE RAFI All World 3000 3048 6225.58 -0.2 -0.4 4.3
5.0 3.0 Life Insurance
8147.66 52 207.69 -0.5 -0.5 3.7 328.35 4.4 3.0
Technology (17) 1911.41 -0.25 1745.83 1916.24 1901.62 1468.32 2.32 1.06 40.79 17.71 2448.94 FTSE RAFI US 1000 1004 10352.34 -0.4 -2.4 2.0
2.6 2.4 Financial Services
13493.10 147 254.10 -0.3 -0.3 5.5 347.71 5.9 1.9 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Software & Computer Services (12) 2177.80 -0.28 1989.15 2183.94 2160.43 1891.03 2.22 1.28 35.22 20.68 2946.71 FTSE EDHEC-Risk Efficient All-World 3088 355.33 -0.1 0.5 6.2
6.7 2.2 Technology
491.36 182 218.00 -0.2 -0.2 12.3 265.84 12.7 1.5 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Technology Hardware & Equipment (5) 1828.65 0.03 1670.24 1828.07 1870.37 1610.16 3.33 -0.40 -74.55 12.16 2143.84 FTSE EDHEC-Risk Efficient Developed Europe 541 288.06 0.1 3.1 7.6
8.1 2.5 Software & Computer Services
434.15 89 370.38 -0.1 -0.1 11.3 430.83 11.6 1.0 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Technology Hardware & Equipment 93 166.96 -0.4 -0.4 13.4 211.54 14.0 2.2 liable for any loss arising from the reliance on or use of the listed information.
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Alternative Energy 9 105.34 -0.8 -0.8 14.7 141.44 14.6 1.4 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 7275.27 7267.09 7291.00 7293.60 7302.56 7306.39 7304.22 7308.14 7307.29 7321.89 7258.50 Real Estate Investment & Services 108 304.91 0.5 0.5 10.5 502.89 11.1 2.6
FTSE 250 19014.59 18983.30 19021.90 19035.80 19062.05 19066.37 19066.48 19080.38 19100.95 19126.08 18954.10 The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/
mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC
Data provided by Morningstar | www.morningstar.co.uk
FTSE SmallCap 5406.69 5397.78 5398.76 5397.39 5399.32 5404.18 5405.93 5407.83 5413.23 5415.25 5395.33
FTSE All-Share 3970.02 3965.13 3976.92 3978.49 3983.28 3985.30 3984.40 3986.64 3987.11 3993.46 3961.22 (US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,
Time of FTSE 100 Day's high:14:36:45 Day's Low07:17:45 FTSE 100 2010/11 High: 7429.81(20/03/2017) Low: 7099.15(31/01/2017) WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
Time of FTSE All-Share Day's high:14:37:00 Day's Low07:18:00 FTSE 100 2010/11 High: 4042.35(20/03/2017) Low: 3858.26(31/01/2017) www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock Exchange
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 Corero Network Security Pre 8.772 8.34 17.263L 11.615L 0.09L 0.085L - - - - - date price(p) Sector code Stock price(p) +/- High Low Cap (£m)
price up date High Low Stock Price p +or- CORETX Holdings Pre 43.422 - 4.097L 0.614L 1.88L 1.05 - - - - - 04/05 5.00 AIM SKIN Integumen PLC 4.38 -0.13 5.50 4.25 722.1
75p Nil 04-05-17 138.10 134.50 Cobham PLC 137.40 2.40 Epwin Group Pre 293.2 256 23 18.6 13.85 11.32 4.4 4.25 Jun 5 6.6 6.37 04/05 9.00 AIM SBTX SkinBioTherapeutics PLC 14.63 1.40 16.00 13.00 1736.1
130p Nil 24-04-17 213.28 195.50 Tullow Oil PLC 212.20 -19.60 GETECH Group Int 4.053 3.288 0.382L 0.704L 0.6L 2.14L - - - - - 03/29 0.50 DKE Dukemount Capital PLC 0.43 -0.02 0.68 0.25 143.8
M P Evans Group Pre 83.864 72.528 19.215 6.769 0.561 0.434 15.664 9.63 Jun 23 18.7 13.2 03/21 135.00 MGP Medica Group PLC 190.00 2.00 202.02 135.00 21111.1
Menhaden Capital Pre 1.211 11.032L 0.1L 0.1 - - - - - 03/06 20.00 AIM AAOG Anglo African Oil & Gas PLC 27.50 0.25 30.25 20.00 1461.6
Mercantile Investment Trust (The) Pre 81.843 214.098 53.2 51.46 15.25 13 May 2 25.5 23 02/27 100.00 LXI LXI REIT PLC 104.25 -0.13 104.25 99.50 14402.1
PureTech Health Pre 4.431 11.828 83.182L 56.32L 0.21L 0.21L - - - - -
Schroder Japan Growth Fund Int 40.007 9.728L 1.48 1.08 - - - - 2
Serica Energy Pre 21.432 24.017 3.325 4.32 0.04 0.03 - - - - -
Zegona Communications Pre 140.798 52.966 10.924L 16.437L 0.028L 0.167L 2.615 - Mar 17 5.3 -

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.
Friday 7 April 2017 FINANCIAL TIMES 17

