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TUESDAY 30 OCTOBER 2018 WORLD BUSINESS NEWSPAPER EUROPE

Peak MBA? Brazil’s new direction A global problem

Online courses blamed for decline in Markets hopeful as far-right leader Why nationalism is not an antidote
school applications — BIG READ, PAGE 7 prepares to take reins — PAGE 2 for globalism — GIDEON RACHMAN, PAGE 9

Germany confronts new era as Briefing

i ProSieben finds match with eharmony

Merkel calls time on leadership

The German media group has agreed to buy the US
dating website as part of its drive to create the
world’s biggest online matchmaker. The deal was
said to have valued the website at $85m.— PAGE 11

i Mexico airport reversal spooks investors

3 Chancellor quits as CDU chief 3 Political career to end in 2021 3 Succession fight begins
GUY CHAZAN — BERLIN
Angela Merkel has heralded the close of
a political era in Europe’s most powerful
nation, standing down as leader of Ger-
many’s ruling Christian Democratic
Union after 18 years and declaring her
career in politics would end in 2021.
The decision will set in train a succes-
sion battle that is expected to become a
bitter struggle for the soul of one of
Europe’s most successful postwar par-
ties. In announcing the move, she said it
was “time to open a new chapter”.
Ms Merkel’s authority has been grad-
ually eroded since she was returned to
office for a fourth time last year after the
CDU won its lowest vote share since
1949; her conservative allies spent
many ensuing months in open revolt
over her handling of the refugee crisis.
But the immediate trigger for her res-
ignation was back-to-back setbacks in
regional elections, including Sunday’s
disastrous CDU showing in the western
state of Hesse, where its share of the
vote fell 11 percentage points.
Ms Merkel has ruled Germany for the
past 13 years, a period during which Ber-
lin’s authority and influence in Europe
has steadily grown and she became the
EU’s most powerful politician.
But her hope of staying on as chancel-
lor until the end of her fourth term
could prove illusory. Many in Berlin
believe Germany needs a fresh start
with a new leader capable of giving the
country a new direction.
Ms Merkel admitted the CDU’s cam-
paign in Hesse had been overshadowed
by public anger with her government in
Berlin and in particular at the frequent
rows between the coalition partners —
the CDU, its Bavarian CSU sister party
and the Social Democrats. The blame
for that, she said, rested with her: “I bear
responsibility for everything — for our
successes, as well as our failures.”
Ceding CDU leadership would, she
added, let the grand coalition “concen-
trate its energies on good governance”.
Incoming president Andrés Manuel López Obrador
has sent the peso lower after saying he plans to
scrap the $13bn Norman Foster-designed Mexico
City airport project after a “people’s poll”.— PAGE 2
i EU launches Myanmar genocide probe
Brussels has launched an investigation into alleged
genocide as it seeks to decide on whether the
south-east Asian country should lose the trade
preferences granted to very poor states.— PAGE 4
i Greek impasse threatens Macedonia deal
A nationalist-leftwing stand-off
in Greece’s fragile coalition has
undermined prospects for
settling a three-decade-long
dispute with its neighbour over
the Macedonia name.— PAGE 3
i HSBC costs drive delivers profit jump
The bank has reported a profit jump thanks to a
tighter grip on costs, fuelling hopes that new chief
John Flint can return the group to growth without
resorting to runaway spending.— PAGE 11; LEX, PAGE 10
i Hitachi Chemical adds to testing scandal
The company has admitted to improper testing of a
material used to protect computer chips, hitting its
shares and adding to a long list of Japanese groups
revealing such irregularities.— PAGE 12; LEX, PAGE 10
i Australian banks eye Brexit worst-case
Lenders, including Commonwealth Bank of
Australia and Macquarie Group, have stepped up
preparations to ensure they can operate in the EU
amid fears the UK will leave without a deal.— PAGE 15
Chancellor Ms Merkel’s decision goes some way allowing more than 1m migrants into Abandoning the CDU chair is a per-
Angela Merkel to quelling a wave of discontent inside the country in 2015-16, an influx that sonal defeat for Ms Merkel, who has Datawatch
has led the CDU. Many in the party resent the fuelled the rise of the far-right Alterna- argued the jobs of chancellor and party
Germany’s way the chancellor, the daughter of an tive for Germany — which after Sun- leader should not be split. “It’s a gamble,
ruling Christian East German pastor, dragged the party day’s Hesse vote is represented in all of no doubt,” she admitted yesterday. But Brazil The election
Democratic to the political centre, and want it to the country’s 16 regional parliaments. it was “justifiable” because she had no Real GDP Government debt on Sunday of
Union for 18 return to its conservative roots. Even before Ms Merkel’s announce- intention of running again in 2021. per capita (R$) (% of GDP) Jair Bolsonaro,
a former army
years Some have never forgiven her for ment, several candidates had emerged Whether Ms Merkel will be able to 90 captain, as
as possible replacements as party hang on as chancellor for three years is
6000 80 president of
leader. Annegret Kramp-Karrenbauer, an open question. Her fate could rest Brazil follows
The battle for leadership is CDU secretary-general, is widely seen as with the SPD, which took an even bigger 70 years of falling
anointed heir. Jens Spahn, health minis- hit in Hesse than the CDU, garnering 5750
on. But whoever becomes ter, has risen as a popular rightwinger just 20 per cent of the vote. The result 60
real incomes and
rising government
party chair in December — and critic of the refugee policy. Frie- reignited calls for the SPD to quit the
5500 50
debt under
and the next chancellor — drich Merz, another conservative who coalition and renew itself in opposition.
2013 14 15 16 17
the previous,
Constanze used to head the CDU parliamentary Additional reporting by Katie Martin scandal-plagued
Stelzenmüller bears a responsibility that group but was squeezed out by Ms Mer- Reports & analysis page 3 Source: IMF government
page 9 extends well beyond Berlin kel in 2002, has also expressed interest. Editorial Comment page 8

Britain targets biggest US technology

groups with tax on digital revenues
MADISON MARRIAGE — LONDON intellectual property or has a physical is the first time the sector has gone pub-
MEHREEN KHAN — BRUSSELS presence. This means tech groups often lic with its opposition to EU plans to uni-
The UK government has announced it pay little tax in EU markets where they laterally impose a “digital services tax”.
will implement a new tax on the reve- sell their products and services. The European Commission drafted
nues of multinational technology com- The British levy will only apply to UK plans for a 3 per cent levy on sales gener-
Chinese army scientists panies, becoming the biggest economy sales and is set to raise more than ated by the biggest tech companies early
study military tech in west to introduce a levy aimed specifically at £400m a year. Spain is the only other this year — a measure dubbed a “Gafa”
US groups like Apple and Amazon. big economy to bring in such a scheme. tax for its targeting of big US group such
Analysis i PAGE 4 London’s decision comes as separate as Google, Amazon and Facebook.
The 2 per cent tax, which would come EU plans for a tech levy attract mount- But the letter, co-signed by chief exec-
into effect in 2020 unless an agreement ing opposition from businesses. Euro- utives from Takeaway.com, retailer Zal-
Austria €3.70 Macedonia Den220 is reached on an international “tech pean technology heavyweights, includ- ando and travel agent eDreams, argued
Bahrain
Belgium
Din1.8
€3.70
Malta
Morocco
€3.60
Dh45
tax” regime, would be imposed on prof- ing Spotify, Booking.com and Angry that Europe’s tech companies would be
Bulgaria Lev7.50 Netherlands €3.70 itable companies that generate more Birds maker Rovio, have come out disproportionately hit by the levy. “The
Croatia Kn29 Norway NKr35
Cyprus €3.60 Oman OR1.60 than £500m a year globally. against Brussels’ plans, arguing it will proposed DST has been designed with
Czech Rep
Denmark
Kc105
DKr35
Pakistan
Poland
Rupee350
Zl 20
“It’s only right the global giants pay unfairly punish EU companies. large and highly profitable companies in
Egypt E£35 Portugal €3.60 their fair share,” Philip Hammond, the In a letter to the EU’s 28 finance minis- mind,” the CEOs wrote. “Most start-ups
Finland €4.50 Qatar QR15
France €3.70 Romania Ron17 UK chancellor of the exchequer, said as ters, the chief executives of 16 compa- and new companies rely on their reve-
Germany
Gibraltar
€3.70
£2.70
Russia
Serbia
€5.00
NewD420
part of his annual budget. nies called for plans to impose a 3 per nues to grow and . . . the proposed DST
Greece €3.60 Slovak Rep €3.60 Big tech groups have benefited from cent levy on revenues to be abandoned. would deprive these very businesses of
Hungary Ft1090 Slovenia €3.50
India Rup210 Spain €3.60 corporate tax rules that target profits They said it would “cause material an essential source of capital.”
Italy
Latvia
€3.60
€6.99
Sweden
Switzerland
SKr39
SFr6.00
based on where a company develops harm” to Europe’s tech sector. The letter UK budget analysis page 2
Lebanon LBP7500 Tunisia Din7.50
Lithuania €4.30 Turkey TL19
Luxembourg €3.70 UAE Dh17.00

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 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
2 ★ FINANCIAL TIMES Tuesday 30 October 2018

INTERNATIONAL

Investor unease British Budget

Mexico City airport plan faces cancellation UK finance

minister lifts
Peso falls as president-elect ity, and expand an airport in Toluca.
The decision raised business concerns
analysis at Mexico’s Banco Base, said the
cancellation could raise the perception
trol tower. Some 500,000 tonnes of con-
crete and 100,000 tonnes of steel have
Santa Lucia as at the Texcoco location.
The new administration said con-
spending and
says he will axe $13bn
project after ‘people’s poll’
that the administration, which will be
sworn in on December 1, may not res-
of sovereign risk, limit fixed investment
in Mexico and reduce long-term eco-
been sunk into the base of the X-shaped
terminal, where structures to hold up
tracts would be respected but legal
experts said scrapping Texcoco could
points to end
AMY GUTHRIE — MEXICO CITY
pect long-term contracts.
The peso was the biggest loser among
major currencies trading against the US
nomic growth potential.
A 30-year bond issued by the Mexico
City Airport Trust due in 2047 fell as low
the roof were already being erected.
Enrique Calderón, head of the Arturo
Rosenblueth Foundation which was in
constitute a bond default, and antici-
pated legal challenges.
Juan Francisco Torres Landa, at law
of austerity
Mexican president-elect Andrés Manuel dollar yesterday. As Mr López Obrador as 79 cents on the dollar, pushing its charge of counting the ballots from the firm Hogan Lovells Mexico, said: “Our
López Obrador plans to scrap a $13bn spoke, the currency weakened to trade yield up to more than 7 per cent. It had unofficial poll, said 1.07m voted — less clients say they have an enormous appe- GAVIN JACKSON AND CHRIS GILES
LONDON
Norman Foster-designed Mexico City 3.2 per cent lower at 19.97 per dollar, the traded as high as 92 cents on the dollar than 1 per cent of the electorate. tite to invest in Mexico, but they need
airport after a “people’s poll” deemed it weakest level since early July. as recently as the end of June. The International Civil Aviation Org- the legal certainty to do so.” UK chancellor Philip Hammond said
undesirable, stirring unease and send- Mexican equities deepened early The project, covering 5,000 hectares, anization has called for a full technical Enrique Cárdenas, a professor at the the era of austerity was “finally coming
ing the peso sharply lower. losses, with the IPC stock index down 2.5 already has a part-built air traffic con- study given concerns that simultaneous Iberoamericana University, said: “The to an end” in his Budget yesterday,
He said yesterday he had decided to per cent at 44,665.86, a five-month low. operations at Santa Lucía and Mexico decision . . . will be remembered as one after upgraded forecasts for govern-
“obey the mandate of the citizens” by Mr López Obrador called the citizens’ City airport could lead to collisions, or of the worst stupidities by a president in
abandoning the project on a dried lake vote “wise” and declared the decision a
‘The decision . . . will be for flights to be staggered so much that contemporary economic history.”
ment borrowing and growth enabled
the chancellor to increase public
bed in Texcoco, where construction victory for environmentalists who had recalled as one of the worst traffic volumes would plunge. Gustavo de Hoyos, head of Coparmex, spending.
began in 2015. Mexico will instead build panned the project as “ecocide”. He also Mr López Obrador insisted that Santa a business group, said investors should
two runways at a nearby military air- claimed the new plan would save tax-
stupidities by a president Lucia is “viable” from a technical per- blame “every peso” of losses on Mr Lóp- With a large windfall from better than
port and invest to improve Mexico City payers 100bn pesos ($5bn). in economic history’ spective and that contractors can ez Obrador, saying the decision “will expected tax receipts, the chancellor
airport, which is operating at full capac- Gabriela Siller, head of economic expect the “same volume” of work at define his presidency”. was able to meet Prime Minister
Theresa May’s pledge to provide signifi-
cant new funding for the publicly-
funded health service and increase
income tax thresholds, while reducing
South America. Economic reform public debt as a proportion of national
income.

Brazil puts faith in Bolsonaro’s free-market conversion Austerity has been the watch word for
the UK’s coalition and Conservative gov-
ernments over the past eight years as
former chancellor George Osborne and
Mr Hammond aimed to rein in deficits
that ballooned following the financial
Country braced for battle crisis. But with many public services
between liberalism and stretched close to breaking point, public
appetite for further cuts is flagging and
corporatism under new leader the government is under pressure to
spend more as well as needing to gain
parliamentary support for any Brexit
JOE LEAHY — SAO PAULO
ANDRES SCHIPANI — RIO DE JANEIRO divorce agreement.
As well as increases in spending, Mr
In an interview on the eve of his historic Hammond also unveiled a range of new
victory in Brazil’s presidential elections revenue raising measures, including a
on Sunday, far-right politician Jair Bol- new digital services tax targeting the
sonaro delivered a shock to his support- sales of Silicon Valley giants in the UK.
ers in the financial markets. With the hard work of getting the
The former army captain, who def- public finances under control now com-
eated his rival Fernando Haddad of the plete, day-to-day government spending
leftist Workers’ party in the landmark will increase at an average rate of 1.2 per
election, proposed the central bank set cent in real terms over the next five
“targets” for Brazil’s exchange rate. For years, Mr Hammond said. There would
many economists, this would be cata- be further increases if the UK strikes a
strophic; a freely floating exchange rate good exit deal with the EU. Clinching an
is regarded as one of the pillars of Bra- agreement with the EU would allow the
zil’s economic stability as it allows the UK to “harness a double deal dividend”,
currency to act as a shock absorber. he said, due to a boost from ending
“We have to establish targets for the uncertainty and releasing some of the
dollar, inflation. Then, interest rates,” fiscal “buffer” held back in case a cha-
Mr Bolsonaro said in an interview with otic Brexit required further borrowing.
Brazilian website Poder360. But Mr Hammond said while “auster-
The comments underlined what some ity is coming to an end, discipline would
economists see as the risk of a Bolsonaro remain” and increases in spending were
presidency. While the former army cap- enabled by upgrades to the existing
tain won partly by wooing investors forecasts of the Office for Budget
with promises of orthodox liberal eco- House party: per cent of GDP — high for an emerging slashing state privileges and waste ‘What we implement all of his proposals without Responsibility, the fiscal watchdog.
nomic reforms, he spent most of his supporters of economy. would be a priority for the new govern- creating more social divisions.” While the UK has grown more slowly
nearly 28 years in congress as a “corpo- Jair Bolsonaro Worse, Brazil spends much of its huge ment. Tax would be “brutally” simpli- are not so Businesspeople in São Paulo, how- than many of its European peers follow-
ratist”, protecting the interests of his celebrate in government budget on salaries and a fied. Those earning up to five times the sure about ever, worry most about Mr Guedes. The ing the vote to leave the EU, the OBR
political base in the security forces by front of his regressive pension system that overly minimum salary, about R$5,000 investor is under investigation over his forecast higher growth in the years
voting against reforms, including priva- home in Rio benefits its well-paid public servants. ($1,380) a month, would be exempt and is whether dealings with state pension funds; he ahead and revised down its estimate of
tisations and changes to pensions. de Janeiro after “The problems we are facing are those on more than that would pay a flat he will be has decried the cases as a political smear borrowing so far this year.
His conversion to liberal economics is his presidential huge,” said one private equity executive rate of 20 per cent, from 27.5 per cent. campaign. Also of concern is what they Meanwhile, forecasts for borrowing in
about as recent as his rebirth as an evan- victory in São Paulo, who said he remained pes- Pensions would be reformed and the able to describe as his gruff temperament, 2018 were revised down by £11.6bn, so
gelical Christian; he was rebaptised in Mauro Pimentel/AFP/Getty simistic despite the Bolsonaro victory. number of ministries cut by half, with implement which some believe will be ill-suited to borrowing as a percentage of national
the river Jordan two years ago. Investors hope Mr Bolsonaro’s hiring Mr Guedes himself possibly becoming a public life. “It’s going to be an alliance of income is now expected to fall to 0.8 per
“That will be one of the more serious of University of Chicago economist super minister in charge of finance, all of his the centre and right in politics around a cent by 2023-24, down from 1.2 per cent
conflicts,” said José Francisco de Lima, Paulo Guedes as his economic guru. A planning and international trade. proposals liberal economic programme,” Mr this year. Debt will also decline as a
chief economist at Brazil’s Banco Fator, co-founder of BTG Pactual, once the “We are so far from the efficiency Guedes said of the new government. It share of national income from 2017-18
on liberalism versus corporatism in the country’s biggest homegrown inde- frontier that if you keep removing dis- without would not be radical or “ultra-liberal” — onwards, from 83.7 per cent this year to
future Bolsonaro presidency. pendent investment bank, he runs tortions, you could have three to four creating nothing of the kind, he said. 74.1 per cent in 2023-24. The chancellor
Investors are upbeat about his vic- investment fund Bozano Investimentos. years of rapid growth,” Mr Guedes said. Investors hope Brazil will implement also announced an extra £1.7bn by
tory. The Bovespa stock index reached a “Order, what an open society needs is He might also attempt a massive pri- more social its first genuinely liberal economic pro- 2023-24 to increase the generosity of the
record high yesterday and the real hit its order,” said Mr Guedes earlier this year, vatisation programme generating up to divisions’ gramme in years. But for many, the universal credit welfare reform scheme
highest level in five months. explaining the rise of Mr Bolsonaro. R$700bn ($194bn) in revenue to help proof will be in the pudding. criticised for driving benefit claimants
But the economic challenges facing Economists expect Mr Guedes to keep pay down debt, estimated Marcos “These kinds of more unpopular into penury.
the new president are severe. Brazil is a freeze on fiscal spending. They also see Casarin of Oxford Economics. adjustment policies, they require politi- The pro-business chancellor, who has
struggling to emerge from its worst him introducing formal autonomy for “We tend to agree with most of the cal leadership and the capacity to organ- been allied with Conservative MPs
recession in history, with unemploy- the central bank and allowing state- measures Bolsonaro has proposed,” said ise and convince congress to do it, that is wanting to retain a close relationship
ment running at 12 per cent. owned oil company Petrobras to set fuel Mr Casarin in a report, leaving aside the a big question mark,” said economist with the EU, thinks that any further eas-
Meanwhile the budget deficit is run- prices based on market tendencies. On tax cut, which he called “regressive”. Alberto Ramos of Goldman Sachs. ing of austerity will depend on a deal
ning at 7 per cent of gross domestic Sunday, after the victory of his putative “What we are not so sure about, Editorial Comment page 8 that keeps trade flowing easily between
product and public debt is nearing 80 future boss, he said pension reform and though, is whether he will be able to Lex page 10; Markets page 19 the EU and the UK.

Workforce participation
MAKE A SMART INVESTMENT
Subscribe to the FT today at FT.com/subscription India social norms hit women’s fight to find work
FRIDAY 31 MARCH 2017 WORLD BUSINESS NEWSPAPER UK £2.70 Channel Islands £3.00; Republic of Ireland €3.00

Trump vs the Valley

Tech titans need to minimise
political risk — GILLIAN TETT, PAGE 13
A Five Star plan?
Italy’s populists are trying to woo
the poor — BIG READ, PAGE 11
Dear Don...
May’s first stab at the break-up
letter — ROBERT SHRIMSLEY, PAGE 12
AMY KAZMIN — NEW DELHI workplaces, often perpetrated by the labour force. “The richer you get, the family, and there was no question that
HMRC warns Lloyd’s of Brussels Insurance market powerful men who run them. But the morelikelyitisthatyouwillbepulledout their very first reaction would be ‘Quit
Shortly after she graduated from a New
UK £3.80; Channel Islands £3.80; Republic of Ireland €3.80 SATURDAY 1 APRIL / SUNDAY 2 APRIL 2017
Briefing
to tap new talent pool with EU base
customs risks THE END
i US bargain-hunters fuel Europe M&A
Europe has become the big target for cross-border

debate over workplace harassment of the labour force because men are say- your job and come back home, then’,”
dealmaking, as US companies ride a Trump-fuelled
equity market rally to hunt for bargains across the
HOW DRIVERLESS
OF THE TECHNOLOGY IS
Atlantic.— PAGE 15; CHINA CURBS HIT DEALS, PAGE 17

being swamped
Delhi high school, Tulsi Singh-
i Report outlines longer NHS waiting times
A report on how the health service can survive CHANGING AN
ROAD
more austerity has said patients will wait longer for
non-urgent operations and for A&E treatment while AMERICAN WAY OF LIFE Censors and sensitivity
by Brexit surge
some surgical procedures will be scrapped.— PAGE 4

comes as many Indian women are still ing that they don’t want their wives to said Ms Raj. “But I didn’t want to. I didn’t
i Emerging nations in record debt sales Warning: this article may be
FT WEEKEND MAGAZINE
FEBRUARY 4 2017

Developing countries have sold record levels of

government debt in the first quarter of this year,
upsetting — LIFE & ARTS

alia secretly applied for a coveted gov-

taking advantage of a surge in optimism toward
emerging markets as trade booms.— PAGE 15

3 Confidence in IT plans ‘has collapsed’

3 Fivefold rise in declarations expected
JAMES BLITZ — WHITEHALL EDITOR
Credit Suisse Art of persuasion Mystery deepens
i London tower plans break records
How To Spend It
fighting for the right to work at all. work,” said Ms Agrawal. “It’s the do all these things to quit in my life.”
A survey has revealed that a
adjust its negotiation position with the
record 455 tall buildings are
planned or under construction
in London. Work began on
over disputed painting of Jane Austen
engulfed in
EU, a Whitehall official said. “If running almost one tower a week

ernment data-entry job.

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

fresh tax probe

leaves the EU, customs authorities have
admitted to MPs.
HM Revenue & Customs told a parlia-
mentary inquiry that the new system
needed urgent action to be ready by
March 2019, when Brexit is due to be
completed, and the chair of the probe
said confidence it would be operational
in time “has collapsed”.
India has one of the world’s lowest whole patriarchy thing. It looks bad for It is too soon to assess how India’s
In a letter to Andrew Tyrie, chairman tensions after talks in Ankara with President Recep
of the Commons treasury select com-
mittee, HMRC said the timetable for
Tayyip Erdogan on issues including Syria and the
extradition of cleric Fethullah Gulen.— PAGE 9
Chic new lodgings
delivering CDS was “challenging but
achievable”. But, it added, CDS was “a i Toshiba investors doubt revival plan
in Scotland
complex programme” that needed to be In a stormy three-hour meeting, investors accused MAGAZINE
linked to dozens of other computer sys- managers ofhaving an entrenched secrecy culture
tems to work properly. In November, 3 UK, France and Netherlands swoop
and cast doubt on a revival plan after Westinghouse
HMRC assigned a “green traffic light” to filed for Chapter 11 bankruptcy protection.— PAGE 16
3 Blow for bid to clean up Swiss image

Setting up a digital customs system
has been at the heart of Whitehall’s
Brexit planning because of the fivefold
increase in declarations expected at
British ports when the UK leaves the EU.
But when she was offered the post, her rates of female participation in the the men if they can’t provide for their #MeToo movement will affect women’s
CDS, indicating it would be delivered on
time. But last month, it wrote to the i HSBC woos transgender customers
committee saying the programme had The bank has unveiled a range of gender-neutral
RALPH ATKINS — ZURICH it followed “a strategy offull client tax
been relegated to “amber/red,” which DUNCAN
titles such asROBINSON — BRUSSELS
“Mx”, in addition to Mr, Mrs, Misscompliance”
or but was still trying to
means there are “major risks or issues Ms, in a move to embrace diversity and cater togather the information about the probes.

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

(Deposito Legal) M-32596-1995; Publishing Director,

Theresa May announced in January that
Brexit would include departure from
both trading blocs. HMRC handles 60m
declarations a year but, once outside the
customs union, the number is expected
to hit 300m.
father, a government clerk, forbade her labour force, with just 27 per cent of all wholefamilyandthewifehastowork.” entry into the workforce. While some
international trade once the UK leaves its image as a tax haven. and certain ofits employees”. The UK
the EU . . . Internal ratings are designed The Swiss bank said yesterday it was tax authority added: “The international
to make sure that each project gets the
focus and resource it requires for suc-
Terror attacks inwith
co-operating western Europe after
authorities
offices in London, Paris and Amsterdam
Recent reach
itsattacks
notably the message
2011
— of this investigation sends a clear
that there is no hiding place for
The lure of the exotic
cessful delivery.” were contacted
Highlighted attack byOthers massacre bythose seeking to evade tax.”
local officials Robin Lane Fox on the flair
“concerning client tax matters”. Anders BreivikDutch in prosecutors, who initiated the
HMRC’s letters to the select commit- of foreign flora — HOUSE & HOME

1 Southwark Bridge,
The revelations about the system,
called Customs Declaration Service, are
likely to throw a sharper spotlight on
tee, which will be published today, pro-
vide no explanation for the rating
change, but some MPs believe it was
Lloyd’s of London chose Brus-
sels over “five or six” other
insurers to follow. Most of the
business written in Brussels
EU, with Dublin and Luxem-
bourg thought to be more likely
AFP
parts in Germany wereBrussels
while Australia’s revenue department
Norway
said it was investigating a Swiss
Lionel Barber; Publishing Company, The Financial Times
Norway, the
Dutch authorities said their counter- action, said they seized jewellery, paint-
attacks in Paris
also involved,
and Nice, and
ings and gold ingots as part of their
Brussels suicide
Nice bank.
the while French officials said their
probe;
investigation had revealed “several

whether Whitehall can implement a
host of regulatory regimes — in areas
caused by Mrs May’s unexpected deci-
sion to leave the EU customs union.
cities in its decision to set up an
EU base to help deal with the
will be reinsured back to the
syndicates at its City of London
homes for the industry. But Paris
Mr Nelson said the city won on The inquiries threaten to undermine
efforts by the country’s banking sector
from accepting. “He was happy for girls working-age women holding paid jobs India’s poorest families often have no men have threatened to stop hiring
bombings — have
thousand” bank accounts opened in
bucked the trend
Switzerland and not declared to French

London SE1 9HL

ranging from customs and immigration
to agriculture and fisheries — by the
time Britain leaves the EU.
Problems with CDS and other projects
essential to Brexit could force London to
Timetable & Great Repeal Bill page 2
Scheme to import EU laws page 3
Editorial Comment & Notebook page 12
Philip Stephens & Chris Giles page 13
JPMorgan eye options page 18
expected loss of passporting
rights after Brexit.
John Nelson, chairman of the
centuries-old insurance mar-
ket, said he expected other
headquarters, pictured above.
The Belgian capital had not
been seen as the first choice for
London’s specialist insurance
groups after the UK leaves the
its transport links, talent pool
and “extremely good regula-
tory reputation”.
Lex page 14
Insurers set to follow page 18
to overhaul business models and ensure
customers meet international tax
requirements following a US-led clamp- Limited, registered office as above. Local Representative
of generally low

western Europe
tax authorities.
fatalities from
The Swiss attorney-general’s office
Sources: Jane’s Terrorism and Insurgency Centre terror incidents in
said it was “astonished at the way this
down on evaders, which resulted in operation has been organised with the
billions of dollars in fines. deliberate exclusion of Switzerland”. It

office; C/ Infanta Maria Teresa 4, bajo 2, 28016, Madrid.

The probes risk sparking an interna- demanded a written explanation from
tional dispute after the Swiss attorney- Dutch authorities.

City watchdog sends a clear message as

to get an education, but it wasn’t sup- outside their home. That figure is choice but to allow women to work to women, many others hope it will lead to
general’s office expressed “astonish- In 2014, Credit Suisse pleaded guilty
ment” that it had been left out of the in the US to an “extensive and wide-
actions co-ordinated by Eurojust, the ranging conspiracy” to help clients THE RISE
Escape OF
the taper ECO-GLAM
trap
EU’s judicial liaison body. evade tax. It agreed to fines of $2.6bn.

banker loses job over WhatsApp boast How high earners can evade

Subscriptions & Customer service

Credit Suisse, whose shares fell 1.2 per

subject ofinvestigations in the Nether-

lands, France and the UK. The bank said in Paris ISSN 1135-8262.
Additional reporting by Laura Noonan in
cent yesterday, identified itself as the Dublin, Caroline Binham and Vanessa
Houlder in London, and Michael Stothard
Austen’s descendants insist the Rice portrait depicts her as a girl — see magazine Bridgeman Art Library
a pension headache — FT MONEY

posed to lead to employment,” she said. almost on par with deeply conservative scrape by. But official data show that healthier working environments.
LAURA NOONAN — DUBLIN Berrys after discussions with regulators. media at work, but banks are unable to
JENNIFER THOMPSON — LONDON

Tel: +44 207 775 6000, fte.subs@ft.com,

Shutdown risk as border
A boastful WhatsApp message has cost
a London investment banker his job
and a £37,000 fine in the first case of
Christopher Niehaus, a former Jeffer-
ies banker, passed confidential client
information to a “personal acquaint-
ance and a friend” using WhatsApp,
according to the FCA. The regulator said
ban people from installing apps on their
private phones.
Andrew Bodnar, a barrister at Matrix
Chambers, said the case set “a precedent
in that it shows the FCA sees these mes-
UAE: Al tough
Brussels takes Nisrstance
Publishing
on Brexit LLC, P.O.Box 6519. Dubai. Editor
inwithChief:
Spain handed veto over Gibraltar
regulators cracking down on commu- 390_Cover_PRESS.indd 1 19/01/2017 13:57

wall bid goes over the top nications over Facebook’s popular Mr Niehaus had turned over his device saging apps as the same as everything

www.ft.com/subscribetodayCongressional Republicans seeking to

avert a US government shutdown after
April 28 have resisted Donald Trump’s
attempt to tack funds to pay for a wall
on the US-Mexico border on to
chat app.
The fine by the Financial Conduct
Authority highlights the increasing
problem new media pose for companies
that need to monitor and archive their
to his employer voluntarily.
The FCA said Mr Niehaus had shared
confidential information on the messag-
ing system “on a number of occasions”
last year to “impress” people.
Several banks have banned the use of
else”.
Information shared by Mr Niehaus
Lionel Barber.
Instead, at 21, Ms Singhalia was mar- Arab societies and far below more pros- strong economic growth over the past 15 “The easiest thing to do is say, ‘we’re
included the identity and details of a
client and information about a rival of ALEX BARKER — BRUSSELS ambitious trade and airline access deals. mise. If Britain wants to prolong its
Jefferies. In one instance the banker GEORGE PARKER — LONDON Gibraltar yesterday hit back at the status within the single market after
boasted how he might be able to pay off STEFAN WAGSTYL — BERLIN clause, saying the territory had “shame- Brexit, the guidelines state it would

Advertising
stopgap spending plans. They fear
that his planned $33bn increase in
defence and border spending could
force a federal shutdown for the first
time since 2013, as Democrats refuse
staff’s communication.
Several large investment banks have
banned employees from sending client
information over messaging services
including WhatsApp, which uses an
new media from work-issued devices,
but the situation has become trickier as
banks move towards a “bring your own
device” policy. Goldman Sachs has
clamped down on its staff’s phone bills
his mortgage if a deal was successful.
Mr Niehaus was suspended from Jef-
feries and resigned before the comple-
tion of a disciplinary process.
Jefferies declined to comment while
Living wage rise to pile
pressure on care services
Qatar: Dar Al Sharq, PO Box 3488, Doha-Qatar. Tel: +97
The EU yesterday took a tough opening
stance in Brexit negotiations, rejecting
Britain’s plea for early trade talks and
explicitly giving Spain a veto over any
arrangements that apply to Gibraltar.
fully been singled out for unfavourable
treatment by the council at the behest of
Spain”. Madrid defended the draft
clause, pointing out that it only reflected
“the traditional Spanish position”.
require “existing regulatory, budgetary,
supervisory and enforcement instru-
ments and structures to apply”.
Mr Tusk wants talks on future trade
to begin only once “sufficient progress”

44557825 ried into a conservative family where perous east Asian economies, where up years has been accompanied by a not going to hire women’. It’s the cow-
to accept the proposals. encryption system that cannot be as iPhone-loving staff spurn their work- Facebook did not respond to a request Senior EU diplomats noted that has been made on Britain’s exit bill and

Tel: +44 20 7873 4000 asiaads@ft.com,

US budget Q&A and
Trump attack over health bill i PAGE 8
accessed without permission from the
user. Deutsche Bank last year banned
WhatsApp from work-issued Black-
issued BlackBerrys.
Bankers at two institutions said staff
are typically trained in how to use new
for comment.
Additional reporting by Chloe Cornish
Lombard page 20
About 2.3m people will benefit from
today’s increase in the national living
wage to £7.50 per hour. But the rise
will pile pressure on English councils,
which will have to pay care workers a
European Council president Donald
Tusk’s first draft of the guidelines,
which are an important milestone on
the road to Brexit, sought to damp Brit-
ain’s expectations by setting out a
Mr Tusk’s text left room for negotiators
to work with in coming months. Prime
minister Theresa May’s allies insisted
that the EU negotiating stance was
largely “constructive”, with one saying it
citizen rights, which Whitehall officials
believe means simultaneous talks are
possible if certain conditions are met.
Boris Johnson, the foreign secretary,
reassured European colleagues at a

emeaads@ft.com Subscribe In print and online World Markets

lot more. Some 43 per cent of care
staff — amounting to 341,000 people
aged 25 and over — earn less than the
France: Publishing Director, Jonathan Slade, 46 Rue La
“phased approach” to the divorce proc-
ess that prioritises progress on with-
drawal terms.
was “within the parameters of what we
were expecting, perhaps more on the
upside”.
Nato summit in Brussels that Mrs May
had not intended to “threaten” the EU
when she linked security co-operation

women had to cover their faces, defer to to two-thirds of women work. decline in both the absolute number of ard’s way out,” said Aparna Jain, a cor-
www.ft.com/subscribenow new living wage and the increase is The decision to add the clause giving British officials admitted that the EU’s after Brexit with a trade deal.
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Analysis i PAGE 4 300-year territorial dispute between tion deal could be problematic. Man in the News: David Davis page 11

Letters to the editor www.ft.com

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No: 39,435 ★
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7369.52
1.249
0.859
1.241 £ per $
0.866 € per £
0.801
1.164
0.806 UK Gov 10 yr
1.155 Ger Gov 10 yr
111.295 111.035 ¥ per € 119.476 119.363 Jpn Gov 10 yr
3475.27 0.18 ¥ per £ 139.035 137.822 £ index 76.705 76.951 US Gov 30 yr
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100.46
98.68
100.45
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5376 8253; Commission Paritaire N° 0909 C 85347; ISSN

elders and stay at home. It was only after Part of the problem is that India has women working, and the percentage. porate leadership coach. “We have to
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 4011.01 4011.80 -0.02 SFr per € 1.069 1.072 SFr per £ 1.244 1.238 price prev chg

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Hang Seng
FTSE All World $
5089.64 5069.04 0.41 COMMODITIES
12256.43 12203.00 0.44
19063.22 19217.48 -0.80 Oil WTI $
24301.09 24392.05 -0.37 Oil Brent $
297.99 297.73 0.09 Gold $
Mar 30
50.22
52.98
1248.80
prev
49.51
52.54
1251.10
Fed Funds Eff
%chg US 3m Bills
1.43 Euro Libor 3m
0.84 UK 3m
-0.18 Prices are latest for edition
0.66
0.78
-0.36
0.34
0.66
0.78
-0.36
0.34
0.00
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letters.editor@ft.com
© THE FINANCIAL TIMES LTD 2017
No: 39,436 ★
Printed in London, Liverpool, Glasgow, Dublin,
1148-2753.
Dow Jones Ind
FTSEurofirst 300
Euro Stoxx 50
FTSE 100
20689.64 20728.49 -0.19 £ per €
1503.03 1500.72 0.15 ¥ per $
3495.59
7322.92
3481.58 0.40 ¥ per £
7369.52 -0.63 € index
0.855 0.859 € per £
111.430 111.295 ¥ per €
139.338 139.035 £ index
88.767 89.046 $ index
1.169 1.164 Ger Gov 10 yr
119.180 119.476 Jpn Gov 10 yr
77.226 76.705 US Gov 30 yr
104.536 104.636 Ger Gov 2 yr
99.27
100.36
99.27
102.57
0.33
0.07
3.04
-0.75
-0.01
0.00
0.01
0.00

her mother-in-law died and her hus- failed to create the large-scale manufac- That drop partly reflects girls studying focus on the companies making affirma-
Frankfurt, Brussels, Milan, Madrid, New York, FTSE All-Share 3990.00 4011.01 -0.52 SFr per € 1.071 1.069 SFr per £ 1.252 1.244 price prev chg
Chicago, San Francisco, Washington DC, Orlando, CAC 40 5122.51 5089.64 0.65 COMMODITIES Fed Funds Eff 0.66 0.66 0.00

Turkey: Dunya Super Veb Ofset A.S. 100. Yil Mahallesi

Tokyo, Hong Kong, Singapore, Seoul, Dubai Xetra Dax 12312.87 12256.43 0.46 Mar 31 prev %chg US 3m Bills 0.78 0.78 0.00

Executive appointments Nikkei

Hang Seng
FTSE All World $
18909.26 19063.22 -0.81 Oil WTI $
24111.59 24301.09 -0.78 Oil Brent $
297.38 298.11 -0.24 Gold $
50.46
53.35
1244.85
50.35
53.13
1248.80
0.22 Euro Libor 3m
0.41 UK 3m
-0.32 Prices are latest for edition
-0.36
0.34
-0.36
0.34
0.00
0.00
Data provided by Morningstar

Tel: +44 20 7873 4909 34204, Bagcilar- Istanbul, Tel. +90 212 440 24 24.
www.exec-appointments.com band fell ill that she was permitted to turing jobs that can absorb poorly edu- for longer, but economists said women tive change.”
©Copyright The Financial Times 2018.
Reproduction of the contents of this newspaper in any
work as an aide in a private school to cated rural women. “In east Asia, girls had also dropped out as higher male But women’s road to the workplace
Published by: The Financial Times Limited, 1 Southwark
Bridge, London SE1 9HL, United Kingdom. Tel: +44 20 manner is not permitted without the publisher’s prior bolster her family’s precarious finances. and young women came off the fields earnings allowed them to stay at home. will remain bumpy. After working full
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consent. ‘Financial Times’ and ‘FT’ are registered trade
marks of The Financial Times Limited.
Even then, her job caused family ten- and straight into these factory jobs,” Nidiya Raj, a 24-year-old IT engineer time for seven years, Ms Singhalia, who
Germany, An der Brucke 20-22, 64546 Morfelden - sions, stoked by her sister-in-law. “She said feminist economist Nisha Agrawal, from a small town in Kerala, had strong now drives for a women’s taxi service, is
The Financial Times and its journalism are subject to a
Walldorf. Responsible Editor, Lionel Barber. Responsible
for advertising content, Jon Slade. self-regulation regime under the FT Editorial Code of told my husband: ‘Whenever women former director of Oxfam India. “We parental support to take up a job in under pressure to quit from her teenage
Italy: Monza Stampa S.r.l., Via Michelangelo Buonarroti, Practice: www.ft.com/editorialcode step out of the house, they start talking don’t have that story. We are not creat- India’s male-dominated tech industry, son, who has been persuaded that it is
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she said. “My husband started suspect- But India’s social norms — including tical. But when she started feeling har- “My son has started resenting my
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Milano n. 296 del 08/05/08 - Poste Italiane SpA-Sped. in One-off copyright licences for reproduction of FT articles ing me of having an affair.” entrenchedbeliefsaboutawoman’splace assed by her supervisor — and her job,” she said. “He feels that his mama
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For both services phone +44 20 7873 4816, or email
India is being rocked by a #MeToo in the home and taboos on interactions employer was unreceptive to her com- going out at night is not safe. But I tell
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28821, Coslada, Madrid. Legal Deposit Number harassment in elite, white-collar barrier to women entering the paid her parents. “They are a conservative Additional reporting by Jyotsna Singh

Tuesday 30 October 2018
Merkel’s ability to see out term Weakened position dents
will depend on CDU successor hopes on EU overhaul
German chancellor would be comfortable with Kramp-Karrenbauer, not Spahn
Happier days: Angela Merkel is named CDU chief in 2000, applauded by predecessor Wolfgang Schäuble and parliamentary leader Friedrich Merz — Reuters
GUY CHAZAN — BERLIN
Angela Merkel’s decision to stand down
as leader of the Christian Democratic
Union and not run again as chancellor in
2021 ushers in a new age in German pol-
itics: the pre-post-Merkel era.
Her move was designed to quell rising
discontent in her party and set it on a
path of renewal, while allowing Ms Mer-
kel to retain the reins of power as chan-
cellor — a strategy her supporters in the
CDU appeared willing to endorse.
“I believe that giving up the leader-
ship of the party will strengthen her as
chancellor,” said Katja Leikert, a CDU
MP who is deputy head of the party’s
parliamentary group. “She will gain
more legitimacy by giving up some of
her power.”
But others are not so sure, predicting
that the chancellor will be forced to
resign before her fourth and final term
officially ends in three years’ time.
“Although it’s difficult, I think it
would be right to have a change at the
top of the government during this par-
liamentary term and go into the next
Bundestag election with new leadership
and a new programme,” said Joachim
Pfeiffer, a rightwing CDU MP. “We
Who’s next? Leading contenders for party leader
Annegret Kramp-
Karrenbauer
The “mini-
Merkel”, as the
German media has
nicknamed her, is
widely believed to
be Ms Merkel’s
choice to succeed
her. She was prime
minister of the tiny
state of Saarland
until she took her
post as secretary-
general of the CDU
this year. Ms
Kramp-
Karrenbauer is
well-liked by CDU
members on both
right and left of the party. Leftwingers appreciate her
support for minimum wage and workers’ rights, while
conservatives praise her stance on family values.
Balkans
Greek political impasse threatens name-change deal with neighbour on use of ‘Macedonia’
KERIN HOPE — ATHENS
A stand-off between nationalists and
leftwingers in Greece’s fragile coalition
government is undermining prospects
for settling a three-decade dispute over
Macedonia’s name, which has blocked
the Balkan country’s path to member-
ship of Nato and the EU.
The leftwing Syriza party of prime min-
ister Alexis Tsipras strongly supports a
deal signed with Skopje in June, which
removes Athens’ concern that the term
Macedonia implies a territorial claim on
the Greek region of the same name.
But Syriza’s coalition partner, the
rightwing Independent Greeks, has
threatened to pull out of government
over the Prespa agreement, named after
the Balkan lake where it was signed.
Panos Kammenos, the defence minis-
ter and the party’s leader, said last week:
“North Macedonia [the country’s pro-
posed new name] for us is the last straw.
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INTERNATIONAL
can’t just go back to business as usual.” December elect Jens Spahn. The health
Ms Merkel has been under attack minister has frequently clashed with the
from conservatives in her party for chancellor over refugee policy.
years. Many have not forgiven her for In another bad omen for Ms Merkel,
her liberal asylum policy during the ref- Friedrich Merz, former head of the CDU
ugee crisis of 2015, when she allowed parliamentary group, said he, too, was
more than 1m migrants into Germany. eyeing a leadership bid. Mr Merz, a con-
But the pressure on her intensified servative, fiercely resisted Ms Merkel’s
after electoral setbacks for the CDU and efforts to move the CDU to the political
its Bavarian sister party the CSU in centre: she repaid him by forcing him
Bavaria and Hesse this month. out of his job in 2002.
Olav Gutting, a CDU MP, accepted the “Merkel/Spahn would be a difficult
chancellor’s logic for giving up as party constellation, but Merkel/Merz would
chief. He said: “It was clear after these not work at all,” said Thorsten Faas, a
terrible results that we urgently need a political scientist at Berlin’s Free Uni-
new start, and a new start needs new versity. “If Merz wins, she’ll have to go.”
faces.” That Ms Merkel agreed to give up the
But Ms Merkel’s ambitions to hold her chairmanship of the CDU is in itself sur-
government together and see out her prising. She has always insisted that the
chancellorshipcoulddependcruciallyon jobs of chancellor and CDU boss should
which face the party opts for in her stead. not be split. For some in Berlin, the fact
She could probably work comfortably she has now changed her mind — saying
with Annegret Kramp-Karrenbauer, the it was a “gamble” that could be managed
current CDU secretary-general, who is for a limited period — shows that her
often portrayed as Ms Merkel’s ideologi- days as chancellor are numbered.
cal heir. AKK, as she is widely known, is That was not the message she con-
in charge of drafting a new manifesto veyed yesterday, though. By insisting
that many hope could win the next gen- she would stay on as chancellor until
eration of voters. 2021 “she was signalling to her party —
Ms Merkel could be in trouble if party ‘watch out, you still have me to reckon
delegates meeting in Hamburg in with’,” said Mr Faas.
Jens Spahn
The “anti-Merkel” is
Germany’s health
minister and one of
Ms Merkel’s most
vocal critics. In 2016
he rallied the CDU
against Ms Merkel to
reject a government-
approved law giving
dual citizenship to
German-born
children of
foreigners. Mr
Spahn, who is gay,
has also criticised
Ms Merkel’s open-
door policy
for asylum seekers.
Last year he said
that the arrival of many Muslims meant that “German
society risks becoming more anti-Semitic, homophobic,
more macho and violent”.
We will not accept the term Macedonia, Yet the unlikely alliance, forged in
we will walk out of parliament if Syriza 2015 after Syriza narrowly missed win-
presents the agreement [for ratifica- ning an outright election victory, was
tion].” renewed after a second election and sur-
Mr Kammenos is exploiting lingering vived Greece’s unpopular third interna-
popular resentment over the former tional bailout unscathed.
Yugoslav republic’s decision to call itself The US pressed for the Macedonia
Macedonia after declaring independ- agreement to strengthen the role of
ence in 1991. This was seen in Greece as Nato and the EU in the Balkans at a time
an attempt to usurp the heritage of
Alexander the Great.
Opinion polls show more than 50 per
cent of Greeks oppose the June deal
because the government accepted the
existence of Macedonian ethnicity and
language in return for the name change.
To many observers, Mr Tsipras’s
choice of coalition partner seems
bizarre. Syriza is led by former mem-
bers of the Greek Communist party,
while Mr Kammenos served as shipping
minister in a conservative government
before founding his nationalist party Greek PM Alexis Tsipras, left, with
with links to Greece’s religious right. Macedonia counterpart Zoran Zaev
Regardless of what happens in her
own party, Ms Merkel’s future cannot be
completely divorced from the dilemma
facing the Social Democrats, junior part-
ner in Ms Merkel’s grand coalition.
The SPD’s performance in Hesse,
where its share of the vote shrank by
one-third to 20 per cent, was even worse
than the CDU’s. Many in the party have
argued that the only way to stem further
electoral losses is to quit the govern-
ment. That would trigger elections, in
which Ms Merkel would not run again.
“The CDU will stabilise after we elect a
new leader, but I can’t see that happen-
ing to the SPD,” said Mr Gutting. Its nev-
er-ending soul-searching would, he said,
continue to threaten Ms Merkel’s posi-
tion and endanger the grand coalition.
But many analysts insisted that trig-
gering a government collapse would not
necessarily be in the SPD’s best interests.
“The main parties, above all the SPD,
will want to avoid new elections at all
costs because their poll ratings are so
bad,” said Andrea Römmele, a political
scientist at the Hertie School of Govern-
ance. “For that reason the likelihood is
that Merkel will make it to 2021.”
Editorial Comment page 8
Opinion page 9
Armin Laschet
Mr Laschet is the
prime minister of
North Rhine-
Westphalia,
Germany’s most
populous state. The
region was a
longstanding
bastion of support
for the Social
Democrats before
Mr Laschet and the
CDU took power last
year. During the
campaign Mr
Laschet, a former
editor of a Catholic
newspaper, was
criticised as
lacklustre and uncharismatic. He is considered a pro-
European liberal and stood loyally behind Ms Merkel at
the height of the refugee crisis.
when Russia and China are also vying
for influence in the region.
“Tsipras is determined to complete
the Prespa agreement even if there are
political costs,” said Aris Hatzis, an Ath-
ens University law professor and politi-
cal commentator. “It would cement his
transformation over the past three
years from radical leftist politician to a
western partner who can deliver both
on foreign affairs and the economy.”
But Mr Kammenos has other ideas.
This month he provoked the resignation
of Nikos Kotzias, foreign minister, who
negotiated the deal with his Macedo-
nian counterpart, Nikola Dimitrov, by
claiming at a cabinet meeting that for-
eign ministry funds had been misappro-
priated on his watch.
Mr Kotzias strongly denied the
accusations but Mr Tsipras failed to
speak up in defence of his foreign minis-
ter, according to two witnesses. Later
the same day, the prime minister took
European co-operation
ALEX BARKER AND JIM BRUNSDEN
BRUSSELS
BEN HALL — PARIS
Angela Merkel’s decision to relinquish
leadership of her party in Berlin
reinforces a trend in plain sight at EU
level for some time: the German chan-
cellor’s once formidable authority is
waning.
For most of the 102 summits she has
attended in Brussels since 2005, Ms
Merkel was the pre-eminent voice, play-
ing an outsized role in shaping — or stop-
ping — decisions, from the eurozone cri-
sis and budget negotiations to Russia’s
invasion of Ukraine.
But since the uncontrolled migration
wave of 2015 and the disappointing
results that followed in the federal elec-
tions of 2017, Ms Merkel’s role at the
EU’s top table has shifted.
Rather than weighing in on the
domestic problems of others — from
Greek bailouts to special British deals —
Ms Merkel has sometimes been asking
others to help solve her own problems at
home. Günther Oettinger, Germany’s
EU commissioner, cited such grand coa-
lition squabbling in Berlin as one factor
“weakening Germany’s ability to act in
the EU”.
During recent summit discussions,
Ms Merkel has appeared less across the
detail of some topics, including Brexit,
and more liable to go “off script”,
according to witnesses. But even in the
twilight of her career, she still carries
considerable influence, both as Europe’s
longest-serving leader and the head of
Europe’s biggest economy.
Her approach will still frame the
range of possible outcomes on all the big
questions looming on the EU agenda, be
it the Brexit negotiation and eurozone
reform to the appointment of a clutch of
top EU jobs next year.
Thomas Wieser, the top civil servant
for the eurogroup of euro area finance
ministers during the sovereign debt cri-
sis, said that Ms Merkel has “a political
view that transcended the borders of
her country” — something that could
not be taken for granted with any future
German leader.
“Any successor will need to consoli-
date her or his position within the party,
the government and the country before
lifting their eyes over the horizon,” Mr
Wieser said, adding that “within
Europe, [Merkel] does remain strong”.
Mr Wieser noted that, when it comes
to efforts to reform the governance of
the euro, Ms Merkel’s political troubles
are unlikely to have much short-term
impact, given that disagreements over
Italy’s budget are already holding back
progress.
But her weakened position domesti-
cally may make it even harder to deliver
Friedrich Merz
Mr Merz holds
several senior
positions in
German business.
He was previously
a senior member of
parliament for the
CDU. The former
judge was
parliamentary
party leader in the
early 2000s when
Ms Merkel was
consolidating her
authority as
overall party chief.
Mr Merz saw his
star fading as Ms
Merkel’s power
grew. He quit parliament and developed a successful
career in business. In November 2017, Mr Laschet made
him Brexit commissioner for North Rhine-Westphalia.
over Mr Kotzias’s portfolio himself.
Even if Mr Kammenos makes good on
his threat, Syriza would hope to survive
as a minority administration in the
run-up to a general election — which is
due by next October but is expected to
be held alongside May’s European Par-
liament elections, according to Costas
Iordanides, a political commentator.
Mr Tsipras counts on having several
months to drum up the six votes Syriza
needs to secure a parliamentary major-
ity among pro-European opposition
MPs. Stavros Theodorakis, leader of the
centrist To Potami party, has urged his
six MPs to back the deal.
Zoran Zaev, Macedonia’s prime min-
ister, won the necessary two-thirds
majority in parliament this month to
proceed with constitutional amend-
ments required under the deal with
Greece. It will take an estimated three
months to prepare the amendments
and pass them through parliament, this
3
on the limited promises she did make to
President Emmanuel Macron of France
in the Meseberg declaration in June.
“That agenda was very much driven
by a personal commitment of the Ger-
man chancellor to the French presi-
dent,” said Guntram Wolff of the
Bruegel think-tank. “For a while it has
been clear that many in the Bundestag
did not share the same degree of ambi-
tion on Europe. It will certainly not
make it easier to advance the Meseberg
agenda.”
In France, traditionally Germany’s
closest partner in the EU, the govern-
ment tried to put a brave face on the
political instability in Berlin and the fate
of Ms Merkel.
“She has been in power for quite a
long time,” said Nathalie Loiseau,
Europe minister, in an interview. “So I
don’t know if it is the beginning of the
end. Political leaders have more lives
than cats. So many of them have been
judged to be dead or disappearing only
to come back again.”
At the same time there is also deep
frustration in Paris that, after years of
German carping about a lack of reform
in France or ideas for bolstering the EU,
‘I don’t know if it is the
beginning of the end.
Political leaders have
more lives than cats’
Berlin has given the modernising Mr
Macron such short shrift. It is tinged
with a sense of regret that Ms Merkel’s
successor could prove even less accom-
modating.
“We feel we don’t have the luxury of
waiting until the next crisis in order to
take a decision,” Ms Loiseau said. “So
people who talk about risk reduction
only — and [say that] only when we have
done everything needed can we begin
thinking of risk-sharing — this is very
theoretical. Chancellor Merkel gets it.”
There are other governments who will
relish the prospect of Ms Merkel being
brought low, not least populists in Italy
and Hungary with virulent anti-immi-
gration stances.
For the time being, though, Ms Mer-
kel’s domestic challenges may simply
make for more complications at EU
level.
Even before the Merkel era, other
European capitals often struggled to
read the mixed messages emerging
from Germany’s federal government.
That may only become worse as an
open succession contest unfolds in Ber-
lin, and a new party leader is appointed
to run the CDU, possibly with different
EU priorities from the chancellor.
time with a simple majority. A second
two-thirds majority would be needed to
finalise the process in Skopje, before the
Greek parliament begins its own ratifi-
cation procedure.
Analysts link Mr Kammenos’ increas-
ingly strident rhetoric with his party’s
fading popularity. Opinion polls show
support for Independent Greeks falling
below the 3 per cent threshold for enter-
ing parliament at the next election.
Syriza is polling 10 points behind the
centre-right New Democracy party but
is projected to halve the gap before the
election, boosting Mr Tsipras’s chances
of staying in power in coalition govern-
ment, according to pollsters.
Mujtaba Rahman, of the risk consul-
tancy Eurasia Group, said: “If Tsipras
officially breaks with Kammenos to get
the [Macedonia] deal done, this might
actually boost his profile with leftist
undecided voters who view the coalition
very critically.”
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4 ★ FINANCIAL TIMES Tuesday 30 October 2018

