You are on page 1of 30

WORLD BUSINESS NEWSPAPER

WEDNESDAY 28 SEPTEMBER 2016

EUROPE

Smart solution

Path to peace

After the coup

Working harder is not the way to up


productivity SARAH OCONNOR, PAGE 9

Colombia prepares to vote on a deal to end


its 52-year civil war BIG READ, PAGE 7

An FT special report on Turkey


SEPARATE SECTION

Markets see
Clinton as
debate victor

Briefing
i StanChart faces fresh DoJ investigation
The UK-listed bank has returned to the crosshairs
of the US justice department, this time facing a
probe into allegations of bribery at an Indonesian
power station company that it controls. PAGE 11

Hillary Clinton speaks to reporters on


her plane yesterday as she flew to North
Carolina to resume her campaign after
Monday nights first presidential debate
with Donald Trump.
Currency markets joined most pundits in indicating they believed the
Democratic candidate had won, driving
up the Mexican peso. The peso has
moved with Mr Trumps performance,
falling when the Republican does well in
the polls. Mr Trump claimed the debate
went better than he expected but he
criticised the moderator and complained about a defective mic.

i Global warnings on trade and deflation


The IMF has warned that the world is at risk of
slipping into a deflation trap and the WTO that an
expected dramatic slowing in global trade growth
should serve as a wake-up call. PAGE 5

i Moscow boosts Assad backing, says west


Western officials have said Russia has expanded its
military support to the Syrian regime. The UN and
Jordan, meanwhile are nearing a deal to provide aid
to more than 75,000 stranded refugees. PAGE 2

i European Parliament readies Brexit veto

US debate page 3
Editorial Comment page 8
Martin Wolf page 9
Markets pages 21 & 22
Brendan Smialowski/AFP/Getty Images

Iran rejects output cap and wrecks


Saudi bid to reverse oil price slide
3 Brent falls 3.5% 3 Tehran seeks larger market share 3 Grim outlook for Riyadh finances
DAVID SHEPPARD ALGIERS
ANJLI RAVAL AND NEIL HUME LONDON

Iran dealt a severe blow to Saudi-led


efforts to curb oil production and
reverse the two-year downturn in crude
prices by rejecting a Riyadh offer to cap
output, sending Brent down more than
3.5 per cent.
On the eve of todays oil producers
meeting, Bijan Namdar Zanganeh,
Irans energy minister, said his country
was not willing to freeze output until it
had hit more than 4m barrels a day,
heightening tensions between two of the
most powerful producers in the region.
Saudi Arabia signalled it would back a
co-ordinated production cut of up to 1m
barrels a day to tackle a global glut but
only if Iran froze output at levels that
analysts estimate at 3.6m b/d.

Riyadhs offer came amid an ever


gloomier outlook for its finances, with
the kingdom racking up a record budget
deficit of nearly $100bn. In a drive to
find savings, the government this week
announced a 20 per cent cut to ministers salaries and public sector bonuses.
Its willingness to freeze output is a
shift from its policy since the start of the
oil price decline, when it pushed to keep
production high to put pressure on
rivals who operate more expensively.
Iran is emerging from years of
western sanctions against its oil
industry and Tehran has said it is not
interested in capping output until it
reaches pre-sanction levels, or 13 per
cent of Opecs total. Based on Opecs current production, 13 per cent translates
to about 4.2m b/d, or 600,000 b/d more

than Iran claims to pump at present.


At current levels we are not ready to
freeze, Mr Zanganeh said. It is not on
our agenda to reach an agreement in
these two days.
The comments sent oil prices down
sharply. Brent crude, which has more
than halved since mid-2014, was trading
$1.68 lower at $45.67 a barrel.
Saudi officials said they had not given
up hope of a deal today and were still
talking to big producers, including
Russia. They hope for a foundation that
could be the basis for a deal later this
year.
We are very happy that producers
from outside Opec have started an
effective dialogue and co-operation
with the organisation. Russia in
particular has had a leading role, said

1m b/d
Co-ordinated
production cut
sought by
Saudi Arabia

4.2m b/d
Estimated level
for Iran to hit
post-sanction
market share goal

Kahlid al-Falih, Saudi energy minister.


But Mr Zanganehs comments suggest
a deal to end a supply glut that has hammered oil prices and shredded budgets
of producer nations will be difficult to
reach. Analysts said Irans position
reflected its view that it could better
withstand low prices than Saudi Arabia.
While a deal might still emerge, Opec
ministers said talks were more likely to
pave the way for an agreement at their
next formal meeting in November.
A deal is definitely close and they are
still talking. Getting Iran on board is still
the key and that will require compromise, said Bill Farren-Price, an oil
industry consultant.
Additi]onal reporting by Heba Saleh
Riyadh fiscal crisis page 2
Markets pages 19 & 20

Chinas Wang set to win Golden Globes


as Wanda steps up Hollywood spree
CHRISTIAN SHEPHERD BEIJING

Far-right flirtations blunt


broad attraction of AfD
Analysis i PAGE 3

Austria
Bahrain
Belgium
Bulgaria
Croatia
Cyprus
Czech Rep
Denmark
Egypt
Finland
France
Germany
Gibraltar
Greece
Hungary
India
Italy
Kazakhstan
Kenya
Latvia
Lebanon
Lithuania

3.60
Din1.7
3.60
Lev7.50
Kn27.50
3.50
Kc100
DKr32
E20
4.10
3.60
3.60
2.70
3.50
Ft1090
Rup195
3.50
US$5.50
Kshs300
6.99
LBP7500
4.30

Luxembourg
Macedonia
Malta
Morocco
Netherlands
Norway
Oman
Pakistan
Poland
Portugal
Qatar
Romania
Russia
Serbia
Slovak Rep
Slovenia
Spain
Sweden
Switzerland
Tunisia
Turkey
UAE

3.60
Den220
3.50
Dh43
3.60
NKr35
OR1.50
Rupee 280
Zl 18
3.50
QR15
Ron17
5.00
NewD420
3.60
3.50
3.50
SKr37
SFr5.90
Din7.50
TL10
Dh15.00

The conglomerate led by Chinas richest man is in talks to buy the US studio
that stages the Golden Globe Awards
for a reported $1bn, the latest in a
flurry of moves by Chinese companies
to snap up Hollywood assets.
Eldridge Industries said it had agreed to
enter into exclusive talks with Wanda
Culture Industry a unit of Wang Jianlins Wanda Group with the goal of
finalising a mutually satisfactory transaction for Dick Clark Productions.
The production company is a mainstay of Hollywoods self-promotion,
staging the Golden Globe Awards and
American Music Awards. Both are popular among Chinese audiences.
The Chinese push into Hollywood has
been led by Mr Wang, founder of
Wanda, already the worlds largest

cinema owner-operator. He is building a


huge cinematic company by snapping
up assets on both the production and
screening end of the film industry.
Chinese entertainment companies
covet the prestige and expertise of
established studios in the US, while cosy
relations with Beijing bring Hollywood
access to Chinas big audiences of newly
affluent consumers. Dick Clark Productions would allow Wanda new access to
TV production.
However, Republicans have voiced
concerns over Chinas incursion into the
US film industry, with 16 lawmakers this
month calling for greater scrutiny of
Chinese investment.
Wanda began its global expansion in
film distribution with the 2012 purchase
of US cinema chain AMC. A drive into
production followed with a controlling
stake in Legendary Pictures, producer

World Markets

Subscribe In print and online


www.ft.com/subscribetoday
email: fte.subs@ft.com
Tel: +44 20 7775 6000
Fax: +44 20 7873 3428
THE FINANCIAL TIMES LTD 2016
No: 39,280
Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Brussels, Milan, Madrid, New York,
Chicago, San Francisco, Washington DC, Orlando,
Tokyo, Hong Kong, Singapore, Seoul, Dubai

of the Godzilla and Jurassic World movies.


Wanda has sealed a deal with Sony
Pictures Entertainment to distribute
films in the companys domestic cinema
network. Legendary Entertainments
ties to Wanda gave it access to data on
the Chinese market that allow it to target films to the Chinese consumer using
advanced ticket sales and other metrics.
Such techniques helped Warcraft, a
film adaptation of computer game World
of Warcraft, account for an unprecedented 74 per cent of Chinese box-office
sales in its opening weekend, despite
sluggish sales elsewhere.
Even Wandas core business of construction has taken an entertainment
twist, with Mr Wangs decision to build
theme parks across the country in a
move to take on Walt Disney, which
recently opened its first Chinese mainland theme park, Shanghai Disneyland.

STOCK MARKETS

CURRENCIES
Sep 27

S&P 500
Nasdaq Composite

2154.78

prev %chg
2146.10

prev

Sep 27

0.40 $ per
0.56 $ per

1.120

1.127 per $

0.893

1.299

1.297 per $

0.770

0.49 per
0.06 per $

0.862

0.869 per

1.160

5286.89

5257.49

Dow Jones Ind

18184.30

18094.83

FTSEurofirst 300

1339.11

1338.26

Euro Stoxx 50

2966.96

2975.88

FTSE 100

6807.67

6818.04

FTSE All-Share

3706.83

3714.32

CAC 40

4398.68

4407.85

Xetra Dax

10361.48

10393.71

-0.31

Nikkei

16683.93

16544.56

Hang Seng

23571.90

23317.92

0.84 Oil WTI $


1.09 Oil Brent $

275.82

274.84

FTSE All World $

Sep 27

INTEREST RATES

-0.30 per
-0.15 index

100.330 100.415 per


130.278 130.269 index
89.817

1.089
-0.20 SFr per
-0.21 COMMODITIES

0.36 Gold $

89.603 $ index
1.090 SFr per

prev

price

yield

chg

99.46

1.56

-0.03

107.84

0.68

-0.02

106.73

-0.21

0.00

101.84

-0.08

0.00

99.27

2.28

-0.04

103.12

-0.71

0.00

price

prev

chg

Fed Funds Eff

0.40

0.39

0.01

%chg US 3m Bills
-3.53 Euro Libor 3m

0.25

0.18

0.07

-0.32

-0.32

0.00

-3.42 UK 3m
-1.01 Prices are latest for edition

0.38

0.38

0.00

Data provided by Morningstar

0.888 US Gov 10 yr
0.771 UK Gov 10 yr

1.151 Ger Gov 10 yr


112.339 113.142 Jpn Gov 10 yr
77.300
99.085
1.262

Sep 27

prev

44.31

45.93

45.73

47.35

1327.00

1340.50

77.408 US Gov 30 yr
99.337 Ger Gov 2 yr
1.255

Guy Verhofstadt, chief


negotiator for the assembly,
has warned that it has more
power over a British exit deal
than any EU state and is ready
to wield its veto. PAGE 3

i Over 90% of people breathe dirty air


A World Health Organisation study has found that
more than 90 per cent of the global population lives
in a place where the air does not meet its guidelines.
It says dirty air causes 3m deaths a year. PAGE 3

i Beijing rounds up hyping estate agents


Overzealous estate agents accused of hyping the
market by creating a false sense of urgency have
been arrested and blacklisted in the latest push to
cool the overheated property market. PAGE 5

i First trading platform for green bonds


The Luxembourg Stock Exchange has launched the
worlds first platform for trading environmentally
friendly securities, which are meant only to raise
money for green purposes. PAGE 20

Datawatch
Tax revenue in OECD countries
As a % of GDP

34
32
30
28
26
24

1965

80

90 2000

Source: OECD, Tax Policy Reforms


in the OECD 2016

14

At 34.3 per cent,


the average
tax-to-GDP ratio
in 2014 was the
highest recorded
since the OECD
began measuring
it in 1965. It has
risen since the
financial crisis in
2009, when OECD
average tax
revenues were
32.7 per cent

FINANCIAL TIMES

Wednesday 28 September 2016

INTERNATIONAL
Desert camps

Russias Syria strategy


bewilders west
Diplomats query whether
Moscow is stringing the US
along or is itself being played
GEOFF DYER WASHINGTON
MAX SEDDON MOSCOW
ARTHUR BEESLEY BRUSSELS

As Syrias brief ceasefire collapsed in the


wake of the aerial bombardment of
Aleppo, Russia has over the past week
expanded its military support to the
Syrian regime, western officials say.
The UN and several western governments have warned that Russian bunker-busting bombs are being dropped
on civilian areas of Aleppo, and the US
and European states have reacted with
indignation to what they see as Moscows efforts to undermine a ceasefire it
helped broker.
Yet the burst of military activity
with Aleppo enduring the fiercest
bombing campaign of Syrias five-year
war has left many western diplomats
confused about Russias ultimate motivations and strategy.
Critics say Moscow has been stringing
Washington along for the past few
months as they negotiated the deal, but
others suggest Russia has been played
by Syria president Bashar al-Assad.
While the UK and France have
accused Russia of being a partner in
war crimes in Aleppo in recent days,
some Russian observers say the west is
overestimating Moscows influence over
events on the ground.
Alexander Shumilin, a director at the
Moscow-based Institute for US and
Canadian Studies at the Russian Academy of Sciences, insisted that Russia
wanted to pursue a political process to
find a way out of Syria. But he added
that the collision is that Assad has no
interest in that.
European officials, however, firmly
believe Russian warplanes have taken
part in the new offensive on Aleppo,
which has killed hundreds of people.
On one hand you agree a ceasefire,
and on the other hand you violate it in
the most heinous way, said a senior
European diplomat.
Aleppo is the key battleground of the
conflict and the regimes offensive on
the city has sparked a ferocious blame
game between Russia and the west.
After the attack on an aid convoy last
week in Aleppo, which the US blamed
on Russia, western governments
accused Moscow and Damascus of escalating violence against civilians in order
to defeat rebels who control the east of
the northern city. For its part, Russia has
accused the Pentagon of trying to undermine the ceasefire with a US air strike 10
days ago that hit Syrian troops, something Washington says was a mistake.
Dmitry Peskov, Kremlin spokesman,
said opposition forces in Aleppo were
using the ceasefire to regroup, restock
their arsenals and make obvious preparations for attacks.
Moscow also accuses western countries of drawing no distinction between
the moderate opposition to Mr Assad
and Jabhat Fatah al-Sham, the former
al-Qaeda affiliate. Naturally, the Syrian
army, which withdrew to the required
distance a week ago, started doing
something after it came under attack,
Mr Peskov said.

City of death:
a cemetery
yesterday in a
rebel-held area
of Aleppo,
surrounded by
badly damaged
buildings Reuters

The harshest view of Russias behaviour is that it has used the ceasefire deal
to widen a rift between the US and the
Syrian rebels Washington backs. From
the rebels perspective John Kerry, US
secretary of state, strong-armed them
into accepting the agreement only for
the Assad regime to use the lull in fighting to press for an advantage.
The collapse of the ceasefire has
prompted speculation about closer collaboration between some Islamist rebel
groups and Jabhat Fatah al-Sham, which
the US considers a terrorist group.
The diplomatic process to broker the
ceasefire also served to underline Russias central role in Syria, especially at a
time when Washington appears to have
little leverage.

On one
hand you
agree a
ceasefire,
and on the
other hand
you violate
it in the
most
heinous
way

4km

SYRIA

A LE P PO

Areas of control
Kurdish YPG
Rebels
Syrian regime

Source: Institute for the Study of War

Fiscal crisis

MAKE A SMART INVESTMENT

Riyadh cuts public sector bonuses

Subscribe to the FT today at ft.com/subscription

SIMEON KERR DUBAI

Saudi Arabia has cut public sector


bonuses and benefits for the first time
since the collapse in oil prices, in a
move that underlines the depth of the
fiscal crisis facing the kingdom.

NOVEMBER 7 2015

FINANCIAL TIMES
1 Southwark Bridge,
London SE1 9HL

Spain; Fabripress, C/ Zeus 12, Polgono Industrial MecoR2, 28880 Meco, Madrid. Legal Deposit Number
(Deposito Legal) M-32596-1995; Publishing Director,
Lionel Barber; Publishing Company, The Financial Times
Limited, registered office as above. Local Representative
office; C/ Infanta Maria Teresa 4, bajo 2, 28016, Madrid.
ISSN 1135-8262..
UAE; Al Nisr Publishing LLC, P.O.Box 6519. Dubai. Editor
in Chief: Roula Khalaf. Origin of publication, twofour54,
Media Zone, Abu Dhabi.
France; Publishing Director, Dominic Good, 40 Rue La
Boetie, 75008 Paris, Tel. +33 (0)1 5376 8256; Fax: +33 (01)
5376 8253; Commission Paritaire N 0909 C 85347; ISSN
1148-2753.
Turkey; Dunya Super Veb Ofset A.S. 100. Yil Mahallesi
34204, Bagcilar- Istanbul, Tel. +90 212 440 24 24.
ROLLING IN THE DEEP

Subscriptions & Customer service:


Tel: +44 207 775 6000, fte.subs@ft.com,
www.ft.com/subscribetoday
Advertising:
Tel: +44 20 7873 3794 asiaads@ft.com,
emeaads@ft.com
Letters to the editor:
Fax: +44 20 7873 5938,
letters.editor@ft.com
Executive appointments:
Tel: +44 20 7873 4909
www.exec-appointments.com
Published by: The Financial Times Limited, 1 Southwark
Bridge, London SE1 9HL, United Kingdom. Tel: +44 20
7873 3000; Fax: +44 20 7407 5700. Editor: Lionel Barber.
Belgium; BEA Printing sprl, 16 Rue de Bosquet, Nivelles
1400.
Germany; Dogan Media Group, Hurriyet AS Branch
Germany, An der Brucke 20-22, 64546 Morfelden Walldorf. Responsible Editor, Lionel Barber. Responsible
for advertising content, Dominic Good.
Italy; Poligrafica Europa, S.r.l, Villasanta (MB), Via Enrico
Mattei 2, Ecocity - Building No.8. Milan.
Owner, The Financial Times Limited; Rappresentante e
Direttore Responsabile in Italia: I.M.D.Srl-Marco Provasi Via G. Puecher, 2 20037 Paderno Dugnano (MI), Italy.
Milano n. 296 del 08/05/08 - Poste Italiane SpA-Sped. in
Abb.Post.DL. 353/2003 (conv. L. 27/02/2004-n.46) art. 1
.comma 1, DCB Milano.

361_Cover.PRESS.indd 1

Mark Toner, US state department


spokesman, admitted on Monday that
Mr Kerry was playing the hand hes
been dealt but that there was no discussion of a plan B of increased US military action in Syria.
OL AN
Theyre [the Russians] trying toHGEruin
I G HT S
the game, said a European diplomat.
Stirring the pot means that everyone
still has to go to them and say, Come
back into the game, play ball again.
Yet there are some signs that the
breakdown in the ceasefire has also
frustrated Moscow.
US officials noted that their Russian
counterparts stuck with the ceasefire
negotiations for weeks, indicating that
they were committed to the process.
European officials added that the
recriminations against Moscow in the
wake of the Aleppo bombardment will
hamper Russian efforts to have
Ukraine-related sanctions lifted.
Some analysts say Russia had already
achieved its main strategic goals in
Syria, including preventing the regime
from collapsing and securing its coastal
stronghold, which made Moscow open
to a ceasefire.
But Russia has also often had a different agenda with Iran, the Syrian governments other main backer.
This is part of the strains between
the Russians and the Syrians, said
James Jeffrey, former US deputy
national security adviser.

21/10/2015 10:51

Copyright The Financial Times 2016.


Reproduction of the contents of this newspaper in any
manner is not permitted without the publishers prior
consent. Financial Times and FT are registered trade
marks of The Financial Times Limited.
The Financial Times and its journalism are subject to a
self-regulation regime under the FT Editorial Code of
Practice: www.ft.com/editorialcode
Reprints are available of any FT article with your
company logo or contact details inserted if required
(minimum order 100 copies).
One-off copyright licences for reproduction of FT articles
are also available.
For both services phone +44 20 7873 4816, or email
syndication@ft.com

Bonuses and allowances for public sector workers were cancelled and
amended in a series of royal decrees
issued late on Monday.
Applying austerity measures to the
large public sector is a politically sensitive move forced by the hole in public
finances and a deterioration across the
broader economy, as the worlds biggest
oil exporter grapples with low oil prices.
Saudis have become accustomed to
lavish salaries and generous perks in the
state sector, which employs about twothirds of working nationals.
The royal decree also ordered ministerial salaries to be reduced by 20 per
cent and pay for members of the
appointed consultative council be cut by
15 per cent.
The rules, which come into force next
month, apply to all public sector workers, both Saudis and expats, as well as
the military. Soldiers serving in Yemen,

where Saudi Arabia is leading a coalition


fighting Houthi forces, are exempt.
Some workers criticised the
announcement, which came a few days
after the countrys national day celebrations. One state employee said colleagues were complaining about the
timing, while others wondered about
any cuts to royal salaries.
The announcement did not address
whether similar austerity measures
would be imposed on the generous bursaries granted to many members of the
extended al-Saud ruling family.
The National Transformation Plan
published in June said the government
planned to trim public sector wages as a
proportion of the budget to 40 per cent
by 2020 from its current 45 per cent, or
a decrease in salaries from 480bn riyals
($128bn) to 456bn riyals by 2020.
To rein in this years expected budget
deficit of 13 per cent of gross domestic
product, Riyadh has been burning
through its foreign reserves and borrowing from local financial institutions.
The finance ministry is expected to
launch an international bond programme as early as next month, seeking
to raise up to $15bn.

UN and Jordan near to


refugee aid agreement
JOHN REED AMMAN

The UN and Jordan are closing in on a


deal to provide aid to more than 75,000
Syrian refugees stranded in dire conditions in open desert on a remote part of
the Syrian-Jordanian border, according to officials.
The refugees, in camps at Rukban and
Hadalat in Jordans eastern panhandle,
have not received any food or medical
aid other than water for more than
seven weeks, the last time Jordans military, which controls the area, allowed
humanitarian agencies into the area.
The government says the refugees,
who are mostly from northern and eastern Syria including areas controlled
by Isis pose a security threat. The refugees, who fled the five-year war in their
country, are mostly camped in a no
mans land between two earthen berms
that mark the border. Amman has been
calling on the international community
to help devise and pay for a solution to
what they see as a global problem.
Aid officials told the Financial Times
that a plan is now being discussed by UN
and Jordanian officials that would see
aid distributions resume a few kilometres west of the main encampment at
Rukban.
We need to recognise that this population is in a dire situation, said Mageed
Yahia, country director in Jordan for the
UN World Food Programme. There is a
lot of disease spreading; old people, children, pregnant women and there is
nothing, no medical aid, absolutely
nothing.
A government official confirmed
Amman was in talks on new logistical
arrangements through which aid and
water can reach the stranded Syrians a
couple of kilometres inside Syria.
There will be distribution points inside
Syria, in which community leaders can
receive aid and distribute it, he said.
The Jordanian office of UNHCR, the
main UN agency responsible for refugees, declined to comment.
Jordan declared the area a closed military zone in June after a suicide bomber
drove a car from the encampment at
Rukban and rammed it into an army
100 km

Damascus

Rukban

SYRIA

I RAQ

Civil war. Shattered truce

Hadalat
Ruwaished

Amman

JORDAN

SAU DI
AR AB IA

post, killing six people and wounding 14


others.
Since then, the kingdoms military has
only allowed one aid distribution to the
area. UN contractors have been delivering water. Jordan, a US ally which is
buckling under the financial, social and
security strain of hosting more than
1.3m Syrians, has recently taken a more
assertive stance on refugee issues with
world powers.
However, aid agencies say about
three-quarters of the refugees in the
camps at Rukban and Hadalat are
women and children.
Because of the encampments remote
location and the militarys decision to
seal off the area to humanitarian workers, aid agencies have had to study satellite images, which show the number of
tents and shacks erected by people fleeing the war has grown since June.
The figure we are using to be conservative is more than 75,000 people,
said Luis Eguiluz, head of mission in Jordan for Mdecins Sans Frontires, the

I dont think there is any


place in Syria similar to
the harsh environment
these people are living in
medical charity. They are not looking
for humanitarian assistance, not even
for settlement; they are looking for protection, mainly from air attacks.
MSF, which worked in the camps for
three weeks in May and June, found
rampant diarrhoea among children,
skin diseases related to lack of sanitation and cases of malnutrition, including 10 severe ones, Mr Eguiluz said.
Amnesty International this month
published video footage and satellite
images showing what appeared to be
makeshift graves and burial mounds in
the no mans land.
There may be people who are
besieged and living in similar need of
aid, but I dont think there is any place in
Syria similar to the harsh environment
these people are living in, said Mr Yahia
of the UN.
Working out a way of helping the refugees has proved logistically difficult and
politically sensitive. Jordans army says
that in addition to Isis, armed criminal
groups are active in the encampment.
The government describes the space
between the berms as no mans land, or
territory disputed with Syria. However,
some aid officials and human rights
activists assert the Syrian-Jordan border runs through the middle of the
camps, adding that any relocation of the
refugees north to allow Jordan a bigger
buffer zone would amount to refoulement, the legal term for returning refugees to the country they had fled from.

Islamic republic

Irans supreme leader blocks


Ahmadi-Nejad from poll fight
NAJMEH BOZORGMEHR TEHRAN

Irans supreme leader has blocked


Mahmoud Ahmadi-Nejad, the former
president, from contesting next years
elections in a move that highlights the
struggle among hardliners to identify a
suitable candidate to take on Hassan
Rouhani.
Mr Ahmadi-Nejad has been touring the
country in recent weeks to drum up support ahead of the May polls with regime
hardliners desperate to prevent Mr
Rouhani, the centrist president, from
securing a second term. But Ayatollah
Khamenei, the Islamic republics ultimate decision maker, said on Monday
that if Mr Ahamdi-Nejad ran in the election, it could polarise the country and
will be detrimental for the country.
A man [Mr Ahmadi-Nejad] came to
me . . . and I told him you should not
participate in that matter [presidential
poll], Ayatollah Khamenei was quoted
as saying in Iranian media. I said I did
not see it expedient.
Analysts say his decision to prevent
Mr Ahmadi-Nejad from running was
intended to avoid provoking middleclass voters who fear that if the former
president was returned to office, it
would damage Irans international relations and could lead to crackdown on
reformers and a rise in corruption.
Mr Ahmadi-Nejad, who served two
terms from 2005 to 2013, is one of Irans
most controversial political figures and
gained notoriety for his belligerent
stance towards the west, Israel and,
eventually, Ayatollah Khamenei. His reelection in 2009 for a second term triggered the biggest anti-regime protests
since the 1979 revolution, and led to the
deaths of scores of pro-democracy supporters. A populist who enjoys support
among poorer Iranians, his presidency

was also marred by widespread allegations of graft and restricting political


freedoms.
In contrast, Mr Rouhani, who won
2013 elections, has sought to improve
relations with the west and oversaw a
historic agreement with world powers
last year to scale down Irans nuclear
activities. In return, many western
sanctions on the Islamic republic were
lifted.
But hardliners who are mainly
based in the judiciary, the elite Revolutionary Guards, the parliament and a
constitutional watchdog called the
Guardian Council have been stepping
up attacks on him in the lead up to the
elections.
They argue that the nuclear agreement has failed to deliver any economic
dividends for ordinary Iranians, with
many foreign companies still wary of
investing in the republic.
Moderate forces counter that without
the deal, Irans oil exports the lifeblood of the economy would be nonexistent, while saying the easing of sanctions has helped the currency stabilise
and boosted economic growth.
Under the circumstances, hardliners
have no serious candidate who can win
the election which leaves them with no
choice but to attack Rouhanis economic
records, said an official in the presidential office.
But we remain wary that hardliners
may have a discrete plan to unveil their
main candidate in the last minute.
Hamid-Reza Taraghi, a senior politician and critic of Mr Rouhani, said hardliners had up to 18 candidates in mind.
He insisted that equitable distribution
of the nations wealth remained the
most popular demand among Iranians,
which, he said, meant hardliners had a
good chance of winning the election.

Wednesday 28 September 2016

FINANCIAL TIMES

INTERNATIONAL

Extremists threaten rise of Germanys AfD


Populist, anti-immigration party is winning regional seats but also attracting far-right supporters
GUY CHAZAN BERLIN

Alice Weidel objects to gays being called


a degenerate species, particularly
when the insult comes from her own
political party.
A former Goldman Sachs banker who
is in a same-sex relationship, Ms Weidel
is a senior figure in Alternative for Germany, the rising force in German politics. Though formed just three years ago
it has already won seats in 10 of Germanys 16 regional parliaments.
But with greater popularity has come
greater scrutiny, particularly of AfD politicians on the right of the party. One is
Kay Nerstheimer, who won a seat in
local elections in Berlin this month but
was forced to resign the party whip after
details emerged of his extremist past.
Mr Nerstheimer had been a member
of the extreme-right, Islam-hating German Defence League. He had described
Syrian refugees on his Facebook page as
disgusting worms and asylum seekers
as parasites, who feed off the life juices
of the German people. Gays belonged to
a degenerate species.
His is not an isolated case. This year,
one AfD lawmaker was outed as an antiSemite while one of the partys candidates was caught selling Nazi paraphernalia.
Ms Weidel, who describes herself as a
hardcore liberal, is horrified. The
AfD must weed out these people as rigorously as possible, she said in an interview. With them in our ranks we will
never be able to govern.
Feisty, populist and unapologetically
anti-immigration, the AfD portrays
itself as an insurgent movement that is
breaking the mould of German politics.
It claims, with some justification, to be a
broad church that has attracted defectors from both the left and right: indeed,
polling data show it has stolen votes
from Chancellor Angela Merkels Christian Democrats and the centre-left SPD
in almost equal measure.
But the Nerstheimer scandal risks
undermining the partys crossover
appeal and turning off mainstream Germans who, mindful of their countrys
Nazi past, are repelled by all forms
of political extremism.
It is a dilemma other fastgrowing European populist parties, such as the UK Independence party, have grappled with.
Often such organisations grow
so quickly that they lack the
resources to properly vet candidates.
The risk is that a lot of peo-

More than 90 per cent of the global


population lives in a place where the air
does not meet World Health Organisation safety guidelines, according to a
study from the UN agency that warns of
a public health emergency created
by rising pollution levels.

An Alternative
for Germany
rally this month
in Erfurt,
central
Germany.
Below,
Alice Weidel,
a senior figure
in the party
Martin Schutt/EPA

ple who voted for the AfD as a protest


but who in principle identify with democratic values will turn their back on the
party, says Everhard Holtmann, a
political scientist at Halle-Wittenberg
university. He predicts the AfD itself
could see an exodus of activists and lawmakers if the leadership fails to domesticate, or exclude, people like Nerstheimer.
The AfD began life in 2013 as a Eurosceptic party opposed to the Greek bailouts, and many of its early members
were liberals and academics. But the
party later lurched to the right, capitalising on popular anger with Ms Merkels
open-door refugee policy.
Many of the original members have
watched with dismay the growing influence of the nationalist, xenophobic
right. Markus Egg, a Berlin-based academic, says the university he works in is
a very multicultural, international
environment and he wants the AfD to
be a party that is open to foreigners.
For that reason he finds the Nerstheimer affair troubling.
Yet he has no plans to quit, for the
moment, at least. Still, Ill be monitoring closely whats happening, he
says. My personal view is that people [like Nerstheimer] should be
kicked out as quickly as possible.

With
people
like this we
have a real
credibility
problem
because
they
counteract
all the work
done by
more
moderate
members

Britain given warning on


Brussels Brexit power

ALEX BARKER BRUSSELS

The European Parliament has more


power over a British exit deal than any
EU member state and will be ready to
wield its veto, the assemblys chief negotiator has said in a warning over the
complexity of agreeing Brexit terms.
Speaking to the Financial Times, Guy
Verhofstadt, the former Belgian premier and leader of the parliaments liberal bloc, staked a claim for his institution to be involved in talks from day
one and urged Europe not to force Britain into another love-hate relationship it regrets.
Although EU states will play the decisive role in shaping Britains Brexit deal,
the European Parliament an unruly
body of growing clout must approve
exit terms and any future trade deal. For
Britain, that makes the need to cut deals
with Mr Verhofstadt and other parliamentary leaders almost unavoidable.
If the treaty says that we have to
approve [an exit deal], the parliament
has more power here than the individual member states, Mr Verhofstadt
said, referring to the fact they do not
have a veto. Right or wrong, this parliament has already refused things [and
rejected draft international pacts].
His devotion to a federal Europe and
fiery oratory (his schoolmaster resorted
to taping his mouth shut to stop him jabbering) have made Mr Verhofstadt a
bte noire of Brexiters. In Westminster,
his recent appointment was met with a
mix of alarm and mockery. Get thee
behind me, Satan, joked David Davis,
UK Brexit minister, when asked about
Mr Verhofstadts views. There is no love
lost: Mr Verhofstadt has called Brexiters
rats fleeing a sinking ship, depicted
the Leave campaign as full of lies, and
said it would be mad to give Britain

WHO calls
air pollution
public health
emergency
PILITA CLARK LONDON

Interview. Guy Verhofstadt

European Parliament can veto


deal, says its negotiator, whom
UK minister likened to Satan

Environment

the single market advantages if it


clamped down on EU immigration.
Yet in an extended interview, Mr Verhofstadt kept his sharper views in
check, denying any ill-will towards Britain, quoting former prime ministers
Margaret Thatcher and Winston
Churchill and talking with pride about
his vintage Aston Martin and Elva
sports cars. I like Britain. I race British
cars. How more a lover of Britain can
you be than racing a British car?
For all the friction with Brexiters, Mr
Verhofstadts views with them converge
on one point: the EU is doomed unless it
seizes a last chance to integrate and
build federal institutions.

I like Britain. I race British


cars. How more a lover of
Britain can you be than
racing a British car?
You have to put everything within a
clear, transparent, comprehensive,
framework and I think in that sense
Brexit is also an opportunity because
maybe that could be the starting point
or so to simplify our different relationships we have outside the union, as it is
necessary inside the union.
He has long argued countries like
Britain that are unwilling to make the
federal leap should have a special associate status. It is an arrangement first
outlined by the EUs founding fathers in
the 1950s that may suit the British.
Divorces are painful, at least painful . . . I was a lawyer in the past so I did
a few of them, Mr Verhofstadt said.
Instead of making this a painful

divorce that weakens Europe and Britain, lets try this time to put in place a
system where everybody feels
. . . happy is maybe too much, but comfortable. Is that not the right way?
I want to avoid the mistake from the
past where we give the impression that
we push Britain in one or other direction. That has to be avoided, I think,
absolutely. Not to have this love-hate
relation as we got for nearly 40 years.
Behind the conciliatory tone, however, Mr Verhofstadt hinted at how difficult it might be for Britain to tailor an
exit deal to its political needs. Asked
whether he could imagine the City of
London remaining the euros financial
centre after Brexit he replied: If [Britain] is fully-fledged in the internal market and they accept the four freedoms,
then OK. But then I ask myself: what
was the reason to go out of the EU?
His reference is in particular to the
principle of free movement, which Britain is looking to restrict while preserving its trading rights. Politically everybody had already said 100 times, 1,000
times, in every member state here in the
parliament, in the commission, that we
cannot undo the four freedoms.
Mr Verhofstadts career has charted
the slow-motion separation of Britain
and the continent. Once nicknamed
baby Thatcher for his aggressive liberal views, Mr Verhofstadt hosted a joint
Belgium-UK cabinet meeting in Ghent
with Tony Blair, then prime minister.
But that relationship descended into
acrimony over the Iraq war, with Mr
Verhofstadt hosting the praline summit of countries opposed. Against British objections he pushed for greater EU
defence co-operation; a few years later
Mr Blair duly vetoed his bid to become
European Commission president.
Does he hold a grudge? Is he offended
by being likened to Satan? From time
to time you can use a joke to say what
you think. British humour is . . . he
said, trailing off. The proof will be in
how you say? in eating the pudding.
Peter Mandelson see Comment

There are others. Rudolf Mller, an


AfD politician in the western state of
Saarland who runs an antique shop, was
discovered to have been peddling swastika-decorated medals and concentration camp money a crime in Germany.
Jrg Meuthen, the partys joint
national leader, said such behaviour was
incompatible with membership of the
AfD. The incident comes just months
after Mr Meuthen had to grapple with a
similar scandal involving Wolfgang
Gedeon, an AfD politician who was
elected to the regional parliament of
Baden-Wrttemberg in March.
After Mr Gedeon took up his seat,
German media quoted from books he
had written in which he demonised Jews
and trivialised the Holocaust. In one, he
said that the Talmudic Ghetto Jews are
the internal enemy of the Christian
west. In another, he claimed that the

Protocols of the Elders of Zion, a forgery


that alleges a Jewish plot to rule the
world, were authentic. Mr Gedeon later
resigned from the AfD faction in the
Baden-Wrttemberg parliament led
by Mr Meuthen but only after the faction split over whether to expel him.
With people like this we have a real
credibility problem, says Ms Weidel,
because they completely counteract all
the work done by more moderate AfD
members on a voluntary basis.
Getting rid of the bad apples, however,
is no easy task. It is notoriously difficult
to exclude members of a political party
in Germany.
Ms Weidel also dismisses the view
that the Nerstheimer and Gedeon
affairs speak of a deeper malaise in the
party. I wouldnt say so, considering we
only have two such cases among all the
AfD lawmakers that have been elected.

The most detailed research on outdoor


pollution in individual countries undertaken by the organisation shows an estimated 3m deaths a year can be linked to
dirty air from coal-fired power plants,
old cars, factories and other sources.
Millions more are affected by smoke
inside homes from stoves or fires fuelled
with wood or dung, meaning a total of
6.5m deaths were associated with air
pollution in 2012, the agency said.
Air pollution continues to rise at an
alarming rate, and affects economies
and peoples quality of life. It is a public
health emergency, the study says.
An interactive map made by the
agency reveals stark disparities among
countries levels of particulate matter,
one of the most dangerous forms of air
pollution. Tiny particles, no bigger than
2.5 micrometres, can penetrate deep
into the lungs and cardiovascular system. WHO guidelines say annual average concentrations should not exceed 10
micrograms per cubic metre.
The limit is met in much of the US,
Canada and countries such as Australia
and New Zealand. But many places in
Europe, including parts of the UK,
France and Germany, exceed it. More
than 90 per cent of the UK population
lives in areas that break WHO limits,
according to the studys model, developed with an international team led by
the University of Bath.
The higher levels of pollution in
Europe could be down to the number of
EU countries that encouraged the use of
diesel cars compared with North America, said Annette Pruss-Ustun, a co-author of the study.

FINANCIAL TIMES

Wednesday 28 September 2016

US DEBATE

Clintons tactics rattle Trump

GLOBAL INSIGHT
WASHINGTON

Democrat turns the tables on a tycoon who has specialised in irritating his opponents
DEMETRI SEVASTOPULO WASHINGTON

Immediately after the first presidential


debate, Donald Trump entered the
media spin room and told reporters
that his battle with Hillary Clinton had
gone even better than expected. But his
criticism of the moderator and microphone hinted that he did not buy his
own spin: They gave me a defective
mic, he said. Was that on purpose?
Over the past 15 months, Mr Trump
has praised the media when he has done
well, and lashed out when his performance was mediocre. While he and his
surrogates argued that he was presidential in the first of three debates on
Monday night, most experts agreed that
the man who brilliantly needled his
rivals in the primary let Mrs Clinton get
under his skin.
Trump played distracted defence.
He spent too much time explaining his
tax returns, views on the Iraq war and
other . . . dead ends and not nearly
enough time holding Hillary accountable for her own record, said Chad Kolton, a former Bush administration official. It was a terrible performance that
will likely blunt any momentum he
had.
Ahead of the encounter, some of the
strategists who prepped the Republi-

Forex reaction
Currency trading rooms
award victory to Democrat
While political pundits pontificated, an
instant assessment of the US
presidential debate was to be found on
the floors of currency trading rooms:
foreign exchange activity pointed to
Hillary Clinton emerging victorious over
Donald Trump.
Tokyo traders, at their desks as the
candidates set out their stalls, bought
and sold every quip, interruption and
snarl of their first head-to-head, driving
notable swings in the Mexican peso,
Canadian dollar and Japanese yen.
Those moves were broadly
maintained in the European and US
sessions, consolidating the forex

TV clash
Rivals go toe
to toe over
racism, trade
deals, cyber
security and
email scandals

Poll tracker
Which White House candidate is
leading in the polls?
ft.com/uspolltracker

cans for the primary debates said one


key to beating Mr Trump was not taking
his bait. But Mrs Clinton went one step
further. She turned the tables on her
opponent, and accused him of being a
racist who rips off ordinary Americans
and has in the past avoided paying federal income tax.
I had said she should not take his
bait. Instead what happened is he took
her bait, said Robert Klaffky, a strategist who helped Ohio governor John
Kasich prepare for the Republican
debates. Ive never seen him do that so
repeatedly.
While voters may take a more charitable view of his debate performance
which happened in the primaries to the
surprise of pundits most analysts
argued that the Democratic candidate
has halted his momentum, for now. Mr
Trump caught up with Mrs Clinton in
the polls in recent weeks after a raft of
mis-steps by her, including when she
said that half his fans were deplorables and her delay in revealing that she
had pneumonia, which resurrected
questions about her transparency.
Mr Trump has moderated his tone
over the past month after making Kellyanne Conway, a pollster who helps
Republicans win female voters, campaign manager. This has helped him

markets immediate impression: that


Mrs Clinton put on a more convincing
show than the Republican nominee, that
the US relationship with its immediate
neighbours will remain where it is, and
that the yen will not, for now at least, be
called upon to perform its traditional
role as a haven currency in times of
profound global uncertainty.
Its very rare, said a currency trader
at a large Japanese house, that you
have a whole market responding to the
tone of one persons voice when that
person isnt a central bank governor.
Across trading floors, the Mexican
peso assumed the job of reflecting
the currency markets reading of the
debate. After several weeks of sustained
declines against the dollar in strong
correlation, according to traders, with
Mr Trumps closure of polling gaps with

BARNEY JOPSON AND SAM FLEMING


WASHINGTON

Donald Trump attempted to paint his


opponent as the author of many of
Americas misfortunes while Hillary
Clinton portrayed Mr Trump as illsuited for the presidency. Here are eight
highlights of the clash:

Trumped up
trickle-down

Mrs Clinton argued that Mr Trumps


economic plans would benefit wealthy
individuals like himself, calling his proposals trumped-up trickle-down
because they entailed large tax cuts for
the wealthiest. She brandished policies
that she said were focused on fairness
and helping the middle class through
broad-based, inclusive growth.
Mrs Clinton portrayed Mr Trump as a
son of privilege, saying his business
career was kick-started by a $14m loan
from his father. Mr Trump described
the loan as very small, adding: I built
it into a company thats worth many,
many billions of dollars, with some of
the greatest assets in the world, and I say
that only because thats the kind of
thinking that our country needs.

Trans-Pacific
Partnership

Mr Trump hit his mark when he went


for Mrs Clinton on her shifting position
on the Trans-Pacific Partnership trade

I had said
she should
not take
his bait.
Instead
what
happened
is he took
her bait

On the margins:
Donald Trump
and Hillary
Clinton take
part in the first
presidential
debate at
Hofstra
University,
New York
Mike Segar/Reuters

close what was a big deficit in the


national polls, narrow the gap in key
swing states such as Florida and Pennsylvania, and to pull ahead in the bellwether state of Ohio.
His new approach led many people to
speculate that he would attempt to look
more presidential on the stage with Mrs
Clinton. But while Mr Trump started on
a solid footing, Mrs Clinton quickly
forced him off balance. With relentless
attacks on his character, she caused Mr
Trump to ramble aimlessly instead of
attacking the woman he calls Crooked
Hillary over her controversial email
server and their differences over
Supreme Court appointees.
The game plan was that he was going
to show up and be civil and charming
and all of the pre-debate gamesmanship . . . was to set expectations that he
would show up and be combative, said
Rick Tyler, a former top aide to Ted
Cruz. He confused not attacking Hillary personally with not going after her
very vulnerable record on many issues
and didnt lay a glove on her.
Mr Tyler said the danger for Mr
Trump was he would swing the pendulum back in the other direction when
the candidates meet for the next debate
in St Louis, Missouri, on October 9.
While Mr Trump has spent weeks try-

Mrs Clinton the peso surged 2 per


cent against the dollar during the
debate as the market placed its bet on
the Democratic candidate, and held its
level into the European session.
Bank analysts are watching the peso
closely because it is seen as a
barometer of risk for emerging markets
(EM) more broadly. Other EM currencies
rode the wave of what Esther Reichelt,
FX analyst at Commerzbank, called a
marked shift in risk sentiment.
Notable currency gainers were the
Korean won and the South African rand,
both up more than 1 per cent, and the
Indonesian rupiah.
Just as striking was the surge in the
Canadian dollar against the yen, as the
debaters hit their respective strides and
Tokyo dealers opted to play in a more
liquid currency market than the yen

deal. He reminded the former secretary


of state that she had been in favour of
the deal but then had altered course.
Mrs Clinton rejected that, saying she
had hoped it would be a good deal but
that she could not support the final
terms. So is it President Obamas
fault? Mr Trump asked, exposing the
awkward ground Mrs Clinton has stood
on when it comes to her trade policies.

Criticism of the
Federal Reserve

The US central bank has repeatedly


been on the receiving end of barbs from
Mr Trump, who has claimed without
supporting evidence that it is doing the
bidding of Barack Obama by keeping
interest rates low. He doubled down
during the debate, bringing the Fed up
during a segment that was supposed to
be focused on taxes. The US, he said, was
in a big, fat, ugly bubble, in part
because the Fed was doing political
things by keeping rates very low. The
day Obama goes off, and he leaves, and
goes out to the golf course for the rest of
his life to play golf, when they raise
interest rates, youre going to see some
very bad things happen, he said.

Traders
drove
swings
in the
Mexican
peso,
Canadian
dollar and
Japanese
yen

ing to ensure he wins the white Republican women voters who are crucial to his
chances, he may have hurt those efforts
with his performance on Monday. When
the moderator asked him what he had
meant by a previous comment that his
opponent did not have a presidential
look, he tried to argue that he had been
talking about her stamina. But Mrs Clinton demolished his attack, and came
back with one of her strongest punches.
You know, he tried to switch from
looks to stamina. But this is a man who
has called women pigs, slobs and dogs,
and someone who has said pregnancy is
an inconvenience to employers, Mrs
Clinton said.
Mr Tyler said that Mrs Clinton had
locked down the female and minority
vote with her performance. But Mr
Klaffky argued that, overall, the debate
might have little impact on the course of
the election. I judge a debate based
upon whether a candidate earns any
new voters as a result. Im not certain
either did much on that measure, said
Mr Klaffly. So I think it was a missed
opportunity for both. He certainly did
not help himself with women but she
didnt do much to help herself with
white men.
See Editorial Comment
Martin Wolf see Comment

against the peso. It was really


surprising how closely the [Canadian
dollar/yen] pair was tracking the
debate, said Yunosuke Ikeda, Nomura
FX strategist.
The Canadian dollar, added Mr Ikeda,
is being used as a gauge of Mr Trumps
election prospects because of his
rhetorical attacks on the North
American Free Trade Agreement.
Market participants will now be
watching closely the incoming polls in
the week ahead to see if the first
presidential debate has had a material
impact on the publics voting
preferences, said Lee Hardman,
MUFGs currency analyst.
Reporting by Leo Lewis in Tokyo, Peter
Wells in Hong Kong and Roger Blitz
in London
See Markets

returns. Mrs Clinton had put forward


theories for why Mr Trump had not
released them, one of which was that he
paid nothing in federal income taxes.
The only years that anybodys ever
seen were a couple of years when he had
to turn them over to state authorities
when he was trying to get a casino
licence, and they showed he didnt pay
any federal income tax, said Mrs Clinton. Mr Trump responded: That makes
me smart.

Taking responsibility for the


email scandal

Some Democrats have cringed when


Mrs Clinton seeks to play down her use
of a private email server with lengthy
legalistic explanations. She avoided that
on Monday night and instead gave a
terse response when asked about her
emails while secretary of state. If I had

Mr Trump found himself on sticky turf


when it came to the inevitable questions
over why he was not releasing his tax

People watch the debate on a TV


outside a Hollywood office building

Republican nominee
sets himself a low bar
and fails to clear it

t was a tale of contrasting preparations. People


thought Donald Trump was gaming expectations
when he said he had not spent much time working on
the first presidential debate. It turns out he was telling
the truth. Mr Trump set his bar as low as possible yet
was still unable to clear it. It did not seem as if he even
tried.
If he expected to be asked about his role in stoking the
Obama birther theories, he did not betray it. His answer
was rambling and self-congratulatory. The same applies to
what he said about his unpublished tax returns. As is her
wont, Hillary Clinton not only prepped intensively but
happily owned up to it.
I prepared for this debate, she said, after Mr Trump
observed that she must have, and I am prepared to be
president.
Pundits joked it would be like the high school president
debating the wisecracking jock. Take away the wisecracks
and they were not far wrong.
But any Trump performance, however bad it seems,
should come with skyscraper health warnings. Time and
again in the Republican primary debates what appeared
disastrous to some went down swimmingly with others. In
a country as polarised as America, viewers filter different
realities. It is not only the screen that is split but the perceptions.
Mr Trumps poll numbers may not bear out what was a
poor debate on style and substance. But he is unlikely to
receive a boost. He needed to pull off what Ronald Reagan
did against Jimmy Carter in 1980: appear calm, presidential and likeable. Unlike
Reagan, Mr Trump will
He was weak on
get two more bites at the
cherry. But his first facts and clearly
attempt was hectoring
had no idea what a
and overbearing.
It was also weak on no first use nuclear
facts. He clearly had no
posture meant
idea what a no first use
nuclear posture meant,
for example. The property mogul flailed badly when Mrs
Clinton challenged him on his business record. If they outsourced Trump fact checking to Bangalore, it could
become a successful cottage industry.
Yet few voters bother with earnest fact checking. If
something feels right and a candidate captures their sentiments they can be swayed. Mr Trumps summary of US
trade policy was factually contentious. But his claim that
the North American Free Trade Agreement was the worst
trade deal in history would strike a chord with millions of
Americans. So too would his anger in talking about China,
Mexico and other US trading partners.
One of Mrs Clintons weakest moments came in her
response to Mr Trumps claim that she had done nothing in
30 years to stem the export of industrial jobs. It may have
been unfair and Mr Trump repeatedly spoke over Mrs
Clintons attempts to answer. But his point will have hit
home with many Americans. They may not care less about
Mr Trumps business leverage ratio, or the true estimate of
his net worth. They feel enraged and pessimistic and he
channelled it.
Will Mrs Clinton receive a debate bounce? After several
weeks of bad news, a pneumonia diagnosis and a gaffe
about deplorable Trump supporters, she is certainly due
one. The polls have been steadily tightening in the past two
weeks. She ought now to recover a modest lead. But opinions are too hard set on both sides for Mrs Clinton to run
away with the race.
In this first debate she came across as collected and
impervious to provocation and had clearly done her homework. She also seemed in good health and comfortably batted off Mr Trumps claim that she suffered from a lack of
stamina. But there are two debates and countless public
events left to go.
Among her supporters, the pendulum has swung from
panic to complacency and back again since the July conventions. In the next six weeks it will probably keep on
swinging.
edward.luce@ft.com

to do it over again, I would, obviously, do


it differently. But Im not going to make
any excuses. It was a mistake, and I take
responsibility for that.

Accusations
of racism

Mr Trump sought to claim credit for


ending the controversy over Mr
Obamas birthplace by declaring shortly
before the debate that he accepted the
president was born in the US. I think I
did a great job and a great service not
only for the country, but even for the
president, in getting him to produce his
birth certificate, he said.
But Mrs Clinton seized on the chance
to portray Mr Trump as racist, saying he
started his career back in 1973 being
sued by the justice department for racial
discrimination because he would not
rent apartments in one building to African-Americans. So he has a long record
of engaging in racist behaviour. And the
birther lie was a very hurtful one. You
know, Barack Obama is a man of great
dignity. And I could tell how much it
bothered him and annoyed him.

Theories about
Trumps taxes

Edward
Luce

Cyber security, Russia and


an obese hacker

The praise Mr Trump has lavished on


Russian president Vladimir Putin has
created what Democrats see as a vulnerability. Mrs Clinton sought to exploit it
when the debate turned to cyber secu-

rity. I was so shocked when Donald


publicly invited Putin to hack into
Americans, she said. That is just unacceptable. Mr Trump, however, managed to shift attention away from Russia
by conjuring a memorable alternative
image.
I dont think anybody knows it was
Russia that broke into the DNC, he said.
It could also be China. It could also be
lots of other people. It also could be
somebody sitting on their bed that
weighs 400 pounds, OK?

Miss Piggy makes a


surprise appearance

Mrs Clinton waited until almost the end


of the debate to bring up controversial
comments Mr Trump has made about
women.
This is a man who has called women
pigs, slobs and dogs, and someone who
has said pregnancy is an inconvenience
to employers, who has said women dont
deserve equal pay unless they do as
good a job as men, she said. She went on
to say Mr Trump had called a woman in
a beauty contest Miss Piggy and then
Miss Housekeeping because she was a
Latin American.
Mr Trump responded by saying he
was resisting the temptation to say
something extremely rough to Hillary,
to her family. But he told CNN afterwards that Bill Clintons indiscretions
might come up in the second debate.

Wednesday 28 September 2016

FINANCIAL TIMES

INTERNATIONAL
World economy

Alerts sounded on global deflation and fall in trade


IMF urges greater state
intervention while WTO
fears protectionism rise
SHAWN DONNAN WASHINGTON

The world economy is at risk of slipping


into a deflation trap and faces a historic
drop in global trade that should serve as
a wake-up call for governments around
the world, two leading economic institutions have warned.
The International Monetary Fund
warned yesterday that a broad-based
phenomenon of low inflation, fed by a
collapse in commodity prices and faltering demand, risked deteriorating into a
full-blown deflation trap, particularly in
advanced economies.
Governments needed to join central

banks, which were increasingly seen to


be running out of options, to do more to
boost growth and raise incomes, it said.
The funds warning, contained in
analytical chapters from its forthcoming World Economic Outlook, came as
the World Trade Organisation forecast
global trade volumes would rise only
1.7 per cent this year. This would be the
slowest increase since the 2008 financial crisis and a big reduction from the
2.8 per cent growth it forecast in April.
The dramatic slowing of trade
growth is serious and should serve as a
wake-up call, said Roberto Azevdo,
the WTOs director-general.
The trend was particularly worrying
in the context of an increase in protectionism and anti-globalisation rhetoric
seen in the US and around the world, he
said, adding: This is a moment to heed

the lessons of history and recommit to


openness in trade, which can help to
spur economic growth.
The twin warnings highlight mounting concerns over the world economys
slow recovery from the 2008 crisis and
the tepid response by policymakers.
They are likely to be amplified next
week when finance ministers and central bank governors from around the
world gather in Washington for the
annual meetings of the IMF and World
Bank.
The warnings also point to two key
areas of concern. International institutions are increasingly worried about the
potential impact on a fragile global
economy of the rise of populist politicians, such as US presidential candidate
Donald Trump, and the protectionist
policies they put forward. They are

equally frustrated by what they see


as the failure of many governments to
take tough decisions and their continuing overreliance on central banks and

The dramatic slowing


of trade growth should
serve as a wake-up call
Roberto Azevdo, WTO chief

monetary policy to respond to slow


growth.
The IMF has for years urged governments to adopt more growth-friendly
fiscal policies and to push structural
reforms to stimulate consumption and
investment.
Alongside the warning on inflation,
the IMF called for governments to target
stagnant wages and adopt policies such
as raising the minimum wage to boost
incomes.
Such a response, IMF economists
wrote, was particularly necessary in
advanced economies, where the scope
of monetary policy to further stimulate
demand is perceived to be increasingly
constrained and policy rates are not
far from their effective lower bounds.
The IMF also commented on the slowdown in world trade, blaming it largely

Cities

Commodities. Reform

Beijing moves
to calm
property
market frenzy

China adopts
triple strategy
to forge sleeker
steel industry
Programme of closures, asset
restructuring and mergers
aims to address overcapacity
CHRISTIAN SHEPHERD BEIJING

It was a long road to insolvency for


Dongbei Special Steel Group, a stateowned producer in Chinas north-eastern industrial heartlands that first
defaulted in March after Yang Hua, the
companys chairman, was found dead
after a suspected suicide.
Efforts to save the company through
months of negotiations between creditors and the Liaoning government,
Dongbei Specials owner, got nowhere.
On Thursday, eight defaults in, the company finally entered bankruptcy proceedings with a restructuring plan
expected to be enacted next month.
Dongbei Specials demise was the latest shock in a seismic week for Chinese
steel, where the first act of a Beijing-orchestrated plan to forge a more efficient
and less indebted industry is under way.
Similar to earlier attempts, Beijing
hopes to use a strategy of closures, asset
restructuring and mergers to create 10
groups responsible for 60-70 per cent of
the countrys production by 2025.
If they can merge with others, they
merge, says Li Hongmei, an analyst at
S&P Global Platts. If not, they will ask
the banks if they can change debt for
equity. If that fails, then they will choose
the last resort that will be bankruptcy.
The sectors problems with overcapacity have global consequences. Last
year Chinese steelmakers failure to cut
production to match falling domestic
demand led to a glut of Chinese steel
flooding global markets, dragging down
prices and throwing the global industry
into crisis.
International steelmakers are fighting
the rise of Chinese exports with a growing number of anti-dumping cases but
Beijing says the continued rise in

exports merely reflects Chinese steels


competitiveness.
To increase it further, Beijing is pushing top-down consolidation. An
arranged marriage between two of
Chinas state-owned steel groups officially started a week ago.
The absorption of Wisco by Baoshan
Steel was the first step to come out of
continuing discussions between Baosteel Group and Wuhan Iron & Steel
Group aimed at creating a steel producer second in output only to ArcelorMittal.
Aside from clearing out zombies
and creating super groups, Beijing is
encouraging local governments to carry
out debt restructuring plans to deal with
indebted local steel companies, either
via debt-for-equity swaps or bond issuance.
Last Sunday a restructuring plan
including the issuance of corporate
bonds was finalised for Bohai Steel
Group, a producer owned by the Tianjin
city government with debts of
Rmb192bn ($29bn).
Debt-for-equity deals in steel are part
of a broader attempt to deal with corporate debt, says Tomas Gutierrez of
Kallanish, a research group. There is
definitely a trend and its definitely
political, because creditors dont agree
to these things willingly or easily, he
says.
Pushing through the ambitious Chinese steel restructuring plan depends
on Beijings ability to keep in line provincial governments which, worried
about unemployment and tax income,
often keep local lossmaking producers
afloat using subsidies and loans.
President Xi Jinpings rapid centralisation of power through a sweeping
anti-corruption campaign has given
him greater control over the provinces
and their enterprises than his immediate predecessors.
The latest move in Mr Xis
political house-clearing was the expuls i o n o f 4 5 l a w m a ke r s f ro m
Liaoning, one of Chinas most indebted

on a collapse in investment and general


weakness in the global economy.
But it said the waning pace of trade
liberalisation in recent years and an
uptick in protectionist measures had
also had an impact.
The slowdown in trade volumes in
recent years, which has ended a longrunning pattern of trade growing at as
much as twice the rate of global gross
domestic product, has perplexed economists.
If the latest WTO forecast for this year
holds, it will be the first time in 15 years
or since China joined the institution
that global trade has grown more slowly
than global GDP.
The IMF has forecast global growth of
3.1 per cent this year, although that may
be revised downwards when it releases
new forecasts next week.

CHRISTIAN SHEPHERD BEIJING

China is trying to cool overheated


property markets in the countrys largest cities, launching stringent measures at local level to damp sales even
punishing overzealous estate agents.

Off the shelf:


a labourer
marks steel bars
at a factory in
Huaian, Jiangsu
province
Patty Chen/Reuters

provinces and home to Dongbei Special.


Mr Xis clout may improve the odds of
restructuring, according to analysts, but
they warn that deals announced last
week may have a limited effect on steel
overcapacity. The overall impact of
recent announcements on oversupply is
unlikely to be significant, says Mr Gutierrez.
Restructuring deals tend to save profitable capacity by creating a separate
entity with a lower debt burden so it can
continue producing.
For Bohai, this means the formation
of a subsidiary consisting of the companys premium assets that will hold
only Rmb50bn of a total debt pile of
Rmb192bn.
For Dongbei Special, it is likely that
Fushun Special Steel, a high-end steel

Kashmir tensions

10
Number of groups
Beijing wants to be
responsible for
60-70 per cent of
the countrys
production by 2025

Rmb192bn
Debt burden of
Bohai Steel Group, a
producer owned by
the Tianjin city
government

pipe manufacturer, will be spun off and


continue producing, analysts say.
The drive to preserve and promote
high-end, coastal capacity while cutting
off low-end, inland capacity is present
throughout the restructuring plans,
including the headline Bao-Wu merger.
Coastal capacity is growing, and
thats the main trend of the next two
years, says Mr Gutierrez. Baosteel has
a plant in Guangdong, Wisco has one in
Guangxi, and they are ramping up to
just under 10m tonnes of capacity a year
each by the end of 2017. What [international steel producers] really should be
asking is whats happening with the
extra 50m tonnes of capacity being
commissioned on the [Chinese] coast in
the next two years.
See Lex

Amid a 15-month price surge in the


countrys biggest cities, with some such
as Xiamen recording annual growth
above 40 per cent in August, municipal
governments have moved this week to
reduce what Beijing sees as excess speculation.
Hangzhou, host of this monthss G20
summit, yesterday introduced rules
requiring buyers at auctions of highpriced land to pay the full amount
within a month, a move aimed at reining
in Chinas infamous land kings
developers prepared to pay above the
market rate during pricing booms.
Local governments are also trying to
put a lid on a boom in home purchases
resulting from earlier attempts to ease
inventory by lowering downpayment
requirements and transaction taxes.
Nanjing, capital of Jiangsu province,
on Monday became the fourth big second-tier city to introduce restrictions on
home sales by limiting those without
local residence permits to a single purchaseinthecityanddenyingfurtherpurchasestothosewithtwoormorehomes.
Meanwhile, an editorial yesterday in
official Communist party newspaper
the Peoples Daily warned against speculation in the housing market, saying
the stormy situation in national large
midsize cities housing prices has created a new real estate market craze.
The article named a number of companies from outside the sector that it
said had increased their property
investments in the hope of making a
quick profit during the upswing.
The government is also targeting
estate agents who are considered to be
hyping the market by creating a false
sense of urgency, often telling buyers to
snap up deals immediately or lose out.
Several Shanghai estate agents were
arrested this month for prompting a
spate of divorces in the city by telling
residents unmarried couples would be
exempt from higher downpayment
requirements.