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES

52 Week 52 Week 52 Week 52 Week 52 Week 52 Week
Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m
Australia (A$) Finland (€) Japan (¥) Sweden (SKr) AutomData 101.87 -0.06 105.20 84.36 2.00 31.70 45729.71 Lockheed 266.96 -0.02 274.57 224.11 2.05 27.17 77371.2
ANZ 31.36 -0.32 32.44 22.06 7.77 16.99 69534.52 Nokia 4.95 0.06 5.58 3.66 3.28 -37.90 30762.9 AstellasPh 1491.5 1.50 1779 1358 2.17 14.68 28970.8 AtlasCpcoB 278.30 -2.00 286.30 182.30 2.19 31.34 12063.22 Avago Tech 217.16 0.03 227.75 139.18 1.15 -41.33 87157.87 Lowes 82.25 0.63 84.00 64.87 1.61 23.86 70515.63
BHPBilltn 24.67 -0.08 27.95 15.86 2.35 39.62 59836.44 SampoA 44.55 0.19 44.69 34.42 4.83 15.09 26531.25 Bridgestne 4477 -26.00 4717 3089 3.01 13.76 32829.14 Ericsson 58.70 1.00 83.60 43.19 6.37 18.38 20013.93 BakerHu 60.65 0.29 68.59 38.77 1.05 -9.24 25797.43 Lyondell 89.12 0.72 97.64 69.82 3.35 10.24 35873.59
CmwBkAu 84.79 -1.20 86.65 69.22 6.86 16.21 110341.2 France (€) Canon 3453 -49.00 3549 2780 4.58 20.49 41533.89 H&M 219.10 -0.20 305.10 217.80 4.46 19.83 35549.76 BankAm 23.29 0.12 25.80 12.05 1.09 15.35 233188.16 Marathon Ptl 50.08 0.64 54.59 32.02 2.75 22.41 26435.98
CSL♦ 127.99 1.59 128.02 91.62 1.55 33.55 43951.64 Airbus Grpe 72.52 0.95 72.60 48.07 1.82 21.40 59736.8 CntJpRwy 18300 -260.00 21045 16305 0.68 10.17 33997.39 Investor 382.50 1.40 383.60 260.70 2.64 7.38 19352.92 Baxter 52.32 -0.24 53.18 41.20 0.85 6.45 28352.5 Marsh&M♦ 73.50 0.12 75.52 59.85 1.79 21.50 37877.07
NatAusBk 32.60 -0.31 33.62 23.90 7.68 15.68 65867.78 AirLiquide 107.95 0.85 108.30 88.25 2.13 21.28 44743.86 Denso 4695 -78.00 5323 3317 2.46 15.84 33621.79 Nordea Bk 102.10 0.80 110.70 66.30 6.02 0.11 45932.21 BB & T 44.14 0.16 49.88 32.22 2.44 17.05 35683.92 MasterCard♦ 112.28 0.21 113.50 86.65 0.71 30.09 118859.57
Telstra 4.57 -0.06 5.86 4.50 8.93 16.10 41046.98 AXA 23.83 0.13 25.05 16.11 4.62 9.20 61596.28 EastJpRwy 9670 -164.00 10645 8388 1.29 15.65 33959.28 SEB 97.85 1.00 107.30 67.75 5.38 20.13 23586.63 BectonDick 183.33 0.02 186.11 152.54 1.32 37.43 39017.22 McDonald's 130.26 -0.15 131.96 110.33 2.80 23.68 106682.05
Wesfarmers 44.44 0.18 46.06 38.62 5.99 133.04 38052.98 BNP Parib 60.75 0.65 63.35 35.27 3.86 11.25 80760.72 Fanuc 22815 -370.00 23410 15445 2.17 31.66 41988.72 SvnskaHn 120.60 0.80 136.30 90.25 3.74 14.50 25572.74 BerkshHat 250150 1249.99 266445 205074 - 18.37 192864.15 McKesson 144.44 -0.31 199.43 114.53 0.75 16.85 30628.86
Westpc 34.22 -0.43 35.39 27.57 7.65 16.12 86744.96 ChristianDior 221.05 1.20 221.70 133.75 1.25 29.93 42524.52 FastRetail 34760 140.00 44370 25305 1.03 72.20 33251.75 Swedbank 206.30 0.30 234.00 159.70 5.24 11.82 25941.17 Biogen 272.23 1.79 307.33 205.43 - 15.90 58788.6 Medtronic 80.21 -0.04 89.27 69.35 2.07 26.12 109791.42
Woolworths♦ 26.57 -0.20 26.98 20.30 4.01 13.20 25847.89 Cred Agr 12.52 -0.04 12.87 6.79 4.80 7.32 37975.97 Fuji Hvy Ind 3864 -103.00 5016 3252 3.58 10.18 26803.4 Telia Co 35.61 -0.87 41.96 33.93 8.44 9.45 17128.13 BkNYMeln 47.25 0.25 49.54 35.44 1.54 14.83 48928.59 Merck♦ 63.69 0.12 66.80 53.06 2.94 44.66 174865.42
Belgium (€) Danone 63.75 0.15 70.53 57.66 2.03 35.13 44562.16 Hitachi 585.60 -9.60 679.50 400.00 1.97 12.57 25526.25 Volvo♦ 127.30 3.00 132.50 78.50 2.38 23.45 23132.69 BlackRock 383.83 2.92 399.46 317.60 2.41 19.93 62276.78 Metlife 52.44 0.54 58.09 36.17 3.04 82.47 57015.76
AnBshInBv 103.70 -0.10 119.60 92.13 3.64 160.70 187133.48 EDF 7.87 0.15 12.82 7.33 19.83 6.84 23008.96 HondaMtr 3148 -62.00 3675 2417 2.75 13.81 51426.04 Switzerland (SFr) Boeing 177.89 0.81 185.71 122.35 2.26 28.19 108953.83 Microsoft 65.92 0.36 66.35 48.04 2.26 30.60 509398.77
KBC Grp 62.33 0.44 64.79 39.35 - 16.56 27772.66 Engie SA 13.41 0.12 15.21 10.77 7.47 -58.23 34791.26 JapanTob 3655 -10.00 4796 3607 3.42 16.15 65924.16 ABB 23.47 0.13 23.87 18.14 3.27 26.57 51770.35 BrisMySq♦ 53.34 0.26 77.12 46.01 2.74 27.72 87869.43 Mnstr Bvrg 46.12 0.19 55.50 40.30 - 43.06 26132.48
Esslr Intl 113.10 1.20 124.55 93.41 0.96 32.06 26340.71 KDDI 2893.5 -32.50 3446 2745.5 2.73 12.57 68380.75 CredSuisse 14.62 0.04 16.31 9.76 4.78 -11.09 30431.06 CapOne 83.99 -0.14 96.92 58.03 1.66 14.07 40369.11 MondelezInt♦ 44.10 0.09 46.40 40.32 1.65 41.52 67315.96
Brazil (R$)
Hermes Intl 447.55 3.10 449.45 289.20 0.73 46.53 50353.92 Keyence 44070 -910.00 45650 28790 0.26 - 48330.08 Nestle 76.60 0.10 77.65 71.45 2.93 27.88 237429.86 CardinalHlth♦ 82.22 1.69 87.85 62.70 2.13 19.59 25936.69 Monsanto 115.99 0.68 116.56 84.79 1.86 32.39 50867.97
Ambev 18.02 0.14 20.09 15.79 2.10 25.68 90831.79
LOreal 179.35 0.50 180.75 151.70 1.73 32.58 107393.96 MitsbCp 2412 -21.50 2705.5 1679.5 2.40 -29.82 34587.78 Novartis 74.15 -0.45 82.80 67.40 3.53 27.03 194014.79 Carnival 59.11 0.31 60.24 42.94 2.10 19.18 31719.3 MorganStly 42.03 0.29 47.33 23.11 1.68 14.23 78436.78
Bradesco 31.82 0.06 34.16 23.96 3.09 11.96 28336.17
LVMH 207.25 2.50 207.75 130.55 1.74 26.24 111987.75 MitsubEst 2006 -44.50 2443 1724 0.86 30.68 25158.64 Richemont 78.65 0.75 80.20 65.60 2.16 39.68 40889.7 Caterpillar 96.09 1.85 99.46 69.04 3.24-863.81 56357.79 MylanNV 38.96 0.14 50.40 33.60 - 41.87 20862.96
Cielo 28.76 -0.45 37.78 24.43 1.64 18.32 20881.6
Orange 14.36 -0.03 15.66 12.38 4.07 17.33 40695.62 MitsubishiEle 1543 -53.00 1802 1064.5 1.84 14.04 29879 Roche 256.80 -1.10 265.20 218.30 3.04 25.29 179690.36 CBS 69.26 -0.25 70.10 48.88 0.96 19.79 25760.32 Netflix 143.73 0.11 148.29 84.50 - 330.51 61863.06
ItauHldFin♦ 33.45 -0.24 36.38 22.27 0.45 10.51 35955.3
PernodRic 111.80 0.10 112.20 90.00 1.68 23.47 31625.09 MitsuiFud 2329 -25.50 3009 2031.5 1.24 18.33 20823.63 Swiss Re 90.30 0.70 98.50 88.05 5.35 9.06 32383.4 Celgene 124.39 0.21 127.64 94.42 - 49.40 96774.75 NextEraE 129.63 -1.01 133.28 110.49 2.71 20.51 60688.67
Petrobras 15.42 0.09 19.72 9.82 - -4.47 36804.13
Renault 78.41 -0.07 90.76 63.64 2.09 8.82 24712.07 MitUFJFin 665.40 -11.40 778.80 425.80 2.32 13.49 85024.6 Swisscom♦ 437.50 -0.50 525.00 426.80 5.01 15.14 22571.93 CharlesSch 39.97 0.49 43.65 23.83 0.63 33.50 53424.89 Nike 55.49 0.51 60.68 49.01 1.23 23.02 73331.19
Vale 29.27 -0.18 37.28 13.66 0.99 -9.82 30199.2
Safran 71.93 1.11 72.00 53.00 1.49 -81.60 31969.11 Mizuho Fin 193.10 -4.10 225.30 142.00 3.73 6.10 44208.73 Syngent 451.00 -0.60 455.00 360.50 2.56 34.73 41584.33 Charter Comms 335.97 3.98 341.50 193.77 - 20.84 90341.59 NorfolkS 115.85 1.12 125.00 78.15 1.96 22.26 33642.04
Canada (C$) Murata Mfg 15140 -440.00 16790 10365 1.40 22.18 30757.01 Chevron Corp 109.33 0.69 119.00 92.82 3.66-299.88 206972.95 Northrop 236.81 0.71 253.80 198.75 1.49 19.21 41397.18
Sanofi 85.21 -0.22 85.82 62.50 3.44 25.10 117362.81 UBS 15.69 0.02 17.49 15.11 5.40 17.30 60182.45
BCE♦ 59.84 0.17 63.41 56.80 4.43 19.29 40084.26 NipponTT 4862 -27.00 5180 4156 2.37 12.98 91921.09 Chubb♦ 137.78 1.00 140.56 116.65 2.01 15.36 64385.61 NXP 104.54 -0.26 107.54 73.62 - 178.22 36171.14
Sant Gbn 47.46 0.10 48.41 32.15 1.13 83.21 28093.6 Zurich Fin 267.70 2.20 290.80 195.30 6.68 12.34 40180.44
BkMontrl 100.11 0.48 104.15 77.08 3.51 12.96 48638.83 Nissan Mt 1009.5 -17.00 1220 893.10 4.29 8.76 38425.52 Cigna 150.66 0.75 154.83 115.03 0.03 21.28 38727.52 Occid Pet♦ 63.42 -0.02 78.48 61.01 4.82 -47.87 48485.81
Schneider 69.16 0.67 69.57 49.50 2.89 22.36 43674.71 Taiwan (NT$)
BkNvaS♦ 79.01 0.89 82.30 60.95 3.78 13.08 71235.07 Nomura 651.80 -16.20 711.50 691.90 1.77 15.61 20709.99 Cisco 33.09 0.09 34.53 25.81 3.12 17.17 165709.96 Oracle 44.38 -0.11 46.99 37.62 1.36 20.94 182609.68
SFR Group 28.00 -0.22 30.77 19.51 - -35.48 13200.62 Chunghwa Telecom 104.00 0.50 125.50 99.50 4.94 21.01 26416.12
Brookfield 49.46 0.04 49.73 41.05 1.43 23.52 36434.27 Nppn Stl 2450 -67.00 2912 1787.5 1.29 58.29 20997.31 Citigroup 59.78 0.19 62.53 38.31 0.71 12.47 165283.65 Pepsico 111.78 -0.16 112.76 98.50 2.50 25.48 159648.96
SocGen 46.13 0.48 49.38 25.00 4.40 9.86 39713.87 Formosa PetChem 106.50 -1.50 115.00 83.30 3.60 13.98 33218.17
CanadPcR 201.97 2.13 209.12 156.01 0.93 18.78 22077.35 NTTDCMo 2607 -25.00 2946 2361 3.03 14.74 91682 CME Grp 118.23 0.68 127.60 89.00 1.87 28.65 40156.57 Perrigo 67.29 0.68 133.53 65.47 0.67 - 9647.67
Total 48.53 0.53 49.50 38.34 5.28 20.37 126915.68 HonHaiPrc 97.30 -0.70 98.60 72.50 3.58 11.92 55207.28
CanImp 115.69 0.87 120.83 94.71 3.90 11.60 34474.65 Panasonic 1235.5 -24.50 1309.5 831.40 2.13 13.49 27332.34 Coca-Cola 42.62 0.05 47.13 39.88 3.32 28.28 182925.66 Pfizer 34.25 0.06 37.39 29.83 3.54 28.94 203933.28
UnibailR 222.80 3.80 250.55 203.10 4.24 8.93 23600.87 MediaTek 217.00 -3.00 260.50 192.00 4.86 14.97 11241.22
CanNatRs 44.74 0.24 46.74 33.52 2.13-232.80 37112.29 Seven & I 4444 -82.00 4902 4051 1.83 36.39 35526.43 Cognizant 58.23 0.17 63.23 45.44 - 23.64 35440.94 Phillips66 77.24 -0.33 89.31 73.67 3.21 26.16 39930.8
Vinci 74.63 0.66 75.03 49.93 2.55 16.64 46932.76 TaiwanSem 191.50 -1.50 195.00 143.00 2.94 17.46 162590.23
CanNatRy 99.46 0.91 100.59 72.78 1.33 22.74 56405.09 ShnEtsuCh 9440 -174.00 10120 5562 1.28 23.91 36786.65 ColgtPlm 73.21 -0.25 75.38 63.43 2.14 26.61 64732.25 PhilMorris 112.52 -0.67 114.65 86.78 3.70 24.83 174759.19