INTERNATIONAL

American far-right violence on rise Human rights

EU probes
Extremists caused at least as many deaths as those by radical Islamists in 13 of the 15 years following 9/11
Myanmar
mass killings
KADHIM SHUBBER — WASHINGTON

A series of attacks on liberal politicians,

a synagogue and African-Americans in
the past week has put the spotlight on
rising far-right violence in the US, a
trend President Donald Trump’s critics
have accused him of inflaming days
before midterm elections.
The number of US deaths resulting
from attacks by far-right extremists has
exceeded or equalled those caused by
radical Islamists in 13 of the 15 years fol-
lowing 9/11, according to data published
last year by the government accounta-
bility office. But the election of Barack
Obama, who served as the country’s
first black president between 2009 and
2017, followed by Mr Trump’s poll vic-
tory, accelerated the trend by re-ener-
gising white nationalist and neo-Nazi
groups online and offline, experts say.
“If you look at the trend for the last
decade or so, [it] is very clear. There’s an
increase in the level of violence from the
American far right,” said Arie Perliger, a
professor of security studies at the Uni-
versity of Massachusetts Lowell.
Last week’s attacks began when mail
bombs were sent to Trump critics,
including Mr Obama, Hillary Clinton
and Jewish Hungarian-American bil-
lionaire George Soros. Last Wednesday,
two African-Americans were gunned
down at a supermarket in Kentucky by a
white suspect who had earlier
attempted to enter a church attended by
black worshippers.
The killings were followed by Satur-
day’s shooting at the Tree of Life syna-
gogue in Pittsburgh, where a gunman
killed 11 in the deadliest attack on the
Jewish community in the US.
Since 2010, the proportion of terror
attacks in the US perpetrated by right-
wing extremists has risen from 6 per
cent to 35 per cent, according to Univer-
sity of Maryland figures. “The most
ascendant risk are the Nazis next door,”
said Brian Levin, director of the Center
for the Study of Hate and Extremism at
California State University.
With only a week until the midterm
elections, the synagogue attack has
heightened political divisions. Mr
Trump’s critics are laying the blame on
his aggressive campaign rhetoric.
“Of course, it is an extreme case when
political leaders fire up so much hate
and such a climate of incitement that
they can be held responsible, but that is
the situation we are now in after three
years of Trump’s inflammatory rheto-
ric,” said Norm Eisen, a former ethics
tsar at the Obama White House.
On Sunday, Mr Trump tweeted that
the media was trying to “blame Republi-
Suspected mail cans, Conservatives and me for the divi-
bomber Cesar sion and hatred that has been going on
Sayoc, on the for so long in our Country”. On Monday,
right of the
photograph in
he said the “Fake News Media” was the
“true Enemy of the People”.
a cap and Overall, terrorism in the US has fallen
sleeveless top, greatly since 1970s, when attacks were
cheers a speech largely carried out by leftwing groups.
by Donald The 9/11 2001 al-Qaeda attack remains
Trump last year the worst in US history.
in Melbourne, The Anti-Defamation League, the US
Florida group that fights anti-Semitism, found
Joe Raedle/Getty Images
that between 2007 and 2016, 74 per cent
of murders with an ideological motive
were committed by far-right extremists.
The ADL also found a sharp rise in anti-
Semitic incidents since Mr Trump took
office, reporting a 57 per cent year-on-
year rise in 2017, the biggest since it
began tracking data in 1979.
“The American public is often quick
to dismiss the role of ideology if the all-
Israel. Diplomatic overtures
eged perpetrator looks and sounds like
someone who might live in their neigh-
bourhood or doesn’t have a funny soun-
ding foreign name,” said George Selim,
vice-president at the ADL, who was for-
merly at the Department of Homeland
Security. But the far right has become
harder to ignore after events such as the
murder of nine black churchgoers in
Charleston in 2015 by white suprema-
cist Dylann Roof.
The extent to which far-right ext-
remists feel emboldened was apparent
last year in Charlottesville, Virginia,
when white supremacists had their larg-
est rally in recent memory, after
Heather Heyer was killed by a car
driven by white nationalist James Fields
aimed at counter-protesters.
Mr Trump drew sharp criticism at the
time, including from Republicans, for
stating there were “very fine people” on
‘The most both sides. Keegan Hankes, an analyst at
the Southern Poverty Law Center, said
ascendant Mr Trump’s rhetoric had helped “elec-
risk are trify the entire far right” and pointed to
Charlottesville as a wake-up call.
the Nazis The backlash over Charlottesville has
next door’ damaged far-right groups, but the prob-
lem of radicalisation of individuals con-
Brian Levin tinues to pose a threat, Mr Hankes said.
Although Cesar Sayoc, the Florida
man charged on Friday with sending the
mail bombs, expressed support for Mr
Trump, Robert Bowers, the alleged syn-
agogue shooter, had criticised the presi-
dent in online posts for not hating Jews.
The link between immigration and
Jews is a recurring anti-Semitic trope,
echoed by Republican figures and con-
servative media outlets, who have sug-
gested Mr Soros funded the caravan of
Honduran migrants heading towards
the US hoping to gain entry.
in reappraisal
of trade ties
MICHAEL PEEL AND JIM BRUNSDEN
BRUSSELS
The EU has launched an investigation
in Myanmar into alleged genocide as it
considers whether the south-east Asian
country should lose trade preferences
granted to the poorest countries.
The inquiry, and a similar one for Myan-
mar’s neighbour, Cambodia, has
sparked disputes over whether Brussels
should use the Everything but Arms
(EBA) programme to apply pressure to
countries that it helps.
EBA trade preferences allow the
world’s poorest states full duty- and
quota-free access to the EU market for
everything except weapons, but are con-
ditional upon respect for fundamental
rights. The EU moves test whether the
bloc can use the EBA review process to
stop governments committing rights
abuses or sliding into authoritarianism.
The joint mission between the Euro-
pean Commission’s trade arm and the
EU’s diplomatic service, which started
yesterday, is expected to spend several
days in Myanmar looking into the mili-
tary crackdown that has driven hun-
dreds of thousands of Muslim Rohingya
people from their homes.
The investigators will also assess a UN
panel report published in August, which
found that the military perpetrated
mass killings and gang rapes with “geno-
cidal intent”.
Brussels sees the trade preferences as
one of the tangible ways it can press
Myanmar to respect the rights of the
Rohingya. Trade relations have multi-
plied since the EU granted preferential
trading rights to Myanmar in 2013, with
the EU importing €1.5bn of goods from
the country in 2017, compared with
€164m in 2012. Clothing accounts for
the bulk of EU imports.
‘We are very sensitive
to the arguments on the
economic, political
and social impact’
Cecilia Malmstrom, EU trade com-
missioner, warned in a blog post this
month that there was “a clear possibil-
ity” of Myanmar’s preferences being
withdrawn. “Our EU trade policy must
be led by our values,” she wrote.
“Accordingly, when we are faced with
blatant disregard for those values, the
EU must act.”
A similar EU mission travelled in July
to Cambodia, where Hun Sen, the prime

Netanyahu fosters Gulf relations on back of shared fears over Iran

MEHUL SRIVASTAVA — JERUSALEM
SIMEON KERR — DUBAI
Benjamin Netanyahu, Israel’s prime
minister, is seeking to bolster his coun-
try’s ties with Gulf countries long seen as
its foes in an unusual public effort
focused on Oman and the United Arab
Emirates.
On Friday, Mr Netanyahu revealed
that he had visited the Sultan of Oman,
who greeted the prime minister, his
wife, and the head of Mossad, Israel’s
foreign intelligence service. Next week,
his minister of transportation and intel-
ligence, Israel Katz, will head to Oman
for a conference.
At the weekend one of Mr Netan-
yahu’s parliamentary allies wept as the
Israeli national anthem rang out in an
Abu Dhabi sports auditorium after a
Jewish athlete won a judo champion-
ship. His communications minister,
Ayoob Kara, is expected today in the
UAE, which has no diplomatic ties with
Israel, for another conference.
Much of the Arab world has shunned
the Jewish state since it was born in
1948, but Mr Netanyahu is betting he
can create stronger relations with influ-
ential Gulf nations on the basis of shared
fears over Iran and a shared interest in
boosting trade ties.
The Gulf initiatives come at an oppor-
tune political moment for Mr Netan-
yahu. Israeli analysts predict an election
early next year and note that the prime
minister — who also holds the foreign
policy portfolio — could claim improved
relations as a win.
Mr Netanyahu’s visit to Oman — the
first by an Israeli leader since 1996 —
was filmed and made public at the
request of the prime minister’s office,
according to a person familiar with the
talks leading up to it.
‘Israel is building a wall
of countries that it can
use as leverage to get Iran
to start backing down’
Although Israel has maintained clan-
destine ties with Gulf nations for at least
a decade, they have not been publicised
because Arab leaders worry they would
anger their citizens as long as the Israel-
Palestinian conflict continues.
The Sultan of Oman, Qaboos bin Said
Al Said, severed ties with Israel during
the second intifada, but he hosted some
of the talks that led to the Iran nuclear
deal and is seen as an intermediary
between Jerusalem and Tehran.
Other Gulf nations share Israel’s con-
cerns about Iranian expansionism in
Syria, Iraq, Yemen and elsewhere.
Because of Oman’s strong relations
with Iran it has been left out in the diplo-
matic cold by the Trump White House,
which has abandoned the nuclear deal.
A visit from a western ally helped
shore up the Sultan’s standing in Wash-
ington, while allowing Mr Netanyahu to
advertise an example of Israeli-Arab co-
operation, said Eli Avidar, the former
head of the Israeli delegation to Qatar.
“This visit to Oman was made possi-
ble purely because of the interests of the
Sultanate of Oman,” said Mr Avidar,
who also advised former prime minister
Ariel Sharon on diplomatic issues.
Iranian officials have criticised the
Israeli leader’s visit to Oman, but few
expect Muscat to pivot away from
Tehran as it seeks to balance interests
across the divided region.
While the Israeli-Palestinian peace
process is stalled, Israel does not want it
to stand in the way of normalising ties
with the wealthy and increasingly inter-
ventionist Gulf states.
“Israel is building a wall of countries
[with] which it has interests that it can
use as leverage to get Iran to start back-
ing down,” said Michael Stephens at the
Royal United Services Institute think-
tank.
minister, has overseen the dissolution of
the opposition party, the jailing of its
leader, Kem Sokha, and alleged land
grabs. Kem Sokha was allowed to return
home in September under court moni-
toring, after Hun Sen’s ruling party won
a crushing victory in elections.
Brussels’ move on Myanmar has
drawn criticism from both business and
non-governmental groups over its
potential to put workers out of jobs and
companies out of business, while leav-
ing the alleged perpetrators of atrocities
against the Rohingya untouched.
Another question is over the selectiv-
ity of the EU’s targeting, given the poor
human rights records of other countries
in the EBA scheme, such as energy-rich
Equatorial Guinea.
“We are very sensitive to the argu-
ments on the economic impact, on the
political impact, on the social impact,”
said one EU diplomat. “On our side we
would like to use the process and the
leverage to the full.”

Think-tank allegation

China’s military exploits western universities to develop defence technologies

KATHRIN HILLE — TAIPEI
China has sent thousands of scientists
affiliated with its armed forces to west-
ern universities — especially in coun-
tries that share intelligence with the US
— and is building a web of research col-
laboration that could boost Beijing’s
military technology development.
About 2,500 researchers from Chinese
military universities spent time at for-
eign universities — led by the US and UK
— over the past decade, and many hid
their military affiliations, according to a
new report from the Australian Strate-
gic Policy Institute (ASPI), a think-tank
partly funded by Australia’s department
of defence.
The research effort focused on mem-
bers of the so-called “Five Eyes” group
of countries with which the US shares an
intelligence relationship: the UK, Aus-
tralia, New Zealand and Canada. Over
the past five years, researchers affiliated
to the People’s Liberation Army pub-
lished more joint papers with scientists
from the UK and the US than with those
of any other country.
The findings will fuel the debate rag-
ing in some western capitals over how to
control the flow of cutting-edge and
especially dual-use technology to Bei-
jing, one of the main fronts in their
struggle to adapt to a rapidly rising
China.
The PLA’s international research col-
laboration “focuses on hard sciences,
especially emerging and dual-use tech-
nologies”, said Alex Joske, author of the
report. Dual-use technology has civilian
and military applications.
While the US and other western mili-
taries have expanded exchanges with
China’s armed forces, the scientists the
PLA sends abroad usually have no con-
tact with military officers in their host
countries. Instead, the focus is on col-
lecting knowledge to power China’s mil-
itary technological progress.
In 2015, science publication Shen-
zhou Xueren wrote about an interdisci-
plinary project between the PLA’s
National University of Defence Technol-
ogy (NUDT) and the University of Cam-
bridge. The article said the collabora-
tion would produce the next generation
of supercomputer experts for China and
“greatly enhance our nation’s power in
the areas of defence, communications,
anti-jamming for imaging and high-pre-
cision navigation”.
Mr Joske found that navigation tech-
nology, computer science and artificial
intelligence were the dominant areas of
exchanges after reviewing collabora-
tions between Chinese and foreign sci-
entists since 2006 and statistics on Chi-
nese researchers who were sent abroad.
In one example, several researchers
visited UK universities and are continu-
ing joint research on topics such as com-
bustion in scramjet engines, which
could power hypersonic aircraft capable
of flying at six times the speed of sound.
Wang Zhenguo, deputy chief of the
PLA’s scramjet programme and head of
the department of postgraduate studies
Research is focused on
the so-called ‘Five Eyes’
countries with which the
US shares intelligence
at the NUDT, has co-authored 18 papers
with foreign scientists.
Huang Wei, an NUDT scramjet
researcher and aircraft design expert for
the PLA’s General Armaments Depart-
ment, worked on his PhD while visiting
the University of Leeds between 2008
and 2010, a researcher at the UK univer-
sity told the FT. Luo Wenlei, another
NUDT scramjet researcher, wrote his
PhD thesis on scramjet engines at Leeds
in 2014.
Both Mr Huang and Mr Luo, as well as
Mr Luo’s doctoral thesis supervisors,
have published together with Gen Wang
on scramjets. Derek Ingham, a professor
at Leeds and one of Mr Luo’s thesis
supervisors, did not respond to a
request for comment.
Qin Ning, a professor at the University
of Sheffield involved in some of the
exchanges with Chinese scramjet
experts, said their joint research was
fundamentally academic in nature. “I
have not [been] involved in military
related research myself or with the visi-
tors while they [were] at Sheffield. Simi-
larly the visitors [were not] involved in
military related research while in Shef-
field,” Prof Qin said. Many scientists
working in PLA universities do not men-
tion this affiliation when applying to
western universities or publishing in
English, but present themselves as
members of civilian-sounding academic
institutions instead.
One of the persistent pushes for inter-
national technology collaboration has
come from the PLA’s Rocket Force,
which includes China’s missile and
nuclear weapons programmes.
Major General Hu Changhua, one of
the leading missile experts at Rocket
Force Engineering University, spent
three months at Germany’s University
of Duisburg-Essen in 2008, while Zhou
Zhijie, another lecturer at RFEU, stud-
ied at the University of Manchester in
2009.
Both concealed their affiliation with
RFEU and named the Xi’an Research
Institute of High Technology, a non-ex-
istent institution, instead, ASPI said.
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Tuesday 30 October 2018 FINANCIAL TIMES 5
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6 ★ FINANCIAL TIMES Tuesday 30 October 2018

ARTS

Gauguin’s disturbing visions brought to life

The centrepiece of a new Tate
St Ives exhibition is a riposte
to the artist’s Tahitian works,
writes Jackie Wullschlager

W
hat I heard was nothing
but the melody of children
at play . . . an almost
articulate spurt of vivid
laugher . . . I stood lis-
tening to that musical vibration, and then I
knew that the hopelessly poignant thing
was not Lolita’s absence from my side, but
the absence of her voice from that concord.”
— Vladimir Nabokov, Lolita.
The idea of childhoods lost, and with
them whole societies ruined, weaves
through Rosalind Nashashibi and
Lucy Skaer’s crystalline/hazy film mon-
tage “Why Are You Angry?” (2017),
centrepiece of Tate St Ives’s intriguing,
unexpected, uneven new exhibition
Nashashibi/Skaer: Thinking Through
Other Artists. Set in Tahiti and taking its
name from a Gauguin painting, the film
alternates bright, informal documen-
tary footage of women’s and children’s
everyday domestic life, grainy mono-
chrome landscapes evoking the island
in the late 19th century, and formal tab-
leaux vivants restaging some of Gauguin’s
pictures created there.
The most disturbing of these re-enact
two famous nudes: “Manao tupapau
(Spirit of the Dead Watching)” (1892),
depicting Gauguin’s 13-year-old “wife”
Teha’amana on her stomach, buttocks
prominent, face shadowed by fear, and
“Nevermore” (1897), featuring her
equally apprehensive-looking succes-
sor, 14-year-old Pahura, as uneasy odal-
isque harmonising dark flesh on orna-
mental yellow and turquoise drapery.
Nashashibi and Skaer recreate pre-
cisely these details and colours, plus the
menacing figures coming and going in
the backgrounds of both paintings.
What the moving image adds is the
models’ consciousness: these nudes
fidget, shrink, cover bodies with hands
in embarrassment, walk away from the
bed in frustration. All this lasts slow
minutes, increasingly discomforting as
the models’ agitation implicates the
audience. Without hectoring, allowing
their meandering montages to unfold
lightly, Nashashibi and Skaer play out
layers of ambivalence — are they too
exploiting their models? — as well as dif-
ferences between male versus female
gaze, film versus painting. But trium-
phantly here Gauguin’s girls-as-objects
become living subjects.
Installed among several Gauguins —
the soft-hued pastoral frieze “Faa
Iheihe”, the erotic watercolour mono-
type “Te Faruru (Here We Make Love)”,
the smoky original 1894 lithograph ver-
sion of “Spirit of the Dead” — the film
draws attention to just how frightened
these young teenagers must have been
of the monstrous, alien, nearly 60-year-
old artist. Of “Spirit of the Dead”, Gau-
guin boasted that Teha’amana lay
“motionless, naked, belly down on the
bed: she stared up at me, her eyes wide
with fear . . . Perhaps she took me, with
my anguished face, for one of those
legendary demons.”
For visual distillations of colonial and
sexual exploitation, “Spirit of the Dead”
and “Nevermore” have no rivals; the
painter’s own abuse of power shadows
these compositions, determining their
potent dark undercurrent — for Gau-
guin, though a brute, was on canvas a
truth-teller. This narrative is not, I
think, fully acknowledged in most
museum settings; in 2010, the Cour-
tauld’s “Nevermore”, for example, was
voted Britain’s “most romantic art
Left: still from
Rosalind
Nashashibi and
Lucy Skaer’s
‘Why Are You
Angry?’ Above:
the artists re-
enact Gauguin’s
‘Manao tupapau
(Spirit of the
Dead Watching)’
(1892)
work” in an Art Fund poll, director
Stephen Deuchar applauding how “Gau-
guin’s beautifully rich, evocative paint-
ing . . . captures the spirit of romance.”
“Why Are You Angry?” is a feminist,
post-imperial riposte. How well, too,
Nashashibi and Skaer de-exoticise
the other: we contrast vulnerable
Teha’amana and Pahura not only with
the children running on sandy beaches
and through turquoise seas surrounded
by palm trees in documentary footage
from today’s Tahiti, but also with won-
derfully echoing scenes of families at
play directly outside Tate’s door on
Porthmeor Beach this sunny autumn.
Tate St Ives co-commissioned the film,
and the show treads the tightrope the
museum also negotiated in its Virginia
Woolf exhibition earlier this year: to
combine local allusion and setting with
the socio-political agenda now govern-
ing all Tates.
Indeed the St Ives outpost, founded 25
years ago to celebrate (all white, mostly
male) mid-century British painters who
lived in the town, has undergone a
remarkable feminised transformation
following its expansion and reopening
last year: since then, five of its six shows
have been women-only. Thinking
Through Other Artists embodies the gains
and also the limitations.
Nashashibi and Skaer’s other films
here, such as “Pygmalion Event”,
focused on a priest wearing robes from
Matisse’s Rosary Chapel, and “Our Mag-
nolia” zooming in on Paul Nash’s war
painting “Flight of the Magnolia” — also
on display — are flimsy, dull, long-
winded. Seen at a stretch, such films
reveal the shortcomings of the duo’s aca-
demic curatorial/archivist approach.
As curators on the museum floor,
though, they have grabbed hefty mas-
terpieces from Tate’s collection for St
Ives this season, notably, on the nude
theme, Bonnard’s “The Bath”, enclosing
his wife Marthe in a watery tomb, and
Matisse’s “Backs”, monumental bronze
sculptures of four versions of a woman’s
back. St Ives’s invitation to reconsider
some of modern art’s greatest works in a
fresh light and context, away from met-
ropolitan centres and familiar narra-
tives, is most welcome.
To January 6, tate.org.uk

Life, death — and Pop-Tarts

T H E AT R E
I and You
Hampstead Theatre, London
aaaee
Sarah Hemming
Pronouns in Walt Whitman’s poetry
might not be top of the list for discussion
for most 17-year-olds, but then
Anthony, in Lauren Gunderson’s I and
You, is not most 17-year-olds. He has just
arrived in Caroline’s bedroom with a
project to complete, urgently, and he
needs her help. Unfortunately Caroline,
who is chronically ill, has spent most of
her young life erecting protective barri-
ers that make co-operation difficult.
To say she reacts unfavourably would
be putting it mildly. “Who are you?
What is this? What?” she yells at the mis-
erable Anthony, as he hops awkwardly
from foot to foot clutching his copy of
Leaves of Grass. That’s a question that
will press more insistently as the play
unfolds; it’s only with time — and a mas-
sive plot twist — that he, she and we will
understand the bonds between them.
Gunderson’s play, receiving its UK
premiere here and fielding the stage
debuts of Maisie Williams (Game of
Maisie Williams in ‘I and You’
Thrones’ Arya Stark) and Zach Wyatt,
has been a popular hit in the US. A two-
hander, it operates by stealth, moving
from sparring games between the two
teenagers about texting, music and food
(he likes Pop-Tarts; she favours Chunky
Monkey ice cream) to delve into big
questions about death, connection and
living life to the full.
Identity is at the core of the piece,
which takes Whitman’s philosophical
thinking about individuality and uni-
versality and fuses it with contemporary
science and the illusions of closeness
fostered by social media. At one point,
to Anthony’s exasperation, Caroline
ignores his presence in the room in
order to try and “friend” him on Face-
book. The play works like a jigsaw: the
final piece of the puzzle suddenly
throws everything that has gone before
into new light.
Big issues; spiky text; young charac-
ters and performers — these are all
things to like. What holds the piece
back, however, is that it feels contrived
and thinner than it should. Large parts
of the play consist of Caroline being
super-brattish to Anthony and him try-
ing to placate her. The dialogue — for
Caroline in particular — seems to play
several years younger than 17 and the
two remain fairly flimsy as characters.
Williams and Wyatt, however, bring a
touching freshness to their parts as they
dance around each other in Ed Hall’s
production. She finds the vulnerability,
frustration and loneliness behind Caro-
line’s defensive posing and barbed
retorts; he carries Anthony’s complex
situation well, geeky yet likeable, hesi-
tant yet determined. Michael Pavelka’s
set contains the action within a slightly
off-kilter teenage bedroom. It’s a gentle
play with a thoughtful message, but it
doesn’t quite hit home.
To November 24, hampsteadtheatre.com

glow. At Wembley Arena it seemed

POP
Kacey Musgraves
Wembley Arena, London
aaaee
Sam Taylor
Kacey Musgraves had the look of a clas-
sic country star. As if channelling Bob-
bie Gentry, the Texan singer matched
dark eye make-up and velvet black cen-
tre-parted hair with a sequinned rain-
bow-coloured trouser suit. Musgraves
can’t resist a bit of kitsch.
Since her early single “Follow Your
Arrow” encouraged listeners to “kiss
lots of boys, or kiss lots of girls — if that’s
somethin’ you’re into”, critics have
eagerly cast Musgraves as a trailblazing
female outlaw in a male-dominated
genre. Though she is progressive, her
rebel status is overstated. Her latest
album Golden Hour is closer to main-
stream pop than traditional country,
embracing oh-so-in-love sincerity over
sarky small-town social commentary.
On record Musgraves’ voice sounds
relaxed and radiant, effortlessly melting
into the production’s flushed, lambent
occasionally shrill as she competed with
overly loud drums. Despite the slightly
unbalanced mix, her six-man band were
versatile, as adept with electric country-
pop as bluegrass.
They best complemented the singer
when they gathered around the mike,
switching synthesisers, electric bass and
drum pads for cello and double bass.
Without its cloying vocoder refrain,
“Oh, What a World” had an earthy
charm, its bouncy banjo hook more
prominent. “Family Is Family” was a
chirpy flawed-but-they’re-yours com-
edy tune set to a jaunty galloping Whimsical: Kacey Musgraves
rhythm: “They might smoke like chim-
neys, but give you their kidneys.” full, and while a few songs, such as the
These stripped-back arrangements mushy piano ballad “Rainbow”, edged
focused the ear on Musgraves’ lyrics towards corny positivity, most demon-
where before they had been obscured. strated Musgraves’ talent as a writer of
Earlier, slowed-down versions of “Die clever, catchy pop.
Fun” and “Merry Go ’Round”, a pessi- The set closed with “High Horse”.
mistic reflection on growing up in a tiny “Oh I bet you think you’re John Wayne
Bible Belt town from her Grammy-win- . . . you’re classic in the wrong way,” she
ning debut album, had sentimentalised snarked over a lightly funked, disco-
Musgraves’ wry whimsical humour — inspired venture into clubby country.
one of her most distinctive qualities. Her strong contemporary references
As a first headline arena show, this make Musgraves classic in the right way.
was an accomplished crowd-pleasing
performance. Golden Hour was played in kaceymusgraves.com

Tuesday 30 October 2018
Competition from online courses and Asian rivals has led to a decline in MBA applications in America,
even for top-tier schools. Many are now becoming more specialist as they adjust to challenging times.
A
t its peak, the University of
Iowa’s Tippie College of
Business enrolled 240 20-
something high achievers
each year on its core MBA
programme. Today, the flagship public
research university, with one of the old-
est and highest-ranked US business
schools, is down to its last 35 students.
When this cohort submits their final
dissertations in May, the two-year
course will close, 57 years after it was
launched as the university’s flagship
business masters qualification.
It is the end of an era for Tippie’s dean,
Sarah Fisher Gardial, who had the unen-
viable job of announcing the course’s
closure 14 months ago.
The surprise move — at the time, Tip-
pie was ranked 84th in the FT’s global
list of top MBA programmes — sparked
anger from students, faculty staff and
alumni. Those who had completed the
qualification appeared most upset, out-
raged at what they saw as a sudden
devaluation in what was for them a con-
siderable investment, both in terms of
tuition costs and time away from the
workplace.
“Social media blew up on us,” Ms
Gardial says about the hundreds of
former Tippie students that took to
Twitter and Facebook to vent their
anger. “It was an emotional [reaction]
with them that we could not fix.”
The closure of such a highly regarded
course suggests that those rising up
through the ranks have lost some faith
in the qualification, put off by the time
commitment and expense of studying
for a degree whose tuition fees now run
into six figures at most top US business
schools. Many are opting instead for
shorter courses that cost less money or
decide not to study for an MBA at all.
Few have gone as far as Tippie, but
there is an expectation that others will
also close their programmes in the com-
ing years. Some leading universities,
such as King’s College London, have
opened business schools without an
MBA option, claiming that their corpo-
rate advisers no longer see a need for
such a qualification.
The fate of the MBA has a significance
beyond its importance commercially to
a business school, according to Ms Gar-
dial, who says Tippie’s core two-year
MBA was losing $1.5m a year when the
decision to close it was made.
“It was a difficult decision for me
because the MBA is very close to my
heart,” Ms Gardial says, noting that her
first management role in academia was
running the full-time MBA course at the
University of Tennessee. “But that is not
a good enough reason to keep it going.”
Need for rationalisation?
The first MBA, devised at Harvard Busi-
ness School as a generalist management
degree, dates back to 1908. It combined
classes in “quant” subjects, such as
finance and accounting, with courses in
soft skills, including leadership, entre-
preneurship and communication.
The first curriculum was based on
Frederick Winslow Taylor’s principles
of scientific management and quickly
gained traction, with the number of stu-
dents taking the course at Harvard ris-
ing from 80 in 1908 to 1,070 by 1930. It
was adopted by other fledgling business
schools across the US, making the MBA
a staging post for many in search of the
American dream.
But for the past four years, interest in
the full-time MBA course has been on
the decline in the country of its birth.
Highly ranked schools in other coun-
tries are taking note.
“I think the MBA has peaked,” says
Arnoud De Meyer, former dean of
Insead, Europe’s highest ranked school,
and now president of Singapore Man-
agement University. “There were a few
very good years in the US in the 1980s.
Then with the emergence of European
MBAs there was an explosion of the
good, the bad and the ugly. Now we have
a bit of rationalisation.”
This year 70 per cent of US schools
with full-time MBA degrees reported
declines in applications for their two-
year programmes, according to figures
compiled by the Graduate Management
Admissions Council.
That was offset by growth of 8.9 per
cent in business school applications in
the Asia Pacific region, a 7.7 per cent rise
in Canada and a 3.2 per cent increase
among institutions in Europe.
Sangeet Chowfla, GMAC’s president
and chief executive, puts a positive spin
on the numbers by saying that the over-
all demand for graduate management
education was now “stable”. But like-
for-like comparisons by GMAC showed
a 0.02 per cent decline year on year, with
52 per cent of programmes reporting
declining application volumes.
The deans of US business schools had
blamed previous declines in the MBA
market overall on a “flight to quality”, in
which students, keen to find the best
return on their total course costs —
which run to over $200,000 for the two-
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
FT BIG READ. BUSINESS EDUCATION
By Jonathan Moules and Andrew Jack
$1.5m
Estimated annual loss
for the core MBA
course at Tippie before
it was discontinued
Students see signs of ‘peak MBA’
year programme at Stanford Graduate
School of Management, for instance —
limited their interest to a few highly
ranked schools.
But the 2018 figures showed that
demand for MBA places also fell at first-
tier institutions, such as Harvard, Duke
University’s Fuqua School of Business
and University of California Berkeley’s
Haas School of Business.
Some have even blamed the fall-off in
numbers on Donald Trump’s presi-
dency and the impression that the US is
closing its door on overseas students,
which make up a significant proportion
of many MBA cohorts. But the problem
Sarah Fisher Gardial: a ‘difficult
decision’ to close Tippie’s core MBA
China
Students take faster route
to business opportunities
When Ding Yuan wanted to improve
his knowledge of business three
decades ago, he went to Paris and was
happy to work part time as a waiter,
earning five times the salary of a
teacher in China.
After building a successful career
including as a professor at HEC, one of
France’s leading business schools, he
returned to Shanghai, where he
oversees the gleaming campus of the
China Europe International Business
School, a partnership between the EU
and the Chinese authorities.
His move reflects broader shifts,
with China’s students and professors
seeing the appeal of staying at home
— and foreign students and faculty
ever more interested in moving to the
booming country to study and work.
“For Chinese, studying at Ceibs was
the easy way to enter multinational
companies,” he says. “Now it’s the
quickest way for them to get
connected with the Chinese business
community.”
While China’s fast-growing economy
and large population means many are
★ FINANCIAL TIMES
70%
Percentage of US
schools that reported a
drop in applications for
two-year programmes
predates the current White House
administration.
Bill Boulding, dean of Fuqua, where
MBA applications are down 6 per cent
this year, says it would be “too strong” to
pin the decline on Mr Trump. While not
dismissing the impact of the president’s
anti-immigrant rhetoric he believes a
bigger factor has been the longer-term
tightening in work visas for foreign stu-
dents, many of whom are now choosing
to apply to schools in Canada, Australia
and Europe.
“That has been building over a
number of years,” Mr Boulding says,
adding that he expects other lower-tier
US schools to close their MBA pro-
grammes in the future.
Demand for traditional MBAs is not
weakening because people view the
teaching as less relevant, Mr Boulding
insists. The issue, he says, is that people
now have many ways to gain these skills,
either by taking online degrees or spe-
cialist business masters qualifications.
Geoffrey Garrett, dean of the Whar-
ton School at the University of Pennsyl-
vania, talks of a “bifurcation” in the
MBA market. For the best business
school brands, students are still pre-
pared to pay a premium for the experi-
ence, and face-to-face learning is likely
still interested in travelling abroad to
study, a rising number are being
tempted to stay at home to build their
careers — or are reluctant to be left
out by spending too long abroad.
Prof Ding, below, says they earn at
least as much on graduating by
remaining in China, and more than half
his students are now recruited by
Chinese technology companies such
as Alibaba and Tencent.
A few years ago, Singapore and
Hong Kong were seen as the focal
points for students from China and the
west interested in gaining access to
high-quality teaching, mixing with
students from different countries and
understanding China.
But Chinese universities have been
investing significantly in
improving their appeal to local
and international students
with a range of business
education courses — including
ones taught in English. Many
have partnered with highly-
ranked peers overseas. And
as interest in MBAs
grows among the
Chinese diaspora,
they are starting
to expand abroad
themselves.
$22,000
Cost of the iMBA
course offered by the
University of Illinois’s
business school
to go up on the courses they run, Mr
Garrett says. At the other end, cost and
convenience will be more and more
important. “We’re doubling down with a
two-year residential MBA, but the geo-
graphically challenged [those in remote
locations], cash-strapped schools are
moving online,” Mr Garrett says.
‘Why do we need 10,000 schools?’
Another factor in the US is the booming
economy — gross domestic product
grew by an annualised 3.5 per cent in the
third quarter — and when the jobs mar-
‘It’s a slow shake-up, if
there is such a thing.
There is pressure coming
from . . . more aggressive
price discounting’
ket improves people are less willing to
put careers on hold to return to full-time
study, fearing that they might miss out
on promotions.
Stacy Blackman, who has run an MBA
admissions advice service since 2001,
believes that for the top tier of US insti-
tutions this year’s declines are part of a
cycle from which they will recover.
But she is less optimistic for lower
ranked schools. “Quality will always win
out,” she says. “The MBA market for
lower-ranked programmes may be
reaching saturation.”
Deans of business schools with the
strongest global brands remain bullish.
“If I was the age of our students, I
would definitely do an MBA,” says
Glenn Hubbard, dean of Columbia Busi-
ness School. He defends his institution’s
two-year full-time MBA, which costs
$110,978 in the first 12 months, exclud-
ing study tours and student club events,
according to the school. “There is a huge
opportunity cost to doing an MBA,” Mr
Hubbard says. “People are not buying
products but ideas and solutions.”
The University of Illinois’s business
school, which was seeing only modest
demand for full-time MBAs, has
launched a $22,000 iMBA
course. “[While] global
demand has declined quite a
bit, the number of pro-
grammes and alternative spe-
cialised masters has risen,” says
Jeffrey Brown, the business
school’s dean. “Outside
the top 20 schools
there are very few
experiencing any
growth.”
Ted Snyder, a
professor at Yale
7
MBA students at the
University of Edinburgh
Business School
run through a group
exercise on innovation
$110,978
First-year cost of
the full-time MBA
offered by Columbia
Business School
School of Management, is more blunt,
US schools post decline in arguing that proliferation has “screwed
MBA applications in 2018 up” the sector. “Why do we need 10,000
Annual change in volume, domestic business schools in the world?”
and international applications (%) Yet he is cautious about a turning
Domestic International
point in MBAs, saying he started talking
about a shake-up in management edu-
cation over a decade ago. “It’s a slow
US
shake-up, if there is such a thing,” Mr
Snyder adds. “There is pressure coming
Canada from below with the second tier really
more and more aggressive with price
discounting.”
Europe
Deeper engagement
Asia Pacific
Adam Palmer had quit his job as a
research associate at Dupont and was
two days into the MBA programme at
-15 -10 -5 0 5 10 15 Tippie last August when he and his
classmates were told that his cohort
MBAs: increased rewards would be the last.
offset by higher fees “It felt like our world had been taken
$’000 out from underneath us,” the 28-year-
Salary three years after old says.
completing an MBA Mr Palmer had only applied to busi-
Average tuition fee for 160 ness school at the prompting of his uncle
a two-year MBA and had turned down another institu-
Pre-MBA salary 140 tion to take his place at Tippie. “For the
next couple of months, the thought that
120 I should have taken that other offer
crossed my mind four or five times a
100 day,” he says. “We wanted the school to
80 make sure that companies were still
coming to campus.”
60 Despite the uncertainty about what
the demise of the Tippie MBA will mean
40 for his future job prospects and his need
to pay off debt of about $30,000, Mr
2006 08 10 12 14 16 17
Palmer does not regret his decision to go
Source: Graduate Management Admission Council;
FT MBA 2018 rankings data
to business school. He secured an
internship at CVS Health, the US phar-
macy chain, in the summer and is hope-
ful about making a career switch into
data analytics after graduation.
Yet for a growing number of Ameri-
cans considering the best route to get
ahead in business, the story of Tippie
could just reinforce a growing sense that
the traditional full-time MBA is no
longer the way to do it.
Saturated sector One professor says
MBAs have been ‘screwed up’ by the
proliferation of institutions and courses
High charge It costs over $200,000 for
the two-year programme at Stanford
Graduate School of Management
Flight to quality MBA consultant Stacy
Blackman is not optimistic about the
prospects for lower-ranked schools