1MDB fallout

India threatens to hit Pakistans water supply Singapore warned over financial crime record
KIRAN STACEY NEW DELHI

Narendra Modi has turned to an unorthodox tool in his attempts to punish


Pakistan for this months attack on an
Indian army base in Kashmir: water.
Warning yesterday that blood and
water cannot flow together, the Indian
prime minister threatened to maximise
Indias use of water in three rivers that
flow through India to Pakistan: the
Indus, Jhelum and Chenab. This would
limit the amount of water that flows to
Pakistani agriculture and hydroelectric
projects.
Mr Modi has also suspended the
meetings of commissioners employed
by Pakistan and India to arbitrate on
disputes relating to the usage of water
from six rivers flowing through India
into Pakistan.
New Delhi is having to be inventive in
its efforts to retaliate against Pakistan
after the attack on the Uri army base,
which killed 18 Indian soldiers.
The prime ministers Bharatiya Janata
party has put the blame for the attacks

on Islamabad and the Pakistan-based


Islamist extremist group, Jaish-e-Mohammad. Officials in Islamabad have
dismissed Mr Modis comments about
Pakistan since that attack as mere
propaganda. But with analysts warning
that India has limited scope for military
retaliation, New Delhi is looking for
other options to assert itself over its
neighbour.
India could limit the water to which
Pakistan has access without breaking
the terms of the Indus water treaty,
which both countries signed in 1960.
The agreement entitles India to 20 per
cent of the water that flows through the
Indus river, enough to irrigate 1.3m
acres. Currently, however, the country is
using enough to irrigate just 800,000
acres, according to reports sourced to
Indian officials.
But while increasing its water usage
might be a convenient and legal way to
take revenge on Pakistan, it would not
necessarily be easy. India lacks the facilities to store the extra water, and would
have to build more.

Water has been a regular source of


tension between the two countries. The
arbitration panel that Mr Modi has suspended was set up in 2010 after a dispute over Indias plans to build a 330megawatt hydroelectric project in
Kashmir on the Kishanganga river.
Pakistan claimed that project
would adversely affect its own 969MW
Neelum-Jhelum project.
Meanwhile, the next tool at Mr Modis
disposal appears to be trade.
The prime minister will chair a meeting tomorrow to review the most
favoured nation status it has granted to
Pakistan under World Trade Organisation rules. Under those terms, India cannot levy higher tariffs or impose lower
trade quotas on Pakistan than it does on
any other nation.
According to figures from the Associated Chambers of Commerce of India,
Pakistan accounts for just 0.83 per cent
of Indias total exports, while imports
make up 0.13 per cent.
Additional reporting by Farhan Bokhari in
Islamabad

JEEVAN VASAGAR SINGAPORE

Singapore has been urged to do more to


combat money laundering in a report
by a global watchdog that highlights
the reputational risk posed by the
1MDB scandal in Malaysia.
The Financial Action Task Force said
Singapore was effective in tackling
smaller-scale financial crime involving
money mules who courier cash for
criminals but must strengthen the capability of law enforcement agencies to
identify and investigate bigger, crossborder cases.
Singapore should more aggressively
target the more complex cases expected
of a sophisticated financial centre, the
intergovernmental body said.
The report, based on a review of Singapores measures against money laundering conducted late last year, finds
that few foreign cases were prosecuted
and low amounts of criminal proceeds
were confiscated.
Singapore is conducting a wide-ranging inquiry into illicit fund flows linked

to the 1MDB state investment fund of


Malaysia. The city states regulator
admitted in July that the scandal had
dented Singapores reputation as a
trusted financial centre, and pledged
more intrusive inspections of banks.
Authorities have found lapses at a
number of banks in Singapore that
The city states
regulator admitted
in July the scandal
had dented its
reputation as a
financial centre

acted as conduits for flows of funds from


1MDB.
Singapore authorities said in response
to yesterdays report that they intended
to develop more sophisticated data analytics as part of a broader push to
strengthen policing of financial crime.
The task force, based in Paris, also
warned that the majority of Singapores
dealers in precious stones and metals
are not covered by anti-money launder-

ing supervision. In contrast with the


financial sector, the financial penalty
structure . . . is quite diverse and
enforcement of the sanctioning regime
for non-compliance . . . is at an early
stage, the report said.
The report says Singapores transparency measures are insufficient to ensure
information on beneficial owners the
people who ultimately own and control
companies is available in a timely
manner. Singapore should be more
alert to the terrorist financing risks
associated with its geographical location and its position as a financial hub,
it suggests.
Since the review, six Bangladeshi men
have been jailed in Singapore on terrorist financing charges, on suspicion of
planning attacks in their home country.
Malaysias government has been
rocked by allegations that about $4bn
has been misappropriated from state
companies, following investigations by
regulators into 1MDB. Flows of money
linked to the fund are under investigation in at least six countries.

FINANCIAL TIMES

Wednesday 28 September 2016

ARTS

Alien invasion with world-class potential

T H E AT R E

Imogen
Shakespeares Globe, London

aaaee
DANCE

Ian Shuttleworth

The Seasons Canon

Cymbeline is hardly a neglected play, but


its still not one of the more popular of
Shakespeares late works, so its somewhat improbable that this should be the
third version of it presented at Shakespeares Globe in 12 months. Yet its not
simply for the sake of ringing the
changes that director Matthew Dunster
has so geed it up.
This is a thoroughly modernised version: text is cut and added to render
more comprehensible the plot of an
ancient British king manipulated by his
wife into resisting the Romans, his
daughters marital fidelity tested and
tricked, exiles and disguises aplenty.
The setting becomes contemporary east
London, with virtually the entire cast
dressed in Adidas and an economy
based on white powder and weed. An
urban soundtrack of grime and ragga
pulses through the proceedings. The climactic British/Roman battle is staged in
flying harnesses, with the kind of moves
which in a screen context have become
cynically known as wire-fu.
Dunsters production, led by Maddy
Hill (formerly Danny Dyers daughter in
EastEnders) as the now-titular Imogen
(simply because she has twice as many
lines as her father Cymbeline, played by
Jonathan McGuinness), works on its
own terms. The trouble is that one wonders in what has already become a
mantra during Emma Rices first season
at its helm what its doing at the Globe.
Once again, its not a matter of snobbery . . . although, God knows, cutting
almost all of the plays most famous and
poignant section Fear no more the heat
othsun while having Imogen lament
her supposed widowhood by singing a
Daft Punk number does make the nostrils flare in that respect. But no, its
about waste of potential. When a production like this would work as well in
any space of comparable size; when it
ignores the configuration, structure and
historical aspect of the Globe . . . then
where is the identity of the Globe, and
what is its particular purpose? Rice
hasnt yet grasped the primacy of this
question. She sorely needs to.

Paris Opera Ballet, Palais Garnier

aaaaa
Laura Cappelle
Ironically, the greatest successes of
the Benjamin Millepied era at the
Paris Opera Ballet have come after
his resignation. The mixed bill that
opened the season, programmed by
Millepied but now shepherded by his
successor, Aurlie Dupont, was the companys best in some time, capped by a
sweepingly convincing creation from
Crystal Pite.
With 154 dancers, depth is one of the
POBs great strengths, and Pite has harnessed this asset as few others have. For
The Seasons Canon a third of the company morphed into an alien-like army
clad in baggy trousers, their throats and
torsos painted blue. Together they rippled, swayed and beat their chests like a
single organism; groups swept into line
briefly, then rushed forward to split into
new formations.
Pite was inspired by natural phenomena, and she has found a potent musical
vehicle for her preoccupations in Max
Richters Recomposed version of
Vivaldis Four Seasons. Strikingly, MarieAgns Gillot entered with a retinue of
women linked at the elbows, who prolonged her spiderlike lines and carried
her like insects following their queen.
Elsewhere, men launched into airborne
turns at full force, their feats combining
to create a hurricane of movement.
The sculptural tableaux and mass
effects are far from todays pas de deuxcentric work and practically a throwback to Maurice Bjart. Their musicality and grounded articulation demonstrate Pites craft. The POB responded to
the work with wholehearted commitment, and one hopes Pite will be back to
build on this first collaboration.
Two revivals from last season preceded The Seasons Canon: Justin Pecks
short study In Creases, which seems to
have lost energy, and William Forsythes
latest creation, Blake Works I. Forsythe
was among the first to deconstruct
the classical technique, and here he
proves he is still a master at it. The cast

Striking:
Marie-Agns
Gillot with Paris
Opera Ballet
dancers in The
Seasons Canon
Julien Benhamou

performed with, if anything, even more


abandon than at its July premiere.
Millepied nurtured talent regardless
of rank, and young soloists dominated
both works. Dupont, by contrast, has
stressed the importance of the hierarchy, and the annual Dfil gave precedence to established toiles. Unfortunately, the current crop doesnt inspire
the way POB principals did just a decade
ago, but the new generation shows
world-class potential.
To October 9, operadeparis.fr

CLASSICAL MUSIC

Mariinsky Orchestra
Cadogan Hall, London

aaaae
Richard Fairman
When Valery Gergiev became chief conductor of the Mariinsky Opera, a new
force of nature was born in the musical
world. Their international tours, such as
those to the Edinburgh Festival in the

early 1990s, featured vast chunks of the


Russian repertoire and soon multiplied
across the west in a whirlwind of activity.
Twenty-five years on, nothing has
changed. This week Gergiev and the
Mariinsky Orchestra have flitted into
London for a complete cycle of
Prokofievs symphonies, with a few concertos thrown in, over three days at
Cadogan Hall. Then they are off again.
Gergiev never stops to blink.
The first concert alone was a marathon more than three hours long,
comprising three symphonies, a concerto, and encores from both the soloist
and the orchestra. Despite the stress
of the itinerary, the characteristic
Mariinsky warmth and blend of sound
seemed unchanged, allowing for a hall
that is too small for an orchestra of this
size. What other team exhibits this kind
of stamina?
At the end of last year President Putin
was reported as having declared 2016 to
be the year of Prokofiev, the 125th anniversary of the composers birth. For
Gergiev, this will have been an open
invitation. Prokofiev has long been a staple of his repertoire his first major
calling card at the London Symphony

Orchestra, leading to his appointment as


principal conductor, was a cycle of
Prokofievs symphonies in 2004 and
these performances at Cadogan Hall
were no less fresh and spontaneous.
Gergievs Prokofiev is an offspring of
the Russian fantasy tradition stretching
back to Rimsky-Korsakov. Not for him
the fast, thin, modernist Classical Symphony that Thomas Ads gave us at the
BBC Proms. The violins phrased the
slow movement here with melting
romanticism. The Symphony No.2 was
an onslaught of decibels, too much in
Cadogan Hall. I moved to the back
row of the gallery for the second
half. Hungarian violinist
Kristf Barti was the lithe
soloist in the often magical
Violin Concerto No.1.
The Symphony No.3, an
unholy piece possessed by
the operatic demons that
haunt The Fiery Angel,
raged with intense heat, but
without losing the orchestras
beauty of sound. The cycle concludes on Wednesday.

To October 26, shakespearesglobe.com

cadoganhall.com

Music lights up a clumsy symbol-land


OPERA

Tristan und Isolde


Metropolitan Opera, New York

aaaae
Martin Bernheimer
The mighty Met hasnt had much luck
with Tristan und Isolde in recent times. In
the so-called good old days, Wagners
Gesamtkunstwerk enjoyed the vocal
splendours of Lauritz Melchior, Kirsten
Flagstad, Helen Traubel and Astrid Varnay, not to mention such lesser lights
(term used advisedly) as Set Svanholm
and Ramn Vinay. Theatrical values,
however, were prosperously primitive.
So were the cuts.
The last Met Tristan, dating back to
1999, was staged by Dieter Dorn. Surviving till 2008, it fluctuated between neat
abstraction and silly obfuscation. Now,
as of Monday, we have yet another
problematic version of the beloved lovetragedy, this one directed by Mariusz
Treliski and designed by Boris
Kudlika. It is shared, not incidentally,
with Baden-Baden, the Polish National
Opera and Beijing.
Treliski has set the period piece in a
modern symbol-land dominated by a
seemingly irrelevant, eminently fussy
radar circle-scope that spins on the
quasi-industrial cyclorama ad nauseam.
The hyper-clever sets, which place the

inaction in a contemporary wartime


setting, provide more confusion than
enlightenment. At best one should try to
ignore the clumsy sexual images.
All this is doubly regrettable because
the musical standards remain lofty.
Simon Rattle conducts with a compelling fusion of piety, pity and passion.
Nina Stemme invests Isolde with
luminous tone, tireless energy and
infectious sympathy. Stuart Skeltons
Tristan may lack the power of his
most illustrious predecessors, but he
sings also acts! with unfailing
urgency. Ren Pape commands the
stage as usual, this time as the sadly
betrayed King Marke. Appropriately

integrated support is provided by Ekaterina Gubanova as Brangne and Evgeny


Nikitin as Kurwenal.
The official company blurb proclaims
that Tristan stresses themes associated
with ancient Celtic culture: mysticism,
magic arts, an evolved warrior code
and a non-Christian vision of the
afterlife. Little of that emerged on
Treliskis stage.
The production was dedicated to the
memory of Johan Botha, the extraordinary South African tenor who died
of cancer at 51 this month. He will be
sorely missed.
To October 27, metopera.org
Tireless
energy:
Nina
Stemme
as Isolde
Ken Howard

Music Pop album reviews


By Ludovic Hunter-Tilney

Billie Marten
Writing of Blues
and Yellows
Chess Club/RCA

aaaae

What would life be like


with a lion heart inside?
Billie Marten sings, in
breathy high tones that
convey the wistful ache
of a wallflower at the edge
of the action. The
atmospherically worked
mood of introversion is all
the more impressive

considering Martens youth:


she is 17, an age more
associated in todays showbiz
with super-confident
stage brats than subtle
singer-songwriters.
The Yorkshire teens rapid
ascent, winning praise from
Ed Sheeran and releasing a
debut album on a major
label, began when her
mother posted a video of her
playing on YouTube, an
immaculately modern back
story. Her songs are more
old-fashioned, however.
Based around her acoustic
guitar and lingering voice,
they dare risk associations
with Nick Drake and Joni
Mitchell, disproving the lack
of boldness lamented in
Lionhearted. Plain
arrangements are given

added body with drums,


brass and strings, while
Martens eye for observation
is summed up by her
evocation of a northern
winter in Heavy Weather.

Devendra Banhart
Ape in Pink Marble
Nonesuch

aaaee

Ape in Pink Marble finds


Devendra Banhart in as
whimsical mood as ever,
although it is a less
animated variety of whimsy
than before. Several tracks

are inspired by the cult


Nigerian act William
Onyeabor, to whom
Banhart pays tribute with
mellow Afro-funk in
Mara and quirky lo-fi
disco in Fig in Leather, the
latter capsized by the US
singers smirking turn as
an exotic romancer with
broken English.
Elsewhere he adopts a
quiet croon, soft-shoeing his
way through bossa nova on
Theme for a Taiwanese
Woman in Lime Green
and quavering like a
folk-rock Bryan Ferry in
Good Time Charlie.
Late-night torch song
Linda finds him at
his beguiling best; the rest
is pleasant but
inconsequential.

Wednesday 28 September 2016

FINANCIAL TIMES

FT BIG READ. COLOMBIA


A peace accord with leftwing rebels could end five decades of conflict that have left more than 250,000
dead and 7m displaced. As the country prepares to vote on endorsing the deal, can it lay the past to rest?
By Andres Schipani and John Paul Rathbone

Leave the rifles behind

uan Manuel Santos, Colombias


president, wore white to symbolise peace. So did Rodrigo
Londoo, the normally olivegarbed commander of Latin
Americas largest rebel movement.
They were joined by John Kerry, US secretary of state, and the presidents, from
Cubas Ral Castro to Argentinas Mauricio Macri, who flew into Cartagena to
witness the end of the western hemispheres oldest conflict.
After 52 years of fighting, more than a
quarter of a million deaths and almost
7m people displaced, all it took on Monday was two signatures and a roar of
applause from the 2,000 guests, also
wearing white, and the Colombian government and the Marxist guerrillas of
the Revolutionary Armed Forces of
Colombia (Farc) agreed to live in peace
at least on paper.
Several presidents have sought to end
the conflict in Colombia, the worlds
most populous Spanish-speaking country after Mexico, with a population of
47m and an economy a similar size to
South Africas. That this attempt has got
so far is therefore remarkable. Yet its
central question remains: at what price?
The last effort failed in 2002 after an
inauspicious start: the Farcs founder,
Manuel Marulanda, did not turn up at
the opening negotiations in 1999. The
image of his empty chair, la silla vaca,
became etched in popular memory as a
symbol of vengeful Farc duplicity.
It also led to a controversial USbacked counter-insurgency led by President lvaro Uribe, called Plan Colombia. This pounded Farc troops
labelled narco-terrorists in the language
then employed by Washington in its war
on drugs in their jungle redoubts but
never vanquished them. That offensive
has now culminated in this peace initiative led by Mr Santos, after four years of
painstaking negotiations in Cuba.
In historical terms, this is comparable to the fall of the Berlin Wall,
enthuses Felipe Gonzlez, Spains
former prime minister who, in his day,
struggled with Basque terrorists. This
is a transformational moment for the
hemisphere, adds Bernard Aronson,
the USs special Colombia envoy. It is a
final repudiation of political violence as
a means of changing governments.
Such talk holds up a rare beacon of
hope in a world beset by terrorism. And
for once the hyperbole may be justified.
The end of Colombias civil conflict
promises to drain the water from a Latin
American quagmire that for more than
a half century has fostered international
terrorism and drug-trafficking, and
been implicated in other insurgencies
and uprisings from the conflict in
Northern Ireland to neighbouring Venezuelas socialist revolution. Peace would
also present the Obama administration
since 2002 the US has sunk $10bn into
Plan Colombia with a rare foreign policy victory.
If all goes to plan, Mr Santoss peace
drive will be celebrated with a November state visit to the UK. London has
provided Bogot with military intelligence and UN Security Council support
since the mid-1980s after links emerged
between the Farc and the IRA in Northern Ireland.
Nonetheless, success is far from guaranteed. For one, there are the difficulties of implementing peace in a country
that is the worlds largest cocaine
exporter and the size of two Spains,
spread over often impenetrable terrain.
Last year, Colombia produced 646
tonnes of the drug, the UN estimates.
With a retail value of over $30bn a
fraction of Colombias $300bn annual
economic output but still a significant
source of finance in the conflict there
are reasons why violence may continue.
The peace accord is a beautiful document, says Jos Miguel Vivanco of
Human Rights Watch. But however
beautiful the conception, daily reality in
much of Colombia is just too hard.

Crucial referendum
Although world leaders from Pope
Francis to Ban Ki-moon, the UN secretary-general, enthusiastically support
the accord, the majority of Colombians
must first approve it in a referendum on
Sunday that has sparked a vitriolic campaign between the Yes and No camps.
On a recent afternoon in Santa Marta,
a sweltering Caribbean port, a No campaign lorry drew smatterings of
applause. It carried a giant billboard
that showed the bearded Mr Londoo,
better known by his nom de guerre of
Timochenko, brandishing an AK-47,
and the slogan: Vote Yes if you want
Timochenko for President.

To lose the plebiscite would be a


national disaster, claims Humberto de
la Calle, who led the government team
during the Havana peace talks. Not so,
says the No camp, led by Mr Uribe, who
has become President Santoss arch-enemy, and wants it renegotiated. The government says this is impossible.
This is a negotiated end to a war, not
a surrender, says Mr Santos, who has
compared the peace process to swallowing toads.
He adds: But we could never finally
win the war due to Colombias geography and the drugs trade. This is the best
deal we could get.
Polls give conflicting signals. The latest Ipsos survey suggests 72 per cent of
Colombians support the deal. But as one
senior official warns: We cannot relax.
Uribe is a political fox with a clear goal
to stop this at any cost.
The No campaign has three main
complaints: the judicial impunity they
say disbanded Farc guerrillas will enjoy;
that the group can run for political
office; and the subversion of Colombias
constitution by the 297-page peace
accord that they claim will subsume
local law to supranational bodies.
This last complaint may seem like
legalistic nit-picking. But arguably it is
the legal strength of Colombias institutions that helped the country prevail
through a series of conflicts including
a drugs war recently trivialised in the
Netflix blockbuster series Narcos that
would have brought many other countries to their knees.
The effects of the [peace] accord are
[constitutionally] limited, says Manuel
Jos Cepeda, a former constitutional
court judge, who disagrees with the No
camp objections. It [the legal basis] is a
reference used to verify the way the
peace agreement is implemented . . .
[It] can only be applied for six months,
extendable for another six.

A perilous path to peace


New dawn After several failed
attempts, Bogot hopes the peace deal
with the Farc will end 52 years of war
Old habit Colombias role as a major
cocaine exporter makes a continuation
of violence almost inevitable
Peoples voice Although the countrys
leaders have signed the accord it must
be ratified by a referendum on Sunday

1964

Guerrilla leader Manuel


Marulanda, known as Sureshot,
creates the Revolutionary
Armed Forces of Colombia or
Farc following two decades of
sectarian violence sparked by
the assassination of Liberal
presidential candidate Jorge
Elicer Gaitn in 1948

1999 Farc fighters


on the march

1982

August Peace talks with the Farc


open, but end in failure

1990

March Colombias government and


the M-19 leftist rebels sign a peace
agreement which leads to the
groups demobilisation and
conversion into a political party

1991-92

The Farc, and other leftwing


groups, hold talks in Venezuela and
Mexico with representatives of the
Bogot government. But the peace
attempt fails

1993

December Pablo Escobar, at the


time the worlds biggest drug lord,
is killed by Colombian security
forces in Medelln

2001 Former president Andrs Pastrana, left, with Manuel Marulanda

2003 Colombian forces hunt Farc kidnappers

1998-2002

President Andrs Pastrana


launches a new peace effort. But
the talks come to nothing after
Farc rebels kidnap senator Jorge
Eduardo Gchem. lvaro Uribe,
elected as president in 2002,
launches an all-out offensive
against the group

2003-06

Some 30,000 paramilitaries,


members of the rightwing United
Self-Defence Forces of Colombia,
are demobilised

2007 A vigil for the hostage ngrid


Betancourt in Paris

The most emotionally charged issue is


justice. In the pursuit of truth and reconciliation any guerrilla who admits to
involvement in human rights abuses
faces a maximum eight years under
house arrest. Such apparent impunity
strikes a deep chord in Colombia, where
more than 46,000 people have disappeared since the 1980s although not
all at the hands of the Farc.
There have been a great number of
concessions, warns Ivn Duque, a
member of Mr Uribes No camp. This
could generate fresh violence.

Truth and justice


Colombias transitional justice
scheme is much the same as the one
imposed on the 30,000 rightwing paramilitaries that disbanded in the mid2000s under Mr Uribe and many of its
leaders now support the agreement.
Human rights abusers in the military
will face the same scheme too.
Who wouldnt like to see some of the
Farc rot in jail? says Mr Santos. But
there has to be a balance between forgiveness and justice.
Many Colombians are also concerned
that Farc leaders can run for congress,
or even the presidency, and will turn
Colombia into a socialist state like Cuba
or Venezuela. Worse, say critics, they
have already been granted 10 seats in
congress part of the process of turning
bullets into ballots.
But this compromise is comparable to
peace deals elsewhere, according to
Claudia Lpez, a pro-accord senator: in
Angola, demobilised insurgents got 70
seats out of 220; in Nepal they were initially promised 83 out of 330.
Until 2018 Farc deputies will only be
allowed to vote on matters relating to
the peace accords; after that they must
win office in fresh elections. Nor, as Nstor Humberto Martnez, the attorneygeneral, stresses, can Farc politicians
fund themselves with illicit money.
As to the prospect of Timochenko
becoming president, it is a theoretical

Caquet province, where the Farc held a


peace convention this month dubbed
Farcstock an ideologically charged
cross between Glastonbury and Woodstock there are pressing life-anddeath concerns. Many of its estimated
7,000 troops fear assassination by rightwing death squads once they lay down
their arms, despite UN troops overseeing the demobilisation. We need guar-

2007

August Hugo Chvez, president of


Venezuela, offers to broker a
hostage swap including three
US contractors and FrenchColombian politician ngrid
Betancourt held by the Farc. A
year later the hostages are freed in
a military operation that draws
global attention to the conflict

2016 Farc supporters celebrate at their peace convention earlier this month

2008-2011

Armed forces kill top Farc leaders,


including Ral Reyes, Mono Jojoy
and Alfonso Cano. Manuel
Marulanda dies of natural causes

2012

August Following months of backchannel negotiations, President


Juan Manuel Santos announces
fresh peace talks with the Farc

2016 Rebels watch the signing ceremony on TV

2016 Referendum fight

antees, says Vladimir Ruiz, who joined


the Farc when he was 10 years old.
Some guerrillas, most of whom know
how to handle a rifle better than a
mobile phone, may also struggle to
adjust to civilian life. Indeed, Mauricio
Jaramillo, a Farc commander, says 100
men in his 3,500-strong unit have
already rejected the accord. They have
been co-opted by the mafia, he says,
referring to drug gangs. As well as moving into crime, splinter groups may join
a smaller guerrilla movement, the
National Liberation Army, or ELN. It
has not signed the accord but is exploring the possibility of separate peace
talks with the government.
This raises the horrifying prospect of
Colombia turning into a gangland freefor-all, as in El Salvador, which has been
plagued by gang conflict since its civil
war ended in 1992.
Joaqun Villalobos, a former El Salvador guerrilla leader who advises Colom-

We could never finally


win the war due to
geography and the drugs
trade. This is the best deal
we could get
bias government, does not believe that
will happen. El Salvador had no organised crime before [its] war, he says.
Colombia is better prepared because it
already knows the criminal phenomenon and has lived through it . . . growing and strengthening [the power] of
the state.

Generational change

2016 President Juan Manuel Santos, left, and Farc leader Rodrigo Londoo at the signing of the deal on Monday

2016

August Bogot and Farc leader


Rodrigo Londoo, aka
Timochenko, announce the peace
accord, ending five decades of
armed conflict
September 26 Santos and
Timochenko formally sign the
peace deal
October 2 Colombians go to the
polls in a referendum to endorse,
or reject, the peace deal

possibility. But most Farc militants


espousal of Marxist-Leninist rhetoric is
unlikely to win many hearts and minds
in traditionally conservative Colombia.
We made many mistakes within the
framework of armed conflict, admits
Carlos Antonio Lozada, one of the few
top Farc commanders to recognise
openly the political challenges of peace.
We have to accept our errors to have
moral authority.

Colombias striking beauty and the


sophistication of its cities hide the origins of the conflict, which has roots so
deep and varied it is simply referred to
as La Violencia. Indeed, for most people
the concerns of war feel a world away
from the bustling streets of the capital
Bogot or Medelln, with their humming
entrepreneurialism and multilatina
companies that are expanding abroad.
But in the jungled savannahs of

Every peace agreement is a compromise. The success or failure of Colombias will reflect the very personal feelings of millions of people who have lived
through the conflict. Peace is an opportunity, not an event, says Sergio Jaramillo, the high commissioner for peace.
That is particularly so for the young,
who have the most at stake. This is for
my generation, and generations to
come, says Mara Fernanda Guarn, a
23-year-old law student at a Bogot
peace rally, where her fellow marchers
chanted Obviously, Yes in favour of
the deal.
Her call is echoed 600 miles away in
the jungle by Roco Bohrquez, who
joined the Farc as a teenager after paramilitaries killed her parents. The most
important thing now is to have peace,
forgiveness and to leave the rifles
behind, says the 30-year old, who says
she wants to study dentistry. Nobody
likes war and this war has just been
terrible for everybody.

FINANCIAL TIMES

Wednesday 28 September 2016

Letters
Look for leaders among the cultural marginals

WEDNESDAY 28 SEPTEMBER 2016

Americas dystopian
presidential debate
The realities depicted by Trump and Clinton are far from the truth
Anyone watching the first presidential
debate would be forgiven for thinking
the US was on the brink of collapse. The
Republican candidate, Donald Trump,
insisted the US was a third-world country suffering an almost biblical flight of
jobs to China and beyond. Violence was
out of control and parts of the country
were now in open warfare.
Hillary Clintons language may have
been rather less melodramatic. But she
shared Mr Trumps premise about the
threat posed to the US by an open global economy. She declined the chance
to re-embrace the Trans-Pacific Partnership that she once labelled a gold
standard of trade deals. She also failed
to spell out what kind of America the
world should expect if she were to succeed Barack Obama. Their message to
Americans was: Be afraid. Be very
afraid. The rest of the world should
take note.
The big puzzle is the gap between the
relatively healthy reality of the American economy, particularly compared
with Europe and Japan, and the dystopia gripping its politics. Contrary to Mr
Trumps depiction of a jobless America, the US unemployment rate is just
4.9 per cent, which is less than half that
of parts of Europe.
Even in rust belt states such as Michigan and Ohio, joblessness has fallen far
and reasonably fast since the Great
Recession of 2008. Moreover, immigrants, illegal or otherwise, are not taking all the jobs or suppressing workers wages. The rate of illegal entries
into the US mostly from Mexico has
gone into reverse. After a drought lasting more than a decade, US median
incomes last year finally began to grow
again. It is one thing to scapegoat trade
and foreigners in the midst of a depression. It is quite another to do so when
recovery is finally bearing some fruit.
That said, there is method in Americas frustration, even if the blame for it

is misdirected. Middle-class incomes


have finally started to advance again.
But they remain considerably below
where they were at the start of the century. If annual income growth had
tracked normal patterns, they would
now be almost a third higher than they
are.
The distribution of US aggregate
growth has also skewed more sharply
towards the top 10 per cent, particularly the top 1 per cent. Meanwhile, US
productivity growth, and trend annual
growth in gross domestic product, have
both slowed sharply in recent years.
There is little reason to suppose that
there is another 1990s productivity
miracle just around the corner. The
outlook for blue-collar men in particular is bleak. One in eight prime-aged
males is no longer in the job market,
according to a report from the Council
of Economic Advisers. In the absence of
a dramatic turnround in skills training,
that number is set to rise further. So
too, will the politics of irate venting
that has fuelled Mr Trumps candidacy.
What can be done? The responsibility of a leader is to be straight with the
people. Neither trade, nor technology,
should be blamed for Washingtons failure to equip its workforce for the 21st
century.
Both Mr Trump and Mrs Clinton
pander to the idea that comfortable
mid-20th century factory-floor jobs
can simply be willed back into existence. It is a myth. The blame for Americas labour force woes and the increasingly skewed distribution of the fruits
of growth are to be found at home. It is
Washington, not Beijing, which sets US
tax rates. The answer to most of Americas challenges are to be found in the
booming cities and technological hubs
of 21st century America. Blaming it on
foreigners may be good tactics. But it
could result in terrible policies that will
only deepen the malaise.

Nigerians are dying in


droves for want of aid
The response is far too slow to the crisis left in Boko Harams wake
The world was briefly shocked into
focusing on the war in Nigerias remote
north-east in 2014. Then Boko Haram
extremists stole into the village of Chibok in the dead of night and kidnapped
276 school girls. The sheer horror of the
groups maniacal leader, Abubakar
Shekau, threatening days later to sell
the girls as sex slaves was hard to
ignore. Tragically, the humanitarian
crisis now unfolding, one that aid agencies are starting to recognise as being
among the most severe in the world,
has commanded less attention.
Today, aid agencies believe nearly as
many children as were taken from Chibok back in 2014 are dying of starvation every day. The Chibok girls, 218 of
whom remain unaccounted for 898
days on, proved a tiny proportion of the
women and children abducted by Boko
Haram. The ability of the terrorist
organisation, designated by the Institute for Economics and Peace in 2015 as
the most deadly in the world, to conduct fresh attacks has been greatly
reduced. But the impact of the depredations it inflicted will live on for years.
Unless Nigeria, and the world, wake up
fast to the scale of the emergency at
hand, there is a risk that far more people will succumb to hunger and disease
than the 20,000 Nigerians estimated to
have died directly as a result of massacres, beheadings and suicide bombs at
Boko Harams hands.
The degree of suffering in the region
has become clear as Nigerias military
has steadily retaken territory once captured by the group. Hardened aid
workers are reduced to tears at the
trauma they witness in areas that have
been freed. Yet there has been an
across the board failure by Nigerias
government and most international
aid agencies to act.
President Muhammadu Buhari, the
former military ruler elected in May
last year, has proved far more effective

at prosecuting the war than Goodluck


Jonathan, the incumbent he defeated.
But his governments ill-co-ordinated
efforts at addressing the humanitarian
imperatives at hand are deeply troubling. Adopting a militaristic approach,
Mr Buhari has scrapped some of the
most impressive soft counter-terrorism policies developed under (and
largely in spite of) his hapless predecessor. These include a deradicalisation programme for extremists and
those vulnerable to their ideology, and
an economic revival plan for the
region; 200 associated staff were fired.
Nigeria has lost precious time, and
institutional knowledge, in the process.
UN relief agencies, who until recently
had almost no presence on the ground,
have been equally slow. To this day, the
UN has no designated leadership in the
country the top humanitarian position is filled on an acting basis.
Poor relations between the UN and
government also hamper relief efforts.
Nigerian authorities accustomed to
deploying peacekeepers and largesse to
help solve the crises of poorer neighbours, are reluctant to admit that this
time it is their country that is in need of
help. In the face of this injured pride,
UN officials are too timid in their
response. Thus unofficially they regard
the situation as a level 3 emergency, the
global humanitarian systems classification for the most severe crises. Officially, however, they are holding off,
depriving the country of the resources
that come with level 3.
Nigerias woes are compounded by
the severe economic downturn the
country is experiencing. Budgets are
strained across the board. For that reason the government must accept it
needs outside help, and the UN should
lead the international response in providing it. For 2.4m Nigerians, forced to
flee repeatedly for years, it is a matter
of life and death.

Sir, Alicia Clegg, in How to fix culture


clashes in global teams (FT.com,
September 22), is right on the money
about many of the issues affecting
global teams. But one point she
touched upon how employees at
home in more than one culture can
detect cultural nuances others miss
doesnt go far enough. Recruiters are
missing a trick in not paying more
attention to how so-called cultural
marginals (immigrants, long-term
expatriates, and third-culture kids who
do not identify strongly with either
their home or their host environment)

may possess attributes that make


them uniquely suited to lead global
teams.
While it is important to understand
cultural differences, global leaders
must also be able to perform a bridging
role between different cultural groups.
Being culturally homeless allows
more freedom to navigate different
groups without judgment, enabling
more effective team collaboration.
The very fact of being both an insider
and outsider also means that
multicultural individuals can view
problems and organisations with

A Stalinist posture on
Syria is not inevitable
there are things we can do
Sir, With reference to Gideon
Rachmans column We are all
Stalinists on Syria (September 27):
there are a number of things that can
be done without taking a Stalinist
posture.
First, make sure that injured and
sick children are evacuated to receive
care. Maybe if the paediatric wards of
the rich United Nations Security
Council countries were full of injured
and sick resulting from their poor
foreign policy decisions, people would
wake up.
Second, demand that neighbouring
Gulf states open their borders to
refugees. The number of refugees from
Syria in Gulf countries as listed in the
UN High Commissioner for Refugees
database is laughably small. These are
countries building essential
infrastructure such as the largest
amusement parks in the world or
skiing resorts in the desert. Why is this
never mentioned? Are people afraid of
losing billions of dollars in arms sale
deals?
Finally, make sure humanitarian
laws are respected and strengthened,
and that the mainstream media hold
the powers that be responsible. They
could start by asking who bombed the
al-Quds hospital in Aleppo, the water
wells in Yemen and the UN convoy in
Syria. Why do the media fall silent
after a couple of days? Where are
news organisation investigations?
Or is a cop-out easier?
Dr Tom Adamkiewicz
Atlanta, GA, US

The debate on managing


climate risk is under way
Sir, Gillian Tett has wisely called on
company executives to agree how to
measure and report the financial
consequences of climate change
in a harmonised and clear way
(Crank up the energy on accounting
standards, September 23). This has in
fact been well under way for the best
part of a year.
Since Bank of England governor
Mark Carney made his groundbreaking
Tragedy of the Horizon speech to
Lloyds of London last September,
heralding the formation of the
Financial Stability Boards Task Force
on Climate-related Financial
Disclosures (TCFD), he has indicated
that the task forces recommendations
would be instrumental in navigating
the worlds economies and society away
from a tragic horizon dominated by the
effects of dangerous climate change.

Computer code
neglect costs
companies dear

Notebook
by Lisa Pollack

His Farc days are long behind him


The TCFDs 31 members were chosen
by the FSB to include both users and
preparers of disclosures from across
the G20s constituency, covering a
broad range of economic sectors and
financial markets. Oil & gas and
extractives are represented by Eni and
BHP Billiton.
The group will share its final
recommendations with the G20 in
early 2017. It will advocate voluntary
adoption of its proposals, which we at
CDP stand ready to help implement. It
will address the standardisation of
climate-risk reporting to bring clarity,
coherence and comparability into
climate disclosure to enable informed
investment decisions, and to shift
investment into driving positive
outcomes for the planet. It will
incorporate requirements for forwardlooking disclosures based on scenario
analysis and stress-testing against
science- based targets.
The key question then will be, what
market pressures and processes could
or should be brought to bear to reach a
high level of adoption across the G20
and beyond?
Jane Stevensen
Engagement Director to the TCFD at CDP
(formerly the Carbon Disclosure Project),
London EC4, UK

Reason to hope Brexit will


be positive for universities
Sir, In your editorial British
universities need support to stay at the
top (September 23), you say that, if
fees for EU students in the UK rise after
Brexit, their numbers will inevitably
dwindle. That is the consensus and
could be true. But we have been here
before and, last time, the exact
opposite happened.
In the early 1980s, the Thatcher
government ended the taxpayer
subsidy for international students from

Antiquated programming languages


rarely make the news. And yet in the
past few months, Cobol, created more
than 50 years ago, has done so. Twice.
In May, the US Government
Accountability Office highlighted the
continued use of Cobol in public
agencies. It was easy to miss as most
media focused on the use of eight-inch
(yes, eight-inch) floppy disks by the
Pentagon for such humdrum activities
as co-ordinating intercontinental
ballistic missiles, nuclear bombers
and tanker support aircraft.
The second outing came more
recently with the proposed merger of
Micro Focus with the software arm of
Hewlett Packard Enterprise in an
$8.8bn deal. The British companys
business centres around helping
clients maintain software written in
unfashionable languages, like Cobol.
Which leads me to wonder: how
many managers, especially outside
tech departments, would know if their
company is using Cobol? Or other
languages heading to a digital dustbin?
Those who dont know should take
an interest, not least because getting
support will become interestingly
difficult. The accountability office
notes that the Social Security
Administration had to rehire retired
employees to keep its systems written
in Cobol ticking over. Unless youre
Micro Focus, thats bad news. Forces of
supply and demand are probably not
going to solve this either. Joel Spolsky,
chief executive and co-creator of Stack
Overflow, a popular question-andanswer website for developers, tells

fresh eyes, producing real innovation.


Organisations should pay more
attention to these cultural marginals.
Training culturally aware global
leaders is an expensive, long and
uncertain process; while skills and
abilities can be developed over time,
organisations may benefit more
quickly from leveraging the specific
status of being of their workers.
Dr Yih-teen Lee
Associate Professor of Managing People
in Organizations,
IESE Business School,
Barcelona, Spain
outside the European Economic
Community. Neil Kinnock, then
shadow secretary of state for education
and science, told the House of
Commons in June 1980 that the change
was opposed by every university,
polytechnic and college of higher or
further education, every education
trade union and every students union.
He claimed that international students
would be repelled by higher fees.
Yet when universities started
charging international students the full
economic costs of their education (and
more), their numbers rose fast. This
was because institutions fought much
harder to recruit students from abroad
and the spending power they
represent. Today, one in 20 students in
the UK comes from another EU
country but one in seven hails from
farther afield.
Last week, the University of Oxford
was declared the best university in the
world. That would not have happened
without the huge financial and
educational contributions made by
their international students since the
1980s. If we do not recall what
happened last time, there is a risk that
our pessimism will create the very
conditions that we wish to avoid.
Nick Hillman
Director,
Higher Education Policy Institute,
Oxford, UK

Iheanacho is prolific
but he is not the best
Sir, I used to say to my boss: Give me
the raw data, tell me what you want the
data to say, and I will find a way to
make the numbers do that.
In The Baseline (September 26),
John Burn-Murdoch presents a case
that ranks Manchester Citys Kelechi
Iheanacho way above Ronaldo,
Uniteds Marcus Rashford, and even
Lionel Messi. However, the ranking is
based solely on the individuals goals
scored and assists. Undoubtedly a
players performance reflects not only
his own contribution, but it is patently
also very dependent on the
performance of those around you. So a
better measure of a players rank
should reflect his contribution in assist
and goals, but pro rata to his teams
aggregate achievement in goals scored.
Bearing in mind that City have
scored 89 Premiership goals since the
start of last season, whereas United
have scored only 61, then while
Iheanachos performance remains
prolific, it is not as Mr Burn-Murdoch
contends by far the best, in particular
standing out much less prominently
than Rashfords, and perhaps others.
Dick Sands
London W5, UK

me that good programmers will take


a big pay cut to work on something
that they like. They arent as
mercenary as you might think. This
goes as far as some being hesitant to
work even for Facebook, he says, as
the company uses PHP, a
programming language that is
probably past its peak.
Aside from the language used, a
more challenging problem that
managers need to be aware of is code
fragility. This is where an attempted
change in one part of the code has an
unexpected effect on some other part.
Its like changing the lock on your
front door and having it inexplicably
cause a fuse to blow in the kitchen. In
a 2016 survey by Stack Overflow, code
fragility was ranked among the top
challenges developers say they face,
with the more experienced placing it
higher.
The issue, which can affect all
languages, has many underlying
causes. For a start, most development
teams have a style of working that
emphasises the frequent delivery of
working software. Pressure from the
business to deliver new features and
bug fixes within a large codebase
heightens the risk of unnecessary
complexity being introduced. Add
poor documentation and frequent
staff turnover and the overall
architecture may become a big ball of
mud. Big mud translates to a high
cost of adding new functionality that a
company needs to stay competitive.
Maintaining code in a tidy state
should be part of the work. But it

Email: letters.editor@ft.com or
Fax: +44 (0) 20 7979 7790
Include daytime telephone number and full address
Corrections: corrections@ft.com

High street casinos foster


crime and human misery
Sir, The statement by Malcolm George
of the Association of British
Bookmakers (Letters, September 23)
that the reality is that FOBTs [fixedodds betting terminals] are like many
other gaming machines disregards the
enormous human misery that these
100-a-spin machines cause. The
maximum stake on gambling machines
in all other easily accessible venues
such as arcades and bingo halls is 2.
The bookmaking industry has created
casinos on the high street. Clinical
psychologist Anna Henry, who treats
gambling addicts, has said that FOBTs
are designed to foster addiction.
More crime takes place in betting
shops than in any other gambling
venue. Gambling Commission figures
reveal 11,232 incidents in 8,980 betting
shops from January to December 2014.
This compares with just 479 incidents
related to the remaining 2,747 venues.
These incidents account for 97 per cent
of police call-outs to all gambling
venues.
The reality is that these machines are
highly dangerous products which are a
catalyst for problem gambling, social
breakdown and serious crime in
communities. We welcome reports that
UK prime minister Theresa May will
crack down on these machines and
urge the government to reduce the
stake without further delay.
Lord Clement-Jones
Lord Foster of Bath
UK House of Lords

The violence in Chicago


is someone elses fault
Sir, The Chicago Metropolitan Area
(variously defined) has a population of
about 9.5m. Fewer than 30 per cent of
these people live in the city of Chicago.
Since Chicagos central business district
is located on the west shore of Lake
Michigan, the city effectively has no
East Side. That part of the city south of
the old Illinois & Michigan Canal is
known as the South Side. That part of
the city north of the first railroad built
west from the city is known as the
North Side. The area in between is
known as the West Side.
The violence that has received so
much attention lately (Chicago
communities torn apart by crime,
September 22) is occurring primarily
in certain police districts located on the
South and West sides. Almost all the
victims and offenders are either blacks
or Hispanics. The offenders are often
associated with criminal street gangs.
The victims are often either members
of rival gangs or innocent bystanders
hit by misdirected bullets.
The gang members support
themselves by drug-trafficking, theft
and armed robbery.
Nevertheless, no one ever forcefully
suggests that the decent people living
in these neighbourhoods take control
of their young people and see that they
behave. Those people (and their
apologists) always insist that someone
else, far away (in either time or space),
is to blame for all their woes and
misbehaviour, and that consequently
the world owes them a living. Taint so.
DW Sutherland
Downers Grove, IL, US
COMMENT ON FT.COM
The Exchange
Europes banks need consolidation to find
stability, writes Lorenzo Bini Smaghi
www.ft.com/the-exchange

requires constant attention to this sort


of hygiene, Robert Chatley tells me
when we meet at Imperial College,
London, where hes teaching the next
generation of computer scientists
about software in industry. Its like, if
you clean your teeth every day it
avoids major dental surgery.
It is, however, easy not to floss and
mess up the codebase in order to hit
deadlines. Especially if departments
outside technology prioritise delivery
over sustainability.
A fashionable method of attempting
to force a degree of hygiene, and tie
everyones hands to the mast, is to
adopt a microservices architecture.
This is one way of organising software
into separate, independent modules,
to try to avoid the ball of mud.
Michael Feathers, author of a book on
legacy code, refers to this approach as
something we were forced into by the
fact that we programmers are adept at
overcoming any sort of self-discipline
we try to impose on ourselves.
Proponents argue that it makes it
easier to phase out old languages such
as Cobol and try newer ones that will
attract good developers. But its also
often frustratingly hard to implement
due to the interdependencies large
codebases tend to have. It could be
that at some point someone attached
the front door to the fuse in the
kitchen on purpose. Who knows why.
In any case, Kenneth is retired now.
Hes probably at home. Tending to his
vintage floppy disk collection.
lisa.pollack@ft.com

Wednesday 28 September 2016

FINANCIAL TIMES

Comment
A hard Brexit is far from inevitable
OPINION

Peter
Mandelson

t is possible to see Britains exit


from the EU from both ends of the
telescope. At the moment, too
many people are choosing to see
only what they want to see either
an inflexible European Commission
that wants Britain out as quickly as possible or hardliners in the British cabinet
winning the argument for a clean break.
Both sides are in danger of damaging
the negotiations before they start. Few
are focused on creating a framework in
which the closest and most co-operative
relationship can be achieved.
Establishing such a relationship
which should cover trade in goods and
services, security co-operation, and
many other aspects of Britains 40-year

integration in Europe will be the most


complex policy process ever mounted
in peacetime. It can only be achieved by
Britain and the EU working together,
though that currently seems a long way
off. Boris Johnson, UK foreign secretary,
has described the EUs understanding of
its own rules as baloney, while the
commissions chief representative,
Michel Barnier, is proposing to conduct
negotiations in French.
In the meantime, major companies
whose default position for decades has
been to invest in Britain wonder what
will be left to invest in if hard Brexit
wins the day. At the moment all they
have to go on is the empty mantra
Brexit means Brexit.
In reality, there is a lot of space
between a hard Brexit, which would
entail the UK enjoying no free trade with
Europe, and becoming like Norway,
enjoying trade in the European Economic Area with all the costs and obligations, but no say in the rulemaking.
The UK could stay in the European

customs union, for example. This would


mean that industrial goods exported to
and from Britain would not face European customs duties and checks that
would increase their cost and jeopardise
the value chains that link UK manufacturing to the continent.
Those who say the UK has to be out-

Inside the customs union,


Britain would enjoy the
privileges of the EUs
existing free-trade deals
side the customs union because it prevents us having an autonomous trade
policy are wrong. In fact, being in the
customs union requires such a policy
because you have to try to sign flanking
deals to the EUs own free trade agreements in order to get your own goods
into third country markets.
What membership of the customs

union removes is the ability to negotiate


on industrial tariffs that are bound by
the EUs common external tariff. This
would be hard to swallow for Leave
campaigners who made so much of Britains ability to negotiate its own agreements outside the EU. But we have to
weigh the hypothetical benefits of
future tariff cuts for UK exports globally
with the actual costs imposed on our EU
trade of being outside the union.
While remaining inside the customs
union for goods, Britain could negotiate
a bilateral treaty to try to recreate elements of passporting for its supply of
financial and other services to the EU
single market. What the EU demands in
return for this would depend on what
the agreement covered.
If the UK requested rights that were
great enough to require a reciprocal
freedom of movement of people, the
extent of this would be tested in the
negotiation. It is too early to assume that
any participation in the single market
would demand total freedom of move-

ment. We should also bear in mind that


many of those who voted Leave did so to
control migration, not end it.
Once negotiations start, it will soon
become clear that there is leverage on
both sides. Although the EU clearly has
more leverage, European businesses
count on London for a substantial proportion of their capital needs. EU banks
rely on Londons deep capital markets
for onward lending to many businesses.
The EU may also judge it is better to
bind the UK into EU regulation than cut
it loose.
It is not disrespectful of the political
choice made in the referendum to
examine the closest possible relationship between Britain and the EU. But
this requires changing the rhetoric and
some of the assumptions on both sides,
and curbing the zeal of those who want a
complete break with Europe, whatever
the price.
The writer is a former EU trade commissioner and UK cabinet minister

If trust
crumbles, the
west is lost
ECONOMICS

Martin
Wolf

ometimes history jumps.


Think of the first world war,
the Bolshevik revolution, the
Great Depression, the election of Adolf Hitler, the second world war, the beginning of the cold
war, the collapse of the European
empires, Deng Xiaopings reform and
opening up of China, the demise of
the Soviet Union, and the financial
crisis of 2007-09 and subsequent great
recession.
We may be on the brink of an event as
transformative as many of these: the
election of Donald Trump as US president. This would mark the end of a
US-led west as the central force in global
affairs. The result would not be a new
order. It would be perilous disorder.
The fact that Mr Trump can be a credible contender for the presidency is
astounding. In business, he is a serial
defaulter and litigator turned reality TV
star. He is a peddler of falsehoods and
conspiracy theories. He utters racist calumnies. He attacks the independence of
the judiciary. He refuses to reveal his
taxes. He has no experience of political
office and incoherent policies. He glories in ignorance. He even hints at a federal default. He undermines confidence
in the US-created trade order, by threatening to tear up past agreements. He
undermines confidence in US democracy by claiming the election will be
rigged. He supports torture and the

deliberate killing of the families of


alleged terrorists. He admires the
former KGB agent who runs Russia.
Evidently, a huge number of US voters
have lost confidence in the countrys
political and economic systems. This is
so to an extent not seen even in the
1930s, when voters turned towards an
established politician. Yet, for all its
challenges, the US is not in such terrible
shape. It is the richest large country in
the history of the world. Growth is slow,
but unemployment is low. If voters were
to choose Mr Trump despite his failings, displayed again in the first presidential debate this would tell us grim
things about the health of the US.
It is the worlds leading power, so this
is not just a domestic US concern. What
might a Trump presidency mean? Forecasting the policies of someone so
unpredictable is impossible. But a few
things seem at least reasonably clear.
The US and its allies remain
immensely powerful. But their economic dominance is in slow decline.
According to the International Monetary Fund, the share of the high-income
countries (essentially, the US and its
chief allies) will fall from 64 per cent of
global output (measured at purchasing
power) in 1990 to 39 per cent in 2020,
while the US share will fall from 22 per
cent to 15 per cent over this period.
While the US military might is still
huge, two caveats must be made. One is
that winning a conventional war is quite
a different matter from achieving ones
aims on the ground, as the Vietnam and
Iraq wars showed. Furthermore, Chinas
rapidly rising defence spending could
create serious military difficulties for
the US in the Asia-Pacific region.
It follows that the ability of the US to
shape the world to its liking will rest

Tony
Barber

quarter of a century ago,


the eminent French historian Michel Pastoureau
wrote: The myth of our
ancestors the Gauls, which
did so much harm to so many generations of schoolchildren, is dead.
To judge from Nicolas Sarkozys
remarks last week at a presidential election campaign rally, Prof Pastoureau
spoke too soon. Mr Sarkozy, battling to
recapture the presidency he held from
2007 to 2012, made a blatant bid for the
anti-immigrant vote by telling his audience: Once you become French, your
ancestors are the Gauls.
Mr Sarkozys words elicited disapproval and ridicule from political oppo-

nents and liberal French intellectuals.


Alain Jupp, his main rival for the centre-right presidential nomination,
rebuked Mr Sarkozy for stoking tensions when France fears more Islamist
terrorist attacks and is divided over the
definition of national identity. If we
carry on like this, we are heading for
civil war, Mr Jupp told Le Monde.
There was scorn for Mr Sarkozy, too.
How could he seriously suggest that the
French are descended exclusively from
the ancient Gauls when one glance
around any city or town is enough to see
the nations tremendous diversity of origins? As Franois Mitterrand, the late
Socialist president, observed in 1987,
the French not only have Gauls as ancestors but Romans, Germanic tribes, Jews,
Italians, Spaniards, Portuguese, Poles
and I ask myself if we arent already a
bit Arab?
Mr Sarkozy, who is of partly Hungarian descent, would doubtless protest
that his remarks were not to be taken literally. Indeed, in a speech on Saturday
he qualified them by including among

EMPLOYMENT

Sarah
OConnor

n economics, no matter what the


question, productivity is usually
the answer. How do you make
wages go up without consumers
paying more or companies making
less? Raise productivity. How do you
repair the public finances without raising tax rates or cutting spending? Raise
productivity. For a politician, saying you
want to boost labour productivity
usually defined as workers output per
hour will make you no enemies and
plenty of friends.
So it feels faintly heretical to question
whether all productivity is necessarily
good productivity. Yet what the term
means to an economist is not always
what it means to the owner of a small
business, like, say, a seaside hotel. For
an economist, boosting output per hour
within a company means giving workers
more training so they can deliver more
value, or investing in labour-saving
technology that can generate more
goods or services for a given number of
staff. For the hotel owner at least for
the one I interviewed in the UK recently
it means telling the cleaning staff to
clean more rooms per hour.
The cleaners already worked hard, he
said, but he could not see how else to
cope with the UKs rising minimum
wage. The hourly rate for over-25s has
gone from 6.70 to 7.20 this year and
the government plans to raise it to
almost 9 by 2020 (the opposition
Labour party favours 10).
This hotel owner is not an outlier.
When the Resolution Foundation thinktank surveyed 500 employers this year
about how they planned to respond to

It feels faintly heretical


to question whether all
productivity is necessarily
good productivity
increasingly on its influence over the
global economic and political systems.
Indeed, this is not new. It has been a feature of US hegemony since the 1940s.
But this is even more important today.
The alliances the US creates, the institutions it supports and the prestige it possesses are truly invaluable assets. All
such strategic assets would be in grave
peril if Mr Trump were to be president.
The biggest contrast between the US
and China is that the former has so
many powerful allies. Even Vladimir
Putin is not a reliable ally for China.
Americas allies support the US largely
because they trust it. That trust is based
on its perceived commitment to predictable, values-based behaviour. Its
alliances have not been problem-free,
far from it. But they have worked. Mr

If Trump is elected in the


US, the result would be
perilous disorder rather
than a new world order

Trumps cherished unpredictability and


transactional approach to partnerships
would damage the alliances irreparably.
A vital feature of the US-led global
order has been the role of multilateral
institutions, such as the IMF, the World
Bank and the World Trade Organisation. In binding itself by the rules of an
open economic system, the US has
encouraged others to do the same. The
result has been extraordinary growth in
prosperity: between 1950 and 2015,
average global real output per head rose
sixfold. Mr Trump does not understand
this system. The results of repudiation
could be calamitous for all.
The Iraq war has damaged trust in US
wisdom and competence. But the global
financial crisis has been even more
destructive. Many have long suspected
US motives. But they thought it knew
how to manage a capitalist system. The
crisis devastated that confidence.
After all this damage, election of a
man as unqualified as Mr Trump would
call into question something even
more fundamental: belief in the capacity of the US to choose reasonably well-

informed and competent leaders. Under


a President Trump, the democratic system would lose much of its credibility as
a model for the organisation of a civilised political life. Mr Putin and other
actual or would-be despots would cheer.
Their belief that talk of western values is
just hypocrisy would be vindicated. But
those who see the US as a bastion of
democracy would despair.
If Mr Trump were to win, it would be a
regime change for the world. It would,
for example, end efforts to manage the
threat of climate change, possibly forever. But even his candidacy suggests
that the US role in the global order risks
undergoing a transformation. That role
depended not only on American economic and military prowess, but also on
the values it represented. For all its mistakes, the ideal of a law-governed democratic republic remained visible. Hillary
Clinton is an imperfect candidate. Mr
Trump is something else altogether. Far
from making America great, his presidency might unravel the world.

racy, with no threats to its national unity


and a seemingly bright future at the
heart of an integrated Europe. If the
Gauls impinged at all on French consciousness, it was in the form of pure
entertainment, exemplified in the
Asterix comic books, or in the Gauloises
cigarettes smoked in Left Bank cafs by
Jean-Paul Sartre and his existentialist
comrades.
Thanks to the long-term impact of
decolonisation, economic underperformance, the EUs uncertain future and
the state of emergency declared after
the recent terrorist atrocities, Frances
self-confidence is fragile. Perhaps it was
only a matter of time before our ancestors the Gauls made a reappearance.
Mr Sarkozy is implying nothing less
than that France is once again in mortal
danger from non-indigenous dissenters and malcontents within its borders
as well as enemies abroad. It is up to
Frances other presidential hopefuls to
meet the challenge he has thrown down.

the rising minimum wage, ask workers


to do more was the second-most common response after increase prices,
beating ideas like investing in training
or technology. To be fair to employers,
some service sector jobs like cleaning
and social care simply do not lend themselves to automation (at least not yet).
And if employees can work faster without suffering strain, they might benefit
if they can earn the same amount of
money overall for fewer hours of work.
The danger is that workers do feel the
strain. You might successfully improve
output per hour through a combination
of tougher targets and monitoring
think scan rates for supermarket checkout staff, or number of product picks for
warehouse workers. Yet Alan Felstead, a
research professor at Cardiff University,
says work intensification correlates
strongly with stress, absenteeism and
high staff turnover, particularly when
combined with a lack of control over
how you work. This will cost both the
employer and the state in the long-run.
The other danger is that workers cope
by cutting corners. The cleaning staff
that have less time per room might simply clean each one less thoroughly. In
this case, the boost to productivity is
illusory: if the quality has gone down,
output per hour has not really gone up.
Either the customer will bear the cost by
paying the same for a worse service, or
the business will have to lower its prices.
In 1997, about a quarter of UK
respondents to a regular governmentfunded survey said they worked at very
high speeds three-quarters or more of
the time. By 2012 it stood at 40 per cent.
The UK also comes near the top of crosscountry European surveys of work
intensity. Yet Britains workers still
generate less output per hour than
their international peers: the UK has the
second-worst productivity in the G7.
Of course, an economys productivity
is shaped by more than just what happens inside companies. But employers
could still use a little more imagination.
You do not need shiny robots in order to
redesign work in small but useful ways.
A good first step would be to ask
employees for ideas. One office cleaning
company has replaced the individual
bins under peoples desks with a few
central ones per room, making it
quicker for the cleaners to empty them.
Productivity has to mean working
smarter, not harder. Otherwise, we are
simply running to stand still.

tony.barber@ft.com

sarah.oconnor@ft.com

martin.wolf@ft.com

Sarkozy seeks to seduce the French with tales of Gaul


EUROPE

Want your staff


to do more?
Just listen
to them

Frances ancestors north African Muslims who fought with French forces at
the 1944 battle of Monte Cassino. He
was certainly deploying racial themes to
woo voters inclined to support Marine
Le Pen of the far-right National Front,
but his bigger argument was that immigrants should adopt French civic and
patriotic values.

Battling to recapture
the presidency, he has
made a blatant bid for
the anti-immigrant vote
These values used to be evoked in
our ancestors the Gauls, a slogan
which the Third Republic, the regime
that governed France from the 1870s to
1940 and developed the first mass education system, drilled into schoolchildren in the name of national unity.
But the celebration of Frances Gallic
origins has deeper roots and a wider

meaning. Ancient Gaul as a unifying


symbol of French identity has always
come to the fore at moments of supreme
national peril and internal conflict.
These include the Wars of Religion,
the 16th-century civil war that became
entwined with a war against Spain; the
revolutionary and Napoleonic wars; the
1848 revolution; and Frances 1870
defeat at the hands of Prussia, which
gave birth to a united Germany.
Marshal Philippe Ptain, Frances collaborationist leader during the 1940-44
Nazi occupation, put the myth to more
sinister use when he compared the
ancient Gallic chieftain Vercingetorixs
submission to Julius Caesar in 52BC with
Frances surrender to Hitler. Just as the
Gauls had knelt before a superior
Roman civilisation, so the French were
acknowledging the rottenness of their
institutions and yielding to a Nazi-led
New Order in Europe.
The catchphrase our ancestors the
Gauls faded into obsolescence after the
second world war as France reconstructed itself as a prosperous democ-

10

FINANCIAL TIMES

Wednesday 28 September 2016

Sweet and sour


The prospect of a sugar tax is unpopular among UK soft-drinks
makers. But most of the underperformance in AG Barr, on
paper the most exposed, came before the tax was announced

Share prices

Twitter: @FTLex Email: lex@ft.com

Fake it till you make it: not an


approach that governments like to
admit to. Yet it may be working for
China. Stimulus-led growth is spilling
over into the rest of the economy. The
question is how sustainable it is.
Encouragingly, the pick-up is
increasingly broad based. Yesterday,
industrial profits at large companies
registered their highest growth since
late 2013, up one-fifth year on year in
August, They are up nearly one-tenth
this year. The consumer has been doing
well, too. Last week, FT Confidential
Research, a data service of the
Financial Times, said that its China
consumer index hit a two-year high.
Along with a rise in real spending,
the 1,000 households surveyed saw a
strong pick-up in sentiment towards
the economy and personal incomes.
The discretionary spending sub-index
jumped the most in nearly three years.
Incomes also rose strongly.
Still, recent data suggest an old
economy resurgence financed by
borrowed money; discouraging for
proponents of economic rebalancing.
Labour demand growth from
construction companies has bounced
while growth in workers bound for the
service sector has slowed. Not all
observers expect such a statesponsored run to last. Researchers at
Oxford university argued that Chinas
stimulus may have cost more than it
helped. Spending on infrastructure led
to significant waste; many projects are
underutilised, returns targets are often
missed and costs overrun by 30 per
cent on average. Leverage has added to
Chinas mounting debt pile. Such poor
quality growth must surely fizzle out.
But the drivers of Chinas new
economy, domestic consumers, are
unfazed. Infrastructure spending can
benefit the retail economy in multiple
ways from the increase in
employment to the provision of better
transport networks for travel (or
internet shopping). Even wasted
money can still sustain demand in this
case, rebalancing the economy towards
consumer spending. If that continues
long enough, worries over debt
servicing will prove unfounded.
There may be another old-fashioned
factor behind the sense of financial
wellbeing: a house-price rally. Beijing,

1010

13
19

LO

16

1
17
21

22

20

19

22
21

24

23

1 0 3 0 22

HIG

26
31

24

6
25

26

27

48

25

25

25

27

Wind speeds in KPH

Forecasts by

CROSSWORD
No. 15,357 Set by IO

JOTTER PAD

250
200

UK sales (% of total)
Mid to no-sugar drinks
(as % of portfolio)
0 20 40 60

80 100

AG Barr

150
Nichols
100

Early in its history, Close Brothers


speculated on railway lines into the
Yukon, as many English merchant
banks did. These days it prefers more
modest gambles, such as lending to the
UKs smaller companies. For all the UK
government noise that such enterprises
deserve more attention from banks,
Close Brothers has targeted them for
decades. This type of lending does very
well for the group and is unlikely to get
any better.
Banking has accounted for well over
80 per cent of Closes operating profits
over the past three years. Its securities
and asset management divisions make
up the balance of profits, though not
the growth. In yesterdays full-year
results only the lending unit improved
its earnings. The loan book expanded
12 per cent, in line with the pace seen
since 2011. And a good thing too, with
net interest margins at about 8 per
cent. Most banks, even other
challengers such as One Savings
Bank, would be happy with less than
half that. Close trades on a price to
book multiple of 1.7 times, more than
double the average UK bank.
Not that it takes on many risky long
term bets. Its average loan tenure is
just 14 months. Regional offices lend
small amounts (often less than
100,000), financing mostly heavy
industrial vehicles, small property
developments or used car sales.
These are highly cyclical sectors and
bad debts are sitting at historical lows.
The bank reported credit costs (loan
impairments) of just 60 basis points,
well below its 10-year average of over
double that. One could justifiably ask
whether Closes banking business has
seen its best days in this business cycle.
With a healthy core tier one capital
ratio of over 13 per cent Close is
arguably prepared for any derailments,
although a drop in profits will of course
knock the shares back following their
strong post-Brexit rally (they have
risen by a third). Given its valuation

LO

1010

300

Close Brothers:
banking on the cycle

990
1000

Nichols
Britvic
AG Barr

Shanghai and Shenzhen properties are


up a third in the year to August.
Whatever the merits of the
infrastructure boom, as China moves
to curb house-price rises the economic
momentum will be hard to maintain.