Vivendi 18.08 -0.03 20.09 14.87 11.07 19.42 24797.75
Enbridge 56.45 0.79 59.19 48.92 3.80 28.91 68795.91 Softbank 7903 -57.00 9066 5194 0.51 24.09 78446.31 Thailand (THB) Comcast♦ 38.13 0.79 38.44 29.81 1.46 21.12 90878.59 PNCFin 119.05 0.76 131.83 77.40 1.80 16.13 57876.9
GtWesLif 36.33 0.38 37.79 30.83 3.57 13.90 26718.25 Germany (€) PTT Explor♦ 390.00 -2.00 430.00 272.00 2.50 12.33 32253.08
Sony 3555 -100.00 3792 2541 0.54-101.55 40510.93 ConocPhil 49.75 0.64 53.17 38.80 2.03 -16.90 61543.27 PPG Inds 105.49 0.49 117.00 89.64 1.50 49.44 27074.98
ImpOil 40.90 0.31 48.72 38.41 1.46 15.86 25846.63 Allianz 173.15 1.05 174.60 118.35 4.11 13.52 84331.99
SumitomoF 3895 -52.00 4768 2766.5 3.70 7.27 49670.8 United Arab Emirates (Dhs) Corning 26.87 0.17 28.36 18.21 2.03 8.23 24937.87 Praxair 119.08 0.95 125.00 106.31 2.55 22.60 33969.39
Manulife 23.46 0.15 25.57 16.43 3.19 16.45 34550.66 BASF 93.51 0.38 94.32 61.58 3.02 21.96 91533.66
Takeda Ph 5188 -103.00 5527 4098 3.34 31.96 36981.46 Emirtestele 18.20 0.20 20.20 17.15 4.10 19.03 43093.11 Costco 170.79 3.79 178.71 138.57 1.06 31.38 74966.77 Priceline 1761.56 -0.21 1798.75 1148.06 - 40.84 86616.64
Potash♦ 22.53 -0.10 26.62 19.93 5.90 43.71 14110.24 Bayer 107.50 -0.35 112.00 83.45 2.33 20.98 94741.49
TokioMarine 4530 -92.00 5441 3063 2.65 11.79 30763.41 United Kingdom (p) CrownCstl 94.37 0.68 102.82 79.38 3.86 98.22 34101.08 ProctGmbl 89.55 -0.42 92.00 79.10 3.02 25.67 228932.54
RylBkC 98.13 1.09 99.90 73.18 3.42 13.39 107924.62 BMW 82.95 -0.29 91.76 63.38 3.86 7.93 53218.55
Toyota 5810 -99.00 7215 4917 3.81 8.55 170970.07 AscBrFd 2502 -31.00 3448 1910 1.36 35.06 24752.8 CSX 47.80 0.66 50.31 24.36 1.31 28.63 44125.54 Prudntl 106.16 0.68 114.55 66.51 2.67 10.81 45648.8
Suncor En 41.63 0.19 44.90 32.69 2.82 152.43 51803.24 Continental 200.20 - 207.15 158.20 1.87 14.28 42673.74
Mexico (Mex$) AstraZen 4795 -62.50 5505 3680 4.58 21.47 75836.17 CVS 76.86 -0.17 106.67 69.30 2.24 15.48 79610.91 PublStor 222.86 0.57 277.60 200.65 3.31 32.36 38667.79
ThmReut 57.88 0.21 60.13 50.01 3.19 31.84 31235.26 Daimler 67.12 0.06 73.23 50.83 4.91 8.66 76528.53
AmerMvl 13.26 -0.10 14.10 10.40 1.90 31.57 31258.68 Aviva♦ 514.50 -15.00 570.50 290.00 4.17 34.07 26157.69 Danaher 86.09 0.32 88.01 70.07 0.67 27.64 59747.93 Qualcomm 56.52 0.05 71.62 49.73 3.44 15.42 83482.36
TntoDom 66.71 -0.14 71.31 53.91 3.37 13.54 92505.23 Deut Bank 15.68 0.04 19.97 9.90 - -12.97 34537.64
FEMSA UBD 171.38 -1.07 184.10 28.35 1.28 36.08 - Barclays 216.40 -2.20 267.32 121.10 2.54 -45.40 46044.11 Deere 110.50 1.25 112.18 75.35 1.85 25.96 35170.29 Raytheon 150.25 0.30 157.59 124.75 1.97 19.97 44005.22
TrnCan 63.05 0.99 65.24 48.77 3.63 389.57 40755.31 Deut Tlkm 16.23 -0.03 16.67 13.54 3.44 12.90 80896.66
WalMrtMex 43.14 0.02 46.10 34.70 1.20 28.71 40118.97 BP 464.45 -0.75 521.20 249.44 6.62 -30.03 114200.02 Delphi 75.28 0.19 83.23 58.04 1.56 17.68 20271.95 Regen Pharm 379.89 2.53 452.96 325.35 - 63.40 39572.89
ValeantPh 12.99 0.20 50.18 12.75 - -1.38 3322.25 DeutsPost 31.75 0.08 32.95 23.36 2.68 15.11 41989.4
BrAmTob 5291 -27.00 5343 4072 2.91 22.85 112517.48 Delta 45.53 0.45 52.76 32.60 1.11 7.93 33271.99 ReynoldsAm 63.46 -0.12 63.70 43.38 2.81 14.76 90482.66
E.ON 7.35 0.05 9.72 5.99 6.81 -6.02 15678.56 Netherlands (€)
China (HK$) BSkyB 962.00 -10.00 1050 560.00 3.41 26.72 20665.49 Devon Energy 42.50 0.98 50.69 26.28 1.36 -2.41 22295.5 S&P Global 130.35 0.18 133.08 95.83 1.12 16.23 33703.63
Fresenius Med 78.25 0.28 85.65 70.00 1.08 20.31 25620.64 Altice 20.39 -0.36 21.56 12.20 - -18.91 21129.99
AgricBkCh 3.56 -0.09 3.74 2.66 5.30 5.72 14083.91 BT 314.20 0.60 457.25 297.80 4.11 10.65 39108.86 DiscFinServ 66.29 0.17 74.33 49.98 1.47 14.66 25446.84 Salesforce 85.15 -0.19 86.42 66.43 - 286.86 60243.63
Fresenius SE 74.49 0.06 77.45 60.00 0.74 25.66 43940.72 ASML Hld 122.95 -0.50 124.90 79.38 0.85 35.71 57549.84
Bk China 3.74 -0.03 4.08 2.90 5.30 5.85 40251.58 Compass 1508 -2.00 1559 1203.5 2.00 25.01 30975.93 Disney 113.24 0.24 113.84 90.32 1.33 20.17 178836.64 Schlmbrg 78.60 0.30 87.84 71.69 2.57 -62.68 109577.85
HenkelKgaA 107.05 0.05 107.20 85.43 1.36 22.66 29639.62 Heineken 80.25 0.08 86.95 67.47 1.27 28.14 49263.26
BkofComm 5.95 -0.06 6.44 4.46 5.13 5.91 26811.38 Diageo 2292 5.50 2348.09 1737 2.51 25.72 72098.1 DominRes 78.21 0.25 79.36 68.71 3.62 22.48 49134 Sempra Energy 109.47 0.03 114.66 92.95 2.79 19.82 27433.74
Linde 158.25 0.75 166.00 116.80 1.85 27.37 31324.7 ING 14.08 0.11 14.75 8.30 4.62 12.02 58182.7
BOE Tech 1.71 0.01 2.30 1.62 1.19 23.11 43.79 GlaxoSmh 1633.5 -29.50 1745.56 1363 4.90 87.82 100377.53 DowChem 63.74 0.22 65.42 47.51 2.78 10.37 77703.67 Shrwin-Will 311.55 2.27 316.66 239.48 1.09 25.69 29017.59
MuenchRkv 183.20 0.20 185.00 140.90 4.51 11.35 31444.91 Unilever 47.03 0.46 47.10 36.22 2.69 25.81 85936.49
Ch Coms Cons 11.38 0.04 11.74 7.81 1.87 10.26 6484.69 Glencore 319.35 -2.60 347.00 124.55 - -78.93 57446.24 DukeEner 82.61 -0.26 87.75 72.34 4.11 22.02 57794.88 SimonProp 170.12 -0.17 229.10 163.55 3.65 30.13 53134.16
SAP 91.43 -0.28 92.98 64.94 1.26 30.05 119706.85 Norway (Kr)
Ch Evrbrght 3.77 -0.03 4.06 3.09 5.53 5.65 3332.78 HSBC 651.80 -2.80 715.20 392.37 6.38 115.06 163447.08 DuPont 80.81 0.34 82.37 61.12 1.81 36.21 69866.22 SouthCpr 36.42 0.27 39.50 24.90 0.45 44.02 28153.26
Siemens 128.55 0.45 129.50 86.82 2.73 18.51 116451.39 DNB 136.30 0.40 144.90 90.80 3.34 12.16 25807.37
Ch Rail Cons 11.48 0.02 11.98 8.61 1.48 10.56 3067.75 Imperial Brands 3884 6.00 4154 3324 3.74 58.85 46532.61 Eaton 74.91 0.26 76.36 54.30 3.08 17.59 33601.37 Starbucks 58.11 -0.11 61.64 50.84 1.32 31.79 84689.51
Volkswgn 137.05 -0.40 157.40 116.05 0.08 41.24 43100.96 Statoil 149.00 -1.60 163.50 122.20 5.09 -18.82 56206.69
Ch Rail Gp 7.10 0.05 7.71 5.40 1.39 12.14 3844.67 LlydsBkg 63.59 -1.90 74.00 47.10 3.70 26.50 56728.39 eBay 34.00 0.19 34.74 22.30 - 5.28 36695.67 StateSt♦ 78.98 0.37 83.49 50.60 1.84 15.71 30165.61
ChConstBk 6.24 -0.11 6.55 4.50 4.80 6.27 193079.15 Hong Kong (HK$) Telenor 139.60 -0.40 150.90 122.50 5.43 73.08 24365.71 Ecolab 125.72 0.89 127.06 110.45 1.14 30.03 36466.01 Stryker♦ 131.15 -0.03 133.59 106.48 1.06 33.09 48928.06
Natl Grid 1019.5 7.00 1148 888.90 4.25 18.74 47774.2
China Vanke 21.55 0.05 24.10 14.56 3.64 11.73 3647.08 AIA 49.65 -0.05 54.15 42.30 1.47 18.25 77054.24 Qatar (QR) Emerson 59.79 0.23 64.37 48.45 2.96 22.68 38565.19 Sychrony Fin 33.26 - 38.06 23.25 0.38 13.00 26967.37
Prudential♦ 1675.5 -2.00 1801.5 1096 2.35 22.34 54138.08
ChinaCitic 5.17 -0.02 5.50 4.36 4.50 5.37 9902.44 BOC Hold 32.20 0.10 32.55 21.55 3.85 13.88 43815.93 QatarNtBk 147.40 1.40 173.00 133.50 2.40 10.14 33992.9 EOG Res 98.13 0.55 109.37 69.76 0.69 -49.01 56636.68 Target 53.95 1.20 84.14 52.72 3.48 12.02 29816.83
RBS 237.70 -1.80 260.90 148.40 - -3.99 35176.93
ChinaLife 23.65 -0.30 25.50 16.00 1.77 23.34 22649.6 Ch OSLnd&Inv 22.85 0.40 27.85 20.15 2.50 6.58 32220.55 EquityResTP♦ 62.98 -0.03 74.71 58.28 3.15 5.70 23119.81 TE Connect 73.12 0.26 76.77 54.54 1.84 14.45 25979.02
Russia (RUB) ReckittB 7240 -15.00 7786 6496 2.03 28.23 63386.41
ChinaMBank 20.60 -0.25 21.85 15.00 3.81 7.41 12171.72 ChngKng 53.50 0.40 59.75 44.05 2.45 11.73 26166.58 Exelon 36.14 0.08 37.70 29.82 3.54 29.29 33457.08 Tesla Mtrs 299.83 4.83 304.88 178.19 - -48.70 48473.64
Gzprm neft 130.25 -0.44 170.43 126.80 5.21 4.19 54741.92 RELX 1570 -4.00 1581 631.02 2.07 28.14 40099.17
ChinaMob 85.85 -0.90 99.30 80.30 2.79 15.97 226236.07 Citic Ltd 11.06 -0.02 12.78 10.54 2.54 13.27 41408.53 ExpScripts 65.59 -0.48 80.02 63.22 - 12.03 39374.52 TexasInstr 79.90 -0.18 82.44 56.19 2.08 22.70 79871.21
Lukoil 3042 -15.00 3582 2523 5.00 26.51 45935.17 RioTinto 3257.5 -10.50 3718.5 1853 3.65 15.77 56307.2
ChinaPcIns 28.75 -0.15 31.00 24.25 3.83 18.92 10269.17 Citic Secs 16.14 -0.10 19.40 15.14 3.53 16.60 6062.13 ExxonMb 83.00 0.47 95.55 80.31 3.31 35.23 344000.12 TheTrvelers 120.89 -0.02 125.49 103.45 2.19 11.63 33786.75
MmcNrlskNckl 9128 -58.00 11199 8064 6.56 17.69 25644.04 RollsRoyce 784.00 5.50 875.50 588.00 1.49 -3.56 18015.57
ChMinsheng 8.18 -0.06 9.48 6.89 4.82 5.75 7299.6 CK Hutchison 95.70 0.25 103.90 80.60 2.49 13.91 47514.42 Facebook 141.71 -0.14 143.44 106.31 - 56.88 333750.87 ThrmoFshr♦ 153.32 0.56 161.66 139.07 0.40 29.73 59981.11
Novatek 736.90 3.60 800.70 581.30 1.61 12.20 39722.23 RylDShlA 2115.5 2.00 2295.5 1644.1 7.12 45.07 118348.07
ChMrchSecs RMB 16.48 0.01 20.09 15.21 2.44 18.04 11258.57 CNOOC 9.40 -0.02 10.88 8.68 4.87-171.96 54014.49 Fedex 196.81 0.96 201.57 145.00 0.74 27.56 52622.06 TimeWrnr 98.51 0.14 99.29 68.97 1.65 19.72 76275.8
Rosneft 338.15 -0.05 425.70 300.35 2.86 16.22 63623.83 Shire 4603.5 -89.50 5377 2707.19 0.44 91.30 52160.83
Chna Utd Coms RMB 7.47 - 8.05 3.75 0.771019.18 22947.01 HangSeng 158.00 -1.30 164.40 127.60 3.38 21.31 38877.34 FordMtr 11.31 0.05 14.22 11.07 4.96 5.71 44233.53 TJX Cos 77.10 1.17 83.64 71.50 1.61 22.43 49771.75
Sberbank 167.83 -0.27 185.34 107.05 0.20 15.88 64319.18 StandCh 746.20 -2.80 821.60 425.65 - -63.59 30627.15