8 ★
TUESDAY 30 OCTOBER 2018
Germany needs to keep
strong for Europe’s sake
Angela Merkel’s diminishing power will test Berlin’s steady hand
Europe is about to enter a decisive new
political cycle. It is not just that the UK
is preparing to part ways with the EU.
Next year also heralds the election of a
new European Parliament, the choice
of a new European Commission head
and the appointment of a new presi-
dent of the European Central Bank. To
complicate matters more, the conti-
nent’s most powerful nation, Germany,
is in the throes of its own transition as
results from elections in the state of
Hesse signal the dawning of a new era.
In their wake, Angela Merkel has
announced her decision to stand down
as leader of the Christian Democratic
Union. She will not seek re-election as
chancellor in 2021 — if she even lasts
that long. After 13 years at Germany’s
helm and a dismal 11 percentage point
fall in CDU support in Hesse on Sunday,
Ms Merkel is preparing her succession
as her authority leaches away.
As chancellor, Ms Merkel has been a
strong and stabilising influence. It is
vital for Europe that Germany main-
tains that stabilising role as she pre-
pares to go. Little is accomplished on
the continent without either Berlin’s
consent or its two-handed involvement
in tackling problems, as the decade
since the financial crisis has shown.
But the political scene in the country
is undergoing the most profound rea-
lignment since the second world war.
The old certainties of a political system
dominated by two parties are fading as
public support wanes for the grand
coalitions, the CDU/CSU on the right
and Social Democratic party on the left,
which have formed three of the past
four governments. The new landscape
is fragmented in ways that will make
alliance building more complicated in
future.
The outcome of the Hesse election
was not quite the nail in the coffin for
the grand coalition at national level
that some predicted. Ms Merkel’s party
Brazil elects Bolsonaro
in a political sea-change
Investors hope rightwinger will be a catalyst for economic reform
Brazilians have chosen as president Jair
Messias Bolsonaro, a rightwing strong-
man with a penchant for Trumpian
hyperbole, who claims to have liberal
economic beliefs. His election marks a
sea change for the country and the con-
tinent, and is a final ebbing of the “pink
tide” of leftist leaders that recently held
sway over both.
To his supporters, Mr Bolsonaro is as
his middle name suggests: a messiah to
deliver Brazil from soaring crime,
political correctness and statist stagna-
tion. To his critics, he is a fascist. To
many Brazilians, though, the formerly
obscure congressman was simply the
lesser evil at Sunday’s ballot box. After
running Brazil most of this century,
and presiding over its worst recession
and biggest corruption scandal, the
rival Workers’ party was unelectable. It
was time for a change.
What kind of change will Mr Bol-
sonaro bring to the world’s eighth big-
gest economy? Brazil certainly needs
reform and its economy needs liberali-
sation. Whether Mr Bolsonaro will
implement such changes, though, is a
blind exercise of hope and fear as he
has revealed so little about his plans.
Markets have their view, having ral-
lied in the past month. Their expecta-
tion is the former army captain will go
beyond his law and order platform to
pursue a radical overhaul of Brazil’s
bloated state. This is more than wishful
thinking. The previous administration
prepared the ground in Congress so
that an urgently-needed but unpopular
pension reform has good chances of
passing when Mr Bolsonaro takes office
on January 1. Brazil is also on the brink
of a cyclical upswing, so an improving
economy could buy him political space
to do so.
Most importantly, Mr Bolsonaro —
who admits to no economics knowl-
edge — has alighted on Paulo Guedes as
his finance minister. The University of
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scraped through as the largest party.
But both main centre-right and centre-
left parties have continued haemor-
rhaging support since recording their
worst results in 70 years in elections to
the Bundestag in September 2017.
Then the two mainstream parties
garnered a combined 53.4 per cent of
the vote. Now they are polling at well
below the majority needed to form a
stable government at the centre. Frus-
tration with one grand coalition too
many has driven voters to the fringes.
The SPD, which like other social
democratic parties in Europe appears
in a spiral of decline, has an immediate
quandary. It joined this government
reluctantly, against the better instincts
of members who felt the time had come
to regroup in opposition. Yet an early
election would crystallise the party’s
losses and cement the rise of rivals.
Of the latter, the majority remains
moderate progressive or moderate
conservative. Although on the
increase, support for radical left and
rightwing populist parties is still man-
ageable at about 20 per cent. As for the
Greens, who are eating into SPD sup-
port with an appeal to affluent,
younger voters, it is a long time since
they were the anti-establishment mav-
ericks of their day.
Ms Merkel has served Germany and
Europe well. She has done so at a time
of French weakness, British divergence
and Italian decline, shouldering many
of the burdens of leadership alone. The
continent will miss her. But she is wise
at this point to allow other leaders the
space to emerge in her place. As politi-
cal allegiances splinter, it will be
incumbent on the future leaders of
Germany’s political parties to be more
flexible and open to breaking new
ground in coalition building, if the
country is to maintain its remarkable
record for stability. On this, the stabil-
ity of the rest of Europe depends too.
Chicago economics PhD and financier
has nurtured hopes that Brazil is on the
brink of a virtuous cycle of reform, pri-
vatisation and economic growth.
That is as far as certainty goes. Mr
Guedes has no government experience
so how long he will stay the course is an
open question. The same may prove
true of Mr Bolsonaro’s recent conver-
sion to liberalism. Lastly, Mr Bolsonaro
has no executive experience, so how
well he will manage Congress is
unclear. What happens when a former
army officer with autocratic tenden-
cies does not get his way?
That leads to the biggest concern
about Mr Bolsonaro: whether he
threatens democracy. Yet Brazil’s insti-
tutional strength should not be under-
estimated. Just take the giant “Lava
Jato” corruption probe. To put this in
US terms, it is as if the heads of the
House of Representatives and Senate
had been convicted of corruption, a
former president put in jail, another
impeached, while the current presi-
dent faces criminal charges, all via an
independent FBI investigation run out
of Wichita, Kansas.
Concerns about Mr Bolsonaro’s suit-
ability are rife — and understandable.
He has provoked his way to the presi-
dency with outrageous comments,
even praising dictatorship.
Supporters need to see the inevitable
criticism that follows as intrinsic to
democracy, not a personal slur or com-
munist plot. Critics, meanwhile, could
recognise that after 30 years of democ-
racy Chile and Argentina also swang
away from the left, without instilling
fascist states.
The onus, though, is on Mr Bolsonaro
to calm nerves after a poisonous cam-
paign. Freedom of expression, rule of
law and separation of powers are cen-
tral to the economic liberalism he
claims to espouse. Mr Bolsonaro must
now show his belief in those values too.
FINANCIAL TIMES
Letters
Design a future WTO model and use it now
In “Saving the WTO from Washington
and Beijing” (editorial, October 25),
you describe the ministerial meeting in
Ottawa last week as one in which the
attending governments will try to
reform the World Trade Organization
“enough to placate Donald Trump . . .
without alienating China” and conclude
that in practice this may be impossible.
I agree and would go further to say
that even were it possible it would not
be desirable.
Meeting the demands of the Trump
administration, particularly as regards
the dispute settlement system, would
so weaken the WTO as a regulator of
multilateral trade as to make it
Licensed to drive — but I
have never owned a car
John Gapper is correct to argue that
because of the revolution in transport,
enabled by the smartphone and Uber,
along with the increasing rate of
urbanisation, car ownership may peak
despite the addition of tens of millions
of “rookie” drivers in China, India and
other successful developing countries
over the next two decades (“Car
ownership may peak, but traffic will
rise”, October 25).
Owning and maintaining an
automobile when residing in one of the
world’s “grandes villes” (Beijing,
London, New York, Rome, Tokyo),
which have well developed bus, subway
and commuter train systems, makes
little economic sense: more than 80 per
cent of the day these vehicles are
parked. Only toasters, vacuum cleaners
and dishwashers are idle for more time
per day than personal automobiles,
and, together they constitute a fraction
of the cost of a car and take up little
space in already cluttered urban
apartments.
In a sense I have seen the future and
it works: while I have been licensed to
drive since I was 17, as a resident of
Manhattan for almost half a century I
have never owned a car. I use New
York’s buses, subway and commuter
trains for local travel, and regional
trains and aeroplanes for more distant
travel, supplemented by car rentals at
my destination train station and
airport that provide me with the
freedom I need to customise my travel.
Needless to say I am looking forward to
enhancing the enjoyment of my future
travel if autonomous vehicles and the
Ubers and ViaVans of the world
perform as promised.
Ira Sohn
Professor of Economics and Finance,
Montclair State University, NJ, US
Palestininians’ stubborn
determination to survive
Mehul Srivastava’s Big Read on
Palestine (“The fire has already
started”, October 19) offers a picture of
Palestine as the world likes to think of
it: on the brink of conflict, “gripped by
hopelessness”, with “a mounting
despair that is the result of an
emboldened rightwing Israeli
government, a belligerent US
administration and an indifferent Arab
world”. It is hard to disagree: there is
much ground for despair in today’s
Palestine. But, on a recent visit to the
West Bank, I found that this picture has
another side, much less commonly
reported. It was summed up by a
Lebanon’s
electricity supply
solution is a
slow-burner
Beirut
Notebook
by Chloe Cornish
ineffective. The value of a system of
regulations for global trade depends on
those regulations being followed which
in turn necessitates an effective,
credible, legitimate system for
resolving disputes. With US leadership
such a system was created with the
founding of the WTO. It has worked
remarkably well, and is not among the
“widely accepted faults in the WTO” to
which you refer.
Because President Trump is unlikely
to relent, I urge other members to take
the radical, unprecedented step of
adopting reforms accepted by a
consensus minus the US. There is
certainly a risk that this would trigger
highly regarded Palestinian business
leader and rings in my memory:
“Nearly 5m Palestinians awake every
morning under military occupation
with a stubborn determination to
survive.”
It is a truism to those who know it
well that the defining characteristics of
Palestine and its people today are as
much about resilience and hope amid
cruel adversity as they are about
despair and hopelessness. It was the
former that characterised the
overwhelming majority of those I was
fortunate to meet: young and old,
women and men, disadvantaged and
prosperous. It was true of the women of
a southern village overlooked by a
recently established Israeli settlement;
it was true of the vocational trainees
whose college I visited near Bethlehem;
and it was true of the network of
professional people I met in Jerusalem
and Ramallah, working against all the
odds to improve the life chances of the
next generation.
At a time which lacks any real peace
process there remain useful things that
can be done. One is to seek out and
report, alongside the threats of
escalating violence, the evidence of
hope and determination where it
exists.
David French
Chair, Board of Trustees,
Y Care International,
London EC1, UK
Europe seeks gas supply
diversity and security
Mark Mills’ arguments in his
Commodities Note “American LNG will
meet Europe’s urgent need for gas”
(FT.com, October 23) are more a sign
of deepening concern among US
liquefied natural gas producers looking
for new gas demand than what would
constitute a commercial reality.
The recently approved new Canadian
LNG export project, large-scale
investments announced by Qatar, and
at least two projects in the US Gulf
Coast hurtling towards the elusive final
investment decision, suggest that the
window of opportunity for more US
LNG exports over the next decade is
beginning to close.
It is wishful thinking to believe that
US LNG exports will be a commercially
viable and logistically feasible
alternative to replace all Russian gas
delivered into Europe by the existing
and under construction Nord Stream
pipelines. Yes, European LNG regas
capacity will be there to accept
significantly more LNG. But intra-
European pipeline capacity does not
exist to transport the re-gasified LNG
Angela Merkel seems an unlikely
figure to be caught up in a political
furore over electricity in Lebanon. But
the German chancellor’s visit to Beirut
in June, accompanied by the energy
company Siemens, lit a slow-burning
fuse that caused an explosion of
popular irritation months later.
Tiny Lebanon has a giant electricity
bill. Government subsidies for
electricity will cost the treasury $2bn
this year alone — equivalent to about
4 per cent of Lebanon’s entire gross
domestic product.
Despite heavy spending, Lebanon
suffers regular power cuts. Beirutis
use an app to forecast blackouts.
Electricity is a constant source of
exasperation for citizens fed up with
living in an ostensibly middle-income
country where you lose air-
conditioning during sweaty summers
and are plunged into darkness while
showering. Mismanagement and
criminality, the Lebanese believe, has
hobbled the power sector.
So when rumours leaked that
Siemens had offered to help back in
June and been turned away by the
government, they erupted.
Siemens, under financial strain, has
been trying to rustle up business in
the Middle East. It pitched a power
grid revamp to Iraqi government
officials this summer, hoping to
capitalise on its Egyptian
“Megaproject”, which it says has
increased Egypt’s power generation
capacity by 40 per cent.
In Beirut, Siemens touched a
political live wire. Lebanon’s system
If you are not satisfied with the FT’s response to your complaint, you can appeal
to the FT Editorial Complaints Commissioner: complaints.commissioner@ft.com
the US withdrawal from the WTO. Such
a withdrawal would greatly weaken
both the WTO and the US but so too
would giving into Mr Trump’s
demands.
Your editorial concludes that the
ministers may end up designing a
model “to be used when a future . . .
administration is in the White House”.
I say use it now. A procedure short of a
de novo accession can be designed
should a post-Trump administration
seek WTO membership.
Eliza Patterson
Lecturer in WTO Law and Policy,
Sciences Po,
Paris, France
from the shores to the demand centers
across all of Europe. We believe there is
no compelling need for Europe to cut
off one of its main supply sources from
the east and in doing so, leaving
countries with limited options for
heating.
US LNG producers are not only
competing with Russia. They are
competing with global LNG producers
including Qatar, Algeria and Nigeria
which already deliver LNG to Europe,
sometimes on more economically
favourable terms. Europe seeks supply
diversity and security for its gas needs.
This implies a coexistence of different
supplies via pipeline and LNG. US LNG
can and should play a role in this,
alongside Russia and others.
Frank Konertz
Head of LNG Analytics,
S&P Global Platts,
London E14, UK
Nicotine in all its forms
needs to be controlled
The vaping industry associations
(Letters, October 26) support vaping,
giving one side of the story. The other
side is based on five facts.
The active ingredient in vaping is
nicotine. Nicotine is addictive. Nicotine
adversely affects the developing brain
and in adolescents is associated with an
increased risk of mood and attention
disorder. In the US in 2011 under 2 per
cent of high school students reported
using ecigarettes in the previous
month. However, by 2015 this
percentage had risen to 16 per cent.
Nicotine in all its forms should be
carefully controlled.
Prof Sir Denis Pereira Gray
Exeter, UK
Former Chairman, Academy of Medical
Royal Colleges
balances power among religious sects;
ministries are held by sectarian
parties. The Free Patriotic Movement,
a Christian party associated with the
president, Michel Aoun, has the
electricity file. FPM’s leader is Mr
Aoun’s son-in-law, Gebran Bassil.
The source of the leak divulging the
rejected Siemens proposal was Yassine
Jaber, an MP from the Shia Amal party
and former economy minister.
“Lebanon should declare a
catastrophe on electricity,” he told me
in his air-conditioned parliamentary
office, as the lights flickered. His own
party courted controversy this
summer when it refused to let a
power-generating barge, donated by a
Turkish company, dock.
With its power infrastructure
outdated and overwhelmed, Lebanon
has developed an expensive,
patchwork approach to sourcing
sufficient megawattage from
neighbouring nations. This is still not
enough. Generator operators who run
back-up neighbourhood electricity
have become kingpins, even
threatening to strike recently when
the ministry introduced metering to
monitor pricing. Critics say the whole
system needs an overhaul.
Mr Jaber says he heard allegations
that in a meeting between Siemens
representatives and the electricity
ministry, the latter had rebuffed the
company’s offer to assess Lebanon’s
power needs for free and assist with
drawing up solutions.
He ranted about this in a WhatsApp
voice note that quickly went viral. Mr
Tuesday 30 October 2018
Email: letters.editor@ft.com
Include daytime telephone number and full address
Corrections: corrections@ft.com
Referendum questions
shouldn’t be too complex
Chris Giles, in “Logic explains why the
will of the people remains elusive”
(October 26), is right to challenge
Theresa May about her lack of concern
for what Britain today thinks of Brexit
but I wonder about the number of
questions — three — that he would pose
on a ballot paper in any hypothetical
second referendum. The negotiations
are today in process and will have
taken place if such a referendum (God
willing) comes about, so there will be
no need any more to strike a gung-ho
negotiating posture with the EU, one of
the principal reasons that “no deal” has
taken up so much airtime.
In truth, I do not think any sane UK
government can — ever — ask UK
citizens if they desire a no-deal
scenario as one of the outcomes. It
would be like asking them if they want
to vote for very obvious uncertainty,
for being forced to improvise the rules,
indeed for an absence of the rule of
established law in the conduct of vital
near-abroad relations. It would be the
height of irresponsibility as well as
showing gross and cynical contempt for
the voters.
As it is generally accepted that
questions posed in referendums should
never be too complex and best if they
are always binary, to my mind there
can only be two questions on the
hypothetical ballot paper: 1. Do you
approve the negotiated deal on which
the UK proposes to leave the EU? 2. Do
you wish the UK to remain in the EU?
Andrew Seton
Oxford, UK
West can no longer rely on
House of Saud’s stability
Philip Stephens’ insightful column “A
killing that has broken the Saudi spell”
(October 26) perhaps even understates
the serious potential damage to the
House of Saud arising from the
Khashoggi affair.
It is true that the west is not about to
walk away from Saudi Arabia, but
equally it can no longer rely on the
stability of the House of Saud. At the
core of this stability internally has
been the sharing of influence, the
respect for experience and seniority,
carefully managed patronage, the
consensus-driven model, and the
delicate dance between the House of
Saud and the clerics. Externally
stability has been promoted by many
longstanding, carefully nurtured
relationships with the west such as
those nurtured over decades by the
former crown prince.
Arguably there has been no need to
disrupt these elements of stability to
promote generational change, exercise
new influence and to undertake the
basic reforms that have been
implemented.
Unless we can see the restoration of
some semblance of order we may be
witnessing the reign of the last
(consensus) King of Saud. And if the
House of Saud is not worried, the west
certainly should be.
Ted Pretty
Sydney, NSW, Australia
Correction
c Fiat Chrysler Automobiles has
committed to a supply deal with
Magneti Marelli for several years,
rather than Nissan as incorrectly
stated in a Lex note on October 23.
Jaber claims it was unintentional; he
was concerned that giving Siemens
the cold shoulder would deter foreign
companies from doing business with
Lebanon — but he held a news
conference to make the most of it.
The ministry insisted that without a
proper tendering process, an
unsolicited offer from Siemens could
not be accepted.
But Siemens chief executive and
president Joe Kaeser turned up the
heat, writing on Twitter: “I did offer to
help improve the whole electricity
value chain and have our team to
come in and assess what’s best for the
people. No response yet from
Government. Our door is open! Offer
still good. Call Anytime!” Lebanese
responded, imploring Mr Kaeser to
reveal any offers, saying they did not
trust their own government. The spat
channelled pent-up frustration.
Claims circulated that Ms Merkel felt
personally snubbed.
Siemens and the electricity ministry
made up this month, agreeing to work
together to improve the electricity
sector. With the international
community lending heavily indebted
Lebanon another $11bn to fix
crumbling infrastructure, the farcical
episode now points towards serious
money. Lebanon has received similar
donations before but they achieved
little. Donors insist Lebanon’s
spending be transparent this time.
“We love our country but it is
corrupted,” one businessman said.
chloe.cornish@ft.com

Tuesday 30 October 2018
German centre’s collapse brings Merkel era to a close
Constanze
Stelzenmüller
A
ngela Merkel is known to be
unflappable under pres-
sure. But what makes her a
rarity among politicians is
that she knows when to
concede defeat with dignity. The morn-
ing after her unpopular grand coalition
was trounced in a bellwether election,
Germany’s chancellor, in her 18th year
as chair of the Christian Democratic
Union and her 13th as head of the gov-
ernment, announced she would not
stand for re-election as party chair in
December, run for a fifth term as chan-
cellor, or seek a top EU job in Brussels.
Who becomes the next CDU chair is
now the all-consuming question in Ber-
lin. The first candidate out of the box
was Friedrich Merz, one of Ms Merkel’s
oldest rivals. A wealthy corporate law-
yer, he might hope for the support of the
CDU’s disgruntled business and con-
servative wings. Another is CDU general
Attacks on
globalism are
dangerous
WORLD AFFAIRS
Gideon
Rachman
T
he difference between glo-
balisation and globalism
might seem obscure and
unimportant, but it mat-
ters. Globalisation is a word
used by economists to describe interna-
tional flows of trade, investment and
people. Globalism is a word used by
demagogues to suggest that globalisa-
tion is not a process but an ideology — an
evil plan, pushed by a shadowy crowd of
people called “globalists”.
In his recent speech at the UN, Donald
Trump declared: “We reject the ideol-
ogy of globalism and embrace the doc-
trine of patriotism.” Last week he again
denounced “globalists” at a campaign
event, while the crowd bayed for the
imprisonment of George Soros, a Jewish
philanthropist regarded as the epitome
of “globalism” by the nationalist right.
It is not just the radical right that
attacks globalisation as an elite project.
Many on the left have long argued that
the international trading system is
designed by the rich and harms ordi-
nary people.
But this right-left ideological assault
on globalisation is simple-minded and
dangerous. It ignores the benefits that
trade has brought, not just to elites, but
James
Woolsey
I
n March, the FBI revealed that the
US’s electrical grid is under con-
stant threat of cyber attack by Rus-
sian actors. Every day, sophisti-
cated hackers attempt to disrupt
water processing plants, air transport
and other critical infrastructure that
Americans rely on for basic services.
And the country is not prepared to
protect itself against it.
The threat of Russian hackers is the
latest example of the vulnerability of
the US’s electrical grid and it shows how
a cyber attack, or even a natural occur-
rence, could wreak havoc on the Ameri-
can way of life.
We already know what a large-scale
blackout on US soil could look like: in
September last year, when Hurricane
Maria struck the US territory of Puerto
Rico, the entire island lost power.
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
secretary Annegret Kramp-Karren-
bauer, a centrist thought to be Ms Mer-
kel’s preferred candidate. “AKK”, as she
is known, stood down after successful
re-election as prime minister of Saar-
land to put herself at the service of the
chancellor. Since then she has been
building influence, touring the country
over the summer. The third is health
minister Jens Spahn, a pronounced con-
servative and long-running leader of the
“Merkel Must Go” faction in the CDU.
None of the three is a foregone conclu-
sion. As the party chair job is now seen
as the dry run for Ms Merkel’s successor
as chancellor, more competitors are
likely to run on to the field in the coming
weeks. And Sunday’s election in Hesse
proves once more that this large, popu-
lous and affluent central state is a test
bed for the country at large.
Ms Merkel’s centre-right CDU and her
partner in the grand coalition (GroKo),
the centre-left Social Democrats, have
strong traditional roots in the state’s
pugilistic politics. Both lost a humiliat-
ing 11 percentage points in a vote that
was squarely a poll on the performance
of the struggling government in Berlin.
But Hesse has also been the forge of
to ordinary people all over the world. It
suggests that globalisation is a plot
rather than a process. And by promot-
ing nationalism as the antidote to the
dreaded “globalism”, it unleashes forces
that are economically destructive and
politically dangerous.
Between 1993 and 2015 — the heyday
of globalisation — the proportion of the
world’s population living in extreme
poverty almost halved. International
trade has helped to pull billions of peo-
ple into the global middle class and
turned once poverty-stricken countries
such as South Korea into wealthy
nations. (North Korea, by contrast, has
enjoyed all the benefits of total isolation
from global markets.)
Mr Trump and his acolytes argue that
this Asian prosperity has been bought at
the expense of the middle class in the
west. But middle-class lifestyles in the
west now depend, to a significant
extent, on the flow of cheap goods from
the rest of the world.
An iPhone that was wholly manufac-
tured in the US would cost around
$2,000 in the shops — or double its cur-
rent price. Competition from cheap
labour in Asia and Latin America has
indeed contributed to the stagnation in
real wages in the US. But rather than
counteract this through public policy,
the current US administration has
driven rising inequality through regres-
sive taxation.
Mr Trump and his European equiva-
lents have also talked up the myth that
dastardly globalists, like Mr Soros, are
encouraging and funding illegal migra-
America must act to protect its power infrastructure
Without functional treatment cen-
tres, raw sewage flooded into the water.
Without refrigeration and fresh water,
food supplies vanished. In the months
following the hurricane, 2,975 deaths
were attributed to the conditions caused
by the storm, 46 times as many as the 64
who died during the storm. Even now,
half a year later, thousands of US citi-
zens still lack electricity and even more
continue to experience intermittent
blackouts.
Without electricity, our way of life is
untenable. We rely on an uninterrupted
supply of power to bring food to our
supermarkets, water into our homes
and prosperity to our citizens.
Even minor blackouts, like that which
occurred at the airport in Atlanta in
December, cause severe disruption. Yet
the critical infrastructure on which soci-
ety depends has been built for effi-
ciency, not for resilience. It is fragile.
The US grid is threatened by cyber
attacks, hurricanes and earthquakes,
solar storms, terrorist strikes and elec-
tromagnetic pulses. And the odds are
not in America’s favour.
★ † FINANCIAL TIMES
Opinion
the country’s future politics: the Greens
and the Alternative for Germany (AfD)
were both founded here. For the past
five years, the state has been governed
by a CDU-Green coalition.
In Sunday’s vote, the Greens nearly
doubled their vote share, becoming the
state’s second-strongest party. The AfD
is now represented in all the regional
Most parties, even the
Greens, have reason
to fear new elections and
a far-right protest vote
parliaments but, at 13 per cent, its vote
share seems to be plateauing.
The fate of Ms Merkel’s government
still hangs in the balance. Many in the
SPD want to leave the coalition. The
leader of the centre right Free Demo-
crats has ruled out working with Ms
Merkel. The Greens, flushed with suc-
cess, will probably scoff at the idea of
being the junior partner in a minority
government. But all these parties have
reason to fear new elections and a pro-
tion. In doing so, they fan the paranoid
fantasies that led to attacks like the
mass killing that took place at a syna-
gogue in Pittsburgh this weekend. For
many anti-Semites, “globalist” has
become a synonym for Jew. It should not
need stating, but it is absurd to suggest
that “globalists” have caused the vio-
lence in Syria or Honduras from which
migrants are fleeing.
Critics of globalisation have every
right to start a debate about migration,
trade and investment. But their “solu-
tions” are often half-baked, and risk
worsening the economic situations of
the people they purport to help.
Brexit is, sadly, a prime example. The
Brexiters’ complaints about the EU echo
many of Mr Trump’s complaints about
“globalism”. “Europe” is blamed for
With his denunciations,
Trump encourages the idea
that the US faces an
unpatriotic enemy within
Each decade, the US faces roughly a
one in 10 chance of losing much of its
grid to a solar storm — a burst of radia-
tion from the sun that could affect the
earth’s atmosphere by compromising
the power grid or disrupting radio com-
munications. In fact, Lloyd’s of London
concluded that such a storm is so likely,
and its effects so devastating, that it
refuses to offer insurance against one.
The threat of Russian
hackers shows how a cyber
attack could wreak havoc
on our way of life
The entire grid can be shut down by
destroying just nine critical transformer
substations, like the one crippled in
minutes by a team of armed attackers
near San Jose in California in 2013.
It is only a matter of time until one of
these events triggers a catastrophic
blackout in the US. Experts estimate it
would result in the loss of trillions of dol-
test vote for the AfD. Like it or not, the
SPD’s best strategy for now is to hang on.
Larger questions about the future of
German politics loom. For decades, the
two big-tent parties, the CDU and SPD,
defined the political centre in Germany,
serving as clearing houses for regional,
ideological and class divisions. Yet
across Europe, their sister parties have
survived by assimilating some of their
fringe challengers’ positions, as has hap-
pened in the Netherlands, or by trans-
forming as in the UK, where the Tories
and Labour have become polarised.
Over nearly 20 years as party leader,
Ms Merkel has modernised her CDU and
moved it into the political centre. But,
say her critics, she has thereby enabled
the rise of the AfD. The Social Demo-
crats, for their part, appear divided
between nostalgia and fear of the future.
The Hesse exit polls delivered a damn-
ing verdict: 14 per cent of voters thought
the GroKo parties had answers for the
country’s problems. More than 200,000
CSU and SPD voters crossed over to the
Greens.
So are the Greens Germany’s new cen-
trist party, or just a shiny bright recepta-
cle for alienated CDU and SPD voters?
uncontrolled migration, international
bureaucracy and elitism. The Brexiters
think of the EU as an ideological project.
They ignore the extent to which Euro-
pean legislation is often a set of practical
solutions to cross-border issues such as
the free flow of goods and the establish-
ment of common trading standards.
Attacking those solutions is a bit like
ripping out the plumbing in a house.
Unless you have a very precise idea of
what you are doing (and nobody has
accused the Brexiters of that), you sim-
ply create a horrible mess.
What is happening in the UK is a
microcosm of what could happen in the
rest of the world if and when a Trump-
inspired assault on international trade
and global supply-chains gathers force.
The tariffs that Mr Trump has imposed
on goods from China and elsewhere will
increase the cost of living for Ameri-
cans. Meanwhile, fears of a global trade
war already weigh heavily on the stock
market.
The biggest dangers, however, are not
economic but political. By repeatedly
denouncing “globalists”, Mr Trump has
lars in economic value and millions of
American lives — many times greater
than the losses from Hurricanes Harvey,
Sandy and Katrina combined. And with
no outside force to rescue us, a country-
wide blackout could last more than a
year and would be next to impossible to
recover from.
This tragedy is preventable. We know
how to defend our electrical infrastruc-
ture and we can afford to do so. More
intelligent federal resilience standards,
a greater density of micro-grids and
individual state action to harden infra-
structure would offer enough protection
to turn an existential catastrophe into a
minor disaster. In a sweeping blackout,
the difference between 30 per cent elec-
trical coverage and zero per cent could
prove the difference between an endur-
ing civilisation and none.
We have sat on this knowledge for
years without acting. The American
government first learnt of the threat
from electromagnetic pulses in the
1960s. In 1989, a small solar storm left
millions of people without power in
Quebec. In the Ukraine, cyber attacks
With a premier in one of Germany’s 16
states and serving as coalition partners
in eight more, they have left their wild
and woolly roots of the 1970s behind
them. But they have yet to prove they
have ideas for how to govern a complex
and anxious postindustrial society on
the cusp of great changes. Or that they
can be trusted to lead a major European
power whose neighbours and allies are
tired of its parochialism and introver-
sion as threats multiply around them.
The stakes are raised higher by an AfD
that is predicted to surge into second or
even first place in three east German
state elections in the autumn of 2019,
while its hard-right wing seems to be
tightening its grip on the party.
Extreme right parties across Europe
are preparing a co-ordinated challenge
to liberal democracy in May’s European
elections.
The battle for leadership in Berlin is
on. But whoever becomes the party
chair in December — and the next chan-
cellor — bears a responsibility that
extends well beyond Germany.
The writer is Robert Bosch Senior Fellow at
the Brookings Institution
encouraged the idea that America faces
an unpatriotic enemy within. That, in
turn, stokes the conspiracy theories that
are spilling over into violence on US soil.
The political risks are also interna-
tional. The rise in economic tensions
between the US and China is merging
with a rise in military tensions over
issues such as Taiwan and the South
China Sea. Both Washington and Beijing
are increasingly using the language of
conflict rather than co-operation.
All this is reminiscent of the backlash
against globalisation in the 1930s, a
process chronicled by Harold James, a
Princeton historian, in The End of Glo-
balisation. Mr James showed how surg-
ing protectionism in the 1930s went
hand-in-hand with a rise in radical ide-
ologies and a drift to war. He thinks it
“highly likely” that today’s “de-globali-
sation” will also culminate in war.
“Globalist” business people and fin-
anciers doubtless have their flaws. But
at least their instinct is to see foreigners
as customers, rather than enemies.
gideon.rachman@ft.com
have cut power to hundreds of thou-
sands of homes twice since 2015. To this
day, Hurricane Maria is showing how
difficult it can be to restore electricity
after an outage, even to a small and con-
tained area.
It often takes tragedy to drive change.
If we wait until after a cyber attack, solar
storm or earthquake has plunged part
of the US into chaos, it will be too late
to act.
That is why I chose to work with the
Helena Group and California Senator
Robert Hertzberg to pass a bill, the first
of its kind, creating a plan to harden Cal-
ifornia’s critical infrastructure.
We are now calling on the other 49
American states to follow our lead. The
federal government must do the same.
The US Congress, the White House and
the Department of Homeland Security
have the authority, the ability and the
duty to solve this problem.
They must stop trying to pass the
buck and move. Now.
The writer is a member of the Helena Group
and a former CIA director
9
Science can
succeed where
politics fails on
climate change
Nick
Butler
F
or the past 20 years the ortho-
dox response to the threat of
climate change has been
focused on the search for a glo-
bal agreement to reduce emis-
sions. Such an approach is entirely logi-
cal and rational. Climate change is a glo-
bal risk and so everyone should be
involved in the response.
The problem is that the approach has
failed. The Paris conference in 2015
brought people together and collected a
range of promises from almost every
country in the world. Those promises in
aggregate were inadequate, and some
have already been forgotten as regimes
have changed, not least in the US.
Many countries are taking action to
mitigate climate change, but these
actions do not add up to an answer.
Potential global solutions such as a uni-
versal carbon tax remain off the agenda.
There has been some progress. The
production of renewable energy has
become cheaper, thanks mainly to the
Chinese, and energy is being used more
efficiently. But the advances have been
slow. The result is that hydrocarbons
continue to provide 80 per cent of global
energy supplies and will still be supply-
ing some 74 per cent in 2040, according
to the International Energy Agency.
Meanwhile, emissions continue to
rise and the latest estimates from the
International Energy Agency predict
they will rise again this year. As the lat-
est report from the Intergovernmental
Panel on Climate Change reminds us,
the clock is ticking and we are getting
ever closer to the moment when the
concentration of carbon in the atmos-
phere reaches a level likely, in the view
We cannot afford to wait
for an age of collective
rationality to dawn or for
the sceptics to convert
of the scientists, to produce fundamen-
tal changes in the world’s climate.
In these circumstances we need a dif-
ferent approach. We cannot afford to
wait for an age of collective rationality
to dawn and for the sceptics in world
governments to change their minds.
What is the alternative? The best hope
for limiting emissions comes from the
application of science to the energy
market. That means finding sources of
energy that can be made available to all
the world’s citizens, at a price they can
afford, enabling them to switch away
from the carbon-intensive fuels such
as coal.
If politics cannot solve climate
change, perhaps science and economics
can do better.
New techniques to store renewable
electricity would be a great advance
making sustainable power available
worldwide. Dramatic gains in the
efficiency of energy consumption may
also be within reach. And there could be
other answers to be found if we looked.
We cannot wait for universal
agreement to implement this plan B.
A coalition of the willing would be more
effective and would avoid the delays
caused if we wait for the slowest movers.
If this means that some countries are
simply passengers taking a free ride,
so what? The end result matters
much more than who pays for it, or
whether the answer comes from the
University of Cambridge or Tsinghua
in China.
Such a plan needs money and the
sources of funds should be as broad as
possible — from governments, founda-
tions and even investors who are pre-
pared to take a risk in the hope of a
return. If someone makes money from
finding the answer, who cares?
Some years ago a group of scientists
launched the Global Apollo Programme
to Combat Climate Change at the
London School of Economics — a con-
cept designed in the belief that science
could produce answers to a clear
challenge just as happened in the
1960s space programme in the US. This
initiative needs to be made global. It
should begin with an open-minded
approach and a willingness to fund work
which offers the prospect of practical
answers.
Politics may have failed, but rational-
ity has not. If one approach does not
work, the logic is to try another.
The writer is an energy commentator for
the FT and chair of The Policy Institute at
King’s College London
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
10 ★ FINANCIAL TIMES Tuesday 30 October 2018

Brazil election: captain of industry

The country’s stock market has underperformed wider emerging markets, if currency movements are taken
into account. The election of the authoritarian Jair Bolsonaro as president points to a more liberal economic
agenda and fiscal reform, which has sent stocks higher and bond yields lower.

Equity returns Government deficit

Twitter: @FTLex
UK budget/tech tax:
disagreeing with Nick
There are sound reasons for tech
groups having to pay higher local taxes.
The discomfort this may cause Nick
Clegg, a prefect-like British politician
turned Facebook PR guy, is just a side
benefit. But the digital-services tax
announced yesterday by Philip
Hammond, the UK chancellor, is the
wrong fix for the right problem.
Even after previous crackdowns on
digital groups, public anger is running
high. Facebook paid just £7.4m in UK
corporation tax last year, after making
a record £1.3bn in British sales.
Amazon’s main UK subsidiary shelled
out only £1.7m. That is irksome for
struggling high street stores saddled
with steep business rates.
Mr Hammond is imposing a 2 per
cent tax on UK turnover of big digital
businesses from 2020. This would leave
the four largest US tech groups each
paying up to £40m more a year in the
UK, based on last year’s results. The
total would still be less than £100m
while the target tax yield is £400m. We
must assume a much wider group of
businesses will be caught out.
Mr Hammond’s new tax will not
have much impact on the likes of
Amazon. That will disappoint diehard
high street shopkeepers. But online
shopping’s growth has been driven by
customer choice, not tax policy.
Turnover taxes are pretty silly to
begin with. If poorly designed, they
can recur at every stage of the supply
chain. The cost advantages of tech
giants are much greater than
2 per cent of UK sales, in any case.
Tech companies have been ingenious
tax avoiders. But even if they gave up
all their wheezes, they would not face
big tax bills in the countries where
many of their customers live.
A big part of the value they create
is thanks to the skill of software
engineers in California.
A real solution requires radicalism.
The outdated international tax system
needs overhauling to allocate the right
to tax cash flows to the countries where
consumers live. Ad hoc taxes on tech
giants are an unhelpful distraction.
Even these will be subject to well-
funded resistance. Experts say there
may be legal grounds for objections.
Mr Clegg and his fellow lobbyists will
depict higher levies as protectionist,
but they will be on weak ground. Tech
giants contribute little financially to
many of the societies whose wealth and
stability they depend on.
Investors in them must buckle up for
a bumpier ride.
HSBC/investment banks:
Wall Street wallflower
In August, an anonymous group of
investment bankers at HSBC wrote a
seven-page memo to John Flint, the
chief executive. They tore strips off
their line managers for their apparent
inability to mount a real challenge to
the best outfits on Wall Street.
The critics were right: the London-
headquartered bank is distinctly
second-rate in activities such as
advising on takeovers and raising
capital. Some heads should probably
roll. But the dissidents were wrong to
argue for a big strategic shift. HSBC,
which reported generally bright third-
quarter numbers yesterday, should
celebrate its mediocrity.
League tables do not flatter the bank.
In European equity offerings, Europe’s
biggest bank ranks 31st this year, says
Bloomberg. That is two notches behind
Davy of Dublin. In M&A, HSBC is 37th
on Dealogic’s numbers, having advised
on deals worth about 4 per cent of
Goldman Sachs’ haul. For a bank that
made great play of hiring rainmakers
such as John Studzinski (2003-2006)
and Matthew Westerman (2016-2017),
from Morgan Stanley and Goldman
respectively, this looks like a failure.
Profitability matters more. Here,
HSBC does respectably, recording a
double-digit return on equity across a
division spanning banking and trading,
cash management and custody. Within
global markets, quarterly revenues
from its fixed-income unit (FICC) were
up 10 per cent powered by its forex
trading. This comes when US banks’
FICC sales have slipped 3 per cent.
And in investment banking, HSBC
has averaged about $950m of revenues
in each of the past eight quarters,
despite a lot of management churn.
That is stable, rather than shameful.
Investors are rightly unappreciative
of expensive efforts to win market
share on Wall Street. Barclays has
posted better investment banking
numbers for several quarters, yet its
valuation multiple has continued to
Rebased in $ terms
MSCI Emerging Market index
2014 15 16
FT graphic Sources: Bloomberg Consensus; Refinitiv
The riotous Lenten carnival for
which Brazil is famous has started
early as far as equity investors are
concerned. They are already getting
carried away in the festive frenzy.
Voters in Latin America’s biggest
economy have elected a self-styled
tropical Donald Trump, the rightwing
former army captain Jair Bolsonaro.
Market sentiment has soared on
hopes that the new president will
tackle corruption, oversee a liberal
economic agenda and push through
long-overdue reform of a pension
system that threatens to overwhelm
the country’s budget.
Investors are also happy that Paulo
Guedes, a University of Chicago-
educated banker, has been tapped to
lead the economy ministry.
shrink. Deutsche Bank, meanwhile,
continues to flounder. Mr Flint should
leave them to it.
Hitachi Chem/quality:
navel manoeuvres
The Japanese business ideal of kaizen —
continuous improvement — is meant to
improve products as well as streamline
processes. Scandals over quality
assurance that was itself poor quality
have inspired grovelling apologies and
tighter scrutiny.
Weekend reports that Hitachi
Chemical has had its second inspection
fiasco of the year suggests that the
navel-gazing is working. But the group
will have an even trickier issue to
160
140
120
100
80
Bovespa index
60
40
20
17 18
*JPM GBI-EM BROAD Brazil **JPM EMBI Global Brazil
Brazil’s Bovespa equity index hit a
record high at yesterday’s open — a
gain of 18 per cent since poll numbers
started moving in Mr Bolsonaro’s
favour about six weeks ago. The real
has strengthened and 10-year
government bond yields are down
about 250 basis points to 10 per cent.
Many global investors may well have
avoided emerging market assets of late.
That suggests the party might go on a
little longer. The optimism might well
last until Mr Bolsonaro takes office
early in 2019.
But then reality must bite. Brazil has
a budget deficit near 8 per cent of gross
domestic product, well over double its
size after the financial crisis. Promises
of a big privatisation programme to cut
it will ring hollow. The government
confront if semiconductor orders peak.
In the past year, Japanese companies
including Kobe Steel, Mitsubishi
Materials and Subaru have all had to
atone for bad behaviour. Hitachi
Chemical in June admitted to falsifying
data on battery production. The latest
reports about the group suggest that
some of its semiconductor sealing
materials were not up to scratch. This
business delivers a tenth of the group’s
operating profits, says Nomura.
Hitachi cannot afford to lose share to
its main rival, Sumitomo Bakelite. The
latter has a fifth of the world market in
these chip sealants, slightly more than
Hitachi. That would explain the 7.5 per
cent drop in its share price yesterday.
But Hitachi Chemical has more than
reputational damage to manage. Its
customers claim to inspect the goods
As % of GDP
0
-2
-4
-6
-8
Forecast
-10
2015 16 17 18 19 20
Bond yields
Per cent
20
Local currency*
15
10
5 dotcom era, when it commercialised
Hard currency**
0
2014 15 16 17 18
carried out a series of these sell-offs
25 years ago, and deficits today are
worse. The only privatisations that
could raise the money needed would
be state energy companies such as
Petrobras and Eletrobras. Most
legislators will see the former as
untouchable, while Mr Bolsonaro has
shied away from selling Eletrobras.
Without big sales, Mr Bolsonaro
would have to narrow the deficit by
cutting spending, which could reduce
economic growth. Worse, Brazilian
exports are sensitive to a slowing
China, its main trading partner.
That leaves Brazilian shares, which
trade a tenth pricier than EM peers
on a forward price-to-earnings ratio,
looking expensive. Best wait for the
party to fade before entering the fray.
too. This reduces the need for a
damaging product recall. A bigger
worry is what happens in chips.
Analysts are split as to whether a big
downturn is looming. But the market is
bearish, assuming that chipmakers
have hit peak earnings. Memory
specialists such as Samsung Electronics
and Micron Technology trade at decade
lows on their multiple of enterprise
value to ebitda (a cash earnings
measure). Hitachi Chemical is
similarly cheap.
If the reports are true, Hitachi
Chemical’s recurrent apologies are
worrisome. However, if the latest mea
culpa is the result of tougher internal
auditing promised this summer, we can
assume that a clean-up process is
under way. That is good. Owning the
chip sector, though, is not.
IBM/Red Hat:
Big Blue’s biggest bet
Stolid, old IBM is, surprisingly, the first
company to announce a megadeal in
the wake of the deep October sell-off of
US stocks. On Sunday, it said it would
acquire Red Hat for $34bn, by far its
largest transaction.
IBM is a survivor of IT’s first wave of
success. Red Hat is a throwback to the
the open-source Linux operating
system. The deal will be a “game
changer” for IBM’s cloud-computing
business, says IBM chief executive
Ginni Rometty. Expect a less gushing
response from many investors. The
company needs to borrow heavily to
pay for Red Hat. IBM will suspend
share buybacks in 2020 and 2021.
Yet, the logic for the deal is plausible
enough. Chief executives of mature
groups sometimes need to make big
bets to remain relevant. If Ms Rometty
wants to stake her job on making a
success of Red Hat, good for her.
IBM has argued that the next stage
in cloud computing is the so-called
“hybrid cloud”. Here, big companies
switch between their own custom
cloud network and public clouds where
multiple companies share computing
operations. IBM already boasts nearly
$20bn in annual cloud revenue. Yet it
is still fighting to keep up with the likes
of Amazon, Google and Microsoft.
IBM says that combining Red Hat
with its own cloud business will
immediately make it the leader in the
hybrid cloud. That title is not coming
cheap. In effect, IBM is paying a
premium of more than 60 per cent. But
Red Hat shares are down one-third
since June because of the tech sell-off
and a summer earnings miss.
Measured against estimated
revenues for 2018, the deal still looks
pricey at 10 times. The tie-up will not
add to free cash flow immediately.
But cost savings are not the point.
Companies such as Salesforce
and Microsoft avoid criticism for
questionable M&A because their chief
executives have better records than
Ms Rometty. This deal will either
confirm that narrative or upend it.
Lex on the web
For notes on today’s breaking
stories go to www.ft.com/lex

CROSSWORD ACROSS
1 Pluck shown by the French in a
3 Ogle poet in recital (4)
5 Deceitful practice in FE involving
No. 16,002 Set by PETO difficult situation (6) Midlands university (4,3)
4 Removed from raised area as it’s 6 Very holy woman after bag with
        hidden from the audience (8) books concealing cocaine (10)
10 Foolish of London area head to 7 Love feeding greedy duck (5)
 accept extremely strange student 8 Complete with nationalist wearing
(9) English flag (6)
 
11 Look inside to switch off power 9 Having no doubt about the city
(5) being safe (6)
12 Sculptor’s earliest cast of god (4) 14 Alcuin’s first language embraced
  13 Unacceptable for detour to go by head of historical territory (10)
wrong around Ohio (3,2,5) 17 Odd fastener seen on clog (9)
 15 Give out advance payment to 18 Set up in addition to protect
cover article on space (7) separate gathering of drinkers
   16 Pass by part of church with oddly (3,5)
neglected bell (6) 20 Bush and Blair at the outset lack

19 Happen to have unpleasant turn organisation (7)
   over unionist’s smear (6) 21 Essential to dismantle Antonio’s
21 Soldiers caught in retreat trapped shed (4-2)
 by river somewhere in Switzerland 22 Appear to be heard describing
(7) King Charles as a funny guy (6)
   23 Stop showing juggling act with 24 Reveal impediment to Rona
Lily and Ada (4,2,1,3) stripping off (3,2)
 26 Section on motorists laid up as a
25 Starts to worry about profits after
 
opening of stock exchange (4) result of injury (4)
27 Unusually without cunning in
retrospect (5) Solution 16,001
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office (9)
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
Tuesday 30 October 2018 ★ 11

Personality cut Megyn Kelly’s fall reveals Deferred pain Why we all lose from
US’s brutal broadcast truths — ANALYSIS, PAGE 15 regulatory turf wars — PATRICK JENKINS, PAGE 12

ProSieben makes eharmony match Market

Forces
3 German group swoops on dating site 3 Valuation of $85m reflects Facebook disruption
$100m during a fundraising round services aimed at farmers to Christian Christian theologian who applied scien-
Michael
MATTHEW GARRAHAN — LONDON
nearly 15 years ago, has spent more than dating apps. Muzmatch, a UK based dat- ‘We have a tific methods to dating, with users Mackenzie
ProSiebenSat.1, one of Germany’s $1bn on marketing in recent years, ing site aimed at Muslims, ran a recent more answering hundreds of questions in an
largest media groups, has agreed to buy according to the person. advertising campaign featuring a car- effort to glean as much matchable infor-
US dating website eharmony as part of Jan Kemper, ProSieben’s chief finan- toon Lionel Richie and the slogan: modern mation as possible. Dr Warren came out It is hardly surprising that a febrile tone dominates finan-
its drive to create the world’s biggest cial officer, declined to comment on the “Halal! Is it me you’re looking for?” platform of retirement in 2012 to try to return cial markets as October has been a month of many tricks
online matchmaker. terms but said love was a “global feel- Dating has also been turbocharged by eharmony to its former glory but left and few treats.
ProSieben, which will merge ehar- ing”, suggesting the deal “may even smartphone use: in the US, dating apps and will again in 2016. The latest fright came from US technology giants Ama-
mony with Parship Elite, the German build a bridge” between Germany and are among the fastest growing type of migrate The group has operations in the US, zon and Alphabet after their revenue misses last week.
group’s internet dating company, did the US amid the current trade tension. app, according to eMarketer, the Canada, the UK and Australia, whereas Both are highly successful companies but the immediate
not disclose financial terms of the deal. The internet has revolutionised research group. However, the sector was eharmony Parship is aimed at the German and market reaction to their results suggested how wary inves-
But one person briefed on the acquisi- matchmaking, with apps such as Tinder hit recently when Mark Zuckerberg to it’ Austrian market. tors are of any sign that their growth trajectories might be
tion said it valued eharmony at $85m, and OkCupid complementing estab- announced plans for Facebook to enter “We have a more modern platform flattening. The wider performance of the NYSE Fang+
making it a surprisingly cheap date lished services, such as Match.com — the market, a move that knocked shares Jan Kemper and will migrate eharmony to it,” Mr index over the month reveals a divergence within a select
compared with rival Match, which has a which are all owned by US group Match. in operators such as Match. Kemper said, adding that eharmony’s group that has long been an investor favourite.
market value of $13.7bn. There are sites for every demo- Eharmony was founded by Neil Clark focus on long-term relationships made Amazon and Alphabet are well in the red as the Nasdaq
Eharmony, which raised more than graphic, religion and taste, from dating Warren, a clinical psychologist and it a good fit for Parship. Composite index remains on course for its worst month
since 2008. Apple’s earnings on Thursday now loom as the
next test of big tech sentiment.
Beyond the US, the hammering delivered for the Bats —
Asia’s tech darlings, comprising Baidu, Alibaba and Ten-
cent (which on Friday closed at a 52-week low, having
dropped 45 per cent from its January peak) — really stands
Pumped up out. This group turned lower
China tax hints during the summer, well
before their US rivals, offer-
Beyond the US,
bolster carmakers ing a snapshot of how a slow- the hammering
ing Chinese economy in con-
junction with a strong dollar
delivered for
Shares in some of the biggest carmakers and a steady tightening by the Bats really
picked up yesterday after China, the the US Federal Reserve has
world’s biggest market, was reported exerted pressure in Asia.
stands out
to be eyeing a 50 per cent cut in vehicle The MSCI Asia Pacific
purchase taxes. index, which excludes Japan,
Ford and General Motors were among has fallen for five straight weeks for a loss of almost 13 per
the early movers, jumping 5 per cent cent. From its peak in January, the index is truly in a bear
and 3.8 per cent on the news. In Europe, market, down a quarter.
Volkswagen’s shares rose by 5 per cent, Robert Horrocks, chief investment officer at Matthews
with BMW and Daimler both up by Asia, argues that the Asia bear mainly reflects tighter US
3 per cent. policy, and believes there is a silver lining.
The share moves were sparked by a “Price-to-forward earnings ratios at about 12.1 [times]
Bloomberg report that China’s economic for Asia ex-Japan, and 12.8 times including Japan, compare
planning body was proposing to cut the favourably with Europe at 13.7 and the US at 17.1,” he said.
tax on some cars from 10 per cent to “I think these valuation discounts are already a bit exces-
5 per cent in a bid to revive sales. sive. It is undeniable that the US has seen superior profit
China’s car market is expected to growth over the last seven years but I do not expect that to
decline this year for the first time since be the case over the next decade, as political and wage
1990 as consumer confidence is hit by cycles switch in the US to favour labour and switch in most
the trade war and an end to years of of Asia to favour corporations.”
strong growth. Beijing has stepped in to That analysis supports the view that, with many global
stimulate demand before, cutting taxes equity markets down in the region of 20 per cent from
in September 2015. their highs, shares are deeply oversold and due for a
Robin Zhu, a Bernstein analyst, bounce. Indiscriminate selling tends to provide a good
estimated that the move could boost opportunity to pick up companies with strong cash flow at
sales by as much as 2.5m next year, attractive levels. Unless we are heading for a recession, the
leading to a modest rise in 2019 against current sell-off will fade.
expectations of a small decline. Nevertheless, there is a risk of cheaper valuations in the
China is the largest market for near term, with strains in shadow banking and commer-
many carmakers with any slowdown cial real estate potentially fostering higher market volatil-
representing a risk to their businesses. ity and very choppy price swings across markets.
Pan Kwan Yuk and Peter Campbell
michael.mackenzie@ft.com
Krisztian Bocsi/Bloomberg