China growth:
build or spend

1000

Exposure

Rebased

50
2011

12

13

14

15

Britvic

16

FT graphic Sources: Thomson Reuters Datastream; Shore Capital

Drinkers of Irn-Bru were once told it


was made from girders. Not a
selling point in most places, yet its
maker AG Barr has so embedded the
sugary orange fizz into the Scottish
psyche that it rivals whisky as the
national drink.
If a certain ferrous cachet is no
downside, sugariness and Scotscentric sales certainly are. Both were
exposed this year, with a tax on
sugary drinks announced in March
and then the vote to leave the EU. AG
Barr has almost three-fifths of its
drinks portfolio in the higher sugar
category, and 97 per cent on UK
shores, according to Shore Capital
both more than for rivals Britvic and
Nichols. Interim results yesterday
showed six-month sales down 3 per

cent year on year, reflecting in part


ebbing demand for high-sugar drinks.
All this should have added up to an
annus horribilis for AG Barr. But while it
underperformed peers over the past
three years, 2016 has not been so bad,
with its shares roughly unchanged.
Cost control is one reason; the
company has kept margins growing,
announcing a further 10 per cent cut to
payroll in the results. They have
responded to changing tastes with
products such as the no-calorie Irn-Bru
Max, and by buying Funkin in 2015, a
fruity purveyor of cocktail mixers.
Cost control can only take AG Barr so
far. Analysts Investec and Berenberg
each forecast revenues for 2018 little
higher than 2016. A stagnant top line
barely merits the current

price/earnings ratio of around 17.


Perhaps they hope the hated sugary
drinks tax will be watered down. A
study from Oxford Economics says it
will cut consumption by just 5
calories a day, while costing industry
4,000 jobs. But the government may
not care: Treasury models generally
predict that workers move on to
other industries and the revenues
raised will be welcome.
AG Barr needs a plan for sales
growth. Its best bet is to embrace
consumers more health-conscious
habits with more low-sugar
innovation in the UK, where its
market share is still low. This still
leaves it UK-dependent, but is more
likely to work than to expect a great
overseas conversion to Irn-Bru.

sits roughly in the middle of its average


range over a decade, best to wait for
tougher times.

have this feature, according to


Dealogic. Twitters biggest shareholder
is co-founder Ev Williams with a
6.2 per cent stake. Chief executive Jack
Dorsey has only 2.1 per cent. Give them
10 or even 100 times the votes for their
shares and the calculation is different.
Twitters ordinary shareholders can be
thankful for one share, one vote.
Coddling founders via preferential
voting rights is seldom a good idea. But
it is not always as permanent or as
useful a concept as many imagine. At
its IPO in 2012, Yelp, the reviews site,
included a provision to wind up its
superior Class B shares if they
dwindled to less than the 10 per cent of
the total. Last Friday, Yelp announced
that the threshold had been reached
and the previously golden shares
became merely base metal. Founders

at Groupon are about to experience the


same reverse alchemy, though the
trigger is the passage of five years since
the IPO. At both these companies a sale
becomes incrementally more likely.
Also, the importance of single-class
stock can be overstated. A single
Twitter shareholder cannot fend off an
acquisition but its certificate of
incorporation allows the board to issue
preferred stock with superior voting
rights to a supportive investor. Yelp
and Groupon have similar abilities.
Even this is not guaranteed to work.
Once potential buyers are engaged, it is
hard to bat them off or even thanks
to the Revlon rule to accept anything
but the best price. If Twitter has got
that far down the road, Mr Dorsey
cannot veto a deal or pick and choose
between bidders.

Dual-class shares:
no veto
A hostile takeover bid for Twitter is a
remote possibility. If the social
networking site is sold in the next few
weeks, it is likely to be a friendly deal.
However, at least a direct appeal to
shareholders from an acquirer is
theoretically possible. Twitter has a
single class of shares. At many other
tech companies from Alphabet to
Zynga multi-class share structures
entrench the founders. So far this year,
nine out of 76 US initial public offerings

Todays temperatures

Abu Dhabi
Amsterdam
Ankara
Athens
8
10
Bahrain
Barcelona
1020
Beijing
Belfast
Belgrade
Berlin
13
Brussels
Budapest
Cairo
Cardiff
Chicago
Cologne
22
Copenhagen
HIGH
Delhi
Dubai
19
Dublin
Edinburgh
Frankfurt
25
Geneva
31
Hamburg
40
Helsinki
24
29
Hong Kong
1020
Istanbul
Lisbon
London
Los Angeles
Wind speed Luxembourg
in KPH Madrid

ACROSS
5, 9, 10 That day you put
in down below a pointer
to eventual success
(3,5,2,3,3,2,3,6)
11 Its rumoured to be the way in
which sailors approach to land
(4)
12 Social groups distribution
of z-scores hospital medics
found boring (10)
14 Little things written about
Queen singer-songwriter (5)
16 Get over upset (5)
20 See 8
21 Literary giant has worried
women (4)
22 See 8
24 Ignore symptom reported by
Spooner, the reason for 19 (8)
26 Ill take leave of mon ami to
represent the weeks 19 (6,7)
DOWN
1 Concoct watered-down drink
we hear (5,2)
2 Extremely cruel (6)
3 Bosses in store took eons to
mark items for restoration (4)
4 Glazed cottons (compilers
first clue, written with much
enthusiasm) (8)
6 Playing a game, touch up ass
(3)
7 To begin cutting a set from
timesheets, miss out (6)

Sun
Fair
Sun
Sun
Sun
Sun
Sun
Rain
Sun
Fair
Fair
Sun
Sun
Cloudy
Drizzle
Fair
Rain
Sun
Sun
Cloudy
Rain
Fair
Sun
Cloudy
Shower
Sun
Fair
Sun
Fair
Sun
Fair
Sun

38
21
19
25
37
26
21
18
21
22
22
23
31
19
16
23
19
36
37
20
18
23
22
20
13
33
22
31
22
30
20
26

Malta
Manila
Miami
Milan
Montreal
Moscow
Mumbai
Munich
Naples
New York
Nice
Nicosia
Oslo
Paris
Prague
Reykjavik
Riga
Rio
Rome
San Francisco
Singapore
Stockholm
Strasbourg
Sydney
Tokyo
Toronto
Vancouver
Vienna
Warsaw
Washington
Zagreb
Zurich

Thunder
Thunder
Thunder
Sun
Fair
Cloudy
Fair
Fair
Sun
Rain
Sun
Sun
Sun
Fair
Fair
Sun
Shower
Sun
Sun
Fair
Shower
Shower
Sun
Sun
Thunder
Fair
Sun
Sun
Fair
Thunder
Sun
Fair

8, 22, 20 For us, hit here may


diffuse with dark centre gap
square (5,3,3,10)
12 Astronomers given up this
troubled country (5)
13 Traditional dancing masters
taken root (5)
15 Discharge jet with bubbly on
ice (8)
17 Boast of very sympathetic
woman (5)
18 The writers stalling old Irish
runner heading for Irish Sea
(6)
19 Corruption of Wig and Gown
at last, the realisation (7)
21 Someone enigmatic setting
puzzles (hard) for beginners
in Times (6)
23 Grant Nelson a spiritual healer
for 3? (4)
25 I refuse to accept base words
from Arturo Alfandari (3)
Solution 15,356
+
$
5
9
$
5
'

( $
3
( $
7
& +
(
$ 7
,
9 , &
(
7 5 2
2
8
, 1 7
'
1
* 2 2

5 7
(
/ 0
3
, /
(
(
$
( &
&
3 ,
'
5 (
1
' 7

<
6

$ 3
(
9 $
.
6
$
/ /
/
6 8
5
3 (
6
'

5
/ (
0
: $
,
2 1
6
&
)
3 ,
5
, 0 (

3 $
1
6 (
&
$ '
2
6 7
(
/
:
7 (
$
$ 9
(
$ 5

5 ( 1 7
/
+
/ , 1 (
'
5
+ ( 5 (
$
5 ( ( 7
<
3 ( / 7
2
$
5 3 $ 1
(
*
( 1 8 (
(
1
$ 5 $ 7

23
29
32
26
19
10
31
20
26
22
25
31
19
24
22
11
14
26
25
20
32
17
24
20
31
21
15
24
19
24
22
22

Monte dei Paschi:


something or nothing

Philosophers have long argued whether


Hobsons choice is a real choice or an
illusion. Creditors in Banca Monte dei
Paschi di Siena are about to find out.
The bank is considering a
voluntary debt-for-equity offer to
holders of roughly 5bn of junior
subordinated debt at a premium yet to
be determined. The new capital would
be used to reduce gross bad debts by
half, to about the Italian average of
18 per cent of loans, while the core tier
one ratio would remain at a
semi-respectable 11.4 per cent.
Without the additional equity, MPS
will struggle to pay the coupons on its
bonds, given projected loan losses
and if state aid is offered, EU rules
would require bondholders be written
down first.
With the shares changing hands for
pennies and the bonds at steep
discounts to par, investors can hardly
say they were not forewarned. Now,
they should grasp the chance to own
equity in a relatively normal bank.

KAL/Hanjin:
abandon ships

South Koreas conglomerates are still


alive but not all are well. As Hanjin
Shipping has flirted with bankruptcy,
its 33 per cent shareholder Korean Air
has faced uncertainty of its own:
whether or not to pump funds into its
affiliate. It should leave Hanjin to sink.
If Hanjin is bust, KAL is hardly flush
itself. Its net debt to equity is higher
than the shipping companys at nearly
800 per cent; by this measure it is
Asias most indebted listed airline. At
least servicing is less of a burden.
Earnings before interest, tax,
depreciation and amortisation are
7 times interest expenses, having been
equal in 2008. Writing off its exposure
to Hanjin $350m, says Citigroup
would not be painless. But it would be
finite, unlike loan extensions. And now
is a good time, for its own future is
looking up (as is its share price, up
4 per cent yesterday). Local brokers
expect a record third quarter. A good
chance to break with the past.
Lex on the web
For notes on todays breaking
stories go to www.ft.com/lex

Wednesday 28 September 2016

Digital ads Japan scandal puts


Dentsus credibility on the line
INSIDE ASIA, PAGE 12

StanChart
faces US probe
over Indonesia
bribery claims

11

Mitsui
Chemicals

Li & Fung

Pearson

Euro / dollar

Brent crude

Nikkei 225

US 10-year
Treasury

Xetra Dax

7.3%
501

4.1%
HK$4.04

3.31%
750p

0.3%
$1.1224

3.4%
$45.75

0.8%
16,683

3bp
1.56%

0.3%
10,361

History in the making Associated Press reels in


the rights to milestone Movietone news archives

Katie
Martin
The Czech koruna could be just weeks away from relinquishing its title as the worlds most boring currency.
This title is no accident. In late 2013, the countrys central bank took drastic action, setting an upper limit on the
currency as a way to deflect deflationary pressures. With
benchmark interest rates at the time a whisker above zero
per cent, and with no desire to take rates into negative territory, this was really the central banks only option.
Its line in the sand is 27. The central bank will not allow
the euro to trade below that point against the koruna
and it hasnt. The exchange rate has flatlined, edging very
slightly closer to the limit of late. The koruna has almost
always been a slow-and-steady currency, but this really
has taken the tedium to a new level.
The central bank has succeeded in this largely because
of its clear and credible message. Simply warning off the
speculators has worked wonders. It has put its money
where its mouth is too, though, with reserves doubling to
about 70bn since late 2013.
However, the trauma of the Swiss decision to scrap its
currency floor in 2015 has left traders wondering when the
Czechs will fold, although any broader impact would
clearly pale in comparison with the Swiss stink bomb.
That time may be approaching. The Czech central bank
has committed itself to keeping the floor at least until 2017,
but thats not too far away. It gave a presentation on the
matter this month, noting that it was likely to keep the
limit until the middle of next year, and outlining its plans
for an orderly removal of the policy. It will, we are warned,
be clean and one-off but transparent, and will leave
the central bank free to intervene here and there to
smooth out any shocks.
HSBC has already dubbed the policy shift Czexit (sigh)
and warned that, in theory, it could happen as soon as January particularly as inflation has been showing signs of
life. The forwards market does not exactly smell blood, but
it does suggest that traders are preparing for a break.
The central bank has a rates decision coming up tomorrow. You neednt set your alarm for that one. But it would
be unwise to take your eye off this arcane pocket of the currency markets indefinitely.

3 DoJ eyes UK bank over power group


3 Lender breached sanctions in 2012
MARTIN ARNOLD LONDON

Standard Chartered is back in the crosshairs of the US Department of Justice,


this time facing an investigation into
allegations of bribery at an Indonesian
power station company that is controlled by the UK-listed bank.
The DoJs investigation into bribes
allegedly paid by Maxpower Group
between 2012 and 2015 risks reopening
the deferred prosecution agreement
(DPA) signed by StanChart four years
ago that averted US criminal charges for
sanction breaches.
If the bank is found to have broken US
law in the period since the 2012 deal
with the DoJ, it could face a range of
extra punishments, including having
the length of its DPA extended from the
end of 2017 or even a criminal prosecution for the sanction breaches.
The bank said in a statement that it
takes very seriously allegations of
impropriety in any of our private equity
investments, adding that it had proactively referred this matter to the appropriate authorities and have conducted
our own review.
The DoJ is investigating whether the
US Foreign Corrupt Practices Act was
breached when Maxpower executives
allegedly organised for bribes to be paid
to Indonesian government officials,
which were first reported by the MLex
news service in May. The DoJ declined to
comment.
StanChart, which focuses on Asia, the
Middle East and Africa, first invested in
Maxpower via the banks principal
finance unit in 2012. It took majority
control after investing more last year.
A key question is whether StanChart
executives on the Maxpower board

knew of the alleged bribes that were


designed to win tenders for new power
stations and to speed up payment for
earlier contracts, and whether the
banks controls were adequate.
The banks case may be helped by the
fact that it self-reported the alleged
bribes to regulators in the US, UK and
Singapore, according to people briefed
on the DoJ probe.
Maxpower conducted an internal
audit last year, which found that more
than $750,000 in cash advances in 2014
and early 2015 needed examining as
potential bribes, according to a report
by the Wall Street Journal yesterday.
The company hired lawyers at Sidley
Austin to review the internal audit and
they apparently found strong indications of bribes having been paid from
2012 to late 2015. StanChart shares fell
2.5 per cent after the report.
After the discovery of the alleged
bribery last year, StanChart removed
Maxpowers founders from its board
and installed members of its own private equity team as directors. Greg
Karpinski, a former Standard Chartered
Private Equity executive, was appointed
chief executive and executive chairman
of Maxpower in mid-2015.
Mr Karpinski could not be reached for
comment. Maxpower said in a statement: The company believes the allegations and attributions provide a onesided and partial view of the operations
and events at Maxpower and as such do
not give a full, or true view. It said it had
implemented robust remedial actions
including enhanced internal controls
since its management and shareholding
structure were overhauled last year.
Additional reporting by Ben Bland in Hong
Kong and David Lynch in Washington

The playwright and the showgirl: Marilyn Monroe and Arthur Miller in 1956 Gamma-Keystone/Getty

Czech koruna
ANNA NICOLAOU NEW YORK

The Associated Press has


bought the rights to the British
Movietone newsfilm archive
a collection of video reels capturing milestones dating back
to 1896, including the first
recorded speech of Gandhi and
George Bernard Shaw, and
Marilyn Monroe arriving in
London in 1956.
Once shown in British cinemas
twice a week, the newsreel was

the first to have sound and then


colour film.
AP, a non-profit news agency
founded in 1846, said the acquisition was designed to cement
our position as the foremost
supplier of news and historical
video. The value of the deal
was not disclosed.
Most of the film has been digitised, although 15 per cent of
the archive including rare
footage that was restricted by
censors during the second

world war is still in its original 35mm format and has not
been made public before. The
AP plans to release these films
over time.
The archive includes more
than 6,000 stories covering the
rise of fascism and the second
world war at a time before
television had become a household fixture and when cinema
was a source for hard news. It
also includes coverage of the
Korean and Vietnam wars.

Risky groups miss out on debt binge


as investors reveal limits to appetite
ERIC PLATT NEW YORK

A global debt binge driven by recordlow borrowing costs is bypassing risky


US companies as investors reveal the
limits to their desire for high-yielding
securities.

Action camera companies


locked in drone warfare
The technological arms race in the
world of video drones is creating
rivalries and causing some smaller
ventures to crash and burn. The stakes
are high, with some predicting the
market for camera drones could
double to $3.2bn by 2020.
Analysis i PAGE 13

Companies with some of the lowest


credit ratings have sold less than $12bn
of debt in the US this year, the slowest
pace since 2009, a sharp contrast to the
reception Wall Street has given the highest-quality companies, according to
data from Dealogic.
There is a search for yield but we
are late in the cycle so the price for
default risk needs to be higher, said
Sherif Hamid, a portfolio manager with
AllianceBernstein. That is a bit of

investor discipline and a little bit fear.


The drop in debt sales from groups
rated triple-C plus or lower by S&P
Global, Moodys and Fitch among the
companies most likely to default on
their obligations comes as highly
rated multinationals have never had
easier access to credit.
More than $5tn of debt has been sold
by companies and sovereigns this year,
the busiest on record, as central banks
in Europe and Japan pump stimulus
into markets in an effort to spur economic activity and rekindle inflation.
For companies teetering on the edge
of default, the market remains closed,
while those viewed as potential survivors have found some investors willing
to lend, money managers said. Defaults

have climbed but remain concentrated


in commodity linked sectors.
While junk-rated double-B rated
companies pay less than 5 per cent on
bonds, triple-C rated groups are paying
nearly 11 per cent on debt to attract
investors.
The triple-C market, like the market
overall, has been bifurcated, said David
Delbos, a portfolio manager with BlackRock. Higher quality issuers have
enjoyed very good [market] access,
while for lower quality companies it has
been tougher.
There is also concern that sudden
market turmoil could once again shut
the door on debt sales as seen in February and spur wider reverberations
through equity markets.

Companies / Sectors / People


Companies
1MDB.................................................................5
AG Barr.........................................................10
Alphabet.......................................................10
Amazon.........................................................14
Apollo Global.............................................14
Apple...............................................................13
ArcelorMittal.................................................5
Associated Press......................................11
Axel Springer.............................................12
BHP Billiton.................................................21
Baoshan Steel..............................................5
Barclays........................................................22
Bats Global Markets.............................20
Britvic.............................................................10
Business Insider.......................................12
CBOE Holdings ......................................20
CME Group.................................................20
Caesars Entertainment........................14
Chesapeake Energy...............................21
Close Brothers..........................................10
Clydesdale and Yorkshire..................14

DHR International...................................12
DJI.....................................................................13
DeliveryHero..............................................12
Dentsu............................................................12
Deutsche Bank.............................20,21,22
Deutsche Brse.......................................20
Dick Clark Productions...........................1
Dongbei Special.........................................5
EMarketer.....................................................12
Eldridge Industries....................................1
Eli Lilly...........................................................21
Engie...............................................................12
Facebook.................................................12,13
Financial Times.........................................12
Flipkart..........................................................14
Fushun Special Steel...............................5
GlaxoSmithKline.......................................12
Glencore.................................................20,21
GoPro..............................................................13
Google............................................................12
Groupon........................................................10
HSBC...............................................................12

The Financial Times Limited 2016

Hanjin Shipping.......................................10
Hewlett Packard Enterprise...............8
Independence Group...........................20
Intl Securities Exchange...................20
JD.com...........................................................14
JPMorgan.....................................................12
Johnston Press.........................................21
JustEat...........................................................12
Korean Air...................................................10
Legendary Pictures..................................1
Lily Ventures..............................................13
Lufthansa.....................................................22
Maxpower.....................................................11
Micro Focus..................................................8
Mitie.................................................................21
Monte dei Paschi....................................10
Nasdaq ........................................................20
New York Stock Exchange...............20
Nichols...........................................................10
NordLB..........................................................22
One Savings Bank..................................10
PDVSA...........................................................22

Short
View

Resolution Foundation .........................9


Royal Bank of Scotland.......................14
Royal Dutch Shell....................................21
Samsung.......................................................13
Sky....................................................................21
Smurfit Kappa...........................................21
Snapchat.......................................................13
Sony Pictures Entertainment.............1
Southwestern Energy...........................21
Standard Chartered..........................11,21
Swedbank.....................................................12
TPG..................................................................14
Takeaway.com...........................................12
Toyota......................................................12,12
Twitter.....................................................10,12
UBS..................................................................12
Uber.................................................................12
UniCredit......................................................22
Walmart .......................................................14
Walt Disney...................................................1
Wanda,..............................................................1
Western Areas.........................................20

WhatsApp.....................................................13
Whitbread.....................................................12
Williams & Glyn........................................14
Wisco.................................................................5
YPF...................................................................11
Yelp.................................................................10
Zynga.............................................................10

Sectors
Airlines...........................................................10
Banks.......................................10,11,12,14,22
Financial Services..........................5,12,20
Food & Beverage..............................10,12
Industrials................................................5,10
Media................................................1,10,11,12
Oil & Gas.......................................................21
Pharmaceuticals.......................................21
Property....................................................5,10
Retail & Consumer.................................14
Shipping........................................................10
Technology......................................10,12,13
Telecoms.......................................................13

Travel & Leisure......................................14

People
Balaresque, Antoine...............................13
Bonnesen, Birgitte..................................12
Brittain, Alison...........................................12
Concannon, Chris...................................20
Dpfner, Mathias.....................................12
Dorsey, Jack...............................................10
Groen, Jitse.................................................12
Karpinski, Greg..........................................11
Kocher, Isabelle.........................................12
McEwan, Ross...........................................14
Mestrallet, Grard...................................12
Palaniappan, Jambu...............................12
Schmidt, Eric..............................................12
Tilly, Ed........................................................20
Walmsley, Emma......................................12
Wang, Frank................................................13
Wang, Jianlin.................................................1
Witty, Sir Andrew....................................12
Woodman, Nick.........................................13
Yang, Hua......................................................5

Week 39

Against the euro (Kc per )


28
27
26
25

2013

14

15

Source: Thomson Reuters Datastream

katie.martin@ft.com

16

The Czech central


bank has
committed itself to
keeping the
currencys floor at
least until 2017

12

FINANCIAL TIMES

Wednesday 28 September 2016

COMPANIES
INSIDE BUSINESS

Banks

US lenders in Brexit senior hiring shift


Paris, Frankfurt and
cheaper EU locations gain
ground over London
LAURA NOONAN

US banks are shifting their senior hiring


away from London and towards Frankfurt and Paris after the UKs decision to
leave the EU, according to research by
headhunters DHR International.
DHR, the worlds sixth largest executive search company, said some financial institutions were also using Brexit as
a handy excuse to move middle and
back office jobs from London to a
cheaper location.
Brexit has profound implications for
City jobs, because 5,500 financial serv-

ices companies that use London as a


gateway to the EU face losing the socalled passports that allow them
access to the European Economic Area.
City executives had warned that up
100,000 jobs could be lost in London
because of Brexit, and recruitment
bosses warned of a hiring slowdown in
the immediate aftermath of the vote.
DHR said that overall the Brexit vote
had a smaller impact on hiring than
expected, but there have been some
notable changes to companies
approaches in the 100 days since the referendum vote passed on June 24.
A number of US banks have shifted
their hiring for senior positions in corporate and investment banking to locations such as Paris and Frankfurt as part
of the first step in expanding their pres-

ence in mainland Europe, said


Stphane Rambosson, head of the European financial services practice of DHR.
UK candidates are increasingly making it clear that they are willing to move
out of London to roles elsewhere in
Europe, while firms are instructing us to
fill roles overseas that might previously
have gone to London, he added. Both
[were] almost taboo ideas a year ago.
Several financial services companies
including JPMorgan, HSBC and UBS
have warned they would have to move
thousands of jobs from London as a
result of Brexit, but they are deferring
hard decisions until there is more clarity
on the terms of the UK/EU separation.
The staff most directly affected by
Brexit are the front office workers
who sell to clients across the EU from

5,500
Financial services
companies that use
London as a
gateway to the EU

40%
Savings that can be
made by moving
London roles to
cities such as
Warsaw or Dublin

London. Back and middle office functions such as administration and settlement can still be carried out in London,
but Mr Rambosson said those back and
middle office jobs were also moving out
of the City as a result of the referendum.
For some, Brexit is that handy excuse
for getting on with the unpleasant task
of moving jobs outside London, he said.
Companies can make savings of up to
40 per cent . . . by moving these roles
outside of London to cities such as Warsaw, Lisbon or Dublin, and Brexit has
prompted plenty of organisations to
bring existing plans forward.
On a more positive note for the City,
DHR found that financial services
bosses had largely ignored get-out
clauses allowing them to rescind job
offers if the UK voted to quit the EU.

Interview. Mathias Dpfner

Old media risks extinction, warns Axel chief


Publisher sees new attitude
from big technology groups as
vital to debate in democracies
DAVID BOND AND GUY CHAZAN BERLIN

Mathias Dpfner, chief executive of


German publisher Axel Springer, has
outlined an apocalyptic vision for old
media, warning that many traditional
companies will die unless they reach
agreement with the dominant technology groups.
In an interview with the Financial
Times, Mr Dpfner says he is encouraged by the European Commissions
new rules on copyright, which will give
news publishers the right to demand a
fee from internet platforms such as
Google and Facebook when they use
their content.
But he warns that unless a change in
the legal framework in Europe is accompanied by a shift in attitude from the Silicon Valley groups, then the consequences for publishers and society
could be devastating.
If there is not a real, sufficient and big
business model on the search-driven
side . . . and there is no business model
at all on the social [media] side, the
number of content producers will deteriorate fast, he says.
You will have a monopoly of content
distribution that will be mainly driven
by user-generated content, and by professional content by commerciallyinterested players.
You will have a total mix-up of
rumours and facts a pretty traumatic
scenario of information or propaganda.
It will be very painful for democracies.
As the head of Europes largest publisher, Mr Dpfner has been an outspoken advocate of new legislation that will
protect content producers.
In 2014, he wrote an open letter to
Google chairman, Eric Schmidt, admitting he was afraid of Google and comparing the fight between old and new
media to David versus Goliath.
A year earlier, the German government introduced a law to force Google to
pay for listing German publishers content. It backfired spectacularly after the
search engine delisted those titles
demanding fees and, according to Mr
Dpfner, led to an 85 per cent fall in traffic for Axels titles online.
Google sources say that while relations are improving, Axel Springer has
in the past led lobbying efforts against it
in Brussels, both directly and through
the European Publishers Council.
But Mr Dpfner dismisses any suggestion that he has been pulling the strings
of the European Commission. He also
rejects the idea that the commissions
ruling on Apples tax affairs amount to
an anti-US agenda in Brussels.
We have nobody in Washington,
nobody in Brussels, the Publishers Asso-

Mathias Dpfner
is leading Axel
Springer
towards a digital
future, but is
concerned at the
power of Silicon
Valley Goliaths
such as Google
Bloomberg/FT graphic

ciation has one person in Brussels, he


says. If you are talking about lobbying,
Google has an army of Goliaths and we
are a lame David.
Despite past tensions with Google, Mr
Dpfner says his business is building a
better understanding with the search
company and other US tech groups. In
February, Facebook chief Mark Zuckerberg visited Berlin to receive an Axel
Springer award for innovation.
He adds: We are at the moment in
very constructive talks with Facebook
and Snapchat. They understand the
necessity of a healthy ecosystem. They
have learnt from Googles mistakes.
Axel Springer has been investing

heavily in digital start-ups and targeting


new-media acquisitions in the US, as it
tries to reduce its reliance on its traditional newspaper businesses and the
European market.
It bought Business Insider for $343m
in September 2015 a deal that valued
the financial news website at nine times
expected revenues for last year. It owns
the online news channel N24, holds a 49
per cent stake in politics blog Politico
Europe and, in July, bought 93 per cent
of eMarketer, a US analytics business.
Sarah Simon, an analyst at Berenberg,
says investors were sceptical of Axel
Springers digital strategy. A lot of people are waiting to see what the economic

Digital times in advertising

Forecast industry change in net ad revenues compared to prior year, by country, 2016 (%)
Online
Print

Germany
UK
France
Netherland
Ireland
Italy
US
Brazil
-10

-5

10

15

20

25

Source: ZenithOptimedia, Axel Springer

model for online advertising looks like.


With Business Insider a lot of the content looks generic and I am not sure people will pay for that.
In 2015, it missed out in the race to
buy the Financial Times, which was sold
to Nikkei for 844m. Mr Dpfner is still
disappointed, but insists Axel will not
look to buy another newspaper brand.
And yet for all its focus on the digital
future, Axel Springers fortunes are still
underpinned by its two newspapers:
Europes biggest selling title, Bild, and
Die Welt. Although circulation and print
advertising revenues are falling at
alarming rates, the papers still
accounted for about a third of Axels
earnings of 1.5bn.
By contrast, its international digital
brands accounted for only about 10 per
cent of revenues. Online subscriptions
for Bild and Die Welt are growing
400,000 across the titles but he
admits Business Insider will not be profitable until 2018.
Despite all the doom and gloom, Mr
Dpfner is trying to remain upbeat, and
is confident Axel can forge a new identity for itself in the digital world.
Im a strong believer in the future of
digital journalism, he says. I think that
digital journalism will be better both
quality-wise and potentially with regard
to its business model. But that depends
very much on certain rules that allow
fair competition.

MEDIA

Kana
Inagaki

Advertising scandal
puts Dentsu agencys
credibility on the line

hen Toyota launched a quirky Twitter


campaign depicting the car parts of its new
Prius hybrid using anime girls earlier this
year, the digital advertising impact was
instant. The oddity and boldness attracted
young Japanese users of social media that had not been
effectively targeted by Toyotas traditional, celebrityheavy TV commercials. As with almost all of Toyotas ads,
the campaigns creator was Dentsu.
The Prius tweets were not part of the overcharging scandal that shook Japans most powerful advertising agency
last week. But it was not coincidental that Toyota was the
company that discovered the irregularities.
The revelation followed a meticulous analysis of digital
ad impact by a company grappling to connect with a home
market that has shown declining interest in owning cars.
The analysis was disappointing, prompting the automaker
to question if whether Dentsu was placing the digital ads
properly.
Since that first complaint from Toyota in July, Dentsu
has identified 633 suspected cases of overcharging,
amounting to at least $2.3m and affecting 111 clients.
Among them were 14 incidents where ads were not placed
at all and other cases of incorrect placement periods and
falsified reporting of ad performance.
Dentsu has
The scandal involves performance-based ads a identified 633
popular tool that allows
suspected cases
advertisers to target specific
types of consumers and pay of overcharging,
fees depending on how much
worth $2.3m
business was generated.
These ads were supposed to
offer advertisers greater transparency and make it easier
to measure effectiveness. In practice, companies have
struggled to judge whether these ads on websites and
mobile devices have the desired impact.
The story is not uniquely Japanese. The Dentsu discovery came days after Facebook admitted a mistake in measuring the time users spent viewing video ads on its social
network.
The US ad industry is addressing concerns that ad agencies had been accepting cash rebates from media companies without informing their clients. There are also cases of
online advertising slots that are never seen by consumers
due to fraud.
But in Japan, concerns about opaqueness are heightened
by the close ties among ad agencies, TV broadcasters and
other media companies,
which makes price negotiaThere are also
tions less transparent.
Dentsu controls one- cases of online
quarter of Japans annual
advertising slots
$61bn advertising market,
and its domination of lucra- that consumers
tive sponsorship slots such as
never see
the Olympics has made it difficult for dissatisfied clients
to voice their concerns publicly. That puts the onus on
companies to toughen their scrutiny of agency management of digital ads, says Yumi Tanaka, JPMorgan analyst.
Dentsu has promised that a more independent unit inside
the company will monitor the performance data of digital
ads in question. But that still lacks third-party verification,
which may prompt clients to pressure Dentsu to disclose
more real-time data rather than a summary version.
It remains unclear whether the discrepancies in online
ads were restricted to Dentsu or whether they plague the
broader Japanese market. Shinsuke Iwasa, Mizuho analyst, warns that rivals should not treat it as a Dentsu only
problem, citing the complexity of the performance-based
ads. Dentsu has blamed lack of personnel and pressure to
meet client demand for this new online advertising. Performance ads posted 22 per cent year-on-year growth in
2015 versus a 0.3 increase for Japans total ad spending.
For now, the amount of overcharging is unlikely to have
any significant impact on Dentsus earnings. Its chief
financial officer has stressed that none of its clients have
cut ties with the company, saying such outright rejections
dont normally happen in Japan.
Regardless of financial fallout, analysts and companies
hope that Dentsu will pursue international standards of
transparency with the rigour it has shown in its ambitions
to expand globally. In addition to the 3.2bn acquisition of
the UKs Aegis in 2013, the agency has bought six companies in the US, France, India, Australia and Brazil for
undisclosed prices in September alone.
The reputational damage from the revelations should
not be underestimated. As a Dentsu client said: Its not
the sums involved, but a question of credibility.
kana.inagaki@ft.com

Corporate governance

Technology

Women making slow progress to CEO roles

UberEats targets growth in Europe and Africa

SARAH GORDON BUSINESS EDITOR

The number of female chief executives


at Europes 350 largest public companies has more than doubled over the
past seven years, according to research
published today.
In 2009, women held the top role at six
of the 350 companies in S&Ps Euro 350
index, which accounts for more than
three-quarters of Europes equity market capitalisation, according to S&P Global Market Intelligence. As at August 18
this year, that number stood at 14.
Women who were appointed to CEO
roles in 2016 included Isabelle Kocher,
who replaced Grard Mestrallet at

Engie, Birgitte Bonnesen at Swedbank,


and Alison Brittain at Whitbread.
S&Ps research which shows that
women still hold only 4 per cent of the
top roles in Europes largest listed
groups shows the slow progress being
made in increasing the number of
female chief executives across western
economies. There are only 27 women at
the helm of S&P 500 companies in the
US, up from 18 in 2009, and just seven
running FTSE 100 companies in the UK.
The UK number has been boosted by
the appointment of Emma Walmsley to
take over from Sir Andrew Witty as CEO
of GlaxoSmithKline the largest London-listed company by market capitali-

sation to be headed by a woman. However, the rise comes as female representation on FTSE 100 boards has stalled at
26 per cent for more than a year, despite
a new target of having women occupy a
third of boards seats at the 350 largest
UK listed companies by 2020.
In the US, research published in June
by campaign group Catalyst found that
fewer than one-fifth of board seats at the
countrys largest public companies were
held by women in 2015, a percentage
unchanged from the year before.
S&P found that there were no female
chief executives in four sectors of the
S&P Euro 350, and none in two sectors of
the S&P 500.

MADHUMITA MURGIA EUROPEAN


TECHNOLOGY CORRESPONDENT

Uber is aggressively expanding its food


delivery service across Europe, the
Middle East and Africa, in a move that
takes on local players such as Dutch
company Takeaway.com, which goes
public later this week.
The San Francisco-based transport
group announced that UberEats, its
takeaway delivery arm, will launch in
European cities including Amsterdam,
Brussels and Stockholm, and farther
afield in Dubai and Johannesburg. The
group is also advertising for UberEats
general manager roles in countries

including Germany, Spain, Italy, Switzerland, Austria and Denmark.


As it expands into Europe, Uber will
take on European market leaders like
Berlins DeliveryHero, Britains JustEat
and Takeaway.com, which aims to raise
175m through an initial public offering
in Amsterdam. The regional start-ups
have been doubling down by consolidating assets and raising funds to stay
ahead of US groups, such as Amazon and
Uber, moving into the food business.
JustEat offloaded its Benelux business
to Takeaway.com earlier this year for
22.5m, while the reverse occurred in
the UK, when the Dutch start-up sold its
assets to JustEat.

The two players currently just take


orders rather than tackling the heavy
cost of delivery, resulting in a battle of
business models. Logistics is a very different business. If you look at profit
margins, it is more of a challenge, Takeaway.coms boss Jitse Groen told the
Financial Times earlier this month.
Uber believes it has a huge competitive advantage compared to local companies. Uber has been delivering people around cities for years, we are a key
part of the infrastructure and we know
how cities move, said Jambu Palaniappan, general manager for UberEats in
Europe, the Middle East and Africa.
Additional reporting by Duncan Robinson

Wednesday 28 September 2016

13

FINANCIAL TIMES

COMPANIES

Technological
arms race fuels
dash for drone
supremacy
DJI stepping up pressure in effort to
keep rival GoPro out of the picture
TIM BRADSHAW SAN FRANCISCO

When GoPro unveiled what it billed as a


huge innovation in the world of drones
last week, the chief executive of the
action-camera maker, Nick Woodman,
seemed confident of success.
Asked how many he expected to sell
of Karma, a camera-toting quadcopter
that could fold up and fit into a backpack, Mr Woodman replied with a grin:
A lot . . . we have high expectations.
However, he also admitted to reporters at the press event in Californias High
Sierra that Karmas launch was long
overdue: Our goal was to have a launch
event like this a year ago, he said. Its
not easy to develop solutions and products like this.
Just a week later, Mr Woodman is
already discovering what that delay
might have cost GoPro. Yesterday, DJI
whose Phantom range has made it the
undisputed leader in camera drones
launched a compact, folding drone of its
own. The Mavic Pro is smaller and
lighter than the Karma and comes with
novel features such as gesture control
and automated tracking that GoPros
drone lacks. Both cost $999 for a package that includes camera and controller.
Drone technology has many potential
uses, from package deliveries to aerial
inspections of oil pipelines, crops and
construction sites. Yet it is the consumer
application of a flying camera that has
caught the publics imagination both
for its cinematic potential and fears of
privacy intrusions. The research group
Futuresource Consulting projects the
video drone market will more than double from $1.4bn in 2015 to $3.2bn by
2020.
The constantly evolving technology is
attracting new entrants, creating new
rivalries and causing some smaller
drone ventures to crash and burn.
DJIs founder and chief executive,
Frank Wang, took a swipe at his new
competitor as he announced the Mavic.
DJI has spent a decade making it easier
for anyone to fly, he said, touting its
technological triumph filled with features that once again show how DJI leads
the industry.
Despite the historic difficulties that
Chinese groups have experienced in
establishing their brands overseas, DJI
has become as synonymous with video
drones as GoPro is with rugged action
cameras. DJI dominates the market,
said Adam Cox, analyst at Futuresource.
No other brand comes close. Thats the
company that GoPro needs to beat.
Before they became rivals, the two
were briefly allies. DJIs original Phantom, released in early 2013, had a mount
for users to attach their own GoPro.
Soon after, however, DJI launched a new
Phantom with its own integrated camera. Last year, DJI was valued at $8bn in
a fundraising.
Investor excitement about Karma,
and the two new Hero 5 cameras that
were launched alongside it, has driven
GoPros stock to its highest point since
early January. But even the gains of
around 13 per cent since last weeks
launch event do little to offset the huge
declines since their peak two years ago
following its June 2014 initial public
offering.
I think one of the reasons that GoPro

has struggled as a public company . . . is


because we were slow to deliver the new
products and services that we said we
would, Mr Woodman said in an interview with the Financial Times last week.
In the end, we have a very big vision
and it took longer to attract the leadership and the teams that were capable of
building out this vision. Weve finally
done that.
GoPro is not alone in struggling to
catch up with DJI. Ambitious new drone
ventures have a decidedly patchy
record. Zano, a miniature camera
drone, raised 2.3m on Kickstarter in
2014 but the company behind it folded a
year later. An investigation commissioned by Kickstarter blamed mismanagement, but also suggested that the
original Zano promotional video may
have exaggerated what the company
was technically capable of delivering.
Concerns about slipping delivery
schedules have been growing in recent
months around San Francisco-based
drone start-up Lily Ventures. It has
raised $15m in backing from Silicon Valley venture capitalists Spark Capital and
SV Angel, as well as celebrities including
former NFL quarterback Joe Montana.
Lilys drone promises to be unlike any
other: according to its marketing, it will
be waterproof, folds into a bag and can
pilot itself, no controller required. A
slick promo video caused an internet
sensation, notching up almost 12m
views on YouTube since its May 2015
release.
The young company, then made up of
just five people, was flooded with orders
that eventually totalled $34m. More
than 60,000 people paid a $500 deposit
to order a Lily drone, which the company promised would be released in
early 2016. However, that deadline has
been pushed back again and again. Lily
is now telling customers the drone will
start shipping by the end of December.
There are a lot of complicated challenges to do with the fact that it is a compact unit, it is waterproof and fully
autonomous, said Antoine Balaresque,
Lilys 25-year-old founder. Every hardware company goes through a similar
path. We were very ambitious and optimistic about the timeline.
Earlier this summer, Lily had to lay off
several people from its marketing and
operations team, in what one former
employee called a large reduction in
force. Its headcount now stands at 35,
mainly engineers focused on perfecting
and manufacturing its product.
Mr Balaresque said the experience
has taught Lily to be more conservative in what it promises.
For new entrants to the drone market

$34m

$1.4bn

Total value of
drone orders
placed with
Lily Ventures

Value of the video


drone market last
year, expected to
double by 2020

High hopes

Software push
GoPro unveils its iTunes
in push to stand out

DJIs Mavic Pro


40 mph
22,960 ft
28.8 oz
Up to 27 minutes
$749 ($999 including remote controller)
Folds to the size of a water bottle; includes
subject tracking and gesture control

Drone market

Estimated size of market


by sales, 2015 ($bn)

Facebook will be banned from collecting and storing the data of 35m users of
its WhatsApp messaging service in Germany, after officials judged the company had breached data protection
laws by sharing customer information.
The data protection commissioner for
the city of Hamburg, Johannes Caspar,
also ordered Facebook to delete all data,
including phone numbers, already forwarded on by WhatsApp. Facebook said
it would appeal against both orders.
In a statement, the office of the commissioner noted that after Facebook
acquired WhatsApp for $19bn two years
ago, both parties had made public assurances that they would not share data.

35 mph
14,500 ft
35.5 oz
Up to 20 minutes
$799 ($999 with GoPro camera)
Folds into a backpack; includes
removable handheld video stabiliser

VC investment by deal, value ($m)

Specialist

14.0

140
120

0.2

Military

100
80

Toy
0.7

2.3 Consumer
Commercial

60

Video
1.4

40
20

0.4

0.02
0

0 0

Civil government

0.4

Sources: Future Source; Teal; CB Insights

both large and small, Futuresources Mr


Cox said that there was quite a bit of
room for growth. But he warned that
the basic flying camera technology had
already become commoditised, putting
pressure on latecomers to deliver fresh
innovations.
Lily and Zano generated huge online
anticipation by putting out videos that
blew everyone away, said Mr Cox.
Thats great if you are 100 per cent confident you can deliver.
Consumers will decide whether DJIs
Mavic lives up to its billing when the
drone goes on sale next month. But
the units portability, its ability to sense
and avoid obstacles before and below
it, and its use of computer vision to track
a moving subject are all features that
DJI hopes will appeal to the GoPro
clientele.
Mr Woodman said GoPro was working on similar follow-me features but
insisted that no rival product was yet
living up to its promise. Some drone
experts agree with that assessment, but
note that GoPro may need to move
quickly if it is to catch up with DJI.
In the meantime, GoPro hopes to
broaden the drone market by focusing
on accessibility and ease of use. Thanks
to a removable gimbal that can bring
stabilised video to a handheld camera,
Karma is more than a drone, Mr
Woodman said.
But at a time when smartphones
optics are improving rapidly, Mr Cox
questioned how many people are prepared to spend hundreds of dollars on a
flying camera.
There are only a finite number of
people who want to spend $1,000 on a
video drone, said Mr Cox. Its ultimately a very expensive selfie.

Germany bans Facebook-WhatsApp sharing


The fact that this is now happening
not only misleads users and the public,
but also constitutes an infringement of
national data protection law, it said.
WhatsApp announced it would share
user information with its parent company Facebook for the first time in
August, admitting that user data such as
phone numbers and device details
would now be used to target advertisements on Facebook.
By connecting your phone number
with Facebooks systems, Facebook can
offer better friend suggestions and show
you more relevant ads if you have an
account with them, WhatsApp said.
WhatsApp users were then notified of
the policy change and were given just 30
days to opt in or out, or face not being
able to access the app.

Top speed
Maximum flight altitude
Weight
Flight time
Cost
Features

Estimated share by value ($bn)

Technology

MADHUMITA MURGIA LONDON


GUY CHAZAN BERLIN

GoPros Karma

Mr Caspar said such an exchange of


information was only permissible if the
two companies had established a legal
basis for it, by asking WhatsApp users
for their permission in advance.
This has not happened, he said.
A spokesperson for Facebook said:
Facebook complies with EU data protection law. We are open to working with
the Hamburg DPA in an effort to
address their questions and resolve any
concerns.
The WhatsApp investigation
may spill over Germanys borders:
earlier this month, European competition commissioner Margrethe Vestager
announced that EU officials were asking
Facebook follow-up questions on the
new data-sharing agreement with
WhatsApp.

2012

13

14

15

16

Nick Woodman smashed his


iPhones screen last week. Trying
to fumble around with this thing to
keep up with my kids, I drop it and
break it, he explained.
A cracked smartphone is an alltoo-familiar sight but it is an
unusual revelation for the founder
of GoPro, whose action cameras are
designed to withstand jumping out
of an aircraft or kayaking down
rapids. I dont always have my
GoPro on me, he admitted during a
press conference.
With the latest iPhones and
Samsung Galaxies offering
improved cameras and better water
resistance, GoPro is arguably facing
greater competition than ever from
smartphones, especially as it tries
to broaden the market for its
activity cameras from adrenalin
junkies to everyday users.
In response, GoPro is improving
more than its hardware. While
insisting that its cameras are not
suffering from cheap competition
from China, Mr Woodman has
blamed GoPros lacklustre software
for its falling sales.
After spending $105m on a pair
of software acquisitions this year,
GoPro has launched Quik, a new
automated editing app. A new
$4.99-a-month GoPro Plus service,
which will allow users to
automatically upload videos to the
cloud from a camera, will be
released in the next few weeks.
We are basically unveiling, in
some senses, our iTunes, he said,
referring to the Apple digital music
store that helped make its iPod a
hit. GoPro is no longer a hardwarecentric company. We are now an
ecosystem.
Yet at the same time, new rivals
from the internet are moving into
physical devices. The group behind
messaging app Snapchat said last
week it is to release a $130 pair of
sunglasses that have a tiny camera
built in. Snap, as the apps parent
has renamed itself, poached
employees from GoPro to help
develop its Spectacles.

14

FINANCIAL TIMES

Wednesday 28 September 2016

COMPANIES
Travel & leisure

Caesars agrees debt restructuring with bondholders


Private equity groups
avoid long legal fight after
raising offer to creditors
SUJEET INDAP NEW YORK

Creditors and the private equity owners


of US casino group Caesars Entertainment yesterday agreed to the terms of a
debt restructuring, averting a bruising
legal fight over claims of asset-stripping.
A group of junior second lien bond-

holders are to receive cash, equity, and


convertible bonds worth 66 cents on the
dollar, 27 cents more than the previous
proposal from Caesars. The first offer to
the group when Caesars filed for bankruptcy last year was 9 cents.
The deal marks the end of a dramatic
month that saw private equity owners
Apollo Global and TPG move quickly to
avoid an uphill legal battle. US bankruptcy court judge Benjamin Goldgar in
late August refused to extend an injunction that had prevented lawsuits against

the Caesars parent company over terminated bond guarantees from proceeding. Judgments in those cases could have
cost more than $10bn.
Caesars, Apollo and TPG had believed
that since nearly all creditors outside
the second lien group had agreed to a
consensual restructuring, the company
stood a good chance of another delay in
litigation, buying months to bring the
final dissident group on board.
However, the judge criticised the
terms of that deal. He questioned why

Apollo, TPG and its executives should be


released from personal liability claims
worth up to $5bn without contributing
to the settlement. Soon after, Judge
Goldgar allowed the second-lien bondholders to review bank and tax records
of those officials, including Apollo cofounder Marc Rowan and TPG cofounder David Bonderman, to evaluate
if they could afford adverse judgments.
Yesterdays deal calls for TPG and
Apollo to surrender their entire interest
in the publicly traded Caesars Enter-

tainment parent, worth nearly $1bn, in


exchange for release of liability. The
remaining public shareholders will keep
6 per cent in the new Caesars. Another
$600m owed to the second-lien group,
whose original face value of debt is
$5bn, will come from senior bank loans
and bondholders. Creditors will own 70
per cent of the reorganised Caesars.
Apollo and TPG will retain a small
stake in the gaming group. Another
listed affiliate, Caesars Acquisition
Corp, will own 23 per cent of the new

company. The private equity groups


own two-thirds of that companys
shares and will retain about $1bn worth
of equity of the new Caesars.
Apollo and TPG contributed a combined $6.6bn of capital to the initial buyout and creation of Caesars Acquisition
Corp in 2013. Caesars ran into trouble
after its $31bn buyout in 2008 because
of its debt load and the financial crisis.
The private equity owners have claimed
that casino sales and financing moves
were to buy time for a turnround.

Oil & gas. Exploratory project

Critics bite back against Great Australian Bight drilling scheme


Environmental concerns greet
proposals as movie portraying
2010 disaster set to be released
JAMIE SMYTH SYDNEY

A multibillion-dollar plan by BP and


other oil majors to begin deep water
exploration drilling in an Australian
marine park has provoked an outcry
from conservationists, who warn it risks
a Deepwater Horizon-style oil spill environmental disaster.
Australias oil and gas regulator is
expected to rule this week on BPs proposal to drill two wells at depths of up to
2km in the Great Australian Bight, a
stretch of ocean that is a sanctuary for
whales and other protected species.
BP, Statoil and Chevron are among
companies with permits to explore the
area, which research group Wood Mackenzie estimates could contain up to
1.9bn barrels of oil equivalent worth
$87bn at todays depressed oil price.
Critics claim BP does not have adequate contingency plans to protect the
environment in the event it suffers a
blowout an uncontrolled release of oil
or gas from an exploration well.
A blowout at a BP-operated well in the
Gulf of Mexico in 2010 led to the sinking
of the Deepwater Horizon oil rig, the
deaths of 11 people and an oil spill that
BP said had cost the company $62bn
before tax.
This is an outrageous proposal, says
Peter Owen of Wilderness Society, an
environmental group. This is the company that nearly wiped out the Gulf of
Mexico, costing billions of dollars of
damage. It now wants to deep water drill
in a whale nursery. Environmental

Contracts & Tenders

groups, including ShareAction, which


promotes responsible investment, have
also criticised the drilling plan as contrary to BPs commitment to take meaningful action against climate change.
A decision on whether to allow drilling in the Great Australian Bight comes
as a Hollywood movie chronicling the
Deepwater Horizon disaster opens in
the US this week, prompting public relations issues for BP.
It is also a key moment for the oil
industry, which has cut spending on
exploration due to lower oil prices and
the challenges of making a profit from
more risky and complex projects.
Angus Rodger, a research director at
Wood Mackenzie, says: Due to spending cuts the majors have de-emphasised
the importance of high-risk deep water
frontier exploration wells over lowerrisk opportunities close to existing
infrastructure, and so we have seen far
fewer new areas being tackled.
The Great Australian Bight is an
exception to the rule, being one of the
largest untested deep water basins in
the world.
Analysts say BP has underperformed
other oil majors in terms of booking new
oil reserves in the past three years and is
under pressure to find new resources.
In its submissions to an Australian
parliamentary inquiry and industry
regulator, BP argues finding oil in the
Great Australian Bight would have enormous economic benefits for Australia,
and that it has learnt lessons from the
Deepwater Horizon accident.
Since the tragic 2010 Deepwater
Horizon accident in the Gulf of Mexico,
BP and the industry have advanced
equipment, procedures and training/
competency management in the areas
of drilling safety and prevention,

Animal friendly: sharks, whales and several protected species live in the region Jeff Rotman/Alamy

containment, and oil spill response. In


the unlikely event that there was a well
incident we would take action immediately, starting from within seconds
there are lots of parallel activities that
we would mobilise, such as starting dispersant injection or surface recovery, at
the same time as capping the well.
Australias oil and gas regulator has
twice denied BPs environmental plan
and is due to make a decision on its
revamped proposal tomorrow.
BP released fresh details of the plan
this month, which shows how the company would respond to any blowout.
Spill analysis conducted by BP shows
oil could begin reaching shore nine days
after a blowout. However, the oil company does not plan to deploy an on-site
capping stack the latest technology
used to cap wells after a blowout.
New US rules require a capping stack
be located within 24 hours travel time of
a drill site in the Arctic, says Andrew
Hopkins, professor at Australian
National University and author of a
book on the 2010 disaster.
If the Arctic justifies this type of protection: then why not the Great Australian Bight?
Professor Hopkins estimates it could
take 35 days for a capping stack to be
shipped from Singapore to the region to
begin work in the event of a blowout.
One of the problems in the oil industry is that incentive and bonus structures are typically linked to cost savings
and speed of drilling, rather than risk
management, says Prof Hopkins. It is
similar to banking.
BP says that not all incidents would
need a capping stack as a response. But
if one does we will transport one from
any of a range of locations, such as Singapore, adds the oil group.

Retail & consumer

Banks

Walmart closes in on
stake in Indias Flipkart

RBS eyes options if it fails


to sell Williams & Glyn

SIMON MUNDY MUMBAI


JAMES FONTANELLA-KHAN NEW YORK

Walmart is in talks to buy a stake in


Indian ecommerce leader Flipkart as
the worlds largest retailer by sales tries
a new tack in a country where its ambitions have been hamstrung by strict
regulations.
The talks, according to two people with
knowledge of the discussions, are at a
preliminary stage and come just three
months after Walmart sold its Chinese
ecommerce operation to local rival
JD.com and completed its $3bn purchase of Jet.com at home.
Any deal would see Walmart square
off against US rival Amazon, which is
locked in a battle for supremacy with
Flipkart in an Indian ecommerce market that Morgan Stanley analysts predict will hit turnover of $119bn by 2020.
The move highlights Walmarts
attempts to remedy its slow start to
investing in ecommerce, where its sales
growth has lagged behind that of the
broader market globally.
Flipkart was founded in 2007 by two
former Amazon employees, who emulated their former employers strategy
by starting with book sales before diversifying into other products.
Last week, it claimed to have become
the first Indian ecommerce company to
register 100m users, but analysts
believe it has been steadily losing market share to Amazon. In June, the US
group announced plans to pump $3bn
into its Indian subsidiary, without specifying the timeframe.
The rivals are poised to spend heavily
on incentives for vendors around sales
promotions ahead of the Diwali festival
next month. Such inducements have
been blamed for pushing up losses at
Flipkart and other Indian ecommerce
groups, which have encountered a finding slowdown after exuberant foreign
investor interest in 2014 and 2015.

A capital injection from Walmart


would be Flipkarts first since July last
year, when it raised $700m at a $15.2bn
valuation, and would provide a vital
cushion to soak up further losses as it
competes for market share.
Flipkart made a pre-tax loss of
Rs29.8bn ($448m) on revenue of
Rs102bn in the year to March 2015,
according to its most recent regulatory
filings in Singapore, where it is domiciled.
Many entrepreneurs and investors in
Indias technology sector argue that consumers are rapidly moving from traditional neighbourhood retail to ecommerce, bypassing the big box hypermarket model pursued by Walmart.
The US company has had a troubled
decade in India. In 2007 it formed a joint
venture with Bharti Enterprises to run
wholesale stores, in what was seen as a
precursor to the opening of retail outlets, in light of regulations requiring foreign retailers to partner with local companies. That partnership was dissolved
in 2013 with Walmart taking sole control of the wholesale outlets, whose
number now stands at 21, according to
its last annual report.
The New Delhi government opened a
potential route for Walmart into the
retail sector this June, however, when it
legalised 100 per cent foreign ownership
of food retailers selling Indian produce.
Both Flipkart and Walmart declined
to comment.

Any Flipkart deal would see Walmart


square off against US rival Amazon

EMMA DUNKLEY

Royal Bank of Scotlands chief executive has warned that it could fail to sell
its Williams & Glyn unit before the end
of this year, leaving the state-backed
lender in uncharted territory.
Ross McEwan, chief executive of the
bank, which is 73 per cent owned by the
government, said RBS was having to
think about the what ifs in the event
that RBS does not sell Williams & Glyn
by the end of 2016.
Mr McEwan said: We are in
uncharted territory if we dont actually
sell the assets this year.
RBS said at the end of 2015 that it
would begin the formal process of seeking a buyer for Williams & Glyn with a
view to striking a binding agreement to
sell the business by year-end 2016.
His comments, made at a conference
hosted by Bank of America Merrill
Lynch yesterday, come a week after the
Financial Times revealed Santander
had dropped out of talks to buy Williams & Glyn following a price disagreement. One banker familiar with the
talks said at the time that Santander
could still come back to the table if the
price was right.
RBS must offload Williams & Glyn as a
condition of European Commission
rules for receiving a 45bn bailout during the financial crisis.
RBS has argued that divesting Williams & Glyn has been a tough and
highly complicated process, as the new
bank has 2m retail and business customers, with a 300-strong branch network that must be extrapolated from its
own systems.
RBS is in Treasury talks about ways it
could meet the commissions criteria. A
person close to the plans said that
Clydesdale and Yorkshire Banking
Group, a challenger bank, was eyeing
the Williams & Glyn branches.
Mr McEwan yesterday confirmed the

bank was looking at alternative


options alongside the trade sale, but
gave no further detail.
One banker suggested RBS could look
at boosting competition in the SME
market through other means as a way to
potentially meet the commissions
requirements. Mr McEwan pointed out
at the conference that the arrangement
was between the commission and the
UK Treasury, which suggests there
might be room for negotiation.
The bank came under fire for spending about 1.5bn on plans to create Wil-

We are in uncharted
territory if we dont sell
the assets this year
Ross McEwan
liams & Glyn as a standalone bank to list
on the stock exchange, which RBS
dropped in August.
Mr McEwan said the decision was
based on the lower-for-longer interest
rate environment after the Brexit vote,
which would render the cost of running
Williams & Glyn as a separate bank
untenable.
Offloading Williams & Glyn is a key
issue for shareholders, as RBS management has said in the past that the return
of excess capita is dependent on selling
off the challenger bank.