ChShenEgy 18.26 -0.20 19.78 11.40 1.98 14.14 7987.04 HK Exc&Clr 196.00 -1.40 213.20 175.00 2.63 40.71 30884.42 Franklin 41.81 0.41 44.35 30.56 1.66 14.78 23636.08 T-MobileUS 62.80 -0.70 65.41 38.31 - 36.74 51905.82
Surgutneftegas 29.83 0.13 39.15 26.92 - 3.27 18916.56 Tesco 185.20 0.95 219.40 143.08 - 71.78 18919.99
ChShpbldng RMB 7.64 0.04 8.13 5.80 - -105.10 20330.22 MTR 43.75 -0.25 44.50 35.55 2.27 27.65 33253.29 GenDyn♦ 186.90 1.05 194.00 129.55 1.61 18.72 56699.98 UnionPac 107.01 0.25 111.38 77.37 1.98 22.29 86794.93
Saudi Arabia (SR) Vodafone 204.00 -2.55 240.10 186.50 6.17 -8.40 67867.66
ChStConEng RMB 10.05 0.56 11.45 5.09 1.59 12.75 43238.06 SandsCh 37.30 0.35 39.30 24.60 5.39 31.29 38748.49 GenElectric♦ 30.15 0.18 33.00 28.19 3.12 29.81 263052.21 UPS B 106.76 0.02 120.44 100.05 2.77 19.78 73632.01
AlRajhiBnk 63.50 0.40 67.50 48.60 2.78 12.58 27514.09 WPP 1716 -23.00 1928.07 1204 2.60 26.69 27424.34
ChUncHK 10.44 -0.42 11.20 7.70 1.84 56.56 32176.73 SHK Props 117.00 - 123.30 85.40 2.76 11.06 43600.75 GenMills♦ 57.88 0.11 72.95 57.50 3.30 21.35 33571.05 USBancorp 51.28 0.24 56.61 38.48 2.11 15.65 86820.04
Tencent 228.00 -0.80 230.20 152.20 0.20 46.58 278102.23 Natnlcombnk 38.60 0.03 46.30 32.00 3.53 8.21 20584.74 United States of America ($)
CNNC Intl RMB 7.54 0.13 7.87 6.58 - 33.31 4634.5 GenMotors 34.32 0.32 38.55 27.34 4.21 4.12 51402.65 UtdHlthcre 165.43 0.06 172.14 125.26 1.31 25.40 157351.26
SaudiBasic 99.75 1.16 101.00 74.25 4.81 18.96 79792.56 21stC Fox A♦ 31.07 -0.31 32.60 23.33 1.07 18.62 32695.39
CSR 7.77 -0.02 8.35 6.45 2.18 334.83 4371.15 India (Rs) GileadSci 66.69 0.22 103.10 65.38 2.79 6.63 87179.61 UtdTech 112.71 0.21 114.44 96.89 2.35 18.18 90358.11
SaudiTelec 69.00 0.81 74.00 51.00 5.57 17.40 36796.56 3M 190.44 0.20 193.50 163.17 2.36 23.08 113806.34
Daqin RMB 7.72 0.05 7.78 5.98 5.80 17.24 16633.11 Bhartiartl 341.80 - 401.00 283.05 0.37 39.20 21137.25 GoldmSchs 228.58 0.92 255.15 138.20 1.15 13.87 90926.94 ValeroEngy 65.11 0.02 71.40 46.88 3.73 13.03 29214.62
Singapore (S$) AbbottLb 43.54 -0.27 45.84 36.76 2.42 60.63 75228.38
Gree Elec Apl 0.19 0.00 0.25 0.16 - -6.09 290.31 HDFC Bk 1438.5 - 1479.95 1042.85 0.62 30.48 57026.94 Halliburton 50.07 0.22 58.78 34.45 1.45 -7.40 43403.01 Verizon♦ 48.50 0.06 56.95 46.01 4.76 14.94 197721.49
DBS 19.13 -0.08 19.42 14.63 3.08 11.75 34706.42 Abbvie 65.00 0.04 68.12 55.06 3.55 17.70 103574.52
GuosenSec RMB 14.78 -0.07 18.94 14.03 1.25 11.38 4701.75 Hind Unilevr 934.65 - 954.00 781.95 1.41 58.39 31295 HCA Hold 88.00 -0.47 91.03 67.00 - 11.92 32598.79 VertexPharm 114.17 0.06 116.86 71.46 - -245.42 28364.18
JardnMt US$♦ 66.13 1.29 67.27 52.42 2.22 9.79 47241.09 Accenture 117.32 -0.33 126.53 108.66 1.97 17.38 77677.99
HaitongSecs 13.02 -0.18 15.24 11.60 3.96 16.45 5713.45 HsngDevFin 1482.6 - 1537.2 1060.15 0.97 24.62 36429.71 Hew-Pack 17.49 -0.20 17.96 11.31 2.90 11.17 29617.22 VF Cp 54.56 0.72 66.31 48.05 2.84 19.41 22616.39
JardnStr US$♦ 41.84 -0.51 43.78 27.35 0.70 8.86 46340.09 Adobe 129.93 0.04 131.33 90.35 - 55.99 64276.11
Hngzh HikVDT RMB 32.08 0.18 33.43 20.28 2.17 28.11 22494.59 ICICI Bk 280.85 - 298.40 213.20 1.66 19.45 25306.1 HiltonWwde 56.92 0.17 60.49 42.81 1.42 12.64 18768.31 Viacom 45.43 0.11 46.72 33.94 2.96 13.08 15783.59
OCBC 9.70 - 9.78 8.21 3.67 11.35 28954.96 AEP 67.63 -0.20 71.32 57.89 3.39 53.50 33254.49
Hunng Pwr 5.34 0.03 7.34 4.43 9.62 6.69 3230.43 Infosys 999.60 - 1279.3 901.00 2.46 16.27 35520.2 HomeDep 147.79 1.15 150.15 119.20 1.84 23.40 177520.76 Visa Inc 89.04 0.01 92.05 73.25 0.66 34.66 165443.75
SingTel 3.91 -0.01 4.36 3.59 4.43 16.54 45555.58 Aetna 127.95 0.67 136.50 104.59 0.73 20.07 44998.26
IM Baotou Stl RMB 3.09 - 3.43 2.74 - -47.84 7049.44 ITC 274.10 - 292.15 204.00 1.29 39.45 51509.88 Honywell 124.11 0.54 127.52 105.25 2.00 19.79 94412.75 Walgreen 81.28 0.11 88.00 75.74 1.83 20.81 87734.41
UOB 21.94 -0.05 22.15 17.41 3.13 12.09 25613.16 Aflac 73.17 0.98 74.50 62.59 2.29 11.27 29354.14
In&CmBkCh 5.03 -0.08 5.27 3.82 5.39 6.25 56187.86 L&T 1683.2 - 1702.3 1177.8 0.82 36.43 24294.06 HumanaInc♦ 211.24 1.17 220.49 150.00 0.42 51.32 30478.66 WalMartSto 71.73 0.08 75.19 62.72 2.77 16.49 217557.74
AirProd♦ 135.49 0.25 150.45 124.02 2.41 20.29 29481.28
IndstrlBk RMB 16.32 -0.02 17.58 15.10 3.72 6.03 45061.63 OilNatGas 187.55 - 211.80 133.33 1.73 20.08 37234.99 South Africa (R) IBM 173.18 0.30 182.79 142.50 3.21 13.82 163345.55 WellsFargo 55.27 0.29 59.99 43.55 2.77 13.70 276546.5
Alexion 114.93 -1.28 162.00 109.12 - 64.57 25876.39
Kweichow RMB 391.91 2.25 396.50 235.80 1.57 29.90 71348.15 RelianceIn 1438.5 - 1448.75 925.65 0.70 16.42 72353.98 Firstrand 44.90 -0.37 54.46 40.52 5.14 10.28 18229.71 IllinoisTool♦ 131.90 0.84 136.03 98.32 1.84 22.88 45594.5 Williams Cos 30.07 0.41 32.69 14.60 5.65 -52.15 24828.4
Allegran 238.73 0.96 261.27 184.50 - -74.47 80113.88
Midea 1.73 0.03 1.88 1.64 5.86 24.04 47.88 SBI NewA 292.85 - 298.75 166.40 0.86 52.42 36123.8 MTN Grp 122.30 0.55 151.90 104.76 9.45 89.47 16679.37 Illumina 170.86 3.38 186.88 119.37 - 59.60 24996.82 Yahoo 46.38 - 47.19 35.05 - -9.52 44361.88
Allstate 81.27 -0.15 83.09 64.36 1.64 17.21 29674.04
New Ch Life Ins 36.85 -0.55 41.75 23.80 - 20.18 4904.45 SunPhrmInds 686.90 - 854.95 571.90 0.14 23.38 25496.19 Naspers N 2430.99 2.35 2553.59 1883.01 0.16 94.34 77113.43 Intcntl Exch 60.34 0.37 61.98 45.88 1.14 25.17 35809 Yum!Brnds 64.72 0.85 68.98 56.21 2.74 17.21 22900.79
Alphabet 849.08 0.17 874.42 672.66 - 30.15 252276.53
PetroChina 5.65 -0.05 6.38 4.76 0.92 168.18 15342.49 Tata Cons 2400.05 - 2744.8 2051.9 1.62 21.25 73160.98 South Korea (KRW) Intel 36.14 -0.08 38.45 29.50 2.91 16.86 170869.92 Venezuela (VEF)
Altria♦ 71.49 -0.44 76.55 59.48 2.69 29.68 138649.17
PingAnIns 43.00 -0.30 44.95 32.50 1.46 10.90 41216.46 Indonesia (Rp) HyundMobis♦ 224000-5000.00 293500 223500 1.55 12.40 19240.29 Intuit 117.74 1.19 128.45 99.20 1.08 39.78 30116.16 Bco de Vnzla 490.00 - 500.00 93.00 - - 2518.09
Amazon 900.55 -8.73 923.72 587.50 - 181.73 429716
PngAnBnk RMB 9.20 -0.01 10.26 8.48 1.67 6.94 22556.59 Bk Cent Asia 17325 - 17325 12625 0.91 21.95 32030.8 KoreaElePwr♦ 45650 -450.00 63700 40050 6.25 2.18 25858.7 John&John 125.23 0.43 129.00 107.88 2.54 20.88 339792.39 Bco Provncl 6200 -400.00 7000 2200 - 27.47 941.98
AmerAir 41.77 0.46 50.64 24.85 0.97 8.59 21058.53
Pwr Cons Corp RMB 8.40 0.13 8.73 5.40 - 22.03 11686.66 SK Hynix 49400 -900.00 54900 25650 1.00 19.85 31733.27 JohnsonCn 41.25 0.27 46.17 32.48 2.75 -30.44 38720.76 Mrcntl Srvcs 18500 - 18500 4500 0.04 126.21 1587
Israel (ILS) AmerExpr♦ 78.00 0.24 82.00 57.15 1.58 13.65 70189.05
SaicMtr RMB 25.77 0.39 26.55 19.46 5.30 8.84 41176.85 SmsungEl 2092000-15000.00 2134000 1240000 0.99 16.09 259685.14 JPMrgnCh♦ 86.46 0.27 93.98 57.05 2.05 15.50 308831.93
TevaPha 117.20 1.00 217.70 116.00 4.06 19.38 32590.8 AmerIntGrp 61.80 0.18 67.47 48.41 1.93 98.83 60536.81
ShenwanHong 0.25 0.00 0.32 0.14 - -0.37 189.43 Spain (€) Kimb-Clark 131.33 -0.37 138.87 111.30 2.67 24.82 46720.76 Closing prices and highs & lows are in traded currency (with variations for that
Italy (€) AmerTower 121.72 1.08 121.99 99.72 1.64 63.26 51998.18
ShgPdgBk RMB 16.10 -0.06 17.57 15.08 3.18 6.51 50441.28 KinderM 21.71 0.24 23.36 16.63 3.92-141.08 48476.59 country indicated by stock), market capitalisation is in USD. Highs & lows are
Enel 4.40 0.02 4.43 3.54 3.69 14.96 47674.41 BBVA♦ 7.13 0.08 7.32 4.50 5.19 14.25 49912.19 Amgen 162.99 0.75 184.21 133.64 2.24 16.96 120034.44
Sinopec Corp 6.46 0.03 6.49 4.86 2.43 19.54 21212.38 Kraft Heinz 91.11 -0.31 97.77 76.64 2.61 32.06 110893.27 based on intraday trading over a rolling 52 week period.
ENI 15.17 0.02 15.92 12.18 5.35 -5.62 58755.18 BcoSantdr 5.76 0.06 5.80 3.15 3.61 19.58 89516.61 Anadarko 63.12 0.27 73.33 43.52 0.95 -6.59 35265.26
Sinopec Oil RMB 3.72 0.02 5.21 3.60 - -3.25 1519.39 Kroger 29.70 0.39 39.22 28.29 1.50 14.59 27152.94 ♦ ex-dividend
Generali 14.35 -0.15 16.00 9.76 5.02 10.86 23856 CaixaBnk 4.04 0.06 4.04 1.82 3.71 22.51 25766.48 Anthem 165.30 0.55 170.79 114.85 1.50 20.07 43790.72
Denmark (kr) Iberdrola 6.76 0.08 6.77 4.80 6.16 15.92 46568.19 L Brands 47.40 4.30 87.16 43.04 5.03 11.99 13511.27 ■ ex-capital redistribution
IntSPaolo 2.53 0.02 2.59 1.52 5.53 20.64 42797.16 Aon Cp 119.47 0.24 120.40 100.55 1.09 22.89 31372.91
DanskeBk 238.80 -1.80 247.60 161.80 3.35 11.51 33671.22 Inditex 33.68 0.80 33.76 27.18 1.44 32.58 111870.1 LasVegasSd 57.00 0.83 63.38 41.45 5.11 26.84 45257.69 # price at time of suspension
Luxottica 51.05 0.15 56.90 39.92 1.70 32.54 26347.55 Apple 144.07 0.05 145.46 89.47 1.26 18.37 755876.36
MollerMrsk 11700 -30.00 12380 7775 2.76 -17.83 16871.78 Repsol 14.83 0.18 14.87 9.14 5.19 -22.54 23642.72 LibertyGbl 35.56 0.43 39.85 26.16 - 16.28 9011.96
Unicred 14.17 0.03 36.56 11.93 4.25 -1.36 33595.95 ArcherDan 45.26 - 47.88 34.79 2.68 20.72 25828.36
NovoB 248.00 -3.10 384.80 218.20 3.84 16.61 71541.42 Telefonica 10.46 0.05 10.63 7.45 7.08 24.88 56159.94 Lilly (E) 85.48 -0.15 86.72 64.18 2.41 32.76 94314.57
AT&T♦ 40.85 -0.18 43.89 36.10 4.78 19.23 250852.43