Cost control lifts HSBC profits and

boosts belief in Flint’s turnround plans
DAVID CROW — LONDON especially in Hong Kong, where the slumped to their lowest level in nearly
ALICE WOODHOUSE — HONG KONG
retail and wealth unit grew 38 per cent two years, rose 5.79 per cent in Hong
HSBC’s quarterly profits jumped versus last year, without a correspond- Kong — putting the stock on track for its
thanks to a tighter grip on costs, fuel- ing rise in costs. Operating expenses fell biggest one-day gain since June 2017.
ling hopes that John Flint, chief execu- 6.8 per cent to $8.8bn while net profits The London shares were up 5.4 per cent
tive, can return the bank to growth rose 29 per cent to $4.2bn. in late trading.
without the need to boost spending. The strong performance was reflected HSBC has staked its future on plans to
Fresh foe for big guns in in HSBC’s so-called “jaws ratio” — which expand further in Asia, where it derives
military procurement fight The bank reported revenue of $13.8bn measures its ability to increase revenue more than three-quarters of its profits.
in the third quarter, an 8.8 per cent faster than its cost base. “We had very But some investors fear the “pivot to
The surge in US military spending has increase on a year ago. positive ‘jaws’ in the third quarter,” said Asia” has come at a time of higher trade
contributed to a similar rise in defence Mr Flint attributed the rise, in part, to Mr Flint, adding that better discipline tensions between China and the US,
and aerospace deals, including L3’s tighter monetary policy in the US, say- on costs would help the bank boost its which could hurt the bank’s perform-
merger with Harris. The move adds a ing a “normalisation of monetary policy, return on equity — a measure of profita- ance. Mr Flint said he expected Chinese
sixth name — and fresh challenger — especially in the dollar area” had helped bility — to 11 per cent by 2020. businesses to prioritise commerce with
to a group with the scale and expertise the bank expand its net interest margin Return on average shareholder equity neighbouring countries. “It’s possible
to deliver for the Pentagon. — the difference between what it pays rose to 9.6 per cent in the third quarter that intra-regional Asian trade grows
Analysis i PAGE 14 on deposits and earns on loans. from 7.1 per cent a year ago. more than US-China,” he said.
HSBC posted strong growth in Asia, Shares in HSBC, which last week Lex page 10

Companies / Sectors / People

Companies
ANZ Bank.....................................................15
Alibaba........................................................7,11
Alphabet........................................................11
Altran Technologies.............................20
Amazon............................................1,10,11,13
Apple.................................................................1
Aptiv...............................................................20
Aricent..........................................................20
BAE Systems.............................................14
BBA Aviation............................................20
BMW.................................................................11
BSG Resources.........................................14
BTG Pactual..................................................2
Babcock International..........................14
Baidu................................................................11
Barclays.........................................................10
Boeing............................................................14
Booking.com..................................................1
BorgWarner................................................20
Bozano Investimentos............................2
BuzzFeed......................................................15
CSRA...............................................................14
CVS Health....................................................7
Cambridge Analytica.............................12
Carillion.........................................................14
Carlyle............................................................14
Cerner............................................................20
Chinalco........................................................14
Chipotle Mexican Grill..........................14
Cobham.........................................................14
Cognos...........................................................13
Comcast.........................................................15
Commonw’h Bank of Australia.......15
Continental.................................................20
Daimler...........................................................11
Davy................................................................10
Deliveroo.....................................................20
Deutsche Bank.........................................10
EDreams..........................................................1
Eharmony......................................................11
Eletrobras....................................................10
Elliott Management................................15
Enel..................................................................15
Essity.............................................................20
Esterline Technologies........................14
Facebook.........................................1,10,11,12
Fiat Chrysler Automobiles...................8
Fincantieri....................................................14
First Data....................................................20
Ford...........................................................11,20
Fox News......................................................15
GVC.................................................................20
Gama Aviation.........................................20
General Dynamics .................................14
General Motors..........................................11
Goldman Sachs...................................10,19
Goodyear.....................................................20
Google...................................................1,10,13
Grifols............................................................20
HSBC...................................................10,11,20
Harris Corp.................................................14
Hitachi Chemical................................10,12
IBM.......................................................10,13,20
Iliad...................................................................15
Infineon Technologies.........................20
Instagram.....................................................12
JPMorgan.....................................................15
Jamalco..........................................................12
Just Eat........................................................20
KKR..................................................................14
KYB..................................................................12
Kobe Steel.............................................10,12
L3......................................................................14
Ladbrokes...................................................20
Lendy..............................................................15
Lloyd’s of London.....................................9
Lockheed Martin.....................................14
Macquarie Group.....................................15
Magneti Marelli...........................................8
Match.com....................................................11
Meggitt..........................................................14
Melrose Industries.................................20
Micron Technology................................10
Microsoft.................................................10,13
Mitsubishi Materials.........................10,12
Morgan Stanley........................................10
NBC..................................................................15
National Australia Bank......................15
Naval Group...............................................14
Nissan...............................................................8
Noble Group...............................................12
Northrop Grumman...............................14
OkCupid.........................................................11
Open Fiber...................................................15
Paddy Power Betfair............................20
Parship Elite................................................11
Petrobras..................................................2,10
ProSiebenSat.1............................................11
Qinetiq...........................................................14
Raytheon......................................................14
Red Hat............................................10,13,20
Rio Tinto.......................................................14
Rockwell Collins.......................................14
Rovio..................................................................1
Rusal................................................................12
Salesforce....................................................10
Samsung Electronics.............................10
Siemens...........................................................8
Snapchat.......................................................15
Spirit AeroSystems................................14
Spotify...............................................................1
Subaru......................................................10,12
Sumitomo Bakelite.................................10
Telecom Italia............................................15
Telemundo...................................................15
Tencent.......................................................7,11
Textron..........................................................14
Tinder..............................................................11
Toshiba Memory......................................12
TransDigm Group...................................14
Triumph Group.........................................14
USA Truck...................................................14
Uber............................................................8,20
Ultra Electronics......................................14
Vail Resorts................................................14
Valeo..............................................................20
Vitol.................................................................12
Vivendi...........................................................15
Vodafone......................................................15
Volkswage....................................................11
Westpac.........................................................15
William Hill.................................................20
Wind Tre.......................................................15
Zalando............................................................1
Sectors
Aerospace & Defence................4,14,20
Automobiles..........................................11,20
Banks.............................................10,11,15,20
Basic Resources........................................12
Chemicals.....................................................12
Energy..........................................................8,9
Financial Services..............................12,15
Financials....................................12,14,15,20
Food & Beverage...................................20
Healthcare..................................................20
Industrial Goods.......................................12
Industrials..............................................12,20
Media.........................................................12,15
Mining............................................................14
Oil & Gas........................................................8
Personal & Household Goods........20
Technology.......................1,10,11,12,13,20
Telecoms......................................................15
Tobacco..........................................................8
Transport.................................................8,14
Travel & Leisure.....................................20
People
Ailes, Roger.................................................15
Bolloré, Vincent........................................15
Elman, Richard..........................................12
Flint, John...............................................10,11
Genish, Amos.............................................15
Gerstner, Lou.............................................13
Guedes, Paulo..............................................2
Kaese, Joe......................................................8
Kelly, Megyn...............................................15
Kemper, Jan.................................................11
Krieger, Mike..............................................12
Kubasik, Chris............................................14
Lack, Andrew.............................................15
Lockwood, David.....................................14
Murdoch, Rupert......................................15
Randall, Will................................................12
Rometty, Ginni....................................10,13
Steinmetz, Beny.......................................14
Studzinski, John.......................................10
Systrom, Kevin..........................................12
Warren, Neil Clark....................................11
Wehner, David...........................................12
Weinstein, Harvey...................................15
Westerman, Matthew...........................10
Zuckerberg, Mark.....................................11

© The Financial Times Limited 2018 Week 44

 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
12 ★ FINANCIAL TIMES Tuesday 30 October 2018

COMPANIES
INSIDE BUSINESS
Industrial goods
FINANCE

Hitachi Chemical admits testing lapses Patrick

Revelation to revive
concerns over reliability
of quality controls
KANA INAGAKI AND LEO LEWIS — TOKYO
Hitachi Chemical has admitted to
improper testing for a material used to
protect chips found in cars and home
electronics, a disclosure that sent shares
in the Japanese company down as much
Yesterday’s admission by Hitachi
Chemical that it “had carried out
improperinspectionsforsomeproducts”
came only four months after the Hitachi
Ltd subsidiary said it had also falsified
data for industrial lead-acid batteries.
The series of scandals, which began in
2017, has put a number of Japan’s best-
known industrial names under intense
scrutiny, forcing many to make abject
apologies to customers and, in some
cases, replace senior management.
Instead, investors have weathered a
steady stream of announcements on
quality standards that have hit shares.
Earlier this month, Tokyo-based
industrial component maker KYB
admitted falsifying inspection data for
earthquake shock absorbers that are
used in hundreds of buildings across the
country. The implications of a scandal
that has so far uncovered 70 govern-
ment buildings that may have used KYB
products for which data were falsified
Jenkins
‘There has lyst at Nomura Securities, estimated
that materials used to encapsulate semi-
not yet
been the
conductors accounted for about 5 per
cent of the group’s sales and more than
10 per cent of its core operating profit.
Price to be paid for
change in
company
“At the final shipment stage, the com-
pany’s semiconductor manufacturer
obscure, fragmented
attitudes
customers would normally carry out
their own quality inspections. Therefore
it may be the case that there are no
derivatives regulation
we had major quality issues with the actual
expected’ encapsulation materials,” Mr Okazaki

as 14 per cent yesterday.
The company joins a long list of Japa-
nese groups that have admitted to irreg-
ularities with testing. The admission is
likely to rekindle concerns about the
reliability of quality controls after other
big manufacturers, including Kobe
Steel, Subaru and Mitsubishi Materials,
admitted to cheating on quality tests or
falsifying quality standards documents.
But Nobuo Gohara, a legal expert on
corporate compliance and scandals, said
any broader lessons had yet to sink in.
“There has not yet been the change in
company attitudes we had expected,”
said Mr Gohara, adding that he knew of
very few companies that had taken the
step of running internal compliance
investigations to check whether they too
might be falsifying quality inspections.
Technology. Social media
has sent ripples through Japan’s real
estate investment trust sector.
None of the string of Japan Inc scan-
dals since 2017 has been linked to any
reports of safety problems.
Hitachi Chemical said it had not yet
found any quality lapses with its prod-
ucts or a breach of law. A committee of
external experts, set up in July, was
investigating. Shigeki Okazaki, an ana-
I
said in a note published on Sunday.
Chipmaker Toshiba Memory con-
firmed it was informed by Hitachi
Chemical in late September that it had
not complied with inspection standards
they had agreed to but that no quality
issue was found in its own inspections.
Hitachi Chemical shares fell 14.6 per
cent but closed down 7.6 per cent.
See Lex
n the jargon-filled world of regulation, the concept of
deference has evolved from a simple expression of
respect and courtesy into something more barbed and
Machiavellian.
The drama in this transformation has everyday rel-
evance. At stake is the price we all pay — via employers,
mortgages and pension funds — to insure against the risk
of rising interest rates, oil prices or currencies.
This month, Christopher Giancarlo, who chairs the
Commodity Futures Trading Commission, delivered
a speech in Chicago. He warmed up slowly, talking
about the promise of fintech and thanking colleagues for
work on technical subcommittees. But halfway through,
he stunned the room with a crescendo of criticism of
European policymakers, whose planned approach to
derivatives regulation was “unprecedented” and “wholly

Five factors to watch in Facebook numbers
Investors harbour concerns
about revenue, margins
and the effect of scandals
HANNAH KUCHLER — SAN FRANCISCO
When Facebook reports earnings today
investors will hope the social network
stays out of the record books.
The company’s market value has
failed to recover from the record-
breaking moment at its previous earn-
ings call, when it lost more than $120bn,
achieving the dubious honour of the
largest one-day fall for any US listed
company
Shares are still trading at almost a
third less than before the second-
quarter earnings statement, when
investors were shaken by forecasts for
slower revenue growth and lower mar-
gins, as well as mounting signs that users
‘The business is slowing
because advertisers can
only allocate so much
money to the platform’
in the developed world were less
engaged with the app.
Analysts are also still divided about
the company’s long-term future, as it
has struggled through punishing
political crises, including the Cambridge
Analytica scandal. But today markets
will be watching five factors that could
influence the growth of the largest social
network.
Revenue growth
Brian Wieser, an analyst at Pivotal
Research, said investors would be pri-
marily focused on revenue growth, add-
ing: “The business is slowing because
advertisers can only allocate so much
money to the platform.”
Last quarter, Facebook forecast a
significant slowing in revenue growth in
the second half of the year, pushing ana-
lysts to remake models to a world where
revenue grows at about 20 per cent,
rather than 40 per cent, year on
year. Sales are forecast to grow to
$13.4bn in the quarter, a 33.4 per cent
increase from the same period the year
before.
Investors will be watching to see if
these forecasts play out — and what the
forecasts are for next year.
Some analysts point to the fact that
Facebook has previously given guidance
for a revenue slowdown that failed to
materialise.
“It is entirely plausible that they were
overly conservative,” said Mr Wieser.
“But it is also plausible that they were
not conservative enough.”
Margins
So far, the financial fallout from Face-
book’s political problems — from elec-
tion manipulation allegations to privacy
violations on the platform — has been
limited to rising costs.
Samidh The social network has pledged to quarter, when the EU’s General Data
Chakrabarti, double its number of content modera- Protection Regulation came into force.
head of civic tors to more than 20,000 by the end of Daily active users in Europe fell further,
engagement, the year, in a huge hiring operation for a down 3m.
centre, and business that has historically been light This quarter, investors will be eager to
Nathaniel on people. see if European users were temporarily
Bleacher, head At the last earnings statement, David put off by the box-ticking required to
of cyber Wehner, Facebook’s chief financial consent to Facebook’s data practices or
security, in officer, forecast that margins would slip whether they shut their accounts for
Facebook’s ‘war from 44 per cent in the second quarter good.
room’ ahead of to the mid-30s in the next two years. Hargreaves Lansdown analysts said
Brazil’s run-off The average analyst’s estimate is for the drop could have been a flash in the
election earnings per share of $1.47. pan — or could have been the result of
David Paul Morris/Bloomberg
the data leak to Cambridge Analytica,
EU users which shook many people’s confidence
Facebook lost about 1m European in the safety of their information.
monthly active users in the second Since then, Facebook has also uncov-
ered a cyber attack that affected a
reported 30m users.
Facebook margins are
GDPR could also hit advertising reve-
coming under pressure nue if many users opt out of some data
Operating profit margin (%) collection, the Hargreaves Lansdown
analysts warned. “Advertisers may have
60 to contend with smaller or less specific
target audiences,” they wrote in a note.
Decisions to stop offering data from
40 partners such as data brokers because of
possible privacy problems could hit rev-
enue. Last week, the Financial Times
20 said it had quit advertising on Facebook
in the UK after the platform tightened
rules on declaring political ads.
0 eMarketer, said marketers were excited
Instagram
2016 17 18
Source: company
Instagram co-founders Kevin Systrom
and Mike Krieger may have left Face-
book during the quarter, but the fast-
growing app with more than 1bn
users remains a source of optimism for
investors.
Rich Greenfield, an analyst at
BTIG Research, said that it was
an “absolute rocket ship” and “the
cure for boredom for humans across
the world”.
Facebook does not break out Insta-
gram revenue.
Research firm eMarketer forecasts
Instagram to contribute 16.5 per cent of
Facebook’s worldwide revenue this
year, up from 10.7 per cent last year. In
dollars, this works out at $9bn, a 110 per
cent increase year on year.
Stories
When Facebook introduced the
24-hour photo collections known as
Stories into all of its major apps, it
finally succeeded in one of its many
attempts to copy Snap, which invented
the concept.
But it faces a similar problem to Snap:
convincing advertisers to adopt the ver-
tical video format.
Users are spending more time in Sto-
ries — but there are not as many adverts
there as there are in the news feed.
Debra Aho Williamson, an analyst at
about buying Stories ads on Instagram,
but somewhat less enthusiastic about
those on Facebook.
unacceptable”. The mooted move by EU regulators to
engage in “extraterritorial overreach” was “completely
irresponsible”.
A fair point. European plans threaten to duplicate
regulation and give the EU27’s regulator the power to
inspect the activities of a US derivatives business on
its turf.
Mr Giancarlo had the humility to admit that the US had
itself been guilty of overreach. After the passing of Dodd-
Frank, the CFTC was given extraterritorial regulatory
rights over foreign participants in foreign jurisdictions.
This, he said, should cease. Here is where the deference
concept comes in: the only way properly to regulate a mar-
ket such as the $500tn over-the-counter derivatives is by
national regulators, such as the CFTC in the US, “defer-
ring” to peers in other jurisdictions.
He expressed frustration that despite a long roadshow
across Europe and Asia to sell the message that the US
wanted to change its ways — and in return ensure that
Europe ditched its plan for tit-for-tat extraterritorial pow-
ers — the EU seemed unwilling to accept his conciliatory
line at face value.
European policymakers might have been sceptical.
First, as Mr Giancarlo conceded, the CFTC’s history of
overreach has been the opposite of the collaborative defer-
ence he is professing.
Second, he was handpicked by Donald “America First”
Trump. Pleading for a globally co-operative approach on
derivatives regulation is
hardly consistent with the
deglobalising mood of the US
The market is at
administration. On the evi- threat if a system
dence of the ditched Paris
of collaborative
climate change accord, the
axed nuclear arms non- oversight cannot
proliferation treaty or the
be agreed
exit from the Trans-Pacific
Partnership on trade, the
idea of Mr Trump showing deference — in any form
— rings hollow.
Third, the conclusion of Mr Giancarlo’s speech was
hardly deferential. He threatened to bar European banks
from the US derivatives market unless EU policymakers
relented. This merely raised the ante with the EU. Within a
day of his speech, Brussels had shot back that it was “the
prerogative of the EU legislator to set the general supervi-
sory framework. We would expect third country authori-
ties to respect that.”
At a geopolitical level, this adds uncertainty and tension.
Alongside instability in the Middle East, US strains with
Russia and China, and the more obvious trade ructions of
Brexit, the idea that an effective market in derivatives
trading might be disrupted should be of concern.
Of course, the derivatives row is itself rooted in Brexit.
European policymakers — whether for reasons of financial
security or of economic gain — have long been pressing for
euro-denominated business to be moved out of London
post-Brexit and into the eurozone. That UK-EU row looks
set to go global.
Fragmentation in derivatives markets would be bad for
anyone who directly or indirectly uses them to hedge.
Traders, exchanges, clearing houses and other partici-
pants say the future of the market is at threat if regulators
cannot agree on a system of collaborative oversight. Multi-
ple regulators demanding compliance with different
standards, sometimes in the same location, can only lead
to a fractured market. If an interest rate swap taken out by
a European group is barred from being pooled with US cli-
ent swaps because conflicting rules proscribe it, the effi-
ciency of the system is compromised.
Markets would still operate. But the smaller, more frag-
mented pools of collateral posted to back the swaps will
cause pricing spreads to widen, with the net result that
companies, pension funds and financial institutions have
to pay more to hedge risks.
The world, and Europe in particular, already stands
on the verge of disruption from the geopolitical and mar-
ket risks that overhang it. Pursuing a fragmented
approach to regulation, and in the process pushing up the
cost of managing many of those risks, seems obtuse, to say
the least.
patrick.jenkins@ft.com

Financial services

Noble blames restructuring costs as it prepares to report another quarterly loss

DAVID SHEPPARD AND NEIL HUME
Commodity trader Noble Group, which
almost blew up in an accounting and
debt scandal before pushing through a
restructuring in August, will report
another loss in the third quarter.
The Singapore-listed commodity house,
founded by British-born trader Richard
Elman, was expected to report a net loss
of $90m-$115m, the group said yester-
day. It blamed financing and restructur-
ing costs and losses from discontinued
operations as it has done in previous
quarters.
Noble once had ambitions to be an
Asia-based version of Glencore,
buying up mining and agriculture assets
and growing to become a full-scale
international commodity trader.
But over the past three years, ques-
tions about its accounting and large
debts led to its near-collapse, before its
creditors agreed a haircut in a debt-for-
equity swap that left shareholders with
a much smaller slice of the restructured
company.
Shareholders have backed the
restructuring, which is pending court
approval.
Noble, which has retrenched to its
core Asia-focused coal and metals busi-
nesses, said profit from its operations
before interest, tax and restructuring
expenses would be $20m-$35m for the
quarter.
One of its few remaining assets, a joint
venture running the Jamalco alumina
smelter in Jamaica, has provided the
company with an unexpected boost this
year after the price of the ingredient in
aluminium rose sharply after the US
imposed sanctions on Rusal.
Noble said its overheads for selling,
administering and running the com-
pany have fallen towards $100m a year,
which it expects to achieve in the fourth
quarter.
Total cash and cash equivalents were
$580m, down from $621m at the end of
the second quarter, a drop the company
said was down to restructuring
expenses and rises in working capital.
Of that figure, $175m has been
pledged as collateral for credit facilities.
Noble said losses from discontinued
operations, including its global oil trad-
ing business that it sold to Vitol in Janu-
ary, were $55m.
Noble said talks about the closing date
for the deal were “ongoing”.
Chief executive Will Randall made no
comment in the release.
The group’s results for the first
nine months will be released on
November 13.

Tuesday 30 October 2018
IBM chief tears up playbook with Red Hat deal
Rometty shakes off caution and confronts group’s strategic crisis with push to lead IT of the future, not just of the past
RICHARD WATERS — SAN FRANCISCO
Ginni Rometty of IBM is finally ready to
roll the dice.
The chief executive has struggled
with playing defence, as Big Blue has
grappled with falling sales of its tradi-
tional tech while trying to tap sources of
growth such as artificial intelligence and
security.
It has not worked. IBM’s revenues
turned down again in the latest quarter,
ending a moment of respite after nearly
six years of contraction.
But Ms Rometty is ready to shake off
the caution that has characterised her
nearly seven years at the helm. Yester-
day’s news that IBM had agreed to pay
$34bn in cash for open source software
company Red Hat represents its largest
deal by far, and a bid to reposition itself
as a leader in the IT of the future, not just
of the past.
“This is all about growth,” Ms
Rometty said as she announced a deal
that makes IBM a contender in the cloud
computing market dominated by Ama-
zon Web Services and Google. “We’re
playing to be number one.”
The bravado resonated with analysts,
many of whom had lost confidence in
her efforts to reverse the slide. The
immediate response on Wall Street: it
will be hard to pull off, but IBM finally
has a strategic answer to the issues that
were accelerating its drift into irrele-
vance.
Toni Sacconaghi of Sanford C. Bern-
stein summed up the reaction among
investors: “Congratulations on your
conviction.”
The easy part’s done
If Ms Rometty succeeds in rebooting
IBM, it will rank as one of the greatest
tech turnrounds, alongside the rescue of
Big Blue engineered a quarter of a cen-
tury ago by Lou Gerstner.
Back then, many of the big companies
and governments that were IBM’s tradi-
tional customers were turning away
from its mainframe systems, but were
struggling with the complexity of a cli-
ent/server computing architecture
championed by companies like Micro-
soft. Mr Gerstner made systems integra-
tion the key to IBM’s turnround, turning
IT services into the foundation for the
new IBM.
Today, with the architectural shift to
cloud computing, Ms Rometty believes
she has a similar opportunity. The tran-
sition to the cloud began with compa-
nies moving individual computing
workloads to the centralised systems
run by Amazon — and, later, Microsoft
and Google. Now they are facing the
challenge of integrating these with their
existing data centres, which represent
massive sunk costs.
“The easy part’s done,” Ms Rometty
said of the first stage of the new cloud
market. But she added that the biggest
users of computing were once again
struggling: “They need help.”
IBM’s bet is that companies will link
their existing computing resources to
the cloud in a “hybrid” infrastructure.
Microsoft’s latest earnings bear witness
to the opportunities in this strategy: its
cloud platform, Azure, is growing at
more than 70 per cent, but it is also see-
ing strong sales of traditional server
software, as the two sides of the business
grow in parallel.
Legal Notices
Ginni Rometty’s deal makes IBM a contender in the cloud computing market dominated by Amazon Web Services and Google — FT Montage
IBM bets on Red Hat for growth
Stock performance: share price ($)
Jan Apr Jun Aug
2018
Sources: Refinitiv (formerly Thomson Reuters); Bloomberg
A second force that Ms Rometty is
hoping to tap is the persistent worry
among big customers that they will
become overly dependent on any single
tech company, in a technological
dependency known as “lock-in”.
“This cloud battle is going to be open
versus proprietary,” she said, with IBM
the champion of an open source tech
platform that provides the only real
alternative to one of the emerging
“superclouds”.
Like turning round two
supertankers
The argument resonated with Wall
Street. Despite paying a massive pre-
mium, IBM had lost only about 3 per
cent of its value by mid-afternoon
yesterday, while Red Hat’s market value
rose by around $10bn.
But making the deal work will be chal-
‘Congratulations on
your conviction’
The market reaction, as summed
up by Bernstein’s Toni Sacconaghi
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
★ FINANCIAL TIMES
COMPANIES
Revenue growth: rolling 4-quarters ($bn)
170 100
160 80
150 60
140 40
130 20
120 0 shown that she is ready to tear up the
Oct 2010 12 14 16 18
lenging. IBM has a history of dealmak-
ing, shuffling and re-shuffling its portfo-
lio of technologies to keep pace with
changing tech. Its biggest deal until now
was the $5bn purchase of business intel-
ligence company Cognos more than a
decade ago.
With Red Hat, it is going for some-
thing different: re-engineering its core
tech strategy so as to present a new, and
more relevant, face to customers.
Phil Dawson, an analyst at IT research
firm Gartner, likened the task to turning
round two supertankers. If IBM had
been backward-looking in trying to
defend its old tech base, Red Hat was
also trying to reposition itself for the
cloud, he said.
Red Hat rose as the dominant Linux
company, providing the support and
services companies needed as they
moved to the open source operating
system.
But with Linux well established, that
transition was complete, Mr Dawson
said — as evidenced by the company’s
slowing growth and declining share
price in the last year.
Together, IBM and Red Hat have to
show they can extend their combined
13
tech base to link it more closely with the
cloud. Red Hat has already gained rec-
ognition for a newer set of technologies
on which the “hybrid cloud” sales pitch
will depend, though the revenue is still
minimal.
One is OpenShift, a tech framework
that involves breaking down monolithic
corporate software programs into
smaller, inter-connected segments.
Known as containers, they can easily be
moved between different computing
platforms, greatly increasing the effi-
ciency of both developing and deploying
complex applications.
They hold out the promise of span-
ning both internal data centres and pub-
lic clouds.
But Mr Dawson warned that there
were extensive risks associated with try-
ing to pull off such an integration,
including how the rest of the IT industry
reacted.
As the largest distributor of Linux,
Red Hat has become a vital partner for
many other old-line IT companies,
among them Hewlett Packard Enter-
prise, Dell and Cisco. Its newer technol-
ogies also rely on partnerships: Micro-
soft’s Azure cloud service, for instance,
supports Red Hat’s OpenShift.
“Will Oracle and Microsoft continue
their relationships with Red Hat if IBM
is behind them? Maybe not,” said Mr
Dawson.
He said rivalry between the big tech
companies could even lead to a “frag-
Largest selected M&A deals (value, $bn) mentation” of the Linux platform if
Red Hat, 34.0
IBM’s rivals feel compelled to support
The Weather their own versions of the software and
PwC Consulting, 3.9 drop Red Hat, in an outcome that would
Channel, 2.3
Netezza, 1.7 represent a large backwards step for the
industry.
Ms Rometty is aware of the danger.
Referring yesterday to Red Hat’s histori-
2000 2010 2018 cal independence from the traditional
Cognos, 4.5 IT giants, she insisted: “We’re absolutely
SoftLayer going to preserve this Switzerland.”
Technologies, 2.0 After a long retreat, she has finally
Lotus Development, 3.1
Truven Health playbook she inherited and face up to
Analytics, 2.6 the extent of IBM’s strategic crisis.
See Lex
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
14 ★ FINANCIAL TIMES Tuesday 30 October 2018

COMPANIES

Mining Financials

Rio sale of Guinea mine stake falls through US tax cut

Inability to reach deal with
Chinalco blocks exit from
Simandou ore project
NEIL HUME AND JAMIE SMYTH
Rio Tinto has suffered a setback in its
efforts to exit a controversial iron ore
project in Guinea after failing to reach
agreement with its biggest shareholder
on a sale.
The Anglo-Australian miner
announced two years ago a non-binding
agreement to sell its interest in Siman-
dou to Aluminium Corp of China, or
Chinalco as it is known.
Rio owns a 45 per cent stake in two of
the four blocks that make up the giant
Simandou deposit, while state-control-
led Chinalco controls 40 per cent and
the Guinea government 15 per cent.
Under the deal, Rio was set to receive
between $1.1bn and $1.3bn for its stake
in the project, with payments scheduled
to begin with commercial production.
The agreement was supposed to
become a binding deal in 2017 but that
deadline passed and now the original
accord has lapsed, sending Rio back to
the drawing board.
“Rio Tinto and Chinalco . . . will con-
tinue to work with the government of
Guinea to explore other options to real-
Aerospace & defence. Consolidation
ise value from the world-class Siman-
dou iron ore deposit,” Rio said. Chinalco
owns more than 14 per cent of Rio’s Lon-
don-listed shares.
Simandou is one of the world’s best
untapped reserves of iron ore, holding
an estimated 2bn tonnes of the steel-
making ingredient. It rivals the huge
high-grade deposits of northern Brazil,
resources that are prized by Chinese
steel mills because of their high quality
and low levels of contaminants.
But the project requires huge invest-
ment in infrastructure, including a
650km trans-Guinean railway line and a
port, which could push the total invest-
ment in the project to $20bn.
Although there are shorter routes to
market available through neighbouring
countries, poverty-stricken Guinea has
opposed any changes to the terms of the
project, making it unviable even for a
state-backed Chinese company such as
Chinalco. Unless that changed it was dif-
ficult to see Simandou ever being devel-
oped, say analysts.
Simandou has been a near constant
source of headaches for Rio since it was
granted rights to start prospecting for
iron ore in a remote, forested region of
Guinea two decades ago.
The company has battled repeated
legal and political challenges to its claim
on Simandou. In 2008, Rio’s rights over
said to have
two of the four blocks were confiscated
and handed to BSG Resources, the min-
little impact
ing arm of Israeli tycoon Beny Stein-
metz’s business empire.
on hiring and
Rio was able to hang on to the two
other blocks but only after paying
$700m to the government of Guinea in
investment
2011 to guarantee its tenure for the life-
time of the Simandou mine. ANDREW EDGECLIFFE-JOHNSON
AND ED CROOKS — NEW YORK
That deal has come under scrutiny
after Rio fired two senior managers two The sweeping corporate tax cuts Don-
years ago after reviewing a questionable ald Trump signed into law almost a
$10.5m payment made to a consultant year ago have had little or no effect on
who helped Rio secure the two blocks. most US companies’ hiring and invest-
Rio also alerted regulators about the ment plans, according to a business
payment and the UK’s Serious Fraud survey released yesterday.
Office has launched an investigation.
The National Association for Business
Economics found buoyant conditions in
the third quarter of 2018, with its
members reporting rising sales and
improved profit margins, but reported
that the Republican tax reform “has not

Suppliers merge as military spending soars
Combination of L3 and
Harris provides challenger
to US big five contractors
SYLVIA PFEIFER — LONDON
For more than two decades the US
defence industry has been dominated
by five “prime” contractors, compa-
nies with the technological and finan-
cial firepower to deliver key pro-
grammes for the Pentagon.
Now there is a sixth. This month’s pro-
posed merger between L3 and Harris
Corp creates a genuine challenger to the
big five: Lockheed Martin, Boeing,
Northrop Grumman, General Dynamics
and Raytheon.
“It’s about chasing the cycle in the US
and the ability to bid for major pro-
grammes. Everybody always wants to
move up the food chain,” said Robert
Thomson at consultants Roland Berger.
The new company is to be called L3
Harris Technologies and is set to
become a formidable competitor in mil-
itary communications and defence elec-
tronics, with estimated net revenues in
2018 of $16bn. This is still some way
behind the revenues of the top five but
close enough to warrant a place among
prime contractors.
Explaining the rationale for the deal,
L3 chief executive Chris Kubasik told
analysts he had always envisioned it
would become “a non-traditional sixth
prime [contractor]. Non-traditional
meaning we want to be more agile, inno-
vative and affordable with greater speed
to market.”
The agreement, structured as a
merger of equals, comes after a series of
deals in the aerospace and defence sec-
tor as companies have responded to a
surge in military spending in the US and
a global boom in commercial aircraft
sales.
Both Boeing and Airbus, the Euro-
pean aerospace and defence group, have
record order backlogs equivalent to
almost a decade’s worth of production.
On the deals front, TransDigm Group
this month agreed to take over aero-
space parts maker Esterline Technolo-
gies for $4bn, including debt.
This followed the agreement by Gen-
eral Dynamics to acquire IT and cyber
security group CSRA for $9.6bn earlier
this year. According to PwC, deals worth
more than $30bn had already been
announced by the end of the third quar-
ter of this year in the sector.
For BAE Systems, Britain’s largest
defence group, which is also a significant
contractor to the Pentagon, the L3-
Harris deal could have repercussions for
its US business in the longer term.
The company has competed against
both Harris and L3 on numerous pro-
grammes and has also worked with
both. BAE’s US operations last year gen-
erated about $10bn or £7.65bn in sales.
A Lockheed The deal “pushes them quite some
Martin F-35 way down the pecking order” in the US,
Lightning II said Mr Thomson.
performs at an Sash Tusa of Agency Partners noted
air show in the that “BAE has eschewed doing big
UK. The deals”, adding that “it will be interesting
company is one to see whether they can continue with
of the prime that sort of discipline when their peers
contractors to are consolidating”.
the US military, Some industry advisers suggested
with the size and BAE could decide to expand its elec-
skills to deliver tronic systems business in the US
big projects through smaller acquisitions below the
Adrian Dennis/AFP/Getty
$500m level but cautioned that valua-
tions were already high given the posi-
tive spending environment.
Sandy Morris, analyst at Jefferies, said
BAE could instead increase its spending
on research and development in its elec-
tronics business.
In the US, the L3-Harris merger will
leave Textron, which makes Bell heli-
copters and Cessna jets, as one of the few
remaining independent mid-sized
defence contractors, according to Jeffer-
ies analysts.
Textron has been the subject of
break-up speculation in the past
because of its conglomerate structure.
The company this month reported
lower than expected profits for the third
quarter mainly because of a poor per-
formance from its industrial unit, which
sells golf carts and snowmobiles. Tex-
tron also has a systems division that spe-
cialises in military simulation and train-
ing tools, as well as armoured vehicles.
In the UK, the sector, unlike the prime
contractor-dominated US market, still
has several reasonably sized companies
including Babcock International, Cob-
ham, Ultra Electronics, Qinetiq and
Meggitt.
Here, Babcock is in the spotlight. The
engineering and support services com-
pany, which is the second-biggest sup-
plier to the UK Ministry of Defence and
repairs and decommissions the Royal
Navy’s submarines among other things,
has seen its share price drop.
Concerns it could suffer the same fate
as some of its support services peers,
such as Carillion, have undermined the
stock’s performance. Its shares have
dropped sharply from their peak of
almost £13 a share in 2014, partly as it
has been targeted by short sellers.
While a merger with BAE Systems is
deemed unlikely because of competi-
tion concerns, private equity groups
such as KKR and Carlyle of the US could
be tempted, according to analysts.
Analysts said Cobham, which is dis-
puting an unquantified damages claim
from Boeing over delays to the KC-46
tanker refuelling programme, could
become vulnerable once the issue has
been resolved. The dispute with one of
its most important customers has been
a blow to David Lockwood, Cobham’s
chief executive, who was appointed
nearly two years ago to turn round the
company after a string of profit warn-
ings under previous management.
Global defence spending
$tn
2008
2017 is estimate
Global aerospace and defence
industry M&A
Deal value ($bn)
2008 11
Source: Deloitte
‘Everybody In continental Europe, some in the
industry expect defence groups to form
always cross-border alliances for future pro-
wants to grammes, such as the 50:50 joint ven-
ture between Naval Group of France and
move up Fincantieri of Italy announced this
the food month, rather than pursue significant
transactions.
chain’ The fledgling military shipbuilding
alliance aims to make them more com-
Robert petitive in international tenders, prima-
Thomson,
Roland Berger rily against rivals from the US but also
increasingly from countries such as
China and South Korea.
But the area most ripe for consolida-
tion, according to Mr Thomson, is aero-
structures. United Technologies, a glo-
bal leader in aerospace components
such as wheels, brakes, landing gear,
aerostructures and electrical systems
agreed to buy smaller rival Rockwell
Collins last year.
More deals could be agreed. Spirit
AeroSystems, the Kansas-based
designer and manufacturer of aero-
structures, along with Triumph Group,
are tipped as potential buyers of smaller
rivals, according to analysts.
While defence contractors have done
well thanks to President Donald
Trump’s spending promises, some of his
recent comments suggest that military
budgets could stagnate over the rest of
his tenure.
Against that backdrop, executives at
L3 and Harris may just have timed their
run well.
broadly impacted hiring and invest-
ment plans”.
The survey, conducted between Sep-
tember 26 and October 11, adds to evi-
dence that much of the windfall from
tax reform has been spent on share buy-
backs rather than investment, jobs or
research and development.
Republicans had predicted their
2.5
Forecast
changes to the tax code would trigger a
boom in corporate investment and hir-
2.0 ing in the US. On the day he signed the
bill into law, Mr Trump said: “It’s going
1.5 to be a tremendous thing for the Ameri-
can people. It’s going to be fantastic for
the economy. It’s going to keep compa-
1.0
nies from leaving our shores and open-
ing up in other countries.”
0.5
The tax act both cut the federal cor-
porate income tax rate from 35 per cent
0
to 21 per cent and encouraged compa-
15 20 22
nies to repatriate roughly $1tn in cash
accumulated abroad from foreign earn-
ings. In a paper published last month,
Federal Reserve economists showed the
bulk of the repatriated cash had been
spent on buybacks and found limited
60 evidence of an increase in investment.
Last week’s third-quarter GDP report
50
from the US commerce department
40 showed that after a bump up in the first
half of the year, growth in investment
30 has slowed. Non-residential business
investment grew at an annualised rate
20 of 0.8 per cent, while spending on
10
equipment grew at 0.4 per cent.
A sharp rise in imports and invento-
0 ries suggested that companies were
13 15 17 stockpiling goods before Mr Trump’s
tariffs on China and other countries
came into effect.
The GDP report also pointed to an
acceleration in wages, which was sup-
ported by the NABE’s data. A tight
labour market is putting pressure on US
companies to raise wages, the survey
found, pushing businesses to increase
prices and consider more automation.
Several groups have detailed rising
wage pressures in the third quarter,
from fast-food restaurants such as
Chipotle Mexican Grill to Vail Resorts,
the ski resort operator. Trucking groups
such as USA Truck have reported prob-
lems in finding drivers, leading to wage
inflation that has increased customers’
transportation costs.
Corporate America is halfway
through a reporting season that has
been poorly received by investors even
as earnings have comfortably exceeded
analysts’ expectations.
US public companies are on track to
report earnings growth averaging 25.3
per cent for the third quarter, compared
with 8.5 per cent a year earlier. Revenue
growth has accelerated from 5.5 per
cent to 7.7 per cent in the same period.
The impact of the Trump administra-
tion’s trade policies has been a recurring
theme across sectors, with several exec-
utives saying tariffs that had only been
threatened earlier in the year are now
starting to bite.
But, with consumer spending buoy-
ant, companies have reported little
trouble in passing on higher costs from
tariffs, wages and commodity price
inflation to customers.

Contracts & Tenders

Businesses For Sale

Business for Sale, Business Opportunities, Business Services,
Business Wanted, Franchises
Runs Daily
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UK: +44 20 7873 4000 | Email: acs.emea@ft.com