Wednesday 28 September 2016

FINANCIAL TIMES

15

16

FINANCIAL TIMES

Wednesday 28 September 2016

MARKET DATA
WORLD MARKETS AT A GLANCE

FT.COM/MARKETSDATA

Change during previous days trading (%)


S&P 500

Nasdaq Composite

0.40%

Dow Jones Ind

0.56%

FTSE 100

FTSE Eurofirst 300

-0.15%

0.49%

Nikkei

0.06%

Hang Seng

0.84%

FTSE All World $

1.09%

$ per

$ per

-0.621%

0.36%

0.154%

Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS
EUROPE
Index

Aug 28 - Sep 27
S&P 500

All World

New York

2,169.04
Month -0.66%

Nasdaq Composite

Year NaN%

Day -0.19%

New York

IPC

5,286.89

5,218.92
Day 0.56%

Month 1.30%

Year 12.81%

Dow Jones Industrial

18,184.30

Day 0.49%

Month -1.15%

Country

Index

Year 11.46%

Month -0.31%

Year 9.09%

Day 0.46%

Month 0.22%

Year 11.88%

Bovespa

57,914.71

Day -0.24%

Month 0.42%

Year 29.28%
Latest

Previous

Year 11.31%

FTSE Eurofirst 300


1,350.40
Month -1.01%

Year -2.57%

CAC 40

4,398.68

Day -0.21%

Month -0.97%

Country

Index

Year -1.83%

Cyprus
Czech Republic
Denmark
Egypt
Estonia
Finland
France

close
price
88.26
112.77
89.95
811.54
128.41
15.22
44.99
97.24
57.60
78.87

Day's
change
0.41
-0.11
-0.01
12.38
1.10
0.13
0.11
2.68
0.70
-1.76

BIGGEST MOVERS

Close
price

Day's
change

Day's
chng%

48.37
64.31
14.39
112.75
38.05

1.90
2.42
0.51
3.66
1.18

4.09
3.91
3.67
3.36
3.20

Ups
Virgin Money Holdings (uk)
Carnival
Pearson
Softcat
Tui Ag

6.11
13.04
10.01
69.44
25.50

-0.51
-0.67
-0.51
-3.24
-1.15

-7.70
-4.89
-4.80
-4.46
-4.32

Downs
Aldermore
Aa
Hunting
Tullow Oil
Ip

Downs
Chesapeake Energy
Southwestern Energy
Freeport-mcmoran
Eqt
Murphy Oil

Based on the constituents of the S&P500 and the Nasdaq 100 index

Oil Brent $ Sep

-0.085%

-0.806%

Gold $

-1.80%

-1.01%

Month -0.31%

Year NaN%

Ibex 35

Day -0.27%

Month 0.33%

Year -8.73%

FTSE MIB

All World

Month 1.98%

Seoul

2,032.35

Year -6.69%

Hang Seng

All World

2,062.82

16,683.93

Day 0.84%

Index

Aug 28 - Sep 27
Kospi

Tokyo

16,555.95

Madrid
8,688.20

Index

Aug 28 - Sep 27
Nikkei 225

Day 0.77%

Hong Kong

Month 1.24%

Year 6.17%

FTSE Straits Times

23,571.90

Singapore
2,860.23

2,857.65

22,909.54
Day 1.09%

Milan

Month 2.89%

Year 11.26%

Shanghai Composite

Day 0.36%

Shanghai

Month 0.09%

Year 0.97%

BSE Sensex

Mumbai

3,070.03

16,655.22
Day -0.36%
Country

16,134.71
Year -24.39%

Month -4.21%
Index

Philippines
Poland
Portugal

Latest

Manila Comp
Wig
PSI 20
PSI General
BET Index
Micex Index
RTX
TADAWUL All Share Index
FTSE Straits Times
SAX
SBI TOP
FTSE/JSE All Share
FTSE/JSE Res 20
FTSE/JSE Top 40
Kospi
Kospi 200
IBEX 35
CSE All Share
OMX Stockholm 30
OMX Stockholm AS
SMI Index

Romania
Russia
Saudi-Arabia
Singapore
Slovakia
Slovenia
South Africa
South Korea
Spain
Sri Lanka
Sweden
Switzerland

Previous

7557.34
47159.72
4520.61
2437.99
6917.93
1978.46
973.49
5956.59
2860.23
319.26
742.21
50899.66
30764.74
44397.13
2062.82
259.57
8688.20
6483.29
1345.44
480.68
8175.42

Day 0.60%
Country

7632.46
47448.10
4566.88
2457.53
6955.06
1997.94
986.83
5913.00
2849.94
324.96
744.56
51479.80
31374.06
44963.91
2047.11
257.48
8711.40
6478.94
1359.14
485.01
8165.05

Taiwan
Thailand
Turkey
UAE
UK

USA

Venezuela
Vietnam

Month -2.35%

Year -3.05%

Index

Latest

Weighted Pr
Bangkok SET
BIST 100
Abu Dhabi General Index
FT 30
FTSE 100
FTSE 4Good UK
FTSE All Share
FTSE techMARK 100
DJ Composite
DJ Industrial
DJ Transport
DJ Utilities
Nasdaq 100
Nasdaq Cmp
NYSE Comp
S&P 500
Wilshire 5000
IBC
VNI

Day -0.25%

Previous

9194.52
1489.39
76725.73
4492.22
2968.00
6807.67
6056.17
3706.83
4359.62
6410.20
18184.30
7955.14
689.76
4851.26
5286.89
10643.13
2154.78
21224.32
12661.68
684.89

28,223.70

27,835.91

2,998.17

Country

9284.62
1490.14
79756.44
4497.21
2972.60
6818.04
6066.76
3714.32
4375.48
6388.53
18094.83
7914.69
692.43
4817.17
5257.49
10624.88
2146.10
21238.05
12503.98
677.04

Month 1.59%
Index
DJ Global Titans ($)
Euro Stoxx 50 (Eur)
Euronext 100 ID
FTSE 4Good Global ($)
FTSE All World
FTSE E300
FTSE Eurotop 100
FTSE Global 100 ($)
FTSE Gold Min ($)
FTSE Latibex Top (Eur)
FTSE Multinationals ($)
FTSE World ($)
FTSEurofirst 100 (Eur)
FTSEurofirst 80 (Eur)
MSCI ACWI Fr ($)
MSCI All World ($)
MSCI Europe (Eur)
MSCI Pacific ($)
S&P Euro (Eur)
S&P Europe 350 (Eur)
S&P Global 1200 ($)
Stoxx 50 (Eur)

Cross-Border

Year 9.13%
Latest

Previous

245.84
2966.96
872.68
5429.09
275.82
1339.11
2628.56
1352.58
1759.85
3142.40
1557.89
487.89
3752.42
4080.31
416.20
1714.85
1386.37
2409.30
1366.57
1375.57
1907.26
2826.23

244.83
2975.88
873.52
5408.43
274.84
1338.26
2625.74
1346.05
1769.18
3178.20
1571.35
486.16
3746.46
4088.47
420.02
1729.70
1406.82
2419.79
1369.09
1374.83
1902.57
2825.06

UK MARKET WINNERS AND LOSERS

LONDON
ACTIVE STOCKS

stock
traded m's
Procter & Gamble (the)
24.2
Apple
12.3
Hospira
11.8
Amazon.com
11.2
Facebook
9.7
Bank Of America
5.6
Wells Fargo &
5.5
Netflix
5.0
Microsoft
4.8
Gilead Sciences
4.3

Ups
Carnival
Tripadvisor
Navient
Expedia
Southwest Airlines

10,361.48

Day -0.31%

STOCK MARKET: BIGGEST MOVERS


AMERICA
ACTIVE STOCKS

Frankfurt

10,544.44

Paris

4,424.25

All World

8,616.40

1,339.11

Day 0.06%

Index

Aug 28 - Sep 27
Xetra Dax

Europe

17840.88
29793.53
16192.48
4408.51
16544.56
1092.68
1335.84
2136.75
3174.15
5410.23
734.97
541.86
1575.18
1669.50
47252.54
9985.84
447.87
683.74
7264.87
28166.42
665.18
40294.38

16356.44
5519.10
5431.40
3012.90
2381.42
3551.45
6074.46
58053.53
851.45
14619.46
670.38
20351.04
8102.10
9504.90
3119.87
348.09
2980.42
2056.92
1178.40
1351.60
1948.92

Index

Month -0.56%

FTSE Italia All-Share


17767.32
CSE M&P Gen
66.57
67.18
Italy
FTSE Italia Mid Cap
29559.38
PX
866.34
869.10
OMXC Copenahgen 20
990.99
996.35
FTSE MIB
16134.71
EGX 30
7904.53
7913.94
Japan
2nd Section
4420.73
OMX Tallinn
993.19
992.27
Nikkei 225
16683.93
Austria
OMX Helsinki General
7979.72
8001.14
S&P Topix 150
1102.52
Belgium
CAC 40
4398.68
4407.85
Topix
1349.22
SBF 120
3503.89
3513.68
Jordan
Amman SE
2131.27
Brazil
Germany
M-DAX
21319.76
21334.09
Kenya
NSE 20
3187.33
Canada
TecDAX
1779.13
1780.48
Kuwait
KSX Market Index
5407.87
XETRA Dax
10361.48
10393.71
Latvia
OMX Riga
723.06
Chile
Greece
Athens Gen
562.40
563.59
Lithuania
OMX Vilnius
542.13
China
FTSE/ASE 20
1495.92
1496.66
Luxembourg
LuxX
1566.11
Hong Kong
Hang Seng
23571.90
23317.92
Malaysia
FTSE Bursa KLCI
1664.72
HS China Enterprise
9746.56
9629.35
Mexico
IPC
47468.59
HSCC Red Chip
3924.13
3901.47
Morocco
MASI
10000.05
Hungary
Bux
27481.04
27685.30
Netherlands
AEX
447.83
India
BSE Sensex
28223.70
28294.28
AEX All Share
683.07
S&P CNX 500
6627.95
6634.30
New Zealand
NZX 50
7252.92
Colombia
Indonesia
Jakarta Comp
5419.60
5352.14
Nigeria
SE All Share
28247.07
Croatia
Ireland
ISEQ Overall
5990.69
6014.94
Norway
Oslo All Share
663.11
Israel
Tel Aviv 100
12.83
12.81
Pakistan
KSE 100
40294.38
(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.
16162.63
5493.70
5405.90
3001.20
2371.66
3547.89
6050.62
57914.71
850.98
14592.18
670.38
20188.06
8146.44
9519.43
3138.48
349.37
2998.17
2072.30
1179.50
1346.67
1943.21

Country

6,818.04

Day -0.15%

So Paulo

57,716.25

London

6,816.90

Mexico City
47,468.59

All World

Previous

Merval
All Ordinaries
S&P/ASX 200
S&P/ASX 200 Res
ATX
BEL 20
BEL Mid
Bovespa
S&P/TSX 60
S&P/TSX Comp
S&P/TSX Met & Min
IGPA Gen
FTSE A200
FTSE B35
Shanghai A
Shanghai B
Shanghai Comp
Shenzhen A
Shenzhen B
COLCAP
CROBEX

Previous

14,592.18

per

ASIA
Index

Aug 28 - Sep 27
FTSE 100

Latest

Argentina
Australia

Latest

Toronto

47,599.12

New York

18,395.40

All World

14,639.88

2,154.78

Day 0.40%

Index

Aug 28 - Sep 27
S&P/TSX COMP

per $

stock
traded m's
Sabmiller
623.8
Hsbc Holdings
170.2
Royal Dutch Shell
147.7
Reckitt Benckiser
133.7
Barclays
124.2
Rolls-royce Holdings
121.9
British American Tobacco
114.7
Lloyds Banking
108.7
Astrazeneca
108.4
National Grid
108.2

close
price
4465.00
577.10
1800.50
7210.00
165.95
711.00
4898.00
54.64
5058.00
1093.50

Day's
change
1.52
5.13
-35.63
46.78
-2.36
-0.91
13.25
0.24
9.43
10.49

BIGGEST MOVERS

Close
price

Day's
change

Day's
chng%

314.70
3726.00
750.00
328.40
1086.00

16.12
167.11
22.03
7.80
24.38

5.40
4.70
3.03
2.43
2.28

166.90
285.00
414.00
216.30
166.70

-7.80
-11.78
-17.06
-7.42
-5.70

-4.46
-3.97
-3.96
-3.31
-3.31

Based on the constituents of the FTSE 350 index

EURO MARKETS
ACTIVE STOCKS

TOKYO
ACTIVE STOCKS

stock
traded m's
Nestle N
357.1
Deutsche Bank Ag Na O.n.
311.2
Volkswagen Ag Vzo O.n.
301.6
Novartis N
254.0
Total
250.2
Ab Inbev
247.2
Roche Gs
246.7
Allianz Se Na O.n.
246.2
Cs N
241.0
Intesa Sanpaolo
217.2

close
price
69.90
10.55
116.20
71.65
40.77
117.35
222.39
132.30
11.76
1.97

Day's
change
0.00
0.00
0.00
0.00
-0.96
1.20
0.00
0.00
0.00
0.00

stock
close
traded m's
price
Mitsubishi Ufj Fin,.
630.1
526.20
Toyota Motor
610.1 6014.00
Sumitomo Mitsui Fin,.
547.2 3553.00
Mizuho Fin,.
464.2
178.20
Softbank .
331.9 6666.00
Thb Dai-ichi Life Insurance ,
231.5 1408.00
Nippon Telegraph And Telephone
213.9 4800.00
Kddi
212.9 3219.00
Sony
208.7 3378.00
Fast Retailing Co.,
202.9 32400.00

Day's
change
-7.40
97.00
-25.00
-2.00
43.00
-14.50
57.00
65.00
-3.00
-310.00

BIGGEST MOVERS

Day's
change

Day's
chng%

BIGGEST MOVERS

Ups
Deutsche Wohnen Ag
Rwe Ag
Pandora A/s
Delhaize Sa
Sampo A

Close
price
28.23
8.83
130.53
94.30
38.49

1.12
0.24
3.02
1.88
0.74

4.15
2.81
2.37
2.03
1.96

Downs
Grifols Sa
Bayerische Motoren Werke Ag
Industrivarden Ab
Svenska Handelsbanken Ab
Vonovia Se

14.99
64.40
16.14
11.40
29.34

-14.40
-4.15
-0.82
-0.50
-0.93

-48.99
-6.05
-4.81
-4.18
-3.08

Based on the constituents of the FTSEurofirst 300 Eurozone index

Ups
Mitsui Chemicals,.
Toshiba
Sumitomo Metal Mining Co.,
Dainippon Sumitomo Pharma Co.,
Tosoh

Close
price

Day's
change

Day's
chng%

501.00
328.80
1384.00
1960.00
643.00

34.00
18.10
73.50
92.00
26.00

7.28
5.83
5.61
4.93
4.21

Downs
Concordia Fin Ltd
Sumitomo Mitsui Trust Holdings,.
Resona Holdings, .
Thb Chiba Bank,
Fukuoka Fin,.

469.70
344.60
449.30
595.00
440.00

-14.90
-10.20
-12.70
-16.00
-9.00

-3.07
-2.87
-2.75
-2.62
-2.00

Based on the constituents of the Nikkei 225 index

FTSE 100
Winners
Anglo American
Fresnillo
Glencore
Carnival
Bhp Billiton
Rio Tinto
Coca-cola Hbc Ag
Hammerson
Randgold Resources Ld
Sainsbury (j)
Bp
Tui Ag

Sep 27
price(p)

%Chg
week

%Chg
ytd

916.80
1776.00
208.25
3726.00
1077.50
2460.00
1739.00
589.00
7760.00
250.80
428.20
1086.00

9.2
6.6
5.8
5.1
4.6
4.2
3.3
3.1
2.8
2.4
1.8
1.8

Losers
Itv
Polymetal Int
Royal Bank Of Scotland
Whitbread
Pearson
Travis Perkins
Intercontinental Hotels
Hikma Pharmaceuticals
Associated British Foods
Easyjet
Bae Systems
Direct Line Insurance

183.70
961.00
174.60
3863.00
750.00
1500.00
3135.00
2064.00
2599.00
1009.00
520.00
368.60

-6.7
-6.4
-5.9
-5.4
-5.3
-4.9
-4.9
-4.3
-4.2
-4.1
-3.8
-3.6

Sep 27
price(p)

%Chg
week

%Chg
ytd

212.9
151.4
130.4
-3.7
42.1
24.2
20.1
-2.0
87.1
-3.3
21.9
-9.6

FTSE 250
Winners
Jrp
Hochschild Mining
Vedanta Resources
Evraz
Virgin Money Holdings (uk)
Big Yellow
Kier
Centamin
Investec
Kaz Minerals
Rpc
Barr (a.g.)

130.10
284.20
556.00
157.10
314.70
782.00
1326.00
147.90
469.40
208.00
939.00
518.00

10.1
9.3
9.2
6.0
5.3
4.8
4.4
3.6
3.2
3.2
2.9
2.6

-21.5
487.6
102.0
114.4
-17.3
-3.0
-4.7
130.1
-1.1
103.4
12.2
-2.4

FTSE SmallCap
Winners
Lamprell
Kenmare Resources
Lonmin
Hogg Robinson
Petra Diamonds
Macau Property Opportunities Fund
Mj Gleeson
Wanton
Jimmy Choo
Baillie Gifford Shin Nippon
Motorpoint
Stobart Ld

-33.6
65.8
-42.7
-12.5
1.6
-24.1
-2.2
-10.2
-22.2
-42.6
4.8
-9.7

Losers
Ip
Countrywide
Smurfit Kappa
Cmc Markets
Indivior
Aa
Mitie
Brewin Dolphin Holdings
Thomas Cook
Fidessa
Daejan Holdings
Ladbrokes

166.70
216.10
1729.00
208.80
309.10
285.00
180.40
263.00
69.80
2360.00
5540.00
140.40

-9.9 -18.7
-8.0 -47.6
-7.9 7229.4
-7.6
-7.0
65.1
-6.9
-9.2
-6.6 -42.0
-6.4 -15.1
-6.3 -42.4
-6.3
17.5
-6.0 -12.6
-5.8
17.3

Losers
Ecofin Global Utilities And Infrastructure Trust
Sepura
Hansard Global
The Gym
Nanoco
Dialight
Trinity Mirror
Lookers
Shanks
Soco Int
Braemar Shipping Services
Helical

Sep 27
price(p)

%Chg
week

%Chg
ytd

-31.4
241.9
144.2
4.7
39.7
-11.5
15.0
3.7
-9.6
23.5
51.2

Industry Sectors
Winners
Industrial Metals
Mining
Personal Goods
Beverages
Real Estate Investment Trusts
Tobacco
Gas Water & Multiutilities
Forestry & Paper
Construction & Materials
Oil Equipment & Services
Automobiles & Parts
Food & Drug Retailers

1547.23
12193.69
31555.17
17627.53
2926.13
56929.91
6653.84
17449.60
6206.72
14915.32
7439.73
2823.50

6.1
4.3
1.5
1.1
1.0
0.9
0.8
0.6
0.5
0.2
0.1
-0.4

114.7
65.6
22.2
14.3
-10.3
23.5
11.9
21.2
19.9
14.6
3.1
12.4

-91.0
1.8
-9.0
10.0
54.4
-44.0
-36.2
4.4
-10.7
-24.2
-38.4

Losers
Aerospace & Defense
Technology Hardware & Equip.
Industrial Engineering
Food Producers
General Retailers
Media
General Industrials
Industrial Transportation
Support Services
Travel & Leisure
Banks
Software & Computer Services

4422.17
2070.13
9540.23
7892.18
2524.43
7507.64
5158.60
3052.65
7103.91
8495.03
3548.98
2029.13

-3.4
-2.7
-2.5
-2.5
-2.4
-2.3
-2.1
-2.1
-2.0
-1.7
-1.7
-1.7

6.7
61.9
32.9
-10.9
-16.1
1.2
17.2
17.1
4.4
-6.3
-7.2
22.5

Sep 27
price(p)

%Chg
week

%Chg
ytd

68.25
313.50
202.00
74.50
123.25
135.50
607.50
205.00
127.75
579.00
205.25
161.75

18.7
11.1
9.9
9.6
8.2
6.9
6.4
6.2
6.0
5.9
5.0
4.9

116.50
17.25
114.50
192.50
63.25
695.00
93.00
119.00
100.75
131.50
338.00
293.50

-18.5
-12.8
-9.4
-8.3
-7.9
-7.0
-6.5
-6.3
-6.1
-6.0
-5.7

Based on last week's performance. Price at suspension.

CURRENCIES
Sep 27
Argentina
Australia
Bahrain
Bolivia
Brazil
Canada
Chile
China
Colombia
Costa Rica
Czech Republic
Denmark
Egypt
Hong Kong
Hungary
India

Currency
Argentine Peso
Australian Dollar
Bahrainin Dinar
Bolivian Boliviano
Brazilian Real
Canadian Dollar
Chilean Peso
Chinese Yuan
Colombian Peso
Costa Rican Colon
Czech Koruna
Danish Krone
Egyptian Pound
Hong Kong Dollar
Hungarian Forint
Indian Rupee

DOLLAR
Closing
Mid
15.2675
1.3062
0.3771
6.9300
3.2446
1.3257
662.8850
6.6682
2940.5800
550.9700
24.1337
6.6548
8.8757
7.7548
274.6629
66.4700

Day's
Change
0.0450
-0.0030
0.0047
0.0089
0.9250
-0.0017
24.0400
-0.5300
0.1523
0.0405
-0.0016
-0.0006
2.6061
-0.1800

EURO
Closing
Mid
17.0950
1.4625
0.4222
7.7595
3.6330
1.4843
742.2293
7.4664
3292.5550
616.9186
27.0224
7.4513
9.9381
8.6830
307.5388
74.4262

POUND
Day's
Closing
Day's
Change
Mid
Change
-0.0570
19.8248
0.0766
-0.0126
1.6961
-0.0023
-0.0027
0.4896
0.0005
-0.0489
8.9986
0.0083
-0.0176
4.2131
0.0100
0.0006
1.7214
0.0131
-3.6327 860.7555
1.9928
-0.0489
8.6587
0.0058
6.3492 3818.3402
34.7036
-4.4828 715.4340
-0.0286
0.0014
31.3376
0.2264
-0.0014
8.6413
0.0604
-0.0644
11.5251
0.0085
-0.0554
10.0696
0.0084
0.9993 356.6495
3.7093
-0.6716
86.3112
-0.1540

Sep 27
Indonesia
Israel
Japan
..One Month
..Three Month
..One Year
Kenya
Kuwait
Malaysia
Mexico
New Zealand
Nigeria
Norway
Pakistan
Peru
Philippines

Currency
Indonesian Rupiah
Israeli Shekel
Japanese Yen

Kenyan Shilling
Kuwaiti Dinar
Malaysian Ringgit
Mexican Peson
New Zealand Dollar
Nigerian Naira
Norwegian Krone
Pakistani Rupee
Peruvian Nuevo Sol
Philippine Peso

DOLLAR
Closing
Day's
Mid
Change
12955.0000
-75.0000
3.7517
0.0032
100.3300
-0.0850
100.3298
-0.0853
100.3296
-0.0858
100.3283
-0.0884
101.3000
0.0500
0.3014
0.0001
4.1245
-0.0045
19.5605
-0.2858
1.3714
-0.0047
314.7500
-0.5000
8.1551
0.0528
104.7250
-0.0600
3.3705
0.0122
48.1950
-0.0375

EURO
POUND
Closing
Day's
Closing
Day's
Mid
Change
Mid
Change
14505.6616 -175.8667 16822.0746
-81.8099
4.2008
-0.0229
4.8716
0.0086
112.3390
-0.8033 130.2784
0.0097
112.3390
-0.8033 130.2783
0.0095
112.3391
-0.8033 130.2781
0.0092
112.3390
-0.8034 130.2783
0.0085
113.4251
-0.6581 131.5379
0.1860
0.3375
-0.0020
0.3914
0.0005
4.6182
-0.0342
5.3557
-0.0009
21.9018
-0.4599
25.3993
-0.3473
1.5355
-0.0150
1.7807
-0.0045
352.4241
-2.7831 408.7026
-0.2722
9.1312
0.0019
10.5893
0.0782
117.2601
-0.8062 135.9853
0.0474
3.7739
-0.0100
4.3765
0.0199
53.9637
-0.3821
62.5812
0.0090

Sep 27
Currency
Poland
Polish Zloty
Romania
Romanian Leu
Russia
Russian Ruble
Saudi Arabia
Saudi Riyal
Singapore
Singapore Dollar
South African Rand
South Africa
South Korea
South Korean Won
Sweden
Swedish Krona
Switzerland
Swiss Franc
Taiwan
New Taiwan Dollar
Thailand
Thai Baht
Tunisia
Tunisian Dinar
Turkey
Turkish Lira
United Arab Emirates
UAE Dirham
United Kingdom
Pound Sterling
..One Month

DOLLAR
Closing
Day's
Mid
Change
3.8206
0.0096
3.9732
0.0229
64.0338
0.3963
3.7516
0.0012
1.3616
0.0020
13.5313
-0.1250
1096.6500
-11.3000
8.6288
0.1043
0.9723
0.0049
31.4370
34.5830
-0.0375
2.2046
0.0095
2.9813
0.0027
3.6730
0.0001
0.7701
-0.0007
0.7702
-0.0007

EURO
POUND
Closing
Day's
Closing
Day's
Mid
Change
Mid
Change
4.2779
-0.0161
4.9610
0.0170
4.4487
-0.0023
5.1591
0.0344
71.6983
-0.0051
83.1478
0.5906
4.2006
-0.0251
4.8714
0.0060
1.5245
-0.0073
1.7680
0.0042
15.1509
-0.2363
17.5703
-0.1460
1227.9141 -20.4663 1423.9990
-13.3479
9.6617
0.0567
11.2046
0.1456
1.0886
-0.0013
1.2625
0.0075
35.1999
-0.2217
40.8209
0.0376
38.7224
-0.2861
44.9060
-0.0073
2.4685
-0.0048
2.8627
0.0150
3.3381
-0.0179
3.8711
0.0071
4.1126
-0.0258
4.7694
0.0045
0.8623
-0.0062
0.8622
-0.0062
-

Sep 27
..Three Month
..One Year
United States
..One Month
..Three Month
..One Year
Venezuela
Vietnam
European Union
..One Month
..Three Month
..One Year

Currency

United States Dollar

Venezuelan Bolivar Fuerte


Vietnamese Dong
Euro

DOLLAR
Closing
Mid
0.7703
0.7712
9.9900
22310.0000
0.8931
0.8929
0.8927
0.8912

Day's
Change
-0.0007
-0.0007
0.0100
-1.5000
0.0056
0.0056
0.0056
0.0056

EURO
POUND
Closing
Day's
Closing
Day's
Mid
Change
Mid
Change
0.8621
-0.0062
0.8615
-0.0062
1.1197
-0.0071
1.2985
0.0012
1.1195
-0.1776
1.2986
0.0012
1.1192
-0.1776
1.2987
0.0012
1.1178
-0.1776
1.2996
0.0012
11.1858
-0.0592
12.9720
0.0249
24980.4528 -159.0084 28969.5530
24.7363
1.1597
0.0083
1.1596
0.0083
1.1595
0.0083
1.1589
0.0083

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

Produced in conjunction with the Institute and Faculty of Actuaries

Strlg Day's
Euro
Strlg
Strlg
Year
Div
P/E
Sep 27 chge%
Index
Sep 26
Sep 23
ago yield% Cover
ratio
FTSE 100 (100)
6807.67 -0.15 6155.65 6818.04 6909.43 5958.86 3.69 0.76 35.55
FTSE 250 (250)
17628.71 -0.53 15940.29 17722.80 17923.08 16614.16 2.74 1.88 19.35
FTSE 250 ex Inv Co (207)
18929.35 -0.58 17116.36 19039.75 19266.12 18114.83 2.81 2.00 17.84
FTSE 350 (350)
3761.55 -0.22 3401.28 3769.66 3818.87 3334.98 3.53 0.91 31.21
FTSE 350 ex Investment Trusts (307) 3733.74 -0.21 3376.13 3741.76 3791.09 3313.17 3.56 0.90 31.07
FTSE 350 Higher Yield (126)
3521.40 -0.34 3184.13 3533.45 3575.22 3016.76 4.87 0.50 41.13
FTSE 350 Lower Yield (224)
3633.88 -0.07 3285.84 3636.39 3689.07 3339.93 1.98 2.07 24.40
FTSE SmallCap (279)
4969.78
0.18 4493.79 4960.89 4988.57 4478.53 2.81 1.34 26.50
FTSE SmallCap ex Inv Co (145)
4398.85 -0.21 3977.54 4407.93 4422.13 4111.94 3.01 1.79 18.61
FTSE All-Share (629)
3706.83 -0.20 3351.80 3714.32 3761.85 3288.62 3.51 0.92 31.02
FTSE All-Share ex Inv Co (452)
3661.91 -0.21 3311.19 3669.78 3717.49 3252.98 3.55 0.92 30.69
FTSE All-Share ex Multinationals (567) 1125.94 -0.19
843.81 1128.03 1144.28 1153.24 3.16 1.41 22.49
FTSE Fledgling (101)
8393.07
0.02 7589.21 8391.20 8419.56 7721.32 2.72 -0.08 -479.25
FTSE Fledgling ex Inv Co (50)
11093.91
0.13 10031.37 11079.33 11145.28 10969.18 3.31 -1.18 -25.62
FTSE All-Small (380)
3447.57
0.17 3117.37 3441.69 3460.49 3110.15 2.80 1.27 28.04
FTSE All-Small ex Inv Co Index (195) 3282.63 -0.19 2968.23 3288.95 3299.91 3075.06 3.02 1.65 20.05
FTSE AIM All-Share Index (826)
815.25 -0.18
737.17
816.68
816.01
726.72 1.58 0.74 84.87
FTSE Sector Indices
Oil & Gas (16)
7285.13
Oil & Gas Producers (9)
6945.19
Oil Equipment Services & Distribution (7)15332.28
Basic Materials (28)
4271.19
12803.60
Chemicals (7)
Forestry & Paper (1)
19040.72
Industrial Metals & Mining (2)
1646.54
Mining (18)
11736.57
Industrials (115)
4791.18
Construction & Materials (15)
6325.29
Aerospace & Defense (9)
4583.00
General Industrials (5)
4201.21
Electronic & Electrical Equipment (10) 6195.95
Industrial Engineering (12)
10333.22
Industrial Transportation (8)
4669.86
Support Services (56)
6966.74
20758.08
Consumer Goods (39)
Automobiles & Parts (1)
7477.85
Beverages (6)
17652.12
Food Producers (8)
8001.36
Household Goods & Home Construction (15)13687.68
Leisure Goods (1)
5337.59
Personal Goods (6)
27472.66
Tobacco (2)
56930.00
10701.28
Health Care (19)
Health Care Equipment & Services (8) 7766.70
Pharmaceuticals & Biotechnology (11)14533.08
Consumer Services (93)
4712.71
Food & Drug Retailers (7)
2945.98
General Retailers (30)
2483.70
Media (21)
7597.94
Travel & Leisure (35)
8281.96
Telecommunications (6)
3653.11
Fixed Line Telecommunications (4) 4491.18
Mobile Telecommunications (2)
4940.32
Utilities (7)
9237.92
Electricity (2)
8967.48
Gas Water & Multiutilities (5)
8793.72
Financials (289)
4357.10
Banks (11)
3504.26
Nonlife Insurance (10)
3158.06
Life Insurance/Assurance (10)
7051.13
Index- Real Estate Investment & Services (20) 2449.82
Real Estate Investment Trusts (28) 2667.96
General Financial (33)
7838.99
Equity Investment Instruments (177) 8451.49
Non Financials (340)
4463.99
Technology (17)
2013.61
Software & Computer Services (12) 2239.08
Technology Hardware & Equipment (5) 2383.80

-1.75
-1.74
-2.12
-0.95
-0.01
0.12
-0.81
-1.12
-0.54
-0.57
-0.09
-1.18
-0.47
-1.06
-0.39
-0.54
0.34
-1.49
0.32
-0.54
0.50
-0.47
0.89
0.24
-0.08
0.01
-0.09
0.39
0.62
-0.65
0.51
0.72
0.01
-0.72
0.43
0.81
0.58
0.86
-0.05
0.48
-0.47
-0.95
-0.03
0.43
-0.95
0.10
-0.25
-0.63
-0.51
-1.67

6587.38
6280.00
13863.80
3862.11
11577.31
17217.06
1488.84
10612.48
4332.30
5719.47
4144.06
3798.83
5602.52
9343.54
4222.60
6299.49
18769.93
6761.64
15961.45
7235.01
12376.72
4826.38
24841.42
51477.42
9676.34
7022.83
13141.15
4261.34
2663.82
2245.82
6870.24
7488.74
3303.22
4061.03
4467.15
8353.14
8108.60
7951.49
3939.79
3168.63
2855.59
6375.79
2215.19
2412.43
7088.20
7642.03
4036.45
1820.75
2024.63
2155.49

7414.78
7067.88
15664.89
4311.94
12804.29
19017.21
1659.99
11869.96
4817.26
6361.61
4586.90
4251.34
6225.25
10444.15
4688.08
7004.88
20687.59
7590.65
17596.12
8044.69
13619.99
5362.61
27229.88
56791.86
10710.28
7765.90
14546.61
4694.22
2927.78
2500.06
7559.06
8222.82
3652.77
4523.94
4919.40
9164.03
8915.88
8718.65
4359.34
3487.48
3173.02
7118.98
2450.48
2656.51
7914.13
8443.13
4475.13
2026.42
2250.51
2424.29

7513.32
7162.78
15809.11
4355.16
12935.45
19381.57
1653.81
11984.03
4886.78
6470.47
4644.23
4302.06
6242.32
10583.56
4768.60
7115.02
20867.88
7595.35
17680.53
8115.43
13830.76
5462.69
27423.46
57305.80
10858.57
7896.93
14743.85
4787.16
2993.27
2553.24
7694.53
8386.80
3686.21
4613.02
4935.03
9181.34
8953.97
8730.13
4422.01
3543.80
3197.70
7291.11
2472.41
2674.50
8009.42
8510.21
4530.19
2043.10
2267.41
2458.94

5771.64
5452.73
15516.02
2920.35
10624.43
15984.80
742.21
7737.99
4184.51
4957.70
4313.21
3374.47
5089.56
7454.59
3973.36
6326.14
17192.68
6037.27
14177.50
8441.49
13322.35
5482.70
20791.93
43656.57
8800.95
6931.13
11859.10
4716.46
2704.76
2975.53
7106.79
8154.98
3665.74
4827.38
4759.35
8069.46
8249.30
7584.70
4384.85
3713.08
2652.72
7129.78
3137.73
3008.05
7597.73
7267.22
3797.27
1303.50
1625.21
1473.37

6.38
6.45
4.37
1.88
2.33
2.83
0.00
1.79
2.42
2.11
2.57
2.88
2.02
2.57
3.88
2.27
2.69
2.75
2.23
2.07
2.37
3.20
2.64
3.32
3.17
1.42
3.34
2.61
1.49
3.04
2.87
2.53
4.69
3.79
5.19
4.38
5.45
4.13
3.93
4.83
2.83
4.25
2.72
3.62
3.37
2.47
3.37
1.98
1.89
2.73

-0.62
-0.65
0.36
2.41
2.05
3.44
0.00
2.42
1.05
0.28
-0.50
1.11
1.80
1.31
1.02
1.71
1.78
1.29
1.54
1.81
2.52
1.50
3.24
1.17
0.40
2.04
0.34
2.00
2.47
2.22
1.82
1.96
-0.23
1.74
-1.04
1.73
1.49
1.80
1.37
0.82
2.16
1.37
3.67
3.96
1.90
0.97
0.75
1.06
1.41
-1.00

X/D
adj
203.08
367.02
403.72
106.59
106.76
133.82
63.40
103.43
98.24
104.06
104.26
27.71
147.71
203.03
71.17
72.76
8.11

Total
Return
5508.37
12538.21
13733.14
6123.59
3130.49
5944.53
3917.53
6968.35
6483.78
6102.84
3120.67
1967.25
15416.84
19829.80
6205.70
6129.52
887.13

-25.12 354.04 6433.98


-23.98 340.57 6345.32
62.91 549.02 11710.59
22.10
80.03 4290.07
20.89 288.46 11281.13
10.27 539.50 20429.65
-9.07
0.00 1436.91
23.10 209.60 6171.01
39.45
85.45 4853.20
167.28 122.69 6609.86
-77.67
79.96 4824.07
31.25
61.94 4648.28
27.52
88.39 5573.74
29.71 228.20 12422.76
25.22 145.23 4061.13
25.72 116.24 7115.07
20.88 485.55 15011.32
28.28 205.63 7088.90
29.21 385.57 12304.17
26.62
96.79 6777.70
16.76 260.88 9488.76
20.89 129.52 4626.80
11.68 560.53 18134.70
25.77 1682.67 35851.21
78.16 301.48 8054.50
34.59
67.40 6646.81
88.75 437.94 9739.65
19.19
93.62 4339.83
27.19
31.18 3407.06
14.86
50.23 2775.95
19.20 168.99 4588.57
20.14 168.73 7705.88
-91.37 118.31 3947.92
15.17 115.79 3992.69
-18.50 178.45 4786.10
13.22 304.45 10187.63
12.33 488.80 12606.26
13.45 245.09 9692.09
18.57 143.49 3939.59
25.40 140.22 2522.36
16.35
88.66 5470.54
17.15 278.24 6730.49
10.02
52.38 6425.62
6.98
76.30 3242.39
15.62 215.12 8757.18
41.68 155.97 4536.19
39.30 118.62 6433.04
47.70
20.43 2552.46
37.51
40.15 2997.99
-36.66
11.42 2756.87

8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00 High/day Low/day
Hourly movements
FTSE 100
6859.11 6828.67 6813.17 6803.02 6809.70 6794.96 6782.05 6798.70 6785.53 6860.37 6769.58
FTSE 250
17769.13 17593.74 17577.19 17565.99 17607.59 17584.86 17578.67 17606.87 17596.18 17772.68 17543.79
FTSE SmallCap
4962.70 4958.89 4958.54 4955.06 4958.50 4961.12 4960.03 4958.72 4954.78 4969.78 4953.73
FTSE All-Share
3733.94 3714.57 3707.21 3702.30 3706.72 3699.56 3693.65 3701.83 3695.64 3734.38 3687.48
Time of FTSE 100 Day's high:07:03:15 Day's Low13:30:45 FTSE 100 2010/11 High: 6941.19(15/08/2016) Low: 5536.97(11/02/2016)
Time of FTSE All-Share Day's high:07:04:00 Day's Low13:18:00 FTSE 100 2010/11 High: 3773.93(15/08/2016) Low: 3046.53(11/02/2016)
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
Issue
price
441p
343p

Amount
paid
up
Nil
Nil

Latest
renun.
date
25-10-16
26-10-16

FT 30 INDEX

FTSE SECTORS: LEADERS & LAGGARDS

Sep 27 Sep 26 Sep 23 Sep 22 Sep 21 Yr Ago


High
Low Year to date percentage changes
FT 30
2968.00 2972.60 3010.40 3026.90 2996.80
0.00 3054.90 2508.90 Industrial Metals &
126.08
FT 30 Div Yield
1.63
1.63
1.61
1.61
1.63
0.00
3.93
2.74 Mining
70.03
P/E Ratio net
27.38
27.39
27.70
27.71
27.40
0.00
19.44
14.26 Basic Materials
58.82
FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35
Tech Hardware & Eq
54.52
FT 30 hourly changes
Technology
41.72
8
9
10
11
12
13
14
15
16
High
Low Industrial Eng
38.43
2972.6 2962.2 2956.7 2951.1 2954.8 2951.9 2950.8 2959.7 2957.1 2983.9 2947.3 Oil & Gas Producers
25.78
FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30
Oil & Gas
25.44
Tobacco
24.47
Forestry & Paper
23.61
Software & Comp Serv
22.82
Personal
Goods
21.92
Sep 26 Sep 23 Mnth Ago
Sep 27 Sep 26 Mnth Ago
Industrial Transport
21.16
Australia
91.41
91.55
90.84 Sweden
77.66
77.70
78.59 Construct & Material
20.40
Canada
88.42
88.75
89.99 Switzerland
159.64 159.61 159.12 Electronic & Elec Eq
16.15
Denmark
107.82 107.68 107.66 UK
77.30
77.41
78.54 Oil Equipment & Serv
15.83
Japan
152.78 152.18 152.26 USA
99.09
99.34
98.49 Pharmace & Biotech
15.16
New Zealand
116.67 116.56 117.08 Euro
89.82
89.60
89.38
Norway
89.57
89.69
87.86
Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100.
Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk

FX: EFFECTIVE INDICES

Food & Drug Retailer


Beverages
Health Care
Consumer Goods
NON FINANCIALS Index
Nonlife Insurance
Chemicals
Industrials
Gas Water & Multi
FTSE 100 Index
Equity Invest Instr
Utilities
FTSE All{HY-}Share Index
Aerospace & Defense
FTSE SmallCap Index
Health Care Eq & Srv
Support Services
Automobiles & Parts

Low
706.00
571.50

Stock
Informa PLC
Menzies (John) PLC

closing
Price p
711.50
585.00

+or0.00
0.50

FTSE 250 Index


Media
Electricity
Household Goods & Ho
Leisure Goods
Financial Services
Consumer Services
Mobile Telecomms
Financials
Travel & Leisure
Banks
Telecommunications
Life Insurance
Food Producers
Real Est Invest & Tr
General Retailers
Fixed Line Telecomms
Real Est Invest & Se

2.83
2.41
1.89
0.34
-0.28
-0.93
-2.59
-3.23
-3.29
-5.21
-6.00
-7.81
-8.18
-9.00
-9.46
-13.19
-14.67
-19.84

FTSE GLOBAL EQUITY INDEX SERIES


Sep 27
Regions & countries
FTSE Global All Cap
FTSE Global All Cap
FTSE Global Large Cap
FTSE Global Mid Cap
FTSE Global Small Cap
FTSE All-World
FTSE World
FTSE Global All Cap ex UNITED KINGDOM In
FTSE Global All Cap ex USA
FTSE Global All Cap ex JAPAN
FTSE Global All Cap ex Eurozone
FTSE Developed
FTSE Developed All Cap
FTSE Developed Large Cap
FTSE Developed Europe Large Cap
FTSE Developed Europe Mid Cap
FTSE Dev Europe Small Cap
FTSE North America Large Cap
FTSE North America Mid Cap
FTSE North America Small Cap
FTSE North America
FTSE Developed ex North America
FTSE Japan Large Cap
FTSE Japan Mid Cap
FTSE Global wi JAPAN Small Cap
FTSE Japan
FTSE Asia Pacific Large Cap ex Japan
FTSE Asia Pacific Mid Cap ex Japan
FTSE Asia Pacific Small Cap ex Japan
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
FTSE Emerging Large Cap
FTSE Emerging Mid Cap
FTSE Emerging Small Cap
FTSE Emerging Europe
FTSE Latin America All Cap
FTSE Middle East and Africa All Cap
FTSE Global wi UNITED KINGDOM All Cap In
FTSE Global wi USA All Cap
FTSE Europe All Cap
FTSE Eurozone All Cap
FTSE RAFI All World 3000
FTSE RAFI US 1000
FTSE EDHEC-Risk Efficient All-World
FTSE EDHEC-Risk Efficient Developed Europe

No of
US $
stocks indices
7745 471.72
7079 462.39
1418 414.00
1667 638.02
4660 674.74
3085 274.84
2548 486.16
7420 488.07
5815 431.87
6458 480.74
7101 489.06
2103 440.92
5696 464.32
891 406.37
220 318.74
313 501.31
704 710.19
286 458.38
399 693.10
1464 709.70
685 307.61
1418 226.81
173 333.65
321 521.39
793 563.59
494 140.01
543 592.86
420 813.92
1448 527.73
963 470.24
2049 649.37
527 612.35
455 827.67
1067 679.19
112 309.92
232 777.81
242 698.68
325 313.15
1930 529.14
1424 371.22
644 349.30
3026 5670.86
992 9373.51
3085 334.24
533 275.83

Day
%
-0.9
0.3
-0.9
-0.8
-0.7
-0.9
-0.9
-0.9
-0.9
-0.9
-0.8
-0.9
-0.8
-0.9
-1.1
-1.0
-0.7
-0.9
-0.6
-0.7
-0.9
-0.9
-0.6
-0.5
-0.3
-0.5
-0.9
-0.9
-0.8
-0.9
-1.3
-1.3
-1.3
-1.0
-1.4
-1.4
-0.7
-1.2
-0.8
-1.1
-1.2
-1.0
-0.9
-0.8
-0.9

Mth
%
-0.5
7.3
-0.5
-0.7
0.0
-0.5
-0.6
-0.4
0.0
-0.9
-0.4
-0.6
-0.5
-0.6
-1.1
-1.6
-0.8
-1.0
-1.4
-0.4
-1.1
0.1
3.3
5.1
5.0
3.6
0.5
-0.6
0.3
0.4
0.1
0.1
-0.7
0.6
0.3
-3.0
-1.0
-2.2
-0.9
-1.1
-0.8
-0.7
-1.3
-0.4
-1.2

YTD
%
4.6
-0.3
3.9
6.0
7.6
4.2
4.0
5.3
3.5
4.7
5.4
3.3
3.8
2.9
-3.4
-2.2
-2.9
5.0
8.2
10.6
5.6
0.1
1.8
6.1
7.1
2.7
9.6
9.0
5.7
9.5
13.7
13.7
16.6
10.3
16.0
29.9
12.9
-4.8
5.6
-2.7
-2.6
4.5
6.0
5.9
-1.2

Total
retn
658.45
624.68
591.99
847.41
868.94
404.99
961.65
671.31
642.88
677.44
669.95
620.08
645.54
579.75
519.27
736.45
1012.13
613.66
866.86
862.99
421.76
362.47
422.53
636.61
711.56
199.15
911.13
1202.47
768.01
767.85
950.76
902.66
1202.63
957.28
470.29
1169.83
1065.47
510.32
688.60
585.01
556.31
7319.59
12068.43
457.29
412.29

YTD Gr Div Sep 27


No of
US $
Day
Mth
YTD
Total
YTD Gr Div
% Yield Sectors
stocks indices
%
%
%
retn
% Yield
6.7
2.5 Oil & Gas
149 337.95
-0.7
-0.7
10.8 531.35
14.0
3.6
0.2
2.5 Oil & Gas Producers
109 313.46
-0.7
-0.7
9.9 502.15
13.1
3.8
6.1
2.7 Oil Equipment & Services
30 321.62
-0.7
-0.7
15.9 459.34
18.7
2.8
7.8
2.1 Basic Materials
254 400.95
-0.7
-0.7
14.1 600.08
16.5
2.5
9.2
2.0 Chemicals
125 604.07
-0.7
-0.7
2.1 908.21
4.4
2.8
6.4
2.6 Forestry & Paper
15 214.73
-1.8
-1.8
9.5 355.71
13.0
3.7
6.1
2.6 Industrial Metals & Mining
61 325.35
-0.6
-0.6
26.4 485.57
28.2
2.3
7.3
2.4 Mining
53 496.78
-0.6
-0.6
53.5 742.22
56.5
1.8
6.2
3.0 Industrials
546 324.49
-0.7
-0.7
8.5 459.26
10.5
2.3
6.9
2.5 Construction & Materials
110 470.38
-0.8
-0.8
12.3 696.94
14.3
2.1
7.4
2.4 Aerospace & Defense
26 525.84
-0.5
-0.5
3.8 737.46
5.7
2.3
5.4
2.5 General Industrials
57 231.22
-0.9
-0.9
6.6 352.66
8.9
2.6
5.8
2.5 Electronic & Electrical Equipment
72 336.37
-1.2
-1.2
6.3 438.10
8.0
1.9
5.1
2.6 Industrial Engineering
104 616.25
-0.8
-0.8
15.0 858.80
17.2
2.4
-0.1
3.7 Industrial Transportation
98 548.29
-0.5
-0.5
10.7 775.20
12.9
2.4
0.3
2.8 Support Services
79 291.94
-0.3
-0.3
5.8 395.53
7.3
1.9
429 435.53
-0.8
-0.8
4.6 631.35
6.6
2.5
-0.8
2.6 Consumer Goods
6.8
2.2 Automobiles & Parts
104 360.27
-1.1
-1.1
-5.6 502.68
-3.6
3.0
9.7
1.8 Beverages
47 596.73
-0.7
-0.7
4.4 877.01
6.3
2.5
12.0
1.7 Food Producers
108 597.18
-0.7
-0.7
6.9 891.03
9.0
2.2
7.3
2.1 Household Goods & Home Construction
49 424.58
-0.5
-0.5
5.7 611.08
7.6
2.3
2.7
3.1 Leisure Goods
31 164.27
-0.8
-0.8
24.6 212.76
25.3
1.3
3.1
2.3 Personal Goods
79 619.22
-0.9
-0.9
3.6 853.18
5.3
2.0
7.2
2.0 Tobacco
11 1332.77
-1.3
-1.3
9.5 2679.35
12.7
3.7
8.4
2.2 Health Care
178 452.89
-1.1
-1.1
-1.2 641.40
0.5
2.0
3.9
2.2 Health Care Equipment & Services
66 713.89
-1.0
-1.0
9.9 824.65
10.7
1.0
12.6
3.0 Pharmaceuticals & Biotechnology
112 331.47
-1.1
-1.1
-4.7 489.33
-2.8
2.4
11.6
2.7 Consumer Services
388 393.42
-1.1
-1.1
0.9 518.30
2.4
1.8
8.1
2.6 Food & Drug Retailers
55 293.55
-1.1
-1.1
-2.1 402.64
-0.6
1.9
12.5
3.0 General Retailers
121 547.23
-1.0
-1.0
2.7 702.62
4.0
1.6
16.7
2.9 Media
82 295.30
-1.3
-1.3
2.1 390.20
3.6
2.0
16.8
3.0 Travel & Leisure
130 376.43
-1.1
-1.1
-1.3 501.05
0.1
1.9
19.4
2.8 Telecommunication
95 166.89
-0.6
-0.6
6.0 302.69
9.3
4.0
13.1
2.8 Fixed Line Telecommuniations
44 141.94
-0.7
-0.7
7.1 282.38
10.7
4.5
19.9
4.0 Mobile Telecommunications
51 171.95
-0.6
-0.6
4.4 281.59
7.1
3.4
32.3
3.0 Utilities
166 261.24
-0.4
-0.4
10.1 493.00
13.4
3.7
110 285.63
-0.4
-0.4
10.3 533.35
13.7
3.7
15.6
3.0 Electricity
56 276.29
-0.2
-0.2
9.7 534.62
13.0
3.8
-1.8
3.6 Gas Water & Multiutilities
694 197.18
-1.2
-1.2
-1.8 314.55
0.9
3.3
7.2
2.0 Financials
247 168.44
-1.5
-1.5
-5.6 287.68
-2.6
3.9
0.4
3.4 Banks
68 214.72
-1.1
-1.1
0.1 305.65
2.4
2.6
0.3
3.4 Nonlife Insurance
50 185.22
-1.7
-1.7
-6.6 289.63
-3.7
3.4
7.1
3.2 Life Insurance
150 225.78
-1.1
-1.1
1.5 305.80
3.2
2.1
8.0
2.4 Financial Services
186 192.49
-0.8
-0.8
10.5 232.92
12.1
1.7
7.8
2.3 Technology
92 337.34
-0.9
-0.9
8.8 390.45
9.7
1.0
1.2
2.7 Software & Computer Services
Technology Hardware & Equipment
94 142.24
-0.6
-0.6
12.6 178.25
15.0
2.5
Alternative Energy
10 109.94
-0.9
-0.9
6.3 147.48
7.7
1.3
Real Estate Investment & Services
108 298.97
-1.0
-1.0
5.7 488.13
8.2
2.6
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
(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,
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
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.

UK COMPANY RESULTS
High
715.00
586.00

14.71
14.60
14.43
14.02
13.73
12.81
12.35
11.95
11.24
10.69
10.42
9.31
9.22
7.80
7.64
7.07
6.67
4.80

FTSE 100 SUMMARY

Company
365 Agile Group
Avingtrans
Baron Oil
Barr (A G)
Braime (T F & J H) (Holdings)
Card Factory
Cellcast
Circassia Pharmaceuticals
Close Brothers Group
Eden Research
Malvern International
Netcall
NetScientific
Next Fifteen Communications Group

FTSE 100

Closing Day's
Price Change FTSE 100

3I Group PLC
Admiral Group PLC
Anglo American PLC
Antofagasta PLC
Ashtead Group PLC
Associated British Foods PLC
Astrazeneca PLC
Aviva PLC
Babcock International Group PLC
Bae Systems PLC
Barclays PLC
Barratt Developments PLC
Bhp Billiton PLC
BP PLC
British American Tobacco PLC
British Land Company PLC
Bt Group PLC
Bunzl PLC
Burberry Group PLC
Capita PLC
Carnival PLC
Centrica PLC
Coca-Cola Hbc AG
Compass Group PLC
Crh PLC
Dcc PLC
Diageo PLC
Direct Line Insurance Group PLC
Dixons Carphone PLC
Easyjet PLC
Experian PLC
Fresnillo PLC
Gkn PLC
Glaxosmithkline PLC
Glencore PLC
Hammerson PLC
Hargreaves Lansdown PLC
Hikma Pharmaceuticals PLC
HSBC Holdings PLC
Imperial Brands PLC
Informa PLC
Intercontinental Hotels Group PLC
International Consolidated Airlines Group S.A.
Intertek Group PLC
Intu Properties PLC
Itv PLC
Johnson Matthey PLC
Kingfisher PLC
Land Securities Group PLC
Legal & General Group PLC
Lloyds Banking Group PLC

637.00
2062
916.80
501.00
1219
2599
5058
435.00
1079
520.00
165.95
484.20
1077.5
428.20
4898
627.00
387.00
2283
1403
951.50
3726
223.60
1739
1478
2535
6850
2215
368.60
356.60
1009
1544
1776
318.20
1637.5
208.25
589.00
1258
2064
577.10
3980
711.50
3135
394.80
3481
292.10
183.70
3227
367.60
1053
216.20
54.64

-2.50
-21.00
-14.00
-6.00
18.00
-26.00
-41.00
-3.10
-3.00
0.50
-2.15
7.30
-16.00
-3.80
13.00
1.50
-2.75
-4.00
-6.00
-19.00
171.00
-1.80
-1.00
7.00
-19.00
25.00
4.00
-3.20
-4.10
-7.00
-6.00
-14.00
-4.80
4.00
-1.50
3.50
-4.00
-12.00
7.90
7.50
37.00
0.30
-6.00
3.30
0.30
1.00
-0.40
7.00
-2.40
0.39

Closing Day's
Price Change

London Stock Exchange Group PLC


Marks And Spencer Group PLC
Mediclinic International PLC
Merlin Entertainments PLC
Micro Focus International PLC
Mondi PLC
Morrison (Wm) Supermarkets PLC
National Grid PLC
Next PLC
Old Mutual PLC
Paddy Power Betfair PLC
Pearson PLC
Persimmon PLC
Polymetal International PLC
Provident Financial PLC
Prudential PLC
Randgold Resources LD
Reckitt Benckiser Group PLC
RELX PLC
Rio Tinto PLC
Rolls-Royce Holdings PLC
Royal Bank Of Scotland Group PLC
Royal Dutch Shell PLC
Royal Dutch Shell PLC
Royal Mail PLC
Rsa Insurance Group PLC
Sabmiller PLC
Sage Group PLC
Sainsbury (J) PLC
Schroders PLC
Severn Trent PLC
Shire PLC
Sky PLC
Smith & Nephew PLC
Smiths Group PLC
Sse PLC
St. James's Place PLC
Standard Chartered PLC
Standard Life PLC
Taylor Wimpey PLC
Tesco PLC
Travis Perkins PLC
Tui AG
Unilever PLC
United Utilities Group PLC
Vodafone Group PLC
Whitbread PLC
Wolseley PLC
Worldpay Group PLC
WPP PLC

2800
309.90
936.00
469.40
2128
1620
218.60
1093.5
4748
196.30
8675
750.00
1784
961.00
2879
1360.5
7760
7210
1443
2460
711.00
174.60
1882.5
1800.5
503.00
547.00
4465
728.50
250.80
2657
2486
5143
847.50
1240
1387
1539
951.00
610.10
337.60
150.50
177.75
1500
1086
3640.5
995.50
221.05
3863
4244
296.60
1787

-44.00
-3.70
5.50
6.30
-6.00
2.00
2.20
14.50
22.00
-1.30
-5.00
24.00
20.00
-7.00
-4.00
-15.50
-140.00
27.00
-7.00
-23.50
-1.00
-2.90
-42.50
-38.50
-3.50
5.50
26.00
-3.50
2.10
-20.00
23.00
23.00
13.00
2.00
-16.00
11.00
-2.00
-15.60
-4.70
1.30
1.30
-18.00
16.00
41.00
9.50
0.85
9.00
-56.00
2.90
10.00

UK STOCK MARKET TRADING DATA


Sep 27
Sep 26
Sep 23
Sep 22
Sep 21
Yr Ago
SEAQ Bargains
7820.00
5164.00
5164.00
5164.00
5670.00
5624.00
Order Book Turnover (m)
343.36
168.31
168.31
168.31
162.00
106.05
Order Book Bargains
889846.00 758321.00 758321.00 758321.00 857321.00 785011.00
Order Book Shares Traded (m)
1541.00
1448.00
1448.00
1448.00
1420.00
1353.00
Total Equity Turnover (m)
8063.17
8348.93
8348.93
8348.93
8649.82
7486.97
Total Mkt Bargains
1004549.00 872915.00 872915.00 872915.00 980834.00 885707.00
Total Shares Traded (m)
5475.00
5026.00
5026.00
5026.00
5165.00
4403.00
Excluding intra-market and overseas turnover. *UK only total at 6pm. UK plus intra-market turnover. (u) Unavaliable.
(c) Market closed.

All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
liable for any loss arising from the reliance on or use of the listed information.
For all queries e-mail ft.reader.enquiries@morningstar.com

Data provided by Morningstar | www.morningstar.co.uk

UK RECENT EQUITY ISSUES


Int
Pre
Int
Int
Int
Int
Int
Int
Pre
Int
Int
Pre
Int
Int

Turnover
0.947
2.012
22.557
21.177
1.015
130.3
125.6
13.487
13.619
161.4
169.2
5.791
5.664
0.6
11.1
647.6
669.1
0.16
0.109
2.348
2.067
17.151
16.627
0.055
0.359
61.759
80.471

Pre-tax
0.076
3.23L
1.323L
0.245
0.963L
0.183L
16.9
21.1
0.406
0.464
24
27
0.256
0.078
26L
107.6L
219.9
228.5
0.719L
0.86L
0.569L
0.46L
2.351
1.737
4.387L
6.133L
4.23
4.162

Figures in m. Earnings shown basic. Figures in light text are for corresponding period year earlier.
For more information on dividend payments visit www.ft.com/marketsdata

EPS(p)
17.33L
112.3
0.01L
14.33
22.52
6.3
0.1
36L
125.7
0.44L
0.72L
1.37
10.8L
3.7

5.47
6.4
0.07L
11.57
19.61
5.61
0.4
11L
125.4
0.4L
0.86L
1.94
12.9L
4.3

Div(p)
2.1
3.53
2.9
2.8
38
2.05
1.5

2
3.36
2.9
2.5
35.5
1
1.2

Pay day
Sep 12
Oct 21
Oct 21
Nov 25
Nov 22
Jan 11
Nov 25

Total
3.2
13.446
9.066
8.767
57
3
4.484

3
12.37
9.1
9.3
53.5
1
2.107

Issue
date
09/21
08/24

Issue
price(p)
160.00
100.00

Sector

Stock
code

AIM

LOOP

Stock
Hollywood Bowl Group PLC
LoopUp Group PLC

Placing price. *Intoduction. When issued. Annual report/prospectus available at www.ft.com/ir


For a full explanation of all the other symbols please refer to London Share Service notes.