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
RelianceIn 1438.50 1438.50 0.00 0.00 181.85 14.5 14.30 ValeantPh 12.99 12.79 0.20 1.56 -1.76 -11.9 -22.03 Apr 06 date Coupon S* M* F* price yield yield yield US Apr 06 date Coupon S* M* F* price yield yield yield US
L&T 1683.20 1683.20 0.00 0.00 126.65 8.1 14.48 Nissan Mt 1009.50 1026.50 -17.00 -1.66 -104.50 -9.4 -10.44 High Yield US$ US$
Tesla Mtrs 299.83 295.00 4.83 1.64 21.91 7.9 19.14 Firstrand 44.90 45.27 -0.37 -0.82 -4.22 -8.6 -12.95 Navient Corporation 03/20 8.00 BB- Ba3 BB 105.64 5.98 0.02 0.15 4.73 FleetBoston Financial Corp. 01/28 6.88 BBB Baa3 A- 119.42 4.62 -0.08 -0.18 2.26
Pwr Cons Corp 8.40 8.27 0.13 1.57 0.57 7.3 13.21 HondaMtr 3148.00 3210.00 -62.00 -1.93 -288.00 -8.4 -11.47 High Yield Euro SunTrust Banks, Inc. 01/28 6.00 BBB+ Baa1 A- 110.38 4.81 -0.05 0.18 2.45
ChStConEng 10.05 9.49 0.56 5.90 0.62 6.6 15.78 Nomura 651.80 668.00 -16.20 -2.43 -55.80 -7.9 -12.94 Kazkommerts Intl BV 02/17 6.88 B Caa1 B 97.50 - 0.00 0.00 - NationsBank Corp. 03/28 6.80 BBB Baa3 A- 117.48 4.79 0.02 -0.13 2.43
VertexPharm 114.17 114.11 0.06 0.05 6.88 6.4 25.35 H&M 218.70 219.30 -0.60 -0.27 -18.50 -7.8 -8.76 Caterpillar Inc. 07/28 6.63 A A3 A 119.58 4.45 0.03 -0.04 2.09
HonHaiPrc 97.30 98.00 -0.70 -0.71 5.80 6.3 9.57 Mizuho Fin 193.10 197.20 -4.10 -2.08 -15.80 -7.6 -9.14 Emerging US$ United Utilities PLC 08/28 6.88 BBB- Baa1 A- 118.14 4.84 0.03 -0.10 2.48
Naspers N 2430.99 2428.64 2.35 0.10 122.99 5.3 14.80 Delphi 75.28 75.09 0.19 0.25 -5.72 -7.1 -0.84 Mexico 09/16 11.40 BBB+ A3 BBB+ 106.80 1.49 0.03 0.01 0.44 Countrywide Home Loans, Inc. 06/29 6.15 BBB+ Baa1 A 99.85 6.35 0.00 0.00 -
Rosneft 338.15 338.20 -0.05 -0.01 15.95 5.0 1.81 Fuji Hvy Ind 3864.00 3967.00 -103.00 -2.60 -293.00 -7.0 -12.31 Brazil 01/18 8.00 BB Ba2 BB 103.45 3.45 0.04 0.00 2.20
Peru 03/19 7.13 BBB+ A3 BBB+ 109.97 1.96 0.01 0.09 0.71 Euro
NovoB 247.60 251.10 -3.50 -1.39 11.60 4.9 3.90 MitUFJFin 665.40 676.80 -11.40 -1.68 -46.90 -6.6 -12.27 HSBC Holdings plc 06/28 3.13 BBB+ A2 A+ 106.50 2.45 0.02 -0.13 0.09
Daqin 7.72 7.67 0.05 0.65 0.35 4.7 11.40 Swedbank 205.90 206.00 -0.10 -0.05 -14.10 -6.4 -8.36 Peru 03/19 7.13 BBB+ A3 BBB+ 114.01 2.60 0.00 0.20 0.84
Brazil 01/22 12.50 BB Ba2 BB 110.80 9.63 -0.01 -0.15 7.77 AT&T Inc. 12/29 2.60 BBB+ Baa1 A- 104.50 2.18 0.00 0.00 -
SaicMtr 25.77 25.38 0.39 1.54 1.12 4.5 0.16 Denso 4695.00 4773.00 -78.00 -1.63 -321.00 -6.4 -7.03 Citigroup Inc. 02/30 4.25 BBB Baa3 A- 117.65 2.26 0.02 -0.10 -
MollerMrsk 11710.00 11730.00 -20.00 -0.17 430.00 3.8 0.09 TokioMarine 4530.00 4622.00 -92.00 -1.99 -284.00 -5.9 -9.87 Poland 03/23 3.00 BBB+ A2 A- 99.71 3.08 0.02 -0.18 1.21
Colombia 03/23 2.63 BBB Baa2 BBB 95.99 3.41 0.02 -0.23 1.54 HBOS plc 03/30 4.50 BBB- Baa2 A- 113.45 2.78 0.02 -0.16 -
Bk Cent Asia 17325.00 17325.00 0.00 0.00 625.00 3.7 11.95 Alexion 114.93 116.21 -1.28 -1.10 -7.15 -5.9 -13.91
Turkey 03/23 3.25 - Ba1 BB+ 81.19 7.19 0.01 -0.28 5.32 Yen
ChShpbldng 7.64 7.60 0.04 0.53 0.27 3.7 0.79 SumitomoF 3895.00 3947.00 -52.00 -1.32 -239.00 -5.8 -12.53
Russia 05/26 4.75 - - BBB- 104.21 4.23 0.02 -0.07 1.87 Enagas Transportes, S.A.U. 09/39 3.23 A- Baa2 A- 106.57 2.85 0.00 0.01 -
UnibailR 222.80 219.00 3.80 1.74 7.80 3.6 2.63 Hitachi 585.60 595.20 -9.60 -1.61 -34.70 -5.6 -6.50
Inditex 33.68 32.88 0.80 2.43 1.13 3.5 10.07 SvnskaHn 120.20 119.80 0.40 0.33 -7.10 -5.6 -4.91 Turkey 03/27 6.00 - Ba1 BB+ 104.16 5.52 0.03 -0.41 3.16 £ Sterling
Williams Cos 30.07 29.66 0.41 1.37 1.01 3.5 0.74 MitsubishiEle 1543.00 1596.00 -53.00 -3.32 -89.00 -5.5 -7.74 Emerging Euro Electricite de France (EDF) 05/28 6.25 A A3 A- 131.69 2.88 -0.01 -0.08 0.52
CNNC Intl 7.54 7.41 0.13 1.75 0.24 3.3 4.72 Toyota 5810.00 5909.00 -99.00 -1.68 -314.00 -5.1 -9.96 Brazil 02/15 7.38 BBB- Baa2 BBB 111.75 0.73 0.00 0.00 0.09 HSBC Holdings plc 08/28 2.63 A A1 AA- 97.66 2.87 -0.01 -0.07 0.51
SandsCh 37.30 36.95 0.35 0.95 1.15 3.2 12.52 Barclays 216.40 218.60 -2.20 -1.01 -11.65 -5.1 -5.25 Mexico 02/20 5.50 BBB+ A3 BBB+ 113.84 0.60 0.02 0.02 -0.65 Data provided by SIX Financial Information. US $ denominated bonds NY close; all other London close. *S - Standard & Poor’s, M -
Mexico 04/23 2.75 BBB+ A3 BBB+ 107.05 1.52 0.02 -0.17 -0.35 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 BB+ Baa2 BBB- 108.64 2.11 0.02 -0.22 -0.25
Data provided by SIX Financial Information & Tullett Prebon Information. US $ denominated bonds NY close; all other
London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Apr 06 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Apr 06 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 0.50-0.75 14-12-2016 1.00 0.50-0.75 0.25-0.50 Index change change change 1 month 1 year VIX 12.02 -0.87 12.89 26.72 9.97 Apr 06 Price £ Yield Day Week Month Year High Low £m
US Prime 4.00 16-12-2008 3.75 3.50 3.50 Markit IBoxx VXD 11.61 -0.72 12.33 23.69 3.59 Tr 8.75pc '17 103.42 -0.03 -25.00 -40.00 -40.00 -107.69 105.16 100.00 11.14
US Discount 0.75 16-12-2015 0.75 1.00 0.75 ABF Pan-Asia unhedged 179.83 -0.05 0.01 3.82 1.63 -2.26 VXN 12.76 -0.38 13.14 27.10 9.75 Tr 5pc '18 104.47 0.13 0.00 18.18 44.44 -45.83 109.14 104.47 35.24
Euro Repo 0.00 10-09-2014 0.05 0.05 0.05 Corporates( £) 336.90 -0.25 0.20 2.05 0.67 10.35 VDAX - - - - - Tr 4.5pc '19 108.43 0.10 0.00 -9.09 400.00 -70.59 112.19 108.43 36.35
UK Repo 0.25 05-03-2009 0.25 0.50 0.50 Corporates($) 267.38 -0.06 0.21 1.56 0.21 1.56 † CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 113.46 0.13 18.18 -23.53 18.18 -76.36 117.02 113.33 33.31
Japan O'night Call 0.00-0.00 05-10-2010 0.00 0.00-0.10 0.00-0.10 Corporates(€) 222.60 0.01 0.35 0.59 0.60 2.46 ‡ Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 104.55 0.29 7.41 -17.14 -6.45 -63.29 106.04 102.20 32.46
Switzerland Libor Target 0.00-0.25 15-01-2015 0.00-0.75 -1.25--0.25 0-0.25 Eurozone Sov(€) 229.89 -0.02 0.40 -1.20 0.35 -1.56 Tr 4pc '22 117.67 0.37 8.82 -13.95 -9.76 -55.42 121.31 116.43 37.95
Gilts( £) 323.26 -0.39 0.27 1.95 1.25 6.72 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 132.22 0.79 3.95 -7.06 -9.20 -36.80 138.11 128.54 35.08
INTEREST RATES: MARKET Global Inflation-Lkd 252.43 -0.16 0.65 2.13 1.93 1.27 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 100.83 1.16 2.65 -5.69 -2.52 -25.16 138.26 99.31 5.43
Over Change One Three Six One Markit iBoxx £ Non-Gilts 333.03 -0.25 0.20 2.04 0.76 9.00 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 138.01 1.45 2.11 -3.97 -6.45 -24.48 148.92 128.17 35.44
Apr 06 (Libor: Apr 05) night Day Week Month month month month year Overall ($) 233.82 -0.03 0.22 1.25 0.22 1.25 Australia 10/19 2.75 102.42 1.77 0.00 -0.07 -0.27 -0.15 Tr 4.25pc '36 142.85 1.61 1.90 -3.59 -6.40 -23.33 155.77 130.11 29.76
US$ Libor 0.93111 0.001 0.006 -0.001 0.98556 1.15039 1.42294 1.79594 Overall( £) 323.17 -0.35 0.25 1.97 1.11 7.39 11/28 2.75 100.32 2.72 0.00 -0.12 -0.41 0.00 Tr 4.5pc '42 157.64 1.71 1.79 -3.39 -5.52 -22.97 174.65 140.38 26.64
Euro Libor -0.42400 0.001 0.001 0.003 -0.39786 -0.35929 -0.25357 -0.12971 Overall(€) 226.51 -0.01 0.35 -0.67 0.42 -0.55 Austria 10/19 0.25 99.98 0.26 0.00 0.00 0.00 0.00 Tr 3.75pc '52 156.88 1.63 2.52 -2.98 -6.86 -24.19 177.28 134.20 23.59
£ Libor 0.22438 0.000 0.001 0.000 0.25638 0.33619 0.49075 0.70756 Treasuries ($) 221.32 -0.03 0.25 1.00 0.25 1.00 10/26 0.75 102.81 0.45 -0.02 -0.10 -0.16 -0.05 Tr 4pc '60 176.13 1.56 2.63 -3.11 -7.14 -25.36 201.27 147.24 23.21
Swiss Fr Libor 0.000 -0.77420 -0.72980 -0.66480 -0.49660 FTSE Belgium 06/18 0.75 100.74 0.10 -0.03 0.01 0.00 0.00 xd Ex dividend. Closing mid-prices are shown in pounds per £ 100 nominal of stock. Red yield: Gross redemption yield.
Yen Libor -0.012 0.01400 0.03521 0.04657 0.14829 Sterling Corporate (£) 117.54 0.07 - - -0.03 4.58 06/27 0.80 100.26 0.77 -0.01 -0.06 -0.15 0.00 This table shows the gilts benchmarks & the non-rump undated stocks.
Euro Euribor -0.001 -0.37300 -0.32900 -0.24100 -0.11400 Euro Corporate (€) 106.82 -0.01 - - -0.24 -1.64 Canada 05/19 0.75 99.96 0.77 0.01 -0.02 -0.12 0.00
Sterling CDs
US$ CDs
0.000
0.000
0.20000
0.95000
0.30000
1.10000
0.45500
1.29000
Euro Emerging Mkts (€) 756.83 -4.54 - - -8.61 -11.73 06/27 1.00 93.74 1.67 0.01 -0.07 -0.25 0.00 GILTS: UK FTSE ACTUARIES INDICES
Eurozone Govt Bond 111.83 0.04 - - 0.28 -4.14 Denmark 11/18 0.25 101.36 -0.59 0.00 0.00 0.00 0.00
Euro CDs 0.000 -0.43500 -0.38500 -0.29500 11/27 0.50 99.66 0.53 0.00 -0.07 -0.16 0.00 Price Indices Day's Total Return Return
CREDIT INDICES Day's Week's Month's Series Series Fixed Coupon Apr 06 chg % Return 1 month 1 year Yield
Short 7 Days One Three Six One Index change change change high low Finland 05/18 1.00 99.55 1.41 0.01 -0.03 -0.12 0.39
04/26 0.50 101.27 0.36 -0.02 -0.10 -0.20 -0.04 1 Up to 5 Years 96.72 -0.02 2431.30 0.01 1.20 0.23
Apr 06 term notice month month month year Markit iTraxx 2 5 - 10 Years 185.44 -0.04 3494.15 0.59 3.73 0.78
Euro -0.50 -0.35 -0.50 -0.35 -0.51 -0.36 -0.46 -0.31 -0.37 -0.22 -0.30 -0.05 Crossover 5Y 369.26 -12.07 35.21 40.34 390.04 288.69 France - - - - - - -
3 10 - 15 Years 220.28 -0.01 4247.35 1.19 6.28 1.21
Sterling 0.15 0.25 0.15 0.25 0.25 0.35 0.38 0.53 0.55 0.70 Europe 5Y 85.00 -1.98 7.21 7.01 90.43 67.59 11/20 0.25 101.85 -0.26 0.00 0.00 0.00 0.00
4 5 - 15 Years 193.93 -0.03 3679.83 0.80 4.53 0.97
Swiss Franc - - - - - - - - - - - - Japan 5Y 70.05 -2.51 2.21 -0.87 93.03 64.22 10/22 2.25 111.88 0.10 -0.01 -0.08 -0.11 0.00
5 Over 15 Years 344.33 -0.02 5176.12 2.68 12.17 1.63
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 111.86 -3.89 10.86 12.50 121.66 80.36 11/26 0.25 94.01 0.90 -0.02 -0.04 -0.18 0.00
7 All stocks 184.12 -0.02 3588.40 1.36 6.50 1.43
US Dollar 0.90 1.00 0.95 1.05 1.00 1.10 1.20 1.30 1.30 1.40 1.65 1.75 Germany 04/19 0.50 102.60 -0.78 0.00 0.00 0.00 0.00
Markit CDX 08/23 2.00 114.74 -0.30 0.00 0.00 0.00 0.00
Japanese Yen -0.15 0.05 -0.15 0.05 -0.20 0.10 -0.20 0.10 -0.15 0.15 -0.10 0.20 Day's Month Year's Total Return Return
Emerging Markets 5Y 211.43 -0.88 -0.46 0.00 218.09 209.77 02/27 0.25 99.86 0.26 0.00 -0.07 -0.16 0.00
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: Index Linked Apr 06 chg % chg % chg % Return 1 month 1 year
Nth Amer High Yld 5Y 338.48 2.69 -2.55 0.00 353.95 335.79 08/46 2.50 136.88 1.04 -0.01 -0.07 -0.20 0.27
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 1 Up to 5 Years 315.97 0.04 -0.04 1.84 2476.21 0.47 4.02
Nth Amer Inv Grade 5Y 65.89 -0.10 -1.80 0.00 69.24 65.89 Greece 04/19 4.75 94.77 7.64 0.00 0.20 -0.26 -2.96
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 2 Over 5 years 739.83 1.02 6.54 25.18 5501.17 6.58 25.89
02/27 3.00 77.30 7.02 0.02 0.16 -0.09 -1.87 3 5-15 years 487.24 0.25 2.23 11.16 3755.95 2.25 12.36
Ireland 10/19 5.90 115.84 -0.34 0.00 0.00 0.00 0.00 4 Over 15 years 956.21 1.27 7.99 30.51 6961.32 8.05 31.01
05/26 1.00 100.65 0.93 -0.03 -0.03 -0.17 0.16 5 All stocks 667.59 0.95 6.01 22.53 5037.39 6.09 23.41
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED Italy 10/19 0.05 99.34 0.31 0.02 0.01 -0.07 0.00
11/21 0.35 98.14 0.77 0.00 -0.05 -0.18 0.00 Yield Indices Apr 06 Apr 05 Yr ago Apr 06 Apr 05 Yr ago
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
06/27 2.20 99.50 2.27 0.01 -0.03 -0.19 0.00 5 Yrs 0.38 0.37 0.70 20 Yrs 1.73 1.73 2.18
Crude Oil† Apr 51.39 0.56 Corn♦ May 365.00 0.50 Apr 05 Apr 05 Prev return stock Market stocks
03/47 2.70 90.09 3.24 0.00 -0.02 -0.17 0.00 10 Yrs 1.10 1.10 1.47 45 Yrs 1.56 1.56 2.12
Brent Crude Oil‡ 54.93 0.86 Wheat♦ May 430.25 1.25 Can 4.25%' 21 121.66 -0.361 -0.362 0.22 5.18 74327.95 7
Japan 03/19 0.10 100.62 -0.22 0.00 0.00 0.00 0.00 15 Yrs 1.56 1.56 1.96
RBOB Gasoline† Apr 1.72 0.01 Soybeans♦ May 945.00 1.00 Fr 2.25%' 20 112.91 -1.532 -1.501 0.32 20.31 222422.76 16
03/22 0.10 101.16 -0.13 0.00 0.00 0.00 0.00
Heating Oil† Apr 1.58 0.00 Soybeans Meal♦ May 310.30 0.50 Swe 0.25%' 22 113.91 -1.863 -1.888 0.00 30.03 228717.71 7
03/27 0.10 100.38 0.06 0.00 0.00 -0.03 0.00 inflation 0% inflation 5%
Natural Gas† Apr 3.24 -0.02 Cocoa (ICE Liffe)X May 1667.00 -26.00 UK 2.5%' 20 373.77 -2.938 -2.909 0.35 6.58 649585.17 27
03/47 0.80 98.94 0.84 -0.03 0.01 -0.01 0.00 Real yield Apr 06 Dur yrs Previous Yr ago Apr 06 Dur yrs Previous Yr ago
Ethanol♦ - - Cocoa (ICE US)♥ May 2105.00 -9.00 UK 2.5%' 24 372.23 -2.228 -2.220 0.78 6.82 649585.17 27
Netherlands 01/20 0.25 102.63 -0.69 0.00 0.00 0.00 0.00 Up to 5 yrs -2.72 2.12 -2.70 -1.28 -3.37 2.11 -3.36 -1.95
Uranium† Apr 18.10 0.00 Coffee(Robusta)X May 2149.00 0.00 UK 2%' 35 274.24 -1.805 -1.803 1.58 9.08 649585.17 27
01/28 5.50 153.05 0.44 0.00 -0.09 -0.19 0.08 Over 5 yrs -1.82 25.01 -1.78 -0.96 -1.84 25.09 -1.80 -0.98
Carbon Emissions‡ - - Coffee (Arabica)♥ May 137.45 0.45 US 0.625%' 21 103.99 -0.302 -0.276 0.28 35.84 1253677.41 38
White SugarX 467.40 1.90 New Zealand 04/20 3.00 102.08 2.28 -0.01 -0.08 -0.19 0.14 5-15 yrs -2.09 8.61 -2.06 -0.98 -2.20 8.62 -2.17 -1.09
Diesel† - - US 3.625%' 28 133.48 0.500 -0.276 0.46 16.78 1253677.41 38
Sugar 11♥ 16.23 0.11 04/27 4.50 112.00 3.10 0.00 -0.12 -0.31 0.24 Over 15 yrs -1.80 30.06 -1.76 -0.95 -1.81 30.09 -1.77 -0.97
Unleaded (95R) - - Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total market
Norway 05/19 4.50 108.16 0.61 0.00 0.00 -0.11 0.20 All stocks -1.83 23.31 -1.79 -0.96 -1.85 23.41 -1.81 -1.00
Base Metals (♠ LME 3 Months) Cotton♥ May 74.91 0.05 value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
Aluminium 1952.50 -13.50 Orange Juice♥ May 160.00 0.35 02/27 1.75 101.17 1.62 0.00 -0.01 -0.22 0.00 See the FTSE website for more details: http://www.ftse.com/products/indices/gilts
amount.
Aluminium Alloy 1710.00 15.00 Palm Oil♣ - - Portugal 06/19 4.75 109.28 0.46 -0.06 -0.09 -0.11 -0.74
Copper 5866.00 -58.50 Live Cattle♣ Apr 118.48 0.00 BONDS: TEN YEAR GOVT SPREADS 04/27 4.13 101.96 3.88 0.00 0.00 0.00 0.00 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Lead 2296.50 -17.50 Feeder Cattle♣ Apr 130.88 0.03 Spain 01/19 0.25 100.76 -0.17 0.00 0.00 0.00 0.00 at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor guarantee
Nickel 10120.00 -225.00 Lean Hogs♣ Apr 63.65 0.00 Spread Spread Spread Spread 04/27 1.50 98.87 1.62 0.01 0.00 -0.18 0.00 that the information is reliable or complete. The FT does not accept responsibility and will not be liable for any
Tin 20305.00 135.00 Bid vs vs Bid vs vs Sweden 10/18 1.00 99.35 1.45 0.01 -0.01 -0.11 0.43 loss arising from the reliance on or use of the listed information. For all queries e-mail
Zinc 2732.00 -54.00 % Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds 12/26 9.41 182.64 0.62 0.02 -0.05 -0.08 0.23 ft.reader.enquiries@morningstar.com
Precious Metals (PM London Fix) Apr 05 Month Year Australia 2.72 2.45 0.36 Italy 2.27 2.00 -0.09 Switzerland 05/19 3.00 108.21 -0.88 0.00 0.00 0.00 0.00
Gold 1252.50 6.70 S&P GSCI Spt 392.21 -1.58 26.37 Austria 0.45 0.18 -1.91 Japan 0.06 -0.20 -2.30 05/26 1.25 113.41 -0.20 0.00 0.00 0.00 0.00 Data provided by Morningstar | www.morningstar.co.uk
Silver (US cents) 1822.00 -4.00 DJ UBS Spot 85.60 -1.83 11.21 Belgium 0.77 0.51 -1.59 Netherlands 0.44 0.18 -1.92 United Kingdom 07/19 1.75 103.68 0.14 0.01 0.04 0.03 -0.41
Platinum 963.00 5.00 R/J CRB TR 188.02 -1.61 13.36 Canada 1.67 1.41 -0.69 Norway 1.62 1.36 -0.74 07/22 0.50 99.66 0.56 0.01 0.01 -0.05 0.00
Palladium 816.00 10.00 M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark 0.53 0.27 -1.83 Portugal 3.88 3.62 1.52 07/27 1.25 100.65 1.18 0.01 -0.02 0.00 0.00
Bulk Commodities UBS Bberg CMCI TR 14.09 -2.79 19.77 Finland 0.36 0.09 -2.00 Spain 1.62 1.36 -0.74 07/47 1.50 95.31 1.70 0.00 -0.02 -0.11 0.00
Iron Ore (Platts) 78.35 -3.40 LEBA EUA Carbon 4.90 -8.58 -15.95 France 0.90 0.64 -1.46 Switzerland -0.20 -0.47 -2.56 United States 02/19 1.13 99.77 1.25 0.02 -0.01 -0.14 0.00
Iron Ore (The Steel Index) 80.90 -0.10 LEBA CER Carbon 0.27 -3.57 -28.95 Germany 0.26 0.00 -2.10 United Kingdom 1.18 0.92 -1.18 02/22 1.88 100.04 1.87 0.02 -0.08 -0.27 0.00
GlobalCOAL RB Index 80.00 1.00 LEBA UK Power 2440.00 -26.73 22.67 Greece 7.02 6.75 4.66 United States 2.36 2.10 0.00 02/27 2.25 99.04 2.36 0.02 -0.06 -0.25 0.00
Baltic Dry Index 1215.00 -8.00 Ireland 0.93 0.66 -1.43 02/47 3.00 99.73 3.01 0.03 -0.02 -0.18 0.00
Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $ Data provided by SIX Financial Information & Tullett Prebon Information Data provided by SIX Financial Information & Tullett Prebon Information
unless otherwise stated.
18 ★ FINANCIAL TIMES Friday 7 April 2017