Tuesday 30 October 2018
Financials
Lendy in loan
sale talks with
debt investors
Peer-to-peer platform
confronts legal problems and
escalating late payments
NICHOLAS MEGAW
RETAIL BANKING CORRESPONDENT
The chief executive of Lendy has spoken
to distressed debt investors about a sale
of the loans on its platform, highlighting
the pressures on the peer-to-peer prop-
erty lender as it deals with legal issues
and spiralling numbers of late loans.
A potential deal would involve selling
the loans at a discount to their face
value, exposing thousands of retail
investors to losses, according to people
familiar with the discussions.
UK-based Lendy said it had been car-
rying out “fairly standard loan servicing
steps”, and held discussions “on a regu-
‘There are plenty of
distressed funds out
there that would take it
for the right price’
lar basis with a wide variety of lenders
who could provide refinancing to
selected borrowers where their loans
have gone over term”.
“It is often in our lenders’ interests
that borrowers refinance rather than
have to sell their collateral to settle their
loan. Helping the borrower to refinance
is typically a less contentious, timely
and more cost-effective method by
which lenders can be repaid,” it added.
A sale of all or a large number of the
loans would represent an escalation of
one of the biggest crises to hit the young
industry in Europe.
Lendy’s troubles come at an awkward
time for the sector, with the UK’s Finan-
cial Conduct Authority considering
stricter rules to prevent overly risky
Peer-to-peer lending platforms are facing headwinds — Steve Hawkins/Alamy/Live News
Financials
Australia banks prepare for
no-deal Brexit contingency
JAMIE SMYTH — SYDNEY
Australian banks are stepping up
Brexit preparations to ensure they can
continue to operate across the EU amid
fears the UK will leave without a deal.
Commonwealth Bank of Australia has
applied for a banking licence in the
Netherlands, where it is setting up an
office with 50 staff to oversee passport-
ing functions that enable banks to pro-
vide services across the bloc.
Macquarie Group has chosen Dublin
as a passporting hub and Westpac is eye-
ing Frankfurt, said a person familiar
with the matter. National Australia
Bank was “considering all options”.
CBA, Australia’s largest lender by
assets, said it was “working to ensure we
can continue to provide the best serv-
ice . . . while limiting disruption to
existing business and our employees.
“We are currently pursuing the estab-
lishment of a new CommBank subsidi-
ary with a full banking licence, to be
located in Amsterdam.”
The UK and EU have failed to agree on
an exit deal and transition period ahead
of the March 29 departure date.
In a survey in September by EY, the
professional services firm, 77 of 222
financial companies said they were con-
sidering moving, or would shift, some
operations elsewhere in Europe. They
included 28 banks and brokerages,
22 wealth and asset managers, and
15 insurers and brokers.
Australia’s main banks have tradi-
tionally based their European head-
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
behaviour. Lendy received full authori-
sation from the FCA less than six
months ago.
Politicians and regulators encouraged
the growth of P2P lenders as they helped
to fill gaps left by mainstream banks
that cut lending after the financial crisis.
However, a recent FCA study identified
“poor business practices” at some lend-
ers that meant investors may not fully
understand the products and the risks
they were exposed to.
The P2P sector has experienced sev-
eral high-profile scandals or collapses in
the US and Asia, but only a handful —
such as Collateral, TrustBuddy and Be
The Lender — have encountered signifi-
cant problems in Europe.
There are about £180m in outstand-
ing loans on Lendy’s platform. The com-
pany does not own the loans but acts as
an agent for P2P investors. Its terms and
conditions give it power to take action
on “lender matters” that could affect
investors’ returns.
Investors in peer-to-peer platforms
are not protected by the UK’s financial
services compensation scheme. Lendy
maintains a provision fund that can help
make up some shortfalls but use of the
fund is “entirely discretionary”. The
fund is currently worth about £3.9m.
Lendy has been considering arrang-
ing a sale for several weeks, but discus-
sions have accelerated since the FT
reported last week that it had turned to
the FCA for advice after receiving legal
threats from one borrower, according to
one person close to the company.
A senior executive at another peer-to-
peer lender said the company would
struggle to attract investors for new
loans as the scale of late payments on its
existing loanbook became clear, making
a sale a sensible move.
“I very much doubt another P2P plat-
form would [be interested], but there
are plenty of distressed funds out there
that would take it for the right price”,
the person said.
quarters in London, where they employ
more than 2,000 staff. But the UK’s deci-
sion to leave the EU is prompting some
to apply for banking licences in other EU
jurisdictions and transfer some staff out
of London.
CBA, which has been in London since
1913, said its City branch would con-
tinue to offer a full range of services out-
side the European economic area. It
employs 250 people, some of whom will
be offered posts in Amsterdam.
Macquarie, which deploys most of its
1,500 staff in London servicing the
European, Middle East and African
region, has applied for a banking licence
in Dublin.
ANZ Bank, with about 200 staff, said
it already had banking registrations in
Paris and Frankfurt and had no plans to
move any employees.
David Ellis, analyst at Morningstar,
said Australian lenders were small rela-
tive to other global investment banks
moving operations out of London. But
he said the trend could dent the City’s
standing. “The risk is that London’s role
is diminished over the long term.”
European officials have told
the finance industry not to expect regu-
lators to help them cope with any
upheaval caused by the UK’s departure.
Elke König, the head of the eurozone’s
Single Resolution Board, said banks
would have to move people rather than
carry out “letterbox” relocations.
“I’ve told the banks that for now you
can’t hope for the white knight to come
along so rather look at it, be prepared.”
★ FINANCIAL TIMES
COMPANIES
The skewering interview style of Megyn Kelly, honed over a decade at Fox News, did not work as well in the softer daytime environment — Nathan Congleton/NBC/NBCU/Getty
How Kelly bet proved a mug’s game for NBC
Blackface row apart, her ratings
showed that audiences do not
always travel with presenters
ANNA NICOLAOU — NEW YORK
The 2016 presidential election made
Megyn Kelly the biggest star in TV news.
Last week she was dropped from NBC
with a two-sentence statement.
After confronting Donald Trump dur-
ing a campaign debate over his treat-
ment of women, the longtime Fox News
anchor won plaudits from across the
political spectrum, her newfound main-
stream appeal landing her on the covers
of Vanity Fair and the New York Times
magazine. Roger Ailes, whom she would
later help oust from Fox News over sex-
ual harassment allegations, declared Ms
Kelly could become “bigger than any-
one” in US television.
Last year Ms Kelly left Fox News for
NBC. The move made headlines for its
price tag — she turned down a $20m
offer from Rupert Murdoch, which
would have made her the industry’s
highest paid presenter. But it raised
questions about whether her skewering,
“non-PC” interview style, fine-tuned
over a decade at Fox News, would work
in a softer daytime environment where
personalities such as Ellen DeGeneres
have thrived.
US television news is driven by big
personalities and it is not unusual for
presenters to switch networks. Yet this
was a gamble. A year-and-a-half on, it
has failed. Last Tuesday Ms Kelly made
comments on-air defending white peo-
Telecom Italia head bemoans ‘market failure’
Recovery hopes pinned on
launch of 5G to move from
being a ‘bleeding sector’
NIC FILDES
TELECOMS CORRESPONDENT
The chief executive of Telecom Italia
has said that there is a “market failure”
in European telecoms but that the
launch of 5G networks offers a chance to
restore the sector to growth.
Amos Genish, who was appointed
head of the Italian telecoms company in
September 2017, warned that change
was needed in European telecoms,
which has been one of the worst per-
forming sectors for investors. In the
year to date, the FTSE Eurofirst 300 Tel-
ecoms index has fallen 18.6 per cent,
compared with a 9.3 per cent fall for the
broader FTSE Eurofirst 300 index.
“The telcos are running out of steam
financially and shareholders are voting
with their feet. We cannot ignore this
market failure,” he told the FT.
He cited rampant price competition,
regulation and the fact that for most tel-
ecoms companies in the region, profits
were not enough to cover their cost of
capital as causes for concern.
Mr Genish has also had to deal with a
vicious battle between US activist inves-
tor Elliott Management and Vivendi,
the French company that is Telecom Ita-
lia’s biggest shareholder, which erupted
just after he was appointed chief execu-
tive. Elliott took control of the board in
Media. Television
ple dressing up in blackface for Hallow-
een. She was admonished both within
and outside NBC. On Wednesday she
opened her programme by apologising,
and at the close of the show said: “We’ll
see you tomorrow.”
She did not return. On Friday, NBC
confirmed that her show would not be
back. Ms Kelly is negotiating an exit; her
contract is reported to be worth $69m.
Her downfall is the latest drama in a
tumultuous few years for NBC’s news
business under Andrew Lack, who had
fought to bring in Ms Kelly. He said at
the time that he did not invest in her
because of her star power but because
she was a “serious journalist”.
It reflects the cut-throat world of TV,
in which the biggest names can be
knocked off their perch if ratings do not
deliver. Ms Kelly had been drawing 2.7m
viewers to her Fox News show, The Kelly
File. But she never quite found her foot-
ing at NBC: Today’s 9am ratings sank
when Ms Kelly took over last year, from
2.8m to about 2.3m viewers to Septem-
ber, according to Nielsen.
Early episodes were panned by critics,
while she clashed with celebrity guests
including Jane Fonda and Debra Mess-
ing. JPMorgan pulled its advertising
when Ms Kelly decided to interview
Alex Jones, a conspiracy theorist, on a
Sunday night programme. That show
was later dropped.
Ken Doctor, analyst at Newsonomics,
says NBC’s failed experiment is proof
that “audiences don’t always travel with
presenters”.
He said: “Kelly was hired early in the
Trump Age, and we had no idea how
audience loyalties would morph. NBC
Interview. Amos Genish
May, but Mr Genish — a personal friend
of Vincent Bolloré, the billionaire who
was in charge of Vivendi — has
remained in charge.
Vivendi publicly supported Mr Gen-
ish in September and accused members
of the Elliott-backed board of spreading
rumours, notably that Mr Genish could
leave the business. The French com-
pany, which retains a 24 per cent stake
in Telecom Italia, could even try to
regain board control in 2019, say people
with knowledge of the situation.
Shares in Telecom Italia have fallen
40 per cent since May to a five-year low
had thought, ‘We're accused of being
liberal, so what a coup to take someone
like this who is a little nuanced’. But you
can’t take the most moderate part of Fox
and translate it to NBC.”
From a PR perspective, “it’s an easy
call for NBC to get rid of her,” says Ronn
Torossian, founder of the 5W agency.
“You can’t lose when you say you’re fir-
ing someone over blackface.”
The question remains whether Mr
Lack will face repercussions for this
$69m mistake. Observers were quick to
point out that Ms Kelly had been
accused of making racist statements in
the past, making her hiring a liability.
$69 m 2.3 m
Reported Audience for
value of Megyn Today, down
Kelly’s contract from 2.8m when
at NBC she took over
Don Lemon, an anchor on CNN, on
Thursday said: “It is partially the fault of
the people who hired her . . . Megyn’s
record . . . it’s all there. All you have to
do is do a Google search.”
NBC News has been coping with the
loss of its morning programme’s long-
est-serving host, Matt Lauer, who was
fired last November after claims of inap-
propriate sexual behaviour. The group
had come under fire for its decision not
to air an investigation by Ronan Farrow
into allegations of abuse by Harvey
Weinstein. The report was later pub-
lished in the New Yorker magazine,
where it won a Pulitzer Prize. The event
put Ms Kelly further at odds with NBC
management, as she called on-air for
European telecoms under
pressure
Rebased
105
FTSE Eurofirst 300 index
100
95
90
85
FTSE Eurofirst 300
Telecoms
80
Jan 2018 Oct
Source: Refinitiv (formerly Thomson Reuters)
Telecom Italia chief Amos Genish
has had to deal with a battle between
Vivendi, its biggest shareholder, and
activist investor Elliott Management
and Mr Genish admitted that the board-
room turmoil had not helped the com-
pany’s recovery efforts. “We have a very
fragile governance scenario which is
counterproductive and not helpful
when we, like all other telcos in Europe,
are facing critical challenges,” he said.
However, Mr Genish, a former Israeli
artillery captain, said that the seeds of
recovery for Telecom Italia and the sec-
tor lay in 5G — even though the sale of
spectrum this month landed it with an
unexpectedly high bill of €2.5bn. Tele-
com Italia and Vodafone acquired the
lion’s share of the airwaves, with cut-
15
NBC to hire an outside lawyer to investi-
gate Mr Lack for passing on the story.
Today continues to be a profit centre
for NBC and its parent Comcast, gener-
ating about $500m in advertising reve-
nue a year, according to Kantar. Viewer-
ship at MSNBC, NBC’s cable news net-
work, has soared, powered by the popu-
larity of hosts such as Rachel Maddow.
But excluding the 2016 Olympics,
advertising revenue for NBC’s broadcast
networks — NBC and Telemundo — fell
about 2 per cent last year to $5.6bn,
which Comcast attributed to “continued
declines in audience ratings”.
NBC and its peers are under pressure
as they prepare for a future where most
people will watch programmes through
streaming video. NBC has made its own
push into digital delivery with partner-
ships with Snapchat and BuzzFeed.
Wall Street analysts say Comcast
investors are unlikely to be fazed. “I
doubt that heads will roll over this,
besides Megyn’s,” says Jonathan Chap-
lan of New Street Research. He added:
“$69m may seem like a high cost, but it
is insignificant in the context
of . . . Comcast’s calculated bets. They
have lost a great deal more money on
their investment in Snap at the IPO than
they have on Megyn Kelly.” Mr Toros-
sian calls her “fairly untouchable” now.
Mr Doctor points to the ordeal as
indicative of a time in US society. “The
president could have gotten away with
saying this. If Trump had [made these
comments] at a MAGA rally, it would
have just been more of what you expect.
But not a news presenter at NBC,” he
said. “It’s a weird cultural moment we
are in.”
price competitor Iliad and Wind Tre
having to settle for smaller packages.
Mr Genish said that the spectrum auc-
tion was “designed clearly to enhance
revenues for the government” but he
had no option other than to bid high.
“We paid a premium for a natural future
market repair. You will have two win-
ners out of four. You have to take advan-
tage,” he said. “It was painful. It was not
expected. As market leader we could
not afford to be out of this game . . . We
need 5G to move from a bleeding sector
to a winning sector.”
5G promises to boost profitability by
drastically reducing the cost of deliver-
ing a gigabit of data by up to 70 per cent.
It will also allow telecoms companies to
sell bespoke services by “slicing” the
network to provide businesses dedi-
cated bandwidth while delivering faster
network speeds to consumers willing to
pay more. Mr Genish said this would
lead to a less crowded market for high-
quality mobile services and a “decom-
moditising” of the product.
The recent change in government in
Italy has also added uncertainty to Tele-
com Italia’s plans to spin off its network
business into a new company, with min-
isters yet to rule on changes to how the
sector is regulated.
Mr Genish said that the regulatory
changes could pave the way for a merger
with Open Fiber, an independent net-
work backed by government funds and
electricity company Enel that was
championed by former prime minister
Matteo Renzi to spur competition in
high-speed broadband infrastructure.
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
16 ★ FINANCIAL TIMES Tuesday 30 October 2018

MARKET DATA

WORLD MARKETS AT A GLANCE FT.COM/MARKETSDATA

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

-0.16% -0.22%
No change No change No change No change
0.77% 0.27% 0.47% 1.25% 0.86% 0.38% 0.40% 0.25%
Stock Market movements over last 30 days, with the FTSE All-World in the same currency as a comparison
AMERICAS EUROPE ASIA
Sep 30 - - Index All World Sep 30 - Oct 29 Index All World Sep 30 - Oct 29 Index All World Sep 30 - Oct 29 Index All World Sep 30 - Oct 29 Index All World Sep 30 - Oct 29 Index All World

S&P 500 New York S&P/TSX COMP Toronto FTSE 100 London Xetra Dax Frankfurt Nikkei 225 Tokyo Kospi Seoul
2,913.98 16,204.62 12,435.59 2,343.07
7,510.20 23,796.74

14,878.51 7,026.32 11,335.48

2,679.06 1,996.05
21,149.80
Day 0.77% Month -7.96% Year 3.91% Day -0.07% Month -7.39% Year -6.70% Day 1.25% Month -6.33% Year -6.26% Day 1.20% Month -7.44% Year -14.24% Day -0.16% Month -12.31% Year -3.90% Day -1.53% Month -14.81% Year -20.05%

Nasdaq Composite New York IPC Mexico City FTSE Eurofirst 300 Europe Ibex 35 Madrid Hang Seng Hong Kong FTSE Straits Times Singapore
8,046.35 49,504.16 1,503.57 9,389.20 27,816.87 3,236.26
8,821.20
1,398.53 24,812.04 2,981.54
7,186.51 44,814.97
Day 0.27% Month -10.55% Year 7.40% Day -2.16% Month -9.43% Year -8.89% Day 0.86% Month -6.96% Year -9.56% Day NaN% Month NaN% Year NaN% Day 0.38% Month -10.71% Year -12.75% Day 0.32% Month -8.46% Year -11.96%

Dow Jones Industrial New York Bovespa São Paulo CAC 40 Paris FTSE MIB Milan Shanghai Composite Shanghai BSE Sensex Mumbai
26,458.31 85,719.87 5,493.49 20,711.70 2,821.35 36,542.27
24,805.04 79,342.42 19,039.85 34,067.40
4,989.35 2,542.10
Day 0.47% Month -6.14% Year 5.97% Day 1.95% Month 8.98% Year 12.94% Day 0.44% Month -9.18% Year -9.19% Day 1.91% Month -8.07% Year -15.99% Day -2.18% Month -9.90% Year -25.60% Day 2.15% Month -5.96% Year 2.75%

Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous Country Index Latest Previous
Argentina Merval 29305.34 29369.87 Cyprus CSE M&P Gen 68.46 68.68 Italy FTSE Italia All-Share 20975.51 20565.89 Philippines Manila Comp 7109.03 7064.33 Taiwan Weighted Pr 9516.32 9489.18 Cross-Border DJ Global Titans ($) 302.43 301.76
Australia All Ordinaries 5813.80 5759.60 Czech Republic
PX 1055.25 1031.63 FTSE Italia Mid Cap 36059.41 35170.71 Poland Wig 54286.29 54027.32 Thailand Bangkok SET 1636.88 1628.96 Euro Stoxx 50 (Eur) 3154.93 3134.89
S&P/ASX 200 5728.20 5665.20 Denmark OMXC Copenahgen 20 893.93 876.46 FTSE MIB 19039.85 18683.27 Portugal PSI 20 4952.31 4924.95 Turkey BIST 100 116840.94 116315.98 Euronext 100 ID 968.64 964.59
S&P/ASX 200 Res 4065.60 4020.10 Egypt EGX 30 13074.47 12980.96 Japan 2nd Section 6770.28 6876.97 PSI General 2920.80 2911.50 UAE Abu Dhabi General Index 4871.58 4897.57 FTSE 4Good Global ($) 6471.07 6446.30
Austria ATX 3073.36 3070.91 Estonia OMX Tallinn 1191.73 1192.33 Nikkei 225 21149.80 21184.60 Romania BET Index 8504.83 8412.36 UK FT 30 2911.90 2942.10 FTSE All World ($) 314.90 313.66
Belgium BEL 20 3406.02 3373.51 Finland OMX Helsinki General 9140.55 9157.78 S&P Topix 150 1301.07 1304.60 Russia Micex Index 2317.06 2293.22 FTSE 100 7026.32 6939.56 FTSE E300 1398.53 1386.66
BEL Mid 6550.24 6460.07 France CAC 40 4989.35 4967.36 Topix 1589.56 1596.01 RTX 1112.61 1098.31 FTSE 4Good UK 6305.17 6216.38 FTSE Eurotop 100 2705.88 2682.34
Brazil Bovespa 85719.87 84083.51 SBF 120 3999.04 3979.52 Jordan Amman SE 1961.70 1970.80 Saudi-Arabia TADAWUL All Share Index 7847.51 7802.65 FTSE All Share 3846.97 3800.41 FTSE Global 100 ($) 1645.95 1648.88
Canada S&P/TSX 60 885.28 883.76 Germany M-DAX 23713.40 23478.22 Kenya NSE 20 2820.55 2825.41 Singapore FTSE Straits Times 2981.54 2972.02 FTSE techMARK 100 4274.27 4225.40 FTSE Gold Min ($) 1229.49 1224.40
S&P/TSX Comp 14878.51 14888.26 TecDAX 2552.85 2508.49 Kuwait KSX Market Index 6633.44 6603.51 Slovakia SAX 332.83 336.34 USA DJ Composite 8234.27 8175.23 FTSE Latibex Top (Eur) 4440.00 4432.20
S&P/TSX Div Met & Min 715.40 716.27 XETRA Dax 11335.48 11200.62 Latvia OMX Riga 946.50 940.25 Slovenia SBI TOP 801.78 807.13 DJ Industrial 24805.04 24688.31 FTSE Multinationals ($) 1849.83 1874.54
Chile S&P/CLX IGPA Gen 25946.69 26056.06 Greece Athens Gen 640.07 633.27 Lithuania OMX Vilnius 655.18 649.58 South Africa FTSE/JSE All Share 51320.52 50837.57 DJ Transport 10082.36 9965.67 FTSE World ($) 561.18 558.81
China FTSE A200 8183.62 8465.69 FTSE/ASE 20 1684.27 1664.09 Luxembourg LuxX 1539.07 1516.41 FTSE/JSE Res 20 40413.99 39557.01 DJ Utilities 736.37 729.72 FTSEurofirst 100 (Eur) 3916.81 3886.12
FTSE B35 9000.71 8988.96 Hong Kong Hang Seng 24812.04 24717.63 Malaysia FTSE Bursa KLCI 1683.73 1683.06 FTSE/JSE Top 40 45109.77 44651.45 Nasdaq 100 6846.96 6852.40 FTSEurofirst 80 (Eur) 4411.99 4379.58
Shanghai A 2662.15 2721.64 HS China Enterprise 10012.63 10058.63 Mexico IPC 44814.97 45803.33 South Korea Kospi 1996.05 2027.15 Nasdaq Cmp 7186.51 7167.21 MSCI ACWI Fr ($) 475.11 480.83
Shanghai B 266.61 270.44 HSCC Red Chip 4046.29 4055.21 Morocco MASI 11070.96 11099.91 Kospi 200 260.19 262.69 NYSE Comp 12097.65 11976.95 MSCI All World ($) 1981.89 2006.27
Shanghai Comp 2542.10 2598.85 Hungary Bux 36110.12 35937.61 Netherlands AEX 509.40 507.52 Spain IBEX 35 8821.20 8730.40 S&P 500 2679.09 2658.69 MSCI Europe (Eur) 1462.73 1474.78
Shenzhen A 1322.05 1349.26 India BSE Sensex 34067.40 33349.31 AEX All Share 756.86 751.24 Sri Lanka CSE All Share 5944.18 5768.54 Wilshire 5000 27660.60 27427.14 MSCI Pacific ($) 2511.86 2500.17
Shenzhen B 865.07 887.51 Nifty 500 8610.10 8417.25 New Zealand NZX 50 8615.54 8568.40 Sweden OMX Stockholm 30 1503.14 1485.27 Venezuela IBC 445677.41 409382.91 S&P Euro (Eur) 1480.72 1464.24
Colombia COLCAP 1397.17 1395.49 Indonesia Jakarta Comp 5754.61 5784.92 Nigeria SE All Share 32907.33 32545.06 OMX Stockholm AS 554.50 546.69 Vietnam VNI 888.82 900.82 S&P Europe 350 (Eur) 1443.80 1426.34
Croatia CROBEX 1789.42 1798.00 Ireland ISEQ Overall 6050.01 5978.12 Norway Oslo All Share 994.71 981.94 Switzerland SMI Index 8759.62 8665.80 S&P Global 1200 ($) 2221.19 2207.24
Israel Tel Aviv 125 1420.45 1417.96 Pakistan KSE 100 41453.76 39631.91 Stoxx 50 (Eur) 2897.06 2876.37
(c) Closed. (u) Unavaliable. † Correction. ♥ Subject to official recalculation. For more index coverage please see www.ft.com/worldindices. A fuller version of this table is available on the ft.com research data archive.

STOCK MARKET: BIGGEST MOVERS UK MARKET WINNERS AND LOSERS

AMERICA LONDON EURO MARKETS TOKYO Oct 29 %Chg %Chg Oct 29 %Chg %Chg Oct 29 %Chg %Chg Oct 29 %Chg %Chg
ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's ACTIVE STOCKS stock close Day's FTSE 100 price(p) week ytd FTSE 250 price(p) week ytd FTSE SmallCap price(p) week ytd Industry Sectors price(p) week ytd
traded m's price change traded m's price change traded m's price change traded m's price change Winners Winners Winners Winners
Amazon.com 75.4 1593.87 -48.94 Hsbc Holdings 300.4 633.80 28.80 Volkswagen Ag Vzo O.n. 345.7 142.42 5.54 Softbank . 700.0 8506.00 -122.00 Easyjet 1170.00 6.0 -22.1 Just 90.75 24.8 -45.0 Communisis 70.80 39.4 8.9 Tobacco 40146.71 6.9 -
Red Hat 29.2 170.00 53.32 Bp 176.1 535.20 7.10 Daimler Ag Na O.n. 330.4 52.43 1.06 Fast Retailing Co., 499.5 56030.00 500.00 Int Consolidated Airlines S.a. 593.60 5.9 -11.2 Polypipe 358.60 12.4 -8.7 Nanoco 39.40 7.9 53.3 Automobiles & Parts 8007.12 6.1 7.7
Apple 27.7 216.01 -0.29 Glaxosmithkline 141.4 1531.20 21.80 Inditex 316.5 24.96 0.21 Toyota Motor 465.8 6426.00 -108.00 Smiths 1361.00 5.7 -7.8 Playtech 479.70 10.7 -44.9 Brown (n) 136.20 7.9 -48.9 Index - Technology Hardware & Equipment 937.00 2.2 -
Netflix 19.7 289.58 -10.25 Astrazeneca 137.8 5864.00 109.00 Caixabank 310.8 3.51 0.01 Sony 427.2 5802.00 -32.00 British American Tobacco 3549.00 5.6 -28.2 Spire Healthcare 118.20 10.1 -52.5 Debenhams 9.45 6.5 -73.1 Life Insurance 7343.62 1.7 -
Microsoft 15.7 106.03 -0.93 British American Tobacco 127.7 3549.00 -70.00 Basf Se Na O.n. 302.0 66.66 0.21 Shin-etsu Chemical Co., 418.1 9130.00 677.00 Bunzl 2292.00 4.9 12.1 Hill & Smith Holdings 1000.00 9.8 -24.6 Georgia Healthcare 240.00 6.4 -32.4 General Retailers 2181.66 1.7 -
Facebook 13.1 145.75 0.38 Rio Tinto 114.8 3724.00 59.50 Bay.motoren Werke Ag St 279.1 76.40 1.38 Mitsubishi Ufj Fin,. 288.7 649.20 -3.90 Marks And Spencer 295.20 4.8 -6.6 Wizz Air Holdings 2658.00 9.2 -28.2 Dp Eurasia N.v. 107.40 6.1 -49.9 Banks 3787.52 1.6 -
Int Business Machines 12.5 121.70 -3.09 Glencore 109.7 308.20 5.70 Intesa Sanpaolo 277.4 2.00 0.06 Takeda Pharmaceutical 273.2 4461.00 93.00 Barclays 173.00 4.6 -14.9 Iwg 234.10 8.7 -8.2 Pendragon 26.00 6.1 -8.8 Food Producers 7156.01 1.6 -
Alphabet 11.4 1055.10 -16.37 Royal Dutch Shell 98.7 2428.00 15.00 Unicredit 255.5 11.45 0.47 Sumitomo Mitsui Fin,. 242.2 4222.00 -26.00 Compass 1546.00 4.1 -2.2 Crest Nicholson Holdings 329.40 7.6 -39.6 Foxtons 49.35 5.6 -40.5 Industrial Engineering 11193.61 1.5 -10.4
Nvidia 11.0 197.08 -1.21 Unilever 96.9 4160.00 -6.50 Siemens Ag Na 252.0 101.58 1.50 Canon . 229.2 3179.00 -27.00 Next 5242.00 3.7 16.5 Domino's Pizza 276.60 7.3 -21.2 Zotefoams 540.00 4.7 18.8 General Industrials 5710.51 1.4 -
Alphabet 10.9 1067.76 -15.99 Diageo 91.8 2677.00 -18.00 Infineon Tech.ag Na O.n. 239.0 17.11 0.97 Tokai Carbon Co., 218.6 1587.00 -13.00 Crh 2211.00 3.5 -16.6 Thomas Cook 44.78 7.0 -64.1 Tyman 294.50 4.6 -19.5 Personal Goods 35685.48 1.3 -1.5
Paddy Power Betfair 6710.00 3.5 -24.6 hcape 526.00 6.0 -33.7 Acacia Mining 153.20 4.5 -24.5 Travel & Leisure 9027.97 1.3 -
BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's BIGGEST MOVERS Close Day's Day's
Legal & General 247.80 3.3 -8.3 Ti Fluid Systems 198.00 5.9 -21.6 Photo-me Int 110.40 3.8 -40.7 Construction & Materials 5235.87 1.2 -
price change chng% price change chng% price change chng% price change chng%
Ups Ups Ups Ups Losers Losers Losers Losers
Red Hat 170.00 53.32 45.70 Superdry 762.00 52.00 7.32 Grifols 25.44 2.06 8.81 Shin-etsu Chemical Co., 9130.00 677.00 8.01 Wpp 869.20 -16.7 -35.0 Hastings Holdings 186.70 -17.5 -40.9 Rps 149.00 -28.7 -45.8 Software & Computer Services 1621.31 -7.0 -
Borgwarner 40.56 2.51 6.60 Gvc Holdings 922.00 56.50 6.53 Infineon Tech.ag Na O.n. 17.11 0.97 6.01 Thb Kansai Electric Power ,orporated 1788.00 107.50 6.40 Micro Focus Int 1190.00 -11.3 -52.2 Metro Bank 2126.00 -16.2 -41.1 Int Personal Finance 175.00 -15.5 -13.5 Oil & Gas Producers 8983.25 -2.9 -0.4
The Goodyear Tire & Rubber 21.42 1.08 5.31 hcape 526.00 27.00 5.41 Continental Ag O.n. 143.55 7.45 5.47 Chubu Electric Power ,orporated 1692.50 80.50 4.99 Ocado 800.80 -6.4 104.0 Integrafin Holdings 274.00 -12.2 - Discoverie 355.00 -15.5 -4.6 Fixed Line Telecommunication 2755.08 -2.7 -11.9
Aptiv 77.55 3.82 5.18 Capita 126.50 6.25 5.20 Stmicroelectronics 12.85 0.63 5.16 Mitsui Mining And Smelting , 3050.00 131.00 4.49 Itv 146.00 -5.5 -13.0 Sophos 417.80 -11.0 -28.2 Circassia Pharmaceuticals 53.60 -14.6 -45.6 Media 7626.52 -2.5 1.1
Macy's 34.04 1.67 5.16 Convatec 154.50 7.60 5.17 Electrolux, Ab Ser. B 17.41 0.84 5.08 Tokyo Tatemono Co., 1233.00 49.00 4.14 St. James's Place 982.60 -5.0 -20.6 Entertainment One 390.00 -10.2 20.8 Gulf Marine Services 40.00 -13.6 -11.3 Industrial Transportation 2536.76 -2.4 -
Schroders 2630.00 -4.9 -25.1 Fdm (holdings) 823.00 -9.1 -10.8 Low & Bonar 29.50 -13.2 -44.3 Nonlife Insurance 3080.44 -2.2 -4.4
Downs Downs Downs Downs
Sage 528.00 -3.6 -33.0 Sirius Minerals 22.70 -8.5 -2.4 Renewi 51.20 -12.3 -50.3 Aerospace & Defense 4707.67 -2.1 -3.6
Take-two Interactive Software 113.86 -6.21 -5.17 Bba Aviation 232.20 -10.60 -4.37 Thales 111.05 -3.85 -3.35 Ricoh , 1070.00 -127.00 -10.61
Informa 705.80 -3.6 -2.1 Saga 119.20 -8.4 -3.9 Liontrust Asset Management 570.00 -12.3 16.2 Chemicals 13647.97 -2.0 -3.2
Harris 154.56 -6.28 -3.90 Plus500 Ltd 1317.00 -54.00 -3.94 Dassault Systemes 106.15 -3.35 -3.06 Fujitsu 6622.00 -381.00 -5.44
Rolls-royce Holdings 831.40 -3.4 -1.3 Premier Oil 104.60 -8.2 36.9 Gem Diamonds 103.00 -12.0 43.1 Equity Investment Instruments 9363.28 -1.9 -3.2
L3 196.53 -7.72 -3.78 Rolls-royce Holdings 831.40 -23.60 -2.76 Seadrill 17.35 -0.46 -2.57 Recruit Hldgs Co Ltd 2701.50 -145.00 -5.09
Royal Dutch Shell 2469.50 -3.1 -1.2 Avast 271.65 -8.0 - Findel 245.00 -10.9 19.8 Oil Equipment & Services 14341.82 -1.9 11.5
Dxc Technology 70.57 -2.55 -3.49 Ibstock 213.80 -5.80 -2.64 Raiffeisen Bank Internat. Ag 23.56 -0.59 -2.44 Cyberagent,. 4520.00 -220.00 -4.64
Ferguson 5170.00 -3.1 -8.2 Jpmorgan Japanese Investment Trust 394.00 -7.9 -10.0 Robert Walters 590.00 -10.9 1.7 Mobile Telecommunications 3296.24 -1.6 -
Netflix 289.58 -10.25 -3.42 Rank 151.00 -3.80 -2.45 Safran 107.85 -1.85 -1.69 Nippon Meat Packers,. 3860.00 -160.00 -3.98
Bae Systems 522.40 -3.0 -9.2 Fidelity China Special Situations 182.40 -7.6 -24.5 Devro 165.00 -10.4 -29.3 Real Estate & Investment Servic 2481.71 -0.8 -
Based on the constituents of the S&P500 Based on the constituents of the FTSE 350 index Based on the constituents of the FTSEurofirst 300 Eurozone index Based on the constituents of the Nikkei 225 index
Based on last week's performance. †Price at suspension.

CURRENCIES
DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND DOLLAR EURO POUND
Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's Closing Day's
Oct 29 Currency Mid Change Mid Change Mid Change Oct 29 Currency Mid Change Mid Change Mid Change Oct 29 Currency Mid Change Mid Change Mid Change Oct 29 Currency Mid Change Mid Change Mid Change
Argentina Argentine Peso 36.6900 - 41.7183 - 47.0367 - Indonesia Indonesian Rupiah 15216.5000 - 17301.9062 - 19507.5894 - Poland Polish Zloty 3.7923 - 4.3120 - 4.8617 - ..Three Month 0.7807 0.0000 0.8866 0.0000 - -
Australia Australian Dollar 1.4137 - 1.6075 - 1.8124 - Israel Israeli Shekel 3.7069 - 4.2149 - 4.7523 - Romania Romanian Leu 4.0977 - 4.6593 - 5.2533 - ..One Year 0.7825 0.0000 0.8856 0.0000 - -
Bahrain Bahrainin Dinar 0.3769 - 0.4286 - 0.4832 - Japan Japanese Yen 111.4350 - 126.7070 - 142.8599 - Russia Russian Ruble 65.7975 - 74.8149 - 84.3525 - United States United States Dollar - - 1.1370 - 1.2820 -
Bolivia Bolivian Boliviano 6.9100 - 7.8570 - 8.8586 - ..One Month 111.4348 -0.0005 126.7070 0.0000 142.8598 -0.0003 Saudi Arabia Saudi Riyal 3.7511 - 4.2651 - 4.8089 - ..One Month - - 1.1368 -0.1449 1.2822 0.0000
Brazil Brazilian Real 3.6866 - 4.1918 - 4.7262 - ..Three Month 111.4341 -0.0018 126.7070 0.0001 142.8594 -0.0009 Singapore Singapore Dollar 1.3823 - 1.5717 - 1.7721 - ..Three Month - - 1.1361 -0.1450 1.2826 0.0000
Canada Canadian Dollar 1.3116 - 1.4913 - 1.6814 - ..One Year 111.4314 -0.0071 126.7072 0.0003 142.8598 -0.0020 South Africa South African Rand 14.6426 - 16.6493 - 18.7718 - ..One Year - - 1.1331 -0.1450 1.2845 0.0000
Chile Chilean Peso 690.6250 - 785.2741 - 885.3826 - Kenya Kenyan Shilling 101.3000 - 115.1830 - 129.8668 - South Korea South Korean Won 1141.8500 - 1298.3388 - 1463.8541 - Venezuela Venezuelan Bolivar Fuerte 248519.9500 312.0500 282579.2239 354.8160 318603.066 400.0487
China Chinese Yuan 6.9478 - 7.9000 - 8.9071 - Kuwait Kuwaiti Dinar 0.3039 - 0.3455 - 0.3895 - Sweden Swedish Krona 9.1414 - 10.3943 - 11.7194 - 5
Colombia Colombian Peso 3192.3050 - 3629.8062 - 4092.5422 - Malaysia Malaysian Ringgit 4.1750 - 4.7472 - 5.3524 - Switzerland Swiss Franc 0.9982 - 1.1349 - 1.2796 - Vietnam Vietnamese Dong 23356.0000 - 26556.9687 - 29942.4506 -
Costa Rica Costa Rican Colon 597.1000 - 678.9317 - 765.4834 - Mexico Mexican Peson 19.5072 - 22.1806 - 25.0082 - Taiwan New Taiwan Dollar 30.9985 - 35.2468 - 39.7401 - European Union Euro 0.8795 - - - 1.1275 -
Czech Republic Czech Koruna 22.7238 - 25.8380 - 29.1319 - New Zealand New Zealand Dollar 1.5348 - 1.7451 - 1.9676 - Thailand Thai Baht 33.1200 - 37.6590 - 42.4599 - ..One Month 0.8792 0.0000 - - 1.1274 0.0000
Denmark Danish Krone 6.5615 - 7.4607 - 8.4119 - Nigeria Nigerian Naira 363.0000 - 412.7486 - 465.3667 - Tunisia Tunisian Dinar 2.8630 - 3.2553 - 3.6703 - ..Three Month 0.8785 0.0000 - - 1.1272 0.0000
Egypt Egyptian Pound 17.9207 0.0267 20.3767 0.0304 22.9744 0.0342 Norway Norwegian Krone 8.3631 - 9.5092 - 10.7215 - Turkey Turkish Lira 5.6174 - 6.3873 - 7.2016 - ..One Year 0.8756 0.0000 - - 1.1262 0.0000
Hong Kong Hong Kong Dollar 7.8399 - 8.9143 - 10.0507 - Pakistan Pakistani Rupee 132.3250 - 150.4599 - 169.6409 - United Arab Emirates UAE Dirham 3.6732 - 4.1765 - 4.7090 -
Hungary Hungarian Forint 285.1106 - 324.1846 - 365.5124 - Peru Peruvian Nuevo Sol 3.3463 - 3.8048 - 4.2899 - United Kingdom Pound Sterling 0.7800 - 0.8869 - - -
India Indian Rupee 73.3675 - 83.4224 - 94.0573 - Philippines Philippine Peso 53.6500 - 61.0026 - 68.7794 - ..One Month 0.7802 0.0000 0.8868 0.0000 - -
Rates are derived from WM Reuters Spot Rates and MorningStar (latest rates at time of production). Some values are rounded. Currency redenominated by 1000. The exchange rates printed in this table are also available at www.FT.com/marketsdata
UK SERIES
FTSE ACTUARIES SHARE INDICES www.ft.com/equities FT 30 INDEX FTSE SECTORS: LEADERS & LAGGARDS FTSE 100 SUMMARY
Produced in conjunction with the Institute and Faculty of Actuaries Oct 29 Oct 26 Oct 25 Oct 24 Oct 23 Yr Ago High Low Year to date percentage changes Closing Day's Closing Day's
£ Strlg Day's Euro £ Strlg £ Strlg Year Div P/E X/D Total FT 30 2911.90 2942.10 2934.80 2919.70 2940.30 0.00 3384.10 2890.10 Tech Hardware & Eq 33.12 Nonlife Insurance -5.39 Household Goods & Ho -12.97 FTSE 100 Price Change FTSE 100 Price Change
Oct 29 chge% Index Oct 26 Oct 25 ago yield% Cover ratio adj Return FT 30 Div Yield 2.03 2.01 2.02 2.04 2.03 0.00 3.93 2.74 Industrial Metals & 22.53 Leisure Goods -5.61 Electronic & Elec Eq -13.29 3I Group PLC 860.20 19.20 London Stock Exchange Group PLC 4272 36.00
FTSE 100 (100) 7026.32 1.25 6158.62 6939.56 7004.10 7487.81 4.32 2.01 11.51 267.13 6176.56 P/E Ratio net 21.98 22.15 22.10 21.89 21.97 0.00 19.44 14.26 Food & Drug Retailer 11.34 Consumer Services -6.26 Health Care Eq & Srv -13.55 Admiral Group PLC 1968 33.00 Marks And Spencer Group PLC 295.20 7.60
FTSE 250 (250) 18566.82 1.17 16273.94 18352.90 18531.53 20213.25 3.11 2.20 14.63 469.19 13971.73 FT 30 since compilation: 4198.4 high: 19/07/1999; low49.4 26/06/1940Base Date: 1/7/35 Pharmace & Biotech 10.98 Utilities -6.41 Food Producers -13.98 Anglo American PLC 1631 14.80 Melrose Industries PLC 161.65 7.65
FTSE 250 ex Inv Co (196) 19682.64 1.34 17251.97 19421.58 19600.89 21688.69 3.27 1.96 15.58 520.88 15126.96 FT 30 hourly changes Health Care 8.13 NON FINANCIALS Index -7.96 Financial Services -14.73 Antofagasta PLC 756.40 10.80 Micro Focus International PLC 1190 -8.50
FTSE 350 (350) 3896.74 1.24 3415.52 3849.14 3885.21 4166.74 4.12 2.04 11.92 139.91 6861.20 8 9 10 11 12 13 14 15 16 High Low Oil Equipment & Serv 8.02 Real Est Invest & Tr -8.64 Fixed Line Telecomms -14.91 Ashtead Group PLC 1850.5 38.50 Mondi PLC 1802 22.00
FTSE 350 ex Investment Trusts (295) 3856.87 1.26 3380.57 3808.78 3843.92 4130.22 4.19 2.00 11.97 140.68 3500.75 2942.1 2910.9 2907.6 2903.1 2907.7 2918.4 2922.9 2905.6 2883.2 2942.1 2883.2 Automobiles & Parts 3.14 FTSE SmallCap Index -9.42 Financials -15.48 Associated British Foods PLC 2391 -6.00 Morrison (Wm) Supermarkets PLC 248.00 -0.50
FTSE 350 Higher Yield (103) 3585.42 1.40 3142.64 3536.05 3567.88 3817.74 5.61 1.84 9.67 166.51 6723.76 FT30 constituents and recent additions/deletions can be found at www.ft.com/ft30 Media 0.32 Support Services -9.61 General Retailers -15.63 Astrazeneca PLC 5864 109.00 National Grid PLC 843.90 11.70
FTSE 350 Lower Yield (247) 3839.69 1.05 3365.52 3799.63 3836.83 4126.35 2.42 2.55 16.23 92.76 4342.31 Oil & Gas -1.12 FTSE 100 Index -9.73 Real Est Invest & Se -15.72 Aviva PLC 423.00 6.20 Next PLC 5242 80.00
FTSE SmallCap (285) 5404.13 0.92 4736.76 5354.70 5432.02 5835.52 3.61 2.01 13.78 154.90 8054.04 Oil & Gas Producers -1.31 FTSE All{HY-}Share Index -9.98 Life Insurance -19.50
FTSE SmallCap ex Inv Co (159) 4564.57 0.61 4000.88 4537.11 4584.79 5120.67 3.81 1.55 16.97 134.42 7153.16 FX: EFFECTIVE INDICES Beverages -1.59 Basic Materials -10.12 Banks -20.70
Bae Systems PLC 522.40 -9.60 Nmc Health PLC 3278 50.00
Barclays PLC 173.00 4.94 Ocado Group PLC 800.80 18.40
FTSE All-Share (635) 3846.97 1.23 3371.90 3800.41 3836.72 4114.94 4.10 2.04 11.97 137.10 6845.94 Personal Goods -1.73 Electricity -10.36 Construct & Material -21.48
Oct 26 Oct 25 Mnth Ago Oct 29 Oct 26 Mnth Ago Barratt Developments PLC 498.90 10.00 Paddy Power Betfair PLC 6710 180.00
FTSE All-Share ex Inv Co (454) 3782.75 1.25 3315.61 3736.09 3770.67 4054.85 4.18 1.99 12.05 137.45 3488.60 Aerospace & Defense -2.40 Industrials -11.38 Industrial Transport -23.38 Berkeley Group Holdings (The) PLC 3381 73.00 Pearson PLC 905.20 9.80
FTSE All-Share ex Multinationals (564) 1127.51 1.38 819.09 1112.19 1126.60 1235.09 4.01 1.76 14.17 37.89 2111.68 Australia - - - Sweden - - - Forestry & Paper -3.66 FTSE 250 Index -11.45 Tobacco -25.15 Bhp Billiton PLC 1531.6 13.00 Persimmon PLC 2226 40.00
FTSE Fledgling (102) 10184.77 0.51 8927.02 10133.38 10249.99 10689.08 3.23 1.77 17.52 235.02 19759.24 Canada - - - Switzerland - - - Equity Invest Instr -4.72 Mining -11.48 Technology -29.07 BP PLC 535.20 7.10 Prudential PLC 1527 30.50
FTSE Fledgling ex Inv Co (51) 14683.46 0.59 12870.15 14598.05 14846.90 15331.28 3.69 -0.78 -34.70 355.29 27868.68 Denmark - - - UK 77.89 77.85 78.29 Chemicals -4.76 Industrial Eng -11.78 Telecommunications -31.38 British American Tobacco PLC 3549 -70.00 Randgold Resources LD 6300 -116.00
FTSE All-Small (387) 3769.58 0.90 3304.06 3735.93 3789.29 4064.80 3.59 2.00 13.94 106.96 7209.77 Japan - - - USA - - - Gas Water & Multi -5.21 Travel & Leisure -12.36 Software & Comp Serv -31.72 British Land Company PLC 592.80 9.60 Reckitt Benckiser Group PLC 6611 -59.00
FTSE All-Small ex Inv Co (210) 3438.52 0.60 3013.89 3417.86 3454.64 3846.70 3.80 1.46 18.01 100.56 6826.03 New Zealand - - - Euro - - - Consumer Goods -12.85 Mobile Telecomms -37.66 Bt Group PLC 238.25 8.65 Relx PLC 1528.5 -3.00
FTSE AIM All-Share (813) 967.33 0.46 847.87 962.86 973.16 1038.66 1.45 1.34 51.62 11.21 1082.84 Norway - - -
Bunzl PLC 2292 41.00 Rentokil Initial PLC 302.00 6.20
FTSE Sector Indices Source: Bank of England. New Sterling ERI base Jan 2005 = 100. Other indices base average 1990 = 100. Burberry Group PLC 1738 17.50 Rightmove PLC 446.80 0.20
Oil & Gas (15) 9383.77 0.90 8224.94 9299.94 9369.59 8980.87 5.24 1.20 15.90 368.83 9294.65 Index rebased 1/2/95. for further information about ERIs see www.bankofengland.co.uk Carnival PLC 4160 -44.00 Rio Tinto PLC 3724 59.50
Oil & Gas Producers (10) 9019.57 0.87 7905.71 8941.45 9008.27 8642.22 5.28 1.21 15.65 355.96 9253.50 Centrica PLC 147.75 0.10 Rolls-Royce Holdings PLC 831.40 -23.60
Oil Equipment Services & Distribution (5)14978.25 2.09 13128.54 14671.73 14791.80 13628.56 3.30 0.61 49.74 487.46 12216.31 FTSE GLOBAL EQUITY INDEX SERIES Coca-Cola Hbc AG 2328 41.00 Royal Bank Of Scotland Group PLC 230.10 5.20
Basic Materials (28) 5748.10 1.23 5038.25 5678.29 5689.88 5887.67 4.88 2.49 8.24 282.83 6258.09 Compass Group PLC 1546 16.50 Royal Dutch Shell PLC 2469.5 17.50
Chemicals (8) 14525.70 1.29 12731.87 14341.26 14557.48 14892.95 2.16 2.30 20.20 280.88 13356.20 Oct 26 No of US $ Day Mth YTD
YTD Gr Div Oct 26Total No of US $ Day Mth YTD Total YTD Gr Div Crh PLC 2211 41.00 Royal Dutch Shell PLC 2428 15.00
Forestry & Paper (1) 22135.76 1.24 19402.15 21865.52 22123.48 21497.21 3.16 3.13 10.10 700.08 25057.14 Regions & countries stocks indices % % %
% Yield Sectorsretn stocks indices % % % retn % Yield Croda International PLC 4698 20.00 Royal Mail PLC 360.90 12.20
Industrial Metals & Mining (2) 5287.36 4.07 4634.41 5080.76 5375.65 3571.35 6.78 2.81 5.25 531.83 5491.42 FTSE Global All Cap 7881 536.29 -1.2 -9.9
-6.0 -7.8 786.47
2.6 Oil & Gas Producers 108 365.52 -0.5 -0.5 -2.9 630.34 -0.1 3.7 Dcc PLC 6540 140.00 Rsa Insurance Group PLC 549.00 7.60
Mining (17) 16030.70 1.16 14051.01 15847.11 15827.32 16579.53 5.25 2.47 7.72 840.82 9174.49 FTSE Global Large Cap 1439 476.00 -1.2 -9.3
-4.9 -6.9 717.30
2.7 Oil Equipment & Services 32 262.42 -0.8 -0.8 -16.6 396.62 -14.3 4.2 Diageo PLC 2677 -18.00 Sage Group PLC 528.00 1.60
FTSE Global Mid Cap 1772 702.61 -1.1 -10.9
-8.9 -10.5 974.00
2.4 Basic Materials 258 459.18 -0.3 -0.3 -15.8 728.80 -13.4 3.4 Direct Line Insurance Group PLC 322.70 5.40 Sainsbury (J) PLC 310.30 5.50
Industrials (105) 4937.63 1.36 4327.87 4871.62 4929.14 5617.64 2.79 1.81 19.81 120.91 5265.34
Construction & Materials (15) 5524.55 2.46 4842.31 5391.84 5381.33 7111.64 3.04 0.38 85.87 168.59 6077.32 FTSE Global Small Cap 4670 744.32 -1.0 -12.2
-8.6 -10.0 996.50
2.1 Chemicals 120 681.07 -0.7 -0.7 -15.5 1079.69 -13.5 2.9 Easyjet PLC 1170 2.00 Schroders PLC 2630 21.00
Aerospace & Defense (9) 4896.20 -1.21 4291.55 4956.19 5062.60 5518.23 2.57 3.45 11.28 109.51 5412.39 FTSE All-World 3211 313.66 -1.2 -9.6
-5.6 -7.6 486.29
2.6 Forestry & Paper 18 284.97 -0.1 -0.1 -7.5 501.49 -5.1 3.1 Evraz PLC 525.40 22.40 Scottish Mortgage Investment Trust PLC 469.20 6.35
General Industrials (8) 4620.59 1.70 4049.98 4543.13 4567.57 5192.43 3.31 1.16 26.01 148.48 5495.10 FTSE World 2620 558.81 -1.2 -9.5
-4.8 -6.8 1162.87
2.6 Industrial Metals & Mining 66 390.43 -0.1 -0.1 -19.9 618.37 -17.6 3.7 Experian PLC 1780 28.00 Segro PLC 622.40 2.20
Electronic & Electrical Equipment (10) 7137.08 2.00 6255.70 6997.13 7083.45 8037.04 1.95 2.18 23.48 115.12 6665.29 FTSE Global All Cap ex UNITED KINGDOM In 7563 559.13 -1.2 -9.8
-5.6 -7.4 806.48
2.5 Mining 54 558.41 0.3 0.3 -15.0 897.42 -11.3 4.5 Ferguson PLC 5170 179.50 Severn Trent PLC 1866 32.00
Industrial Engineering (11) 12377.02 2.02 10848.54 12131.94 12076.31 13554.43 2.42 1.71 24.06 289.55 15559.63 FTSE Global All Cap ex USA 6013 448.12 -0.5 -10.9
-12.7 -15.0 709.03
3.3 Industrials 577 367.07 -0.9 -0.9 -11.6 542.43 -10.0 2.2 Fresnillo PLC 895.20 -14.60 Shire PLC 4543 143.00
Industrial Transportation (6) 4037.01 -0.17 3538.46 4043.89 4123.90 4820.61 5.35 1.05 17.90 170.22 3819.28 FTSE Global All Cap ex JAPAN 6543 549.10 -1.3 -9.8
-5.7 -7.5 812.91
2.6 Construction & Materials 117 446.78 -0.6 -0.6 -19.7 690.13 -18.2 2.5 Glaxosmithkline PLC 1531.2 21.80 Smith & Nephew PLC 1263.5 5.50
Support Services (46) 7259.61 1.90 6363.10 7124.06 7236.49 8007.99 2.64 1.98 19.06 158.96 7779.77 FTSE Global All Cap ex Eurozone 7193 558.72 -1.2 -9.6
-5.2 -7.0 803.17
2.5 Aerospace & Defense 29 785.83 -1.0 -1.0 2.2 1147.43 3.7 1.9 Glencore PLC 308.20 5.70 Smith (Ds) PLC 378.20 12.20
FTSE Developed 2193 509.47 -1.2 -9.6
-4.4 -6.3 753.17
2.6 General Industrials 58 199.60 -1.1 -1.1 -16.8 320.08 -15.1 2.8 Gvc Holdings PLC 922.00 56.50 Smiths Group PLC 1361 30.00
Consumer Goods (42) 19386.04 -0.52 16991.99 19487.96 19573.19 22103.42 3.74 4.56 5.87 640.99 15052.36
FTSE Developed All Cap 5769 534.63 -1.2 -9.9
-4.8 -6.6 780.17
2.5 Electronic & Electrical Equipment 78 383.34 -0.8 -0.8 -16.9 516.91 -15.7 1.8 Halma PLC 1271 25.00 Smurfit Kappa Group PLC 2558 34.00
Automobiles & Parts (1) 8048.15 4.27 7054.26 7718.91 7820.53 7522.50 1.94 0.00 0.00 291.29 8058.94
FTSE Developed Large Cap 927 473.31 -1.2 -9.3
-3.6 -5.6 711.13
2.6 Industrial Engineering 108 668.74 -0.6 -0.6 -22.6 976.35 -21.1 2.7 Hargreaves Lansdown PLC 1787.5 15.50 Sse PLC 1152.5 22.00
Beverages (5) 21370.33 -0.44 18731.24 21463.95 21399.90 20827.69 2.45 1.83 22.33 508.38 15660.02
FTSE Developed Europe Large Cap 247 331.76 -0.8 -10.9
-11.2 -14.1 579.80
3.8 Industrial Transportation 103 658.51 -0.8 -0.8 -8.2 974.95 -6.5 2.3 HSBC Holdings PLC 633.80 28.80 St. James's Place PLC 982.60 12.80
Food Producers (12) 7237.74 0.23 6343.92 7221.17 7186.72 8985.65 2.43 2.41 17.07 98.77 6397.40
FTSE Developed Europe Mid Cap 348 543.63 -0.9 -13.2
-12.6 -14.8 843.45
3.2 Support Services 84 384.58 -1.4 -1.4 0.4 542.16 1.9 1.7 Imperial Brands PLC 2687 -10.50 Standard Chartered PLC 536.20 13.70
Household Goods & Home Construction (15)13610.56 0.25 11929.75 13576.34 13712.72 15369.77 4.40 2.27 9.99 562.10 10203.25
FTSE Dev Europe Small Cap 739 758.35 -0.7 -13.8
-14.5 -16.5 1136.86
3.1 Consumer Goods 435 442.32 -0.7 -0.7 -13.2 676.18 -11.3 2.8 Informa PLC 705.80 -3.00 Standard Life Aberdeen PLC 266.25 9.25
Leisure Goods (2) 9726.25 3.22 8525.13 9422.64 9506.80 8877.18 4.93 1.34 15.15 407.87 9491.93
FTSE North America Large Cap 288 572.48 -1.7 -8.31.4 -0.2 799.92
2.1 Automobiles & Parts 109 350.57 0.9 0.9 -22.1 520.43 -20.1 3.3 Intercontinental Hotels Group PLC 4046 45.00 Taylor Wimpey PLC 155.40 3.55
Personal Goods (5) 31109.27 0.06 27267.48 31091.78 31541.97 32447.77 3.07 2.86 11.40 727.49 21818.10
FTSE North America Mid Cap 400 785.87 -1.5 -10.3
-5.2 -6.3 1017.46
1.9 Beverages 45 603.64 -0.7 -0.7 -10.4 932.09 -8.8 2.8 International Consolidated Airlines Group S.A. 593.60 8.00 Tesco PLC 212.50 -0.30
Tobacco (2) 40146.78 -1.57 35188.92 40786.53 40856.54 53534.65 4.71 7.78 2.73 1676.42 27621.41
FTSE North America Small Cap 1391 819.34 -1.2 -11.7
-3.6 -4.7 1028.71
1.7 Food Producers 107 582.59 -0.8 -0.8 -8.0 912.71 -5.8 2.6 Intertek Group PLC 4555 97.00 Tui AG 1290.5 20.00
Health Care (21) 10488.34 1.95 9193.10 10287.74 10398.41 9500.85 3.27 1.21 25.33 295.13 8474.13
FTSE North America 688 377.79 -1.7 -8.60.2 -1.3 539.85
2.1 Household Goods & Home Construction 45 394.62 -1.6 -1.6 -16.2 601.42 -13.9 3.0 Itv PLC 146.00 2.80 Unilever PLC 4160 -6.50
Health Care Equipment & Services (9) 6786.64 1.41 5948.53 6692.56 6750.48 8125.65 1.93 2.75 18.88 124.14 6018.39
FTSE Developed ex North America 1505 237.62 -0.4 -11.3
-11.6 -13.9 404.47
3.3 Leisure Goods 31 208.88 -1.0 -1.0 -12.7 280.41 -11.7 1.2 Johnson Matthey PLC 2898 62.00 United Utilities Group PLC 733.80 23.20
Pharmaceuticals & Biotechnology (12)14438.04 2.01 12655.04 14154.23 14309.52 12651.51 3.41 1.12 26.24 420.57 10434.39
FTSE Japan Large Cap 197 355.47 0.9 -10.6
-8.2 2.3 Personal Goods
-10.1 474.33 85 717.51 -1.5 -1.5 -4.9 1030.02 -3.4 2.1 Just Eat PLC 594.40 -7.40 Vodafone Group PLC 147.28 3.24
Consumer Services (91) 4898.85 0.89 4293.87 4855.57 4906.99 4982.85 3.03 2.04 16.14 126.04 4774.26 FTSE Japan Mid Cap 323 578.49 0.4 -12.0
-11.1 -12.6 736.23
1.9 Tobacco 13 1138.49 -0.7 -0.7 -19.2 2489.94 -16.1 4.9
Food & Drug Retailers (6) 3811.77 0.44 3341.04 3795.09 3865.91 3084.78 1.95 2.07 24.73 67.71 4573.22 Kingfisher PLC 249.90 6.70 Whitbread PLC 4346 -18.00
FTSE Global wi JAPAN Small Cap 818 629.25 0.0 -13.2
-14.1 -15.5 828.84
2.0 Health Care 204 514.48 -0.8 -0.8 2.3 759.91 4.1 2.0 Land Securities Group PLC 857.00 14.60 Wood Group (John) PLC 720.20 16.00
General Retailers (27) 2129.64 1.68 1866.64 2094.51 2104.36 2533.82 3.77 1.61 16.44 62.09 2547.08
FTSE Japan 520 150.56 0.8 -10.9
-8.8 2.3 Health Care Equipment & Services
-10.6 225.15 79 957.92 -1.4 -1.4 8.9 1131.05 9.8 1.0 Legal & General Group PLC 247.80 4.40 Wpp PLC 869.20 -4.80
Media (19) 7710.23 0.16 6758.07 7698.15 7826.52 7401.39 3.26 2.12 14.43 210.93 4949.13
FTSE Asia Pacific Large Cap ex Japan 529 605.30 -0.8 -12.2
-16.7 -18.8 988.08
3.3 Pharmaceuticals & Biotechnology 125 350.98 -0.4 -0.4 -0.6 545.05 1.6 2.5 Lloyds Banking Group PLC 57.18 0.35
Travel & Leisure (39) 8856.15 1.31 7762.48 8741.96 8789.27 9513.69 2.96 2.18 15.52 230.73 8704.88
FTSE Asia Pacific Mid Cap ex Japan 479 767.48 -1.0 -11.9
-19.1 -21.3 1203.34
3.5 Consumer Services 398 463.10 -2.3 -2.3 -2.2 630.98 -0.9 1.6
Telecommunications (6) 2383.84 2.67 2089.45 2321.83 2383.88 3195.18 7.87 1.13 11.22 127.55 2905.53 FTSE Asia Pacific Small Cap ex Japan 1469 479.39 -1.1 -13.6
-20.4 -22.2 735.81
3.2 Food & Drug Retailers 58 271.63 -1.1 -1.1 -7.1 390.41 -5.2 2.4
Fixed Line Telecommunications (4) 2821.91 3.54 2473.43 2725.34 2844.38 3147.42 6.27 1.25 12.77 119.53 2798.43
Mobile Telecommunications (2) 3291.25 2.22 2884.80 3219.88 3277.52 4802.25 8.72 1.09 10.55 195.75 3607.71
FTSE Asia Pacific Ex Japan
FTSE Emerging All Cap
1008 475.99
2112 656.57
-0.8
-0.8
-12.2
-17.0
-9.3
-16.4
-19.0 825.48
3.3 General Retailers
-18.6 1019.24
3.3 Media
129 740.01
79 315.30
-3.3
-2.0
-3.3
-2.0
6.9 976.87
-8.1 431.41
7.9
-6.7
1.1
1.8
UK STOCK MARKET TRADING DATA
Utilities (8) 6971.83 1.56 6110.85 6864.75 6932.90 7701.56 6.16 1.46 11.09 353.29 8587.63 FTSE Emerging Large Cap 512 629.50 -0.9 -9.4
-15.6 -17.8 984.06
3.1 Travel & Leisure 132 429.89 -0.6 -0.6 -10.2 594.24 -8.9 2.1 Oct 29 Oct 26 Oct 25 Oct 24 Oct 23 Yr Ago
Electricity (3) 7056.29 1.94 6184.89 6922.30 6984.56 8070.84 7.48 0.94 14.19 532.33 11265.49 FTSE Emerging Mid Cap 506 803.20 -0.4 -6.6
-16.6 -19.0 1240.99
3.9 Telecommunication 89 143.57 -1.6 -1.6 -13.6 285.33 -10.0 4.9 - - - - - -
Gas Water & Multiutilities (5) 6575.10 1.46 5763.11 6480.70 6546.70 7187.85 5.80 1.65 10.46 288.72 8049.55 FTSE Emerging Small Cap 1094 634.17 -0.6 -11.6
-22.4 -24.3 943.42
3.5 Fixed Line Telecommuniations 38 117.86 -2.0 -2.0 -12.7 259.77 -8.5 5.6 Order Book Turnover (m) 93.89 104.31 104.31 65.50 164.85 256.90
Financials (304) 4670.55 2.06 4093.77 4576.29 4629.30 5216.27 4.18 1.79 13.39 184.80 4566.11 FTSE Emerging Europe 86 330.15 -2.0 -4.8
-11.3 -15.3 551.98
5.9 Mobile Telecommunications 51 155.16 -1.0 -1.0 -14.8 274.15 -12.0 4.0 Order Book Bargains 977267.00 919871.00 919871.00 1029811.00 928635.00 1179307.00
Banks (10) 3740.46 3.43 3278.54 3616.39 3664.40 4392.38 4.85 1.36 15.18 182.70 2947.05 FTSE Latin America All Cap 240 878.62 0.8 6.3
-2.9 -5.3 1403.99
3.1 Utilities 166 264.60 -1.2 -1.2 -4.1 538.56 -1.1 3.7 Order Book Shares Traded (m) 1217.00 1594.00 1594.00 1687.00 1542.00 2000.00
Nonlife Insurance (10) 3520.02 0.97 3085.32 3486.13 3525.90 3589.04 3.57 1.46 19.25 124.49 6509.56 FTSE Middle East and Africa All Cap 258 612.21 -1.5 -9.4
-19.8 3.7 Electricity
-22.0 992.91 111 295.61 -1.1 -1.1 -2.2 593.71 0.7 3.6 Total Equity Turnover (£m) 4062.88 4993.94 4993.94 4783.17 6025.09 5441.35
Life Insurance/Assurance (7) 7449.58 1.76 6529.60 7320.67 7358.69 8722.60 4.73 1.47 14.40 345.84 7718.48 FTSE Global wi UNITED KINGDOM All Cap In 318 314.71 -0.9 -10.6
-11.9 4.2 Gas Water & Multiutilities
-14.9 555.23 55 268.76 -1.4 -1.4 -7.6 563.66 -4.4 3.9 Total Mkt Bargains 1100248.00 1054608.00 1054608.00 1159278.00 1071482.00 1321871.00
Real Estate Investment & Services (18) 2456.24 0.83 2152.91 2435.93 2457.53 2671.73 2.77 2.80 12.92 53.82 6780.85 FTSE Global wi USA All Cap 1868 651.36 -1.7 -9.00.4 2.0 Financials
-1.1 881.32 730 226.05 -1.0 -1.0 -12.5 383.83 -10.2 3.5 Total Shares Traded (m) 3419.00 4121.00 4121.00 3813.00 3868.00 4136.00
Real Estate Investment Trusts (39) 2636.39 0.82 2310.81 2615.03 2621.29 2626.42 4.28 1.85 12.67 100.93 3482.54 FTSE Europe All Cap 1489 390.18 -0.8 -11.4
-11.8 3.7 Banks
-14.5 657.18 244 193.44 -0.7 -0.7 -16.6 355.28 -13.9 4.2 † Excluding intra-market and overseas turnover. *UK only total at 6pm. ‡ UK plus intra-market turnover. (u) Unavaliable.
General Financial (39) 8195.64 1.40 7183.53 8082.13 8197.55 9252.57 4.00 2.16 11.58 263.02 9822.35 FTSE Eurozone All Cap 688 379.60 -0.9 -12.5
-13.1 3.4 Nonlife Insurance
-15.5 641.36 72 257.55 -0.9 -0.9 -5.4 384.68 -3.3 2.4 (c) Market closed.
Equity Investment Instruments (181) 9697.22 0.75 8499.67 9624.69 9774.66 9928.74 2.62 3.58 10.67 209.70 5483.11 FTSE RAFI All World 3000 3167 6399.17 -0.9 -9.1
-7.2 3.3 Life Insurance
-9.6 8783.85 55 207.28 -1.3 -1.3 -17.9 345.03 -15.5 3.6
Non Financials (331) 4583.97 0.94 4017.88 4541.13 4581.41 4829.23 4.08 2.12 11.56 157.26 7140.04 FTSE RAFI US 1000 1030 11094.44 -1.4 -7.9
-2.0 2.6 Financial Services
-3.9 14994.98 165 288.12 -1.5 -1.5 -6.3 406.34 -4.8 2.1
Technology (15) 1646.51 0.83 1443.18 1632.89 1677.77 2264.32 3.20 1.55 20.09 48.47 2191.22 FTSE EDHEC-Risk Efficient All-World 3211 372.19 -1.0 -9.6
-6.5 2.5 Technology
-8.2 533.16 207 270.36 -1.8 -1.8 0.8 337.29 1.9 1.5 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed
Software & Computer Services (13) 1828.49 0.81 1602.69 1813.81 1866.64 2601.32 3.25 1.57 19.58 55.72 2572.68 FTSE EDHEC-Risk Efficient Developed Europe 595 297.72 -0.8 -11.8
-9.8 3.2 Software & Computer Services
-12.0 469.82 106 463.53 -2.1 -2.1 0.1 546.69 0.8 0.9 accurate at the time of publication. No offer is made by Morningstar or the FT. The FT does not warrant nor
Technology Hardware & Equipment (2) 2520.93 1.38 2209.61 2486.64 2463.00 1992.24 2.26 0.94 47.22 39.43 3023.36 Oil & Gas 147 371.55 -0.6 -10.9
-2.4 -5.0 626.76
3.8 Technology Hardware & Equipment 101 205.01 -1.4 -1.4 1.6 268.55 3.4 2.2 guarantee that the information is reliable or complete. The FT does not accept responsibility and will not be
Alternative Energy 7 83.64 -1.3 -1.3 -13.2 115.50 -11.6 2.2 liable for any loss arising from the reliance on or use of the listed information.
Hourly movements 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 High/day Low/day Real Estate Investment & Services 116 307.88 0.5 0.5 -16.4 532.09 -14.2 3.3 For all queries e-mail ft.reader.enquiries@morningstar.com
FTSE 100 6973.20 6999.25 7027.46 7046.54 7064.53 7078.16 7053.85 7057.16 7046.68 7085.07 6973.20 The FTSE Global Equity Series, launched in 2003, contains the FTSE Global Small Cap Indices and broader FTSE Global All Cap Indices (large/mid/small cap) as well as the enhanced FTSE All-World index Series (large/
FTSE 250 18449.87 18527.77 18590.88 18675.26 18749.29 18795.95 18623.10 18653.02 18619.62 18795.95 18449.20 mid cap) - please see www.ftse.com/geis. The trade names Fundamental Index® and RAFI® are registered trademarks and the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC
(US Patent Nos. 7,620,577; 7,747,502; 7,778,905; 7,792,719; Patent Pending Publ. Nos. US-2006-0149645-A1, US-2007-0055598-A1, US-2008-0288416-A1, US-2010- 0063942-A1, WO 2005/076812, WO 2007/078399 A2,
Data provided by Morningstar | www.morningstar.co.uk
FTSE SmallCap 5360.17 5378.35 5385.72 5398.86 5404.16 5418.13 5416.48 5420.22 5412.04 5422.96 5358.95
FTSE All-Share 3818.57 3833.07 3847.78 3859.28 3869.76 3877.65 3861.29 3863.82 3857.89 3879.89 3818.57 WO 2008/118372, EPN 1733352, and HK1099110). ”EDHEC™” is a trade mark of EDHEC Business School As of January 2nd 2006, FTSE is basing its sector indices on the Industrial Classification Benchmark - please see
Time of FTSE 100 Day's high:12:20:15 Day's Low08:03:00 FTSE 100 2010/11 High: 7877.45(22/05/2018) Low: 6888.69(26/03/2018) www.ftse.com/icb. For constituent changes and other information about FTSE, please see www.ftse.com. © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the London Stock Exchange
Time of FTSE All-Share Day's high:12:20:00 Day's Low08:03:00 FTSE 100 2010/11 High: 4324.41(22/05/2018) Low: 3800.41(26/10/2018) Group companies and is used by FTSE International Limited under licence.
Further information is available on http://www.ftse.com © FTSE International Limited. 2013. All Rights reserved. ”FTSE®” is a trade mark of the
London Stock Exchange Group companies and is used by FTSE International Limited under licence. † Sector P/E ratios greater than 80 are not shown.
For changes to FTSE Fledgling Index constituents please refer to www.ftse.com/indexchanges. ‡ Values are negative.