Close
price(p)
169.50
122.50

+/1.50
-3.65

High
178.83
127.00

Low
167.00
104.00

Mkt
Cap (m)
25425.0
4996.1

17

FINANCIAL TIMES

Wednesday 28 September 2016

MARKET DATA
FT500: THE WORLD'S LARGEST COMPANIES
Stock
Australia (A$)
ANZ
BHPBilltn
CmwBkAu
CSL
NatAusBk
Telstra
Wesfarmers
Westpc
Woolworths
Belgium ()
AnBshInBv
KBC Grp
Brazil (R$)
Ambev
Bradesco
Cielo
ItauHldFin
Petrobras
Vale
Canada (C$)
BCE
BkMontrl
BkNvaS
Brookfield
CanadPcR
CanImp
CanNatRs
CanNatRy
Enbridge
GtWesLif
ImpOil
Manulife
Potash
RylBkC
Suncor En
ThmReut
TntoDom
TrnCan
ValeantPh
China (HK$)
AgricBkCh
Bk China
BkofComm
BOE Tech
Ch Coms Cons
Ch Evrbrght
Ch Rail Cons
Ch Rail Gp
ChConstBk
China Vanke
ChinaCitic
ChinaLife
ChinaMBank
ChinaMob
ChinaPcIns
ChMinsheng
ChMrchSecs RMB
Chna Utd Coms RMB
ChShenEgy
ChShpbldng RMB
ChStConEng RMB
ChUncHK
CNNC Intl RMB
CSR
Daqin RMB
Gree Elec Apl
GuosenSec RMB
HaitongSecs
Hngzh HikVDT RMB
Hunng Pwr
IM Baotou Stl RMB
In&CmBkCh
IndstrlBk RMB
Kweichow RMB
Midea
New Ch Life Ins
PetroChina
PingAnIns
PngAnBnk RMB
Pwr Cons Corp RMB
SaicMtr RMB
ShenwanHong
ShgPdgBk RMB
Sinopec Corp
Sinopec Oil RMB
Denmark (kr)
DanskeBk
MollerMrsk
NovoB

52 Week
High
Low

Price Day Chg

Yld

P/E MCap m

27.45
21.50
72.70
108.10
27.98
5.11
43.97
29.96
22.52

-0.15
-0.05
-0.70
2.00
-0.06
-0.08
0.24
-0.39
-0.33

29.17
25.77
85.85
121.25
32.76
5.86
44.59
33.74
28.03

21.86
14.06
69.22
87.68
23.82
4.92
36.65
27.57
20.30

8.55 13.60
6.56 -14.12
7.80 14.53
1.80 31.67
9.18 13.13
8.19 17.56
5.44 23.99
8.07 13.59
7.38-316.44

117.35
51.48

1.20
-0.98

124.20
58.97

92.73
39.35

2.93 57.08 211317


3.57 15.91 24099.34

19.64
28.67
31.99
31.23
14.30
17.27

0.02
0.13
-0.01
0.17
-0.40
-0.17

20.46
32.00
37.78
32.39
16.45
22.19

15.99
16.27
23.36
21.49
5.67
8.60

2.15
3.64
1.45
2.32
1.77

60.78
85.96
70.23
46.46
196.13
101.00
38.49
84.69
57.03
32.36
39.57
18.24
21.15
81.03
34.25
54.41
58.08
62.40
34.25

0.09
0.47
-0.20
0.45
2.55
0.45
-0.59
0.46
-0.09
0.01
-0.31
0.01
0.10
0.14
-0.43
0.30
0.26
0.06
-

63.41
87.92
71.26
46.53
204.40
104.97
42.35
85.61
59.19
37.10
46.27
22.65
29.29
83.00
40.35
57.66
59.10
63.41
275.72

52.38
68.65
51.17
37.11
140.02
82.19
21.27
66.62
40.03
30.83
37.25
15.32
19.93
64.52
27.32
47.56
48.52
40.58
24.32

3.41
3.60
6.11
1.83
8.27
3.73
8.76
5.68
5.86
20.10
5.25
20.80
19.80
95.10
29.45
8.91
16.94
4.13
15.22
6.19
6.15
9.44
6.63
7.14
6.23
0.19
16.21
13.46
24.10
4.91
2.77
4.97
16.01
291.17
1.74
34.40
5.00
41.35
9.06
6.05
21.39
0.21
16.48
5.48
3.86

0.08
0.07
0.10
-0.07
0.05
-0.03
0.02
0.07
0.38
0.01
0.30
0.30
-0.10
0.20
0.02
0.12
0.02
0.08
0.05
0.02
0.06
0.02
-0.02
0.03
0.00
0.16
0.08
0.10
0.03
0.02
0.12
0.10
2.44
0.60
0.02
0.35
0.02
0.18
0.01
0.10
0.01

3.48
3.88
6.33
2.65
11.06
4.00
12.64
7.81
6.14
24.10
5.42
31.15
21.95
99.30
34.25
8.96
24.95
7.27
15.66
12.21
7.44
11.36
11.68
10.72
10.01
0.30
23.41
15.50
32.06
9.89
4.55
5.19
17.63
326.80
2.07
37.50
6.60
46.70
11.15
9.99
24.36
0.23
18.29
5.88
11.58

2.50 5.55 13516.78


2.83 5.81 6.04 38819.97
4.24 4.86 6.27 27585.85
1.55 0.96 35.15
46.95
5.77 2.61 7.76 4721.66
3.07 5.80 5.39 3303.79
6.72 7.97 2345.43
4.21 1.51 9.94
3081.7
4.31 5.30 5.68 181673.75
14.56 4.05 10.55 3408.28
4.00 4.60 5.26 10075.22
16.00 2.08 19.80 19958.79
12.72 3.97 7.34 11721.76
79.00 2.61 17.05 251098.42
23.70 3.88 18.69 10539.62
6.13 2.27 6.43 7966.47
13.45 4.32 17.26 12201.89
3.75 1.35 55.59 13128.32
10.12 2.38 19.20 6670.26
5.66 0.60 -56.20 16670.1
4.93 2.60 7.77 27618.89
7.70 2.06 39.64 29151.02
6.58 29.17 4216.95
6.45 4.29 14.31 4024.53
5.98 7.04 10.47 13889.89
0.16 -6.03
297.07
13.28 1.15 12.43 5336.06
10.36 3.84 14.48 5917.99
19.77 2.83 24.08 17009.96
4.43 10.85 5.93 2976.09
2.66 - -23.86 6539.24
3.72 5.66 5.96 55625.44
13.77 3.32 6.43 45743.71
188.30 3.53 22.85 54852.46
1.64 5.06 11.52
48.25
22.00 18.17 4587.26
4.16 1.98 81.67 13603.73
30.50 2.85 10.85 39711.82
7.85 1.65 7.04 19879.24
5.40 1.54 16.90 8709.98
16.04 5.93 7.88 35367.37
0.12 -0.29
143.70
14.02 3.05 50710.82
3.86 3.12 21.58 18029.33
3.60 - -18.16 1631.45

188.00 -1.80
9540 -115.00
289.00 -7.20

209.50
11490
402.90

161.80
7355
288.30

Stock

95140.77
24536.42
22321.94
29328.43
32801.28
17124.1

4.35 19.40
3.62 13.78
4.02 12.50
1.39 27.97
0.78 20.21
4.59 9.86
2.37 -99.54
1.61 18.86
3.46 41.08
4.12 12.06
1.43 114.03
3.86 14.60
8.46 20.28
3.93 11.86
3.36 -17.71
3.19 25.61
3.36 14.10
3.45 -31.16
-9.05

39874.99
41814.93
63829.17
34600.1
21845.43
30087.7
31982.74
49351.5
40191.14
24236.45
25300.42
27146.75
13396.04
90787.49
43004.68
30588.92
81295.36
37650.06
8862.66

4.11 14.54 27790.17


3.10 -21.39 14422.22
2.04 23.38 87400.22

FT 500: TOP 20
Day
change change %
0.01
3.00
1.79
1.66
0.92
0.52
52.00
1.11
-0.05
-0.23
65.00
2.06
55.00
1.14
57.00
1.20
2.00
1.89
0.18
0.38
0.08
0.53
-1.50
-0.72
0.27
1.76
1650.00
4.18
0.00
0.00
14.00
0.65
1.90
4.09
0.38
1.93
0.11
0.12
0.00
0.00

Week
change change %
0.02
12.6
8.43
8.4
13.61
8.4
329.00
7.4
1.36
6.8
203.00
6.7
299.00
6.5
293.00
6.5
6.08
6.0
2.60
5.8
0.84
5.8
11.25
5.7
0.75
5.1
1950.00
5.0
750.00
4.9
99.00
4.8
2.18
4.7
0.90
4.7
4.15
4.5
0.74
4.4

Month
change %
24.10
6.80
6.87
8.20
2.97
2.94
8.26
2.53
-0.87
2.35
10.93
12.69
6.22
13.52
5.26
1.74
2.63
1.62
2.57
-2.15

INTEREST RATES: OFFICIAL


Rate
Fed Funds
Prime
Discount
Repo
Repo
O'night Call
Libor Target

Current
0.25-0.50
3.50
0.75
0.00
0.25
0.00-0.00
0.00-0.25

Sep 27 (Libor: Sep 26)


US$ Libor
Euro Libor
Libor
Swiss Fr Libor
Yen Libor
Euro Euribor
Sterling CDs
US$ CDs
Euro CDs

P/E MCap m

Stock

52 Week
High
Low

Price Day Chg

Yld

P/E MCap m

Japan ()
AstellasPh
1607.5 18.00
1804
1358 1.89 16.82 34508.83
Bridgestne
3693 17.00
4620
3089 3.60 11.59 29929.1
Canon
2946 23.00
3862
2780 4.84 16.97 39163.43
CntJpRwy
17600 250.00 22935 16305 0.67 10.52 36136.75
Denso
4107 -12.00
6047
3317 2.78 15.85 32505.13
EastJpRwy
9171 -22.00 12350
8388 1.35 15.36 35595.13
Fanuc
16915 15.00 22790 15300 2.75 24.97 34405.36
FastRetail
32400 -310.00 50700 25305 0.90 84.23 34254.82
Fuji Hvy Ind
3924 58.00
5223
3252 2.96 8.70 30083.18
Hitachi
477.60
6.90 754.60 400.00 2.39 10.62 23008.69
HondaMtr
2972 29.50
4142
2417 2.81 16.92 53658.59
JapanTob
4066 45.00
4850
3551 2.99 17.67 81052.52
KDDI
3219 65.00
3446
2519 1.63 20.21 84076.25
Keyence
73730 750.00 75820 50500 0.26 44681.81
MitsbCp
2164.5 14.00
2300
1565 2.19 -29.83 34304.02
MitsubEst
1864.5 26.50 2707.5
1724 0.82 31.12 25844.05
MitsubishiEle 1297.5 15.50 1409.5 947.00 1.98 13.03 27768.3
MitsuiFud
2131.5 18.50
3536 2031.5 1.25 19.05 21062.71
MitUFJFin
526.20 -7.40 841.80 425.80 2.76 11.35 74311.25
Mizuho Fin
178.20 -2.00 263.20 142.00 4.00 5.77 45089.64
Murata Mfg
13115 350.00 19820 10365 1.52 15.01 29446.15
NipponTT
4800 57.00
5419
4005 2.18 13.44 100295.96
Nissan Mt
1028
7.50 1321.5 893.10 3.88 8.89 44988.1
Nomura
458.50 -3.10 809.00 338.80 2.69 16.32 17468.81
Nppn Stl
2049 23.00
2608 1773.5 2.09 34.46 19408.04
NTTDCMo
2623
7.50
2946
1961 2.54 18.06 103491.08
Panasonic
1032
1.50
1466 799.00 1.42 16.32 25232.26
Seven & I
4756 52.00
5868
4051 1.31 32.22 42020.51
ShnEtsuCh
7140 98.00
7639
5160 1.46 20.46 30750.94
Softbank
6666 43.00
7012
4133 0.57 17.87 79772.78
Sony
3378 -3.00
3568
2199 0.48 35.65 42518.72
SumitomoF
3553 -25.00
5220 2766.5 4.01 6.73 50076.15
Takeda Ph
4896 55.00
6250
4098 3.49 26.12 38570.06
TokioMarine
4051 53.00
5030
3063 2.19 14.91 30586.38
Toyota
6014 97.00
7862
4917 3.32 8.93 200086.88
Mexico (Mex$)
AmerMvl
11.07 -0.12 15.12 10.40 2.42 24.99 25049.97
FEMSA UBD 180.29
0.19 183.05 28.35 1.34 39.27
WalMrtMex
43.27
0.22 47.44 39.26 1.33 27.00 38626.54
Netherlands ()
Altice
16.00 -0.40 22.44
9.98 - -15.00 15071.51
ASML Hld
97.29
0.47 100.50 70.54 0.66 38.62 47205.26
Heineken
78.79
0.90 86.95 68.94 1.28 27.93 50815.41
ING
10.83
0.02 13.88
8.30 2.84 9.18 47025.38
Unilever
41.22
0.62 43.11 34.23 2.87 24.72 79141.29
Norway (Kr)
DNB
102.70 -0.10 123.40 90.10 4.15 7.86 20512.15
Statoil
124.20 -2.30 150.20 97.25 5.48-190.34 49145.37
Telenor
133.60
0.20 173.40 116.80 5.31 145.50 24597.62
Qatar (QR)
QatarNtBk
157.00
1.90 169.80 122.50 2.01 12.77 36200.86
Russia (RUB)
Gzprm neft
134.07 -3.00 170.43 122.75 4.65 4.64 49566.18
Lukoil
3026.5 -33.50
3125 2040.1 4.55 10.91 40201.14
MmcNrlskNckl
9819 152.00 10067
7840 14.25 14.29 24265.52
Novatek
662.50 710.00 535.10 1.98 12.58 31413.96
Rosneft
339.95 -10.40 370.80 228.30 3.37 13.80 56264.88
Sberbank
147.71 -1.39 156.25 72.95 0.25 19.02 49795.69
Surgutneftegas
30.18 -1.22 41.16 29.12 3.07 16835.52
Saudi Arabia (SR)
AlRajhiBnk
54.50
0.50 62.75 44.70 2.48 12.85 23614.14
Natnlcombnk
34.50
0.90 56.00 33.10 4.36 7.73 18398.04
SaudiBasic
82.50
0.75 92.75 59.50 6.47 15.18 65992.95
SaudiTelec
57.25 69.75 54.25 6.78 13.98 30530.08
Singapore (S$)
DBS
15.30
0.10 18.25 13.01 3.85 9.16 28338.66
JardnMt US$
60.50 -0.28 63.71 45.00 2.33 11.24 43029.39
JardnStr US$
32.99
0.49 34.17 25.24 0.84 8.53 36546.02
OCBC
8.59
0.05
9.60
7.41 4.12 10.13 26387.72
SingTel
3.99
0.03
4.36
3.38 4.31 16.73 46722.33
UOB
18.80
0.03 20.78 16.80 3.66 9.86 22193.17
South Africa (R)
Firstrand
47.51 -0.20 52.49 34.08 3.40 15.48 19695.64
MTN Grp
119.77 -4.23 192.95 109.56 9.82 86.10 16322.34
Naspers N
2300 -23.56 2553.59 1654.06 0.17 87.71 74481.52
South Korea (KRW)
HyundMobis 288000 4000 293500 219000 1.12 17.21 25564.25
KoreaElePwr
58600 100.00 63700 47300 4.89 2.78 34303.65
SK Hynix
41150 1650 41150 25650 1.12 13.52 26491.57
SmsungEl
1569000 1000.00 1694000 1088000 1.24 - 202689.27
Spain ()
BBVA
5.30 -0.01
8.28
4.50 8.19 15.68 38435.2
BcoSantdr
3.86 -0.02
5.40
3.15 4.99 10.32 62386.17
CaixaBnk
2.19 -0.02
3.99
1.82 5.27 17.95 14519.16
Iberdrola
5.95 -0.02
6.71
4.80 0.49 16.44 42413.88
Inditex
32.98
0.17 35.38 26.60 1.22 38.96 115090.35
Repsol
11.56 -0.29 12.89
7.95 6.32 -10.53 18962.62
Telefonica
9.25 -0.09 12.57
7.45 7.77 -59.96 51506.74

Last
1.00
3.50
0.75
0.05
0.25
0.00
0.00-0.75

Mnth Ago
0.25-0.50
3.50
1.00
0.05
0.50
0.00-0.10
-1.25--0.25

Year Ago
0.00-0.25
3.50
0.75
0.05
0.50
0.00-0.10
0-0.25

Day
0.001
-0.002
-0.001

Change
Week
0.004
0.000
-0.001

Month
0.002
0.000
-0.001
0.000
0.000
-0.001
0.000
0.000
0.000

One
month
0.52444
-0.37414
0.26625
-0.81000
-0.07843
-0.37100
0.27000
0.46000
-0.42500

Three
month
0.85294
-0.32186
0.37594
-0.74640
-0.02021
-0.30300
0.39000
0.65000
-0.34500

Six
month
1.24444
-0.21200
0.52625
-0.64640
0.00886
-0.19900
0.54500
0.91000
-0.25500

One
year
1.55522
-0.07686
0.74919
-0.48380
0.10929
-0.06000

Short
7 Days
One
Three
Six
One
Sep 27
term
notice
month
month
month
year
Euro
-0.45 -0.35 -0.45 -0.35 -0.50 -0.35 -0.43 -0.28 -0.33 -0.18 -0.12 0.03
Sterling
0.18 0.28 0.22 0.32 0.34 0.44 0.47 0.62 0.65 0.80
Swiss Franc
Canadian Dollar
US Dollar
0.40 0.50 0.45 0.55 0.50 0.60 0.80 0.90 1.15 1.25 1.45 1.55
Japanese Yen
-0.40 -0.20 -0.40 -0.20 -0.70 -0.30 -0.40 -0.10 -0.20 0.10 -0.15 0.15
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs:
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA.

COMMODITIES
Energy
Price*
Crude Oil
Oct
44.75
Brent Crude Oil
45.73
RBOB Gasoline
Sep
1.37
Heating Oil
Oct
1.45
Natural Gas
Oct
3.06
Ethanol
Uranium
Oct
24.40
Carbon Emissions
Diesel
Unleaded (95R)
Base Metals ( LME 3 Months)
Aluminium
1650.00
Aluminium Alloy
1570.00
Copper
4795.00
Lead
1961.00
Nickel
10605.00
Tin
19710.00
Zinc
2323.00
Precious Metals (PM London Fix)
Gold
1327.00
Silver (US cents)
1942.00
Platinum
1033.00
Palladium
691.00
Bulk Commodities
Iron Ore (Platts)
55.85
Iron Ore (The Steel Index)
56.20
GlobalCOAL RB Index
70.50
Baltic Dry Index
930.00

www.ft.com/commodities

Change
-0.82
-1.26
-0.02
0.04
0.05
0.00
-10.00
-15.00
-49.50
14.50
140.00
-15.00
36.00

Agricultural & Cattle Futures


Corn
Wheat
Soybeans
Soybeans Meal
Cocoa (ICE Liffe)X
Cocoa (ICE US)
Coffee(Robusta)X
Coffee (Arabica)
White SugarX
Sugar 11
Cotton
Orange Juice
Palm Oil
Live Cattle
Feeder Cattle
Lean Hogs

S&P GSCI Spt


DJ UBS Spot
R/J CRB TR
M Lynch MLCX Ex. Rtn
UBS Bberg CMCI TR
-1.05 LEBA EUA Carbon
-0.20 LEBA CER Carbon
1.40 LEBA UK Power
-4.00

-13.50
-2.00
-3.00
0.00

Oct
Oct
Oct

Price*
329.50
398.00
947.25
299.50
2283.00
2855.00
1997.00
152.10
604.60
23.06
69.84
204.80
106.55
130.85
53.03

Change
0.75
2.00
0.50
1.70
11.00
12.00
25.00
-0.75
6.00
-0.07
0.00
0.80
0.00
-1.55
0.00

Sep 26
349.03
83.86
183.51
231.14
13.15
5.83
0.36
3610.00

% Chg
Month
-3.79
-1.32
-1.89
-9.84
-1.12
0.00
-10.00
200.83

% Chg
Year
-3.51
-5.24
-6.49
-33.05
-2.09
-22.37
-29.41
58.96

Dec
Dec
Nov
Oct
Dec
Dec
Nov
Dec
Oct
Nov

Sources: NYMEX, ECX/ICE, CBOT, X ICE Liffe, ICE Futures, CME, LME/London Metal Exchange.* Latest prices, $
unless otherwise stated.

Stock

Price Day Chg

52 Week
High
Low

Sweden (SKr)
AtlasCpcoB
229.50
0.10 233.20 162.60
Ericsson
58.10 -0.75 88.40 56.60
H&M
246.10
1.60 339.90 234.50
Investor
306.20 -3.00 331.70 256.80
Nordea Bk
83.35 -0.40 100.00 66.30
SEB
84.20 -0.25 95.20 67.75
SvnskaHn
115.10 -0.10 126.60 90.25
Swedbank
195.70 -2.00 201.40 150.80
Telia Co
38.20 -0.07 45.41 35.56
Volvo
96.20
0.20 100.20 72.20
Switzerland (SFr)
ABB
21.77 -0.10 22.20 15.94
CredSuisse
12.38 -0.42 25.31
9.76
Nestle
76.95
0.85 78.30 70.80
Novartis
78.10
0.10 92.25 67.00
Richemont
58.75 -0.40 86.75 55.85
Roche
243.50
1.40 281.40 229.90
Swiss Re
87.15 -0.85 99.75 82.30
Swisscom
467.10 -0.70 528.50 445.00
Syngent
425.60
0.30 433.30 288.50
UBS
12.93 -0.13 20.27 12.79
Zurich Fin
248.80 -3.10 272.90 194.70
Taiwan (NT$)
Chunghwa Telecom 112.00 125.50 97.30
Formosa PetChem
95.00 -0.40 100.50 72.50
HonHaiPrc
79.00
0.10 90.10 72.50
MediaTek
244.00
0.50 307.00 192.00
TaiwanSem
183.50
0.50 187.50 127.00
Thailand (THB)
PTT Explor
331.00 357.00 197.00
United Arab Emirates (Dhs)
Emirtestele
19.95 20.20 14.10
United Kingdom (p)
AscBrFd
2599 -26.00
3606
1910
AstraZen
5058 -41.00
5505
3680
Aviva
435.00 -3.10 522.50 290.00
Barclays
165.95 -2.15 259.50 121.10
BP
428.20 -3.80 464.40 249.44
BrAmTob
4898 13.00
5135
3505
BSkyB
847.50 13.00
1134 560.00
BT
387.00 -2.75 502.60 359.60
Compass
1478
7.00
1521
1008
Diageo
2215
4.00 2231.78
1708
GlaxoSmh
1637.5
4.00 1716.5 1227.5
Glencore
208.25 -1.50 213.40 66.67
HSBC
577.10
7.90 594.50 392.37
Imperial Brands
3980
7.50
4154
3323
LlydsBkg
54.64
0.39 78.02 47.10
Natl Grid
1093.5 14.50
1148 884.50
Prudential
1360.5 -15.50 1578.5 1045.99
RBS
174.60 -2.90 336.00 148.40
ReckittB
7210 27.00
7786
5788
RELX
1443 -7.00
1475 631.02
RioTinto
2460 -23.50
2621
1557
RollsRoyce
711.00 -1.00 875.50 497.00
RylDShlA
1800.5 -38.50 2127.4
1256
SABMill
4465 26.00 4590.8 3566.5
Shire
5143 23.00 5562.83 2707.19
StandCh
610.10 -15.60 791.80 373.40
Tesco
177.75
1.30 205.90 137.00
Vodafone
221.05
0.85 240.10 197.70
WPP
1787 10.00
1875
1204
United States of America ($)
21stC Fox A
24.10
0.31 31.40 22.66
3M
176.41
0.46 182.27 134.64
AbbottLb
41.89
0.21 46.38 36.00
Abbvie
64.35
0.28 68.12 45.45
Accenture
115.29
1.56 120.78 91.40
Adobe
109.05
1.79 109.14 71.27
AEP
66.02 -0.34 71.32 53.30
Aetna
114.96
0.03 123.57 92.42
Aflac
72.32
0.30 74.50 54.57
AirProd
149.00
0.65 157.84 114.64
Alexion
124.35 -0.16 193.45 110.56
Allegran
239.30
0.62 322.68 195.50
Allstate
68.85
0.46 70.38 56.03
Alphabet
811.48
8.83 819.06 617.84
Altria
63.23
0.20 70.15 53.68
Amazon
811.54 12.38 812.60 474.00
AmerAir
35.86
0.93 47.09 24.85
AmerExpr
64.20
0.78 77.85 50.27
AmerIntGrp
58.70
0.45 64.31 48.41
AmerTower
112.60 -0.09 118.26 83.07
Amgen
171.32 -2.21 176.85 130.09
Anadarko
57.78 -0.76 73.87 28.16
Anthem
125.08 149.87 115.63
Aon Cp
112.30
0.68 113.78 83.83
Apple
112.77 -0.11 123.82 89.47
ArcherDan
41.51 -0.39 47.03 29.86

Yld

P/E MCap m

2.65
6.30
3.65
3.23
6.82
4.98
3.87
5.41
3.88
3.00

25.95
14.08
23.59
-16.38
11.30
11.90
13.85
12.01
15.83
13.95

10378.58
20666.95
41659.24
16163.13
39120.35
21174.96
25381.81
25673.58
19169.33
18093.57

5.10
2.45
3.05
2.49
3.22
5.16
4.57
2.53
-

29.16 49591.11
-5.40 26611.39
31.11 246315.98
31.98 211033.85
19.68 31542.81
23.83 175956.82
7.12 32275.98
18.27 24887.31
35.07 40525.85
10.76 51205.6
28.28 38521.01

4.10
3.98
3.94
8.53
3.09

21.26 27637.3
16.56 28786.69
10.57 43546.43
17.39 12279.64
17.87 151357.45

2.68 52.72 27338.16


3.89 20.06 47237.98
1.31 36.42 26717.41
4.00 38.64 83081.71
4.78 36.25 22922.63
3.31 -36.08 36454.16
7.02 -20.05 104444.83
3.14 21.15 118573.17
3.87 23.54 18917.22
3.33 13.12 50022.33
1.99 26.87 31528.69
2.60 24.86 72377.71
4.89-16375.00 103668.01
2.16 -8.24 38925.11
6.69 16.07 148547.42
3.54 33.73 49546.43
4.12 26.02 50639.67
3.95 15.92 53455.34
2.85 19.03 45562.58
-4.05 26732.47
1.93 33.26 65779.08
2.06 27.80 37412.33
6.36 843.33 43912.23
2.30 -6.36 16975.95
7.82 -29.71 101137.24
1.79 38.66 94180.01
0.35 32.87 60238.85
1.69 -6.32 26011.87
64.40 18866.85
5.11 -14.66 76380.32
2.50 27.79 29746.28
1.12 22.05 25564.42
2.35 23.16 106622.26
2.32 33.43 61570.76
2.95 21.39 104796.7
1.70 21.83 93956.55
69.06 54336.13
2.98 21.80 32462.66
0.84 17.35 40327.97
2.00 13.17 29620.48
2.18 23.00 32265.91
- 426.72 27885.24
- -40.52 94751.36
1.78 18.03 25573.23
32.36 239260.15
3.16 25.27 123542.22
- 207.83 384729.64
1.08 3.63 19002.69
1.63 14.20 59306.73
1.99 604.28 62847.63
1.72 72.00 47910.09
2.03 18.05 128209.19
1.08 -5.80 29951.27
1.98 14.80 32917.43
1.06 21.90 29826.88
1.67 13.84 607654.72
2.71 17.37 24148.99

Stock

52 Week
High
Low

Price Day Chg

AT&T
AutomData
Avago Tech
BakerHu
BankAm
Baxter
BB & T
BectonDick
BerkshHat
Biogen
BkNYMeln
BlackRock
Boeing
BrisMySq
CapOne
CardinalHlth
Carnival
Caterpillar
CBS
Celgene
CharlesSch
Charter Communications
ChevrnTx
Chubb
Cigna
Cisco
Citigroup
CME Grp
Coca-Cola
Cognizant
ColgtPlm
Comcast
ConocPhil
Corning
Costco
CrownCstl
CSX
CVS
Danaher
Deere
Delphi
Delta
Devon Energy
DiscFinServ
Disney
DominRes
DowChem
DukeEner
DuPont
Eaton
eBay
Ecolab
Emerson
EOG Res
EquityResTP
Exelon
ExpScripts
ExxonMb
Facebook
Fedex
FordMtr
Franklin
GenDyn
GenElectric
GenMills
GenMotors
GileadSci
GoldmSchs
Halliburton
HCA Hold
Hew-Pack
HiltonWwde
HomeDep
Honywell
HumanaInc
IBM
IllinoisTool
Illumina
Intcntl Exch
Intel
Intuit
John&John
JohnsonCn
JPMrgnCh
Kimb-Clark
KinderM
Kraft Heinz
Kroger
L Brands
LasVegasSd
LibertyGbl

41.52
0.38 43.89 31.85
88.73
0.54 96.00 76.65
169.56
2.87 179.42 111.53
47.90 -1.26 58.23 37.58
15.22
0.13 18.09 10.99
47.22
0.02 49.49 32.18
37.27
0.24 39.47 29.95
177.73
0.72 181.76 128.87
216700 540.00 226490 186900
311.82
2.00 333.65 223.02
39.52 -0.03 44.73 32.20
361.80
1.10 376.65 280.55
131.07
0.50 150.59 102.10
55.62
0.14 77.12 55.02
71.35
0.54 81.62 58.03
77.67
0.79 91.23 73.25
48.37
1.90 55.77 40.52
82.48
0.11 84.73 56.36
51.87
0.74 58.22 38.51
106.60
0.29 128.39 93.05
30.58
0.12 34.52 21.51
276.23
2.41 279.95 156.13
99.18
0.40 107.58 75.28
125.31
0.93 131.00 100.11
130.25 -0.09 148.99 121.87
31.46
0.39 31.95 22.46
46.20
0.31 56.46 34.52
105.96
0.69 110.35 81.87
42.43
0.38 47.13 39.33
54.35
0.20 69.80 51.22
73.54
0.43 75.38 61.40
66.23
0.42 68.36 52.34
39.33 -0.69 57.24 31.05
23.28
0.28 23.29 16.13
150.68 -0.51 169.73 138.57
95.72
0.11 102.82 75.71
29.73
0.02 30.53 21.33
90.48
0.56 106.67 86.50
77.27
0.67 82.64 61.58
83.08 -0.50 88.63 70.16
68.05 -0.71 88.89 55.59
38.89
0.85 52.77 32.60
38.06 -1.58 48.68 18.07
56.87
0.14 60.29 42.86
91.68 -0.28 120.65 86.25
76.23 -0.37 78.97 64.54
52.18
0.05 57.10 39.84
81.93 -0.23 87.75 65.50
66.70
0.18 75.72 47.11
63.15
0.25 68.20 46.19
31.91
0.24 32.81 21.52
119.62
0.69 124.60 98.62
51.55
0.12 56.82 41.25
88.28 -0.98 95.93 57.15
65.04
0.55 82.39 62.39
34.44 -0.39 37.70 25.09
70.59 -0.04 89.20 65.55
82.94 -0.12 95.55 71.55
128.41
1.10 131.98 85.72
176.26
0.92 176.60 119.71
12.00 -0.02 15.84 11.02
34.60
0.10 42.23 30.56
155.38
1.51 155.70 121.61
29.85
0.31 33.00 24.26
63.74 -0.16 72.95 53.53
31.76 -0.04 36.88 26.69
78.87 -1.76 111.11 76.67
162.54
1.06 199.90 138.20
40.72 -0.66 46.90 27.64
74.67 -0.24 83.69 60.07
15.29
0.27 15.30
8.91
23.00
0.05 26.27 16.16
126.58
1.13 139.00 109.62
115.92 -0.02 120.02 91.57
176.80
1.49 191.65 150.00
156.08
2.10 164.95 116.90
118.71
0.98 123.50 79.15
178.79
0.32 196.47 127.10
273.82 -0.23 287.02 223.49
36.94
0.29 38.05 27.68
109.93
0.95 116.97 85.61
118.67
0.89 126.07 89.90
44.19 -0.10 48.97 30.30
66.26
0.48 69.03 52.50
125.81
0.30 138.87 106.66
21.60 -0.18 32.89 11.20
88.95
0.42 90.54 68.18
29.95 -0.13 42.75 29.85
73.22 -0.12 101.11 60.00
56.72
0.26 58.65 34.88
33.33
0.08 47.40 26.16

BONDS: HIGH YIELD & EMERGING MARKET

Close
Prev
price
price
MTN Grp
119.77
124.00
Naspers N
2300.00
2323.56
Firstrand
47.51
47.71
CaixaBnk
2.19
2.21
Devon Energy
38.06
39.64
Deut Bank
10.55
10.55
FastRetail
32400.00 32710.00
Alexion
124.35
124.51
ITC
245.85
248.05
RBS
174.60
177.50
VertexPharm
87.26
88.29
BOC Hold
26.45
26.20
Cielo
32.00
32.00
Citic Ltd
11.20
11.24
ICICI Bk
260.00
262.55
AscBrFd
2599.00
2625.00
MollerMrsk
9655.00
9655.00
NovoB
296.20
296.20
Volvo
96.00
96.00
Gree Elec Apl
0.19
0.19
Based on the FT Global 500 companies in local currency

Day
Week
change change %
change change %
-4.23
-3.41 -12246.23
-99.0
-23.56
-1.01 -234746.00
-99.0
-0.20
-0.42
-4703.49
-99.0
-0.02
-0.81
-0.20
-8.4
-1.58
-3.99
-2.60
-6.4
0.00
0.00
-0.71
-6.3
-310.00
-0.95
-1960.00
-5.7
-0.16
-0.13
-7.38
-5.6
-2.20
-0.89
-13.00
-5.0
-2.90
-1.63
-9.10
-5.0
-1.03
-1.17
-4.43
-4.8
0.25
0.95
-1.20
-4.3
0.00
0.00
-1.43
-4.3
-0.04
-0.36
-0.50
-4.3
-2.55
-0.97
-11.60
-4.3
-26.00
-0.99
-114.00
-4.2
0.00
0.00
-415.00
-4.1
0.00
0.00
-12.60
-4.1
0.00
0.00
-4.00
-4.0
0.00
-0.52
-0.01
-4.0

Month
change %
-1.42
-3.46
1.67
-3.98
-14.04
-6.26
-8.20
-3.89
-3.13
-12.08
-9.96
1.73
-3.09
-10.83
5.99
-11.89
-3.88
-7.18
5.96
7.87

BOND INDICES
Since
16-12-2015
16-12-2008
16-12-2015
10-09-2014
05-03-2009
05-10-2010
15-01-2015

INTEREST RATES: MARKET


Over
night
0.42433
-0.40157
0.22750

Yld

FT 500: BOTTOM 20

Close
Prev
price
price
ShenwanHong
0.21
0.20
Adobe
109.05
107.26
Fedex
176.26
175.34
Seven & I
4756.00
4704.00
BHPBilltn
21.50
21.55
KDDI
3219.00
3154.00
Takeda Ph
4896.00
4841.00
NipponTT
4800.00
4743.00
CSL
108.10
106.10
T-MobileUS
47.10
46.92
ChShenEgy
15.22
15.14
Glencore
208.25
209.75
Hew-Pack
15.29
15.02
SK Hynix
41150.00 39500.00
Bk Cent Asia
16000.00 16000.00
MitsbCp
2164.50
2150.50
Carnival
48.37
46.47
China Vanke
20.10
19.72
CrownCstl
95.72
95.61
Vale
17.44
17.44
Based on the FT Global 500 companies in local currency

Sep 27
US
US
US
Euro
UK
Japan
Switzerland

52 Week
High
Low

Finland ()
Nokia
5.01
0.03
7.11
4.48 3.08-138.38 32736.2
SampoA
39.90 -0.58 47.67 34.42 4.49 15.35 24964.86
France ()
Airbus Grpe
52.14 -0.35 68.50 48.07 2.40 14.47 45110.79
AirLiquide
94.28 -0.16 123.65 88.25 2.66 19.64 36483.72
AXA
18.64 -0.25 26.02 16.11 5.69 7.97 50597.2
BNP Parib
45.19 -0.24 58.17 35.27 4.93 8.76 63058.91
ChristianDior 158.90 -0.35 187.50 133.75 1.72 21.75 32332.81
Cred Agr
8.54 -0.09 11.93
6.79 6.77 6.96 26872.44
Danone
65.98
0.43 70.53 53.68 1.94 36.76 48455.67
EDF
10.38 -0.17 18.16
9.13 15.13 179.52 23398.89
Engie SA
13.54 -0.09 16.83 12.34 7.12 -7.24 36920.58
Esslr Intl
116.55
0.10 125.15 102.10 0.92 33.41 28461.71
Hermes Intl
362.15 -3.50 399.00 281.20 0.89 38.07 42808.15
LOreal
167.55
0.90 177.90 142.65 1.78 33.95 105291.2
LVMH
151.85
0.10 174.30 130.55 2.25 21.47 86328.23
Orange
13.76
0.24 16.98 12.38 3.73 21.47 40983.52
PernodRic
105.65 -0.15 110.25 88.00 1.46 34.24 31398.26
Renault
71.24
0.50 98.14 59.59 2.28 8.10 23588.91
Safran
63.10 -0.29 72.45 48.87 1.68 -72.38 29464.3
Sanofi
67.94
0.35 93.82 62.50 4.16 22.21 98060.15
Sant Gbn
37.99 -0.01 42.12 31.47 1.39 67.35 23605.95
Schneider
61.98 -0.31 63.59 45.32 2.65 29.48 41073.36
SFR Group
26.33 -0.47 46.23 19.51 - -37.88 12990.14
SocGen
30.63 -0.33 45.90 25.00 3.60 7.32 27694.89
Total
40.77 -0.96 47.40 35.21 5.40 30.26 114267.8
UnibailR
243.10
1.80 257.85 212.05 3.85 9.85 27033.9
Vinci
67.69 -0.01 69.80 55.70 2.62 18.26 45164.86
Vivendi
17.63 -0.08 22.73 14.87 15.65 16.52 25390.89
Germany ()
Allianz
130.20 -2.10 170.00 118.35 4.50 10.47 66623.45
BASF
72.36 -0.12 79.20 56.01 3.86 17.18 74416.21
Bayer
88.78 -0.42 127.25 83.45 2.71 17.32 82204.04
BMW
73.18 -0.55 104.85 63.38 3.64 8.06 49327.07
Continental
186.20 -0.30 231.90 162.05 1.94 13.24 41698.71
Daimler
61.50 -0.38 85.50 50.83 5.09 8.57 73670.37
Deut Bank
10.55 27.98 10.18 -1.86 16293.06
Deut Tlkm
14.93 -0.04 17.57 13.54 3.08 13.31 78184.01
DeutsPost
27.60
0.17 29.00 19.55 2.97 18.97 37478.44
E.ON
6.30 -0.06 10.24
6.24 7.65 -1.82 14106.25
Fresenius Med
78.23 -0.09 85.65 67.88 0.99 24.98 26831.2
Fresenius SE
70.89
0.11 73.55 52.39 0.75 27.45 43390.63
HenkelKgaA 103.45
0.35 104.70 76.12 1.35 23.13 30092.8
Linde
143.00 -0.15 169.70 113.50 2.03 25.00 29738.94
MuenchRkv
165.85 -0.90 193.65 140.90 4.30 10.82 29907.95
SAP
80.85
0.39 82.60 55.89 1.37 28.15 111213.27
Siemens
103.80
0.15 109.00 77.91 3.25 17.43 98790.73
Volkswgn
123.95 -2.65 146.50 95.00 0.09 -17.43 40954.41
Hong Kong (HK$)
AIA
51.90
0.70 51.95 36.85 1.20 35.72 80676.22
BOC Hold
26.45
0.25 29.70 18.82 3.73 13.24 36061.53
Ch OSLnd&Inv
27.00
0.30 28.25 20.45 2.19 7.50 38146.32
ChngKng
56.65
0.25 59.75 38.20 2.40 11.98 28091.94
Citic Ltd
11.20 -0.04 14.80 10.02 2.60 12.96 42014.19
Citic Secs
16.80
0.08 20.45 12.82 1.85 10.37 4935.77
CK Hutchison
99.00 -0.20 109.50 80.60 3.31 9.48 49273.78
CNOOC
9.30
0.06 10.20
6.41 5.11-164.04 53543.91
HangSeng
139.00 -0.50 148.90 121.10 3.98 18.08 34268.6
HK Exc&Clr
205.40
2.40 219.40 160.10 2.81 37.31 32428.42
MTR
42.60
0.70 44.50 33.10 2.42 25.96 32412.78
SandsCh
33.30
1.00 36.75 20.75 5.78 27.98 34654.34
SHK Props
118.50
1.80 123.30 79.00 2.83 10.80 44240.47
Tencent
215.80
2.80 220.80 125.30 0.21 52.22 263431.37
India (Rs)
Bhartiartl
314.80 -5.55 385.00 282.30 0.67 34.56 18931.57
HDFC Bk
1298.05
1.90 1318.45 928.00 0.70 28.04 49647.52
Hind Unilevr 897.30
4.70 954.00 766.40 1.57 52.47 29216.24
HsngDevFin
1418.9
6.45
1464 1011.45 1.08 22.05 33803.71
ICICI Bk
260.00 -2.55 292.70 180.75 1.74 16.47 22760.65
Infosys
1039.75
3.85 1279.3 1009.1 2.26 17.70 35929.73
ITC
245.85 -2.20 265.90 178.67 1.54 33.12 44754.75
L&T
1436.4 -29.30
1615 1016.05 1.03 29.10 20147.51
OilNatGas
247.55 -2.00 267.75 187.75 3.47 12.43 31862.7
RelianceIn
1110.5
3.30 1129.55 826.10 0.80 13.88 54181.87
SBI NewA
249.00 -2.65 271.60 148.25 1.00 23.70 29079.75
SunPhrmInds 770.15
4.00 933.95 704.00 0.37 31.33 27884.99
Tata Cons
2436.1 35.00
2770
2115 1.71 20.18 72215.44
Indonesia (Rp)
Bk Cent Asia
16000 16000 11300 0.95 21.73 30449.92
Israel (ILS)
TevaPha
192.00
0.60 259.30 187.80 2.56 35.33 51766.74
Italy ()
Enel
3.93
0.01
4.28
3.33 3.28 17.80 44714.69
ENI
12.31 -0.06 15.85 10.93 6.26 -4.71 50091.61
Generali
10.89 -0.05 18.09
9.76 6.37 9.58 19020.41
IntSPaolo
1.95 -0.03
3.30
1.52 6.93 14.15 34592.43
Luxottica
44.39
1.08 65.90 41.90 1.93 28.61 24050.65
Unicred
2.03 -0.04
6.17
1.70 5.43 7.83 14055.9

61522.8
52865.53
95462.94
37769.83
56916.17
47829.21
37909.3
76752
22047.4

26.98
9.59
19.81
7.30
-5.47
-3.62

Price Day Chg

Bid
yield

Mth's Spread
chge
vs
yield
US

Sep 27
High Yield US$
Navient Corporation

S*

F*

Bid
price

06/18

8.45

BB-

Ba3

BB

107.59

3.85

0.00

0.38

3.11

High Yield Euro


Kazkommerts Intl BV

02/17

6.88

Caa1

97.50

0.00

0.00

Emerging US$
Mexico
Brazil
Russia
Peru
Peru
Colombia
Brazil
Poland
Turkey
Turkey

09/16
01/18
07/18
03/19
03/19
07/21
01/22
03/22
09/22
10/26

11.40
8.00
11.00
7.13
7.13
4.38
12.50
5.00
6.25
4.88

BBB+
BB
BB+
BBB+
BBB+
BBB
BB
BBB+
-

A3
Ba2
Ba1
A3
A3
Baa2
Ba2
A2
Baa3
Ba1

BBB+
BB
BBBBBB+
BBB+
BBB
BB
ABBBBBB-

106.80
105.13
115.83
128.75
114.01
112.75
110.33
117.38
110.46
103.82

1.49
3.86
2.08
1.95
2.60
2.64
9.90
2.80
4.30
4.45

0.03
-0.03
0.00
0.00
0.00
0.00
0.32
0.00
0.01
0.00

0.01
-0.31
0.12
0.00
0.20
0.00
-0.17
0.00
0.11
-0.04

0.44
3.12
1.34
1.21
0.84
1.52
8.78
1.68
3.18
2.89

Emerging Euro
Brazil
02/15
7.38
BBBBaa2
BBB 111.75
0.73
0.00
0.00
0.09
Mexico
07/17
4.25
BBB+
A3
BBB+ 111.13
1.50
0.00
0.00
0.75
Mexico
02/20
5.50
BBB+
A3
BBB+ 121.63
2.06
0.00
0.00
0.94
Bulgaria
09/25
5.75
BB+
BBB- 122.31
2.94
0.11
0.23
1.38
Data provided by SIX Financial Information & Tullett Prebon Information. US $ denominated bonds NY close; all other
London close. *S - Standard & Poors, M - Moodys, F - Fitch.

VOLATILITY INDICES
Index

Day's
change

Markit IBoxx
ABF Pan-Asia unhedged
Corporates( )
Corporates($)
Corporates()
Eurozone Sov()
Gilts( )
Global Inflation-Lkd
Markit iBoxx Non-Gilts
Overall ($)
Overall( )
Overall()
Treasuries ($)

187.33
341.04
271.02
224.26
239.63
332.42
260.92
337.02
239.22
330.77
233.60
228.17

-0.13
0.23
0.12
0.08
0.19
0.36
-0.31
0.22
0.11
0.32
0.15
0.13

0.16
-0.93
-0.31
-0.03
0.17
-1.40
-0.34
-0.81
-0.24
-1.23
0.13
-0.24

8.10
15.54
8.64
6.14
6.36
15.88
9.48
14.27
6.31
15.41
5.85
5.25

-0.41
-0.99
-0.31
-0.06
-0.10
-1.63
-0.61
-0.86
-0.24
-1.40
-0.05
-0.24

10.98
16.53
8.64
7.13
7.24
15.10
6.49
14.74
6.31
15.01
6.63
5.25

FTSE
Sterling Corporate ()
Euro Corporate ()
Euro Emerging Mkts ()
Eurozone Govt Bond

122.65
111.05
917.17
118.68

0.34
0.17
28.54
0.06

-0.72
-0.11
3.40
-0.27

10.97
5.07
14.80
4.81

Index

Day's
change

Week's
change

Month's
change

Series
high

Series
low

369.26
85.00
70.05
111.86

-12.07
-1.98
-2.51
-3.89

35.21
7.21
2.21
10.86

40.34
7.01
-0.87
12.50

390.04
90.43
93.03
121.66

288.69
67.59
64.22
80.36

CREDIT INDICES
Markit iTraxx
Crossover 5Y
Europe 5Y
Japan 5Y
Senior Financials 5Y

Month's
change

Year
change

Return
1 month

Return
1 year

Markit CDX
Emerging Markets 5Y
239.31
6.78
0.00
0.00
242.86
226.53
Nth Amer High Yld 5Y
Nth Amer Inv Grade 5Y
79.06
2.15
0.00
0.00
81.57
76.06
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names.

BONDS: INDEX-LINKED
Price
Month
Value
No of
Yield
Sep 26
Sep 26
Prev
return
stock
Market
stocks
Can 4.25%' 21
124.62
-0.446
-0.406
0.25
5.18
77549.97
7
Fr 2.25%' 20
114.42
-1.393
-1.377
0.39
20.31 213132.97
14
Swe 0.25%' 22
113.51
-1.674
-1.602
-0.33
29.20 225556.83
7
UK 2.5%' 20
370.10
-2.342
-2.295
-0.32
6.58 640863.27
27
UK 2.5%' 24
370.30
-2.082
-2.039
-0.58
6.82 640863.27
27
UK 2%' 35
275.80
-1.842
-1.806
-0.10
9.08 640863.27
27
US 0.625%' 21
104.90
-0.386
-0.375
0.88
35.84 1212443.40
37
US 3.625%' 28
138.03
0.277
-0.375
0.27
16.78 1212443.40
37
Representative stocks from each major market Source: Merill Lynch Global Bond Indices Local currencies. Total market
value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
amount.

BONDS: TEN YEAR GOVT SPREADS


Bid
Yield

Spread Spread
vs
vs
Bund T-Bonds

Australia
2.08
2.28
0.52 Italy
Austria
0.08
0.28 -1.48 Japan
Belgium
0.11
0.32 -1.45 Netherlands
Canada
1.06
1.27 -0.50 Norway
Denmark
-0.04
0.16 -1.60 Portugal
Finland
0.00
0.21 -1.56 Spain
France
0.17
0.37 -1.39 Switzerland
Germany
-0.21
0.00 -1.77 United Kingdom
Greece
8.28
8.49
6.72 United States
Ireland
0.35
0.55 -1.21
Data provided by SIX Financial Information & Tullett Prebon Information

Bid
Yield
1.26
-0.08
-0.14
1.15
3.40
0.98
-0.53
0.68
1.56

Spread Spread
vs
vs
Bund T-Bonds
1.47
0.13
0.06
1.36
3.60
1.19
-0.33
0.88
1.77

-0.30
-1.64
-1.70
-0.41
1.84
-0.58
-2.09
-0.88
0.00

Stock

4.47 18.43 255446.42


2.28 28.11 40316.71
0.911739.00 67371.19
1.38 -7.02 20496.48
1.19 13.27 155317.04
0.98 5.61 25682.38
2.84 14.81 30356.42
1.41 34.92 37843.31
14.38 170953.33
21.20 68326.24
1.55 15.81 42194.6
2.40 19.85 58856.51
2.96 24.58 81764.87
2.64 33.49 92933.15
2.03 11.50 36108.56
2.01 18.51 24850.72
2.22 21.81 26646.61
3.63 54.43 48187.39
1.05 18.46 21104.6
46.11 82627.23
0.79 27.14 40450.85
15.52 74837.04
4.19-261.81 187105.1
2.09 20.67 58279.11
0.03 17.39 33418.26
2.51 17.57 157751.57
0.42 9.99 134213.75
2.02 27.55 35904.76
3.11 25.10 183107.55
21.92 32987.34
2.02 48.53 65560.4
1.40 22.22 159109.71
4.89 -7.12 48710.41
2.13 12.75 24133.32
0.98 31.93 66007.72
3.53 98.54 32311.58
2.19 17.14 28124.31
1.66 21.51 96465.8
0.74 20.24 53357.9
2.56 18.78 26122.26
1.38 17.52 18561.64
1.35 6.52 29125.02
1.99 -1.35 19928.22
1.78 12.11 22954.27
1.35 18.69 147332.61
3.43 24.45 47701.92
3.35 7.86 58792.37
3.91 22.19 56440.88
2.21 27.80 58317.48
3.45 16.05 28714.31
21.53 36021.35
1.12 38.60 34880.63
3.57 18.82 33174.35
0.74 -9.68 48610.81
3.15 5.85 23775.77
3.25 19.75 31779.11
20.73 44487.16
3.44 33.88 343923.16
87.20 298291.13
0.65 26.38 46842.75
4.86 5.82 46809.15
1.72 13.83 19933.8
2.05 18.54 47432.7
2.78 51.63 267492.81
2.83 23.38 37696.84
4.15 5.30 49606.64
2.17 7.16 104074.87
1.45 20.26 65903.74
1.60 -15.81 35064.09
13.28 28273.51
3.48 7.13 26150.73
1.18 14.26 22764.86
1.72 25.10 156398.92
1.93 18.88 88344.42
0.64 27.92 26355.11
3.30 13.08 149188.17
1.80 22.76 42137.34
71.19 26210.61
1.14 23.26 32626.18
2.40 17.47 174739.49
1.07 36.97 28355.13
2.28 23.93 324666.5
2.48 94.78 18834.85
2.64 11.56 239329.95
2.78 24.03 45244.02
5.621111.94 48201.61
2.31 703.31 108310.04
1.37 14.51 28276.01
2.94 18.30 21049.49
4.69 28.35 45078.43
- -94.56 8811.43

52 Week
High
Low

Price Day Chg

Lilly (E)
80.15
0.63 88.48
Lockheed
246.75
1.22 266.93
Lowes
71.33
0.52 83.65
Lyondell
77.12
0.63 98.25
Marathon Ptl
41.69
0.21 59.99
Marsh&M
67.45
0.44 68.69
MasterCard
101.14 -0.03 102.23
McDonald's
116.79
0.26 131.96
McKesson
165.88
0.70 202.20
Medtronic
86.40
0.27 89.27
Merck
62.47
0.32 64.00
Metlife
43.68
0.28 52.45
Microsoft
57.60
0.70 58.70
Mnstr Bvrg
148.09
0.49 166.50
MondelezInt
43.16
0.44 47.42
Monsanto
102.41
0.28 114.26
MorganStly
31.41
0.38 35.74
MylanNV
40.96 -0.22 55.51
Netflix
97.24
2.68 133.27
NextEraE
127.33
1.10 131.98
Nike
54.68
0.28 68.20
NorfolkS
93.81
0.53 98.75
Northrop
218.05
1.05 224.12
NXP
82.57
0.04 98.09
Occid Pet
68.51 -0.82 78.48
Oracle
39.34
0.31 42.00
Pepsico
107.64
0.61 110.94
Perrigo
95.17 -0.56 167.92
Pfizer
33.71
0.07 37.39
Phillips66
79.35 -0.12 94.12
PhilMorris
99.09 -0.05 104.20
PNCFin
88.36
0.59 97.50
PPG Inds
102.03 -0.11 117.00
Praxair
116.92
0.49 125.00
Priceline
1451.93
4.78 1476.52
ProctGmbl
88.26
0.41 89.30
Prudntl
80.11
0.70 88.77
PublStor
224.66
0.71 277.60
Qualcomm
63.09
0.78 64.00
Raytheon
139.24
0.70 143.39
Regen Pharm 411.49
7.37 592.59
ReynoldsAm
47.87
0.06 54.48
S&P Global
126.77
1.84 128.40
Salesforce
70.14 -0.05 84.48
Schlmbrg
74.98 -0.61 83.97
Sempra Energy 109.39 -0.62 114.66
Shrwin-Will
281.07
0.76 312.48
SimonProp
214.57 -0.19 229.10
SouthCpr
25.54 -0.23 31.31
Starbucks
54.02 -0.02 64.00
StateSt
70.19
0.86 75.40
Stryker
116.94
0.73 123.55
Sychrony Fin
27.42
0.12 34.60
Target
68.38
1.16 84.14
TE Connect
63.84
0.35 67.99
Tesla Mtrs
205.93 -3.06 269.34
TexasInstr
69.19
0.77 72.58
TheTrvelers 114.30
0.36 119.32
ThrmoFshr
156.80
0.64 160.68
TimeWrnr
77.42
1.32 81.33
TJX Cos
75.14 -0.04 83.64
T-MobileUS
47.10
0.18 48.11
UnionPac
94.69
0.51 98.28
UPS B
109.66
0.82 111.83
USBancorp
42.74
0.27 44.58
UtdHlthcre
139.90
0.18 144.48
UtdTech
102.38
0.15 109.83
ValeroEngy
54.45
0.16 73.88
Verizon
52.44
0.29 56.95
VertexPharm
87.26 -1.03 134.71
VF Cp
56.22
0.40 73.81
Viacom
35.12
0.28 53.35
Visa Inc
82.15
0.34 83.79
Walgreen
81.18
0.50 95.74
WalMartSto
72.26
0.64 75.19
WellsFargo
44.99
0.11 56.34
Williams Cos
30.18 -0.18 44.51
Yahoo
43.02
0.73 44.92
Yum!Brnds
89.44 -0.08 91.99
Venezuela (VEF)
Bco de Vnzla 105.00
5.00 137.00
Bco Provncl
2400 100.00
4400
Mrcntl Srvcs
5050 50.00
6200

Yld

67.88
199.01
62.62
69.10
29.24
50.81
78.52
95.78
148.29
63.98
47.97
35.00
43.05
113.08
35.88
82.81
21.16
37.59
79.95
95.84
51.48
64.51
161.81
61.61
58.22
33.13
92.20
82.50
28.25
71.74
78.03
77.40
82.93
95.60
954.02
71.29
57.19
205.82
42.24
105.20
329.09
42.85
78.55
52.60
59.60
86.72
218.27
176.11
21.55
52.63
50.60
86.68
23.25
65.50
51.70
141.05
46.73
97.18
117.10
55.53
63.53
33.23
67.06
87.30
37.07
107.51
83.39
46.88
42.20
75.90
52.21
30.11
66.12
71.50
56.30
44.50
10.22
26.15
64.58

P/E MCap m

2.45 35.57 88473.05


2.31 24.17
74742
1.63 23.38 63205.85
4.02 8.53 32060.47
2.98 11.82
22044
2.04 24.89 34955.11
0.70 30.53 108967.97
2.93 23.03 99664.15
0.66 16.71 37439.44
1.78 34.37 119399.24
2.63 42.42 172742.56
3.39 11.80 47994.46
2.34 28.24 448821.62
45.53 28193.6
1.53 9.57 67129.11
1.87 34.89 44812.11
1.86 14.83 60049.92
28.34 21909.97
- 312.84 41689.26
2.50 23.45 58823.01
1.01 28.38 73728.7
2.44 18.09 27537.9
1.33 21.92 38938.21
20.68 28569.46
4.25 -6.27 52332.77
1.51 18.90 161513.01
2.36 34.04 154910.95
0.43 114.46 13636.09
3.34 30.71 204442.81
2.83 14.21 41487.99
4.00 24.40 153720.99
2.24 12.55 43420.91
1.41 19.42 27146.45
2.43 21.92 33349.28
31.79 71764.48
2.71 30.82 235586.66
3.25 8.47 35008.07
2.73 39.92 38956.36
3.03 18.94 92972.48
1.96 20.13 41089.03
66.09 42541.09
3.17 14.00 68319.69
0.96 33.33 33568.7
- -3957.43 48048.3
2.59 -60.30 104267.25
2.58 29.71 27325.78
1.04 24.42 25920.76
2.87 39.24 67422.96
0.84 35.53 19760.79
1.37 31.24 79225.73
1.75 17.78 27375.17
1.23 28.39 43733.35
10.77 22862.06
2.85 14.66 39306.38
2.07 15.04 22830.22
- -25.03 30620.27
2.08 24.06 69412.08
2.12 11.37 32950.55
0.35 34.86 61820.42
1.69 17.35 60220.55
1.16 22.33 49340.3
35.47 38751.06
2.10 19.59 78868.61
2.45 22.07 75804.85
2.32 13.79 73150.95
1.48 22.54 133239.56
2.45 23.37 85684.58
3.75 8.97 25120.01
4.19 15.25 213761.27
- -79.50 21621.17
2.22 22.28 23316.55
4.43 6.99 12195.4
0.64 36.61 154970.54
1.58 32.04 87862.53
2.02 15.92 223503.32
3.01 12.23 226973.94
7.51 -35.54 22654.85
-8.50 40945.69
1.94 27.73 34871.5

85.00
2200
4300

0.35
0.13 35.94

585.29
395.53
458.48

Closing prices and highs & lows are in traded currency (with variations for that
country indicated by stock), market capitalisation is in USD. Highs & lows are
based on intraday trading over a rolling 52 week period.
ex-dividend
ex-capital redistribution
# price at time of suspension

Sep 27
US$
Cummins Inc.
Korea Electric Power Corporation
Archer Daniels Midland Company
SouthTrust Bank
FleetBoston Financial Corp.
SunTrust Banks, Inc.
Euro
Credit Agricole S.A.
Electricite de France (EDF)
B.A.T. Netherlands Fin B.V. (Re - British American Tobacco)
Philip Morris Intl, Inc.
Yen
Wal-Mart Stores, Inc.
Sterling
IPIC GMTN Limited
B.A.T. Intl Fin plc (Re - British American Tobacco)

Red
date Coupon

Ratings
M*

Bid
yield

Day's
chge
yield

Mth's Spread
chge
vs
yield
US

F*

Bid
price

02/27
08/27
12/27
12/27
01/28
01/28

6.75
6.75
6.75
6.57
6.88
6.00

A+
AA
A
A
BBB
BBB+

A2
Aa2
A2
Aa3
Baa3
Baa1

A
AAA
A+
AA-

126.37
106.57
126.71
127.43
125.79
116.65

3.70
6.01
3.84
3.61
4.05
4.18

-0.01
-0.01
-0.01
-0.01
-0.01
-0.01

0.07
0.05
-0.09
0.08
0.06
0.04

2.14
4.45
2.28
2.05
-

03/27
03/27
03/29
05/29

2.63
4.13
3.13
2.88

BBB
A
AA

Baa2
A2
A3
A2

AAAA

104.98
122.21
124.21
121.76

2.09
1.91
1.04
1.03

0.00
0.00
0.00
0.00

0.14
0.00
0.03
0.03

0.53
0.35
-

07/15

0.94

NR

WR

NR

100.00

0.31

0.00

0.00

03/26
09/26

6.88
4.00

AA
A-

Aa2
A3

AA
A-

122.65
104.67

4.11
3.47

0.06
0.06

0.12
0.29

1.82
1.18

S*

Data provided by SIX Financial Information. US $ denominated bonds NY close; all other London close. *S - Standard & Poors, M Moodys, F - Fitch.

GILTS: UK CASH MARKET

Sep 27
Day Chng
Prev
52 wk high
52 wk low
VIX
13.40
-1.10
14.50
32.09
11.02
VXD
13.96
-0.86
14.82
30.36
10.30
VXN
15.63
-0.81
16.44
35.40
13.20
VDAX
CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility.
Deutsche Borse. VDAX: DAX Index Options Volatility.