MARKETS & INVESTING

Capital markets
FT explainer

Fed’s plan to shrink balance

sheet still skimpy on details
Most members of the
Federal Reserve’s board of
governors expect the US
central bank to begin
reducing its balance sheet
this year, according to
minutes from last month’s
meeting.
While the update
broadly confirmed
investors’ views of the
Fed’s thinking following
speeches by policymakers,
financial markets still face
a paucity of details.
“I read it as still a big
uncertainty as to what are
they going to do, when
are they going to do it and
how fast are they going to
do it,” says Greg Parsons,
chief executive at Semper
Capital Management.
How big is it?
The balance sheet has
grown from about $750bn
at the end of 2007 to
$4.2tn at the end of last
month, reflecting the Fed’s
bond purchases under
quantitative easing,
designed to lower yields
and boost the economy.
Most is in Treasuries and
mortgage-backed
securities. The Fed
reinvests the principal from
maturing bonds. Recent
MBS purchases for
example have been in the
$20-$30bn
Fed’s monthly purchases
of mortgage-backed
securities bought with
the principal from
maturing bonds
region of $20bn to $30bn a
month. Such buying
represented 21 per cent of
issuance in March.
What is it proposing to do?
Officials are looking to halt
reinvestment flows and
thereby slowly shrink the
balance sheet, rather than
selling bonds in the market
and sparking higher
interest rates.
Only one member
“preferred to set a
minimum pace for
reductions in MBS holdings
and, if and when necessary,
to sell MBS to maintain
such a pace”.
The preference was for
actions be taken for both
MBS and Treasuries, but
uncertainty remains
about whether to cease
reinvestment or to
Most Fed policymakers expect to begin
balance sheet wind-down by year end
Federal Reserve balance sheet by asset type ($tn)
Others*
Tips
Mortgage-backed securities
Treasury notes and bonds
2006 07 08 09 10 11 12 13 14 15 1617
* Includes Tips inflation compensation, agencies, FRN, Treasury bills
Source: Haver Analytics
cut it slowly. Ceasing
reinvestment is seen as an
easier step for the Fed to
communicate, while a
gradual reduction is less
likely to trigger volatility.
How will the market react?
Some participants are
concerned that once the
Fed stops its reinvesting
flows, other buyers will
need to step in.
One likely outcome is
higher MBS and Treasury
yields, which may warrant
the central bank stepping
back from raising its
overnight federal funds
interest rate.
A significant amount of
Treasury debt held by the
Fed matures over the next
couple of years — $425bn
in 2018 and $352bn in 2019.
Much of the MBS in the
Fed’s portfolio matures
after 2040, but analysts at
Morgan Stanley say most
of it will have been repaid
early, in about a decade.
“The introduction of
interest rate volatility into
the bond market as they
reduce reinvestments will
have an impact,” says Sam
Dunlap at Angel Oak
Capital Advisors.
When will it start?
Most Fed members expect
the shrinking of the
balance sheet to start this
year if the economy
performs “as expected”.
According to the
minutes, several
policymakers said moves
should begin once interest
rates had risen a few times.
Nearly all supported
communicating detailed
plans well in advance and
said changes should be
“gradual and predictable”.
But that does not leave
much time if policy
changes are expected by
the year-end.
What are the risks?
Investors warn that if the
Fed reduces the balance
sheet too quickly, rates
could be pushed higher —
particularly given that
other central banks may be
looking to retreat from
accommodative policies.
“Unlike the past couple
of years, this additional
supply will come at a time
when global term
premiums are likely to rise,
with the European Central
Bank also tapering asset
purchases, making it
harder for the market to
absorb the additional
supply,” says Subadra
Rajappa, US rates strategy
head at Société Générale.
Joe Rennison
5
4 manufacturer.
3
2 The global gluten-free retail market has
1 grown from $1.7bn in 2011 to $3.5bn in
0 in 2020, according to Euromonitor, the
La Vache Qui Rit maker gets the cream
Fromageries Bel laughs off
lack of rating as investors
lap up debut eurobond
DAN MCCRUM
Fromageries Bel, the French cheese-
maker behind Babybel and La Vache
Qui Rit, sold its first ever eurobond yes-
terday in the latest sign of investor
enthusiasm for all types of European
corporate debt.
Bankers said the group received more
than €2.3bn of orders for a €500m sev-
en-year bond yielding 1.59 per cent,
notable for the lack of a credit rating
which many investors require in order
to purchase debt.
“If the market is really hot, and at the
moment it’s red hot, you don’t always
need a rating”, said Roman Schmidt,
Traders eye growing appetite for healthy foods
Bets are on that the trend
for ‘free-from’, low-sugar
and organic is here to stay
EMIKO TERAZONO
Gluten-free food, the war on sugar and
the resurgence of butter are three con-
sumer trends changing what ends up on
supermarket shelves.
They also pose challenges for com-
modities producers and traders, which
historically have had to worry only
about production and overall supply,
rather than appetite for foods perceived
as “healthier” or “natural”.
With grains and sugar having uses
beyond food, and the trends largely lim-
ited to the US and Europe, the effect on
prices has been clearer in some markets
than others. However, “Big Ag”, as the
world’s largest agricultural traders are
known, are responding.
“Revenues for organic, gluten-free
and non-GMO foods are up sharply,”
says Cargill, the largest privately owned
company in the US by revenue, which is
looking to invest more in speciality
products with high-growth potential.
Rising demand for gluten-free is not
the first to squeeze wheat in the US —
the popularity of the Atkins carbohy-
drate-free diet first did that in the early
2000s. After peaking in 1997 at 147lbs,
US per-capita wheat consumption has
declined to 133lbs in 2015, according to
the Department of Agriculture, which is
expecting it to fall again in 2016.
“Reduced per-capita wheat food use
in the US has been attributed to rising
consumption of gluten-free or multi-
grain products and diet trends,” says
Jennifer Bond, an analyst at the USDA.
Niche gluten-free products have been
around for years for people with coeliac
disease. However, demand has widened
beyond medical needs. “The market
started to grow beyond people who
were just needs-based and into a life-
style choice,” says Michael Detlefsen,
managing director of Pomegranate
Capital, a private equity company with
an investment in a gluten-free food
Innovation has made the foods more
palatable, boosting the sector’s profile.
2016, and is forecast to grow to $4.7bn
consumer data group.
As food manufacturers and retailers
increase their offerings of foods that are
gluten-free and organic, some leading
head of corporate finance at Commerz- sold so far this year in a bumper period The group segment,” said Demetrio Salorio, head
bank, which did not work on the for bond issuance. The first three of debt capital markets for Société Géné-
transaction. months of the year was the third busiest received rale, which acted as global co-ordinator
Bond-buying programmes by the quarter for euro-denominated corpo- more than on the sale with Crédit Agricole and
European Central Bank, which last year rate bond issuance on record, Dealogic Natixis.
started to buy high-quality corporate data shows. €2.3bn of Founded in 1865, Fromageries Bel
bonds as part of the €60bn of securities It was the busiest January on record orders for claims to be the world’s largest maker of
it purchases each month, have sup- for non-US bond issuance, and the larg- cheese when judged by the 18bn por-
pressed borrowing costs across the est first quarter total for US investment a €500m tions sold each year, thanks to the indi-
continent. grade corporate bond sales on record, seven-year vidual servings of cheese wrapped in
The borrowing cost for Fromageries according to Thomson Reuters, with wax and foil of its flagship products.
Bel compares to €160m of debt in almost $400bn sold. bond The company is controlled by the
a private placement arranged by Issuers must pay for credit ratings, yielding family holding company, Unibel, and
Crédit Agricole, which included €140m which can take months of work to members of the Bel Fiévet family.
of seven-year debt yielding 3 per cent. receive, but well-known brands 1.59% A little-traded public listing, with less
The group has also used commercial and companies known to investors can than 4 per cent of the stock in public
paper markets for short-term raise capital without seeking such hands, values the group’s shares at
borrowing. validation. €3.6bn.
Non-rated companies accounted for “Over the last three years a good The group had also explored a possi-
4 per cent of the €341bn of investment number of European corporate — in ble 10-year bond with investors, but
grade bonds sold last year, according to most cases household — names across sold the seven-year deal following
Soc Gen, and 3 per cent of the €115bn sectors and countries have tapped this feedback.
Analysis. Commodities
Dietary aid
World gluten-free product sales US per capita wheat consumption
Retail value, $m Pounds per person
160
140
120
5,000
100
4,000
1964 70 80 90 2000 10 15
European butter price
3,000 $ per tonne
5,000
2,000
4,000
1,000 3,000
0 2,000
2012 13 14 15 16 17 18 19 20 2015 16 17
Sources: Eurostar; USDA Photo: Dreamstime
‘Bread is the agricultural traders are betting that the back,” says Kevin Bellamy, an analyst at Back in the wheat industry it is
“free from” trend is here to stay. Rabobank. acknowledged that the gluten-free
holy grail. A Chicago-based Archer Daniels Mid- The push for healthier diets is leading trend remains a phenomenon confined
gluten-free land acquired a maker of high-protein, to jitters in the sugar market. Efforts by to developed economies. Wheat con-
gluten-free pasta called Caterina Foods, health campaigners and governments sumption remains strong in Asia, where
product which uses flours derived from lentils, to control obesity are adding to the wor- the growth of bread and confectionery
with the peas, rice and quinoa. ries at a time when sugar is trading at markets is robust.
“The growth trends for gluten-free just under 17 cents a pound, down a However, Maria Mascaraque, an ana-
taste and products continue to look promising,” third from the four-year high touched lyst at Euromonitor, points out that
says Ken Campbell, president of a speci- last year. emerging markets tend to follow devel-
texture of ality ingredients unit at ADM. “When you have the big food and oping-world food trends. “It’s growing in
bread could In the dairy sector swelling demand drink manufacturers saying they will places like Brazil,” she says.
really hit for natural ingredients has pushed the use less sugar, you would guess people Wheat prices, which are at about
price of butter to record highs in are going to consume less sugar,” says $4.27 a bushel, are being shaped by
wheat’ Europe. Health authorities have Robin Shaw, an analyst at Marex Spec- strong production from important
reversed advice that consumption of tron, a commodity broker. growers such as Russia.
animal fats leads to heart disease. Although demand in North America Mr Detlefsen insists that once manu-
Instead it is transfats, found in proc- and Europe accounts for less than 15 per facturers succeed in producing tasty
essed foods such as margarine, that are cent of world consumption, analysts say gluten-free bread — it has tended to be
considered a health risk, prompting confidence in the sector has been chalky and crumbly — the likely effect
consumers to rethink. shaken. Traders and executives feel glo- on the wheat market would be substan-
Butter prices in Europe are at record bal consumption is still growing, “but by tial. “Bread is the holy grail. If someone
highs of just under $5,000 a tonne. only about 1 per cent instead of the 2 per could make a gluten-free product with
“Demand for butter has been very cent by which it had been growing in the the taste and texture of bread, that could
high and cheese has also made a come- last 20 years”, says Mr Shaw. reallyhitwheat,”hesays.