UK RIGHTS OFFERS UK COMPANY RESULTS UK RECENT EQUITY ISSUES

Amount Latest Company Turnover Pre-tax EPS(p) Div(p) Pay day Total Issue Issue Stock Close Mkt
Issue paid renun. closing BlackRock Smaller Companies Trust Int 63.680 102.132 132.910 213.140 0.00000 10.00000 - 16.000 23.000 date price(p) Sector code Stock price(p) +/- High Low Cap (£m)
price up date High Low Stock Price p +or- Henderson International Income Trust Pre 17.839 43.874 9.300 27.120 0.00000 1.30000 - 1.300 2.500 10/23 100.00 AJOT Avi Japan Opportunity Trust PLC 101.50 0.98 103.00 100.24 8120.0
There are currently no rights offers by any companies listed on the LSE. HSBC Holdings 3rd 49131.000 48086.000 16634.000 14863.000 0.006 0.005 10.00000 10.23600 Nov 21 50.500 50.500 10/19 10.00 SSON Smithson Investment Trust PLC 1040.00 11.73 1047.00 1010.00 85541.0
Lok'n Store Group Pre 17.754 16.654 5.325 3.965 13.050 11.020 0.00000 7.00000 - 3.330 10.000 10/19 100.00 AIM SWC Summerway Capital PLC 101.50 0.00 102.50 101.90 622.2
New Century AIM VCT Int 0.066L 0.543 0.840L 6.900 0.00000 0.00000 - 3.400 1.636 10/10 0.00 GTE Gran Tierra Energy Inc 235.00 - 0.00 0.00 91926.1
The Royal Bank of Scotland Group 3rd 12165.000 14796.000 3326.000 740.000 20.500 2.600L 0.00000 0.00000 - 0.000 0.000 10/01 100.00 MMIT Mobius Investment Trust PLC 94.75 -0.39 101.30 94.01 9475.0
Wey Education Pre 4.192 2.429 0.229L 0.018 0.160L 0.020 0.00000 0.00000 - 0.000 0.000 10/01 20.00 TRR Trident Resources PLC 21.25 0.25 21.45 20.00 467.5

Figures in £m. Earnings shown basic. Figures in light text are for corresponding period year earlier. §Placing price. *Intoduction. ‡When issued. Annual report/prospectus available at www.ft.com/ir
For more information on dividend payments visit www.ft.com/marketsdata For a full explanation of all the other symbols please refer to London Share Service notes.
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
Tuesday 30 October 2018 ★ FINANCIAL TIMES 17

MARKET DATA

FT500: THE WORLD'S LARGEST COMPANIES

52 Week 52 Week 52 Week 52 Week 52 Week 52 Week
Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m Stock Price Day Chg High Low Yld P/E MCap m
Australia (A$) Finland (€) Japan (¥) Sweden (SKr) AT&T♦ 30.01 0.92 39.33 28.85 6.44 6.02 217896.31 Lockheed 295.29 -9.76 363.00 291.52 2.57 34.79 83988.06
ANZ 25.20 0.29 30.40 24.68 6.29 10.49 51222.79 Nokia 4.91 0.05 5.39 3.81 - - - AstellasPh 1704.5 -40.00 2056 1379.5 2.06 19.80 30283.2 AtlasCpcoB 196.92 2.92 339.70 187.74 - - - AutomData 137.87 1.52 153.51 107.61 1.77 38.79 60309.83 Lowes♦ 94.54 0.76 117.70 75.36 1.77 20.28 76414.34
BHPBilltn 31.65 0.45 35.68 26.45 4.16 18.50 71901.99 SampoA 40.00 - 48.92 39.49 - - - Bridgestne 4236 9.00 5605 3906 3.69 11.29 28948.43 Ericsson 79.06 0.36 85.66 49.04 - - - Avago Tech 216.47 3.32 285.68 197.46 2.83 8.20 89498.78 Lyondell 89.81 0.58 121.95 86.41 4.11 6.25 34965.15
CmwBkAu 66.64 0.83 82.66 65.23 6.54 12.63 83445.04 France (€) Canon 3179 -27.00 4472 3171 4.76 13.92 38049.39 H&M 158.68 2.42 218.20 117.10 - - - BakerHu 57.68 3.17 68.59 43.09 - -101.47 24541.87 Marathon Ptl 69.58 0.72 88.45 58.25 2.40 8.92 31381.1
CSL 183.40 6.50 232.69 138.76 1.06 35.09 58761.23 Airbus Grpe 95.83 -0.32 111.16 81.33 - - - CntJpRwy 21360 285.00 24390 19105 0.64 10.71 39486.34 Investor 382.90 5.50 419.90 348.00 - - - BankAm 27.04 0.65 33.05 25.81 1.72 14.50 270082.27 Marsh&M♦ 82.50 0.55 87.89 77.11 1.32 26.55 41660.81
NatAusBk 24.96 0.26 32.98 24.52 7.86 11.20 48272.03 AirLiquide 105.65 -1.00 115.25 97.12 - - - Denso 4908 -79.00 7218 4901 2.59 12.20 34973.65 Nordea Bk 96.86 -0.80 111.30 82.92 7.20 11.38 44109.93 Baxter 67.64 0.54 78.38 62.52 0.96 41.96 36137.76 MasterCard♦ 197.65 0.16 225.35 140.61 0.48 45.54 202602.07
Telstra 3.11 0.06 3.79 2.60 7.50 10.22 26163.47 AXA 21.98 0.18 27.69 20.50 - - - EastJpRwy 9613 86.00 11615 9351 1.42 13.47 32938.1 SEB 92.80 0.02 105.00 79.16 - - - BB & T 47.80 1.32 56.31 45.73 2.86 14.31 37014.69 McDonald's 174.68 1.34 178.70 146.84 2.21 26.38 135516.82
Wesfarmers 45.95 0.35 52.77 40.29 4.92 19.71 36852.84 BNP Parib 47.48 0.60 69.17 46.27 - - - Fanuc 17915 225.00 33450 17375 3.07 19.13 32802.89 SvnskaHn 99.82 0.26 121.90 92.84 - - - BectonDick 230.08 1.08 265.87 203.99 1.26 94.40 61561.03 McKesson 120.66 2.27 178.86 117.19 1.09 -67.17 23574.09
Westpc 26.28 0.32 33.45 25.65 7.09 11.22 63849.85 ChristianDior 333.10 2.00 383.80 290.50 - - - FastRetail 56030 500.00 59960 37060 0.66 39.28 53334.29 Swedbank 204.10 1.10 221.70 177.15 - - - BerkshHat 303599.6 6794.6 335900 270250 - 10.83 223002.1 Medtronic 90.37 0.62 100.15 76.41 2.03 39.86 122045.7
Woolworths 27.98 0.67 31.48 25.04 3.37 22.40 26073.74 Cred Agr 11.32 0.15 14.96 10.97 - - - Fuji Hvy Ind 3006 -8.00 4014 2917 4.68 12.86 20748.8 Telia Co 40.60 1.02 44.02 35.42 - - - Biogen 303.55 3.38 388.67 249.17 - 22.12 61160.04 Merck 72.05 1.65 73.49 52.83 2.57 148.40 191622.79
Belgium (€) Danone 61.74 -0.86 72.13 61.72 - - - Hitachi 3236 -20.00 4721 762.20 2.26 7.94 28072.13 Volvo 133.30 1.80 171.30 128.50 - - - BkNYMeln 46.00 0.81 58.99 45.16 2.03 11.39 45997.45 Metlife 40.47 0.91 55.91 39.31 3.89 8.44 40256.12
AnBshInBv 66.50 0.56 105.95 64.05 - - - EDF 14.53 0.03 15.74 9.83 - - - HondaMtr 2985 7.50 4151 2916 3.37 4.98 48522.59 BlackRock 394.05 7.12 594.52 376.31 2.65 12.25 62884.03 Microsoft 106.03 -0.93 116.18 80.70 1.51 51.26 813909.47
Switzerland (SFr)
KBC Grp 60.52 0.52 78.80 59.22 - - - Engie SA 11.47 -0.01 15.16 11.31 - - - JapanTob 2901 -7.00 3868 2784.5 4.88 13.90 52066.22 Boeing 348.03 -11.24 394.28 255.33 1.75 22.54 197641.14 Mnstr Bvrg 51.34 0.29 70.22 47.61 - 33.46 28366.54
ABB 19.64 0.12 27.24 19.08 - - -
Esslr Intl 128.75 1.30 129.55 100.60 1.18 38.25 32686.21 KDDI 2766 -70.00 3260 2551.5 3.18 11.85 62848.5 BrisMySq♦ 49.98 -0.46 70.05 46.94 3.09 214.45 81569.13 MondelezInt 40.52 0.41 46.54 37.42 2.11 20.66 59425.05
Brazil (R$) CredSuisse 12.76 0.27 18.81 12.23 - - -
Hermes Intl 498.00 -1.90 614.60 417.90 - - - Keyence 51140 -380.00 72400 50780 0.19 29.02 55806.71 CapOne 87.09 1.34 106.50 84.94 1.78 13.53 41666.04 Monsanto 127.95 0.02 127.97 114.19 1.64 23.62 56462.29
Ambev 15.19 0.19 24.56 14.54 3.31 32.65 64781.22 Nestle 83.50 -0.30 86.40 72.92 - - -
LOreal 188.10 -1.00 214.90 170.30 - - - MitsbCp 3157 - 3638 2648 3.40 7.94 45047.55 CardinalHlth 50.68 0.76 75.75 48.14 3.57 64.43 15197.16 MorganStly 44.53 0.56 59.38 42.88 2.18 11.61 77695.49
Bradesco 29.73 0.33 36.80 22.33 1.21 11.63 27095.98 Novartis 86.36 1.48 88.30 71.84 - - -
LVMH 261.95 -0.50 313.70 232.50 - - - MitsubEst 1809 8.00 2218 1682 1.40 20.11 22581.67 Carnival 54.64 0.37 72.70 54.05 3.43 12.39 28787.13 MylanNV 31.49 0.20 47.82 30.33 - 37.71 16235.21
Cielo♦ 12.15 0.15 28.25 11.82 7.59 9.13 8953.97 Richemont 71.26 0.70 99.02 68.32 - - -
Orange 13.71 0.03 15.24 13.32 - - - MitsubishiEle 1315.5 7.00 2179 1260 2.97 11.01 25347.91 Caterpillar♦ 116.13 1.08 173.24 112.25 2.61 23.22 69016.93 Netflix 289.58 -10.25 423.21 178.38 - 135.56 126283.41
ItauHldFin 41.79 0.10 45.81 33.50 1.93 12.41 37470.79 Roche 234.30 0.65 252.85 206.35 - - -
PernodRic 131.40 -2.00 147.75 120.05 - - - MitsuiFud 2592 31.00 3082 2395.5 1.51 16.39 23060.74 CBS 54.44 0.61 61.59 47.54 1.28 15.84 18429.3 NextEraE 171.00 1.11 176.83 145.10 2.38 10.19 81728.64
Petrobras 30.00 1.09 31.80 15.50 0.16 33.52 60564.38 Swiss Re 88.76 2.10 98.80 84.20 - - -
Renault 65.65 1.15 100.80 62.20 - - - MitUFJFin 649.20 -3.90 894.40 607.60 2.86 7.04 80557.15 Celgene 72.72 0.27 110.81 71.14 - 20.52 50849.59 Nike 73.64 1.57 86.04 54.52 1.07 58.79 93748.62
Vale 55.60 0.99 62.42 31.84 1.78 16.52 42681.91 Swisscom 454.90 14.20 530.60 427.00 - - -
Safran 107.85 -1.85 121.95 81.04 - - - Mizuho Fin 187.90 -0.70 220.70 183.90 3.90 7.87 42816.32 CharlesSch 44.34 1.15 60.22 42.01 0.79 23.18 59906.12 NorfolkS 165.29 3.35 186.91 125.59 1.56 8.57 45016.23
Canada (C$) Syngent 453.40 0.90 471.20 402.50 - -437.40 43035.76
Sanofi 74.43 -0.03 82.12 62.88 - - - Murata Mfg 15500 -75.00 20255 13680 1.64 22.26 31334.03 Charter Comms 304.11 9.10 396.64 250.10 - 8.99 70512.14 Northrop 263.50 -6.34 360.88 263.54 1.58 21.27 45748.79
BCE 51.80 0.24 62.90 50.72 5.50 17.54 35467.08 UBS 13.42 0.26 19.77 13.00 - - -
Sant Gbn 32.92 0.91 51.34 30.53 - - - NipponTT 4827 -63.00 5905 4545 2.62 11.88 84484.71 Chevron Corp 111.17 -0.36 133.88 108.02 3.84 18.03 213018.07 NXP 72.83 1.88 125.93 70.25 - 26.79 25199.39
BkMontrl 98.77 -0.09 109.00 93.60 3.71 13.56 48221.77 Zurich Fin 305.20 7.30 321.80 288.70 - - -
Schneider 62.18 0.76 78.56 57.66 - - - Nissan Mt 994.30 3.40 1197 974.60 5.21 5.47 37660.13 Chubb 124.35 0.91 157.50 120.50 2.23 15.66 57334.82 Occid Pet 67.42 -0.49 87.67 62.47 4.44 23.86 51557.52
BkNvaS 70.11 0.12 85.50 69.01 4.52 10.57 65634.22 Nomura 530.20 2.20 756.50 492.90 3.68 11.40 17335.82 Taiwan (NT$) Cigna 208.16 1.47 227.13 163.02 0.02 20.75 50658.77 Oracle♦ 47.58 0.26 53.48 42.57 1.58 49.73 180263.4
SFR Group 34.50 - 34.56 21.87 - -23.02 17905.81
Brookfield 52.67 - 58.67 46.71 1.40 15.61 39897.05 Nppn Stl 2056 6.50 3132 2027.5 3.33 8.44 17533.64 Chunghwa Telecom 109.50 0.50 115.00 102.00 4.46 22.96 27402.64 Cisco 44.41 0.16 49.47 33.67 2.732271.55 201185.56 Pepsico 112.28 1.83 122.51 95.94 3.03 32.82 158490.86
SocGen 32.63 0.26 48.88 31.85 - - -
CanadPcR 258.63 1.64 291.56 212.50 0.88 17.04 28118.45 NTTDCMo 2812.5 -74.00 3095 2597.5 3.47 13.81 95461.18 Formosa PetChem 118.50 - 151.00 104.00 5.25 12.84 36415.55 Citigroup 65.27 1.06 80.70 63.18 1.90 -29.61 164246.25 Perrigo 68.49 0.52 95.93 67.40 0.99 42.24 9371.66
Total 50.98 0.35 56.82 43.09 - - -
CanImp 113.35 1.11 125.21 110.00 4.57 10.08 38340.35 Panasonic 1216.5 -6.50 1800 1191 2.41 11.88 26779.2 HonHaiPrc 75.50 -0.70 114.50 68.10 7.36 7.99 33764.7 CME Grp 180.60 1.96 183.79 135.61 1.46 14.35 61511.88 Pfizer 43.48 0.88 45.81 33.20 2.95 11.97 254884.52
UnibailR 190.00 0.35 236.45 177.35 5.43 8.02 22215.04
CanNatRs 36.38 -0.53 49.08 36.00 3.25 17.56 33797.52 Seven & I 4808 42.00 5203 4275 1.91 22.24 38246.63 MediaTek 208.00 6.00 374.50 199.50 - 13.09 10679.1 Coca-Cola 46.26 0.34 48.62 41.45 3.19 91.62 196740.19 Phillips66 101.21 1.76 123.97 89.14 2.78 8.95 46989.95
Vinci 77.88 0.44 88.80 74.06 - - -
CanNatRy 108.50 0.93 118.62 90.84 1.55 14.94 60490.86 ShnEtsuCh 9130 677.00 13175 8100 1.50 13.93 35034.32 TaiwanSem 222.50 1.50 268.00 210.00 3.55 16.56 186122.31 Cognizant 70.46 -0.07 85.10 69.32 0.96 29.26 40883.28 PhilMorris 90.03 1.03 111.25 76.21 4.69 22.50 139953.79
Vivendi 21.48 0.22 24.87 20.26 - - -
Enbridge 40.54 -0.42 51.04 37.36 6.12 28.88 53026.22 Softbank 8506 -122.00 11500 7540 0.51 7.35 84015.05 Thailand (THB) ColgtPlm♦ 58.44 -1.14 77.91 58.36 2.69 24.07 50710.65 PNCFin♦ 122.90 3.45 163.59 116.55 2.37 11.04 57060.44
GtWesLif 30.00 -0.10 36.30 29.71 4.88 12.10 22604.22 Germany (€)
Sony 5802 -32.00 6973 4284 0.46 12.08 66127.42 PTT Explor 48.75 0.50 59.50 40.80 3.98 11.35 42042.45 Comcast 36.16 0.92 44.00 30.43 1.87 7.37 164145.88 PPG Inds 104.55 1.72 122.07 94.37 1.67 21.80 25079.96
ImpOil 41.45 -0.05 44.91 33.43 1.56 37.56 25052.45 Allianz 181.18 1.92 206.85 170.12 4.40 11.67 87443.12
SumitomoF 4222 -26.00 5333 4151 3.93 8.07 53019.91 United Arab Emirates (Dhs) ConocPhil♦ 68.78 0.30 80.24 48.97 1.55 18.99 79928.92 Praxair 167.92 2.98 169.75 140.00 1.86 36.03 48289.73
Manulife 20.10 -0.05 27.77 19.63 4.09 20.97 30416.15 BASF 66.66 0.21 98.80 64.33 4.50 10.08 69616.69
Takeda Ph 4461 93.00 6693 4203 3.94 29.91 31813.75 Emirtestele 17.00 0.02 18.00 15.75 4.57 17.16 40250.14 Corning 31.15 0.46 36.56 26.11 2.09 -30.26 24932.43 Priceline 1905.64 -1.38 2067.99 1612.41 - 32.36 92937.2
Potash 25.78 -0.05 26.41 20.68 6.78 14.75 16841.05 Bayer 67.88 1.73 115.49 64.83 4.05 17.37 71977.02
TokioMarine 5130 -23.00 5737 4668 3.05 12.96 33131.97 United Kingdom (p) Costco 222.62 4.43 245.16 159.47 0.90 33.83 97628.12 ProctGmbl♦ 88.69 0.83 93.14 70.73 3.05 24.89 220963
RylBkC♦ 94.91 0.42 108.52 93.13 3.84 11.98 104276.06 BMW 76.40 1.38 97.50 71.79 5.22 5.92 52295.62
Toyota 6426 -108.00 7806 6396 3.34 7.72 188163.69 CrownCstl 105.72 2.18 114.97 98.85 3.77 115.82 43856.88 Prudntl 92.12 1.96 127.14 89.33 3.48 5.49 38414.04
Suncor En 44.11 -0.25 55.47 40.49 2.98 17.00 54401.31 Continental 143.55 7.45 257.40 127.90 3.13 9.45 32645.64 AscBrFd 2391 -6.00 3376 2186 1.71 18.11 24266.93
Mexico (Mex$) CSX 66.95 1.03 76.24 48.26 1.22 10.08 56533.94 PublStor 204.67 3.85 234.90 180.48 3.80 29.36 35661.79
ThmReut 60.00 -0.12 61.78 46.69 2.93 22.22 25711.2 Daimler 52.43 1.06 76.48 48.77 6.94 5.90 63778.84 AstraZen 5864 109.00 6122 4544.5 3.55 36.63 95207.32
AmerMvl 13.85 -0.22 18.20 13.73 2.09-248.35 31874.14 CVS♦ 70.68 0.56 83.88 60.14 2.75 24.93 71956.75 Qualcomm 62.85 0.37 76.50 48.56 3.60 -22.71 92334.75
TntoDom♦ 73.05 0.74 80.05 69.21 3.42 12.68 101850.74 Deut Bank 8.59 0.07 17.13 8.42 1.28 -10.26 20191.38 Aviva 423.00 6.20 554.60 410.70 6.48 15.27 21763.28
FEMSA UBD 175.46 -3.39 189.49 158.17 1.47 17.01 19439.04 Danaher 97.59 0.45 110.13 91.50 0.60 26.66 68401.09 Raytheon♦ 172.29 -4.60 229.75 170.73 1.39 21.38 49029.77
TrnCan♦ 49.83 0.05 65.18 49.12 5.11 15.23 34707.27 Deut Tlkm 14.22 0.02 15.76 12.72 4.56 20.37 76960.12 Barclays 173.00 4.94 220.10 161.24 1.73-432.50 37845.04
WalMrtMex 54.72 -1.61 58.00 42.30 1.18 28.42 48981.5 Deere♦ 133.07 0.07 175.26 130.77 1.83 21.31 42805.1 Regen Pharm 335.57 -0.25 432.50 281.89 - 25.04 35619.08
ValeantPh 30.80 -1.06 36.02 14.01 - -4.99 8158.48 DeutsPost 28.68 0.30 41.36 27.23 4.00 14.10 40068.83 BP 535.20 7.10 603.20 452.50 5.62 19.97 136749.61
Delphi 23.02 1.02 60.39 20.58 1.43 6.62 2043.85 S&P Global 174.59 3.18 217.31 153.25 1.01 28.18 43909.39
E.ON 8.46 -0.02 10.81 7.88 3.53 6.77 21183.33 Netherlands (€) BrAmTob 3549 -70.00 5108 3171 5.57 1.94 104356.57
China (HK$) Delta 54.16 0.88 60.79 48.33 2.30 10.82 37133.11 Salesforce 136.75 1.23 161.19 98.68 - 147.28 103474.94
Fresenius Med 70.50 0.18 93.82 68.10 1.50 11.01 24698.77 Altice 2.06 0.04 16.37 2.00 - - - BSkyB 1728 1.50 1740 893.42 - 36.53 38081.37
AgricBkCh 3.39 -0.02 5.02 3.35 6.11 4.92 13291.77 Devon Energy 32.41 0.03 46.54 29.83 0.78 -53.83 16490.21 Schlmbrg 52.73 -0.17 80.35 51.84 3.68-100.56 73020.6
Fresenius SE 58.16 0.20 72.76 57.12 1.29 16.29 36687.61 ASML Hld 145.22 -0.74 189.50 138.26 - - - BT 238.25 8.65 278.50 201.25 6.46 11.68 30305.16
Bk China 3.27 0.01 4.96 3.20 6.28 4.91 34878.85 DiscFinServ 68.18 0.76 81.93 63.31 1.99 11.13 23362.44 Sempra Energy 113.36 0.55 127.22 100.49 2.94 -45.07 30999.25
HenkelKgaA 86.00 0.55 110.65 82.45 2.05 15.40 25404.44 Heineken 79.14 1.40 93.54 75.38 - - - Compass 1546 16.50 1722 1396.5 2.20 21.62 32595.36
BkofComm 5.79 0.12 7.13 5.33 5.75 5.42 25857.31 Disney 114.04 0.85 119.69 97.38 1.43 14.77 169610.2 Shrwin-Will 374.72 4.28 479.64 355.28 0.89 19.66 35083.65
Linde 146.85 - 148.55 - - - - ING 10.35 0.11 16.69 10.03 - - - Diageo 2677 -18.00 2885 2345.5 2.37 22.43 85284.77
BOE Tech 1.06 -0.09 1.78 1.04 - 24.82 26.90 DominRes 72.01 0.34 85.30 61.53 4.31 16.30 47077.67 SimonProp 181.07 1.31 186.03 145.78 4.05 25.68 55988.6
MuenchRkv 186.90 3.55 200.30 174.85 4.59 41.47 31779.07 Unilever 47.49 -0.16 50.16 42.13 - - - GlaxoSmh 1531.2 21.80 1625 1236.4 5.22 45.91 96537.56
Ch Coms Cons 7.22 0.02 9.93 6.96 4.05 5.03 4077.46 DowDupont 52.80 0.80 77.08 51.32 2.94 139.41 121817.96 SouthCpr 36.78 -0.62 58.09 35.85 2.61 29.36 28432.58
SAP 92.63 -0.36 108.52 82.05 1.51 26.10 129391.96 Norway (Kr) Glencore 308.20 5.70 416.90 284.40 3.35 9.69 56994.03
Ch Evrbrght 3.36 -0.03 4.76 3.14 6.35 5.22 5433.85 DukeEner 82.51 0.62 91.80 71.96 4.19 21.40 58776.39 Starbucks 59.25 1.18 61.94 47.37 1.88 19.01 79934.18
Siemens 101.58 1.50 125.95 98.51 3.63 13.13 98176.17 DNB 153.35 1.80 174.15 138.90 - - - HSBC♦ 633.80 28.80 798.60 596.40 6.05 17.08 162969.82
Ch Rail Cons 9.38 -0.17 10.76 7.53 1.94 6.98 2484.18 Eaton 72.29 0.28 89.85 70.58 3.38 10.53 31323.26 StateSt 68.03 1.64 114.27 66.23 2.40 11.56 24887.25
Volkswgn 138.60 4.10 191.80 129.60 2.81 6.09 46504.66 Equinor 215.20 2.90 234.60 162.20 - - - Imperial Brands 2687 -10.50 3204.5 2298 6.35 20.96 32853.75
Ch Rail Gp 6.78 0.01 8.01 5.25 1.47 7.84 3638.59 eBay 27.38 0.04 46.99 26.96 - -31.33 27093.87 Stryker♦ 162.67 2.29 179.84 146.80 1.10 59.19 60835.16
Hong Kong (HK$) Telenor♦ 154.50 3.90 191.70 148.10 - - - LlydsBkg 57.18 0.35 72.68 55.97 5.33 11.00 52831.06
ChConstBk 6.17 - 9.39 6.02 - - 189208.43 Ecolab 148.80 1.46 159.92 125.74 1.04 28.86 42988.86 Sychrony Fin 28.54 0.56 40.59 27.71 2.04 10.00 20512.6
AIA 59.55 0.15 75.00 58.55 1.43 15.73 91735.08 Natl Grid 843.90 11.70 928.50 733.00 5.28 7.88 36372.99
China Vanke 23.85 0.15 42.85 21.50 3.78 7.66 4000.29 Qatar (QR) Emerson 67.50 1.25 79.70 57.47 2.78 21.32 42421.42 Target 84.60 2.66 90.39 54.04 2.86 15.19 44530.45
BOC Hold 31.65 0.30 42.15 30.95 3.99 11.08 42683.05 Prudential 1527 30.50 1992.5 1456 3.08 17.69 50649.11
ChinaCitic 4.84 0.02 6.82 4.61 6.23 4.79 9187.65 QatarNtBk 190.00 1.98 190.01 115.01 2.89 14.85 48198.89 EOG Res♦ 105.13 -1.43 133.53 96.54 0.64 16.23 60891.38 TE Connect 76.91 2.05 108.23 73.70 2.07 21.07 26799.96
Ch OSLnd&Inv 24.45 0.45 32.20 22.35 3.18 6.53 34168.89 RBS 230.10 5.20 304.20 220.80 - 39.67 35298.35
ChinaLife 15.80 -0.16 28.20 15.46 3.01 10.83 14996.5 Russia (RUB) EquityResTP 65.72 0.88 70.46 54.97 3.08 42.57 24203.49 Tesla Mtrs 338.59 7.69 387.46 244.59 - -21.55 57761.13
ChngKng 52.95 0.35 75.30 52.30 3.12 5.06 24945.08 ReckittB 6611 -59.00 7407.22 5255 2.49 13.55 59683.58
ChinaMBank 28.70 -0.85 39.50 26.40 3.43 8.35 16806.28 Gzprm neft 152.52 0.02 176.95 123.64 5.37 4.62 54875.68 Exelon 43.99 0.37 45.05 35.57 2.97 11.44 42490.24 TexasInstr 91.67 1.11 120.75 87.90 2.50 21.65 89121.12
Citic Ltd 11.66 0.20 12.80 10.22 3.00 8.29 43265.08 RELX 1528.5 -3.00 1784 1399 2.58 18.62 38635.17
ChinaMob 71.80 -1.25 84.05 67.85 4.26 10.91 187521.43 Lukoil 4872.5 -16.00 5115 3009.5 1.78 6.87 62986.74 ExpScripts 94.91 0.63 97.22 59.17 - 12.02 53350.87 TheTrvelers 123.73 2.44 150.55 119.67 2.30 17.22 32773.95
Citic Secs 13.28 -0.18 22.95 11.62 3.55 11.67 3859.28 RioTinto 3724 59.50 4541 3399 5.84 6.60 64032.06
ChinaPcIns 28.90 -0.80 42.40 26.60 3.29 13.90 10230.59 MmcNrlskNckl 10679 29.00 12144 8824 2.32 9.13 25683.4 ExxonMb 78.02 0.49 89.30 72.16 3.90 16.36 330321.88 ThrmoFshr 229.13 -0.87 249.95 181.51 0.27 39.82 92292.7
CK Hutchison 78.95 0.95 107.00 77.80 3.50 8.44 38833.7 RollsRoyce♦ 831.40 -23.60 1104.5 747.00 1.41 7.37 19823.23
ChMinsheng 5.62 0.02 7.79 5.29 3.63 3.85 5964.4 Novatek 1067.5 31.10 1215 645.30 1.43 20.09 49261.09 Facebook 145.75 0.38 218.62 143.80 - 23.24 351502.3 TimeWrnr 98.77 0.82 103.89 85.88 1.54 15.09 77269.69
CNOOC 13.40 - 15.78 10.22 3.55 15.34 76312.32 RylDShlA 2428 15.00 2755 2168.5 5.86 13.58 143095.1
ChMrchSecs RMB 12.75 -0.04 20.69 11.13 1.51 19.56 8998.83 Rosneft 458.50 5.20 522.80 281.65 2.33 10.46 73851.81 Fedex 213.66 3.13 274.66 208.10 1.29 12.24 56302.8 TJX Cos 108.77 2.23 113.28 66.44 1.19 23.83 67305.73
HangSeng♦ 189.80 0.20 216.80 175.00 3.48 16.62 46285.04 Shire 4543 143.00 4662 2940.5 0.58 11.36 53205.06
Chna Utd Coms RMB 5.40 -0.03 8.44 4.63 0.37 79.15 16474.42 Sberbank 185.59 4.59 285.00 165.90 3.38 4.84 60888.58 FordMtr♦ 9.37 0.39 13.48 8.17 6.22 5.71 36669.06 T-MobileUS 65.72 0.61 70.94 54.60 - 12.49 55680.05
HK Exc&Clr 205.40 -3.40 18396.39 195.60 2.55 29.28 32765.91 StandCh 536.20 13.70122709.49 514.20 1.55 20.64 22662.38
ChShenEgy 17.50 -0.72 25.75 16.04 6.25 6.93 7586.28 Surgutneftegas 26.48 0.10 30.92 26.15 2.31 2.37 14375.07 Franklin 29.96 0.65 45.96 28.12 2.88 25.50 15790.67 UnionPac 143.93 1.19 165.63 115.16 1.84 10.41 106046.2
MTR 37.95 -0.15 7506.18 37.70 2.86 14.27 29714.23 Tesco♦ 212.50 -0.30 266.80 175.20 1.41 18.77 26605.86
ChShpbldng RMB 4.12 0.02 6.83 3.81 - 67.43 10888.28 GenDyn♦ 171.52 1.66 230.00 167.27 2.00 17.86 50795.61 UPS B 106.56 1.25 135.53 101.45 3.17 18.44 73887.52
SandsCh 30.50 0.10 49.35 30.15 6.34 17.01 31436.03 Saudi Arabia (SR) Vodafone 147.28 3.24 239.65 142.60 8.92 10.62 50363.61
ChStConEng RMB 5.19 -0.13 7.75 4.91 3.01 6.62 31093.42 GenElectric 11.49 0.19 20.75 11.17 5.07 -17.39 99817.07 USBancorp 52.08 1.17 58.50 48.49 2.24 14.00 84840.67
SHK Props 103.80 1.20 139.60 99.50 3.93 6.20 38358.53 AlRajhiBnk 87.50 - 92.40 61.80 4.18 16.76 37906.05 WPP♦ 869.20 -4.80 1474 818.00 6.90 5.83 14108.48
ChUncHK 8.59 -0.14 12.28 8.55 0.70 46.73 33525.75 GenMills♦ 44.35 0.83 60.69 41.01 4.36 12.49 26442.8 UtdHlthcre 259.75 1.57 272.81 207.80 1.18 22.25 250002.46
Tencent 260.00 - 476.60 255.00 0.32 27.05 315778.93 Natnlcombnk 44.35 - 49.95 31.33 2.89 14.94 35470.08 United States of America ($)
CNNC Intl RMB 5.37 -0.10 7.93 5.19 2.09 18.19 12030.68 GenMotors 33.59 0.94 45.52 30.56 4.39 -49.42 47391.74 UtdTech 124.14 0.91 144.15 115.40 2.19 20.13 99323.58
SaudiBasic 127.20 - 131.40 98.20 3.21 18.11 101731.53 21stC Fox A 45.55 0.41 50.15 24.81 0.77 19.46 48145.1
CSR 6.85 0.06 8.82 5.81 2.52 15.28 3819.18 India (Rs) GileadSci 71.24 1.50 89.54 64.27 2.97 43.67 92351.3 ValeroEngy 88.79 3.00 126.98 77.72 3.28 8.88 37948.67
SaudiTelec 86.00 0.50 93.40 66.40 4.52 17.26 45853.82 3M 187.38 2.43 259.77 181.98 2.63 26.69 109108.96
Daqin RMB 7.98 -0.08 10.48 7.51 6.00 8.34 17075.55 Bhartiartl 294.10 - 564.80 276.85 1.36 136.66 16023.94 GoldmSchs 216.28 3.92 275.31 208.40 1.37 17.35 81657.86 Verizon♦ 56.90 1.39 58.44 43.97 4.03 7.76 235107.14
Gree Elec Apl 0.03 - 0.08 0.03 - -0.45 52.23 HDFC Bk 1926.3 - 2220 1788 0.70 26.17 71356.37 Singapore (S$) AbbottLb♦ 67.55 0.56 74.15 53.61 1.57 151.23 118504.27 Halliburton 35.02 -0.12 57.86 33.73 2.00 289.43 30813.94 VertexPharm 170.74 1.26 194.92 136.50 - 110.59 43633.98
GuosenSec RMB 7.97 -0.07 14.13 6.71 1.92 19.09 9406.47 Hind Unilevr♦ 1552.9 - 1808.65 1226.35 1.19 62.76 45817.07 DBS 23.03 -0.07 31.28 22.45 3.98 11.25 42564.87 Abbvie♦ 81.82 1.03 125.86 79.43 3.50 20.86 123897.79 HCA Hold 130.45 2.59 141.11 74.26 0.52 16.86 45141.7 VF Cp 81.07 1.76 97.00 68.35 1.98 45.96 32141.1
HaitongSecs 7.55 -0.15 13.58 6.31 3.61 10.11 3283.52 HsngDevFin 1698.4 - 2052.95 1640.85 1.12 16.71 39365.48 JardnMt US$ 57.29 0.85 68.11 55.80 2.69 13.72 42205.88 Accenture♦ 154.61 0.16 175.64 141.47 1.66 25.72 102599.44 Hew-Pack 23.37 0.24 27.08 19.31 2.30 8.70 36980.89 Viacom 30.89 0.91 35.55 22.13 2.52 6.48 10915.78
Hngzh HikVDT RMB 23.99 -0.37 44.59 22.29 2.12 21.11 27302.23 ICICI Bk 349.40 - 365.70 256.50 0.67 28.58 30647.67 JardnStr US$ 32.90 0.80 44.69 31.55 0.96 11.68 36388.6 Adobe 246.00 0.20 277.61 165.68 - 51.53 120080.85 HiltonWwde 69.43 1.16 88.11 63.76 0.84 16.03 20590.85 Visa Inc 138.25 0.51 151.56 106.60 0.55 34.81 245623.02
Hunng Pwr 4.20 0.13 6.18 4.04 2.68 19.24 2518.09 Infosys♦ 644.75 - 754.90 458.48 2.79 15.68 38389.25 OCBC 10.42 0.02 14.04 10.38 3.50 9.82 31581.01 AEP 73.62 0.88 78.07 62.71 3.23 19.39 36302.67 HomeDep 174.72 2.49 215.43 160.53 2.15 21.03 199903.82 Walgreen 76.83 0.60 80.68 59.07 2.11 15.42 72924.31
IM Baotou Stl RMB 1.52 -0.03 2.73 1.44 - 23.54 6930.02 ITC 283.50 - 322.95 250.00 1.72 29.98 47304.11 SingTel 3.14 0.01 3.80 3.02 5.49 9.67 37092.99 Aetna♦ 195.67 0.38 206.66 164.52 0.99 19.01 64060.72 Honywell 144.72 3.33 167.72 137.96 1.95 67.74 107134.52 WalMartSto 101.06 2.12 109.98 81.78 1.99 59.09 295963.27
In&CmBkCh 5.28 0.02 7.64 5.10 5.33 5.67 58454.05 L&T 1261.3 - 1470 1175 2.28 23.37 24104.51 UOB 24.15 0.08 30.37 24.01 3.26 10.18 29328.65 Aflac 42.46 0.76 48.19 41.41 2.20 7.13 32600.8 HumanaInc 320.09 1.84 341.30 231.90 0.55 33.77 44096.69 WellsFargo 52.54 1.29 66.31 50.02 2.88 13.77 253039.85
IndstrlBk RMB 15.78 -0.16 19.98 13.73 4.19 5.57 43272.05 OilNatGas 154.90 - 212.85 144.70 4.02 8.75 27094.68 South Africa (R) AirProd♦ 152.64 3.21 175.17 148.44 2.61 23.46 33469.75 IBM 121.70 -3.09 171.13 118.30 4.84 20.09 111083.89 Williams Cos 24.69 0.37 33.67 24.00 5.03 10.51 20442.66
Kweichow RMB 549.09 -61.01 803.50 549.09 2.04 21.44 99278.3 RelianceIn 1087.8 - 1329 862.65 1.10 17.01 93978.29 Firstrand 6460 249.00 7725 5086 - - - Alexion 115.09 -1.18 140.77 102.10 - -257.66 25676.19 IllinoisTool 127.71 3.61 179.07 119.38 2.37 23.91 42827.93 Yum!Brnds 86.60 0.82 92.21 74.26 1.48 19.06 27483
Midea 1.58 - 1.90 1.40 3.07 27.15 43.34 SBI NewA 267.90 - 346.70 232.35 - -18.70 32587.95 MTN Grp 8675 275.00 14000 6907 - - - Allegran 176.94 -0.26 197.00 142.81 1.56 -43.59 60061.3 Illumina 292.91 -2.20 372.61 203.03 - 68.71 43057.04 Venezuela (VEF)
New Ch Life Ins 36.30 -1.15 57.85 30.25 1.50 12.39 4788.11 SunPhrmInds 573.60 - 679.30 435.00 0.63 37.12 18758.35 Naspers N 245723-10177.00 414299 245723 - - - Allstate 94.38 2.05 105.36 88.29 1.71 10.23 32677.41 Intcntl Exch 73.76 0.02 78.48 65.15 1.16 17.83 42296.68 Bco de Vnzla 6.00 0.75 7.79 0.01 223.69 - 341.44
PetroChina♦■ 5.58 0.02 6.74 5.02 1.16 24.40 15017.14 Tata Cons♦ 1871 - 2275.95 1247.18 1.19 25.32 95692.38 Alphabet 1067.76 -15.99 1291.44 984.00 - 47.50 319168.63 Intel 45.87 0.18 57.60 42.04 2.42 16.99 211506.57
South Korea (KRW) Bco Provncl 650.00 104.00 720.00 0.95 - 26.77 1093.59
PingAnIns 72.75 -1.65 98.85 67.15 3.23 10.90 69109.87 Altria 64.50 1.41 74.38 53.91 4.09 11.97 121198.43 Intuit 204.80 2.78 231.84 150.39 0.74 45.16 52975.95
Indonesia (Rp) HyundMobis 189000 1000.00 283000 172500 1.84 13.37 16112.44 Mrcntl Srvcs 1400 100.00 1400 1.30 0.00 28.79 1329.9
PngAnBnk RMB 10.75 -0.43 15.24 8.45 1.50 7.82 26566.66 Amazon 1593.87 -48.94 2050.5 1086.87 - 130.07 777395.56 John&John 137.47 0.50 148.32 118.62 2.42 272.26 368798.48
Bk Cent Asia 22300 200.00 24700 16800 - - 38879.26 KoreaElePwr 27100 -200.00 40050 23850 2.90 -15.58 15236
Pwr Cons Corp RMB 4.63 -0.14 7.97 4.60 3.91 9.40 7426.63 AmerAir 33.52 1.06 59.08 30.24 1.16 11.17 15438.69 JohnsonCn 32.33 1.01 42.45 30.91 3.09 35.54 29898.11
Israel (ILS) SK Hynix 66800 -200.00 97700 62900 1.49 3.45 42589.27 Closing prices and highs & lows are in traded currency (with variations for that
SaicMtr RMB 27.09 -0.43 37.66 26.51 - 8.30 44852.81 AmerExpr♦ 102.69 1.44 111.77 87.54 1.32 27.47 87724.14 JPMrgnCh♦ 106.06 2.64 119.33 95.95 2.05 14.56 356455.37
TevaPha 73.15 -1.65 94.75 38.20 0.84 -2.01 20098.19 SmsungEl 41400 400.00 57520 40400 3.07 6.22 232745.13 country indicated by stock), market capitalisation is in USD. Highs & lows are
ShenwanHong 0.14 0.00 0.28 0.09 - 4.40 154.40 AmerIntGrp 40.69 -0.23 65.30 40.48 3.05 -6.08 36150.88 Kimb-Clark 102.48 0.17 123.77 97.10 3.73 21.54 35488.92
Italy (€) Spain (€) AmerTower 152.77 3.16 155.28 130.37 1.83 62.43 67344.17 based on intraday trading over a rolling 52 week period.
ShgPdgBk RMB 10.79 -0.13 14.00 9.17 - 5.82 43645.43 KinderM 16.79 0.20 19.83 14.69 3.33 -96.06 37055.84 ♦ ex-dividend
Enel 4.40 0.02 5.59 4.22 - - - BBVA 5.13 0.05 7.73 4.96 - - - Amgen 188.96 2.98 210.19 163.31 2.54 52.45 122308.53
Sinopec Corp 6.41 0.02 8.35 5.40 11.97 10.35 20860.3 Kraft Heinz 55.68 1.03 82.48 53.03 4.36 6.58 67887.74 ■ ex-capital redistribution
ENI 15.36 0.23 16.89 13.22 - - - BcoSantdr♦ 4.12 0.10 6.09 3.96 - - - Anadarko 57.81 -1.03 76.70 46.80 1.01 77.32 29603.06
Sinopec Oil RMB 1.91 -0.02 3.16 1.82 - -3.30 3310.65 Kroger 28.49 0.91 32.74 20.41 1.72 6.61 22714.47 # price at time of suspension
Generali 14.19 0.30 17.13 13.63 - - - CaixaBnk 3.51 0.01 4.45 3.32 - - - Anthem 266.74 0.99 283.06 206.98 1.06 16.72 69340.04
Denmark (kr) Iberdrola 6.30 0.00 6.99 5.71 - - - L Brands 31.61 1.19 63.10 25.89 7.42 10.33 8694.76
IntSPaolo 2.00 0.06 3.35 1.88 - - - Aon Cp 156.17 3.86 158.77 130.87 0.92 48.30 37895.48 LasVegasSd 51.62 -0.77 81.45 51.47 5.57 11.10 40676.78
DanskeBk 128.20 2.20 252.40 124.35 - - - Inditex 24.96 0.21 32.37 23.00 - - -
Luxottica 55.30 -0.32 59.54 47.42 - - - Apple 216.01 -0.29 233.47 150.24 1.18 20.111043310.38 LibertyGbl 25.01 1.00 39.73 23.17 - -13.70 5165.4
MollerMrsk 8232 392.00 12400 7520 - - - Repsol 15.21 0.10 17.51 13.67 - - -
Unicred 11.45 0.47 18.25 10.79 - - - ArcherDan 47.20 0.74 52.07 38.59 2.70 14.21 26419.61 Lilly (E) 108.38 1.99 116.61 73.69 1.94-930.13 116398.8
NovoB 280.85 5.85 354.80 265.15 - - - Telefonica 7.02 0.17 9.12 6.59 - - -