BONDS: BENCHMARK GOVERNMENT


Red
Bid
Date Coupon
Price
Australia
10/18
3.25 103.30
11/27
2.75 106.65
Austria
10/19
0.25 99.98
10/26
0.75 106.75
Belgium
06/18
0.75 99.89
06/26
1.00 108.60
Canada
11/18
0.50 100.00
06/27
1.00 99.37
Denmark
11/18
0.25 101.82
11/25
1.75 116.40
Finland
05/18
1.00 100.03
04/26
0.50 104.87
France
05/19
1.00 104.30
11/20
0.25 103.15
11/26
0.25 100.83
05/45
3.25 157.32
Germany
04/19
0.50 103.10
10/20
0.25 103.84
02/26
0.50 106.69
08/46
2.50 158.19
Greece
04/19
4.75 91.15
02/27
3.00 68.73
Ireland
10/17
5.50 106.30
05/26
1.00 106.15
Italy
04/19
0.10 100.26
06/21
0.45 100.86
12/26
1.25 99.92
03/47
2.70 109.84
Japan
09/18
0.10 100.72
10/21
0.05 101.05
09/26
0.10 101.79
09/46
0.50 99.81
Netherlands
01/19
1.25 104.41
07/25
0.25 103.48
New Zealand
03/19
5.00 107.43
04/27
4.50 119.95
Norway
05/19
4.50 109.96
02/26
1.50 103.07
Portugal
06/19
4.75 109.84
07/26
2.88 95.69
Spain
01/19
0.25 100.89
10/26
1.30 103.05
Sweden
10/18
1.00 100.05
05/25
2.50 122.33
Switzerland
05/19
3.00 110.55
05/26
1.25 117.73
United Kingdom
07/19
1.75 104.66
07/22
0.50 101.05
07/26
1.50 107.80
07/47
1.50 104.36
United States
08/18
0.75 100.02
08/21
1.13 100.03
08/26
1.50 99.45
08/46
2.25 99.25
Data provided by SIX Financial Information & Tullett Prebon Information

P/E MCap m

BONDS: GLOBAL INVESTMENT GRADE


Day's
chge
yield

Ratings
M*

Red
date Coupon

Yld

Bid Day chg Wk chg Month


Year
Yield
yield
yield chg yld chg yld
1.61
0.02
0.00
0.17
-0.26
2.08
0.01
-0.11
0.14
0.00
0.26
0.00
0.00
0.00
0.00
0.08
-0.02
0.00
-0.05
0.00
0.82
-0.01
0.01
0.06
0.71
0.11
-0.01
-0.10
-0.03
0.00
0.50
-0.02
-0.09
-0.10
0.00
1.06
-0.03
-0.21
-0.07
0.00
-0.60
0.00
0.00
0.00
0.00
-0.04
0.00
0.00
0.00
0.00
0.99
0.00
-0.03
-0.02
-0.05
0.00
0.00
0.00
-0.05
0.00
-0.60
0.00
0.00
0.00
0.00
-0.50
0.00
0.00
0.00
0.00
0.17
-0.02
-0.11
0.00
0.00
0.95
-0.02
-0.13
0.01
-0.96
-0.71
0.00
0.00
0.00
0.00
-0.68
0.00
0.00
0.00
0.00
-0.21
0.00
0.00
0.00
0.00
0.42
-0.02
-0.15
0.00
-0.89
8.75
0.07
-0.75
0.38
-0.15
8.28
-0.04
-0.19
0.24
0.17
-0.46
0.00
0.00
0.00
0.00
0.35
-0.01
-0.08
-0.03
0.00
0.00
0.00
0.00
0.00
0.00
0.27
0.02
-0.03
0.03
0.00
1.26
0.01
-0.05
0.10
0.00
2.26
0.02
-0.07
0.13
0.00
-0.26
0.00
0.00
0.00
0.00
-0.16
0.00
0.00
0.00
0.00
-0.08
0.00
0.00
0.00
0.00
0.51
0.02
0.00
0.00
0.00
-0.65
0.00
0.00
0.00
0.00
-0.14
0.00
0.00
0.00
0.00
1.90
0.02
-0.05
0.07
-0.70
2.35
0.02
-0.21
0.10
-0.95
0.69
0.01
0.04
0.15
0.02
1.15
-0.02
-0.08
0.08
0.00
1.04
0.04
0.04
0.10
0.27
3.40
0.04
0.09
0.39
0.00
-0.13
0.00
0.00
0.00
0.00
0.98
-0.01
-0.08
-0.03
0.00
0.97
0.00
-0.04
-0.08
0.00
-0.08
0.00
0.00
0.00
0.00
-0.96
0.00
0.00
0.00
0.00
-0.53
0.00
0.00
0.00
0.00
0.09
0.01
-0.02
-0.04
-0.91
0.32
-0.01
-0.08
-0.03
0.00
0.68
-0.02
-0.13
0.04
0.00
1.33
-0.03
0.00
0.00
0.00
0.74
0.00
-0.04
-0.06
0.00
1.12
0.00
-0.08
-0.06
0.00
1.56
-0.03
-0.13
-0.01
0.00
2.28
-0.04
-0.14
0.05
0.00

Red
52 Week
Amnt
Change in Yield
Price
Yield
Day
Week
Month
Year
High
Low
m
Tr 1.75pc '17
100.52
0.10
25.00
42.86
11.11
-80.00 101.68 100.52
28.90
Tr 5pc '18
107.14
0.05
-16.67
-44.44
-54.55
-91.94 110.78 107.13
35.24
Tr 4.5pc '19
110.94
0.02
-33.33
-66.67
-71.43
-97.73 112.71 110.82
36.35
Tr 4.75pc '20
116.17
0.05
-16.67
-50.00
-44.44
-95.45 117.12 114.45
33.31
Tr 1.5pc '21
105.70
0.17
-15.00
-32.00
-22.73
-87.68 106.04
99.91
32.46
Tr 4pc '22
120.65
0.18
-18.18
-35.71
-25.00
-87.23 121.31 114.48
37.95
Tr 5pc '25
137.09
0.51
-7.27
-20.31
-3.77
-70.18 138.11 126.02
35.08
Tr 4.25pc '27
137.34
0.76
-5.00
-15.56
-1.30
-61.22 138.26 121.91
31.00
Tr 4.25pc '32
146.35
1.04
-4.59
-13.33
4.00
-54.59 148.92 124.00
35.44
Tr 4.25pc '36
152.39
1.22
-3.17
-11.59
7.02
-50.00 155.77 125.16
29.76
Tr 4.5pc '42
169.72
1.34
-3.60
-11.26
8.06
-46.61 174.65 134.26
26.64
Tr 3.75pc '52
170.53
1.29
-3.73
-11.64
9.32
-47.77 177.28 125.74
23.59
Tr 4pc '60
192.79
1.23
-3.91
-12.14
10.81
-49.59 201.27 136.28
23.21
xd Ex dividend. Closing mid-prices are shown in pounds per 100 nominal of stock. Red yield: Gross redemption yield.
This table shows the gilts benchmarks & the non-rump undated stocks.
Sep 27

GILTS: UK FTSE ACTUARIES INDICES


Price Indices
Fixed Coupon
1 Up to 5 Years
2 5 - 10 Years
3 10 - 15 Years
4 5 - 15 Years
5 Over 15 Years
7 All stocks
Index Linked
1 Up to 5 Years
2 Over 5 years
3 5-15 years
4 Over 15 years
5 All stocks
Yield Indices
5 Yrs
10 Yrs
15 Yrs

Day's
chg %
0.04
0.24
0.41
0.30
0.96
0.51

Sep 27
98.40
190.43
230.90
200.58
371.11
192.79
Sep 27
314.06
738.24
484.28
955.56
665.86
Sep 27
0.13
0.69
1.13

Day's
chg %
0.07
1.60
0.43
1.98
1.48
Sep 26
0.15
0.73
1.18

Yr ago
1.12
1.80
2.22

Total
Return
2434.12
3545.72
4374.35
3753.50
5502.33
3703.64

Month
chg %
-0.22
0.55
0.09
0.70
0.49

Return
1 month
0.15
0.10
-0.36
-0.05
-2.40
-1.04

Year's
chg %
1.04
28.53
11.97
35.00
25.21

20 Yrs
45 Yrs

inflation 0%
Sep 27
Dur yrs Previous
Yr ago
Sep 27
Real yield
Up to 5 yrs
-2.05
2.60
-2.02
-0.78
-2.63
Over 5 yrs
-1.83
25.26
-1.76
-0.81
-1.85
5-15 yrs
-2.01
9.07
-1.96
-0.74
-2.13
Over 15 yrs
-1.81
30.35
-1.75
-0.82
-1.83
All stocks
-1.83
23.51
-1.77
-0.81
-1.86
See the FTSE website for more details: http://www.ftse.com/products/indices/gilts

Total
Return
2431.20
5474.92
3713.64
6944.35
5007.44
Sep 27
1.33
1.25

Return
1 year
2.89
9.11
14.19
10.75
26.73
14.43

Yield
0.10
0.42
0.85
0.61
1.27
1.09

Return
1 month
-0.22
0.59
0.11
0.75
0.53

Return
1 year
2.86
29.35
13.27
35.59
26.21

Sep 26
1.38
1.30

Yr ago
2.41
2.40

inflation 5%
Dur yrs Previous
2.60
-2.60
25.35
-1.79
9.08
-2.08
30.40
-1.77
23.62
-1.80

Yr ago
-1.51
-0.84
-0.86
-0.84
-0.85

All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor guarantee
that the information is reliable or complete. The FT does not accept responsibility and will not be liable for any
loss arising from the reliance on or use of the listed information. For all queries e-mail
ft.reader.enquiries@morningstar.com

Data provided by Morningstar | www.morningstar.co.uk

18

FINANCIAL TIMES

Wednesday 28 September 2016

MANAGED FUNDS SERVICE


Fund

Bid

Offer D+/- Yield

ACPI Select UCITS Funds PLC

(IRL)

Fund
Far East

Bid

Offer D+/- Yield

$ 743.92

Fund

Bid

Offer D+/- Yield

Fund

Bid

Offer D+/- Yield

0.03

ACPI Balanced UCITS Fund EUR Retail 10.94

0.02

ACPI Balanced UCITS Fund GBP Retail 11.11

0.01 0.00

ACPI Balanced UCITS Fund USD Institutional $ 10.00

ACPI Balanced UCITS Fund EUR Institutional 10.00

Generali Worldwide
Bank of America Cap Mgmt (Ireland) Ltd

(IRL)

ACPI Balanced UCITS Fund GBP Institutional 10.00

ACPI Horizon UCITS Fund

$ 13.27

Global Liquidity USD

1.00

0.00 0.61

Crdit Andorr Asset Management


Barclays Investment Funds (CI) Ltd

(JER)
39/41 Broad Street, St Helier, Jersey, JE2 3RR Channel Islands 01534 812800
FCA Recognised

Sterling Bond F

0.50

0.00

Blackrock UK Long Lease


BLK Intl Gold & General

Crediinvest SICAV Money Market Eur I 11.20

0.00 0.00

Crediinvest SICAV Money Market Usd A $ 10.08

0.00

Crediinvest SICAV Fixed Income Eur 10.89

0.00 0.00

Crediinvest SICAV Spanish Value 254.52


40.95
1075.79
$

7.06

-0.15 3.48
-1.26

7.44 -0.01 0.00

0.00 0.00

-1.83

Crediinvest SICAV International Value 236.95

-2.99

Crediinvest SICAV Big Cap Value 15.54

-0.20

Crediinvest SICAV US American Value $ 18.21

-0.15

Offshore Fund Class A US $ Shares


Investment Holdings N.V.
Macro Holdings Ltd

$ 4978.60
$ 4057.71

4.85

5.22 0.05 0.00

UK Multi-Strategy Managed

5.13

5.53 0.06 0.00

EU Multi-Strategy Managed

2.94

3.17 0.03 0.00

Global Bond USD

3.58

3.85 0.00 0.00

-83.67 0.00

$ 337.44

1.24

-0.04 0.00

Genesis Asset Managers LLP


Other International Funds
Emerging Mkts NAV

Equinox Fund Mgmt (Guernsey) Limited

(GSY)

Regulated
-

Crediinvest SICAV Sustainability 15.61

Algebris Financial Credit Fund - Class I EUR 137.80


Algebris Financial Income Fund - Class I EUR 113.91
Algebris Financial Equity Fund - Class B EUR 90.39
Algebris Asset Allocation Fund - Class B EUR 97.32
Algebris Macro Credit R EUR Acc 100.16
Algebris Macro Credit RD EUR Inc 100.12

-1.13 0.00
-1.46 0.00
-1.48 0.00
-0.38 0.00
0.15
0.17

Amundi Funds

(LUX)
5 Allee Scheffer L-2520 Luxembourg + 44 (0)20 7074 9332
www.amundi-funds.com
FCA Recognised
Bd. Euro Corporate AE Class - R - EUR 19.47

0.01 0.00

Bd. Global AU Class - R - USD

$ 27.86

0.05 0.00

Eq. Emerging Europe AE Class - R - EUR 26.83

-0.24 0.00

5.99 0.00

Eq. Greater China AU Class - R - USD $ 618.78

-1.40 0.00
-12.37 0.00

Eq. Latin America AU Class - R - USD $ 373.90

-6.33 0.00

Gl. Macro Bds & Curr Low Vol AHG - GBP 98.55

0.00 0.00

The Antares European Fund Limited


Other International
$ 576.92
577.64

-6.49

-6.65 0.00

6.73

-0.08 0.00

HPB Assurance Ltd


Anglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490

Holiday Property Bond Ser 1

0.54

0.01 0.00

BL-Equities Europe B

6125.50

-74.48 0.00

BL-Equities America B

$ 5851.93

-44.01 0.00

BL-Equities Japan B

15541.00

181.00 0.00

BL-Emerging Markets B

164.48

-2.09 0.00

BL-Global Equities B

767.08

-7.93 0.00

BL-Global 30 B

1433.79

-2.09 0.00

BL-Global 50 B

1719.59

-6.43

BL-Global 75 B

2332.02

-15.05 0.00

BL-Global Flexible EUR B

154.55

-1.43 0.00

-0.02 0.00

Arisaig Asia Consumer Fund Limited $ 67.56

-0.13

Arisaig Global Emerging Markets Consumer Fund $ 10.39

-0.06 0.00

Arisaig Global Emerging Markets Consumer UCITS 11.93

-0.11 0.00

Arisaig Global Emerging Markets Consumer UCITS STG 13.11

-0.08 0.00

Arisaig Latin America Consumer Fund $ 24.35

-0.30

DAVIS Funds SICAV

(LUX)
$ 41.18

-0.42 0.00

Davis Global A

$ 30.68

-0.31 0.00

-0.12 0.00

-0.11 0.00

Artisan Global Value Fund Class I USD Acc $ 16.70

-0.18 0.00

Dodge & Cox Worldwide Funds

25.09

-0.14 0.00

Smaller Cos Cls Three Shares

12.62

-0.09 0.00

EUR Accumulating Class

12.27

-0.03 0.00

28.00 1.94

EUR Accumulating Class (H)

9.78

0.00 0.00

Bonhte Alternative - Multi-Performance (USD) Classe (EUR) 9881.00

61.00 0.81

EUR Distributing Class

11.39

-0.03 4.00

EUR Distributing Class (H)

-0.01 4.03

9.07

(IRL)
CG Asset Management Limited
Northern Trust, George's Court, 54-62 Townsend Street, Dublin 2, Rep of Ireland
00 353 1 434 5098
FCA Recognised

GBP Distributing Class

12.03

-0.01 3.59

GBP Distributing Class (H)

-0.01 4.07

Capital Gearing Portfolio Fund Plc 29773.29 29773.29 330.47 0.56

USD Accumulating Class

Other International Funds

16.24

-0.08 0.00

9.21
9.96

0.00 0.00

Real Return Cls A

203.54 203.54 3.60 1.47

USD Accumulating Share Class

Dollar Fund Cls D

158.38 158.38 2.04 1.37

GBP Accumulating Share Class

144.67 144.67 1.62

Cedar Rock Capital Limited

(IRL)

Regulated
$ 391.14

-4.08 0.00

$ 16.86

GBP Distributing Share class

15.48

-0.20 0.79

EUR Accumulating Share Class

22.49

-0.34 0.00

-0.22

EUR Accumulating Share Class

14.52

-0.26

Cedar Rock Capital Fd Plc

465.85

-7.89 0.00

Dodge & Cox Worldwide Funds plc-U.S. Stock Fund

Cedar Rock Capital Fd Plc

362.01

-7.40 0.00

USD Accumulating Share Class

$ 19.32
23.17

-0.24 0.00

(IRL)

GBP Distributing Share Class

14.66

-0.16 0.61

EUR Accumulating Share Class

22.27

1.00

0.00 0.01

-0.27 0.00

CAM GTi Limited

$ 744.34

Raffles-Asia Investment Company $

1.73

1.73 0.09 4.97

1501 Me Linh Point, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, Vietnam
Fund information, dealing and administration: funds@dragoncapital.com

-0.19 0.00

Vietnam Property Fund (VPF) NAV $

(LUX)

Ashmore SICAV Emerging Market Debt Fund $ 102.40

-0.39 8.00

Cheyne Capital Management (UK) LLP

Ashmore SICAV Emerging Market Frontier Equity Fund $ 149.84

-0.70 1.11

Cheyne Convertibles Absolute Return Fund 1355.73

Ashmore SICAV Emerging Market Total Return Fund $ 88.40

-0.25 6.26

Cheyne Global Credit Fund

123.03

-0.12 0.00

Ashmore SICAV Global Small Cap Equity Fund $ 136.15

-1.56 0.00

Cheyne European Mid Cap Fund

1075.18

-1.77 0.00

EM Mkts Corp.Debt USD F

$ 91.82

0.06 7.92

EM Mkts Loc.Ccy Bd USD F

$ 84.51

-0.15

(IRL)

Regulated
-

-6.04 0.00

Cheyne Capital Management (UK) LLP

Cheyne Real Estate Credit Holdings Fund 169.35

Aspect Diversified USD

$ 411.66

13.75 0.00

Aspect Diversified EUR

245.44

8.21 0.00

Aspect Diversified GBP

127.54

4.32 0.00

6.54 0.00
1.11 0.00

Cheyne Real Estate Credit Holdings Fund III 112.03

0.61 0.00

Cheyne Real Estate Debt Fund Class A1 131.38

1.94 0.00

Cheyne Total Return Credit Fund - December 2017 Class $ 205.37

4.95 0.00

Cheyne Total Return Credit Fund 2020 $ 111.93

7.10

140.65

-2.36 0.00

Global Growth I1 Eur

105.10

-1.77 0.00

DSM US Large Cap Growth

$ 103.55

-1.24

Cohen & Steers SICAV

(LUX)

Regulated

3.86 0.00

European Real Estate Securities

23.3830

-0.1020 1.69

$ 123.55

-0.46 0.00

Europ.RealEstate Sec. IX

31.8653

-0.1389 0.00

Aspect Diversified Trends EUR

122.76

-0.47 0.00

Gbl Listed Infrastructure I

$ 10.8798

-0.0298

Aspect Diversified Trends GBP

128.87

-0.48 0.00

Gbl Listed Infrastructure IX

$ 11.0070

-0.0302

Gbl RealEstate Sec. I

$ 11.7447

0.0027 1.88

American Dynamic

$ 3592.51

19.81

American One

$ 3391.01

17.14 0.00

Bond Global

1430.61

-3.38 0.00

Eurocroissance

894.50

2.38

Kames Global Equity Income B GBP Inc

1297.88

-7.94

MW Japan Fund PLC A

$ 26.44

0.25 0.00

Invesco European Growth Equity A 23.48

-0.11 0.00

Strategic Global Bond A GBP Inc

1127.53

0.20 1.00

MW Japan Fund PLC B

$ 26.55

0.26 0.00

Invesco Global Absolute Return Fund A Class 10.98

0.01 0.00

Strategic Global Bond B GBP Inc

640.23

0.13 1.47

MW Japan Fund PLC C

$ 84.74

0.81 0.00

Invesco Global Bond A Inc

5.58

-0.01 0.59

Invesco Global Conservative Fund 90 (EUR) A 11.62

0.00 0.00

Invesco Global Equity Income Fund A $ 57.73

-0.47 0.00

Invesco Global Inc Real Estate Sec A dist $

9.67

0.01 2.20

Invesco Global Inv Grd Corp Bond A Dist $ 12.45

0.01 2.95

Invesco Global Leisure A

$ 39.32

-0.38

Invesco Global Smaller Comp Eq Fd A $ 59.62

-0.32 0.00

Invesco Global Structured Equity A $ 46.00

-0.14 1.15

Invesco Global Total Ret.(EUR) Bond Fund A 13.53

-0.02 0.00

Invesco Gold & Precious Metals A $

6.56

-0.06 0.00

0.11 0.00

Invesco India Equity A

$ 59.26

0.18 0.00

-0.01 3.25

Reduced Dur UK Corp Bond Gross Inc 10.09

0.00 3.25

1.44

0.01 1.77

UK Long Corporate Bond - Gross Inc 12.76

0.06 3.51

(IRL)

American Fund USD Class

$ 85.79

-0.53

American Fund GBP Hedged

46.50

-0.30 0.00

Gbl RealEstate Sec. IX

$ 14.1697

0.0034 0.00

1.6180

0.0020 2.53

Morant Wright Fuji Yield B YEN Acc 889.16

5.33 0.00

UK

7.1770

-0.0410 1.25

Morant Wright Fuji Yield YEN Dist 970.38

5.82 2.75

Morant Wright Sakura Fund Sterling Acc Hedged 11.81

0.11 0.00

Lloyds Gilt Fund Quarterly Share 1.4170

0.0030 1.46

Monthly Share

0.0030 1.46

Lloyds Gilt Fund Limited

Invesco Pan European Structured Equity A 16.78

-0.03 0.00

-0.19 0.00

1.10

0.00

Invesco US Structured Equity A

$ 22.47

-0.13

Invesco US Value Eq Fd A

$ 31.62

-0.39 0.00

Invesco USD Reserve A

$ 87.13

0.00

1.3610

Lloyds Money Fund Limited


52.6480

0.0000 0.00

1.2120

-0.0030 1.67

Growth Strategy

1.6590

-0.0110 1.22

Aggressive Strategy

2.0890

-0.0230 0.00

$ 1.4330

-0.0090 0.00

Sterling Class

Lloyds Multi Strategy Fund Limited

Global USD Growth Strategy

Hermes Investment Funds Plc

1.20

1.20 0.00 0.00

Hermes Asia Ex-Japan Equity Fund Class R Acc

3.64

3.64 0.01 0.00

Hermes Europe Ex-UK Equity Fund Class F Acc

1.62

1.62 -0.02

Hermes Europe Ex-UK Equity Fund Class R Acc

3.19

3.19 -0.03

1.51

1.51 -0.01

Hermes European Alpha Equity Fund Class F Dis

1.44

1.44 -0.02

Hermes European Alpha Equity Fund Class R Acc

3.06

3.06 -0.02 0.00

Hermes Global Emerging Markets Fund Class F Acc

1.52

1.52 0.00 0.00

Hermes Global Emerging Markets Fund Class R Acc

3.23

3.23 0.01 0.00

Hermes Global Equity Fund Class F Acc

1.83

1.83 -0.01 0.00

Hermes Global Equity Fund Class R Acc

4.02

4.02 -0.02 0.00

Hermes Global ESG Equity Fund Class F Acc

1.38

1.38 -0.01 0.00

Hermes Global High Yield Credit Fund Class F Acc

1.36

1.36 0.00 0.00

Hermes Global High Yield Credit Fund Class R Acc

2.97

2.97 0.00 0.00

1.21

1.21 -0.01 0.00

Hermes Global Small Cap Fund Class R Acc

1.99

1.99 -0.01 0.00

Hermes Multi Asset Inflation Fund Class F GBP Acc

1.03

1.03 0.01 0.00

Hermes Multi Strategy Credit Fund Class F Acc Hed

1.09

1.09 0.00 0.00

Hermes US All Cap Equity Class F Stg Acc

1.23

1.23 -0.01 0.00

Hermes US All Cap Equity Class R Acc

2.01

2.01 -0.02 0.00

-0.62 0.00

Hermes US SMID Equity Fund Class F Acc

2.08

2.08 -0.02

Latin American Fund USD Class

$ 14.37

-0.05 0.00

Hermes US SMID Equity Fund Class R Acc

3.73

3.73 -0.02

Invesco Global Asset Management Ltd

(IRL)

Dublin 00 353 1 439 8100 Hong Kong 00 852 2842 7200


FCA Recognised

M & G Securities (1200)F

(UK)
PO Box 9039, Chelmsford, CM99 2XG
www.mandg.co.uk Enq: 0800 390 390, Dealing: 0800 328 3196
Authorised Inv Funds

1.18

2.26

European Opportunities I GBP

1.95

-0.03 1.56

2.21
1.63

9.44 0.00

-0.02 0.87

-0.27

9.40

-0.04 1.61

Foord Global Equity Fund_Class B $ 13.02

-0.16 0.00

0.40 0.00

0.11 0.00

M&G Global High Yield Bond A Acc

122.32

-0.21 3.91

Diversified Alpha Plus A F

27.05 27.05 -0.07 0.00

91.13

-0.40 0.34

Emerg Europ, Mid-East & Africa Eq A F 70.88

0.55 0.00

Emerging Markets Debt A F

-0.05 0.00

7.16

0.01 0.00

M & G (Guernsey) Ltd

Invesco ASEAN Equity A

$ 97.53

0.57

The M&G Offshore Fund Range

-1.03 0.00

Invesco Emerging Markets Equity A $ 39.42

-0.08 0.00

Invesco Emerging Markets Bond A $ 22.37

-0.05 4.60

Invesco Continental European Equity A

7.79

-0.07 1.20

17.12

0.08 1.11

Invesco Gilt A

Invesco Global Small Cap Equity A NAV $ 125.06

-0.28 0.00

Invesco Global High Income A NAV $ 12.48

-0.02

Invesco Gbl R/Est Secs A GBP F F

0.01 0.79

9.84

Invesco Global Health Care A

$ 120.93

-1.49 0.00

Invesco Global Select Equity A

$ 12.71

-0.09 0.07

Invesco Jap Eqty Core A

$ 18.88

0.14 0.09

Invesco Japanese Equity A

$ 20.13

0.26 0.00

Invesco Korean Equity A

$ 29.68

0.42 0.00

Invesco PRC Equity A

$ 55.17

0.36

Invesco Pacific Equity A

$ 51.89

0.19 0.07

Corporate Bond A

$ 16.08

-0.13 0.00

Invesco UK Eqty A

-0.07 1.46

8.02

1423.12 1467.13 2.33 3.84

Global Basics X

2907.13 2997.04 -14.17 0.16

Global Dividend A

139.13 144.92 -1.02 2.71

Global Leaders A

3990.76 4157.04 -29.52 1.05

Global High Yield Bond X

989.29 1019.89 -1.77 3.90

Global Macro Bond A

13290.15 13701.19 -33.44 2.87

North American Dividend A

192.78 200.81 -1.94 1.87

Optimal Income A

147.06 151.61 -0.16 3.50

Recovery A

10639.96 11083.30 8.53 2.25

Strategic Corproate Bond A

141.36 147.25 0.15 3.89

UK Inf Lkd Corp Bd A Inc

108.63 111.99 -0.07 2.04

UK Select A

1502.21 1564.80 -11.15 1.08

MMIP Investment Management Limited

(GSY)

Regulated
Multi-Manager Investment Programmes PCC Limited
UK Equity Fd Cl A Series 01

Invesco Global Technology A

(GSY)

Regulated

Asset Management

Invesco Continental Eurp Small Cap Eqty A $ 203.91

JPMorgan House - International Financial Services Centre,Dublin 1, Ireland


Other International Funds
Franklin Emerging Market Debt Opportunities Fund Plc
Franklin Emg Mkts Debt Opp CHFSFr 17.88

0.39 8.56

-0.01 1.27

Franklin Emg Mkts Debt Opp EUR 12.63

0.25 6.59

Global Opportunities A GBP

1.18

-0.02 0.76

Franklin Emg Mkts Debt Opp GBP 11.06

0.28 6.41

Ennismore Smaller Cos Plc

Ennismore European Smlr Cos NAV 115.84


Ennismore European Smlr Cos NAV 133.37

Franklin Emg Mkts Debt Opp SGD S$ 23.41

0.56 5.13

Franklin Emg Mkts Debt Opp USD $ 18.00

0.36 6.60

(IRL)

5 Kensington Church St, London W8 4LD 020 7368 4220


FCA Recognised
-

0.41 0.00
0.03 0.00

Frontier Capital (Bermuda) Limited


Other International

Diversified Absolute Rtn Fd USD Cl AF2 $ 1529.00

11.73 0.00

Diversified Absolute Return Stlg Cell AF2 1542.11

11.89 0.00

-0.47 0.00

Emerging Markets Domestic Debt AX F 13.01 13.01 -0.07 4.22


Emerging Markets Equity A F

$ 37.21 37.21 0.18 0.00

Euro Bond A F

16.58 16.58 0.00

Asset Management

Euro Corporate Bond AX F

26.90 26.90 -0.17 1.44

Euro Strategic Bond A F

45.99 45.99 -0.01

European Currencies High Yield Bd A F 22.98 22.98 -0.16

European Equity Alpha A F

40.12

-0.02 0.00

European Property A F

33.90 33.90 0.19

Eurozone Equity Alpha A F

11.01 11.01 -0.05 0.00

Global Bond A F

$ 41.70 41.70 -0.01 0.00

Global Brands A F

$ 104.04

0.44

Global Convertible Bond A F

$ 41.97

-0.04 0.00

Global Property A F

$ 29.39

0.08 0.00

Indian Equity A F

$ 39.07

-0.02 0.00

Latin American Equity A F

$ 46.95

0.31

Short Maturity Euro Bond A F

20.41 20.41 -0.03 0.00

US Dollar Liquidity A F

$ 13.03

0.00 0.00

US Growth A F

$ 72.28

0.45

US Growth AH F

49.63 49.63 0.31 0.00

US Growth AX F

55.67 55.67 0.19

US Property A F

$ 75.91

-0.01 0.00

-0.38 0.00

-0.24 0.00

Ms EF Special Val. EUR/A

143.93

-1.58 1.07

Global Gold & Resources Fund

$ 325.94

-25.48

IVI European Fund GBP

22.13

-0.21 0.54

Strategy Balanced-CHF/B

Global Energy & Resources Fund $ 39.11

-1.00

Other International Funds

Invesco

(LUX)

Dublin 00 353 1 439 8100 Hong Kong 00852 3191 8282


FCA Recognised

SFr 151.86

-0.74 0.00

157.01

-0.90

Strategy Balanced-USD/B

$ 133.32

-0.53

SFr 93.37

-0.69 0.00

Strategy Inc-CHF/B
Strategy Inc-EUR/B

SFr 120.66
161.98

Invesco Active Multi-Sector Credit Fund A

3.06

0.01 0.00

$ 14.38

0.02 3.54

Invesco Asia Consumer Demand Fund A income $ 13.66

0.08

Invesco Asia Infrastructure (A)

$ 13.32

0.02 0.71

Invesco Asia Opportunities Equity A $ 112.71

0.46 0.00

Invesco Balanced Risk Allocation Fund A 16.14

0.06

Invesco Asia Balanced A dist

-1.01 0.00
-0.30 0.00
-0.51 0.00

Invesco Emerging Europe Equity Fund A $

8.73

-0.05 0.00

Global Real Estate-GBP C Class

45.26

-0.50

Invesco Emerging Local Currencies Debt A Inc $

7.21

0.03 6.00

Invesco Emerging Mkt Quant.Eq. A $ 10.61

0.05 0.00

Invesco Energy A

-0.03

$ 17.44

Invesco Euro Corporate Bond Fund (A) 17.73

-0.27 0.00

Kames Capital VCIC

1.64 0.00

Mirabaud Asset Management

(LUX)

www.mirabaud.com, marketing@mirabaud.com
Regulated

Natixis International Funds (LUX) I SICAV (LUX)


FCA Recognised
ASG Managed Futures Fund I/A (USD) $ 97.38 97.38 -0.50

Mir. - Conv. Bds Eur A EUR

132.99

-0.56 0.00

Mir. - Conv. Bds Glb A USD

$ 113.28

-0.47 0.00

Mir. - Eq Asia ex Jap A

$ 188.52

1.17 0.00

Mir.- EqEurope ExUK Sm&Mid

129.98

-0.05

Mir. - Eq Glb Emrg Mkt A USD

$ 99.98

0.65 0.00

Natixis International Funds (Dublin) I plc

Mir. - Eq Global Focus A USD

$ 96.82

-1.01 0.00

One Carter Lane, London, EC4V 5ER, 0044 20 3405 6000


Regulated

Mir. - EqPanEuropeSm&Mid

117.66

-0.59 0.00

Mir. - Eq Spain A

25.55

-0.21 0.00

Mir. - Eq Swiss Sm/Mid A

SFr 362.92

-3.21 0.00

Mir. - Glb High Yield Bds A

$ 114.23

-0.02

Mir. - Glb Eq High Income A USD $ 98.25

-0.51 0.00

Mir. - Glb Strat. Bd A USD

$ 109.37

0.10 0.00

New Capital Fund Management Ltd

Mir. - US Shrt Term Credit Fd

$ 102.71

0.01

Leconfield House, Curzon Street, London, W1J 5JB


FCA Recognised

Harris Global Equity Fund R/A (USD) $ 245.71 245.71 -3.40 0.00
Loomis Sayles Global Growth Equity Fund I/A (USD) $ 106.63 106.63 -0.90

Loomis Sayles U.S. Growth Equity Fund I/A (USD) $ 105.71 105.71 -0.87

(IRL)

Loomis Sayles Multisector Income R/D (GBP) $ 12.61 12.61 -0.03 5.39

(IRL)

1 North Wall Quay, Dublin 1, Ireland +35 3162 24493


FCA Recognised
Absolute Return Bond B GBP Acc

1096.28

-0.45 1.62

Eq Market Neutral B Acc

999.77

0.49

(IRL)

Eq Market Neutral Plus B Acc

982.47

0.90

High Yield Global Bond A GBP Inc

531.53

-1.07 3.52

Asia Pac Bd USD Inst Inc

$ 96.36

-0.04 3.26

High Yield Global Bond B GBP Inc

1108.78

-2.21 4.07

Asia Pac Bd USD Ord Inc

$ 98.34

-0.04 2.59

Regulated
-

$ 150.84

(GSY)

Strategy Inc-USD/B

Other International Funds

Strategy Balanced-EUR

117.20

$ 371.16

Meridian Fund Managers Ltd

funds@gam.com, www.jbfundnet.com
Regulated

Strategy Growth-EUR

-0.53

$ 185.91 189.70 5.03

Morgens Waterfall Vintiadis.co Inc


417.94

18.92

Taurus Emerging Fund Ltd

(CYM)

Regulated

IVI European Fund EUR

71.42

GYS Investment Management Ltd


486.92

$ 85.05

2402.40 2430.04 85.92 0.00

GAM

Commercial Property-GBP Class

Ennismore European Smlr Cos Hedge Fd


Other International Funds

$ 19.25

0.02 1.94

0.20

$ 45.45

Asian Property A F

Invesco Asian Equity A

$ 28.66

$ 61.40

Asian Equity A F

0.00

Invesco Bond A

US Advantage A F

-0.33 2.35

(LUX)
6b Route de Trves L-2633 Senningerberg Luxembourg (352) 34 64 61
www.morganstanleyinvestmentfunds.com
FCA Recognised

-0.09 3.91

(IRL)
1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210
FCA Recognised

Franklin Templeton International Services Sarl (IRL)

0.11 0.00

2.72

Strategy Growth-CHF/B

1.26

-0.02

0.07 0.00

Morant Wright Sakura Fund Swiss Franc Acc HedgedSFr 11.71

Phaeton Intl (BVI) Ltd (Est)

Global Opportunities I GBP

1.36

0.11 0.00

51.68

Marwyn Asset Management Limited

Intrinsic Value Investors (IVI) LLP

-0.02 1.22

50.31

Marwyn Value Investors

$ 35.54

-0.04 1.04

Morant Wright Sakura Fund Dollar Acc Hedged $ 11.86

M&G Episode Growth A Inc

Global Equity Fund A Lead Series 1211.54 1215.84 22.40

NAV

Foord International Trust

-0.04 1.73

11.06 0.00

M&G Global High Yield Bond A Inc

Invesco Stlg Bd A QD F

Other International Funds

5th Floor, Barwa Bank Building, Grand Hamad Street


, P.O. Box 16034, Doha, State of Qatar
+ 974 4459 6111
http://www.tfi.com.qa/
Other International Funds

European Opportunities I EUR

0.10 0.00

Dealing Daily

M&G Managed Growth A Inc

-0.08 0.00

The First Investor QSCC

Emerging Opportunities I USD $

2.55

Morant Wright Sakura Fund Yen Acc Unhedged 1233.28

www.invil.mu

Other International Funds

Morant Wright Sakura Fund Euro Acc Hedged 11.89

Morgan Stanley Investment Funds

Edinburgh Partners Opportunities Fund PLC

NAV

Sterling Bond

-0.11

66.12

6.03 0.00

-0.04 2.68

American Fund GBP Unhedged

Latin American Fund GBP Unhedged 11.23

-0.04 1.31

Morant Wright Fuji Yield YEN Acc 1005.91

Asset Management

Reduced Duration UK Corp Bond Inc 10.07

0.06 2.73

-0.2200 0.00

Invesco Pan European Small Cap Equity A 20.38

Hermes European Alpha Equity Fund Class F Acc

0.00 3.25

Invesco Pan European High Income Fd A 13.86

2.00 0.00 0.00

9.56

18.7200

0.30 0.00

2.00

Reduced Duration UK Corp Bond Gross 11.20

Morant Wright Fuji Yield USD Dist Hedged $

North American

Conservative Strategy

Hermes Asia Ex-Japan Equity Fund Class F Acc

0.06 0.00

-0.16 0.00

-0.04 0.00

4.45

9.67

Invesco Pan European Equity A EUR Cap NAV 16.61

12.19

Europe (ex-UK) Fund ACC-GBP

Morant Wright Fuji Yield USD Acc Hedged $

-0.0270 0.00

(IRL)

(LF) FOF Dynamic Fixed Inc

-0.01 0.36

0.0009 4.47

15.00

1.96 -0.01 0.00

4.8610

1.96

1.61

0.9297

International

Invesco Nippon Small/Mid Cap Equity A 1136.00

Hermes Abs Return Credit Fund Class R Acc

High Income

-0.03 0.00

-0.01 0.00

Target 2030 A-ACC-GBP

0.05 7.01

0.00 0.29

0.06 0.00

6.79

12.62

9.03

Invesco Latin American Equity A $

(LF) Greek Corporate Bond

1.48

9.82

Morant Wright Fuji Yield GBP Dist Hedged

-2.72 0.00

Hermes Abs Return Credit Fund Class F Acc

Morant Wright Fuji Yield GBP Acc Hedged

0.00 0.00

0.06 2.78

-0.0590 0.88

SFr 1177.13

Haussmann Cls D

32.46

0.07

9.38

8.6920

15.00 0.00

Morant Wright Fuji Yield EUR Dist Hedged

European

Morant Wright Fuji Yield EUR Acc Hedged 10.43

0.0020 2.90

Invesco Japanese Value Eq Fd A 1140.00

19.00

0.0300 1.98

(IRL)

FCA Recognised

-4.63 0.00

(LF) Greek Government Bond

Target 2025 A-ACC-GBP

Morant Wright Funds (Ireland) PLC

1.6860

0.01 0.00

0.00 0.47

13.6000

(IRL)

FCA Recognised

Euro High Income

2235.37

Lloydstrust Gilt

Haussmann Cls C

12.78

0.63

PO Box 311, 11-12 Esplanade, St Helier, Jersey, JE4 8ZU 01534 845555
Other International Funds

33.00 0.00

(LF) Eq Mena Fund

Lloyds Investment Fund Managers Limited (1000)F (JER)

(IRL)
Hermes Investment Management Limited, 1 Portsoken Street, London E1 8HZ +44 (0) 207 680 2121
FCA Recognised

Target 2020 A-ACC-GBP

$ 49.86

-0.05 0.00

130, Tonbridge Rd, Tonbridge TN11 9DZ


Callfree: Private Clients 0800 414161
Broker Dealings: 0800 414 181

Invesco Greater China Equity A

(IRL)

0.00

0.94

Foord Asset Management

Pan European Opportunities I EUR

Regulated

Invesco Management SA

SFr 116.44

(LUX)

7.50

27-31 Melville Street, Edinburgh EH3 7JF


Tel: +353 1 434 5143 Dealing - Fax +353 1 434 5230
FCA Recognised

European Opportunities A EUR

INDIA VALUE INVESTMENTS LIMITED (INVIL)

Global Growth I2 Acc

European Opportunities I USD

Invesco Euro Bond A

(LF) Eq Flexi Style Greece

www.dsmsicav.com
Regulated

Global Opportunities I USD

Atlantas Sicav

(LUX)

MW Japan Fund Plc

Invesco UK Investment Grade Bond A

TFI GCC Equity Opportunities Fund (Q)QAR 1275.53

Cheyne European Event Driven Fund 132.72

Other International Funds

-0.01 0.00

Edinburgh Partners Limited


Other International Funds

Aspect Capital Ltd (UK)

DSM Capital Partners Funds

2 rue Albert Borschette L-1246 Luxembourg


FCA Recognised

0.79

Invesco Japanese Equity Adv Fd A 3548.00

30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900


FCA Recognised

Dragon Capital Group

-8.55

-0.01

Findlay Park Funds Plc

-47.28 0.00

-2.79 0.00

Hermes Global Small Cap Fund Class F Acc

$ 302948.64 302948.65 -8861.40 0.00

1398.34

UK Gilt Fund Inc

Chartered Asset Management Pte Ltd

Kames Global Equity Income B GBP Acc

0.77

Institutional OEIC Funds

-0.19 0.00

0.00 0.00

Dodge & Cox Worldwide Funds plc-International Stock Fund


$ 13.88

(LF) Eq Emerging Europe

OEIC Funds

USD Accumulating Share Class

322.03

-0.21 0.00
-0.28

Invesco Euro Reserve A

-0.01 0.00

FIL Investment Services (UK) Limited (1200)F (UK)


21.38

0.22 2.06

-0.04 0.00

Offer D+/- Yield

$ 2582.81

Bid

586.90

Haussmann Cls A

139.55

Fund

Investment Grade Global Bd A GBP Inc

1.31

Offer D+/- Yield

-0.04 0.00

17.39

Bid

(LF) Absolute Return

(LF) FOF Real Estate

Fund

Invesco Euro Inflation Linked Bond A 16.03

Invesco UK Eqty Income A

Dodge & Cox Worldwide Funds plc-Global Stock Fund

CG Portfolio Fund Plc

-0.09 0.00

Ashmore Sicav

Haussmann

Regulated

CAM-GTF Limited

0.01 0.00

Eurobank Fund Management Company (Luxembourg) S.A.

Bonhte Alternative - Multi-Arbitrage (USD) Classe (EUR) 6506.00

Schwab USD Liquid Assets Fd

(IRL)

6 Duke Street,St.James,London SW1Y 6BN


www.dodgeandcox.worldwide.com 020 3713 7664
FCA Recognised
Dodge & Cox Worldwide Funds plc - Global Bond Fund

BONHOTE

Cedar Rock Capital Fd Plc

0.64

Regulated

Other International Funds


Artisan Global Opportunities Class I EUR Acc 18.06

Smaller Cos Cls Two Shares

Other International Funds

Artisan Global Opportunities I USD Acc $ 13.53

Artisan US Value Equity Fund Class I USD Acc $ 12.00

-0.22 0.00

Regulated

Artisan Global Equity Fund Class I USD Acc $ 14.84

Heartwood Caut Multi Asset B Acc

Charles Schwab Worldwide Funds Plc

Artisan Partners Global Funds plc

Heartwood Wealth Management Limited

GBP Accumulating Share Class

(IRL)
Beaux Lane House, Mercer Street Lower, Dublin 2, Ireland
Tel: 44 (0) 207 766 7130
FCA Recognised

36.11

Smaller Cos Cls Four Shares

Artisan Partners Global Funds PLC

Smaller Cos Cls One Shares

Regulated
Davis Value A

Offer D+/- Yield

(CYM)

Regulated

Other International Funds


Arisaig Africa Consumer Fund Limited $ 12.61

Holiday Property Bond Ser 2

FCA Recognised

Capital Value Fund Cls V

Arisaig Partners

-0.10

Euronova Asset Management UK LLP

Other International Funds


Eq. Emerging World AU Class - R - USD $ 90.64

BLI - Banque de Luxembourg Investments S.A.

Bid

Lloyds Investment Funds Limited

International Insurances

Equinox Russian Opportunities Fund Limited $ 116.66

Fund

-13.93 0.00

EnTrustPermal Absolute Return Fund $ 153.10

Fixed Income Holdings N.V.

Global Multi-Strategy Managed

(IRL)

Regulated

Aspect Diversified Trends USD

EnTrustPermal Ltd.
www.entrustpermal.com
Other International Funds

(JER)

Regulated
BlackRock UK Property

www.creditandorra.com
FCA Recognised

Crediinvest SICAV Fixed Income Usd $ 10.79

BlackRock

(LUX)

0.03 0.00

Algebris Investments

International Insurances

Regulated

Bond Funds

Aspect Diversified CHF

Offer D+/- Yield

PO Box 613, Generali House, Hirzel Street, St Peter Port, Guernesy, GY1 4PA 01481 714108

ACPI Balanced UCITS Fund USD Retail $ 14.68

AEF Ltd Eur (Est)

Bid

5.10 0.00

Regulated

AEF Ltd Usd (Est)

Fund

New Capital UCITS Funds

-0.01 0.00

19

FINANCIAL TIMES

Wednesday 28 September 2016

MANAGED FUNDS SERVICE


Fund
Asia Pac Eq EUR Ord Inc

Bid
92.15

Offer D+/- Yield


-

-0.88 2.72

Fund

Bid

Offer D+/- Yield

Odey Absolute Return Focus Fund $ 95.13

-0.54

Fund

Bid

Offer D+/- Yield

Pictet-High Dividend Sel I EUR F 161.70

Fund

Bid

Offer D+/- Yield

Bid

Offer D+/- Yield

Fund

Bid

Offer D+/- Yield

Fund

Bid

Offer D+/- Yield

Rubrics Global Credit UCITS Fund $ 14.84

-0.01 0.00

Nippon Growth (UCITS Fund Euro Hedged Institutional Class EUR) 1019.44

-11.58 0.00

UBS Global Optimal C Acc

0.81

0.00

(JER)

Rubrics Global Fixed Income UCITS Fund $ 159.16

-0.02 0.00

Nippon Growth (UCITS) Fund JPY Class A shares 81430.00

-920.00 0.00

UBS UK Opportunities C Acc

0.70

-0.01 3.16

0.03 0.00

Nippon Growth (UCITS) Fund JPY Class B Acc shares 68317.00

-771.00 0.00

UBS US Equity C Acc

0.98

-0.02 0.47

UBS S&P 500 Index C Acc

0.66

-0.01 1.56

12.38

-1.80 0.00

Purisima Investment Fds (CI) Ltd

Fund

Fund

Bid

Offer D+/- Yield

Data Provided by

Asia Pac Eq GBP Ord Inc

95.60

-0.91 3.35

Odey Allegra European EUR O

248.95

-2.56 0.00

Pictet-India Index I USD

$ 103.84

-1.04 0.00

Asia Pac Eq USD Ord Inc

$ 97.47

-0.94 2.68

Odey Allegra International EUR O 152.82

-1.67 0.00

Pictet-Indian Equities-I USD F

$ 493.39

2.35 0.00

PCG B

170.78

-0.19 0.00

Q Rubrics India Fixed Income UCITS Fund $ 10.78

Asia Pac Eq USD Inst Acc

$ 107.21

-1.02 0.00

Odey Allegra Developed Markets USD I $ 131.25

-1.85 0.00

Pictet-Japan Index-I JPY F

14248.96

132.13 0.00

PCG C

168.18

-0.19 0.00

Rubrics India Fixed Income UCITS Fund $ 92.28

0.21 0.00

Nippon Growth (UCITS) Fund JPY Class C Dis shares 82212.00

968.00 0.00

Asia Pac Eq USD Inst Inc

$ 108.78

-1.04 3.24

Odey European Focus Fund

17.00

-0.21 0.00

Pictet-Japanese Equities Opp-I JPY F 8615.81

88.05 0.00

Rubrics International Bond UCITS Fund $ 18.66

0.01 0.00

Nippon Growth (UCITS Fund Class D Institutional JPY) 44432.00

-500.00 0.00

UBS Targeted Return C Acc

-0.02 1.69

www.morningstar.co.uk

Dyn Europ Eq EUR Ord Inc

165.47

-2.04 1.10

Odey Giano European Fund EUR R 113.39

0.61 0.00

Pictet-Japanese Equity Selection-I JPY F 12519.84

130.49 0.00

Strategic China Panda Fund USD $ 2310.50

-41.19 0.00

UBS Sterling Corporate Bond Indexed C Acc

0.63

0.00 2.84

Dyn Europ Eq GBP Ord Inc

174.29

-2.14 1.59

Odey Naver Fund EUR I

114.78

0.23 0.00

Pictet-LATAM Lc Ccy Dbt-I USD F $ 125.57

-0.57 0.00

Strategic China Panda Fund Hedged EURO 2223.66

-40.05 0.00

UBS Multi Asset Income C Inc Net

0.50

0.00 3.06

Data as shown is for information purposes only. No


offer is made by Morningstar or this publication.

Dyn Europ Eq USD Ord Inc

$ 166.49

-2.06 1.04

Odey Odyssey USD I

$ 120.98

1.83 0.00

Pictet-Multi Asset Global Opportunities-I EUR 118.75

-0.27

Strategic China Panda Fund Hedged Sterling 2262.80

-40.61 0.00

UBS UK Equity Income C Inc Net

0.60

-0.01

China Equity EUR Ord Acc

129.48

-2.58 0.00

Odey Swan Fund EUR I

63.04

0.69 0.00

Pictet-Pacific Ex Japan Index-I USD F $ 363.98

-0.99 0.00

Strategic Euro Bond Accumulating Class CHFSFr 986.88

0.23 0.00

UBS Corporate Bond UK Plus C Inc Net

0.56

0.00 3.62

China Equity GBP Ord Acc

135.73

-2.72 0.00

Odey European Absolute Return GBP S 88.62

-0.25 0.00

Pictet-Premium Brands-I EUR F

Strategic Euro Bond Institutional Class EUR 1023.72

0.46

UBS Global Allocation (UK) C Acc

0.70

-0.01 2.20

China Equity USD Ord Acc

$ 133.11

-2.66 0.00

Strategic Euro Bond Fund Accumulating Class Shares 1145.09

0.48

UBS Global Enhanced Equity Income C Inc

0.46

0.00 10.43

China Equity USD Inst Acc

$ 137.75

-2.75 0.00

Strategic Euro Bond Fund Distributing Class Shares 1021.09

-12.54

UBS US Growth C Acc

0.98

-0.01

Strategic European Smaller Companies Fund EUR Class 1063.17

23.71 0.00

UBS Emerging Markets Equity Income C Inc

Strategic Global Bond RMB Acc

$ 1078.58

Strategic Global Bond USD Acc

Regulated

Putnam Investments (Ireland) Ltd

(IRL)

Regulated

Europ. Equity Fd EUR

100.19

-1.23

Europ. Equity Fd GBP

98.08

-1.20

Europ. Equity Fd USD

$ 99.71

-1.23

Global Val.Cr.Fd GBP Ord Inc

113.33

-0.09 3.56

Global Val.Cr.Fd USD Inst Acc

$ 130.40

-0.10 0.00

(IRL)

www.odey.com/prices
FCA Recognised

141.69

-1.84

Pictet-Quality Global Equities I USD $ 143.92

-1.36 0.00

Pictet-Russia Index I USD

-0.34 0.00

$ 59.30

216.59

-1.81 0.00

Other International Funds


$ 885.58

9.93 0.00

Pictet-Russian Equities-I USD F

$ 57.92

-0.15

Pictet-Security-I USD F

$ 210.02

-1.01 0.00

Pictet-Select-Callisto I EUR

102.91

-0.13 0.00

Pictet-Small Cap Europe-I EUR F 1120.55

-8.85 0.00

140.21

0.00

Pictet-ST.MoneyMkt-I

Global Val.Cr.Fd GBP Ord Acc

187.11

-0.15 0.00

Pictet-ST.MoneyMkt JPY I USD

101391.05

-2.62 0.00

Global Val.Cr.Fd USD Ord Acc

$ 175.86

-0.14 0.00

Pictet-ST.MoneyMkt-ICHF

SFr 123.47

0.00 0.00

Global Val.Cr.Fd EUR Ord Acc

162.10

-0.14 0.00

Pictet-ST.MoneyMkt-IUSD

$ 136.13

0.00 0.00

Swiss Select Equity Inst Acc

SFr 122.76

-1.51 0.00

Pictet-Timber-I USD F

$ 150.58

-1.41 0.00

Swiss Select Equity Ord Acc

SFr 120.75

-1.50 0.00

Pictet Total Ret-Agora I EUR

116.68

-0.09 0.00

US Growth USD Ord Acc

$ 201.25

-2.01 0.00

US Growth EUR Ord Acc

190.43

-1.90 0.00

US Growth GBP Ord Acc

200.92

-2.00 0.00

US Growth USD Inst Acc

$ 186.99

-1.86 0.00

Wealthy Nat Bd EUR Inst Inc

115.34

-0.02 3.22

Wealthy Nat Bd GBP Inst Inc

120.47

-0.02 3.35

Wealthy Nat Bd EUR Ord Inc

114.61

-0.02 2.96

Wealthy Nat Bd GBP Ord Inc

121.30

-0.02 3.11

Wealthy Nat Bd USD Ord Inc

$ 118.74

-0.02 2.91

New Capital Alternative Strategies


All Weather Fd USD Cls
All Weather Fd EUR Cls

$ 114.97
102.64

0.91 0.00
0.69 0.00

All Weather Fd GBP Cls

110.83

0.82 0.00

Tactical Opps USD Cls

$ 143.22

-1.71 0.00

Tactical Opps EUR Cls

119.23

-1.45 0.00

Tactical Opps GBP Cls

133.75

-1.64 0.00

Optima Fund Management


Other International Funds
Cuttyhunk Fund II Limited

$ 1335.09

-13.88 0.00

JENOP Global Healthcare Fund Ltd $ 13.05

0.75 0.00

OPTIKA Fund Limited - Cl A

$ 97.01

5.20 0.00

Optima Fd NAV

$ 85.75

0.03 0.00

Optima Discretionary Macro Fund Limited $ 84.36

-0.40 0.00

The Dorset Energy Fd Ltd NAV

-2.45 0.00

$ 34.44

Platinum Fd Ltd

$ 86.77

-1.87 0.00

Platinum Fd Ltd EUR

16.56

-0.36 0.00

Platinum Japan Fd Ltd

$ 55.83

-0.90 0.00

Optima Partners Global Fd

$ 14.19

-0.03 0.00

Optima Partners Focus Fund A

$ 15.21

0.02 0.00

Pictet Total Ret-Corto Europe I EUR 138.35

-0.14 0.00

Pictet Total Ret-Divers Alpha I EUR 106.26

-0.08 0.00

Other International Funds


9.79

-0.09 0.00

Oasis Global Mgmt Co (Ireland) Ltd

(IRL)

Regulated
Oasis Global Investment (Ireland) Plc
Oasis Crescent Global Short Term Income Fund $
Oasis Global Equity

0.00 1.22

7.77

$ 27.69

-0.21 0.33

Oasis Crescent Global Equity Fund $ 28.60

-0.20 0.11

Oasis Crescent Variable Balanced Fund 10.71

-0.05 1.37

OasisCresGl Income Class A

$ 10.85

-0.01

OasisCresGl LowBal D ($) Dist

$ 11.94

-0.04 0.00

OasisCresGl Med Eq Bal A ($) Dist $ 12.19

-0.05 0.61

-0.01 1.61

(LUX)

OEI Mac Inc GBP A

235.23

-0.21 0.00

OEI Mac Inc GBP B

141.74

-0.73 0.00

OEI MAC Inc USD

$ 1235.91

-0.72 0.00

Odey European Inc EUR

543.81

-1.06 0.00

Odey European Inc GBP A

214.32

-0.38 0.00

Odey European Inc GBP B

121.60

-0.22 0.00

Odey European Inc USD

$ 253.06

-0.37 0.00

Giano Capital EUR Inc

4350.92

-47.28 0.00

(IRL)

FCA Recognised
284.08

-3.72

RAM Systematic Global Shareholder Yield Eq $ 104.24

-0.78 0.00

SFr 189.00

0.90

SFr 162.20

0.70 0.54

Standard Life Wealth


RAM Systematic Long/Short Emerg Markets Eq $ 119.96

-0.07

RAM Systematic Long/Short European Eq 143.67

0.50

RAM Systematic North American Eq $ 248.14

-1.92

RAM Tactical Convertibles Europe 142.89

-0.72

RAM Tactical Global Bond Total Return 144.51

0.13

RAM Tactical II Asia Bond Total Return $ 136.93

-0.10

(JER)

PO Box 189, St Helier, Jersey, JE4 9RU 01534 709130


FCA Recognised
Standard Life Offshore Strategy Fund Limited

0.00 4.83

UBS FTSE RAFI Dev 1000 Index J Acc 119.08

-1.31 1.62

UBS MSCI World Min Vol Index J Acc 136.96

-0.79 1.52

$ 1078.41

0.81

Strategic US Momentum and Value Fund $ 722.19

-7.50 0.00

Strategic US Momentum & Value Fund USD I Class $ 481.60

-4.98 0.00

Unicapital Investments

Strategic US Momentum and Value EUR Hedged Class EUR 499.45

-5.25 0.00

Investments III

Strategic US Momentum and Value CHF Hedged Class CHFSFr 494.04

-5.23 0.00

Investments IV - European Private Eq. 206.46 216.79 0.00 0.00

-0.0096 1.97

Diversified Assets Fund

1.2517

-0.0036 3.24

Global Equity Fund

2.1469

-0.0162 1.35

Value Partners Hong Kong Limited


www.valuepartners.net, fis@vp.com.hk
Regulated

Global Balanced Fund - Income Units 1.5115

-0.0073 2.36

Global Balanced Fund - Accumulations Units 1.7994

-0.0087 2.31

Value Partners Asia Dividend Stocks Fund $

Superfund Asset Management GmbH


www.superfund.com, +43 (1) 247 00

-1.19 0.00

Sterling Fixed Interest Fund

0.9270

0.0025 3.64

Superfund Green EUR SICAV

889.60

-5.16 0.00

Pictet-US Equity Selection-I USD $ 190.38

-1.90 0.00

UK Equity Fund

1.9914

-0.0081 2.87

Superfund Red EUR SICAV

813.30

-1.43 0.00

Pictet-US High Yield-I USD F

$ 152.30

-0.21 0.00

Superfund Blue EUR

890.56

0.85 0.00

Pictet-USA Index-I USD F

$ 191.46

-1.65 0.00

Pictet-USD Government Bonds-I F $ 667.45

1.05 0.00

Pictet-USD Short Mid-Term Bonds-I F $ 131.58

(LUX)

Weena 850, 3014 DA Rotterdam, The Netherlands


www.robeco.com/contact
FCA Recognised
-0.77 0.00

BP US Premium Equities (EUR)

190.05

-1.78 0.00

$ 103.08

0.00 0.00

Pictet-Water-I EUR F

299.92

-2.40 0.00

BP US Premium Equities (USD)

$ 214.34

-2.01 0.00

Chinese Equities (EUR)

78.48

-0.75

Em Stars Equities (EUR)

185.91

-1.42 0.00

Emerging Markets Equities (EUR) 158.23

-1.54 0.00

108.93

-0.06 0.00

Glob.Consumer Trends Equities (EUR) 153.11

-1.79

Flex-o-Rente (EUR)

High Yield Bonds (EUR)

$ 117.69

Platinum Global Dividend Fund - A $ 49.52

Platinum Maverick Enhanced Fund Limited $ 90.35

0.00

Lux -O- Rente (EUR)


New World Financials (EUR)

136.85
148.13
49.40

Gbl Govt Bond (Ex Japan) Index (GBP) 1960.40

Stenham Asset Management Inc


Other International Funds
$ 125.42

3.17 0.00

Stenham Credit Opportunities A Class USD $ 102.37

1.16 0.00

Stenham Equity UCITS USD

$ 142.02

2.86 0.00

Stenham Growth USD

$ 204.70

2.69

Stenham Healthcare USD

$ 171.75

-0.80 0.00

Stenham Managed Fund USD

$ 109.46

0.70 0.00

Stenham Macro UCITS USD

$ 95.60

-0.13 0.00

-0.06 0.00

4.67 0.00

UK Corporate Bond

1777.29

3.78 0.00

Gilt

1809.27

7.23 0.00

Global Eq (Ex Japan) Index Fund

1.43

-0.01 0.00

Global Eq (ex Japan) Class HJ4

1.49

-0.01 0.00

Global Eq (ex Japan) Class JP5

1.34

-0.02 0.00

Global Eq Ex Japan Index Fund (Hedge)

1.23

-0.02 0.00

Gbl Govt Bond (Ex Japan) Index

1.18

0.00 0.00

Gbl Govt Bond (ex Japan) Class JP4

1.15

0.00 0.00

Japan Equity Index Fund

0.94

0.01 0.00

Japan Equity Class JP3

1.14

0.01 0.00

www.stenhamassetmanagement.com

-0.84 0.00

(IRL)

Regulated

0.06 0.00

Pictet-USD Sov.ST.Mon.Mkt-I

Regulated

The Hartford International Funds

-1.02 0.00
Stenham Multi Strategy USD

$ 107.79

-1.69

Stenham Quadrant USD A

$ 400.44

1.23

Stenham Trading Inc USD

$ 115.94

0.34

$ 413.84

3.08

$ 152.74

1.07 0.00

108.52

-0.09 0.00

184.85

-1.14 0.00

Stenham Universal II USD

Pictet-Asian Equities Ex Japan-I USD F $ 232.07

1.44 0.00

Pictet-Asian Local Currency Debt-I USD F $ 166.49

0.50 0.00

$ 706.92

-10.47 0.00

-3.43 0.00

S W Mitchell Capital LLP


Polar Capital Funds Plc

(IRL)

Regulated
$ 323.78 323.78 2.40 1.03

S W Mitchell Small Cap European Fund Class A EUR 204.47

3.45

$ 17.47 17.47 -0.21 0.00

The Charlemagne Fund EUR

254.81

4.13

SFr 514.38

0.49 0.00

$ 113.87

-2.12 0.00

European Income Acc EUR

11.03 11.03 -0.18 0.00

Pictet-Clean Energy-I USD F

$ 81.81

-0.18 0.00

European Ex UK Inc EUR Acc

Pictet-Digital Communication-I USD F $ 299.48

-1.58 0.00

Financial Opps I USD

$ 11.16

-0.14 1.71

$ 174.21

0.22

GEM Growth I USD

9.45

-0.10 0.00

$ 10.32

-0.08 0.00

9.70

9.70 -0.14 0.00

302.31

-7.17 0.00

Pictet-Emerging Markets-I USD F $ 541.86

2.69 0.00

Global Alpha I USD

$ 13.11 13.11 -0.14

Pictet-Emerging Markets Index-I USD F $ 239.15

-3.18 0.00

Global Convertible I USD

$ 11.67 11.67 -0.03 0.00

Pictet-Emerging Corporate Bonds I USD $ 117.78

-0.22 0.00

Global Insurance I GBP

S W Mitchell Capital LLP

(IRL)

Regulated

GEM Income I USD

Pictet-Emerging Markets High Dividend I USD $ 104.11

Asian Financials I USD

Pictet-China Index I USD

7.78

0.40 0.00

Global Technology I USD

Stratton Street Capital (CI) Limited

(GSY)

5.05

$ 27.13

367.92 0.00

Aptus Global Financials B Acc

3.02

-0.03 4.88

Japan Synthetic Warrant GBP Hedged Class 134.52

36.47 0.00

Aptus Global Financials B Inc

2.54

-0.03 5.10

1.40 0.00

Japan Synthetic Warrant USD Hedged Class $ 136.70

37.58 0.00

SWMC European Fund B EUR

13232.85

-267.75 0.00

Renminbi Bond Fund AUD Cls A A$ 129.13

0.23 3.17

SWMC UK Fund B

11679.31

-94.22 0.00

Renminbi Bond Fund AUD Cls B A$ 131.08

0.24 2.96

SWMC Small Cap European Fund B EUR 12835.29


SWMC Emerging European Fund B EUR 10068.69

-97.53 0.00
-161.44 0.00

Renminbi Bond Fund CHF Cls A SFr 122.79

0.21 3.31

Value Partners Classic Equity Fund EUR Hedged 12.22

0.05 0.00

Value Partners Classic Equity Fund GBP Hedged 12.52

0.04 0.00

Value Partners Classic Equity Fund GBP Unhedged 14.90

-0.16 0.00

Value Partners Classic Equity USD Hedged $ 14.31

0.04 0.00

Different share classes are issued to reflect a different


currency, charging structure or type of holder.

Value Partners Greater China Equity Fund $

Selling price: Also called bid price. The price at which


units in a unit trust are sold by investors.

8.89

-0.13 0.00

Value Partners Health Care Fund RMB Class Z UnhedgedCNH 10.74

-0.11 0.00

Value Partners Health Care Fund HKD Class A UnhedgedHK$ 10.05

-0.13 0.00

Value Partners Health Care Fund USD Class A Unhedged $ 10.08

-0.12 0.00

Waverton Investment Funds Plc (1600)F

$ 19.63

-0.02 5.29

Waverton Global Equity Fund A GBP 16.72

Waverton Asia Pacific A USD

-0.13 0.44

Waverton Global Strategic Bond Fund A USD $

8.62

0.00 4.99

Waverton UK Fund A GBP

13.86

-0.11 1.64

Waverton Equity Fund A GBP

16.37

-0.08 0.33

0.01 4.94

-0.30 0.00

14416.00

24.37 0.00

RobecoSAM Sm.Energy/N

12.16

-0.15 0.00

Renminbi Bond Fund USD Cls A

$ 176.78

0.31 3.06

Tel. +41 44 653 10 10 http://www.robecosam.com/


Regulated

0.40

Japan I JPY

1683.07

253.18

-0.40 0.00

North American I USD

$ 18.19 18.19 -0.15 0.00

RobecoSAM Sm.Materials/A

151.28

-1.03 1.16

Renminbi Bond Fund GBP Cls A

171.00

0.31 3.26

Pictet-EUR Short Mid-Term Bonds-I F 137.55

0.02 0.00

UK Absolute Equity I GBP

14.44 14.44 0.00 0.00

RobecoSAM Sm.Materials/N

150.91

-1.51 0.00

Renminbi Bond Fund SGD Cls A S$ 169.62

0.31 3.19

-2.15

Pictet-Europe Index-I EUR F

162.42

-2.59 0.00

104.17

-1.05 0.00

Renminbi Bond Fund YEN Cls A

21329.00

34.00 0.00

RobecoSAM Gl.Small Cap Eq/A

94.56

-0.75 1.08

Renminbi Bond Fund EUR Cls A

115.01

0.20 3.22

-2.47 0.00

Global Opp.A

142.56

-1.09

6.28 0.00

-2.14 0.00

Global Opp.B

$ 144.84

-0.85 0.00

RobecoSAM S.HealthyLiv/B

177.20

-2.18 0.00

Global Opp.C

204.90

-1.41 2.70

RobecoSAM S.HealthyLiv/N

166.10

-2.03 0.00

Sequoia Equity A

137.98

-2.01 0.00

RobecoSAM S.HealthyLiv/Na

125.84

-1.12

Sequoia Equity B

$ 145.51

-2.00

Sequoia Equity C

185.15

-2.74

0.23 0.00

Pictet-Global Emerging Currencies-I USD F $ 101.17

0.01 0.00

RobecoSAM S.Water/A

216.28

-1.54 0.97

RobecoSAM S.Water/N

180.28

-1.87 0.00

Regulated
Monument Growth 20/09/2016

514.55 519.95 9.07 1.18

Pictet-Global Emerging Debt-I USD F $ 399.19

-2.74 0.00

Prusik Investment Management LLP

168.45

-1.61 0.00

Enquiries - 0207 493 1331


Regulated

-2.96 0.00

-2.54 3.17

-0.33

-1.17 3.33

RobecoSAM Sustainable Gl.Eq/N 157.70

$ 263.66

251.82

RobecoSAM Sustainable Gl.Eq/B 181.73

Pictet-Health-I USD

120.02

International D

4.49 0.00

178.28

2.75 0.00

International C

Pictet-Global Bds Fundamental I USD $ 127.11

-1.29 0.00

-3.57 0.00

146.87

-3.51 0.00

-2.84 0.00

European Conviction A EUR

-7.74 0.00

-1.83 0.00

$ 481.70

279.99
$ 364.54

Pictet-Global Megatrend Selection-I USD F $ 232.17

International A
International B

163.31

238.82

Pictet-Greater China-I USD F

(LUX)

RobecoSAM Gl.Small Cap Eq/N

(GSY)

(IRL)

-2753.17

Single price: Based on a mid-market valuation of the


underlying investments. The buying and selling price
for shares of an OEIC and units of a single priced unit
trust are the same.
Treatment of managers periodic capital charge:
The letter C denotes that the trust deducts all or part
of the managers/operators periodic charge from
capital, contact the manager/operator for full details
of the effect of this course of action.
Exit Charges: The letter E denotes that an exit charge
may be made when you sell units, contact the
manager/operator for full details.
Time: Some funds give information about the timing of
price quotes. The time shown alongside the fund
managers/operators name is the valuation point for
their unit trusts/OEICs, unless another time is
indicated by the symbol alongside the individual unit
trust/OEIC name.
The symbols are as follows: 0001 to 1100 hours;
1101 to 1400 hours; 1401 to 1700 hours; # 1701 to
midnight. Daily dealing prices are set on the basis of
the valuation point, a short period of time may elapse
before prices become available. Historic pricing: The
letter H denotes that the managers/operators will
normally deal on the price set at the most recent
valuation. The prices shown are the latest available
before publication and may not be the current dealing
levels because of an intervening portfolio revaluation
or a switch to a forward pricing basis. The
managers/operators must deal at a forward price on
request, and may move to forward pricing at any time.
Forward pricing: The letter F denotes that that
managers/operators deal at the price to be set at the
next valuation.
Investors can be given no definite price in advance of
the purchase or sale being carried out. The prices
appearing in the newspaper are the most recent
provided by the managers/operators. Scheme
particulars, prospectus, key features and reports: The
most recent particulars and documents may be
obtained free of charge from fund
managers/operators. * Indicates funds which do not
price on Fridays.
Charges for this advertising service are based on the
number of lines published and the classification of the
fund. Please contact data@ft.com or
call +44 (0)20 7873 3132 for further information.

(LUX)

Memnon European Fund I GBP

135.84

-1.77 0.00

Regulated

0.39 0.00

Private Fund Mgrs (Guernsey) Ltd

Buying price: Also called offer price. The price at


which units in a unit trust are bought by investors.
Includes managers initial charge.

TreeTop Convertible Sicav

RobecoSAM Sm.Materials/Na

Pictet-European Equity Selection-I EUR F 606.65

TreeTop Asset Management S.A.

10931.83

YMR Umbrella Fund

Zadig Gestion (Memnon Fund)

$ 130.70

167.06

OEIC: Open-Ended Investment Company. Similar to a


unit trust but using a company rather than a trust
structure.

Yuki Asia Umbrella Fund

ALVA Convertible A USD

European Forager A EUR

116.00

Guide to pricing of Authorised Investment Funds:


(compiled with the assistance of the IMA. The
Investment Management Association, 65 Kingsway,
London WC2B 6TD.
Tel: +44 (0)20 7831 0898.)