Trading room Commodities

Hedge fund pays freelancers to code algos
ROBIN WIGGLESWORTH
US MARKETS EDITOR
Quantopian, a “crowdsourced” hedge
fund, has begun allocating some of the
money invested by industry tycoon
Steven Cohen to trading algorithms
coded by freelance computer scien-
tists, as it steps up its efforts to disrupt
the hedge fund industry.
The Boston-based company backed by
venture capital firm Andreessen
Horowitz provides data scientists,
mathematicians and programmers the
tools to design automated trading algo-
rithms. It licenses the best ones for its
own hedge fund, hoping that harnessing
the talent of thousands of do-it-yourself
quantitative traders will allow it to take
on the industry’s big names.
Last year Mr Cohen, the head of
Point72 and one of the hedge fund
world’s biggest names, invested $2m in
Quantopian, and promised up to $250m
of his own money to the platform’s algo-
rithmic traders. This week the company
began allocating dollops of this money
— mostly between $1m and $3m — to
more than 15 trading strategies coded
by its members.
“This is the step that we’ve been wait-
ing for,” said John Fawcett, chief execu-
tive of Quantopian. “We want to be
extremely deliberate, but the trading
capacity of these algos is much higher.
We just want to move cautiously before
scaling up.”
Until this week, Quantopian had allo-
cated modest amounts of its own money
to a handful of trading algorithms to test
their resilience and performance. But in
the second quarter of this year, Quanto-
pian expects to begin allocating more
capital to strategies on its platform via a
pooled investment vehicle, in addition
to Mr Cohen’s money.
Since it raised outside funding it has
been prevented by US regulation from
disclosingitsresults,butinthefirstquar-
ter of investing with its own money in
early 2016 Quantopian notched up a 1.93
per cent net gain after deducting its theo-
retical fees, beating the US stock mar-
ket’s0.8percentriseovertheperiod.
Quantopian is allocating money to
members from countries such as Aus-
tralia, China, India, Spain and the US,
who have backgrounds ranging from
data science to engineering and
academia. They will receive 10 per cent
of their algorithm’s net profit as a licens-
ing fee.
Quantopian says it has 120,000 mem-
bers from 180 countries, and more than
6m trading simulations have been run
on its platform.
Coking coal rises after cyclone hits Queensland
NEIL HUME
The price of coking coal has surged
above $200 a tonne after a tropical
cyclone knocked out a supply route in
the main mining area of Australia.
As steel mills across Asia scrambled for
supplies, premium hard coking coal —
which is combined with iron ore to
make steel — jumped 12.3 per cent to
$211.30 a tonne, according to the Steel
Index, a price reporting agency.
The commodity has surged 40 per
cent since Cyclone Debbie smashed into
the north-eastern state of Queensland
last week, leaving a trail of devastation.
Queensland produces about half the
world’s supply of coking coal and is big
supplier to China’s vast steel industry.
The last time its mining areas were hit
by a cyclone six years ago, the price of
coking rose to a record $330 a tonne.
Analysts would not rule out a similar
reaction because of damage to rail net-
works that serve export terminals.
Jonny Sultoon of Wood Mackenzie, a
consultant, said almost 10m tonnes of
output could be lost, and he expected “a
strong price response”.
On shipments from the Bowen Basin
producers BHP Billiton, Glencore and
Peabody have declared force majeure —
a legal term used when contracts are not
met because of circumstances that can-
not be controlled.
Those moves followed news that the
Goonyella rail system, which connects
the Bowen basin with two terminals on
the east coast, would be out of action for
five weeks. Dalrymple Bay and Hay
Point terminals handle about 55 per
cent of Queensland’s coal exports.
“While the ports will be in a position
to allow ships to load shortly, we antici-
pate exports will be significantly
impacted as there is insufficient stock-
pile volume at port to satisfy require-
ments of vessels waiting and en route to
Australia for loading,” Mr Sultoon said.
The industry recorded bumper prof-
its last year as a price rally made coking
coal the best-performing big commod-
ity. Prices jumped 300 per cent to more
than $300 a tonne after China cut the
number of days coal miners could work
in a year from 330 days to 276 in an
attempt to improve profitability.
But the working time curbs were
relaxed during the winter and Beijing
has indicated that they will be rein-
stated only if there is a marked decline
in prices.
Until Cyclone Debbie hit Queensland,
analysts had expected prices to struggle
this year, in part because of increased
supplies from Mongolia and the US.
Friday 7 April 2017 ★ FINANCIAL TIMES 19

MARKETS & INVESTING

Global overview
TRADING POST Markets update
Jamie
Chisholm
Investors brush aside worries over S&P 500 index
Change on day 0.26%

Fed and Trump tax cut proposals

Watch out for gold when the US
non-farm payrolls data are published
today.
After Wednesday’s solid ADP survey
of private sector employment, analysts
expect the official NFP report will show
the US economy created a net 180,000
jobs in March, according to Reuters.
The unemployment rate is expected
to stay at 4.7 per cent and average
earnings to grow 0.2 per cent month
on month.
If these figures are matched or
beaten, then the report will provide
further evidence of a reasonably
robust US labour market, and may
add to expectations that the Federal
Reserve will look to raise interest
rates again soon.
Futures markets are pricing in a
63 per cent chance that the Fed will
increase borrowing costs by 25 basis
points at its June meeting, according
to the FedWatch calculator from the
CME Group.
But if the NFPs come in shy of
forecasts it should pressure
Treasury yields and the dollar.
Any such move may prove
temporary, but it could provide
the propulsion needed for gold
to break higher.
The precious metal’s price at mid-
session yesterday sat just below
apparent upside resistance around
the $1,260-an-ounce level, which
happens to coincide with the
200-day moving average.
If bullion can breach that
decisively, then gold bugs will begin
eyeing the next band of resistance
at around $1,300.
jamie.chisholm@ft.com
Gold price
$ per troy ounce
200-day moving average 1400
1300
1200
1100
Apr 2016 2017 Apr
Source: Thomson Reuters Datastream
Crude flirts with $55
mark and dollar
edges higher against yen
ahead of summit between
China and US leaders
DAVE SHELLOCK
US stocks stabilised after the previous
day’s late sell-off but the mood
remained hesitant amid uncertainty
about the Federal Reserve’s balance
sheet intentions and doubts about the
US president’s fiscal stimulus plans.
There were signs of nerves ahead of
the start of a summit between Donald
Trump and Xi Jinping, his Chinese
counterpart, and today’s release of US
non-farm payrolls data.
However, Wall Street found support
from a fresh rally for oil prices, with
international Brent retesting the $55-a-
barrel mark. The dollar edged higher
against the yen and the euro — pushing
gold slightly lower — while Treasuries
were little changed.
But the big focus remained the min-
utes of the Fed’s policy meeting last
month, published on Wednesday,
which helped turn a gain of about
0.8 per cent for the S&P 500 to a closing
loss of 0.3 per cent.
The minutes highlighted not only that
“some” Fed members viewed equity
prices as “quite high” relative to stand-
ard valuation measures but that the
central bank could start reducing its
balance sheet as early as this year, pro-
vided the economy stayed on track.
There was no mention of any pause in
the rate rise cycle.
“Unwinding a $4.5tn balance sheet
would imply a significant reduction in
global liquidity and is no mean feat,
especially when the Federal Open Mar-
ket Committee is simultaneously hiking
rates,” said Stefan Koopman, market
economist at Rabobank. “This may
Reinventing Brazil’s economy: FT.com/video
Henrique Meirelles, finance minister and ex-central bank chief, tells
the FT’s John Authers what must be done to tackle Brazil’s crisis
explain the nervousness in the market.”
Meanwhile Paul Ryan, speaker of the
House of Representatives, was quoted in
a media report on Wednesday as saying
the White House, Congress and the Sen-
ate were not “on the same page” regard-
ing planned tax reforms. That fuelled
concerns that a significant plank of Mr
Trump’s economic agenda could still be
some way away.
Wall Street managed to put such wor-
ries to one side as the S&P 500 equity
index rallied 0.3 per cent to 2,359 by
midday in New York, with the Dow
Jones Industrial Average and the Nas-
daq Composite rising by similar
amounts.
European stocks also put in a positive
Christopher Goodney/Bloomberg
showing — with the Stoxx 600 gaining
0.2 per cent — as participants brushed
off steep falls earlier in the day for
shares in Tokyo and Hong Kong.
The energy sector led the way in New
York as oil market participants drove
prices higher while attempting to look
beyond record high levels of US crude
inventories.
Brent was up 0.8 per cent at $54.81 a
barrel, not far off Wednesday’s one-
month intraday high of $55.09. West
Texas Intermediate, the US crude
benchmark, was 1.1 per cent higher at
$51.72.
Meanwhile the dollar rallied 0.2 per
cent against the yen to ¥110.93 after giv-
ing back much of an early advance
2380
2370
2360
2350
2340
Mar 2017 Apr
against the Japanese currency on US equities Wall Street staged a
Wednesday. tentative rally after a late sell-off on
The euro was 0.1 per cent softer ver- Wednesday as the market mood
sus the dollar at $1.0653, after pulling remained nervous ahead of a meeting
off a low of $1.0630 as the markets between the US and Chinese leaders
digested comments by the president of
the European Central Bank. FTSE 100 index
“[Mario] Draghi has delivered the Change on day 0.39%
most forceful defence of the current pol- 7400
icy stance in an effort to push back on
recent rumours surrounding the risk of 7350
potential changes in the [ECB] deposit 7300
rate,” said Eric Theoret, FX strategist at
7250
Scotiabank. Mar 2017 Apr
Mr Draghi, he added, had “under-
scored the need for confidence in infla- UK equities The FTSE 100 lagged its
tion converging toward the 2 per cent continental European peers, with the
target, and suggested that there is cur- healthcare and telecoms sectors
rently ‘scant evidence of this’”. suffering the biggest decline. Property
The currency market will be closely stocks bucked the weaker trend
watching for any news to come out of
the meeting between Mr Trump and Eurofirst 300 index
Mr Xi.
Change on day 0.16%
Antje Praefcke, analyst at Commerz- 1500
bank, said discussions between the pair
were unlikely to be easy. 1490
“Both are fully aware of the signifi- 1480
cance of the bilateral trade relations and
reciprocal market access but are limited 1470
Mar 2017 Apr
in their ability to compromise due to
political restraints,” she said. European equities Banking stocks
“Mr Trump took a very clear stance ended higher as the sector recouped
right at the start of his presidency — early losses driven by dovish policy
very aggressively criticising the Chinese remarks from Mario Draghi, president
trade surplus with the US as well as the of the European Central Bank
allegedly overvalued currency. So it will
be difficult for him to now take a much
more lenient stance towards China and Nikkei 225 index
to sell this politically.” (’000) Change on day 1 40%
20.0
Government bond markets were
becalmed with the yield on the 10-year 19.5
Treasury unchanged at 2.36 per cent 19.0
and that on the two-year note flat at
1.25 per cent. 18.5
Mar 2017 Apr
The German 10-year bond yield
ended at 0.26 per cent, also steady on Japanese equities The Nikkei slid to a
the day. four-month low as the market reacted
Gold was down $2 to $1,252 an ounce, to the minutes of the US Federal
helped by the US dollar’s modestly Reserve’s policy meeting last month
firmer tone.

Constellation Brands basis, projected earnings of $7.70-$8 a

Wall Street
Higher beer sales help
Constellation get over
US-Mexico hangover
Mamta Badkar
and Adam Samson
Constellation Brands was on track for
its biggest one-day gain since 2014 after
the company behind Corona beer
announced upbeat fourth-quarter
results and boosted its dividend.
Bolstered by a better than expected
earnings outlook, the shares rallied
7.3 per cent to $173.23 in early trading.
Profits rose to $452m, or $2.26 a share,
from $243.4m, or $1.19, in the period a
year ago. Adjusting for one-time items,
earnings of $1.48 a share topped
estimates of $1.36.
Sales were 5 per cent higher than a
year ago at $1.63bn, above analysts’
estimates of $1.59bn. An 11 per cent rise
in beer sales helped the top line, while
sales of wine and spirits were flat.
Share price ($) share, above analysts’ estimates of $7.51.
170
Constellation’s advance came with a
160 rise in US stocks. By mid-morning the
150 S&P 500 was up 0.3 per cent to 2,360.76,
140
the Dow Jones Industrial Average had
Nov 2016 2017 Apr risen by the same margin to 20,711.60,
Source: Thomson Reuters Datastream while the Nasdaq Composite was 0.4 per
cent higher at 5,884.89.
Day's L Brands led the gains on the S&P 500,
Indices
S & P 500
Close
2359.81
change
6.86
rising more than 9 per cent to $47.18.
The company behind Victoria’s Secret
DJ Industrials
Nasdaq Comp
20706.32
5881.36
58.17
16.89
lingerie disclosed a sharper than
expected fall in March sales but its Bath
Russell 2000 1204.70 -8.35 & Body Works business topped
VIX 12.02 -0.87 estimates.
US 10 yr Treas Bd 2.36 0.02
Comparable store sales — an
US 2 yr Treas Bd 1.25 0.02
important metric for retailers — fell
10 per cent in the five weeks to April 1.
Like-for-like sales at Victoria’s Secret,
In December the brewer divested its its largest unit by revenues, declined
Canadian wine business to Ontario 13 per cent, compared with estimates of
Teachers’ Pension Plan. a 10.8 per cent fall.
The quarterly cash dividend was The exit from swimwear and apparel
lifted 30 per cent to 52 cents a share of had reduced the brand’s comparable
class A common stock and 47 cents a sales by 10 percentage points, said
share for class B. L Brands.
Sentiment on Constellation soured Randal Konik at Jefferies cautioned
and its shares fell 12 per cent after against buying the relief rally. “We
Donald Trump won the US presidential attribute this morning’s strength to very
election in November on concerns low expectations and our data-driven
about plans for a border-adjustment tax work provides us with conviction that
and his tough stance on Mexico. LB’s struggles are long term and
However, the shares are up 3.4 per structural in nature.”
cent since the election. The New York-listed shares of Yum
The company expects to report fiscal China, spun out of Yum Brands last year,
2018 earnings in the range of $7.65 to were up more than 11 per cent to $31.33
$7.95 a share and, on a comparable after upbeat first-quarter results.