FT 500: TOP 20 FT 500: BOTTOM 20 BONDS: HIGH YIELD & EMERGING MARKET BONDS: GLOBAL INVESTMENT GRADE
Close Prev Day Week Month Close Prev Day Week Month Day's Mth's Spread Day's Mth's Spread
price price change change % change change % change % price price change change % change change % change % Red Ratings Bid Bid chge chge vs Red Ratings Bid Bid chge chge vs
Firstrand 6460.00 6211.00 249.00 4.01 6398.87 10467.6 -4.82 Kweichow 549.09 610.10 -61.01 -10.00 -120.91 -18.0 -24.78 Oct 29 date Coupon S* M* F* price yield yield yield US Oct 29 date Coupon S* M* F* price yield yield yield US
MTN Grp 8675.00 8400.00 275.00 3.27 8589.25 10016.6 -0.95 WPP 869.20 874.00 -4.80 -0.55 -173.80 -16.7 -99.24 High Yield US$ US$
Naspers N 245723.00 255900.00 -10177.00 -3.98 242913.00 8644.6 -19.48 Northrop 263.50 269.84 -6.34 -2.35 -44.17 -14.4 -16.87 Qwest Capital Funding, Inc. 08/21 7.63 B+ WR BB 103.00 6.42 0.00 0.02 - Barclays plc 01/28 4.34 BBB Baa3 A 93.23 5.28 0.03 0.21 2.15
Tesla Mtrs 338.59 330.90 7.69 2.32 78.59 30.2 28.04 Regen Pharm 335.57 335.82 -0.25 -0.07 -54.26 -13.9 -16.83 High Yield Euro Barclays plc 01/28 4.34 BBB Baa3 A 93.41 5.25 0.03 0.18 2.12
GuosenSec 7.97 8.04 -0.07 -0.87 1.02 14.7 -5.57 AmerIntGrp 40.69 40.92 -0.23 -0.56 -6.51 -13.8 -23.46 Aldesa Financial Services S.A. 04/21 7.25 - - B 81.92 16.63 0.29 2.19 13.91 Barclays plc 01/28 4.34 BBB Baa3 A 93.23 5.28 0.03 0.21 2.15
HaitongSecs 7.55 7.70 -0.15 -1.95 0.96 14.6 6.04 Netflix 289.58 299.83 -10.25 -3.42 -43.09 -13.0 -22.29 Barclays plc 01/28 4.34 BBB Baa3 A 93.41 5.25 0.03 0.18 2.12
HonHaiPrc 75.50 76.20 -0.70 -0.92 7.40 10.9 -4.67 Anadarko 57.81 58.84 -1.03 -1.75 -8.19 -12.4 -14.14 Emerging US$ United Utilities PLC 08/28 6.88 BBB Baa1 A- 113.64 5.09 0.03 0.16 1.96
FordMtr 9.37 8.98 0.39 4.31 0.87 10.2 1.41 Celgene 72.72 72.45 0.27 0.37 -9.69 -11.8 -18.61 Peru 03/19 7.13 BBB+ A3 BBB+ 104.40 2.60 - - 0.34 General Electric Company 01/29 5.00 BBB+ A2 A 99.21 5.10 0.03 0.49 1.97
ChMrchSecs 12.75 12.79 -0.04 -0.31 1.14 9.8 -2.89 Caterpillar 116.13 115.05 1.08 0.94 -15.19 -11.6 -23.84 Brazil 01/23 2.63 BB- Ba2 BB- 92.70 4.56 -0.14 -0.26 1.60
Colombia 03/23 2.63 BBB- Baa2 BBB 94.10 4.11 0.00 0.28 1.15 Euro
Citic Secs 13.28 13.46 -0.18 -1.34 1.06 8.7 -4.60 Bayer 67.88 66.15 1.73 2.62 -8.66 -11.3 -11.31 Barclays plc 08/29 2.29 BBB Baa3 A 88.93 3.54 0.04 0.05 0.41
Continental 143.55 136.10 7.45 5.47 10.25 7.7 7.69 Softbank 8506.00 8628.00 -122.00 -1.41 -1024.00 -10.7 -25.96 Poland 03/23 3.00 A- A2 A- 97.39 3.65 0.00 0.20 0.69
Turkey 03/23 3.25 - Ba3 BB 85.70 7.09 -0.05 0.42 4.13 Barclays plc 08/29 2.29 BBB Baa3 A 89.15 3.52 -0.03 0.02 0.39
GenMotors 33.59 32.65 0.94 2.88 2.39 7.7 -0.25 EOG Res 105.13 106.56 -1.43 -1.34 -12.54 -10.7 -17.46 AT&T Inc. 12/29 2.60 BBB Baa2 A- 102.11 2.38 0.02 0.08 -0.75
Delphi 23.02 22.00 1.02 4.64 1.51 7.0 -26.59 Canon 3179.00 3206.00 -27.00 -0.84 -376.00 -10.6 -11.94 Mexico 10/23 4.00 BBB+ A3 BBB+ 99.60 4.09 0.05 0.24 1.13
Turkey 03/27 6.00 - Ba2 BB+ 101.26 5.82 0.00 0.17 3.07 AT&T Inc. 12/29 2.60 BBB Baa2 A- 102.11 2.38 0.02 0.08 -0.75
ICICI Bk 349.40 349.40 0.00 0.00 22.30 6.8 14.35 DiscFinServ 68.18 67.42 0.76 1.13 -7.85 -10.3 -10.77
Peru 08/27 4.13 BBB+ A3 BBB+ 103.50 3.66 0.01 -0.02 0.80 Yen
L Brands 31.61 30.42 1.19 3.91 1.97 6.6 4.34 Lockheed 295.29 305.05 -9.76 -3.20 -32.85 -10.0 -14.53
Russia 06/28 12.75 BBB- Ba1 BBB- 158.40 5.04 0.01 0.13 1.91 Poland 11/27 2.50 - A2 A- 108.73 1.46 -0.02 -0.04 -1.69
Swedbank 204.10 203.00 1.10 0.54 11.60 6.0 -7.35 GenDyn 171.52 169.86 1.66 0.98 -18.74 -9.8 -16.16
BrAmTob 3549.00 3619.00 -70.00 -1.93 187.00 5.6 -99.00 Schlmbrg 52.73 52.90 -0.17 -0.32 -5.74 -9.8 -13.37 Brazil 02/47 5.63 BB- Ba2 BB- 89.44 6.44 -0.04 -0.07 - £ Sterling
Chna Utd Coms 5.40 5.43 -0.03 -0.55 0.27 5.3 -3.05 Raytheon 172.29 176.89 -4.60 -2.60 -18.72 -9.8 -16.56 Emerging Euro Cooperatieve Rabobank U.A. 05/29 4.63 BBB+ Baa1 A 109.26 3.56 0.00 -0.02 0.43
Praxair 167.92 164.94 2.98 1.81 8.07 5.0 4.50 SandsCh 30.50 30.40 0.10 0.33 -3.30 -9.8 -13.96 Brazil 04/21 2.88 BB- Ba2 BB- 103.25 1.50 0.05 -0.25 -1.22 Cooperatieve Rabobank U.A. 05/29 4.63 BBB+ Baa1 A 109.10 3.57 0.02 0.00 0.44
Barclays 173.00 168.06 4.94 2.94 7.68 4.6 -99.00 AstellasPh 1704.50 1744.50 -40.00 -2.29 -184.00 -9.7 -14.14 Mexico 04/21 2.38 BBB+ A3 BBB+ 105.07 0.29 0.00 0.02 -2.43 Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all other London
Mexico 04/23 2.75 BBB+ A3 BBB+ 107.50 1.03 0.00 0.00 -1.93 close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.
Based on the FT Global 500 companies in local currency Based on the FT Global 500 companies in local currency
Bulgaria 03/28 3.00 BBB- Baa2 BBB 112.25 1.59 0.00 0.03 -1.55
Interactive Data Pricing and Reference Data LLC, an ICE Data Services company. US $ denominated bonds NY close; all
other London close. *S - Standard & Poor’s, M - Moody’s, F - Fitch.

INTEREST RATES: OFFICIAL BOND INDICES VOLATILITY INDICES GILTS: UK CASH MARKET
Oct 29 Rate Current Since Last Mnth Ago Year Ago Day's Month's Year Return Return Oct 29 Day Chng Prev 52 wk high 52 wk low Red Change in Yield 52 Week Amnt
US Fed Funds 2.00-2.25 27-09-2018 1.75-2.00 1.75-2.00 1.25-1.50 Index change change change 1 month 1 year VIX 23.59 -0.57 24.16 50.30 8.56 Oct 29 Price £ Yield Day Week Month Year High Low £m
US Prime 5.25 27-09-2018 5.00 5.00 4.25 Markit IBoxx VXD 23.69 -0.29 23.98 40.09 6.53 - - - - - - - - -
US Discount 2.75 27-09-2018 2.50 2.50 1.75 ABF Pan-Asia unhedged 182.84 -0.11 -1.44 -3.98 -1.08 -1.01 VXN 29.54 -0.33 29.87 38.11 11.67 - - - - - - - - -
Euro Repo 0.00 16-03-2016 0.00 0.00 0.00 Corporates( £) 342.55 0.31 0.80 -1.19 0.99 0.93 VDAX - - - - - Tr 4.5pc '19 101.36 0.68 -4.23 -6.85 -4.23 41.67 105.48 101.36 36.35
UK Repo 0.75 02-08-2018 0.50 0.50 0.25 Corporates($) 270.73 -0.12 -1.00 -3.19 -1.00 -3.19 † CBOE. VIX: S&P 500 index Options Volatility, VXD: DJIA Index Options Volatility, VXN: NASDAQ Index Options Volatility. Tr 4.75pc '20 105.47 0.69 -5.48 -10.39 -13.75 38.00 110.07 105.39 33.70
Japan O'night Call 0.00-0.10 01-02-2016 0.00 0.00--0.10 0.00--0.10 Corporates(€) 225.10 0.10 0.02 -0.64 0.19 -0.51 ‡ Deutsche Borse. VDAX: DAX Index Options Volatility. Tr 1.5pc '21 101.77 0.70 -5.41 -13.58 -19.54 7.69 103.11 101.24 32.84
Switzerland Libor Target -1.25-0.25 15-01-2015 -0.75--0.25 -1.25--0.25 -1.25--0.25 Eurozone Sov(€) 231.56 0.27 -0.07 -0.57 -0.33 -0.47 Tr 4pc '22 110.70 0.76 -7.32 -16.48 -21.65 4.11 114.59 109.81 38.39
Gilts( £) 323.28 0.57 1.44 -0.03 1.74 2.41 BONDS: BENCHMARK GOVERNMENT Tr 5pc '25 124.27 1.04 -6.31 -15.45 -18.75 -7.14 128.73 122.06 35.49
INTEREST RATES: MARKET Global Inflation-Lkd 257.00 -0.31 -1.27 -4.39 -1.70 -1.44 Red Bid Bid Day chg Wk chg Month Year Tr 1.25pc '27 99.87 1.27 -4.51 -13.01 -15.33 -11.81 100.65 96.41 23.73
Over Change One Three Six One Markit iBoxx £ Non-Gilts 337.87 0.34 0.89 -0.77 1.08 1.18 Date Coupon Price Yield yield yield chg yld chg yld Tr 4.25pc '32 133.04 1.55 -3.73 -9.88 -10.40 -10.92 136.24 128.48 35.86
Oct 29 (Libor: Oct 26) night Day Week Month month month month year Overall ($) 234.08 -0.06 -0.61 -2.42 -0.61 -2.42 Australia 11/20 1.75 99.50 2.00 -0.02 -0.06 -0.04 -0.06 Tr 4.25pc '36 138.37 1.69 -3.43 -8.65 -8.65 -10.11 141.54 133.08 30.11
US$ Libor 2.17675 0.003 0.007 0.002 2.29669 2.52038 2.77675 3.05675 Overall( £) 324.55 0.50 1.27 -0.25 1.53 2.04 11/28 2.75 101.15 2.62 -0.05 -0.12 -0.07 -0.22 Tr 4.5pc '42 152.59 1.80 -2.70 -7.22 -6.74 -8.63 156.90 145.84 26.95
Euro Libor -0.45529 0.000 0.000 0.000 -0.40543 -0.35486 -0.32657 -0.20914 Overall(€) 228.33 0.22 0.03 -0.45 -0.06 -0.33 Austria - - - - - - - Tr 3.75pc '52 149.34 1.79 -2.19 -6.28 -5.29 -3.76 156.17 141.38 23.87
£ Libor 0.68425 -0.001 0.000 0.003 0.72475 0.81019 0.91138 1.05338 Treasuries ($) 219.87 -0.02 -0.36 -2.13 -0.36 -2.13 10/19 0.25 100.86 -0.64 -0.02 0.00 -0.15 -0.02 Tr 4pc '60 164.99 1.77 -2.21 -4.84 -2.75 0.00 176.65 156.07 23.89
Swiss Fr Libor 0.001 -0.78160 -0.74120 -0.66380 -0.53220 FTSE Belgium 12/20 1.80 104.84 -0.49 -0.02 -0.04 -0.11 -0.02 Gilts benchmarks & non-rump undated stocks. Closing mid-price in pounds per £100 nominal of stock.
Yen Libor 0.002 -0.10617 -0.09550 0.01617 0.13133 Sterling Corporate (£) 111.30 -0.17 - - 0.16 -3.46 03/28 5.50 143.66 0.69 0.00 -0.05 -0.02 0.01
Euro Euribor
Sterling CDs
0.000
0.000
-0.36900
0.75000
-0.31800
0.80000
-0.25900
0.92500
-0.14800 Euro Corporate (€) 104.57 -0.12 - - -0.31 -2.73 Canada 02/20 1.25 98.90 2.14 -0.05 -0.03 -0.01 - GILTS: UK FTSE ACTUARIES INDICES
Euro Emerging Mkts (€) 372.30 1.79 - - 2.77 -46.04 06/28 2.00 96.10 2.46 0.00 -0.03 0.03 0.36
US$ CDs 0.000 2.24000 2.51000 2.75000 Eurozone Govt Bond 108.73 0.26 - - -0.02 -2.87 Denmark 11/20 0.25 101.75 -0.60 0.00 0.00 -0.09 -0.18 Price Indices Day's Total Return Return
Euro CDs - - - - 11/27 0.50 101.85 0.29 -0.05 -0.10 -0.11 -0.19 Fixed Coupon Oct 26 chg % Return 1 month 1 year Yield
CREDIT INDICES Day's Week's Month's Series Series 1 Up to 5 Years 92.14 0.13 2424.52 0.49 0.52 0.80
Short 7 Days One Three Six One Index change change change high low Finland 09/20 0.38 101.78 -0.57 -0.03 -0.02 -0.09 -0.05
07/28 2.75 120.54 0.56 -0.05 -0.10 -0.11 -0.06 2 5 - 10 Years 179.88 0.48 3503.00 1.70 1.87 1.16
Oct 29 term notice month month month year Markit iTraxx 3 10 - 15 Years 211.54 0.64 4292.71 2.24 3.30 1.46
Euro -0.62 -0.32 -0.64 -0.34 -0.57 -0.27 -0.57 -0.27 -0.48 -0.18 -0.39 -0.09 Crossover 5Y 300.50 -5.65 7.60 27.11 308.82 264.87 France 11/20 0.25 101.53 -0.48 0.01 0.01 -0.07 -0.06
4 5 - 15 Years 187.18 0.54 3697.46 1.90 2.42 1.29
Sterling 0.45 0.55 0.70 0.80 0.76 0.86 0.86 1.01 1.00 1.15 Europe 5Y 75.42 -2.01 2.07 7.07 78.00 66.84 05/23 1.75 108.35 -0.07 0.01 -0.03 -0.07 -0.07
5 Over 15 Years 330.62 0.84 5172.11 2.35 3.82 1.78
Swiss Franc - - - - - - - - - - - - Japan 5Y 62.76 -0.17 3.50 6.22 63.00 55.54 05/28 0.75 100.41 0.71 0.00 -0.05 -0.04 -0.18
7 All stocks 176.66 0.54 3589.90 1.64 2.38 1.63
Canadian Dollar - - - - - - - - - - - - Senior Financials 5Y 92.74 -2.84 1.00 9.17 97.97 77.83 Germany 10/20 0.25 101.74 -0.63 0.01 -0.01 -0.10 -0.04
US Dollar 2.09 2.39 2.12 2.42 2.18 2.48 2.45 2.75 2.65 2.95 2.92 3.22 08/23 2.00 110.78 -0.23 0.01 -0.02 -0.10 -0.11 Day's Month Year's Total Return Return
Markit CDX 07/28 4.75 142.72 0.27 -0.05 -0.10 -0.14 -0.20
Japanese Yen -0.20 0.00 -0.30 -0.10 -0.30 0.00 -0.20 0.10 -0.05 0.25 0.00 0.30 Index Linked Oct 26 chg % chg % chg % Return 1 month 1 year
Emerging Markets 5Y 203.86 1.65 -0.69 10.78 214.80 190.04 08/48 1.25 106.87 0.98 -0.04 -0.08 -0.10 -0.23
Libor rates come from ICE (see www.theice.com) and are fixed at 11am UK time. Other data sources: US $, Euro & CDs: 1 Up to 5 Years 310.29 0.14 -0.05 -0.65 2486.65 0.42 0.85
Nth Amer High Yld 5Y 386.03 7.06 20.72 54.27 386.03 325.08 Greece - - - - - - -
Tullett Prebon; SDR, US Discount: IMF; EONIA: ECB; Swiss Libor: SNB; EURONIA, RONIA & SONIA: WMBA. 2 Over 5 years 719.22 1.02 3.76 4.43 5389.00 3.76 4.95
Nth Amer Inv Grade 5Y 70.25 1.17 2.95 10.75 70.25 57.99 01/28 3.75 95.81 4.31 0.07 -0.07 0.13 -
Websites: markit.com, ftse.com. All indices shown are unhedged. Currencies are shown in brackets after the index names. 3 5-15 years 484.16 0.59 2.02 2.23 3789.16 2.02 3.25
Ireland 10/20 5.00 110.84 -0.47 -0.02 -0.03 -0.08 0.01 4 Over 15 years 922.81 1.17 4.37 5.15 6752.81 4.37 5.51
05/30 2.40 113.46 1.15 -0.04 -0.10 -0.04 0.02 5 All stocks 649.30 0.94 3.42 3.99 4943.24 3.46 4.61
Italy 06/20 0.35 98.73 1.14 -0.04 -0.19 0.09 1.14
COMMODITIES www.ft.com/commodities BONDS: INDEX-LINKED 10/23 0.65 90.86 2.63 -0.03 -0.15 0.26 1.58 Yield Indices Oct 26 Oct 25 Yr ago Oct 26 Oct 25 Yr ago
09/28 4.75 111.15 3.41 -0.12 -0.17 0.37 1.25 5 Yrs 0.90 0.96 0.79 20 Yrs 1.81 1.85 1.99
Energy Price* Change Agricultural & Cattle Futures Price* Change Price Yield Month Value No of
03/48 3.45 90.29 4.02 -0.07 -0.01 0.33 - 10 Yrs 1.36 1.43 1.45 45 Yrs 1.78 1.81 1.76
Crude Oil† Nov 67.53 -0.15 Corn♦ Dec 368.75 0.25 Oct 26 Oct 26 Prev return stock Market stocks
Japan 11/19 0.10 100.25 -0.14 0.00 0.00 -0.02 - 15 Yrs 1.67 1.73 1.84
Brent Crude Oil‡ 77.48 -0.27 Wheat♦ Dec 507.75 3.00 Can 4.25%' 21 110.84 0.698 0.749 -0.59 5.18 76083.17 8
12/23 0.60 103.45 -0.07 -0.02 -0.03 -0.03 -0.02
RBOB Gasoline† Nov 1.82 0.00 Soybeans♦ Nov 849.00 4.25 Fr 2.25%' 20 107.70 -2.044 -2.028 -0.04 20.31 245824.78 15
12/28 1.90 117.85 0.13 -0.02 -0.04 -0.03 0.00 inflation 0% inflation 5%
Heating Oil† Nov 1.62 0.00 Soybeans Meal♦ Dec 309.80 2.40 Swe 0.25%' 22 116.01 -2.262 -2.149 0.72 33.83 235862.92 7
09/47 0.80 98.76 0.85 -0.01 -0.05 -0.02 -0.02 Real yield Oct 26 Dur yrs Previous Yr ago Oct 26 Dur yrs Previous Yr ago
Natural Gas† Nov 3.16 -0.04 Cocoa (ICE Liffe)X Dec 1670.00 -36.00 UK 2.5%' 20 360.96 -4.072 -4.048 0.07 6.58 678851.31 30
Netherlands 01/20 0.25 101.21 -0.74 -0.02 -0.03 -0.13 -0.06 Up to 5 yrs -1.95 2.45 -1.89 -1.87 -2.49 2.47 -2.45 -2.81
Ethanol♦ - - Cocoa (ICE US)♥ Dec 2258.00 7.00 UK 2.5%' 24 364.34 -1.934 -1.862 0.97 6.82 678851.31 30
01/28 5.50 146.56 0.35 -0.05 -0.10 -0.11 -0.15 Over 5 yrs -1.61 24.00 -1.56 -1.48 -1.63 24.08 -1.59 -1.51
Uranium† Nov 26.50 0.00 Coffee(Robusta)X Nov 1656.00 -45.00 UK 2%' 35 271.57 -1.650 -1.595 2.55 9.08 678851.31 30
Carbon Emissions‡ - - Coffee (Arabica)♥ Dec 122.35 2.60 New Zealand - - - - - - - 5-15 yrs -1.79 8.74 -1.72 -1.64 -1.91 8.76 -1.85 -1.78
US 0.625%' 21 99.43 0.836 0.922 -0.21 35.84 1290038.18 39
White SugarX 364.30 -6.70 04/20 3.00 101.83 1.73 -0.01 -0.05 -0.02 -0.34 Over 15 yrs -1.59 29.11 -1.55 -1.46 -1.61 29.15 -1.57 -1.48
Diesel† - - US 3.625%' 28 122.85 1.080 0.922 -0.71 16.78 1290038.18 39
Sugar 11♥ 13.98 0.25 Norway - - - - - - - All stocks -1.61 22.15 -1.57 -1.48 -1.64 22.26 -1.60 -1.51
Base Metals (♠ LME 3 Months) Representative stocks from each major market Source: Merill Lynch Global Bond Indices † Local currencies. ‡ Total market
Aluminium 1992.50 -13.50 Cotton♥ Dec 78.42 -0.10 - - - - - - - See FTSE website for more details www.ftse.com/products/indices/gilts
value. In line with market convention, for UK Gilts inflation factor is applied to price, for other markets it is applied to par
Aluminium Alloy 1340.00 0.00 Orange Juice♥ Nov 136.00 0.15 Portugal - - - - - - - ©2018 Tradeweb Markets LLC. All rights reserved. The Tradeweb FTSE
amount.
Copper 6209.50 27.50 Palm Oil♣ - - 06/20 4.80 108.01 -0.12 -0.01 -0.06 -0.04 -0.23 Gilt Closing Prices information contained herein is proprietary to
Lead 1980.50 -16.50 Live Cattle♣ Dec 118.45 0.00 BONDS: TEN YEAR GOVT SPREADS Spain 01/21 0.05 100.16 -0.02 -0.02 -0.07 -0.01 -0.07 Tradeweb; may not be copied or re-distributed; is not warranted to be
Nickel 11835.00 -45.00 Feeder Cattle♣ Nov 155.05 1.25 10/27 1.45 99.89 1.46 -0.04 -0.15 0.09 -0.18 accurate, complete or timely; and does not constitute investment advice.
Tin 19180.00 -70.00 Lean Hogs♣ Dec 58.05 0.00 Spread Spread Spread Spread Sweden 12/20 5.00 111.41 -0.43 -0.01 -0.02 0.02 -0.06 Tradeweb is not responsible for any loss or damage that might result from the use of this information.
Zinc 2645.50 -8.50 Bid vs vs Bid vs vs 11/26 1.00 104.48 0.43 -0.03 -0.06 -0.03 -0.21
% Chg % Chg Yield Bund T-Bonds Yield Bund T-Bonds Switzerland 04/21 2.00 106.70 -0.65 0.01 -0.01 -0.04 -0.05 All data provided by Morningstar unless otherwise noted. All elements listed are indicative and believed accurate
Precious Metals (PM London Fix)
Gold 1233.85 3.05 Oct 26 Month Year 04/28 4.00 137.70 0.01 0.01 -0.02 -0.03 -0.05 at the time of publication. No offer is made by Morningstar, its suppliers, or the FT. Neither the FT, nor
Australia 2.62 2.35 -0.51 Italy 3.41 3.14 0.28
Silver (US cents) 1469.00 -5.00 S&P GSCI Spt 466.60 -3.93 13.38 United Kingdom 01/21 1.50 101.75 0.71 -0.04 -0.11 -0.16 0.07 Morningstar’s suppliers, warrant or guarantee that the information is reliable or complete. Neither the FT nor
Austria - - - Japan 0.13 -0.14 -3.00
Platinum 825.00 -7.00 DJ UBS Spot 84.62 -0.66 -1.43 Belgium 0.69 0.42 -2.44 Netherlands 0.35 0.08 -2.78 07/23 0.75 99.03 0.96 -0.06 -0.17 -0.21 -0.03 Morningstar’s suppliers accept responsibility and will not be liable for any loss arising from the reliance on the
Palladium 1093.00 -12.00 TR/CC CRB TR 200.39 -0.26 - Canada 2.46 2.19 -0.67 Norway - - - 12/27 4.25 125.95 1.23 -0.07 -0.20 -0.21 -0.17 use of the listed information. For all queries e-mail ft.reader.enquiries@morningstar.com
Bulk Commodities M Lynch MLCX Ex. Rtn 231.14 -9.84 -33.05 Denmark 0.29 0.02 -2.84 Portugal - - - 07/47 1.50 92.79 1.82 -0.04 -0.12 -0.09 -0.13
Iron Ore 76.80 -0.20 UBS Bberg CMCI TR 15.28 -0.22 3.89 Finland 0.56 0.29 -2.57 Spain 1.46 1.19 -1.67 United States 11/19 1.75 98.96 2.72 0.00 -0.02 0.01 - Data provided by Morningstar | www.morningstar.co.uk
GlobalCOAL RB Index 97.75 -0.25 LEBA EUA Carbon 22.20 0.00 190.58 France 0.71 0.44 -2.42 Switzerland 0.01 -0.27 -3.12 10/22 2.00 96.38 2.96 0.01 -0.05 0.02 0.90
Baltic Dry Index 1522.00 3.00 LEBA CER Carbon 0.28 0.00 64.71 Germany 0.27 0.00 -2.86 United Kingdom 1.23 0.96 -1.90 11/27 2.25 93.11 3.13 0.01 -0.04 0.07 -
LEBA UK Power 2055.00 35.20 62.84 Greece 4.31 4.04 1.18 United States 3.13 2.86 0.00 11/47 2.75 88.89 3.35 0.00 -0.01 0.15 -
Sources: † NYMEX, ‡ ECX/ICE, ♦ CBOT, X ICE Liffe, ♥ ICE Futures, ♣ CME, ♠ LME/London Metal Exchange.* Latest prices, $ Ireland 1.15 0.88 -1.98 Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.
unless otherwise stated. Interactive Data Pricing and Reference Data LLC, an ICE Data Services company.

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MANAGED FUNDS SERVICE

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

HPB Assurance Ltd

Anglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490
Milltrust International Managed Investments ICAV (IRL)
mimi@milltrust.com, +44(0)20 8123 8369 www.milltrust.com
Odey Asset Management LLP
FCA Recognised
(IRL)
Slater Yapi Kredi Asset Management
www.yapikrediportfoy.com.tr Tel: + 90 (212) 385 48 48
(TUR)

International Insurances
Holiday Property Bond Ser 1
Holiday Property Bond Ser 2
£
£
0.54
0.66
-
-
0.00 0.00
0.01 0.00
Regulated
MAI - Buy & Lease (Australia) A$ 99.42 - -0.58 -
MAI - Buy & Lease (New Zealand)NZ$ 98.95 - -0.49 0.00
Odey Pan European EUR R
Odey Allegra International EUR O
Odey Allegra Developed Markets USD I
€ 338.29
€ 188.07
$ 156.58
-
-
-
-1.20
1.14
0.75
0.00
0.00
0.00
Investments Other International Funds
Eurobond Fund TRY 0.136125 - -0.691588 -
Koc Affiliate and Equity Fund TRY 0.819408 - -0.008305 -
British Innovation Fund £ 98.71 - -1.03 - Odey European Focus Fund € 19.84 - -0.01 0.00 DPM Bonds and Bills Fund (FX) $ 0.963290 - 0.135577 0.00
EICM South Asia Hospitality 1 $ 101.98 - 4.50 - Odey Odyssey USD I $ 102.80 - -1.68 0.00
Algebris Investments (IRL) Dragon Capital Group Haussmann Milltrust Global Emerging Markets Fund - Class A $ 80.55 - 0.16 - Odey Swan Fund EUR I € 56.89 - -0.17 0.00 Polar Capital Funds Plc (IRL) Slater Investments Ltd (UK)
Regulated 1501 Me Linh Point, 2 Ngo Duc Ke, District 1, Ho Chi Minh City, Vietnam Odey Absolute Return Focus Fund $ 99.38 - 3.57 0.00 Regulated www.slaterinvestments.com; Tel: 0207 220 9460
Other International Funds
Algebris Financial Credit Fund - Class I EUR € 148.70 - -1.35 0.00 Fund information, dealing and administration: funds@dragoncapital.com Automation & Artificial Intelligence CL I USD Acc $ 9.64 9.64 0.05 - FCA Recognised
Haussmann Cls A $ 2806.79 - -108.08 0.00
Algebris Financial Income Fund - Class I EUR € 129.84 - 0.59 0.00 Other International Funds
Mirabaud Asset Management (LUX) Asian Financials I USD $ 319.77 319.77 -2.47 0.00 Slater Growth 468.29 495.22 -6.92 0.00
Haussmann Cls C € 2311.09 - -91.92 0.00 Odey Wealth Management (CI) Ltd (IRL)
Algebris Financial Equity Fund - Class B EUR € 106.73 - 1.53 0.00 www.mirabaud.com, marketing@mirabaud-am.com Biotechnology I USD $ 22.11 22.11 0.24 0.00 Slater Income A Inc 145.61 145.61 1.85 0.00
Vietnam Property Fund (VPF) NAV $ 0.80 - 0.03 0.00 Haussmann Cls D SFr 1205.25 - -48.24 0.00 www.odey.com/prices
Algebris Asset Allocation Fund - Class B EUR € 98.18 - -0.05 0.00 Conviction based investment vehicles details available here www.mirabaud-am.com European Income Acc EUR € 12.05 12.05 0.00 0.00 Slater Recovery 222.06 235.61 3.84 0.00
Algebris Macro Credit B EUR Acc € 101.15 - -0.17 0.00 Regulated FCA Recognised European Ex UK Inc EUR Acc € 11.04 11.04 0.00 0.00 Slater Artorius 190.54 190.54 -3.97 0.23
Algebris Core Italy Fund - Class R EUR € 89.62 - 0.27 - Mir. - Glb Strat. Bd I USD $ 108.91 - -0.05 0.00 Odey Opportunity EUR I € 236.58 - 1.14 0.00 Financial Opps I USD $ 12.49 - 0.12 1.96
DSM Capital Partners Funds (LUX)
www.dsmsicav.com Mir. - EqPanEuropeSm&Mid £ 137.47 - -1.30 0.00 GEM Income I USD $ 11.18 - -0.13 0.00 Yuki International Limited (IRL)
Regulated
Mirabaud - UK Equity High Alpha £ 114.21 - -1.42 0.00 Global Convertible I USD $ 12.69 12.69 0.02 0.00 Standard Life Wealth (JER) Tel +44-20-7269-0207 www.yukifunds.com
The Antares European Fund Limited Omnia Fund Ltd Global Insurance I GBP £ 6.16 - 0.08 0.00 PO Box 189, St Helier, Jersey, JE4 9RU 01534 709130 Regulated
DSM Global Growth I2 € 171.54 - -2.65 0.00
Other International Other International Funds Global Technology I USD $ 42.09 - 0.88 0.00 FCA Recognised
DSM Global Growth I2 A$ 100.36 - -1.56 - Yuki Mizuho Umbrella Fund
AEF Ltd Usd (Est) $ 608.77 - -29.07 - Estimated NAV $ 964.15 - 18.05 0.00 Healthcare Blue Chip Fund I USD Acc $ 12.45 12.45 0.13 0.00
DSM Global Growth I1 € 104.48 - -1.62 - Standard Life Offshore Strategy Fund Limited Yuki Mizuho Japan Dynamic Growth ¥ 8490.00 - -202.00 0.00
AEF Ltd Eur (Est) € 589.13 - -28.79 0.00 Healthcare Opps I USD $ 47.90 - 0.47 0.00
DSM US Large Cap Growth A $ 140.76 - -3.02 0.00 Bridge Fund £ 1.7941 - 0.0016 2.11 Yuki Japan Low Price ¥ 39630.00 - -728.00 0.00
Income Opportunities B2 I GBP Acc £ 2.18 2.18 0.01 0.00
DSM US Large Cap Growth I2 € 123.99 - -2.56 0.00 Hermes Investment Funds Plc (IRL) Japan Alpha I JPY ¥ 239.05 239.05 0.20 0.00
Global Equity Fund £ 2.3084 - -0.0202 1.23 Yuki Japan Value Select ¥ 16494.00 - -398.00 0.00
Hermes Investment Management Limited, 1 Portsoken Street, London E1 8HZ +44 (0) 207 680 2121 Global Fixed Interest Fund £ 0.9374 - -0.0005 4.81 Yuki Asia Umbrella Fund
Arisaig Partners Japan I JPY ¥ 2282.12 - 0.70 0.00
FCA Recognised Income Fund £ 0.5522 - 0.0040 3.13 Yuki Japan Rebounding Growth Fund JPY Class ¥ 30906.00 - -684.00 0.00
North American I USD $ 23.14 23.14 0.47 0.00
Other International Funds Hermes Abs Return Credit Fund Class F Acc £ 1.26 1.26 0.00 0.00 Sterling Fixed Interest Fund £ 0.8440 - -0.0009 3.36
UK Absolute Equity I GBP £ 19.89 19.89 -0.57 0.00 Yuki Japan Rebounding Growth Fund USD Hedged Class $ 1225.55 - -26.88 0.00
Arisaig Africa Consumer Fund Limited $ 11.70 - -0.06 0.00 Hermes Abs Return Credit Fund Class F Acc USD € 1.92 1.92 -0.01 0.00 UK Equity Fund £ 2.0952 - 0.0464 3.36
Morgan Stanley Investment Funds (LUX) UK Val Opp I GBP Acc £ 10.69 10.69 -0.03 0.00
Arisaig Asia Consumer Fund Limited $ 80.26 - -0.35 0.00 Hermes Asia Ex-Japan Equity Fund Class C Acc GBP £ 2.45 2.45 0.01 0.00
Arisaig Global Emerging Markets Consumer Fund $ 10.00 - -0.11 0.00 6b Route de Trèves L-2633 Senningerberg Luxembourg (352) 34 64 61
Hermes Asia Ex-Japan Equity Fund Class C Acc USD € 4.28 4.28 0.00 0.00 Zadig Gestion (Memnon Fund) (LUX)
Arisaig Global Emerging Markets Consumer UCITS € 11.43 - -0.07 0.00 Hermes Europe Ex-UK Equity Fund Class F Acc £ 1.93 1.93 -0.03 0.00 www.morganstanleyinvestmentfunds.com
Polar Capital LLP (CYM) FCA Recognised
Arisaig Global Emerging Markets Consumer UCITS STG £ 12.89 - 0.01 0.00 Hermes Europe Ex-UK Equity Fund Class F Acc EUR € 3.66 3.66 -0.07 0.00 FCA Recognised Optima Fund Management
Regulated Memnon European Fund - Class U2 GBP £ 146.91 - -1.76 0.00
Arisaig Latin America Consumer Fund $ 23.98 - -0.38 0.00 Hermes European Alpha Equity Fund Class F Acc £ 1.62 1.62 -0.03 0.00 US Advantage A F $ 82.32 - -0.97 0.00 Other International Funds
European Forager A EUR € 190.61 - -1.15 0.00
E.I. Sturdza Strategic Management Limited (GSY) Hermes European Alpha Equity Fund Class F Dis £ 1.52 1.52 -0.02 1.21 Asian Equity A F $ 43.10 - -0.52 0.00 Cuttyhunk Fund II Limited $ 1777.54 - -8.44 0.00
Regulated Hermes European Alpha Equity Fund Class F Acc EUR € 3.17 3.17 -0.06 0.00 Asian Property A F $ 19.23 - 0.07 0.00 JENOP Global Healthcare Fund Ltd $ 17.66 - 0.00 0.00 Data Provided by
Strat Evarich Japan Fd Ltd JPY ¥ 80140.00 - -2577.00 0.00 Hermes GEMs SMID Equity Fund Class F GBP Acc £ 0.97 - 0.00 - Emerg Europ, Mid-East & Africa Eq A F € 67.40 - -0.76 0.00 OPTIKA Fund Limited - Cl A $ 157.39 - 1.21 0.00 Private Fund Mgrs (Guernsey) Ltd (GSY)
Strat Evarich Japan Fd Ltd USD $ 802.71 - -25.38 0.00 Hermes Global Emerging Markets Fund Class F Acc £ 1.75 1.75 0.01 0.00 Emerging Markets Debt A F $ 82.70 - 0.05 0.00 Optima Fd NAV $ 96.01 - 0.00 0.00 Regulated
Hermes Global Emerging Markets Fund Class F Acc USD € 3.59 3.59 0.00 0.00 Emerging Markets Domestic Debt AX F £ 11.02 11.02 0.04 6.44 Optima Discretionary Macro Fund Limited $ 86.78 - -0.10 0.00 Stenham Asset Management Inc
Monument Growth 23/10/2018 £ 485.88 491.31 0.06 3.06
Hermes Global Equity Fund Class F Acc £ 2.24 2.24 0.02 0.00 Emerging Markets Equity A F $ 36.89 36.89 -0.32 0.00 The Dorset Energy Fd Ltd NAV $ 23.61 - 0.00 0.00 www.stenhamassetmanagement.com
E.I. Sturdza Funds PLC (IRL) Hermes Global Equity Fund Class R Acc USD € 4.75 4.75 0.03 0.00 Euro Bond A F € 16.15 16.15 0.02 0.00 Platinum Fd Ltd $ 99.35 - 0.00 0.00 Other International Funds
Hermes Global ESG Equity Fund Class F Acc £ 1.67 1.67 0.02 0.00 Euro Corporate Bond AX F £ 27.05 27.05 0.03 1.26 Platinum Fd Ltd EUR € 17.93 - 0.00 0.00
Regulated Prusik Investment Management LLP (IRL) Stenham Credit Opportunities A Class USD $ 118.32 - 1.17 0.00
Hermes Global High Yield Credit Fund Class F Acc £ 1.46 1.46 0.00 0.00 Euro Strategic Bond A F € 45.70 45.70 0.06 0.00 Platinum Japan Fd Ltd $ 62.93 - 0.01 0.00
Nippon Growth (UCITS) Fd - B ¥ 87397.00 - -2849.00 0.00 Enquiries - 0207 493 1331 Stenham Equity UCITS USD $ 159.44 - -12.31 0.00
Ashmore Investment Management Limited (LUX) Strategic China Panda Fd - USD $ 2671.80 - -27.85 0.00 Hermes Global High Yield Credit Fund Class F Acc EUR € 3.08 3.08 -0.01 0.00 European Currencies High Yield Bd A F € 24.23 24.23 -0.03 0.00 Optima Partners Global Fd $ 16.23 - 0.00 0.00
Regulated Stenham Growth USD $ 228.25 - -0.64 - Asset Management
Managemen
Asset Management
2 rue Albert Borschette L-1246 Luxembourg Hermes Global Small Cap Fund Class F Acc £ 1.48 1.48 0.01 0.00 European Equity Alpha A F € 41.53 - -0.36 0.00 Optima Partners Focus Fund A $ 16.97 - 0.04 0.00
Strategic Euro Bond Fd - Acc € 1104.56 - -1.15 0.00 Prusik Asian Equity Income B Dist $ 177.67 - -0.61 4.00 Stenham Healthcare USD $ 223.13 - -3.90 0.00
www.morningstar.co.uk
Asset Management Asset Management
Hermes Global Small Cap Fund Class F Acc USD € 2.17 2.17 -0.01 0.00 European Property A F € 33.90 33.90 -0.14 0.00 Optima STAR Fund (hedged) $ 99.55 - 1.72 0.00
FCA Recognised Strategic Europe Value Fd - EUR € 216.14 - 0.09 0.00 Prusik Asia A $ 231.96 - -2.69 0.00 Stenham Managed Fund USD $ 123.95 - -0.20 0.00
Hermes Impact Opportunities Equity Fund F $ 1.80 - -0.01 - Eurozone Equity Alpha A F € 11.73 11.73 -0.11 0.00 Optima STAR Long Fund $ 131.52 - 3.63 0.00
Ashmore SICAV Emerging Market Debt Fund $ 92.72 - -0.01 4.95 Strategic European Smaller Companies Fd - EUR € 1113.23 - 7.43 0.00 Prusik Asian Smaller Cos A $ 130.95 - -0.33 0.00 Stenham Quadrant USD A $ 440.83 - 2.85 -
Ashmore SICAV Emerging Market Frontier Equity Fund $ 156.87 - -0.18 0.76 Strategic Global Bond Fd - USD $ 1042.70 - -0.81 0.00 Hermes Impact Opportunities Equity Fund F £ 0.95 - 0.00 - Global Bond A F $ 40.68 40.68 0.05 0.00 Data as shown is for information purposes only. No
Global Brands A F $ 129.31 - -0.82 0.00 Stenham Trading Inc USD $ 126.62 - 0.76 -
Ashmore SICAV Emerging Market Total Return Fund $ 82.11 - -0.04 4.83 Strategic Global Quality Fd - USD Inst $ 137.30 - 0.14 0.00 Hermes Multi Strategy Credit Fund Class F Acc Hed £ 1.13 1.13 0.00 0.00 offer is made by Morningstar or this publication.
Global Convertible Bond A F $ 43.90 - -0.07 0.00 Stenham Universal USD $ 464.20 - -1.17 -
Ashmore SICAV Global Small Cap Equity Fund $ 127.07 - -2.14 0.66 Strategic Quality Emerging Bond Fd - USD $ 1037.64 - -0.64 0.00 Hermes SDG Engagement Equity Fund F $ 1.94 - -0.02 - Oryx International Growth Fund Ltd
Hermes SDG Engagement Equity Fund F £ 1.02 - 0.01 - Global Property A F $ 28.66 - -0.05 0.00 Purisima Investment Fds (CI) Ltd (JER) Stenham Universal II USD $ 169.55 - -0.50 0.00
EM Active Equity Fund Acc USD $ 115.86 - -0.76 0.00 Strategic US Momentum and Value Fd - USD Class $ 848.39 - 13.82 0.00 Other International Funds Regulated
Hermes Unconstrained Credit Fund Class F USD Acc $ 2.01 - 0.00 - Indian Equity A F $ 34.21 - 0.00 0.00
EM Equity Fund Acc USD $ 85.62 - -1.06 - Strategic Japan Opportunities Fund ¥ 56391.00 - -2349.00 0.00 NAV (Fully Diluted) £ 9.62 - -0.22 0.00 PCG B 205.62 - 4.35 0.00
Guide to Data
Hermes US SMID Equity Fund Class F Acc £ 2.40 2.40 0.04 0.00 Latin American Equity A F $ 51.64 - 0.45 0.00
EM Mkts Corp.Debt USD F $ 92.96 - -0.06 5.44 Strategic Beta Flex Fund € 1010.38 - 3.73 0.00