FCA Recognised

Pictet-EUR Government Bonds I EUR 167.96

126.19

-0.74 0.00

263.00 0.00

11.97 0.00

Renminbi Bond Fund YEN Cls B

Pictet-Euroland Index IS EUR

13383.00

0.08 0.00

(CYM)

61.77

25872.00

Yuki Japan Value Select

Yuki Japan Rebounding Growth Fund USD Hedged Class $ 909.32

Polar Capital LLP

Pegasus Fund Ltd A-1 GBP

Yuki Japan Low Price

0.24 2.96

210.27

Regulated

7.94 0.00

0.23 2.82

0.00 0.00

Renminbi Bond Fund SGD Cls B S$ 128.07

$ 366.16

102.00

305.00

$ 128.23

Pictet-EUR Sov.Sht.Mon.Mkt EUR I 102.59

Tosca Opportunity B USD

Renminbi Bond Fund USD Cls B

-0.09 0.00

4.93 0.00

Yuki Japan Rebounding Growth Fund JPY Class 23120.00

-0.13 1.40

0.24 3.03

123.94

263.83

0.22 2.98

13.86

12.08 1.22

Tosca Mid Cap GBP

Yuki Mizuho Japan Dynamic Growth 6751.00

RobecoSAM Sm.Energy/A

Japan Alpha I JPY

23.45

128.31

175.96 175.96 1.55 0.00

1.86 -0.01 0.00

125.06

Income Opportunities B2 I GBP Acc

1.86

$ 265.16

Renminbi Bond Fund GBP Cls B

0.16 0.00

(LUX)

(IRL)

Renminbi Bond Fund Euro Cls B

RobecoSAM

0.09 0.00

0.22 2.82

Pictet-EUR Corporate Bonds Ex Fin i EUR 151.93

-0.49 0.00

Healthcare Opps I USD

123.58

Renminbi Bond Fund CNH Cls B CNH 139.23

0.60

$ 36.78

(IRL)

0.22 3.04

9.76

Yuki Mizuho Umbrella Fund

Tosca A USD

YMR N Growth

-0.05 0.00

(IRL)

waverton.investments@citi.com
FCA Recognised

593.56

Pictet-Global Env.Opport-I EUR

0.05 0.00

Renminbi Bond Fund CNH Cls A CNH 139.55

-1.13 0.00

Pictet-Global Bonds-I EUR

0.22 3.07

Pictet-European Sust Eq-I EUR F

Value Partners Classic Equity Fund CHF HedgedSFr 12.04

Pictet-Emerging Markets Sust Eq I USD $ 92.98

Pictet-EUR Corporate Bonds-I F

0.05 0.00

Renminbi Bond Fund CHF Cls B SFr 122.58

Healthcare Blue Chip Fund I USD Acc $ 10.79 10.79 -0.14 0.00

Pictet-EUR Bonds-I F

Other International Funds

Prices are in pence unless otherwise indicated. The


change, if shown, is the change on the previously
quoted figure (not all funds update prices daily). Those
designated $ with no prefix refer to US dollars. Yield
percentage figures (in Tuesday to Saturday papers)
allow for buying expenses. Prices of certain older
insurance linked plans might be subject to capital
gains tax on sales.

-0.10 0.00

Tel +44-20-7269-0207 www.yukifunds.com


Regulated

www.toscafund.com

The fund prices published in this edition along with


additional information are also available on the
Financial Times website, www.ft.com/funds. The
funds published on these pages are grouped together
by fund management company.

Yuki International Limited

Toscafund Asset Management LLP

The sale of interests in the funds listed on these pages


may, in certain jurisdictions, be restricted by law and
the funds will not necessarily be available to persons
in all jurisdictions in which the publication circulates.
Persons in any doubt should take appropriate
professional advice. Data collated by Morningstar. For
other queries contact reader.enquiries@ft.com +44
(0)207 873 4211.

www.toscafund.com
Authorised Funds

The fund prices quoted on these pages are supplied by


the operator of the relevant fund. Details of funds
published on these pages, including prices, are for the
purpose of information only and should only be used
as a guide. The Financial Times Limited makes no
representation as to their accuracy or completeness
and they should not be relied upon when making an
investment decision.

9.43

(UK)

Japan Synthetic Warrant Yen Class 1310.29

Japan Synthetic Warrant USD Class $ 15.70

(IRL)

Guide to Data

Value Partners Classic Equity Fund USD Z Unhedged $ 11.71

European Multi-Sector

Regulated

Biotechnology I USD

Pictet-Em Lcl Ccy Dbt-I USD F

Regulated

Toscafund Asset Management LLP

S W Mitchell European Fund Class A EUR 245.25

-22.38

WA Fixed Income Fund Plc

(CYM)

Regulated

Investments IV - Global Private Eq. 286.62 300.95 0.00 0.00

138.48

5.03

1.7851

Pictet Total Ret-Mandarin I USD $ 119.99

Asia-Pacific Equities (EUR)

Bridge Fund

-0.0011 4.37

Robeco Asset Management

(LUX)

Regulated

Waverton Sterling Bond Fund A GBP

(CYM)

Regulated

Odey Pan European EUR R

382.09

RAM Systematic European Eq

LTIF Stability Growth


LTIF Stability Inc Plus

Pictet-Absl Rtn Fix Inc-HI EUR

Pictet-EUR Short Term HY I EUR

Odey Asset Management LLP

Pictet-Agriculture-I EUR F

Pictet-EUR High Yield-I F

Odey Asset Management LLP

-1.64

0.46

0.41 0.00

Oasis Crescent Global Investment Fund (Ireland) plc

-0.99

Stenham Universal USD

Pictet-Emerging Europe-I EUR F

0.99

Oasis Crescent Gbl Property Eqty $ 10.05

RAM Systematic Emerg Markets Eq $ 158.77

15, Avenue J.F. Kennedy L-1855 Luxembourg


Tel: 0041 58 323 3000
FCA Recognised

Pictet-CHF Bonds I CHF

1.29

25.59 0.00

Oasis Crescent Management Company Ltd


R

RAM Systematic Emerg Markets Core Eq $ 87.61

Other International Fds

1.0408

Other International Funds

Pictet-Biotech-I USD F

Oasis Crescent Equity Fund

SIA (SIA Funds AG) (CH)

Global Fixed Interest Fund

Oryx International Growth Fund Ltd

Pictet Asset Management (Europe) SA

$ 2376.08

www.ram-ai.com
Other International Funds

Stenham Asia USD

NAV (Fully Diluted)

128.21 134.25 -0.69 3.00

-0.01 0.00

Platinum All Star Fund - A

Northwest $ class

Other International Funds

Other International Funds

11th Floor, Kinwick Centre, 32, Hollywood Road, Central Hong Kong +852 9084 4373
Other International Funds

Schroder Property Managers (Jersey) Ltd

110.51

Pictet Total Ret-Kosmos I EUR

Platinum Capital Management Ltd

Northwest Investment Management (HK) Ltd

-2.16 3.65

Ram Active Investments SA

Omnia Fund Ltd


Estimated NAV

Indirect Real Estate SIRE

Odey Wealth Management (CI) Ltd

Odey Opportunity EUR I

Putnam New Flag Euro High Yield Plc - E 1019.95

TreeTop Global Sicav

E.I. Sturdza Strategic Management Limited (GSY)


Regulated
Nippon Growth Fund Limited

81822.89

2893.89 0.00

Strat Evarich Japan Fd Ltd JPY

65816.00

-1022.00 0.00

Strat Evarich Japan Fd Ltd USD

$ 642.83

-9.69 0.00

UBS Asset Management

Prusik Asian Equity Income B Dist $ 177.26

0.68

Prusik Asia A

$ 206.18

1.16 0.00

Prusik Asian Smaller Cos A

$ 162.43

1.10 0.00

Rubrics Global UCITS Funds Plc

(IRL)

www.rubricsam.com
Regulated

E.I. Sturdza Funds PLC

(IRL)

Regulated

Rubrics Emerging Markets Fixed Income UCITS Fund $ 123.39

-0.48 0.00

Nippon Growth (UCITS Fund Euro Hedged Class EUR) 862.79

-9.84 0.00

(UK)
21 Lombard Street, London, EC3V 9AH
Client Services 0800 358 3012, Client Dealing 0800 358 3012
www.ubs.com/retailfunds
Authorised Inv Funds
OEIC
UBS Global Emerging Markets Equity C Acc

Asset Management

0.62

0.00 1.33

Asset Management

Asset Management

20

FINANCIAL TIMES

Wednesday 28 September 2016

MARKETS & INVESTING


Capital markets

FT explainer

Debt securitisation engine starts to roar

What does the future look


like for Deutsche Bank?
Deutsche Banks shares
have touched their lowest
level in more than two
decades, with the German
lender at the centre of an
intense market sell-off,
reflecting concern over a
looming fine from the US
government.
While the banks balance
sheet is hard to decipher,
capital markets provide
clues as to what investors
think of Deutsches future.
Why has the share price
been hit so hard?
Shares in Deutsche Bank
have fallen more than 50
per cent so far this year,
and could not hold initial
gains yesterday, falling a
further 1.3 per cent as
support from bargain
hunters collapsed.
Investors are convinced
the bank will need to raise
new capital as the
Department of Justice
seeks a record $14bn to
settle allegations of misselling mortgage securities.
The issuance of equity
would dilute the
shareholdings of existing
investors. The problem is
worsened because it is
difficult to see what story
Deutsche can sell to
prospective investors.
A report by German
magazine Focus said
chancellor Angela Merkel
had ruled out state support
ahead of 2017 polls. The
bank said on Monday a
capital rise is currently not
on the agenda.
What does the market say
about the odds of state
support?
An interesting aspect of
the capital markets
surrounding Deutsche is
the way they price the
prospect of state support.
If a big European bank is
expected to be offered
state support, it is unclear
how prices would react,
given how many market
instruments from
contingent convertible
bonds (cocos) to senior
unsecured bonds are
designed to replace the
need for such support.
Risky bonds may be first in
line for a haircut if the bank
cannot raise new capital.
The situation has led to
unusual opportunities.
Some investors are short
the banks shares but long
its coco bonds. This trade
has a dual benefit: if the
bank is forced to issue
shares, this in principle
boosts bonds by
protecting them from
losses. It would also
weaken the share price.

What are coco bonds and


what are those markets
telling us now?
The purpose of coco bonds
is to take losses when a
bank gets in trouble and its
capital falls below a certain
point. As such, they are
designed to help eliminate
the need for taxpayers to
bail out banks.
Deutsches 1.75bn coco
bond, which pays a 6 per
cent coupon, fell 3.1 per
cent to 73 cents on the
euro on Monday. While the
bond is trading at
distressed levels, it is
above the low of 71 cents
it plumbed in February.
There are two big risks
for any investor in a coco
bond. One is the banks
capital falls so sharply that
the bonds are converted
into equity or written off
entirely. The other is that
the banks capital level hits
a higher point, meaning
that AT1 coupon payments,
along with dividends and
bonuses, are halted.
The bonds are priced in
such a way to imply that a
missed coupon is viewed
as far more probable than
a writedown. Daniel Davies,
of Frontline Analysts,
estimates the bank faces a
tier one capital hit of
7.5bn, which, given profits
and litigation reserves,
would correspond to a fine
of $14bn.
What about the broader
coco market?
In February Deutsche
helped fuel a broad market
sell-off in both equity and
credit. While shares have
fallen this week, other
banks coco bonds are not
suffering to the same
degree. For example, cocos
sold by Spains Banco
Popular traded in the low
70s in February. They are
now trading at more than
90 cents on the euro.
What other markets are
relevant?
As well as coco bonds,
banks sell less risky bonds,
which they use to help
fund their businesses. Socalled senior unsecured
bonds have not fallen
dramatically in price and
generally trade in the high
90s. Like coco bonds, their
prices reflect concerns, but
not a belief that Deutsche
is on the verge of collapse.
Investors are also buying
credit-default swaps (CDS)
derivatives that offer
insurance protection
against senior bonds.
These can also be used
to hedge long positions on
the bank. Thomas Hale

Deutsche Bank
Share price ()

100
80
60
40
20
0
1991

95

2000

05

Source: Thomson Reuters Datastream

10

16

Issuers aim to tap yield


demand ahead of US poll
and incoming regulations
JOE RENNISON AND ERIC PLATT
NEW YORK

Wall Streets debt securitisation engine


is revving up as banks prepare to structure and sell a spate of bonds backed by
consumer loans before the Federal
Reserve meets and Americans head to
the polls two events that investors
worry may unsettle markets.
Issuers, seeking to take advantage of
the global search for yield as volatility
remains muted, are readying a series of
collateralised loan obligations the socalled structured products that are
made up of bundles of riskier leveraged
loans.

Carlson Capital, a Dallas-based alternative asset manager, priced a $404m


CLO on Monday, and deals from BlackRock, Voya and Aegon are expected in
the coming weeks, according to people
familiar with the plans.
Sales of securitised products have
been accelerating. Before an industrywide conference in mid-September, new
supply hit its highest weekly level since
September 2014, according to data from
S&P Global Ratings. Roughly $19bn of
US structured bonds were sold in the
week to September 16, including $13bn
of securities backed by car loans, credit
cards and other consumer products.
DriveTime, a used vehicle retailer, is
marketing a bond backed by subprime
auto loans this week.
You are seeing a frenzy of issuance,
said Jason Merrill, a structured specialist at Penn Mutual Asset Management.

The Fed left interest rates unchanged


when it met last week, and traders and
investors now bet the US central bank
will lift rates at its final meeting of 2016.
Investors in search of income have
been attracted to asset-backed securities, which tend to offer higher yields
than similarly rated corporate bonds.
Despite heightened demand, the highest-rated tranches in recent CLO deals
have yielded between 2.3 and 3 per cent,
above the 2 per cent yield on the Barclays US aggregate bond index.
The ABS market is on fire, said
James Shepard, co-head of investment
grade debt capital markets at Mizuho.
Whatever upsets this market is
unknowable. We point to the presidential election, but that is probably a bump
in the road. Something that completely
reverses things has yet to be determined.

$43.5bn
Value of
collateralised loan
obligations priced
so far in 2016

%
Yield achieved by
highest-rated
tranches of
CLO deals

Managers of asset-backed securities,


and in particular commercial mortgagebacked securities and CLOs, are also
contending with incoming risk retention regulations. The new rules will
force them to retain 5 per cent of the
economic interest of each new deal they
issue after December, prompting some
to rush to complete transactions before
the regulations come into force.
Several banks have increased their
projections for CLO issuance this year,
with most predicting between $50bn
and $60bn will be sold by years end. So
far, $43.5bn has been priced in 2016.
It could become more difficult to
issue in a couple of months around the
election time and as the final stages
of risk retention implementation go into
effect at year-end, said Darrell
Wheeler, head of global structured
finance research at S&P.

Analysis. Exchanges

CBOE-Bats tie-up poised to shake up sector


Deal propels Chicago futures
and options platform into
cash equities, ETFs and forex

CBOE makes bid for Bats


Share of US options market (volume
share by exchange, Sep 2016)
CBOE

Nasdaq + ISE

PHILIP STAFFORD LONDON


NICOLE BULLOCK NEW YORK

It has been known as the small, unheralded exchange from Chicago but at a
stroke CBOE Holdings has forced a reevaluation of its standing in the market.
The surprise $3.2bn deal to buy Bats
Global Markets is the largest in the
CBOEs 43-year history and momentarily draws the spotlight away from its
crosstown rival CME Group, the worlds
largest futures exchange.
And despite the low-key approach
from both sides, it is also a deal that
promises to redraw the exchange industry landscape in North America.
According to the companies managements, a combination is about putting
together the CBOEs popular and longcoveted dominance in trading Vix and
S&P 500 options with Bats acknowledged cutting-edge technology.
We are the product innovator in the
space, says Ed Tilly, chief executive of
CBOE.
Bats is the low-cost disrupter in
this space. Together, and with the data
spun off their exchanges, [this] feeds
perfectly into our growth and the industrys move into more sophisticated
strategies.
Yet as analysts and rival industry
executives are aware, it is a more transformational deal than that.
It moves CBOE out of the closeknit futures and options world of
Chicago, the self-styled trading capital of the world, and brings it for the
first time into the unfamiliar territory of
US and European cash equities,
exchange traded funds and foreign
exchange.
Kansas-based Bats, once a start-up
backed by global banks and launched by
a former high-speed trader, has
expanded, also through mergers and
acquisitions, to overtake Nasdaq in US
share trading with a 20 per cent market
share, second to the New York Stock
Exchange. It also has a fifth of all European equities. The group went public in
April.
CBOE is buying growth, scale and
diversification, says Richard Repetto,
an analyst at Sandler ONeill in New
York.
You can spread your revenues over a
smaller cost base. You dont have to
depend on any single set of products.

29.2

34.8

10.9
17
BOX 2.3

Bats

MIAX 5.8

NYSE

US exchange valuations (ratio of


enterprise value to ebitda)
0

10

15

CBOE
CME
ICE
Bats
Nasdaq

Sources: OCC; Bloomberg

Bats has grown


via mergers and
acquisitions to
surpass Nasdaq
in US share
trading
Jason Alden/Bloomberg

Commodities

For market participants, the deal may


be felt most keenly in the US options
market, where Batss entry five years
ago precipitated a fierce competition for
customers. That hurt industry pricing
and has driven consolidation.
This year Nasdaq bought the International Securities Exchange, which operates three equity options markets, from
Deutsche Brse. Analysts wonder
whether fewer parent companies would
mute the fierce competition.
The options market could change a
bit. The deal probably marks a bottom
in terms of multi-list options pricing.
Bats has been the primary driver of
compression over the past five years,
says Andrew Bond, an analyst at RBC
Capital Markets.
Multi-list options are those on single
stocks and ETFs versus index options
where CBOE has a proprietary business.
Once the CBOE-BATS deal closes, the
two parent companies combined will
control 10 out of 14 exchanges, accord-

ing to Tabb Group, a capital markets


consultancy.
The two companies have few other
overlaps. In cash equities I dont think
anything really changes they dont
operate in the same businesses at all,
says Christian Bolu, an analyst at Credit
Suisse.
The same applies in foreign exchange.
For that reason, few expect the deal to
hit antitrust issues.
Both realised they were smaller niche
exchanges compared with the two largest exchanges, CME and ICE, which both
had market capitalisations in excess of
$30bn. A CBOE-Bats tie-up is not only
likely to skirt competition issues their
larger rivals may face, it will give them
scale. The combined group will have a
market capitalisation of more than
$8bn.
There are limits to the exchange consolidation, there are nationalistic limits, says Chris Concannon, Bats chief
executive. Obviously, when you look at

the exchange business, they are multibillion companies now . . . but clearly
there are cycles of consolidation that
occur and you have to remember there
are new entrants into the market.
But in one respect the deal resembles
the growth path taken by another US
exchange that went from start-up to one
of the worlds largest in just 16 years
ICE.
ICE has switched focus in recent years
to selling lucrative data to investors. It
has a mixture of equities, commodities
and futures on one platform. Some
think the new exchange will do the
same.
This opens the door for them to
charge a lot more for market data, says
Larry Tabb, co-founder of Tabb Group.
Bats has not monetised its market
data and infrastructure as significantly
as Nasdaq and NYSE. That is probably
worth the whole price of admission.
Additional reporting by Arash Massoudi in
London

Capital markets

Nickel prices rise after Philippine mine closures Luxembourg launches green bond platform
HENRY SANDERSON AND
HUDSON LOCKETT

The Philippines decision to suspend


half of its mining operations for failing
to meet environmental standards
boosted nickel prices yesterday, signalling a further recovery in its fortunes
after it hit a 13-year low earlier this
year.
The metal, used to make stainless steel,
jumped 2 per cent on the London Metal
Exchange to $10,705 a tonne after the
Philippines ordered the suspension of
20 mines in the country for failing to
meet environmental regulations. Shares
in nickel producers also rose.
Nickel has been one of the bestperforming commodities this year
since its February nadir, advancing 19
per cent.
The metal has been propelled by

investors anticipating a supply crunch


following the election to office of President Rodrigo Duterte. His environment
and natural resources secretary Regina
Lopez quickly launched an audit on
mining in the country.
That has helped lift the fortunes of
nickel, which is important for companies such as London-listed Glencore,
which produces the metal from mines in
Australia and New Caledonia.
The audit results, which were
released yesterday, found only 11 mining operations out of 41 complied with
the countrys environmental and mining legislation.
The resources of the country must
be utilised in such a way that these
will benefit the greater majority, Ms
Lopez told reporters, according to
the Department of Environment and
Natural Resources Facebook page.

Analysts at Goldman Sachs said


together with seven nickel mines previously suspended, the total production
lost was 223,000 tonnes, or 11 per cent of
global supply.
The shutdowns are likely to further
tighten the global nickel market,
which is already in a supply deficit
in any case, analysts at Commerzbank
said. They added: In our view this justifies higher nickel prices.
The 20 mining companies have seven
days to respond to the audit.
Its not definite those 20 will get
to close, David Wilson, an analyst at
Citi, said.
Shares in Australian nickel producers
Western Areas and Independence
Group advanced 10.9 per cent and 3.9
per cent, respectively, yesterday. Nickel
Asia Corp, a Philippines-listed producer,
also rose 2.7 per cent in Manila.

GAVIN JACKSON AND PHILLIP STAFFORD

It is getting a bit easier to be green. The


worlds first platform for trading environmentally friendly securities was
launched yesterday by the Luxembourg Stock Exchange.
It comes amid increasing interest in
socially conscious investment. Morningstar estimates that the amount
invested in such funds available for sale
in the UK has grown 33 per cent over the
past two years.
So-called green bonds, which will be
traded in a new market known as the
Luxembourg Green Exchange, are
meant only to raise money that is used
for environmentally friendly purposes.
But new issuance of these bonds has
been held back by the need to establish
consistent standards and the added cost
to borrowers of ensuring they are met.

There is a need to have access to a


platform that has green on the door and
then behind that door everything actually is green, said Robert Scharfe, chief
executive of the Luxembourg Stock
Exchange.
Those who might sell the bonds feel
uneasy, he said, given there is no standard documentation while investors face
the risk of getting greenwashed. The
idea is to have an exchange where both
parties can feel safe, he said.
All bonds listed on the new exchange
must be self-declared as environmentally friendly, or those in which the proceeds are earmarked for green purposes
and come with a means of monitoring
whether these standards are met several years after the debt has been issued.
The 114 green bonds with a collective
value of $45bn currently listed with the
Luxembourg Stock Exchange will move

to the new platform. Green bonds are an


emerging sideline for exchanges as they
seek to be a more investable asset class.
The London Stock Exchange Group and
Oslo Bors have heavily pitched to overseas investors for business.
The first green bond was launched in
2007 by the European Investment Bank
and the World Bank. The idea of the
scheme is to mobilise investment for a
transition to a low carbon economy.
Although still small, issuance has
grown and 2016 will be the fourth
straight year of record sales. So far
$51.4bn has been sold this year, bringing
the total outstanding to $142bn, according to the Climate Bond Initiative.
The debt has the same regulatory status as other bonds. This year NTPC, the
Indian energy group, listed the worlds
first offshore green bond, raising $300m
and delivering a 7.48 per cent yield.

21

FINANCIAL TIMES

Wednesday 28 September 2016

MARKETS & INVESTING


Global overview

TRADING POST

Jamie
Chisholm
With Wall Streets S&P 500 once again
easing back from record highs, there is
inevitable chat about whether this bull
run has reached its peak.
Time for another look at the handy
Bull Market Top Checklist provided
by Strategas, the New York-based
research boutique.
Of the nine factors it cites, only one
is flashing red, it believes, and that is
weakening upward earnings revisions.
The third-quarter results season will
start in a few weeks, so well soon see
how that plays out.
Other issues are more benign. Credit
spreads are not signalling angst and
rising real interest rates are not a
concern 5yr to 5yr break-even
expectations have deteriorated from
a year ago as the outlook on growth
has come in, Strategas says.
Next, initial public offering market
and M&A activity have not hit levels
that suggest building exuberance.
Market internals remain supportive
too. There is little sign of an erosion
of stocks making new highs or a
significant shift towards defensives
becoming the market leaders.
But arguably the most important
factor to note is that, unlike the last
two tops in 2000 and 2007, there is
scant evidence of speculative excess.
We have seen trundles higher but
no blow off top that might suggest
panic buying.
Retail participation in the market
rally continues to be conspicuous by
its absence, Strategas notes.
Inflows into equity funds compared
to bond funds still remain below levels
seen at prior peaks.
jamie.chisholm@ft.com

S&P 500 index


000

Sep 2015

2016

2.1
2.0
1.9
1.8
Sep

Source: Thomson Reuters Datastream

Fading hopes over Opec output


cut fuel volatility across sector
Brent falls and oil equities
slip on both sides of
Atlantic, while gains for US
Treasuries and German
Bunds reflect uncertainty
DAVE SHELLOCK

Steep falls for oil prices, lingering concerns about eurozone banks and some
encouraging US economic data left
stock markets struggling for a clear
direction as participants digested Hillary Clintons perceived victory in Mondays US presidential debate.
The dollar lost ground against the
majority of emerging market currencies
with the Mexican peso a notable gainer
on hopes that an election win for Mrs
Clinton would maintain the status quo
in terms of trade agreements with the
nation.
Gains for US and German government
bonds reflected the uncertain mood in
equity markets, although gold suffered
its first decline in seven sessions.
At midday in New York, the S&P 500
US equity barometer was up 0.3 per cent
at 2,153, recouping some of Mondays
0.9 per cent decline. Technology stocks
outperformed, helping the Nasdaq
Composite gain 0.6 per cent.
Consumer cyclical stocks found some
support from data showing that US consumer confidence had hit its highest
level for nine years in September,
according to the Conference Board.
We see this improvement as constructive for third-quarter spending
growth and . . . as further evidence of
the strength of the US consumer, said
Blerina Urui, economist at Barclays.
The pan-European Stoxx 600 index,
however, inched up less than 0.1 per
cent and the Xetra Dax in Frankfurt
shed 0.3 per cent as financials suffered
further losses, although Deutsche Bank
recovered from an early 3.5 per cent

Sky was a gainer yesterday amid a


retread of speculation that 21st Century
Fox, its biggest shareholder, might be
drawn into another takeover approach.
Kepler Cheuvreux turned positive on
Sky with an 11 target price. Worries
about football broadcast rights inflation
and a potentially shrinking market
mean Sky has derated to a 45 per cent
discount to its historical average, which

drop to a fresh record low to close


unchanged.
Worries about the banks capital position have intensified in recent weeks,
fuelling concerns about the rest of the
sector and helping prompt German
Landesbank NordLB to postpone a
bond sale.
With the German government
refusing to comment on whether or
not it will offer help, there are some
analysts and investors who fear a European version of the Lehman Brothers
bank collapse that heralded the 2008
crisis, said Paresh Davdra at RationalFX.
Elsewhere, energy was the worst-performing equity sector on both sides of

puts its UK business on an implied


valuation of just seven times earnings
versus a sector at 16 times, said the
broker. In our view, this huge valuation
gap may revive interest from 21st
Century Fox, it told clients.
While [Fox chief executive James]
Murdoch said at a recent conference
that Fox was not lining up big deals in
the short term, the 15 per cent decline in
the pound, and a 23 per cent share price
fall in Sky year to date, has made it
nearly 40 per cent cheaper than what it
was in dollar terms.
On trading, Kepler forecast Skys
revenue growth to keep outpacing peers
thanks to innovations such as its Now
TV streaming service and AdSmart, its
personalised advertising platform.
And on broadcast rights, the broker
highlighted that Skys English and
German top-league football deals run
until 2020 and 2021, respectively, which
is said gives the company a two-year
period of exceptional visibility on
major sports costs.
Sky closed up 1.6 per cent at 847.5p.
Oil stocks led the wider market lower
after Iran damped hopes that todays
Opec meeting might reach an
agreement to freeze output.
The FTSE 100 was down 0.2 per cent,

off 10.37 points, to 6,807.67 as Royal


Dutch Shell B fell 2.2 per cent to 18.83
and BHP Billiton was down 1.5 per cent
to 10.78.
Glencore was down 0.7 per cent to
208.3p with Canaccord downgrading to
hold on valuation grounds.
Standard Chartered led the banks
lower, losing 2.5 per cent to 610p.
Deutsche Bank repeated sell advice
on StanChart in research, arguing that
pressure on returns for Asian banks is
structural rather than cyclical, meaning
the pace of earnings recovery is likely to
be slower than investors expect.
Mitie eased 2.4 per cent to 180.4p.
Investec, in belated response to Mities
profit warning last week, cut the
outsourcer off its buy list. Uncertainty
over the outlook means the shares merit
a 20 per cent discount to peers, it said.
Packaging maker Smurfit Kappa lost
2.4 per cent to 17.29 after Jefferies
downgraded to hold.
Jefferies cited a 20 per cent year-todate rise in the price of cardboard used
as raw material for recycling.
Johnston Press rose 1.2 per cent to
21p after Crystal Amber, the activist
investor said to be lobbying for the
newspaper publisher to restructure
debt, lifted its stake to 6.7 per cent.

2016

Sep

Day's
Indices
S & P 500

Close

change

2154.78

8.68

DJ Industrials

18184.30

89.47

Nasdaq Comp

5286.89

29.40

Russell 2000

1204.70

-8.35

13.40

-1.10

US 10 yr Treas Bd

1.56

-0.03

US 2 yr Treas Bd

0.74

Adam Samson

Bryce Elder

EM currencies react to US debate: FT.com/video


How emerging markets FX behaved after the US presidential
debate and what could happen in the election run-up

analysis suggests Lilly has generated


about 1 per cent of its cumulative sales
over the past five years from price rises
above the rate of inflation, compared
with 11 per cent at Johnson & Johnson
and 17 per cent at Pfizer.
That is an important positive, she
said, given drug price reform is at the
heart of Democratic presidential
candidate Hillary Clintons platform,
and since the issue has garnered
attention from both sides in Congress.
Looking at the pipeline, Ms Rubin
reckons several new product launches
have the potential to become
blockbusters, or drugs that generate
$1bn or more in annual sales.
She also said she now pinned 35 per

Jan

85
80
75
70

Source: Thomson Reuters Datastream

VIX

London
Sky advances after
21st Century Fox
takeover talk resurfaces

Joe Raedle/Reuters

cent odds of success on Solanezumab, a


drug Lilly is developing for early
treatment of Alzheimers disease, up
from 25 per cent previously.
Lillys shares climbed as much as 1.4
per cent in early trading but investor
enthusiasm waned by mid-morning,
with the shares up 0.5 per cent to $79.94.
They had fallen by 5.6 per cent this year
as of Mondays close.
Elsewhere, US energy shares came
under pressure as the price of crude oil
declined. US crude dropped 3.6 per cent
to $44.30 a barrel while Brent was down
3.5 per cent to $45.69.
Volatility in the energy market has
heated up ahead of an informal meeting
of Opec ministers that is scheduled for
today in Algiers.
There were early hopes that there
could be a long-elusive agreement for a
production freeze but expectations
have dimmed in recent days.
The S&P 500 energy sector skidded
1.3 per cent, by far the worst
performance on the benchmark index.
Chesapeake Energy, a natural gas
group, faced especially strenuous
selling, dropping 8.5 per cent to $6.06.
Southwestern Energy, an exploration
and production company, dropped 4.6
per cent to $13.08.
In midday trading, the S&P 500 rose
0.2 per cent to 2,150.1, the Dow Jones
Industrial Average advanced 0.2 per
cent to 18,137.8 and the Nasdaq
Composite climbed 0.3 per cent to
5,274.1

Share price ($)

Eli Lilly shares will rally by almost a fifth


over the next year given the
pharmaceutical groups slim reliance on
drug price increases and a strong roster
of treatments in its pipeline, Goldman
Sachs said yesterday.
The Indiana-based group is entering
a long-lasting period of accelerating
revenue and [earnings per share]
growth, analyst Jami Rubin said as she
upgraded her rating to buy from
neutral.
The diversified late-stage pipeline
will also propel many years of margin
expansion, Ms Rubin said.
At the same time, Lilly is more
insulated than rivals from increased
scrutiny over drug prices. Ms Rubins

S&P 500 index


Change on day

Aug

Eli Lilly

Wall Street
Accelerating revenues
will gild Lillys shares,
predicts analyst

Markets update

the Atlantic as Brent oil sank 3.2 per


cent to $45.87 a barrel reversing all of
Mondays advance as hopes faded for
a co-ordinated Opec production cut.
Crude oil continues to whipsaw as
the informal meeting between Opec
members in Algiers on Wednesday
approaches, said Ole Hansen at Saxo
Bank.
Hopes of a deal have been rising and
falling during the past week and the
almost binary nature of the outcome
has triggered rising volatility.
Meanwhile, emerging market currencies saw some big moves in the wake of
the first of three televised US presidential debates between Hillary Clinton and
Donald Trump.

The press verdict is that Hillary Clinton won but Donald Trump didnt lose
badly enough to really reduce the uncertainty, said Kit Juckes, strategist at
Socit Gnrale.
The market verdict is that the Mexican peso, the South African rand and the
Korean won all won, while the Japanese
yen was the loser.
The dollar hit a record high against
the peso in Asian trading within a
whisker of the 20 peso per dollar level
but subsequently fell back to 19.46,
down 2 per cent on the day.
David Rees at Capital Economics
noted that the pesos fortunes in recent
months had been closely tied with the
likelihood of Mr Trump becoming the
next US president.
That is hardly surprising, given that
Mr Trump has taken a particularly bellicose stance towards Mexico, he said.
And he has repeatedly talked about
pursuing more protectionist trade policies, which would be bad news for Mexicos open and US-dependent economy.
Elsewhere, the dollar was down 1.5
per cent against the rand and 0.9 per
cent versus the won. The US currency
was flat against the Canadian dollar at
C$1.3227.
But the euro was down 0.4 per cent at
$1.1210 while the dollar was less than 0.1
per cent higher against the yen at
100.39, leaving the dollar index up 0.2
per cent.
The US units broadly firmer tone
came in spite of a renewed rally for
Treasury bonds, which pushed the yield
on the 10-year note down 2 basis points
to 1.57 per cent.
The German 10-year Bund yield fell
3bp to minus 0.14 per cent.
Gold was down $10 at $1,326 a troy
ounce after rising 2.1 per cent over the
previous six days.
In the base metal arena, copper fell 1.1
per cent in London to $4,787 a tonne,
although supply concerns helped drive
nickel to a seven-week high.

0.39%

2016

Sep

2200
2180
2160
2140
2120

US equities Gains for technology and


consumer cyclical stocks helped push
the S&P 500 higher but the advance
was held back by weakness in the
energy sector as oil prices retreated

FTSE 100 index


Change on day

0.15%

6900
6800
6700
6600

Aug

2016

Sep

UK equities Energy stocks were the


worst performers in London as crude
prices came under renewed pressure
from doubts that leading producers
would agree a deal to limit output

Eurofirst 300 index


Change on day

0.06%

1380
1360
1340

Aug

2016

Sep

1320

European equities Financial stocks


continued to lose ground although
Deutsche Bank the main source
of recent angst about the sector
recovered from an initial sell-off

Nikkei 225 index


(000) Change on day

Aug

2016

0.84%

17.2
17.0
16.8
16.6
16.4

Sep

Japanese equities The Nikkei rallied


off a seven-week low struck in early
trade as the yen fell against the dollar
following the US presidential debate

Trading Directory

Trading Directory

Trading Directory
Runs Daily

.....................................................................................................................................................................................................................................................................................................................................................................................................................

Classified Business Advertising


UK: +44 20 7873 4000 | Email: acs.emea@ft.com

22

Wednesday 28 September 2016

Analysis. Currencies

INSIGHT

Traders rush to judgment with Clinton rally

Jonathan
Wheatley

Venezuela clutches at
straws in desperation
to avoid bond default

ow more than ever, investors in the highstakes poker game that is Venezuelas bond
market are focused on one question only: for
how much longer can the country put off what
many are convinced is an inevitable default?
In a broad sense, Caracas is already a serial defaulter. It
has defaulted on its people by denying them access to the
dollars they need for essential imports. It has defaulted on
its commercial partners, first by seizing their assets via
nationalisation, more recently by not paying their bills, so
the oil service companies it depends on to keep the petrodollars flowing have cut operations to a bare minimum.
It has even defaulted, in a partial and negotiated way, on
China, its one significant source of help in an increasingly
exasperated outside world. Beijing has lent the government an estimated $65bn, of which about $25bn has yet to
be repaid. In May, China agreed to accept only interest payments, putting off principal payments to a later date.
Only one of Venezuelas four groups of creditors is being
paid without fail, on the button, every time: its international bondholders.
To anyone left wondering why the leaders of the Bolivarian Revolution and 21st Century Socialism would make it a
priority to hand over scarce dollars to the running dogs of
western capitalism, even as their people riot for lack of
food and die for lack of medicines the answer is simple.
In a bond default, any assets outside Venezuela belonging to the government or to PDVSA, the national oil company, would become attachable, or liable to be seized by
Only one group
creditors. Not only would
PDVSAs overseas refineries of creditors is
disappear in a flash. Exports
paid without fail:
of crude, the governments
vital and only lifeblood, would its international
be catastrophically disrupted.
bondholders
It would be the end of the
world as adherents of
chavismo, the political movement founded by Hugo
Chvez, know it, and the apocalypse would not be orderly.
Those in power still hoping to engineer a transition next
year to a more acceptable form of chavismo-light assuming they can fend off the oppositions attempts to hold a
recall referendum would be cast into the void.
Hence the governments desperate clutching at any
straw to save it from the fall. The $7bn debt swap proposed
last week has been largely written off before it started, the
fact that no lawyers or investment bankers were prepared
to put their names to it being perhaps the least of its unappealing features. Kevin Daly of Aberdeen Asset Management, who holds some of the bonds covered by the offer,
says he will stick with what hes got. He will be one of many.
Yet even if the swap fails, it may not spell the end only
that Caracas will have to come up with something better.
While that moment is approaching, it is not here yet.
Orlando Ochoa, an economist who knows more than most
about the states finances, reckons the government will be
able to muddle through until next year. By the logic of the
chavistas, they would then be able to ditch the unpopular
president, Nicols Maduro, but still cling to power.
Such a transition would solve very little. Yet many
bondholders are still unfazed. A PDVSA bond maturing in
2017, on which a $2.3bn payment is due on November 2, is
trading at about 80 per cent of par hardly a sign of panic.
Even if Venezuela and PDVSA were to default, many
bond investors are confident of a healthy recovery value.
Venezuela, after all, has the worlds biggest proven oil
reserves. It is far from insolvent, just acutely illiquid.
How things pan out depends on the behaviour of Venezuelas other creditors. Its people have shown a remarkable capacity for suffering, perhaps because many of them
still believe chavismo has their interests at heart.
Its commercial partners have their eyes on the long
game. With Russian and Chinese oil companies still on the
ground, western service companies and the few surviving
oil majors have been reluctant to withdraw altogether.
That leaves China. Under the May agreement, it gave up
about $5bn in annual revenues from Venezuela. Many
believe its patience has run out, it is alarmed at the course of
events and would now support any government that can
make things better even if it is unclear if it would welcome
an opposition-led regime that might turn towards the west
andawayfromthetraditionalbackersofchavismo.

jonathan.wheatley@ft.com

More comment and data on ft.com


Y Fast FT Our global
team gives you marketmoving news and views,
24 hours a day, five days
a week. ft.com/fastft
Y Alphaville Our
irreverent financial blog.
Join Paul Murphy and
Bryce Elder for the daily
Markets Live session at
11am. ft.com/alphaville
Y beyondbrics News and
comment from more
than 40 emerging

economies, headed
by Brazil, Russia, India
and China.
ft.com/beyondbrics
Y Podcast The Hard
Currency podcast takes a
look at what is driving
the global currency
market. ft.com/podcasts
Y Lex Video Analysis
and opinion from the
team on the hot issues
affecting companies and
markets. ft.com/lexvideo

Strategists say forex market


overreacted to debate with rise
in Mexican peso and EM peers

Calmer US waters
Brexit trumps Trump so far in volatility

Yen

FX options skew*

10

Relief was the sentiment dominating


the foreign exchange market in the
aftermath of the first US presidential
debate as traders proclaimed Hillary
Clinton the winner over the candidate
investors fear, Donald Trump.
Such a feeling may not last long.
Because bound up in the markets reaction to the debate are nagging concerns
that traders have rushed to judgment,
have been complacent about the prospect of a Trump victory and are unable
to grasp how to price political risk.
Matthew Cobon, portfolio manager at
Columbia Threadneedle, detects what
he called a positive Hillary sigh of
relief in the FX market that generally
boosted emerging market and commodity currencies as the dollar eased.
The Mexican peso, a proxy for election risk given the Republican candidates repeated campaign promises to
build a wall along the USs southern border, deport illegal immigrants and renegotiate trade relationships, rallied as
much as 2 per cent as traders watched
the debate unfold.
But I would be surprised if thats the
end of the news front on this one, Mr
Cobon adds. I dont think the market
necessarily knows what the outcome
means yet. It has a broad idea that
Trump is bad and Hillary good, but its
not a well-formed idea.
If the pesos 2 per cent rise appears
extreme, bear in mind that the currency
had slumped 8 per cent in the two weeks
preceding the debate, and by 14 per cent
since May. Its been on a weakening
trend for a long time, says George Goncalves, Nomuras head of rates strategy.
Yet the post-debate mood was felt
elsewhere in emerging markets. The
Korean won, South African rand and
Indonesian rupiah benefited. The yen,

110
115
120

125
Feb
4

Dollar v Mexican peso

2016

Sep

Mexican peso
Against the dollar (peso per $)

20

19
18

0
120

100

80
60
40
Days before the election/referendum

20

* Disparity between different FX options prices


FT graphic Sources: Bloomberg; Thomson Reuters Datastream

I think we
are building
up a
crescendo
of political
risks on a
number of
different
frontiers

Pressure intensifies on
German bank groups

Deutsches shares fell 3 per


cent, hitting levels not seen
since the early 1980s, before
recovering to close flat amid
broader selling of European
banking stocks.
UniCredit closed down 1.8
per cent while Barclays was
down 1.3 per cent.
The market concerns contributed to NordLB, one of
Germanys five remaining
big Landesbanken, postponing the sale of a seven-year
senior unsecured bond.
Banks frequently sell senior
unsecured bonds in capital
markets as one way of funding the loans they make.
NordLB, which is under
pressure given its exposure
to the shipping market, told
investors that due to current market conditions it
decided not to go ahead with
the sale of the bond but said
it would re-engage with
investors in future.
The cancellation followed
Lufthansa, the German airline, pulling a bond sale on
Monday, also citing market
conditions.
Investors have sold European banking stocks and
debt this week, amid fears
about the capital position of
Deutsche which faces the
prospect of a big settlement
with US authorities over allegations of mis-selling mortgage-backed securities.
Deutsches riskiest bonds
dropped more than 2 per
cent to edge closer to the

105
8

Capital markets

Deutsche Banks share price


hit a new three-decade
low and German Landesbank NordLB postponed a
bond sale yesterday, amid a
renewed bout of investor jitters over the state of the
European banking sector.

100

Dollar v sterling

ROGER BLITZ

JAMES SHOTTER FRANKFURT


THOMAS HALE LONDON

Against the dollar ( per $)

lows that they touched in


February, with a 1.75bn
contingent convertible, or
coco, bond trading at 71.5
cents on the euro before later
rising.
Deutsche Bank is reminding people of January, February time and theyre being
a bit more risk-averse, said
Chris Telfer, a portfolio manager at ECM Asset Management, referring to the brutal
sell off in banking stocks at
the beginning of the year,
prompted in part by concerns that Deutsche might
miss payments on some of its
riskiest debt.
Concerns about Deutsches
capital strength have intensified after the US Department
of Justice made an unexpectedly high opening request of
$14bn from the German
bank to resolve the allegations of mis-selling.
Deutsche insists it has no
intention of paying anywhere near this amount,
which is more than double
the 5.5bn in provisions that
it has set aside to deal with its
legal entanglements, which
include investigations into
10bn of potentially suspicious transactions involving
its Russian business.
Deutsches efforts to reassure investors took a blow
over the weekend, however,
after a German magazine
claimed that chancellor
Angela Merkel had ruled out
intervening in Deutsches
stand-off with the DoJ, or
rescuing the bank ahead
of elections in Germany
next year.
Ms Merkel declined to
comment directly on the
possibility of state aid for
Deutsche yesterday.
Additional reporting by Stefan
Wagstyl in Berlin and Claire
Jones in Frankfurt

which traders expected to strengthen in


the event of a strong performance from
Mr Trump, weakened.
All this amounted to an overreaction, says Mr Goncalves, a view shared
by Stephen Jen, chief executive of asset
manager Eurizon Capital.
The polls will barely be affected by
this debate as the issues involved in the
presidential elections are complex, and
it is way too premature to draw conclusions, says Mr Jen.
Investors with a gnawing sense of dj
vu probably lived through the climax of
the Brexit campaign. As the spot market
gyrates to the respective opinion poll
fortunes of the presidential candidates,
so sterling was bought and sold as pollsters plotted the likelihood of success
for the Remain and Leave camps in the
UK referendum.
Further parallels are detected in the

17
March

2016

Sep
Photos: Getty

FX options market, which provides a


window into the extent of future shifts
in a currency. This sector indicated sterling could well plunge towards $1.30 in
the event of a Brexit vote to leave the UK
and that expectation was swiftly vindicated in June. Similarly, current options
pricing for the Mexico peso is elevated
ahead of the US election in November.
Do not think the worst has passed for
the peso, says Michael Metcalfe, head of
macro strategy at State Street Global
Markets. Brexit implied volatility levels
are more than double where they have
reached for the peso, so the markets
could price in a lot more volatility, says
Mr Metcalfe.
Markets may be best advised to consult their Brexit notes for assessing US
election risk, but not all political events
are in the same bracket.
Spains problems in forming a govern-

ment have had little impact on FX or


fixed income, Mr Metcalfe points out,
and there may be a similar degree of
benign neglect towards the upcoming
referendum on the Italian constitution.
Not all political risk is equal, he says.
But there is little sign of it going away.
I think we are building up a crescendo
of political risks on a number of different frontiers, says Mr Cobon Brexit,
the US election, Europe. Its all kind of
semi-related.
This Clinton relief rally may have little substance or logic to it. But for Mr
Jen, it has one advantage.
Regardless of whether the market
reactions have been excessive, they give
a good indication for how the markets
would absorb the election outcome, Mr
Jen says.
Few investors would find much relief
in that.

FT SPECIAL REPORT

Yachts & Marinas


Wednesday September 28 2016

www.ft.com/reports | @ftreports
elections, says Mr Redmayne.
Financial market instability in the
lead up to the UKs vote to leave the EU
had a knock-on effect in the yacht market and subsequent falls in sterling led
to a few charter cancellations from British customers. In spite of political
uncertainties, brokers are reporting
that the charter market has held
together surprisingly well.
For most its been a very good charter season despite the difficulties in the
eastern Mediterranean. Yachts simply
moved to the western Med, which has
enjoyed a good summer, says Jonathan
Beckett, chief executive of Burgess, the
yacht brokerage. The attempted coup
in Turkey, however, is not going to be
helpful.

Monte Carlo
buyers on the
hunt for luxury
bargains

People are buying boats


between 40m and 65m but
some bigger boats are not
selling at the moment

Suppliers of luxury vessels to the super-rich face


choppy waters ahead, writes Richard Donkin

achting, for so long a


byword for leisure at sea, is a
term that derives from the
Dutch verb for hunting.
Today it could just as easily
be applied to the global marketing of
prestige boats where stalking customers
has been turned into an art form.
Nowhere is that more evident than at
this weeks Monaco Yacht Show, the
worlds most important gathering of
shipbuilders, brokers and enthusiasts,
drawn to the opportunity to see the best
that yachting has to offer.
Walk along the quayside in Port Hercule and it is easy to be seduced into
thinking that all is well in the industry.
But brokers and yards report persisting
tough market conditions even though
the best yards can still boast healthy
order books.
Of course the likes of [boatbuilders]

Feadship, Lrssen and Amels continue


to do well, says Martin Redmayne,
chairman of the Superyacht Group, a
specialist industry publisher, but when
you read some of the promotional guff
in the yachting media its like Botox
papering over the cracks.
The fortunes of different segments of
the market vary considerably, he adds.
Refit is doing well and so is charter,
though terrorism has made Turkey a
scary place and the lorry attack in Nice
led to cruising and charter cancellations. Americans are thinking twice
before they come to Europe.
Currency fluctuations have also
prompted some disruption and delays
in decision-making in the market. So
too have months of political uncertainty
in the US where a lot of Americans are
waiting to see whether Donald Trump
succeeds or fails in the US presidential

Buyers ahoy: crowds at the Monaco Yacht Show

Brokerage of second-hand yachts, he


says, has had mixed success. It seems
that people are buying boats between
40m and 65m but some of the bigger
boats are not selling at the moment,
says Mr Beckett.
The market is taking a keen interest in
two new Feadship yachts put up for sale
by their owners before taking delivery.
Feadship yards are among those with
strong forward-order books, a situation
that can tempt owners awaiting delivery
to try and sell on their yachts, sometimes at a premium to what they have
paid the yard. This may explain why the
two Feadship yachts close to delivery,
the 92m Aquarius and the 96m Vertigo,
have been put on the market for $215m
and 195m respectively.
Its very rare to see two 90m yachts of
this calibre, for sale and ready to sail
Continued on page 2

Inside
Manufacturers remain
stuck in the doldrums
Tightening order books
give potential buyers
the advantage
Page 2

Life below the waves


Submarines are joining
the list of ultimate
onboard accessories
Page 3

Taking the plunge


A quick guide on how
best to buy the boat
of your dreams
Page 3

Art lovers grapple


with life at sea
Seizure of a Picasso
portrait from a yacht
highlights
problems
Page 4

Classic vessels offer an


echo of history
Rescuing old yachts has
an irresistible appeal for
some owners
Page 4

FINANCIAL TIMES

Wednesday 28 September 2016

Yachts & Marinas


Supply and demand Tightening order books give
buyers the advantage, says William Mathieson

Sailing yacht
makers remain
stuck in the
doldrums

eadline-grabbing deliveries of luxury vessels to billionaires Alisher Usmanov


and Sir Philip Green over
t h e p a s t ye a r h ave
attracted the interest of paparazzi, as
well as political controversy over how
the funds used to pay for these assets
were secured.
Certainly, superyachts have rarely
been more prominent in the news as a
focus of popular interest in how the
super-rich choose to reward themselves
for their endeavours.
But despite popular misconceptions,
the global market for newly built
superyachts defined here as yachts
with an overall length of 30m or more
continues to be blighted by uncertainty.
And it is the sailing yacht segment that is
suffering most of all.
Orders of sailing superyachts have
declined, with the number of such vessels delivered annually to their owners
falling by half in the period 2011-15.

It might be premature to declare this a


market collapse. After all, the commissioning of very large sailing yachts has
always been a niche within the sector.
However, the number of new yachts hitting the water as a whole is falling, as is
the number of new orders that are
intended to replenish the builders
inventory.
The sharp fall in orders being placed
for large sailing yachts does reflect in
part a broader malaise in demand for
the most luxurious vessels (as seen in the
graphic above right). However, this sailing segment of the market has experienced the sharpest contraction in
demand when compared with the boom
times of the past decade.
The percentage of larger sailing yacht
deliveries within the overall superyacht
market has fallen from 15 per cent in
2011 to just over 8 per cent in 2015.
The limited placing and completion of
orders in this specialist category of vessel is bound to make the turnover and

By yacht type and size

Sailing yacht deliveries


5-year review

Sailing yacht

Sailing yacht

FT graphic Source: Superyacht Intelligence Agency Photo: Onne van der Wal

Buyers of superyachts hold


the cards and the shipyards
must meet their demands

Monte Carlo buyers on the hunt


for luxury boat bargains
Continued from page 1
away brand new, says yacht broker
Chris Cecil-Wright.
Not content with a Lrssen yacht of
110m one of the biggest in the world
Alisher Usmanov, the Uzbek-born billionaire, this year took delivery of a
156m yacht from the same yard. The
yacht, named Dilbar after his mother,
has the largest volume and gross tonnage of any superyacht. Should Mr
Usmanov choose to moor his yachts end
to end, they would be just a few feet
short of the length of the Titanic. His
older yacht, Ona, is now on the market
for 250m.
Multiple ownership of superyachts is
not uncommon. Paul Allen, the cofounder of Microsoft, has three big
yachts: Octopus, Tatoosh and Meduse.
Jim Ratcliffe, chief executive and leading
shareholder of the Ineos chemicals
group, has two Feadships, Hampshire
and Hampshire II. Tara Getty, the oil
heir, has two classic superyachts, Blue
Bird and Talitha. Meanwhile Andrey
Melnichenko, one of Russias richest
businessmen, will soon take delivery of
one of the worlds biggest sailing yachts,
Sailing Yacht A, from Nobiskrug in Germany. His Blohm & Voss-built motor
yacht, also called A, is on the market at
$300m, according to brokers.
Some of these owners belong to a
more adventurous cadre of billionaires
who want to use their yachts for exploring the oceans. Mr Getty took Blue Bird
looking for treasure in the Pacific while
Mr Allens yachts have navigated the
North West Passage five times.
Espen Oeino, the yacht designer,
believes that lifestyle is having an
increasing influence on yacht design.
Fifteen years ago, yachts often
anchored off hotels so that their owners
and guests could use the spas, he says.
Thats all changed in the latest big
yacht designs. Today spa treatments

Deliveries

Order book breakdown

have been brought on board, so that the


beautician may double up as a hairdresser and physiotherapist. Other crew
members may be qualified diving
instructors or kite surfers.
He adds that one owner of a yacht
launched this year is an avid surfer and
extreme skier. To accommodate these
interests, he had a ski room installed on
the top deck and a helicopter pad to get
closer to the kind of places that allow for
these pastimes.
The yacht, therefore, has become a
lifestyle and entertainment platform,
says Mr Oeino. People are looking for
more exciting things to do and a yacht
offers the means to achieve those
dreams.
Makers of production-line yachts are
responding to demand among potential
owners for higher specifications of

equipment. Sunseeker has had five new


model launches in 2016 and the company announced that it moved back into
profit in the second quarter for the first
time since Chinese owner Dalian Wanda
took over in 2013. I came in with a turnround plan and weve gone beyond that
now with new investment, says chief
executive Phil Popham.
Its main British rival, Princess Yachts,
is also investing under the chairmanship of Antony Sheriff, applying principles he learnt managing the sports car
production side of McLaren, the Formula One racing team. The quality of
the build is one thing, but the quality of
aftersales support must be special too in
order to build the brand, he says.
This years fall in the value of sterling
provided a shot in the arm for UK boat
exports. Princess reported its best sales
in 10 years at the recent Cannes Yachting Festival. But Cornish boatyard Pendennis says the benefit should not be
overstated. The weaker pound has generated more inquiries, but it also means
that some of our supplies have become
more expensive, so you have to look at
where the balance lies, says Toby Allies,
sales and marketing director.
On a worldwide scale, the big yacht
market remains pallid compared with
its heady state a decade ago. Further
industry consolidation has not been
ruled out by some observers. Barry Gilmour, executive chairman of Royale
Oceanic, the superyacht services company, says: A lot of yards that were
promising to do well at one time have
faded away.
Peter Lrssen, chief executive of the
Lrssen yard, points, however, to the
robustness of extreme wealth. Fortunately we have been proved wrong
[about the market] many times over.
The next three to five years will show
where we are heading. We are not yet
back to the boom times.

Richard Donkin
FT yachting correspondent

Michael Kavanagh
Commissioning editor

victoria.roberts@ft.com, or your usual FT


representative.

William Mathieson
The Superyacht Report editor

Steven Bird
Designer

Don Hoyt Gorman


Superyacht journalist and consultant

Alan Knox
Picture editor

All editorial content in this report is


produced by the FT. Our advertisers have
no influence over or prior sight of the
articles.

Simon de Burton
FT contributor

For advertising details, contact:


Victoria Roberts, +44 (0) 20 7873 3226,

Contributors

All FT Reports are available at:


ft.com/reports
Follow us on Twitter @ftreports

cash flow of specialist suppliers unpredictable. But such a persistent decline


has focused minds on how best to cope
with such straitened market conditions.
Speaking at the Italian Superyacht
Forum last year, Franco Torre, then a
senior executive at Perini Navi, a yard
which is one of the worlds leading exponents of sailing yacht construction,
explained: The sailing market has only
historically had four to six clients each
year. There are three or four competitors going for those clients so its just a
question of who gets the business.
Royal Huisman is one of the industrys most respected sailing yacht builders, employing 380 staff centred at a
30,000 sq m shipyard in the Netherlands. The business has two yachts
under construction, measuring 56m
and 58m in length, which are both due
for completion in 2017.
Roemer Boogaard, managing director
of the business, is acutely aware of the
need to replenish new orders, even for a

company that appears to be outperforming its peers.


Since the dollar-euro is very good for
the Americans, we still have a good market there, he explains, but we are also
exploring the Far East and the Middle
East. In the long term, there will be a
shake-out of shipyards, he predicts. But
this should allow surviving builders to
emerge with a stronger market position
than they command now.
Mr Boogaards compatriot Joachim
Kieft heads Claasen Shipyards, a builder
best known for smaller sailing vessels,
which has launched only four superyachts to date. The yard currently has a
35m project on hold and is on the hunt
for buyers to supplement smaller
projects the yard currently has in the
shed.
Such a state of affairs might appear
grim. But Mr Kieft argues: The state [of
the market] is getting better, particularly for yachts that can sail worldwide.
As things stand, the buyers of both

motor and sailing yachts hold the cards


and the shipyards must meet their
demands.
In short, customers are in a strong
position to press for yachts that are built
to a high specification, delivered in the
shortest lead times, and at the keenest
price.
Exemplary aftersales support is also a
must, says Mr Kieft. Poor service breeds
poor orders, he argues, as it undermines
the reputation of a builder. Owners are
part of our sales team and, if they talk
positively about our product, they are
spreading the word.
The shipyards that can balance these
requirements should win orders.
There are 64 shipyards classed as
active that is, building a sailing
yacht or having delivered one within the
past five years. These builders are competing for just 34 orders at the time of
writing. This suggests there will be a
contraction in the number of builders
over the coming years.

Wednesday 28 September 2016

FINANCIAL TIMES

Yachts & Marinas

A luxury view of life under the oceans waves


outlook. The pilot sits behind the passengers to monitor the systems and
drive the sub with a relatively simple joy
stick-equipped Manta box, which is
wireless-operated. This box can be used
by the passengers, too, and also serves as
a remote control unit for manoeuvring
the sub around the yacht while it is on
the seas surface.
With four, electrically-driven propellers mounted on either side of the vessel
that are each powered by 50 lithium-ion
batteries, the Super Yacht Sub 3 has a
top speed under water of 2.8 knots and
can stay submerged for up to six hours
at a time.
Three models are available with
depth ratings of 100m, 200m and 300m
which range in price from 1.5m before
tax to 1.7m.

Accessories
Sub-surface craft are
emerging as the
ultimate in onboard
accessories, says
Simon de Burton

nflatable water slides, jet skis and


stand-up paddle boards all make
useful additions to a superyacht toy
cupboard but there are few owners who would not like to offer their
guests a trip beneath the waves in a miniature submarine.
Such craft have long been regarded as
the ultimate in onboard accessories but,
until recently, they have mainly been
the preserve of commercial and military
buyers due to factors such as price,
safety, the qualifications required to use
them and the logistics of getting them on
and off the mother ship.
Over the years, a number of companies have attempted to produce miniature subs for the leisure market but
most such projects have, in a commercial sense, sunk without trace. One
maker, however, appears to have hit on
the right formula after more than a decade of developing and refining its original design.
The outfit in question is called U-Boat
Worx. A Netherlands-based company
set up by Dutch software tycoon Bert
Houtman in 2005, its first product was
the single-seater C-Quester 1 which
went on sale the following year.
Two more single-seat models followed before the company moved to
higher-capacity craft after potential
buyers expressed a desire to be able to
carry passengers.
We soon found that most people
were interested in larger submarines
with more seats so, in 2008, we
produced the first C-Quester 3, a
three-seater which really took us out
of the hobby field, says Erik Hasselman, the commercial director of U-Boat
Worx. The fact that it was fully
certified helped us to be recognised
as a serious company, and weve now
delivered more than 20 vessels, around
70 per cent of which have gone to

All aboard: the U-Boat Worx Super Yacht Sub 3 in action


private owners for recreational use.
The downside of being able to carry
more passengers is a larger, heavier,
more unwieldy vessel that causes
problems when it comes to storing on
board and loading and unloading from
a yacht. These are problems U-Boat
Worx now appear to have cracked with

Few super-rich customers


have time to learn how to
pilot the sub themselves

the recently introduced Super Yacht


Sub 3 which has been designed specifically to be used from private yachts.
Measuring 315cm long by 241cm wide
and 172cm high, it weighs 3,750kg when
dry and is fitted with multiple lifting
points so it can easily be craned on and
off the yacht for recovery and launch.

The distinctive-looking craft features


a large acrylic sphere at the front
that houses two passengers and affords
a spectacular view of the area being
explored. Said to be the most expensive
component, the spheres are made in
the UK and hand-polished for 200 hours
to ensure they offer a crystal-clear

eassuringly, the sub is replete


with state of the art safety
devices. It will automatically
ascend, for example, if its
controls are left untouched
for more than 10 minutes and, in the
event of an onboard fire, the main oxygen supply shuts off while the occupants
switch to an emergency air system until
reaching the surface.
Using the sub, however, is not simply a
matter of climbing in and setting off to
explore. Prospective pilots must attend
a two-week course to learn about the
controls and systems, during which they
will undertake simulated and practical
dives.
According to Mr Hasselman, few of
his super-rich customers have time to
learn how to pilot the sub themselves.
Most delegate a suitable member of the
yachts crew and content themselves
with having an occasional, supervised
attempt by taking over the Manta control unit.
The Super Yacht Sub 3 has a range of
accessories including an articulated
arm for picking artefacts from the seabed (64,000), a tracking system to
ensure the sub never goes missing
(75,000), a high-definition video camera for recording ones expeditions and,
best of all, a flyout, remote-controlled
rover vehicle.
But even the super-rich might have to
dig deep for that one it is priced at
190,000.