London
Concerns over
virtual schools take
heavy toll on Pearson
Bryce Elder
Pearson led the FTSE 100 lower
yesterday after Exane BNP Paribas
raised concerns about virtual schools,
one of its fastest-growing businesses.
Exane worried that growth rates may
not be sustainable for Connections
Academy, an online-only public
primary and secondary schools
operator bought by Pearson in 2011.
Headwinds for the business include a
lack of new school openings, enrolment
caps on established schools and
regulatory concerns, it said.
Pearson has no new virtual schools
due to open for the upcoming academic
year, against nine in the past three years,
and caps on student numbers mean
enrolment growth has been slowing
since 2013, it said.
The broker also noted evidence that
student performance is worse at virtual
schools than regular public schools with
research from the Walton Family
Foundation last year showing cyber
schools had “significantly weaker
academic performance in math and
reading”.
Nevada, New Mexico, Michigan and
Ohio have all moved to cut funding for
virtual schools, it said.
“We are increasingly sceptical about
the group’s ability to return to growth in
North America this decade.
Faced with structural challenges in
several of its segments, the shares are
not cheap,” said Exane, which put a
550p target on Pearson shares. The
stock, which was trading ex a 34p
dividend, closed 6.7 per cent lower at
637p.
The wider market followed Wall
Street’s overnight decline with the FTSE
100 losing 0.4 per cent, or 28.48 points,
to 7,303.20.
Allied Minds slipped further below its
2014 flotation price, losing 5.4 per cent
to 175p, in the wake of the technology
incubator’s warning on Wednesday that
it was writing off more than a quarter by
value of its portfolio.
Asos faded 4.3 per cent to £54.57,
with Credit Suisse downgrading to
“underperform” on the back of the
online retailer’s recent interim results.
Credit Suisse worried about Asos’s
long-term margin potential given
increased scale has not come with
reduced distribution and warehouse
costs, which together account for over
half of the group’s operating costs.
The 40 per cent premium Asos trades
to German peer Zalando “looks
stretched” as the latter delivers superior
margins and cash conversion, it said.
EasyJet rose 4.2 per cent to £10.60
after reporting a bounceback in
passenger numbers for March.
Short covering lifted Tullow Oil 7.5 per
cent to 212.2p, the stock recouping an
initial drop to 195p, after shareholders
approved its rights issue.
More than 22 per cent of Tullow’s free
float is on loan to short sellers, Markit
data show.
20 ★ † Friday 7 April 2017

INSIGHT Analysis. Commodities

Dan
McCrum
More gas price pressure in the pipeline
Recovery in US shale oil Permian Basin gas output
drilling is increasing the need rises with oil
Hollow theatre of to export cheap byproduct
Rebased from May 2016
1.15
carefully crafted GREGORY MEYER — NEW YORK
1.10

earnings calls The energy world is wary of a place

called Waha.
Gas
1.05
Located in the arid scrubland of west- Oil
ern Texas, Waha is a natural gas pipeline 1.00

G
reat quarter guys! Like cuckoos in spring, the junction. In the past few months, gas May 2016 2017 Apr
distinctive sound of US stock analysts gath- sold there has fallen well below national
ered on conference calls heralds the arrival of prices. Price discount for Waha
earnings season. To the casual observer these The weakening Waha gas price is an natural gas
are moments when chief executives and unheralded side effect of resurgent oil $ per million Btu
financial officers join a public conversation about the com- drilling in the Permian Basin, a hydro- -0.10
pany they run, answering questions on their actions and carbon trove in Texas and New Mexico
plans. The reality is more complicated. Professional inves- that has become the hottest shale -0.20
tors know these calls operate more like a performance, region in the US.
with both sides playing parts. As a company’s value is As oil companies extract Permian
determined by the stories told about it, earnings calls are crude, so the output of natural gas rises. -0.30
crafted to reinforce whatever tale suits the business and its The volumes are creating new uncer-
supporters. tainty for the North American gas mar- -0.40
Yet what is startling to discover, in an academic paper ket and, with the US now exporting gas Apr 2016 2017 Apr
based on a survey and interviews with investor relations in liquefied form on ocean vessels,
Sources: EIA; Bloomberg
professionals, is just how complicit analysts and investors world energy markets.
Brittany Sowacke/Bloomberg
have become in the production of these set pieces. For Virtually all the volume from the Per-
Managing the Narrative: Investor Relations Offices and Corpo- mian is “associated gas,” meaning it the Pecos Trail pipeline project, pro- cent discount in December, according to Texas, says Timm Schneider, analyst at
rate Disclosure, academics at four US universities aimed to comes from wells drilled for oil.
‘[Operators posed to shunt gas 468 miles from near Platts Analytics. Evercore ISI. As a result, there’s a risk
fill a hole in the understanding of the way companies com- After oil prices stabilised last year, in the Waha to the Texas coast of the Gulf of The drop is “directly correlated to the producers will jam it on to existing pipe-
municate. The forecasts and recommendations of invest- companies began bringing drilling rigs Mexico. The 1.85bn cu ft/d line would impending pipeline expansions coming lines at bargain prices, depressing fara-
ment bank analysts have been well studied, but the back to the Permian. Since May the
Permian] link to pipelines feeding Mexico and a out of the basin,” as it creates incentives way markets such as California, where
authors wanted to know more about the role of investor basin’s oil production and natural gas can give the liquefied natural gas (LNG) export ter- to connect Waha gas to higher-priced the spread of renewable energy has
relations officers — people who control access to manage- output have both climbed about 14 per minal under construction in the port of markets, says Grant Gunter, energy ana- already been slowing gas demand at
ment and the way information is conveyed to the market. cent, according to the Energy Informa-
gas away Corpus Christi. lyst at S&P Global Platts. power plants, he adds.
For public companies with thousands of shareholders tion Administration. Gross Permian gas and still Producers are drilling for “what Despite the soft prices, Permian pro- The most promising places to send
worldwide, they are the gatekeepers of knowledge. output is now nearly 8bn cubic feet per brings most bang for the buck. They’re ducers might keep extracting gas Permian gas may be foreign markets.
First surprise from the 610 survey responses, and fol- day, the agency says.
make focusing on oil,” says Jeff Welch of because their primary revenue derives The EIA estimates US gas exports will
low-up interviews, is that “Most people don’t realise the Per- acceptable Namerico Partners, the pipeline’s devel- from selling oil, which at $50 a barrel is total 9.5bn cu ft/d next year, up 51 per
companies do not have to mian’s the second largest gasfield,” Scott oper. “Yet on the associated gas side, worth more per unit of energy than gas. cent from 2016.
manage analyst estimates:
Talking to Sheffield, executive chairman of Pio-
returns on there’s a pretty robust story as well.” In Permian areas where drilling is great- Mexico is a nearby outlet. But the
investors do it for them. executives is an neer Natural Resources, a leading Per- the oil’ Two other companies, Enterprise est, such as the Wolfcamp Delaware for- opportunity is in question as Presi-
A common pattern is for mian producer, told the CERAWeek Products Partners and Kinder Morgan, mation, gas production will almost dou- dent Donald Trump seeks to rework the
analyst profit forecasts to
activity that conference in Houston last month. Mr have also disclosed potential pipelines ble in 2017, says Stephen Beck of con- North American Free Trade Agreement
decline each year, giving the helps justify Sheffield estimated the basin’s gas pro- connecting Waha to Gulf destinations. sultants IHS. binding the US, Mexico and Canada.
company an easier consensus duction was headed to 20bn cu ft/d, Without new pipelines, the price dis- He says: “The operators are indiffer- “We’ve got to keep great relationships
estimate to “beat”, and a com-
fees to clients more than current output from the huge count for Permian gas could worsen as ent to the gas price in the Permian. They with Mexico and not overturn Nafta too
fortable conference call dis- Marcellus Shale of Appalachia. supply grows. Average prices for gas can give the gas away and still make bad,” Mr Sheffield said, noting that
cussion about the business doing better than expected. It is The international consequences of delivered at Waha are 31 cents per mil- acceptable returns on the oil.” exports there were poised to double.
often assumed the earnings are guided downwards by rising Permian gas output became lion British thermal units cheaper than The ability to burn off superfluous “We have to get our gas out of the Per-
companies, within or butting up against rules on fair dis- clearer this week with the unveiling of benchmark US prices, falling from a 16- natural gas at the wellhead is limited in mian.”
closure of non-public information. While analysts some-
times have things pointed out, several investor relations
officers said in interviews that institutional investors, the
so-called buyside, do the job of walking down estimates for Currencies
them. “What isn’t visible to the public is that buy siders call
up sellside analysts all the time and chew them out,” one
said. “Stockholders will call up the analysts and beat them
up and totally leave the company out of it,” said another.
Koruna climbs after
Investors know the benefit of a positive corporate story
as much as executives, so do their part to set expectations.
When it comes to earnings calls, however, the paper sug-
Czechs ditch cap
gests many analysts are complicit in the staging of a pro-
duction for the benefit of executives. The investor rela- KATIE MARTIN In late trading in London
tions professionals describe soliciting questions analysts the koruna was up 1.7 per
plan to ask in advance, to best prepare. A large minority fil- The Czech National Bank cent at Kc26.58.
ter who is called on to ask questions, particular at compa- has scrapped a longstanding The currency cap was
nies with significant numbers of hedge funds investors. cap on the strength of the imposed in an effort to
Such calls typically take place hours after quarterly koruna, highlighting how a deflect deflation. With inter-
results are released, to give everyone time to digest the fig- rise in inflation across the est rates on the floor and no
ures. Many companies do not talk to anyone in this time, region is forcing central desire to cut them below
and some said it would be inappropriate to do so. banks to overhaul policy. zero, the CNB was left with
But two-fifths of investor relations officers described After the announcement few other options.
private calls with the investment community during this yesterday, the koruna Keeping the currency rela-
time as important. They shape the initial reaction, and the climbed almost 2 per cent tively weak also supported
conversation that will follow. That way, says one, “the ana- against the euro, with the sin- import prices.
lyst doesn’t ask me a really tough, embarrassing question gle currency falling below While the timing of the
in public”. The analyst gains an advantage. Afterwards Kc27 for the first time since cap’s removal — dubbed
come the private calls, to favoured analysts and large the limit was imposed in Czexit — came as a surprise,
shareholders, which 82 per cent of investor relations offic- November 2013. the CNB had been widely
ers said they conducted, sometimes setting aside days of Trading volumes were said expected to change the
management time to get through them all. to be 50 to 100 times higher policy this year.
It is possible these private calls are always confined to than usual in the minutes Data on surging official
explanation of what is public, and reiteration of the corpo- after the CNB decision, but reserves had shown that the
rate story. If so, what is the point of them? the koruna’s advance was far central bank was fighting a
It may be investors sitting on large stock portfolios need from disorderly, suggesting battle to keep a lid on the
to do something to fill the days, and talking to executives is the central bank had man- koruna in the face of large
an activity that helps justify the fees to their clients. Maybe aged expectations well. speculative inflows.
there is benefit in the tone of what is said, or unsaid. Per- “We think they are looking Analysts said the fight had
haps hearing something from the horse’s mouth breeds for a monetary tightening intensified sharply of late,
shareholder loyalty. What the public gets from earnings here and so want a currency with the CNB buying about
calls is rather less, a Kardashian-style, carefully managed rally,” said analysts at €7.5bn in 10 days — a large
version of corporate reality. Nomura. “If not, they will sum for a small economy.
have to start hiking rates “On Wednesday and
dan.mccrum@ft.com later in the year.” Thursday last week, the
The Czech economy has intervention was huge,” said
been benefiting, like others Petr Krpata, an analyst at
in central Europe, from signs ING Bank.
of an upturn in the eurozone, For the whole of March
especially in Germany, buying had amounted to
More comment and data on ft.com which receives the bulk of its €19bn, he added.
exports. Reserves stand at about
Falling unemployment — 60 per cent of annual gross
Y Fast FT Our global economies, headed the jobless rate is among the domestic product.
team gives you market- by Brazil, Russia, India lowest in the EU — has also According to Mr Krpata,
moving news and views, and China. boosted consumer demand. the central bank had made
24 hours a day, five days ft.com/beyondbrics Erste Group, the Austrian “a mistake” in committing
a week. ft.com/fastft bank, forecast that Czech to holding the floor beyond
Y Podcast The Hard
Y Alphaville Our Currency podcast takes a growth would accelerate to the first quarter with infla-
irreverent financial blog. look at what is driving about 2.7 per cent this year, tion running above the target
Join Paul Murphy and the global currency up from 2.3 per cent in 2016, level.
Bryce Elder for the daily market. ft.com/podcasts helped by foreign and “But it did the next best
Markets Live session at domestic demand. thing in exiting as soon as
Y Lex Video Analysis In a statement the CNB possible afterwards,” he said.
11am. ft.com/alphaville
and opinion from the made clear it was prepared to Mr Krpata forecast that
Y beyondbrics News and team on the hot issues prevent an excessive rally in the central bank would allow
comment from more affecting companies and the currency and added that the euro to fall to the region
than 40 emerging markets. ft.com/lexvideo it “did not discuss” tweaking of Kc25.
interest rates. See Short View