A guide to how to pick and


buy the boat of your dreams
Broking

Try before you buy and


other purchasing tips from
Richard Donkin
If your heart is set on owning a super
-yacht, where should you start? For
most, the journey to ownership starts
with a first encounter an invitation to
spend time on a friends yacht or a
charter holiday.
Most brokers recommend charter as a
sensible course before committing to
buying. Once you have sampled a few
yachts, toured the yacht shows,
thumbed the brochures, spoken with
brokers and checked your bank
account, what next?
A period of reflection would be wise,
including discussions with other owners
about the pros and cons of running a
yacht. You will learn about the costs
mooring fees, fuel bills, maintenance,
crewing bills, taxes, insurance, legal fees
and broker commission, should you
choose to use a broker.
The super-rich take these sundries in
their stride. But even the sharpest of billionaires can be caught out if a yard collapses mid-build. Due diligence on
builders is important. The best yards
are well known, but choosing one can
prove tricky since the most popular
have order books with delivery times, in
some cases, of up to five and six years
ahead. How much time do you have?
For a first purchase, one option is to
explore the second-hand market. Credible buyers can drive hard bargains in
the market just now. But they must
show some intent if they are to ensure a
brokers goodwill.
Part of my job is to put serious buyers with serious sellers. Its a waste of
everyones time if a buyer goes a way
down the route to committing himself
and then the owner turns around and
says hes changed his mind, says Chris
Cecil-Wright, a boutique yacht broker
with 25 years of experience.
The first thing I try to do with a
potential buyer is establish a relationship because the experience of buying
or building a yacht should be fun. I need
to know who they are, who their family
and friends are and what they like to do
whether theyre a flashy show-off or
whether theyre introvert.
A good broker, he says, knows about

Dealmaker: Chris Cecil-Wright


boats that are not for sale but whose
owners might part with them, given the
right approach. What Im looking for is
a boat with a sensible asking price thats
been well maintained and with an
owner ready to sell.
Mr Cecil-Wright has a database of
yachts and owners that he believes gives
him an advantage in the marketplace
when competing with bigger brokers
with larger overheads.
Jonathan Beckett, managing partner
at Burgess, one of the leading yacht brokerages, begs to differ. He says that boutique brokers can struggle to match the
day-to-day market intelligence shared
among a big team of brokers working
together. Its not unusual for us to have
boutique brokers calling us up and ask-

An owner who likes a


particular yard might
approach the yard directly
ing what price such-and-such a yacht
sold for. They dont know the transaction history but because of our size we
may have sold the boat we often know
this information.
Ive had owners saying Surely everyone knows my boat is for sale, only to
have to tell them of potential buyers
who had no idea it even existed.
Boutiques just dont have the same

intelligence that we have and dont


know everything when dealing with the
highest level of client.
One thorny issue is the question of a
brokers commission. Who pays it? And
if a yard is paying the fee, can a buyer be
sure of a brokers independence? The
most important thing is for a broker to
be transparent about such payments so
that a client can see how fees are apportioned, says Mr Beckett.
For new builds, a buyer usually needs
a broker. But some start with a designer.
Dickie Bannenberg, head of Bannenberg and Rowell, the design team, says:
A client can come to us and we can start
the project on paper, looking at the possibilities and whats needed.
We have a very large project weve
been working up for two years with
BMT, the naval architects all pre-engineering and pre-designing before we
went to a shipyard, he adds. Im not
dismissing brokers, but with a reasonably experienced, savvy owner who
doesnt want to be bound by brokers or
shipyards saying something cant be
done, to approach a build in this way can
be an exciting alternative.
Putting builds out to tender is common among experienced owners who
understand the business, says John Leonida, a superyacht lawyer at Clyde & Co.
An owner who likes a particular yard
might approach the yard directly. Others will appoint a broker to take them
through the process, acting as an agent.
A reputable broker, who is being paid by
the yard, will explain what is happening
and most owners will accept that. But
some might insist on paying the broker
themselves and would expect the yard
to reduce its price accordingly.
Equally, he says, buyers might ask a
lawyer experienced in the field to act as
an adviser in a deal. Brokers are an easy
target, but a good yacht broker adds a
lot of knowledge to a deal. They can
direct the owner to the kind of boat
thats right for them.
When a price is agreed with a seller,
both parties enter into a memorandum
of understanding that includes provision for a four-hour sea trial at the
expense of the seller, dates to confirm or
reject the deal and dates for a survey. A
10 per cent deposit is paid on signing the
MOU. The parties then have four weeks
to tie up any issues and close the deal.
Once all that is over, it is time to swallow hard and pop the champagne. You
have just bought a superyacht.

FINANCIAL TIMES

Wednesday 28 September 2016

Yachts & Marinas

Classic vessels that offer an echo of history


Restoration Identifying
and rescuing historic
yachts has an
irresistible appeal for
some owners, writes
Richard Donkin

n the week before next years


Americas Cup in Bermuda, the biggest fleet of J-Class yachts assembled since the 1930s will gather and
race off the islands in a reminder to
modern crews that the worlds oldest
sporting trophy was once contested by
these ocean-going icons of sail.
Owning and running a J-Class yacht is
beyond the pockets of most, but possession of a much-loved wooden boat can
be achieved with more modest budgets.
Indeed, only 30 or 40 years ago it was
possible to find once-famous classics
rotting in small creeks or converted into
houseboats.
Many of the big classic yachts that
survived the breakers yards have been
restored in the intervening years. In the
case of a wooden boat, this usually
involves a complete rebuild. Some original features may be retained, but to
make a boat seaworthy again generally
means new wood.
Its the man hours that need to go in
to them that soaks up much of the cost,
says Barney Sandeman, a broker who
specialises in classic yachts. A complete
rebuild of a 60ft yacht with, say, eight
shipwrights paid 30 an hour thats
30,000 a month just to keep the
project moving forward and the rebuild
could take two years.
But once a classic yacht is fully
restored, depending on size, it need not

On your marks:
a regatta for
classic yachts
held in Imperia,
Italy
Mauro Ujetto NurPhoto/
Corbis via Getty Images

cost too much to run. The key is to make


sure the yacht is properly surveyed.
People who buy these boats, theres
something in their DNA. Theyre going
to have one, no matter what. Its a passion, a love affair, almost a sickness for
some. Its not about the money but
something far deeper than that.
Julian Reid, an investment specialist,
who bought and restored Dawn, a 1907
canoe-yawl, says that part of the passion
is simply being on his boat. I love to be
working on the boat. Working on her is
as satisfying as sailing her, he says.
Restoring his yacht involved hours
of archival research, going back to the

earliest days of yacht racing in the UK.


Canoe-profiled yachts sometimes
called double-enders were popular in
19th century racing. Gilbert Umfreville
Laws, Dawns designer, won Olympic
gold in yacht racing in 1908.
For some owners, it is not enough to
own and cruise a classic yacht. They
want to race them as well. One of the finest sights to grace the Mediterranean in
recent years has been that of the 15m
yachts contesting the Panerai series of
classic yacht regattas.
The racing heyday of these yachts was
at the beginning of the 20th century,
just before the first world war. Unlike

The clubbable
businessman who
rescued Benetti
Profile Paolo Vitelli

The Italian behind the


Azimut yachting brand aims
to keep things in the family,
writes Richard Donkin
It is a sign of the Azimut Benetti groups
popularity among owners that when
Paolo Vitelli, the companys president
and founder, held a party in Capri in the
spring, some 700 guests turned up to
celebrate.
It was not all play. In the business of
selling motor yachts, buyers want to see
the range and where better to test drive
the goods than on the seas around one of
the playgrounds of the rich?
People love it here, says Mr Vitelli,
who built the worlds biggest volume
manufacturer of motor yachts from
scratch after selling his first business.
I came to London to learn English
and found a club scene that did not exist
in Italy so I tried to replicate it in my own
country, he says. After three years, I
sold the club and started Azimut since
Id fallen in love with boating as a child.
His first step was to charter out a boat
and the next step was brokerage. The
third step was importing boats from
England and the Netherlands to sell in
Italy and the fourth step was to build my
own, he says.
He launched his first boat in 1975.
Those early boats were for sending
people to sea, they were not for luxury
living. I wanted to build something for

the rich and the breakthrough came


with the rescue of Benetti in 1984.
Benetti had foundered due to escalating
costs in the building of Nabila, the
biggest yacht in the world at the time.
Nabila became one of the most
famous of the post-second world war
superyachts, partly because of its
owner, the billionaire arms dealer
Adnan Khashoggi, and partly because of
its appearance in the James Bond film
Never Say Never Again.
Today Benetti is firmly established in
the superyacht market with semicustom designs such as the 90m yacht
Lionheart, delivered to Sir Philip Green,
the retailing entrepreneur, earlier this
year. The yacht is the third Benetti that
Sir Philip has owned and its delivery
around the time of the collapse of the
BHS retailing business Sir Philip had
previously owned and left with a large
pension fund deficit drew attention to
Lionheart for the wrong reasons.
But Mr Vitelli defends the build
quality of his brand which is favoured
by the controversial UK businessman.
We think were matching the quality
of the best Dutch and German yards
now in our biggest yachts, he says. The
level of quality is as good as anything
youll find in northern Europe.
He argues that ordering a yacht where
the interior fittings are customised, but
where what he calls the naval part of
the yacht is a proven design, makes
sense. The concept is the customers,
the design is Benetti, he says.
Unlike most boat builders that either
deliver one or two custom builds a year

modern racers, they were built with


finely-furnished living quarters to allow
their owners, European royalty and
business tycoons, to enjoy their yachts
during the summer season.
Many of these classic racing pedigrees
were built on the River Clyde from
designs by William Fife & Sons. Today
Fife yachts, with their distinctive serpent emblems no motif is the same
are among the most highly prized of all
classic yachts.
Fife faced stiff competition in the bigger boat market from Nathanael Herreshoff in the US and from another Glasgow business, GL Watson, a company

Theyre
going to
have one, no
matter what.
Its a passion
a love
affair

responsible for some of the finest motor


and sailing yachts in the prewar era. The
company is still in business, relocated to
Liverpool and run by William Collier,
one of the worlds most respected yachting archivists.
Mr Collier spent time in his youth
touring the old houseboats in East
Anglia. Later, when working for Camper
& Nicholsons, he was responsible for
identifying and rescuing a number of
historic yachts.
Today he is using the GL Watson
archive to develop the business as a
leading restorer of classic yachts. The
company also offers management of
new builds to original designs or designs
based on modified originals.
The pursuit of authenticity seems
strongest in the US where some owners
will even ask a restorer to recreate components that subsequently proved
defective on the original boat.
I saw a boat in New England recently
built with its original defects in order to
ensure maximum authenticity. It
included a 1910 bilge pump and lifejackets made to their original designs,
says Rob Peake, editor of Classic Boat
magazine. The owner wants to sit on
his boat and experience exactly what it
felt like for its original owners all those
years ago.
Among the classic yachts for sale now
is Manitou, a Sparkman & Stephens 62ft
yawl, once owned by President John F
Kennedy. Today the yacht is owned and
raced by a syndicate that took her on as
a five-year project.
We find in this market that owners
want a yacht with history, says Mr Sandeman. Im not sniffy about the new
yachts made to classic lines and held
together with epoxy. They dont have
the same maintenance issues, but they
dont have the ghosts either.

New luxury destinations aim to


win affections of the super rich
Berthing spots

Marinas on the Catalan


coast and Adriatic are taking
on the favourite haunts of
superyacht owners, reports
William Mathieson
Family affair: Paolo Vitelli
or concentrate on a range of smaller
production yachts, Azimut Benetti is a
strong player over a broad range of
yachts. Our range is based on a deep
experience of what people want and
need in a yacht and its not always about
size, says Mr Vitelli.
During the recession, as many
competitors faltered, the company
increased market share and remained
free of debt. In 2015 Mr Vitelli boosted
the companys finances by selling
almost 12 per cent of the business to
Tamburi Investment Partners, whose
chairman, Giovanni Tamburi, has
joined the board. The Vitelli family own
88 per cent and a residual stake is held
by the management team.
Today the group has six shipyards
five in Italy and one in Brazil offering a
range of motor yachts from 10m to
100m and a constant flow of new
models. The group is producing more
than 300 yachts annually.
Recently the group diversified into
marinas with developments in Varazze,
Viareggio and Livorno in Italy and in
Khimki in Russia.
Unlike many of its competitors, it has
not sold out to foreign buyers or venture
capital. Weve been a family business
for 47 years and want to remain a family
business, says Mr Vitelli.

Marinas built to cater for the


superyachts of the super-rich are facing
growing competition from new rivals.
This new marina model, exemplified
by Barcelonas OneOcean Port Vell and
Porto Montenegro on the Adriatic, is
focused on competing with established
hubs such as Port Hercule in Monte
Carlo and Porto Cervo in Sardinia.
Marinas are all down to location,
location, location, says OneOcean
Port Vells general manager Paul Cook.
He accepts access to the buzzing city
of Barcelona is a key factor behind
his destinations appeal. However, he
also argues investment in improved
facilities has played a role in attracting
superyacht owners away from
more traditional Mediterranean destinations to the shoreline of the Catalan
capital.
The marina, built for the 1992 Olympic Games, now boasts the worlds largest superyacht berth. At 440m, this
could comfortably accommodate the
two longest yachts in the world the
180m-long Azzam whose ownership is
unclear, and the 162.5m-long Eclipse
built for Russian billionaire Roman
Abramovich.
In June, Port Vell hosted Dilbar, the
worlds largest superyacht as measured
by interior volume, which was delivered

this year to Uzbek-Russian oligarch


Alisher Usmanov.
Bookings by yachts over 70m in
length at Port Vell are up by 140 per cent
this year compared with 2015. In the
first six months of this year, we had over
500 yachts visiting, and this winter,
although I hate turning yachts away, I
have to because I dont have the availability, he says.
Porto Montenegro, the marina originally backed by Canadian gold mining
magnate Peter Munk, stands on the site
of a former Yugoslavian naval base. It is
also competing for the custom of the
super-rich and has seen a steady growth
in the number of berths occupied since
it launched during the global financial
crash of 2009.
Earlier this year, Dubais sovereign
wealth fund bought the venture for a figure believed to be 200m. The sale
could give added impetus to the venture, which has secured government
approval to add 400 more berths to the
450 built to date, along with further
Moorage in
Catalonia: the
expanded
OneOcean Port
Vell marina in
Barcelona

commercial development around the


marina.
The ability of these newer destinations to expand has been crucial in their
attempts to take on top marinas where
berthing space can be severely constrained.
For most, Monte Carlos Port Hercule
remains the superyacht industrys most
prestigious and sought-after marina. It

is almost always full throughout the


high season and during the Monaco
Yacht Show welcomes more than 120
yachts over 30m within the harbours
walls, and roughly as many at anchor.
However Galle Tallarida, managing
director of the Monaco Yacht Show, says
growth in marina occupancy is limited
by physical restrictions. We have
worked for more than 10 years to get the
berths we have now, Ms Tallarida says.
We worked with the government of
Monaco to get the biggest berths available in the harbour and we are the only
yacht show in the world which can welcome more than 10 yachts of 80m and
up.
Port Vauban in Antibes on the French
Riviera, which is one of yachtings most
popular destinations, is similarly constrained. The site faces uncertainty over
its future with its government-granted
lease up for renewal and there is little
sign of an appetite for expansion of
berths from the authorities.
The physical restrictions placed on
these marinas, and others that pepper
the Riviera and Italian coastline, mean
space is at a premium and this only
adds to their allure. Most are at capacity
throughout the summer, allowing them
to charge significant sums for high season berths. To rent a berth in a top
French marina in high season for a 55m
superyacht is more than 800 a night.
Offering an alternative in a similarly
desirable location, with amenities in
abundance, can appeal to those looking
for a more exclusive experience. And
while it may seem that, in yachting,
money is no object, features that are
popular with crews and reduce running
costs offer the marinas a competitive
advantage.

Picasso seizure highlights headaches for art lovers at sea


Protecting onboard valuables

Yachts and fine art may go


together but keeping works
aboard is not simple, says
Don Hoyt Gorman
In summer 2015, news circulated of a
Picasso painting seized by French customs officials from a yacht in Corsica.
The yacht had sailed from Spain with
the painting, Head of a Young Woman,
valued at 26m, aboard .
Its owner, Spanish banking billionaire
Jaime Botin, had applied for a permit to
transport the work across Europe, but
was denied by Spanish authorities on
the grounds that the painting (see right)
was a national treasure and could not be
allowed to leave Spain.

The incident raised a number of questions for owners of yachts who also own
works of fine art and keep them aboard
their vessels. What authority do governments have to limit the movement of
certain culturally significant works?
How can owners of yacht-galleries avoid
the pitfalls of customs inspections? And
are yachts safe venues for world-class
works of art?
Legally, the question of jurisdiction is
complex, according to Tony Allen of
London law firm Hill Dickinson.
Both flag and port state, along with
the country from which it might be said
that any works of art have been wrongfully removed, could each take a legitimate interest if there were any imperfection in the ownership or tax status of
the artwork or the owners right to
remove the artwork from the country
concerned, Mr Allen says.

He advises owners to have aboard


their yacht full documentary evidence
of art ownership, provenance and tax
status, including purchase and
export documentation
stamped by the relevant
tax authorities.
Crew are key to
the safety of the
art. In the case of
the Picasso last
summer, it was
reported that the
captain of the 65m
superyacht Adix,
normally moored in
Spain under a British
flag, produced a document from the Spanish
authorities prohibiting the work from
leaving Spain.
Crew are the initial point of contact

for customs; how they manage any situation, and their ability to immediately
access the correct documentation, can
help prevent unwanted disruption to
cruising, explains Helen Robertson, a former yacht
crew member who now
works as a conservator
with the National
Maritime Museum.
From personal
experience [as a
crew member], I
know that if the correct paperwork isnt
to hand, it can be difficult getting something
back once its seized.
But as Ms Robertson points
out, fine art is actually one of few assets
on board that can continue to appreciate in value. So it is imperative, from a

cultural and financial perspective, to


safeguard it.
According to Ms Robertson, the key to
protecting artwork at sea is to understand its inherent vulnerabilities: some
works may be particularly prone to
knocks or scrapes while others may be
affected by environmental conditions
or even vibrations from the engines.
The ability to maintain the environment, primarily temperature, humidity
and light, within specified safe parameters is important in protecting the physical integrity of vulnerable pieces.
Some of the worlds finest yachts are
designed with interiors whose environment may equal or surpass that of the
worlds finest art galleries or museums
in terms of control for humidity, temperature and ultraviolet light. But that
does not prevent damage to art on board
if it is not managed correctly.

From an insurers perspective,


works of fine art will be itemised individually in a yachts insurance policy,
explains Andrew Jameson, a loss
adjuster with Matthews Daniel, the
insurance advisers.
Truly unique and valuable works
will have their own policy, which will
stipulate transport, handling, storage
and display conditions.
The decision of where to place art, or
even the consideration of creating environmental safe zones, is vitally important, Ms Robertson explains. It is most
often the people on board from wellmeaning housekeepers to enthusiastic
party guests who wreak havoc.
Giving crew the knowledge and tools
needed to monitor the condition of an
art collection and ensure best care practices can reduce the potential human
and environmental impact, she says.

FT SPECIAL REPORT

Turkey
www.ft.com/reports | @ftreports

Wednesday September 28 2016

Erdogan
escalates
his master
phase

Inside

The president has used


the failed coup to assert
control over a febrile
nation and advance
his own ambitions,
says Mehul Srivastava

Page 3

erhaps the most revealing


aspect of the aftermath of
Turkeys failed coup in midJuly was how quickly the
country returned to a state of
apparent normality.
The international airport in Istanbul,
the scene of a dramatic takeover by the
putschists while President Recep
Tayyip Erdogans private jet tried to
land, was open again by the next
evening. The stock market followed
suit. Ministers spoke to foreign investors to reassure them that the economy
remained on track. Leaving aside

Ankaras bomb-damaged parliament,


only Istanbuls streets, clogged with
young men waving flags from their car
windows, suggested that anything out of
the ordinary had occurred.
This was all by design, say two people
close to Mr Erdogan. From the beginning, we understood that everything
must return to business [as usual]
immediately. The coup was an extraordinary event and our response must be
extraordinary, said one, who did not
want to identified because he was relating a confidential conversation.
In public, Mr Erdogan has maintained
a posture of strength, even nonchalance. At the same time, he has begun an
unprecedented purge of alleged supporters of Fethullah Gulen, the Islamic
cleric he claims was responsible for the
coup attempt. Mr Gulen denies any
involvement. This purge has already
created a new national order, carving
out the innards of the Turkish state and
placing the country even more firmly in

Interview Naci Agbal


The finance minister
says the purge has
meant more efficiency
Page 2

Construction projects
continue at full speed
The government pins
hopes for growth on
crazy building plans
Page 2

View from abroad


Former US ambassador
James F Jeffrey says the
president must choose
popularity or power
Would-be citizens
Syrian refugees still lack
access to public services
and education
Page 3

Stronger still:
President
Tayyip Erdogan
introduced
emergency
powers after the
coup attempt
Bloomberg

the hands of the neo-Islamist party that


Mr Erdogan brought to power in 2003.
For now, his plan has worked. The lira
recovered from much of the battering it
took in the days after the coup attempt.
The stock market has further to go. Big
ticket infrastructure projects remain on
schedule, and are celebrated with
greater fanfare.
But masked by those obvious gains is
the unanswered question of what the
events of July 15 will mean for Turkey in
the long run. A malaise has taken hold in
the countrys $720bn economy. Consumer spending, the mainstay of its
growth, has slowed.

Cooling relations with EU


signal deadlock over travel
European Union

Ankara insists that a deal


to curb migrant flow must
give its citizens the right to
visa-free entry to the EU,
reports Arthur Beesley
Turkeys strained relationship with the
EU faces more stress in the coming
months, in spite of Brussels and Ankara
working to patch up their differences
over the aftermath of the failed military
coup in July.
The violent attempt to overthrow the
elected government led to discord with
Brussels after president Recep Tayyip
Erdogan purged tens of thousands of
alleged associates of the coup plotters
from the military, civil service and universities. To EU calls urging restraint by
Turkeys most powerful leader in recent
history, Mr Erdogan and his ministers
responded bitterly that European leaders were too slow and too weak in their
support for the Erdogan administration
in its hour of need.
At one point, it seemed the quarrel
might derail Europes migrants deal
with Ankara. A concerted diplomatic
push was made to shore up the March
2016 pact, which offered incentives for
Turkey to stem the flow of people into
Europe.
The expectation in Brussels is that the
deal will remain in place at least until its
first anniversary. Deep divisions
remain, however, over EU visa liberalisation for Turks, which Ankara sees as
its right as part of the deal.
Such disquiet amplifies longer-term
questions over the viability of Turkeys
stalled attempt to join the EU. Accession
talks started in 2005 but membership
will not be a prospect for decades, if it
happens at all. The process is practically
in reverse.
Relations with Turkey are likely to figure prominently in the French and German elections next year. In France,
National Front leader Marine Le Pen
and former president Nicolas Sarkozy
have set themselves against EU membership for Turkey. The same stance has
been adopted in Germany by the antiimmigrant Alternative for Deutschland
party, whose recent electoral advances
are creating difficulties for chancellor
Angela Merkel.

Refugees waiting to travel


The post-coup environment makes
an already fraught relationship even
more difficult to manage, says Sinan
Ulgen, a former Turkish diplomat who
chairs Edam, an Istanbul-based thinktank. The challenge that we see even
more clearly in the post-coup environment is how we reinject a degree of realism and momentum in a relationship
that had been guided by the now most
elusive objective of accession.
Although hard talk from Europe goes

On the one hand we still


love you, but on the other
youre still messing it up
down badly in Turkish circles, the message these days from Brussels to Ankara
remains clear: On the one hand we still
love you but on the other hand youre
still messing it up big-time, so be careful, in the words of one high-ranking
EU official, who declined to be named.
The European sides main concerns
are about the rule of law. These anxieties are likely to feature when the European Commission issues an annual
update in November on conditions in
membership candidate countries. Seen
through Turkish eyes, however,

Europes post-coup defence of the countrys democracy was not as strong as its
concern for restraint once Mr Erdogan
started the purge.
The row over visa liberalisation is
linked to the migrants deal, which
helped curtail the number of people
arriving in Europe on smuggler boats
across the Mediterranean. Turkey
insists that from October the bargain
gives its citizens the right to visa-free
travel in the EU.
Before agreeing to make such a concession, Europe is demanding that
Ankara rework its draconian anti-terror
legislation, arguing that these laws are
too broad and particularly severe on
non-governmental organisations and
journalists. In Turkeys view, the coup
attempt on top of a wave of deadly
bomb attacks claimed by Kurdish separatists and Isis shows that the time is
not right.
Even if the scope of Turkeys terror
laws is eventually narrowed, diplomats
say Mr Erdogans government will have
to accept US-style visa controls in the
EU to allow liberalisation to proceed. In
effect, this would require Turkey to
introduce biometric passports a process that would take considerable time.
As a result, the go-ahead for liberalisation would not take effect immediately.
There is some confidence in EU circles
that an October confrontation on the
visa-free question can be avoided the
argument being that there is no binding
date and that Ankara is still required to
move on the terror laws.
The efforts to ease tensions between
Brussels and Ankara, however, follow
Mr Erdogans post-coup engagement
with Vladimir Putin, the Russian president. Some EU officials see this as nothing more than a shortlived rapprochement between two uncompromising
strongmen. At the same time, European
leaders are keen to ensure the primacy
of their own relations with Turkey, a
Nato member engaged in military operations in Syria.
A basic economic calculation remains
that Ankara has more to gain in European markets than in Russia, particularly if the EU-Turkey customs union
deal, presently restricted to goods, is
widened to embrace agriculture, services and public procurement.
Its a good idea that [Turkey and
Russia] are mending fences, notes the
EU official But its not a recipe for the
future.

He knows
everything
but that
is not a
criticism.
He needs to
know
everything

Foreign investors have taken heed of


ratings downgrades from S&P Global
Ratings and Moodys (I dont care, Mr
Erdogan told Bloomberg News, days
before Moodys junked Turkeys debt
last week, driving stocks down as much
as 5 per cent on Monday). It is likely that
the country will miss its growth targets
for the year.
At the same time, Mr Erdogan has
made a series of risky gambits. He has
sent troops into Syria, stepped up his
assault on the Kurdistan Workers Party
with a military offensive and sped up
the process of eventually jailing Kurdish
Continued on page 4

Purge exacerbates
flight of the young
Students and academics
fear an increasingly
authoritarian state
Page 4

FINANCIAL TIMES

Wednesday 28 September 2016

Turkey

The purge has


reduced my
spending. Its
good for me
Interview Naci Agbal

The finance minister talks to


Mehul Srivastava about
preventing another coup
attempt and his plans to
promote growth
Turkeys finance minister, Naci Agbal, is
a life-long bureaucrat latterly turned
politician. His time in the ministry as a
civil servant has made him familiar with
the red tape that often bogs down Turkish officialdom, as well as the complications involved in economic reform.
Some two months after Julys bloody
coup attempt, Mr Agbal has been faced
with some tough updates on an economy that is likely to miss its full-year
GDP growth target of 4.5 per cent. Meanwhile, as a cabinet minister, he has taken
an active role in the pan-governmental
purge of people suspected of supporting
the failed putsch. Some 1,500 employees of his ministry have been ousted.
He spoke to the Financial Times on
September 7, after he had shepherded
an initiative through parliament to
secure the auto-enrolment of public and
private employees into pension plans.
This is an edited and condensed transcript of a two-hour conversation.
Mehul Srivastava: What are the numbers that are the most worrying for you
right now?
Naci Agbal: In terms of the fiscal policy side, our VAT revenue from imports
is not going well because imports are
well below our budget estimation.
Therefore it has reduced our revenue.
Tourism is not going well. Tourism
revenue is also affecting our budget. But
there is some good news. Our corporate
income tax is going well, for banks

A cleric in exile Inside Fethullah Gulens retreat

profits are going up. As they get more


profit, they pay more corporate income
tax.
Our privatisation revenue is going
well, even exceeding our budget target.
Therefore the overall balance in terms
of the revenue side is higher than our
budget target.
MS: And the spending side?
NA: There are some risks because of
security expenditure. Security spending
is going up but not so much, maybe
TL2bn ($678m) or TL3bn. Our current
spending is going up because government is becoming bigger and bigger.
MS: Is it not getting smaller because
people are getting fired in the purge?
NA: No, [the purges effect is] very
small. In Turkey we have maybe 3m
state employees. How many have been
fired? Just 60,000 people. Therefore the
number is not so much. For example,
teachers: the total number of teachers
employed in Turkey is roughly 1m. They
fired 30,000 teachers.
But, yes, its reduced my personnel
spending. Its good for me. There are
many inefficiencies in personnel
employment. Therefore, reducing the
number of employees is, in the short
term, not bad. It may provide you [with]
some efficiency because you do the
same job with a smaller number of people. This is an economic view, not a
political view.
MS: The last time we spoke, you
talked about the difficulties in removing
people even within the ministry of

Everybody realised this


was not just a religious cult
but a huge organisation

Armed guard: a funeral for victims of the failed coup ILYAS AKENGIN/AFP/Getty Images
finance that you suspected of Gulenist
links because of the procedures.
NA: Members of this organisation are
hidden. The idea of the whole organisation is based on being clandestine, on
secrecy. In Islamic history there [are
those] who we call hashashin (assassins).
This is a concrete example of such a kind
of organisation.
MS: But over what period of time did
you identify these people and how?
NA: We realised that this small
number of people was managing other
hidden guys, hidden employees.
How did we know? We looked at their
relationship with some companies. For
example, these guys did public procurement from some special companies. If
you look at these companies in detail
you realise that [they] are related to the
Fethullah Gulen organisations holdings.
For a long time, everybody thought
OK, these are Muslim people, they
believe in God, they believe in the
Prophet, they are very humanitarian
people. But at the end of the day, everybody realised that this was not just a religious cult.
They are a huge, huge organisation.
They have companies, they have people

working in the public sector. They are


working in important private-sector
organisations.
MS: What kind of measures are you
taking not to have the same thing again?
NA: We reorganised the ministry of
defence. All personnel matters in the
army belong to the ministry of defence.
Before the coup, nobody thought Turkey could make such a big reform but we
are doing it. Turkey is becoming more
and more democratic, more rule based
and more a member of international
society, the international arena.
MS: Mr Erdogan says that if private
banks dont drop interest rates on mortgages and on loans they are traitors. He
has said this seriously . . .
NA: I cannot make any comment on
the presidents speech, but what is
important is that Turkey needs more
investment [and] growth. With high
interest rates, investors may make less
investment.
Mr Erdogans honest view is that Turkey needs more investment. Banks, if
possible, should reduce their interest
rates. The central bank, independent,
has to do the best for fighting against
inflation.

Fethullah Gulen looked like a man who


had been up all night. The morning
after Turkeys attempted coup of July
15, he was unshaven, with puffy eyes
and a sagging posture.
Through the early hours, the cleric
had closely followed the unfolding of
the violence that rocked Istanbul and
Ankara from his religious retreat in
rural Pennsylvania, where he has lived
since fleeing Turkey in 1999.
Back then, Gulen had come under
attack from the military for promoting
a brand of Islam deemed to be a threat
to democracy. Now, the Turkish
government believes he was the
mastermind behind the coup attempt
and is demanding his extradition.
On the morning of July 16, the 75year old was the number one suspect.
Mr Gulen had granted the Financial
Times and a small group of other news
organisations access to his farmturned-religious-compound, the
Golden Generation Worship & Retreat
Center, to hear his side of the story.
The message was simple: the cleric
said he had nothing to do with the
coup attempt. The accusation was, he
said, based on a fiction invented by his
once ally, now enemy President Recep
Tayyip Erdogan, with whom he had
worked at a time when both men were
at odds with Turkeys secular military.
As reporters made their way into a
room sparsely decorated with
ornately-framed Islamic scriptures, Mr
Gulens doctor began a theatrical
examination of his patient before the
rolling cameras. One minute he was
pulling out a stethoscope to monitor
Mr Gulens heartbeat, the next he was
squeezing the pump of a blood
pressure monitor.
Was this a man strong enough to
turn the Turkish state on its head? As
though in answer, doctors and
spokespeople emphasised the frailty
of the elderly leader, who is diabetic
and suffers from a heart condition.
Slouched in a cream-coloured
leather armchair, wearing bulky black
sandals of the kind more commonly
sported by elderly pensioners than
potential rebel leaders, Mr Gulen
explained why it would have been
ridiculous for him to stage the coup.
I dont believe that the world
believes the accusations made by
President Erdogan, he said in Turkish

Ankaras suspect number one


that was translated by one of his
assistants. As a person who suffered
from these coups, I advise Turkish
people not to lean towards military
coups. I believe that coups cannot
bring democracy.
He suggested that the attempted
overthrow served the interests of the
regime rather than his own. He added
that it could have been purposely
staged by Mr Erdogan, a move
calculated to give him a free pass to
go after his political opponents.
Reporters were allowed to inspect
private quarters of the compound. Mr
Gulens spends much of his time in a
small bedroom, divided into two
sections. One side is an area for prayer,
decorated with only a Turkish flag.
The other section has a single futon
bed, a desk and shelves containing
religious and political books, some
including the word darbe, which can
mean coup in Turkish, in their titles.
As the reporters were escorted to
the exit, Mr Gulen offered his guests a
farewell platter of Turkish delight,
dried fruits and pistachio-studded
baklava pastries, accompanied by
black tea. The snack was distributed in
a windowless room with an enormous
panoramic picture of Istanbul and the
Bosphorus a reminder that despite
being comfortably established deep in
the Pennsylvania countryside, Mr
Gulens heart and mind remain
focused on his homeland.
James Fontanella-Khan

Full speed ahead for crazy construction plans


Infrastructure At a time of
political instability, official
hopes are that big projects
will drive economic growth,
reports Mehul Srivastava

Projects by sector, 2003-15


Total investment, $bn (project count)
0
10
20

30

40

50

Electricity (131)
Airports (13)
ICT (1)
Roads (3)

n a sunny afternoon in August,


standing in the shadow of the brand
new, $2.5bn Yavuz Sultan Selim
Bridge at the northernmost tip of
Istanbul, the Turkish transport
minister, Ahmet Arslan, seemed a happy man.
Towers the height of the Chrysler building
soared towards the sky behind him, suspending
between them the eight-lane traffic bridge,
designed by French structural engineer Michel
Virlogeux. The 1.4km-long bridge also carries a
double railway line linking the European and
Asian sides of Turkeys largest city.
A little more than a month before, Mr Arslans
boss, President Recep Tayyip Erdogan, had
crushed a coup and re-established control over
the country by announcing a three-month state
of emergency.
Despite this, Mr Arslan was expecting the president to arrive in a couple of days time to open the
suspension bridge formally. It is part of a wave of
urban transformation in Istanbul over the next
three years that will create an airport the size of
Manhattananda$4.7bnhighway.
Most countries could be forgiven for skipping a
beat after a year like Turkeys. In addition to the
attempted coup, it has faced a ballooning foreign
corporate debt and a sliding currency. There
have been regular attacks from Isis terrorists and
Kurdish separatists, violent insurgencies in its
big cities and a military incursion across the
southern border into Syria.
Rather than postpone the opening of the
bridge, however, Mr Erdogan ordered the event
to be brought forward by nearly a month,
reminding his citizens that Turkey remains open
for business, and will accept no delays not by
one minute, as he told his senior aides to its
large infrastructure projects.
Ambitious schemes such as these were a hallmark of Mr Erdogans early years as prime minister (a post he took up in 2003), when new roads,
bridges and airports made construction the driving force of the Turkish economy. Now, as president, he presides over a slowing economy in
which indebted consumers and companies are
curbing the spending that had kept the country
afloat while other emerging markets faltered.
In the next few years, at least $100bn of infrastructure projects will begin. These range from
the $35bn airport, designed to rival Dubais and
to help Turkish Airlines dominate the market,
to a $10bn motorway connecting the industrial
areas of Gebze in the north of the country to
Izmir in the west. This adds to the $583bn spent

Ports (8)
Natural gas (7)

Top projects, 2003-15


Investment ($bn)

10

20

30

40

IGA airport
Turk Telekom
Gebze-Izmir motorway
Enerjisa phases I and II
Turkcell
Vodafone Turkey
Kemerkoy and Yenikoy
thermal power plants
IS-TIM (Avea)
Third Bosphorus Bridge and
Northern Maramara highway
Ataturk Airport lease contract
Source: World Bank

Vaulting ambition:
the brand new Yavuz
Sultan Selim Bridge
OZAN KOSE/AFP/Getty Images

on construction schemes in the first 11 years of


Mr Erdogans tenure, according to the national
statistical institute.
Mr Erdogan acknowledges the audacity of
some of his construction plans. He routinely
refers to one proposed effort to dig a $12bn
canal connecting the Black Sea to the Sea of Marmara as his crazy project. But his schemes
serve two purposes: growth and the garnering of
votes. As his prime minister, Binali Yildirim,
says: You do politics by highways [and] by
water. You make commitments and, if you cannot deliver them, you do not get re-elected.
Such projects are not without risk. Most are
being built under a public-private partnership
model, with big Turkish companies allied to Mr
Erdogan winning most of the contracts. This has
prompted allegations of corruption and favouritism, as demonstrated by an inquiry initiated in
late 2013 that ensnared a number of Mr
Erdogans allies.
The probe resulted in dozens of arrests of
people considered close to Mr Erdogan but
was halted after he called it a virtual coup
attempt by the followers of Fethullah Gulen, the

You do politics
by highways
[and] by water.
You make
commitments
and if you
cannot deliver
them, you do
not get reelected

Islamic cleric and former ally of the president.


The size of the projects has meant that many of
the businesses involved have taken on foreigndenominated debt. The rapid slide in the Turkish lira last year prompted the government to
provide treasury guarantees for the debt.
We are telling investors that we are taking it
upon ourselves, if there is a problem with the
contractors, to continue the projects ourselves,
says Mr Arslan, promising guarantees on minimum amounts of traffic for airports, bridges and
motorways. These guarantees reveal our confidence in the projects. Mr Arslan estimates that,
even if invoked, the cost of the guarantees for the
new airport, for instance, will be a 10th of its
eventual revenues.
Political instability, an economic downturn
and a downgrade from S&P Global Ratings after
the coup attempt, however, have already made
Turkish corporate debt, especially new debt,
almost prohibitively expensive. Well-funded
Turkish corporates pay at least 10 per cent,
says one Canadian banker, who declined to be
named. It would be almost free in, say, Norway.
Last week, Moodys rating agency followed,

downgrading Turkish government debt to junk,


citing the economys exposure to foreign outflows, dwindling foreign exchange reserves and
muted growth prospects. With two of the big
three rating agencies (Fitch will begin a review in
early 2017) dropping Turkish debt below investment grade, funding costs could jump by as
much as 50 per cent, according to three other
bankers, who also asked not to be identified.
President Erdogans allies insist there is nothing to worry about. Mr Arslan promises that
projects such as the bridge, the airport and the
highways will not cost Turkish taxpayers a single
penny, given the build-operate-transfer model,
where the government receives payments from
contractors for the leases and eventually
becomes owner of the infrastructure itself.
Just from a lease standpoint, the revenue we
generate from the airports is at least $10bn, Mr
Arslan says. These airports, these motorways,
these bridges after the operation period is over,
they will return them to us and we will make
even more revenues from them. Not a single
financial institution has suffered, or will suffer
all their loans have been paid.

Wednesday 28 September 2016

FINANCIAL TIMES

Turkey

Syrians turn to Erdogan for citizenship rights


Refugees
Presidents promise to a
new cohort of would-be
voters is likely to have
an impact for several
decades to come,
reports Laura Pitel

he arrival of 2.7m Syrian


refugees in Turkey over a
period of just five years has
caused remarkably little
social tension in their
adopted country.
But in early July, after a surprise
announcement by President Recep
Tayyip Erdogan that Syrians could be
given Turkish citizenship, a public outcry erupted. Hostile newspapers
described Syrians as freeloaders. Angry
political opponents claimed the president was trying to secure himself a
cohort of indebted voters.
While the attempted coup of July 15
provided an unlikely reprieve for Turkeys Syrians it took the heat out of a
debate that was threatening to boil over
analysts warn that integrating Syrians
remains one of the governments biggest
problems.
Turkey faces many issues right now:
social polarisation, the struggle for
democratisation, integration with
Europe, says Ayhan Kaya, a professor
of political science at Istanbuls Bilgi
University. But the challenge of integrating refugees of Syrian origin is right
up there. Decisions taken now will have
an impact for decades to come.
Speaking after the failed putsch, the
president raised the idea of citizenship
again, tentatively, saying that Syrians
could become Turkish citizens if necessary. He repeated a suggestion that
the process could begin with highlyskilled workers such as doctors and
teachers.
Timur Kaymaz, an expert on Syrian
refugees at the Ankara-based thinktank Tepav, says the surge in Mr
Erdogans popularity since the attempt
to overthrow his government has given
him the power to push ahead with this
plan. He is probably going to be strong
enough to handle any challenge, says
Mr Kaymaz. If any politician can do it,
he can.

Right to work: citizenship would improve access to jobs in the formal labour market for Turkeys 2.7m Syrian migrant Chris McGrath/Getty Images
Others warn that the idea remains
contentious, especially given economic
uncertainty and an unemployment rate
that has risen to 10.2 per cent, according
to September figures from the Turkish
statistical institute.
Social acceptance of refugees in Turkey is extremely high we have been
living together for five years and we had
almost no problems, says Murat

Erdogan, head of the migration and politics research centre at Hacettepe University in Ankara. But it is a fragile
acceptance, he adds. Over a short
period of time, it is not easy to accept
granting citizenship to a group of people
who constitute more than 4 per cent of
the population.
While citizenship would improve the
access to jobs and public services for

Two countries are grappling


to find fresh ways to cooperate in fight against Isis
in Syria, reports Geoff Dyer
Shortly before he ran for re-election in
2012, Barack Obama was asked to list
the world leaders with whom he was
closest. The US president namechecked David Cameron, then prime
minister of traditional ally Britain, German chancellor Angela Merkel and
Manmohan Singh, the cerebral economist who was prime minister of India.
He also mentioned Recep Tayyip
Erdogan Turkeys prime minister at
the time and its president now.
As he prepares to leave the White
House in four months time, it is hard to
imagine Mr Obama including Mr
Erdogan on another list of trusted confidantes.
Even before the abortive putsch in
July, US relations with Turkey were
limping, beset by powerful disagreements over how to intervene in the Syrian conflict and about Mr Erdogans
increasingly authoritarian style.
In the aftermath of the coup effort,
which Mr Erdogan has blamed squarely
on the US-based cleric Fethullah Gulen,
Ankaras longstanding alliance with
Washington is in an even more precarious position. Turkey has formally asked
the US to extradite Mr Gulen. Mr Gulen
denies the charges.
Binali Yildirim, Turkeys prime minister, said in August that the fate of the
relationship between the two countries
would hinge on whether the US decided
to extradite Mr Gulen: Whether or not
the anti-Americanism in Turkey will
continue is also dependent on this.
In this febrile atmosphere, some
Turkish politicians have raised the prospect of withdrawing from the Nato alliance and forging a much closer partnership with Russia.
In the wake of the coup, Turkeys foreign policy is now a reflection less of the

countrys interests and more of


Erdogans own personality, says Blaise
Misztal at the Bipartisan Policy Center, a
US think-tank. That means that it
could go in a lot of different directions.
The first problem is the fate of Mr
Gulen, who has lived in Pennsylvania
since 1999. Mr Erdogan has called for
international action against the cleric
and his supporters whom he calls the
Fethullah Terrorist Organisation.
This terrorist organisation is in a
deep mental heresy of subduing the
whole world, far beyond Turkey, he
told the United Nations General Assembly last week. It is evident from our
experience that if you do not fight
against [Mr Gulen and his supporters]now, tomorrow may be too late.
The Obama administration has said it
will do everything it can to review the
extradition request as quickly as possible, including sending officials to Turkey to advise on the legal process.
Ive assured him that our Justice
Department and my national security
team will continue to co-operate with
Turkish authorities to determine how

Foreign policy has become a


reflection less of the
countrys interests and more
of Erdogans personality
we can make sure that those who carried out these activities are brought to
justice, Mr Obama said, after meeting
Mr Erdogan on the sidelines of the G20
summit earlier this month.
However, the decision on whether to
extradite Mr Gulen will not just come
down to the administration, but will
also have to be approved by a US court.
A judge would have to be convinced that
Mr Gulen would receive a fair trial in
Turkey and that any evidence used to
justify the extradition request was not
obtained through torture.
Beyond Mr Gulen, the US and Turkey
have clashed repeatedly during the past
two years over the Syrian conflict.

It is not easy to accept


granting citizenship to a
group constituting more
than 4 per cent of the
population

Strident leader faces a choice


between popularity and power

Once firm alliance


with Washington
grows uneasy
Diplomacy

Syrians the vast majority of them hold


only temporary protection status
some academics and non-government
organisations argue that it would be no
panacea. Opening a path to citizenship,
they say, must be accompanied by
greater efforts to provide education and
to tackle the lack of formal routes into
the labour market.
At the start of 2016, the government

announced that Syrians would be


granted work permits, a move hailed as
an important step in ending the exploitation of refugee workers. But the
impact remains tiny; in the first six
months of the year, just 5,500 such permits were handed out, according to the
employment ministry. The majority of
Syrians are informal workers, often paid
less than the legal minimum wage by
employers looking to undercut local
Turkish workers.
Many refugee families have little
choice but to send their children to work
on farms, in factories or on the streets,
perpetuating perhaps the biggest barrier to the long-term integration of Syrians: poor education. About 850,000
school-age Syrians are living in Turkey
and just 325,000 of them are enrolled in
school, according to the education ministry. Of these, the majority study in
temporary centres where much of the
teaching is in Arabic, not Turkish.
Mohammed al-Nammous, a former
Syrian headteacher who recently
moved to the central Anatolian city of
Kayseri, was so dismayed by the situation that he set up a summer programme in a Turkish school there, teaching
Turkish and Arabic to refugee children.
Many as old as nine or 10 were illiterate,
though they were enthusiastic about the
classes, as were their parents. As word
spread, the number of children involved
swelled from 150 to 250.
At the start of September, this pop-up
school closed to make way for Turkish
children to return for the new academic
year. Mr al-Nammous warns that
depriving Syrian children of learning
could store up problems for years to
come.
The local authority in Kayseri was not
available for comment but central government officials say they are well
aware of the problem. They insist Turkey is working to expand school capacity as part of its package of refugee support, which has cost $10bn since 2011,
says Turkeys disaster and emergency
management authority.
The plight of the Kayseri pupils highlights the scale of the task facing policymakers. Hacettepe Universitys Mr
Erdogan feels the vast majority of Syrians will remain in Turkey in the long
term and that greater efforts are needed
to help them to adapt. Only then, he
says, can the sensitive subject of citizenship be tackled with confidence.

Comment

The way Erdogan wields his


increased clout after the
failed coup will shape the
region, writes James F Jeffrey
Keeping distant: Barack Obama
While Washington says defeating Isis
is its main objective in the region, Turkey has been more focused on defeating
the regime of Syrian president Bashar
al-Assad. Over the past year, the US has
come to see the Syrian Kurds as one of
the most effective fighting forces on the
ground, aggravating Turkish fears that
the Kurds will manage to carve out a de
facto state in northern Syria.
In recent weeks there have been signs
that Washington and Ankara have
begun to find some sort of compromise.
After months of pressure from the US,
Turkey in August began an offensive
against Isis in northern Syria. For Turks,
this plan of action had the advantage of
also preventing the Syrian Kurds from
linking two strips of territory they currently control along the Turkey-Syria
border.
The initiative raises difficult questions for the US. The first is the risk that
Turkish forces and the Sunni rebels that
the US backs in northern Syria could
turn and begin fighting against the
Kurds in effect, pitting Washingtons
allies against each other.
There is also the question of Syrian
refugees. Soner Cagaptay, director of the
Turkish Research Program at the Washington Institute, says part of Ankaras
plan is to hold refugees in Syria, rather
than allowing them to cross the border
into Turkey. This would require the
establishment of some sort of safe haven
on the Syrian side of the border, he
says. The US has been wary about creating such a haven, fearing it would have
to enforce a no-fly zone, bringing it into
direct confrontation with Syrian or Russian jets.
Even with the disruption unleashed
by the coup attempt, the US and Turkey
are aiming to find new ways to work
together in Syria. They are not, however, entirely on the same page.

Some two months after the attempted


overthrow of its government by rogue
military commanders, Turkey faces a
choice in its political development.
Had the coup succeeded, the country
would probably have plunged into civil
war. But a popular uprising, urged on
via a FaceTime video by President
Recep Tayyip Erdogan, overcame the
revolt in its first few hours. The
quashing of the putschists generated a
rare sense of unity among Turks.
Mr Erdogan, who leads the
conservative Justice and Development
party and has been in power since 2003
as prime minister and then president,
emerged the winner of the night, with a
big increase in both his personal power
and popularity. Having put in place a
three-month, post-coup state of
emergency, his popular support
increased from a usual 40-50 per cent to
68 per cent in one Turkish poll.
On the international front, Mr
Erdogan has recently patched up
relations with Israel and Russia
damaged respectively after Israels raid
on the Gaza aid flotilla in 2010 and the
shooting down of the Russian military
plane in 2015. He has supported moves
towards reunification of Cyprus and
intervened on the ground in Syria to
deter all three of Ankaras foes there
Isis, the Assad regime and the Syrian
Kurdish Democratic Union Party
(PYD). While the PYD is allied with the
US against Isis, it is also closely linked to
the Turkish Kurdistan Workers party
(PKK), which has led insurgencies in
Turkey and is considered a terrorist
group by Ankara and the US. The
refugee deal so critical to Europe is
holding and the Turkish economy, while
slowing, is on an even keel.
The main beneficiary has been Mr
Erdogan himself. He can choose
between two futures: one oriented
towards his popularity, the other
towards his power. His choice will shape
Turkey and the entire south-east

European and Middle Eastern regions.


Opting for popularity and the
political security that sustained popular
support brings could result in a return
to Mr Erdogans reformist early years as
prime minister. It might signify more of
the kind of overtures to PKK rebels he
made before 2015. It could also mean
less of a winner-take-all spirit in
dealing with his political opposition and
a curtailment of extrajudicial hounding
of alleged supporters of the Islamist
cleric Fethullah Gulen, who most Turks
now believe masterminded the coup.
Such an approach could advance Mr
Erdogans aim to create a presidential
state gaining, through constitutional
amendments, enhanced powers similar
to those of a French president.
The second way, however, to achieve
this ambition is through the
exploitation of his post-coup power over
state and society, a level of control
unseen in Turkey since the Republics
founder, Mustafa Kemal Ataturk. No
institution neither the army, the
Gulenists, the media, the political
opposition nor the judiciary can now
halt a move towards a democratically
sanctioned, de facto dictatorship.
In this context, Mr Erdogan could
expand the fight against the PKK,
extend the state of emergency and ban
parliamentarians from the pro-Kurdish
Democratic Peoples Party. He could
obtain the parliamentary super
majority he needs to amend the
constitution through an alliance with
the strongly nationalist, anti-Kurd
National Action Party.
This path is the quicker and more
expedient. It is also more dangerous,
pitting Turkeys Kurds, Alevis (a large
heterogeneous Shia minority) and
west-oriented secularists against Mr
Erdogans nationalist religious
alliance in a permanent cultural civil
war. Vladimir Putins leadership is
the model here but Russia has fewer
cultural divisions.
In the long term, Turkey
cannot prosper in an integrated
global economy while it is in the
midst of a cultural and
political civil war with ever
more restrictions on liberty.
The coups big winner:
Turkeys president faces some
difficult choices

The west has a stake, given Turkeys


geopolitical importance and the
disorder in the region. The west also has
leverage but it is limited. With Syria
burning and new refugee flows looming,
Europe and the US need Mr Erdogan
now as much as he needs them. And he
reacts notoriously badly to pressure
from the outside.
Nevertheless, finding common
ground with Turkey on security,
diplomatic and economic issues
eventually could build trust of the kind
that existed between Mr Erdogan and
Barack Obama during the US
presidents first term.
That is no guarantee of a gentler Mr
Erdogan. But he will want to hedge his
bets; flaunting a proud independence
from the west without burning bridges
to it. The right approach by the west
could help him find such a middle path.
It could include better co-ordination
between Washington and Ankara on
operations in Syria, a good faith US
response to the request for Mr Gulens
extradition and EU adherence to the
refugee accord.
James F Jeffrey is a former US ambassador
to Turkey and fellow at The Washington
Institute

FINANCIAL TIMES

Wednesday 28 September 2016

Turkey

Purge intensifies brain drain


Education As more
academics are targeted
at home, more students
look to move abroad,
reports Selin Bucak

COMMENT

Elif Shafak

he attempted coup of July


15, coming after a series of
terrorist attacks in recent
years, has intensified a
trend long in the making in
Turkey: young, educated and affluent
Turks are quitting home to make new
lives abroad.
The crackdown by president Recep
Tayyip Erdogan since the failed putsch
has seen more than 40,000 people
detained, among them dozens of academics, and over 100,000 people
ejected from state institutions. Some
2,350 academics were fired from a total
of 93 universities.
Yet experts say the latest political
instability is only part of the reason for
this flight of human capital.
Ibrahim Sirkeci, professor of transnational studies and marketing at Regents
University in London, says while Mr
Erdogans purge has so far targeted professionals, it has begun affecting students as well. Some who have not
already left Turkey are trying to move
and others have cancelled plans to
return home.
There is a growing number of applications from Turkish academics to
schemes like the Scholar Rescue Fund,
says Prof Sirkeci. We dont know the
scale yet but anecdotal evidence is so
strong. It might be as big as the scientists exodus from Nazi Germany.
The most recent UK Home Office figures, from 2015, indicate a slight dip in
the number of applications for business
person visas made under the so-called
Ankara Agreement, which allows Turkish workers to establish themselves in
the UK with residency rights. Hursit
Gunes, a former member of the Turkish
parliament and a professor of economics at Istanbuls Bahcesehir University,
however, points out that academics and
students who he believes are increasingly looking abroad apply under different visa categories.

State of emergency: demonstrators in Ankara protest against the suspension of academics REUTERS/Umit Bektas
One Istanbul-based aid worker, who
declined to be named, believes that
among her generation of Turkish millennials the impulse to move abroad has
been brewing for some time.
Turkey was an illiberal democracy
before the coup attempt, and it is still an
illiberal democracy, she says. The only
thing that has gotten progressively
worse is the level of extremist violence.
Whether the [Kurdish armed separatist
group] PKK or Isis, the suicide bombings of the past two or three years are
unprecedented. After the 2013 antigovernment protests in Gezi Park that
were violently quashed, there has been
a sense among millennials that things
are getting bad in Turkey and we need to
move abroad.
Along with one engineering friend
who emigrated to Germany, the aid
worker says she has friends applying to
the US through the green card lottery.
At the same time, people who are dual
nationals and can leave at the drop of
the proverbial hat seem to be staying
put, she adds. I think for millennials it

is very much dependent on life choices


made post-graduation.
Augmenting fears of political instability is a perception of a decreasing quality
of education in Turkey. Some statements by influential people seem to
denigrate the value of learning. One was
the deputy rector of Istanbul Sabahattin
Zaim University, Bulent Ari, in a television interview in March: Those who
will keep this country on its feet are
those who did not get an education, he
said. The most dangerous people in
Turkey are the literates, professors and
university graduates who draw Turkey
into chaos. Prof Ari later claimed that
the recording was manipulated but
resigned from his university post.
Mr Erdogan has clashed with academics in Turkey before. In January, the government rounded up and temporarily
detained 27 university teachers who
signed a petition criticising the governments deliberate massacre and deportation of Turkeys Kurds in the southeast of the country.
The younger generation seems to

Erdogan escalates his master phase


Continued from page 1
political leaders he accuses of sympathising with the violent insurgency.
He has arrested two members of the
constitutional court, the countrys highest legal body, and has consolidated his
hold on the countrys central bank,
bending its agenda of fighting inflation
to his goal of stoking growth.
His purge which has now ensnared
more than 100,000 people in the judiciary, the military, schools, universities
and elsewhere and has also seen the seizure of businesses with billions of dollars in revenues has created a vacuum
into which his allies have rushed to
occupy positions of power and wealth.
These actions belie Mr Erdogans
assertion that the coup attempt has
strengthened Turkish democracy.
Instead, self-bestowed emergency powers allowing him to rule by decree have
mostly strengthened his position.
Turkey has always loved a strong
leader and, right now, it is him, says
one senior opposition member of parliament. Where that leaves us, with
less than a quarter of the national vote,
is simply as bystanders.
That leaves Turks, foreign investors
and Mr Erdogans western allies Nato,
the EU and the US dependent on the
presidents personal ambitions.
In matters of business, above all, Mr
Erdogan prizes constant growth and
ambition. That exacerbates the dwindling of Turkeys foreign exchange
reserves and the ballooning of its current account deficit. As Turks are
encouraged to purchase more, banks
private, public and the theoretically
independent central bank are being
pushed to lower interest rates. If he succeeds, imports will swell.
In matters of politics, Mr Erdogan values obedience, even subservience. He
has dispatched one dissenting prime

Turkish troops in northern Syria


minister, replacing him with a friend
from his early days in politics. He has
appropriated the countrys Kemalist
opposition which has set aside more
than a decade of rivalry to cheer on his
purges and been rewarded with a seat at
the table while hobbling those who
openly disagree with him.
In the Kurdish south-east of the country, which is primed for popular revolt,
Mr Erdogan has stripped mayors of
their powers and installed friendly surrogates, while downgrading cities in
Kurdish strongholds to towns and
municipalities, bringing their budgets
under Ankaras control. At the same
time, he has increased the military presence and stripped Kurdish leaders of
parliamentary immunity, leaving them
open to prosecution and potential
removal from parliament. This aids his
campaign for constitutional changes to
further strengthen his presidency.
In foreign policy, he expects, and
often demands, a show of respect from
heads of states fretting privately over
snubs from US President Barack
Obama, dismissing overtures from the

EU, and swiftly patching up relations


with Russian president Vladimir Putin.
After the coup, we had to put things
into something like a speed mode, says
one adviser to Mr Erdogan. There is a
real urgency to how we need to manoeuvre these complicated foreign relations,
especially after it became clear that we
cant expect real support from the west.
It is here, at the outer reaches of his
political power, that Mr Erdogan has felt
the most cornered, especially when it
comes to the question of Syria. Bashar
al-Assad continues to rule, the Kurdish
militias Mr Erdogan despises still receive
military support from the US and Isis has
continued to bomb his citizens. The
world refuses to celebrate his magnanimitytowards2.7mSyrianrefugees.
Each of these decisions, political, economic and military, has deepened a
sense of perpetual crisis. The six officials interviewed for this article, all of
whom asked for anonymity, described a
frantic struggle to keep up with the presidents latest edicts, with constant monitoring from go-betweens. He knows
everything, says one, describing a 3am
call from Mr Erdogans office. But thats
not a criticism he needs to know everything, especially right now.
The success of each of the new strategies depends on the rest. The military
must not become bogged down in Syria
and the economy must survive attempts
to ignite growth. Meanwhile, weakened
institutions be they the opposition, the
central bank, the constitutional court or
the few remaining independent news
outlets must also survive attempts to
consolidate all levers of the state into one
centraloffice.
Mr Erdogan once described his later
terms as prime minister as the master
phase of his leadership. As president,
he has finally turned the page into that
chapter.

Contributors
Mehul Srivastava
Turkey correspondent

Selin Bucak
Freelance journalist

Arthur Beesley
European diplomatic correspondent

Cordelia Jenkins
Commissioning editor

Geoff Dyer
US diplomatic correspondent

Steven Bird
Designer

James Fontanella-Khan
US M&A correspondent

Alan Knox
Picture editor

Laura Pitel
Freelance journalist

Never before have we


been so scared of words

For advertising details, contact:


Robert Grange +44 (0) 20 7873 4418,
robert.grange@ft.com, or your usual FT
representative.
All editorial content in this report is
produced by the FT. Our advertisers have
no influence over or prior sight of the
articles.
All FT Reports are available at:
ft.com/reports
Follow us on Twitter @ftreports

have taken note. Caner Otrakci, academic co-ordinator at Study in Turkey,


a private organisation that promotes
Turkish colleges and universities overseas, says Turkey is among the top 15
countries sending students abroad. He
estimates that in 2015, there were
45,000 Turkish university students
studying abroad. Adding those on
exchange schemes, work and travel programmes and language education, that
rises to 87,000.
The UK Home Offices quarterly statistics indicate that the number of shortterm student visas granted rose by 28
per cent in the year ending June 2016. Of
the increase, Turkish citizens accounted
for 40 per cent, or 3,448.
Mr Otrakci says this is an outcome of
increasing authoritarianism. Conflict
over Kurdish rights and freedoms have
been a major driver for emigration from
Turkey since the 1960s, he says.
The never-ending dominance of
Erdogans rule and his increasing moves
to limit secular lifestyles mean insecurity for many.

Jailing peace activists and writers is


not new in our country, wrote the
linguist and author Necmiye Alpay this
month, in a letter to Pen International
from a womens closed prison in
Istanbul. Ms Alpay a member of the
Turkish-language daily newspaper
Ozgur Gundems advisory committee
was arrested on August 31, accused of
being part of a terrorist organisation
and disrupting the unity of the state.
It is one of the many heartbreaking
ironies in Turkey that an intellectual,
who has fought for peace and
coexistence all her life, is today
imprisoned on charges of terrorism.
Turkey has a long history of
persecuting its thinkers. Those of us
who have dedicated our lives to the
written word know too well that an
article, a poem, a novel, or even a tweet
might get us into trouble with the state.
But never has it been as difficult and
exhausting to be a Turkish journalist,
writer or academic as now.
There are more women writers and
peace activists in prison than ever, Ms
Alpays letter continued. The
journalists Nazli Ilicak, Nuriye Akman,
Lale Sariibrahimoglu and the
prominent Turkish novelist Asli
Erdogan are striking examples. Asli,
who is a friend and a colleague, was
arrested for having her name on Ozgur
Gundems advisory committee list. In a
message she sent from prison, she says
she will suffer permanent injury as she
has been denied her medications and
mistreated.
There is no doubt that the horrific
coup attempt of July 15, which left
more than 200 people dead, was a
trauma for the Turkish nation. There is
no doubt that those who plotted and
executed the coup must be investigated
or that the accusations of the presence
of a Gulenist cabal within the Turkish
army are serious. But Turkeys liberals
and secularists have been strong

opponents of military takeovers. This


summer, both the liberal media and
opposition parties have, in unison,
defended a government they were not
fond of against the putschists. Instead
of cultivating this spirit of unity, the
government has launched a
widespread purge across society.
Amid the turbulence, thousands
have been stigmatised, sacked,
detained or had their passports
confiscated. The number of those on
the states blacklists has escalated to
100,000. Among them are business
people, teachers, bank accountants,
nurses and doctors.
The witch-hunt against the
intelligentsia is particularly sharp.
Critical voices in the media and
academia are accused of betraying the
nation and acting as pawns of its
enemies. In the space of a day, a writer
can be lynched on social media and
demonised in pro-government media.
If you are a woman, the language of the
attacks gets nastier.
Intimidation and paranoia permeate
Turkish society. Never before have we
been so scared of words and their
repercussions. If the government does
not control this purge, it will not only
cause injustices that will take decades
to heal, but also weaken the credibility
of legitimate efforts against putschists.
More than 120 journalists have been
detained since July 15. Dozens of others
have been stigmatised, lost their jobs or
been forced to leave the country. The
veteran journalist and activist Hasan
Cemal dedicated a recent article To
friends in exile. Turkeys thinking
minds are now scattered all over the
world, alone and bruised.
Surgun exile is one of the saddest
words in the Turkish language. It is
also used to describe a branch or a root
that deviates from the trunk of a tree.
But it is not Turkeys writers but the
country itself that has deviated from
the course of liberal democracy.
Days pass. The government
continues to produce new lists of
names of people to interrogate or
arrest. The motherland that I miss and
love dearly, I can no longer recognise.
Elif Shafak is a novelist and journalist