Asset Management
Hermes US SMID Equity Fund Class F Acc USD € 4.13 4.13 0.04 0.00 Short Maturity Euro Bond A F € 20.07 20.07 0.01 0.00 PCG C 201.73 - 4.27 0.00
EM Mkts Loc.Ccy Bd USD F $ 76.27 - 0.01 5.77
US Dollar Liquidity A F $ 13.29 - 0.01 0.00
EM Short Duration Fund Acc USD $ 137.19
Asset Management
- -0.02 0.00
US Growth A F $ 105.28 - -1.30 0.00
Edinburgh Partners Limited
27-31 Melville Street, Edinburgh EH3 7JF
(IRL)
Asset Management
INDIA VALUE INVESTMENTS LIMITED (INVIL)
www.invil.mu
US Growth AH F
US Growth AX F
€ 69.15 69.15 -0.86 0.00
£ 82.20 82.20 -0.78 0.00
Asset Management The fund prices quoted on these pages are supplied by
the operator of the relevant fund. Details of funds
Tel: +353 1 434 5143 Dealing - Fax +353 1 434 5230
US Property A F $ 69.44 - -0.17 0.00 published on these pages, including prices, are for the
FCA Recognised Other International Funds
purpose of information only and should only be used
Edinburgh Partners Opportunities Fund PLC NAV £ 8.10 - 0.11 0.00 Superfund Asset Management GmbH as a guide. The Financial Times Limited makes no
Emerging Opportunities I USD $ $ 1.23 - -0.01 1.47 Morgens Waterfall Vintiadis.co Inc www.superfund.com, +43 (1) 247 00 representation as to their accuracy or completeness
European Opportunities I EUR € 2.45 - 0.01 1.92 Other International Funds Orbis Investments (U.K.) Limited (GBR) Regulated
and they should not be relied upon when making an
Intrinsic Value Investors (IVI) LLP (IRL) 28 Dorset Square, London, NW1 6QG investment decision.
European Opportunities I GBP £ 2.17 - 0.02 1.67 Phaeton Intl (BVI) Ltd (Est) $ 483.55 - -24.27 0.00 Ram Active Investments SA Superfund Green EUR SICAV € 753.06 - 6.72 0.00
European Opportunities A EUR € 2.40 - 0.01 0.95 1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210 www.orbis.com 0800 358 2030 www.ram-ai.com Superfund Red EUR SICAV € 732.42 - -0.49 0.00 The sale of interests in the funds listed on these pages
Aspect Capital Ltd (UK) Global Opportunities I USD $ 1.82 - -0.01 1.38 FCA Recognised Regulated Other International Funds
IVI European Fund EUR € 21.05 - 0.20 0.00 may, in certain jurisdictions, be restricted by law and
Other International Funds Global Opportunities I GBP £ 1.42 - 0.00 1.11 Orbis OEIC Global Balanced Standard £ 14.98 - -0.08 0.00 RAM Systematic Emerg Markets Core Eq $ 92.05 - -1.02 - the funds will not necessarily be available to persons
Aspect Diversified USD $ 360.37 - -5.80 0.00 Pan European Opportunities I EUR € 1.75 - 0.00 - IVI European Fund GBP £ 24.97 - 0.35 0.00 Orbis OEIC Global Equity Standard £ 15.96 - -0.18 0.00 RAM Systematic Emerg Markets Eq $ 159.57 - -1.75 - in all jurisdictions in which the publication circulates.
Aspect Diversified EUR € 204.20 - -3.44 0.00 Orbis OEIC UK Equity Standard £ 8.70 - -0.07 2.33 RAM Systematic European Eq € 415.53 - -3.85 - Persons in any doubt should take appropriate
Aspect Diversified GBP £ 107.70 - -1.80 0.00 RAM Systematic Global Shareholder Yield Eq $ 121.04 - -0.91 0.00 professional advice. Data collated by Morningstar. For
Aspect Diversified CHF SFr 95.95 - -1.62 0.00 Ennismore Smaller Cos Plc (IRL) RAM Systematic Long/Short Emerg Markets Eq $ 120.35 - 0.37 - other queries contact reader.enquiries@ft.com +44
Aspect Diversified Trends USD $ 106.55 - 0.57 0.00 5 Kensington Church St, London W8 4LD 020 7368 4220 RAM Systematic Long/Short European Eq € 150.55 - -0.27 - (0)207 873 4211.
Aspect Diversified Trends EUR € 100.98 - 0.53 0.00 FCA Recognised RAM Systematic North American Eq $ 283.72 - -3.50 -
Aspect Diversified Trends GBP £ 107.77 - 0.57 0.00 Ennismore European Smlr Cos NAV £ 129.48 - 0.40 0.00 RAM Tactical Convertibles Europe € 141.86 - -0.33 -
The fund prices published in this edition along with
Natixis International Funds (LUX) I SICAV (LUX) additional information are also available on the
Ennismore European Smlr Cos NAV € 145.81 - -0.44 0.00 RAM Tactical Global Bond Total Return € 141.58 - 0.11 -
FCA Recognised Toscafund Asset Management LLP (UK) Financial Times website, www.ft.com/funds. The
ASG Managed Futures Fund I/A (USD) $ 93.66 93.66 0.33 0.00 RAM Tactical II Asia Bond Total Return $ 135.98 - 0.13 - www.toscafund.com funds published on these pages are grouped together
Atlantas Sicav (LUX)
Harris Global Equity Fund R/A (USD) $ 282.36 282.36 -3.34 0.00 Authorised Funds by fund management company.
Regulated Ennismore European Smlr Cos Hedge Fd Kames Capital VCIC (IRL)
Loomis Sayles Global Growth Equity Fund I/A (USD) $ 125.93 125.93 -2.27 0.00 Aptus Global Financials B Acc £ 3.68 - -0.03 4.72
American Dynamic $ 4547.45 4547.45 -3.59 0.00 Other International Funds 1 North Wall Quay, Dublin 1, Ireland +35 3162 24493 Pictet Asset Management (Europe) SA (LUX)
Loomis Sayles U.S. Growth Equity Fund I/A (USD) $ 133.05 133.05 -3.22 0.00 Aptus Global Financials B Inc £ 2.79 - -0.03 4.91 Prices are in pence unless otherwise indicated. The
American One $ 4336.12 4336.12 7.81 0.00 NAV € 539.70 - -2.45 0.00 FCA Recognised 15, Avenue J.F. Kennedy L-1855 Luxembourg change, if shown, is the change on the previously
Bond Global € 1436.35 1436.35 10.23 0.00 Absolute Return Bond B GBP Acc 1109.55 - -0.70 1.29 Tel: 0041 58 323 3000 quoted figure (not all funds update prices daily). Those
Eurocroissance € 970.03 970.03 6.22 0.00 Eq Market Neutral B Acc 938.75 - -0.06 0.00 designated $ with no prefix refer to US dollars. Yield
Natixis Investment Funds (UK) FCA Recognised Toscafund Asset Management LLP
Far East $ 809.77 - -9.59 0.00 Equinox Fund Mgmt (Guernsey) Limited (GSY) High Yield Global Bond A GBP Inc 506.80 - -0.26 3.36 percentage figures (in Tuesday to Saturday papers)
Authorised Funds Pictet-Absl Rtn Fix Inc-HI EUR € 105.82 - 0.19 0.00 www.toscafund.com
Regulated High Yield Global Bond B GBP Inc 1069.17 - -0.54 4.01 allow for buying expenses. Prices of certain older
DNCA European Select Equity Fund £ 0.92 - 0.02 0.86 Pictet-Asian Equities Ex Japan-I USD F $ 246.89 - 0.85 0.00
Investment Grade Global Bd A GBP Inc 551.22 - 0.72 2.09 Other International Funds insurance linked plans might be subject to capital
Equinox Russian Opportunities Fund Limited $ 165.52 - 3.64 0.00 Harris Global Concentrated Equity Fund £ 1.60 - 0.03 1.29 Pictet-Asian Local Currency Debt-I USD F $ 158.34 - 0.42 0.00
Barclays Investment Funds (CI) Ltd (JER) Kames Emerging Market Bond Fund - B Acc USD $ 11.26 - -0.03 0.00 Pictet-Biotech-I USD F $ 757.72 - 18.13 0.00 Robeco Asset Management (LUX) Tosca A USD $ 348.22 - -19.05 - gains tax on sales.
H2O MultiReturns Fund N/A (GBP) £ 1.60 - 0.03 1.25
39/41 Broad Street, St Helier, Jersey, JE2 3RR Channel Islands 01534 812800 Kames Global Equity Income B GBP Acc 1601.79 - 12.52 0.00 Tosca Mid Cap GBP £ 310.16 - 3.45 -
Loomis Sayles U.S. Equity Leaders N/A (GBP) £ 2.47 - 0.01 0.12 Pictet-CHF Bonds I CHF SFr 503.39 - 0.50 0.00 Weena 850, 3014 DA Rotterdam, The Netherlands Guide to pricing of Authorised Investment Funds:
FCA Recognised Kames Global Equity Income B GBP Inc 1455.44 - -8.32 3.19 Tosca Opportunity B USD $ 459.95 - 7.23 -
Euronova Asset Management UK LLP (CYM) Pictet-China Index I USD $ 128.05 - -1.63 0.00 www.robeco.com/contact (compiled with the assistance of the IMA. The
Bond Funds Kames Global Diversified Growth Fund - B Acc EUR € 10.74 - 0.00 0.00 Pegasus Fund Ltd A-1 GBP £ 70.91 - -3.34 0.00
Regulated Pictet-Clean Energy-I USD F $ 85.83 - 1.65 0.00 FCA Recognised Investment Management Association, 65 Kingsway,
Kames Global Equity Market Neutral Fund - B Acc GBP £ 9.81 - 0.02 0.00 Pictet-Digital-I USD F $ 375.18 - 2.89 0.00
Sterling Bond F £ 0.46 - 0.00 2.65 Smaller Cos Cls One Shares € 43.71 - 0.51 0.00 Asia-Pacific Equities (EUR) € 150.63 - 1.26 0.00 London WC2B 6TD.
Global Sustainable Equity B Acc GBP £ 13.50 - 0.22 0.00 Pictet-Em Lcl Ccy Dbt-I USD F $ 165.39 - 0.58 0.00
Smaller Cos Cls Two Shares € 29.42 - 0.35 0.00 BP US Premium Equities (EUR) € 208.05 - -3.04 0.00 Tel: +44 (0)20 7831 0898.)
Global Sustainable Equity C Acc GBP £ 13.59 - 0.22 0.00 Pictet-Emerging Europe-I EUR F € 335.36 - 2.89 0.00
Smaller Cos Cls Three Shares € 14.91 - 0.16 0.00 BP US Premium Equities (USD) $ 246.66 - -3.45 0.00
Kames Absolute Return Bond Global Fund - B Acc GBP £ 10.28 - -0.01 0.00 OEIC: Open-Ended Investment Company. Similar to a
CCLA Investment Management Ltd (UK) Smaller Cos Cls Four Shares € 19.14 - 0.18 0.00 Pictet-Emerging Markets-I USD F $ 561.90 - -0.14 0.00 Chinese Equities (EUR) € 78.89 - -0.23 0.00
Short Dated High Yld Bd B Acc GBP £ 10.09 - 0.00 0.00 Pictet-Emerging Markets Index-I USD F $ 258.67 - -2.58 0.00 unit trust but using a company rather than a trust
Senator House 85 Queen Victoria Street London EC4V 4ET Em Stars Equities (EUR) € 196.39 - 0.36 0.00
Short Dated High Yld Bd C Acc GBP (Hdg) £ 10.13 - 0.00 0.00 Pictet-Emerging Corporate Bonds I USD $ 122.52 - 0.07 0.00 structure.
Authorised Inv Funds Emerging Markets Equities (EUR) € 168.00 - 0.15 0.00
Strategic Global Bond A GBP Inc 1096.84 - -0.21 1.65
Diversified Income 1 Units GBP Inc £ 1.54 1.54 0.00 3.08 FIL Investment Services (UK) Limited (1200)F (UK) Pictet-Emerging Markets High Dividend I USD $ 110.46 - 1.19 0.00 Glob.Consumer Trends Equities (EUR) € 202.43 - -3.17 0.00
Strategic Global Bond B GBP Inc 622.93 - -0.13 2.30 Pictet-Emerging Markets Sust Eq I USD $ 97.49 - 0.35 0.00 Different share classes are issued to reflect a different
Diversified Income 2 Units GBP Inc £ 1.48 1.48 0.00 3.09 130, Tonbridge Rd, Tonbridge TN11 9DZ New Capital UCITS Fund PLC (IRL) High Yield Bonds (EUR) € 142.39 - 0.11 0.00 currency, charging structure or type of holder.
Diversified Income 3 Units GBP Inc £ 1.49 1.49 0.00 - Callfree: Private Clients 0800 414161 Pictet-EUR Bonds-I F € 577.49 - 1.82 0.00 New World Financials (EUR) € 64.12 - -0.71 0.00
Leconfield House, Curzon Street, London, W1J 5JB
Broker Dealings: 0800 414 181 Pictet-EUR Corporate Bonds-I F € 208.88 - -0.24 0.00 TreeTop Asset Management S.A. (LUX)
Link Asset Services (UK) www.newcapitalfunds.com Selling price: Also called bid price. The price at which
Pictet-EUR Government Bonds I EUR € 161.35 - 0.44 0.00 Regulated
OEIC Funds 65 Gresham Street, London, EC2V 7NQ FCA Recognised units in a unit trust are sold by investors.
CG Asset Management Limited (IRL) Pictet-EUR High Yield-I F € 268.90 - -0.53 0.00 Ruffer LLP (1000)F (UK) TreeTop Convertible Sicav
Cash Fund Y-Acc-GBP £ 1.01 - 0.00 0.20 Order Desk and Enquiries: 0345 922 0044 Euro Value Credit Fund - EUR Inst Acc € 99.11 - -0.16 0.00 Pictet-EUR Short Mid-Term Bonds-I F € 136.37 - 0.04 0.00
25 Moorgate, London, EC2R 6AY 65 Gresham Street, London, EC2V 7NQ International AH € 253.43 - 0.88 0.00 Buying price: Also called offer price. The price at
Cash Fund Y-Inc-GBP £ 1.00 - 0.00 0.35 Authorised Inv Funds Asia Pacific Equity Income Fund - USD Ord Inc. $ 91.90 - -0.98 2.78 Pictet-EUR Short Term HY I EUR € 126.61 - -0.06 0.00
Dealing: Tel. +353 1434 5098 Fax. +353 1542 2859 Order Desk and Enquiries: 0345 601 9610 International BH $ 344.92 - 1.30 0.00 which units in a unit trust are bought by investors.
Fidelity Select 50 Balanced Fund PI-ACC-GBP £ 0.99 - 0.00 - LF Heartwood Balanced MA B Acc 142.00 - 0.28 0.63 Dynamic European Equity Fund - EUR Ord Inc. € 173.79 - 0.70 2.75 Pictet-EUR Sov.Sht.Mon.Mkt EUR I € 101.19 - 0.00 0.00
FCA Recognised Authorised Inv Funds International CH £ 104.04 - 0.37 3.41 Includes manager’s initial charge.
Fidelity Short Dated Corporate Bond Fund Y - Gross Inc £ 9.65 - 0.00 3.90 LF Heartwood Cautious MA B Acc 138.57 - 0.27 0.74 China Equity Fund - USD Ord Acc. $ 139.99 - -0.05 0.00 Pictet-Euroland Index IS EUR € 142.42 - -1.19 0.00
Capital Gearing Portfolio Inc £ 32295.13 32295.13 330.10 0.71 Authorised Corporate Director - Link Fund Solutions International DH € 215.58 - 0.75 3.29
Fidelity Short Dated Corporate Bond Fund Y - Gross Acc £ 10.36 - 0.00 3.96 LF Heartwood Defensive MA B Acc 113.78 - 0.01 0.24 Global Value Credit Fund - USD Ord Acc. $ 182.40 - -0.16 0.00 Pictet-Europe Index-I EUR F € 178.65 - -1.35 0.00 Single price: Based on a mid-market valuation of the
CG Portfolio Fund Plc Target 2020 A-ACC-GBP £ 0.66 - 0.00 0.45 Global Equity Conviction Fund - USD Ord Acc. $ 118.91 - 1.29 0.00 LF Ruffer European C Acc 562.84 - -16.29 0.21 TreeTop Global Sicav
LF Heartwood Growth MA B Acc 169.88 - 0.29 0.35 Pictet-European Equity Selection-I EUR F € 716.92 - 14.93 0.00 underlying investments. The buying and selling price
Absolute Return Cls M Inc £ 118.94 118.94 0.40 1.23 Target 2025 A-ACC-GBP £ 1.64 - 0.01 0.50 LF Heartwood Income MA B Inc 108.28 - -0.07 3.76 Strategic Portfolio UCITS Fund - USD Inst Acc. $ 114.31 - 0.77 0.00 LF Ruffer European C Inc 103.54 - -3.00 0.27 Global Opp.AH € 130.14 - -0.17 0.00 for shares of an OEIC and units of a single priced unit
Pictet-European Sust Eq-I EUR F € 254.23 - 4.85 0.00
Capital Value Cls V Inc £ 157.14 157.14 1.60 0.43 Target 2030 A-ACC-GBP £ 1.85 - 0.00 0.56 LF Heartwood Income Plus MA B Inc 112.77 - -0.14 4.65 Wealthy Nations Bond Fund - USD Inst Inc. $ 110.77 - -0.05 4.43 LF Ruffer European O Acc 552.43 - -16.02 0.00 Global Opp.B $ 134.41 - -0.14 0.00 trust are the same.
Pictet-Global Bds Fundamental I USD $ 123.12 - 0.27 0.00
Dollar Fund Cls D Inc £ 152.68 152.68 0.75 1.63 Institutional OEIC Funds LF Seneca Diversified Growth A Acc 265.38 - 0.88 2.63 Swiss Select Equity Fund - CHF Ord Acc.SFr 142.49 - 1.87 0.00 LF Ruffer Equity & General C Acc 441.19 - -4.65 0.10 Global Opp.C £ 191.55 - -0.29 0.00
Pictet-Global Bonds-I EUR € 167.43 - 1.00 0.00
Dollar Hedged GBP Inc £ 94.49 94.49 -0.30 1.75 LF Seneca Diversified Growth B Acc 160.00 - 0.53 3.29 US Growth Fund - USD Ord Acc. $ 275.03 - 7.34 0.00 LF Ruffer Equity & General C Inc 406.35 - -4.28 0.10 Sequoia Equity AH € 123.87 - -0.22 0.00 Treatment of manager’s periodic capital charge:
Europe (ex-UK) Fund ACC-GBP £ 5.11 - 0.10 1.17 Pictet-Global Defensive Equities I USD $ 169.66 - 2.47 0.00
Real Return Cls A Inc £ 195.53 195.53 0.96 2.16 LF Seneca Diversified Growth I Acc 96.91 - 0.33 0.00 All Weather Fund - EUR Inst Acc € 97.47 - -0.34 0.00 LF Ruffer Equity & General O Acc 433.07 - -4.58 0.00 Sequoia Equity B $ 133.14 - -0.30 0.00 The letter C denotes that the trust deducts all or part
UK Gilt Fund Inc £ 1.36 - 0.00 1.52 Pictet-Global Emerging Debt-I USD F $ 390.49 - 1.66 0.00
LF Seneca Diversified Growth N Acc 157.28 - 0.52 3.03 Dynamic UK Equity Fund - GBP Inst Acc. £ 105.53 - 0.89 0.00 LF Ruffer Equity & General O Inc 401.81 - -4.25 0.00 Sequoia Equity C £ 161.11 - -0.45 3.53 of the manager’s/operator’s periodic charge from
UK Long Corporate Bond - Gross Inc £ 12.23 - 0.04 2.99 Pictet-Global Env.Opport-I EUR € 184.80 - -1.28 0.00
US Small Cap Growth Fund - USD Inst Acc $ 132.73 - 3.23 0.00 LF Ruffer Gold C Acc 132.94 - 0.15 0.00 capital, contact the manager/operator for full details
LF Seneca Diversified Income A Inc 89.71 - 0.34 5.14 Pictet-Global Megatrend Selection-I USD F $ 270.20 - -3.09 0.00
Global Alpha Fund - USD Ord Inc $ 102.95 - 0.38 0.90 of the effect of this course of action.
Charles Schwab Worldwide Funds Plc (IRL) LF Seneca Diversified Income B Inc 108.07 - 0.41 5.12 Pictet-Global Sust.Credit HI EUR € 147.35 - 0.12 0.00 LF Ruffer Gold C Inc 80.46 - 0.09 0.00
Regulated Findlay Park Funds Plc (IRL) LF Seneca Diversified Income I Inc 97.49 - 0.37 0.00 Pictet-Greater China-I USD F $ 531.67 - -0.68 0.00 LF Ruffer Gold O Acc 130.44 - 0.14 0.00 Troy Asset Mgt (1200) (UK)
65 Gresham Street, London, EC2V 7NQ Exit Charges: The letter E denotes that an exit charge
Schwab USD Liquid Assets Fd $ 1.00 - 0.00 0.79 30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900 LF Seneca Diversified Income N Inc 106.40 - 0.40 5.12 Pictet-Health-I USD $ 297.47 - 5.67 0.00 LF Ruffer Japanese C Inc 117.06 - -3.36 0.32
may be made when you sell units, contact the
Investment Adviser - Morant Wright Management Limited Pictet-SmartCity-I EUR € 165.55 - 1.87 0.00 LF Ruffer Japanese C Acc 249.93 - -7.17 0.34 Order Desk and Enquiries: 0345 608 0950
FCA Recognised manager/operator for full details.
Pictet-India Index I USD $ 105.62 - -0.99 0.00 LF Ruffer Pacific & Emerging Markets C Acc 333.17 - 0.88 0.99 Authorised Inv Funds
American Fund USD Class $ 108.99 - -0.95 0.00 LF Morant Wright Japan A Acc 381.05 - -1.51 0.08
Chartered Asset Management Pte Ltd Pictet-Indian Equities-I USD F $ 507.01 - 6.14 0.00 LF Ruffer Pacific & Emerging Markets C Inc 92.76 - 0.24 0.96 Authorised Corporate Director - Link Fund Solutions Time: Some funds give information about the timing of
American Fund GBP Hedged £ 57.38 - -0.49 0.00 LF Morant Wright Japan A Inc 371.86 - -1.47 0.36
Other International Funds Pictet-Japan Index-I JPY F ¥ 17371.51 - -52.06 0.00 LF Ruffer Pacific & Emerging Markets O Acc 326.71 - 0.85 0.63 price quotes. The time shown alongside the fund
American Fund GBP Unhedged £ 85.00 - -0.78 0.00 LF Morant Wright Japan B Acc 411.42 - -1.61 0.90 Trojan Investment Funds
Pictet-Japanese Equities Opp-I JPY F ¥ 10867.60 - 145.54 0.00 LF Ruffer Total Return C Acc 432.01 - -2.39 1.43 manager’s/operator’s name is the valuation point for
CAM-GTF Limited $ 271666.43 271666.43 -31.20 0.00 LF Morant Wright Japan B Inc 377.99 - -1.49 0.92
Pictet-Japanese Equity Selection-I JPY F ¥ 15826.62 - 280.34 0.00 LF Ruffer Total Return C Inc 286.66 - -1.58 1.43 Trojan Global Income O Acc 110.75 - -0.83 2.89 their unit trusts/OEICs, unless another time is
CAM GTi Limited $ 600.11 - -3.89 0.00 LF Morant Wright Nippon Yield A Acc 402.16 - -1.46 2.52
Pictet-LATAM Lc Ccy Dbt-I USD F $ 133.19 - 0.17 0.00 LF Ruffer Total Return O Acc 424.01 - -2.37 1.43 Trojan Global Income O Inc 105.04 - -0.79 2.94 indicated by the symbol alongside the individual unit
Raffles-Asia Investment Company $ 1.50 1.50 -0.02 1.32 Foord Asset Management LF Morant Wright Nippon Yield A Inc 327.62 - -1.18 2.56
Northwest Investment Management (HK) Ltd Pictet-Multi Asset Global Opportunities-I EUR € 120.89 - 0.08 0.00 LF Ruffer Total Return O Inc 281.19 - -1.57 1.44 trust/OEIC name.
Website: www.foord.com - Email: info@foord.com LF Morant Wright Nippon Yield B Acc 423.11 - -1.52 2.51
LF Morant Wright Nippon Yield B Inc 344.78 - -1.23 2.56 11th Floor, Kinwick Centre, 32, Hollywood Road, Central Hong Kong +852 9331 9220 Pictet-Nutrition-I EUR € 219.41 - 3.41 0.00
FCA Recognised - Luxembourg UCITS UBS Asset Management (UK) The symbols are as follows: ✠ 0001 to 1100 hours; ♦
Cheyne Capital Management (UK) LLP Other International Funds Pictet-Pacific Ex Japan Index-I USD F $ 388.06 - -1.31 0.00
Foord International Fund | R $ 37.46 - -0.18 - 5 Broadgate, London, EC2M 2QS 1101 to 1400 hours; ▲1401 to 1700 hours; # 1701 to
Northwest China Opps Class T $ $ 2766.20 - -9.89 0.00 Pictet-Premium Brands-I EUR F € 171.62 - 2.33 0.00
Other International Funds Foord Global Equity Fund (Lux) | R $ 11.76 - -0.09 - Client Services 0800 358 3012, Client Dealing 0800 358 3012 midnight. Daily dealing prices are set on the basis of
Lloyds Investment Fund Managers Limited (1000)F (JER) Northwest Feilong Class T $ $ 1699.64 - 0.12 0.00 Pictet-Russia Index I USD $ 73.67 - -1.70 0.00
Cheyne European Event Driven Fund (M) € 144.16 - -0.70 - Regulated the valuation point, a short period of time may elapse
PO Box 311, 11-12 Esplanade, St Helier, Jersey, JE4 8ZU 01534 845555 Northwest Fund Class T $ $ 2502.13 - -8.83 0.00 Pictet-Russian Equities-I USD F $ 72.53 - 1.23 0.00 www.ubs.com/retailfunds
price updated (D) daily, (W) weekly, (M) monthly before prices become available. Historic pricing: The
Foord Global Equity Fund (Sing) | B $ 14.23 - -0.12 0.00 Northwest Warrant Class A $ $ 1969.35 - -444.40 0.00 Pictet-Security-I USD F $ 248.95 - 2.63 0.00 Authorised Inv Funds letter H denotes that the managers/operators will
Other International Funds
Foord International Trust (Gsy) $ 37.18 - -0.17 0.00 Pictet-Select-Callisto I EUR € 100.79 - -0.21 0.00 OEIC normally deal on the price set at the most recent
Lloydstrust Gilt £ 12.3300xd - 0.0000 2.20
Pictet-Small Cap Europe-I EUR F € 1219.34 - 27.65 0.00 UBS Global Emerging Markets Equity C Acc £ 0.72 - 0.00 1.18 valuation. The prices shown are the latest available
DAVIS Funds SICAV (LUX) Lloyds Investment Funds Limited
Pictet-ST Emerg Local Currency Debt-I USD F $ 99.93 - -0.06 0.00 before publication and may not be the current dealing
Regulated Euro High Income € 1.5280xd - -0.0020 2.78 UBS Global Optimal C Acc £ 0.99 - 0.01 0.83
Franklin Templeton International Services Sarl (IRL) Pictet-ST.MoneyMkt-I € 139.00 - 0.00 0.00 S W Mitchell Capital LLP (IRL) UBS UK Opportunities C Acc £ 0.85 - 0.02 3.04 levels because of an intervening portfolio revaluation
Davis Value A $ 49.02 - -0.89 0.00 JPMorgan House - International Financial Services Centre,Dublin 1, Ireland High Income £ 0.8411 - 0.0001 4.22 Pictet-ST.MoneyMkt JPY I USD ¥ 100996.92 - -1.02 0.00 Regulated or a switch to a forward pricing basis. The
Sterling Bond £ 1.4910xd - 0.0000 2.53 UBS US Equity C Acc £ 1.20 - 0.00 0.21
Davis Global A $ 34.55 - -0.46 0.00 Other International Funds Pictet-ST.MoneyMkt-ICHF SFr 121.31 - -0.01 0.00 SWMC European Fund B EUR € 15982.96 - 109.57 0.00 managers/operators must deal at a forward price on
UBS S&P 500 Index C Acc £ 0.86 - -0.02 1.34
Lloyds Gilt Fund Limited Pictet-ST.MoneyMkt-IUSD $ 140.84 - 0.01 0.00 SWMC Small Cap European Fund B EUR € 14094.80 - -29.67 0.00 request, and may move to forward pricing at any time.
Franklin Emerging Market Debt Opportunities Fund Plc UBS Targeted Return C Acc £ 13.56 - -0.06 1.29
Lloyds Gilt Fund Quarterly Share £ 1.2980xd - -0.0010 1.10 Pictet-Timber-I USD F $ 177.09 - 2.24 0.00 Forward pricing: The letter F denotes that that
Franklin Emg Mkts Debt Opp CHFSFr 16.80 - 0.34 9.31 UBS Sterling Corporate Bond Indexed C Acc £ 0.60 - 0.00 2.86
Dodge & Cox Worldwide Funds (IRL) Monthly Share £ 1.2510 - 0.0000 1.10 Pictet TR-Agora I EUR € 125.72 - 0.11 0.00 managers/operators deal at the price to be set at the
Franklin Emg Mkts Debt Opp GBP £ 10.64 - 0.17 6.78 UBS Multi Asset Income C Inc Net £ 0.49 - 0.00 3.94 next valuation.
6 Duke Street,St.James,London SW1Y 6BN Pictet TR-Corto Europe I EUR € 144.91 - -0.36 0.00
Franklin Emg Mkts Debt Opp SGD S$ 22.77 - 0.38 5.34 Lloyds Money Fund Limited Oasis Crescent Management Company Ltd UBS UK Equity Income C Inc Net £ 0.65 - 0.01 4.05
www.dodgeandcox.worldwide.com 020 3713 7664 Pictet TR-Divers Alpha I EUR € 108.99 - 0.13 0.00
Franklin Emg Mkts Debt Opp USD $ 17.68 - 0.32 6.94 Sterling Class £ 52.5280 - 0.0000 -0.20 Other International Funds UBS Corporate Bond UK Plus C Inc Net £ 0.53 - 0.00 4.16 Investors can be given no definite price in advance of
FCA Recognised Pictet TR-Kosmos I EUR € 108.25 - -0.19 0.00 UBS Global Allocation (UK) C Acc £ 0.79 - 0.01 1.71
Lloyds Multi Strategy Fund Limited Oasis Crescent Equity Fund R 10.52 - 0.03 0.00 the purchase or sale being carried out. The prices
Dodge & Cox Worldwide Funds plc - Global Bond Fund Pictet TR-Mandarin I USD $ 161.77 - 0.12 0.00 UBS Global Enhanced Equity Income C Inc £ 0.41 - -0.01 7.23 appearing in the newspaper are the most recent
Conservative Strategy £ 1.2050 - 0.0020 0.43 Pictet-US Equity Selection-I USD $ 239.29 - 2.57 0.00
EUR Accumulating Class € 12.86 - 0.04 0.00 GAM Growth Strategy £ 1.7360 - 0.0010 0.23
UBS US Growth C Acc £ 1.39 - 0.01 0.00 provided by the managers/operators. Scheme
EUR Accumulating Class (H) € 9.89 - 0.00 0.00 Pictet-US High Yield-I USD F $ 165.46 - -0.58 0.00 UBS Emerging Markets Equity Income C Inc £ 0.47 - 0.00 3.99 particulars, prospectus, key features and reports: The
funds@gam.com, www.funds.gam.com Aggressive Strategy £ 2.3390 - -0.0010 0.00 Oasis Global Mgmt Co (Ireland) Ltd (IRL)
EUR Distributing Class € 10.97 - 0.03 3.83 Pictet-USA Index-I USD F $ 242.94 - -4.27 0.00 UBS FTSE RAFI Dev 1000 Index J Acc £ 143.73 - -1.52 2.29 most recent particulars and documents may be
Regulated Global USD Growth Strategy $ 1.5430 - 0.0000 0.00 Regulated Pictet-USD Government Bonds-I F $ 640.01 - 2.02 0.00 obtained free of charge from fund
EUR Distributing Class (H) € 8.42 - 0.00 3.96 LAPIS TOP 25 DIV.YLD-D £ 105.44 - -0.70 1.83 Dealing Daily
RobecoSAM (LUX) UBS MSCI World Min Vol Index J Acc £ 154.78 - -1.51 2.06
GBP Distributing Class £ 11.84 - 0.07 3.86 Oasis Crescent Global Investment Fund (Ireland) plc Pictet-USD Short Mid-Term Bonds-I F $ 132.39 - 0.25 0.00 managers/operators. * Indicates funds which do not
Tel. +41 44 653 10 10 http://www.robecosam.com/
GBP Distributing Class (H) £ 8.74 - 0.00 3.58 Oasis Crescent Global Short Term Income Fund I - Class A Dist $ 0.98 - 0.00 - Pictet-USD Sov.ST.Mon.Mkt-I $ 106.11 - 0.01 0.00 price on Fridays.
Regulated
Oasis Crescent Global Equity Fund $ 29.53 - 0.29 0.69 Pictet-Water-I EUR F € 323.68 - 3.32 0.00
USD Accumulating Class $ 10.55 - 0.01 0.00 GYS Investment Management Ltd (GSY) RobecoSAM Sm.Energy/A £ 15.16 - -0.17 1.24 Unicapital Investments (LUX)
MMIP Investment Management Limited (GSY) Oasis Crescent Variable Balanced Fund £ 9.62 - 0.04 0.15 Charges for this advertising service are based on the
Dodge & Cox Worldwide Funds plc-Global Stock Fund Regulated RobecoSAM Sm.Energy/N € 13.59 - -0.14 0.00 Regulated
Regulated OasisCresGl Income Class A $ 10.34 - 0.00 2.86 number of lines published and the classification of the
USD Accumulating Share Class $ 20.36 - 0.36 0.00 Taurus Emerging Fund Ltd $ 122.53 125.03 12.81 0.00 RobecoSAM Sm.Materials/A £ 185.14 - -0.82 1.26 Investments IV - European Private Eq. € 104.05 - -22.67 0.00 fund. Please contact data@ft.com or
Multi-Manager Investment Programmes PCC Limited OasisCresGl LowBal D ($) Dist $ 11.82 - 0.05 0.16 Investments IV - Global Private Eq. € 170.83 - -3.11 0.00
GBP Accumulating Share Class £ 26.13 - 0.60 0.00 RobecoSAM Sm.Materials/N € 188.61 - -0.58 0.00 call +44 (0)20 7873 3132 for further information.
UK Equity Fd Cl A Series 01 £ 2978.60 3000.06 23.35 0.00 OasisCresGl Med Eq Bal A ($) Dist $ 12.52 - 0.07 0.45
GBP Distributing Share class £ 18.57 - 0.43 0.92 RobecoSAM Sm.Materials/Na € 126.80 - -0.39 1.26
Diversified Absolute Rtn Fd USD Cl AF2 $ 1637.43 - 6.48 0.00 Oasis Crescent Gbl Property Eqty $ 9.04 - 0.06 1.93
EUR Accumulating Share Class € 26.89 - 0.54 0.00 Genesis Asset Managers LLP RobecoSAM Gl.Small Cap Eq/A £ 106.14 - -1.02 1.06
Diversified Absolute Return Stlg Cell AF2 £ 1606.09 - 4.45 0.00 RobecoSAM Gl.Small Cap Eq/N € 186.31 - -1.55 0.00 Value Partners Hong Kong Limited (IRL)
GBP Distributing Class (H) £ 10.76 - 0.18 0.82 Other International Funds Global Equity Fund A Lead Series £ 1529.91 1536.08 -7.63 0.00 RobecoSAM Sustainable Gl.Eq/B € 211.75 - -2.87 0.00 www.valuepartners-group.com, fis@vp.com.hk
Dodge & Cox Worldwide Funds plc-International Stock Fund Emerging Mkts NAV £ 7.11 - -0.08 0.00
RobecoSAM Sustainable Gl.Eq/N € 186.44 - -2.52 0.00 Regulated
USD Accumulating Share Class $ 15.38 - 0.19 0.00
RobecoSAM S.HealthyLiv/B € 191.05 - -2.76 0.00 Value Partners Asia ex-Japan Equity Fund USD V Acc Unhedged $ 8.84 - -0.09 -
EUR Accumulating Share Class € 15.92 - 0.24 0.00 Marwyn Asset Management Limited (CYM) Platinum Capital Management Ltd RobecoSAM S.HealthyLiv/N € 181.89 - -2.63 0.00 Value Partners Classic Equity Fund USD Z Unhedged $ 12.80 - -0.15 0.00
Dodge & Cox Worldwide Funds plc-U.S. Stock Fund Regulated Other International Funds RobecoSAM S.HealthyLiv/Na £ 137.31 - -2.16 1.24 Value Partners Classic Equity Fund CHF HedgedSFr 12.19 - -0.14 0.00
USD Accumulating Share Class $ 25.38 - 0.52 0.00 Marwyn Value Investors £ 421.74 - -18.49 0.00 Platinum All Star Fund - A $ 132.55 - - - RobecoSAM S.Water/A £ 224.70 - -1.78 1.38 Value Partners Classic Equity Fund EUR Hedged € 12.44 - -0.14 0.00
GBP Accumulating Share Class £ 30.81 - 0.80 0.00 Platinum Global Dividend Fund - A $ 46.15 - - - RobecoSAM S.Water/N € 191.77 - -1.27 0.00 Value Partners Classic Equity Fund GBP Hedged £ 13.02 - -0.15 0.00
GBP Distributing Share Class £ 19.19 - 0.49 0.64 Platinum Global Growth UCITS Fund $ 10.04 - -0.34 0.00 Value Partners Classic Equity Fund GBP Unhedged £ 16.27 - -0.14 0.00
EUR Accumulating Share Class € 28.94 - 0.66 0.00 Emerging Markets Managed Accounts PLC (IRL) Odey Asset Management LLP (CYM) Value Partners Classic Equity USD Unhedged $ 15.64 - -0.17 0.00
GBP Distributing Class (H) £ 11.29 - 0.22 0.48 emma@milltrust.com, +44(0)20 8123 8369, www.milltrust.com Regulated Rubrics Global UCITS Funds Plc (IRL) Value Partners Global Emerging Market Bond Fund USD A Acc Unhedged $ 10.08 - 0.00 0.00
Regulated OEI Mac Inc GBP A £ 210.30 - 12.46 0.00 www.rubricsam.com Value Partners Global Emerging Market Equity Fund USD V Unhedged $ 9.13 - -0.05 0.00
Global Investment House Milltrust ASEAN A $ 99.33 - -1.32 0.00 OEI Mac Inc GBP B £ 127.58 - 6.97 0.00 Regulated Value Partners Greater China Equity Fund USD A (Acc) Unhedged $ 9.74 - -0.09 0.00
Global GCC Islamic Fund $ 105.09 - -0.15 0.00 Milltrust India A $ 147.43 - 1.17 0.00 OEI MAC Inc USD $ 1126.94 - 67.50 0.00 Value Partners Health Care Fund HKD Class A UnhedgedHK$ 11.22 - -0.14 0.00
Rubrics Emerging Markets Fixed Income UCITS Fund $ 133.84 - -0.05 0.00
Global GCC Large Cap Fund $ 162.72 - -1.11 0.00 Milltrust Latin America A $ 101.26 - -2.72 0.00 Odey European Inc EUR € 486.63 - 28.74 0.00 Value Partners Health Care Fund USD Class A Unhedged $ 11.43 - -0.13 0.00
Rubrics Global Credit UCITS Fund $ 15.98 - 0.00 0.00
Global Saudi Equity Fund SR 244.43 - -2.44 0.00 Milltrust Keywise China Fund $ 122.31 - -1.12 0.00 Odey European Inc GBP A £ 195.90 - 11.50 0.00 Rubrics Global Fixed Income UCITS Fund $ 162.95 - -0.07 0.00
Milltrust SEDCO MENA Fund (Class A) * $ 96.68 - -0.03 0.00 Odey European Inc GBP B £ 111.06 - 6.53 0.00 Q Rubrics India Fixed Income UCITS Fund $ 10.06 - 0.01 0.00
Odey European Inc USD $ 235.90 - 14.01 0.00 Rubrics India Fixed Income UCITS Fund $ 86.68 - 0.03 0.00 WA Fixed Income Fund Plc (IRL)
Regulated
European Multi-Sector € 114.18 - 0.30 3.57
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
Tuesday 30 October 2018 ★ FINANCIAL TIMES 19

MARKETS & INVESTING

Tail Risk
Analysis. Fixed income
Goldman highlights
Systemic risk fears intensify danger of gloom
among investors

over leveraged loan boom ADAM SAMSON

Weaker investor protections
in the deals raise concerns
they are no longer a good buy
COLBY SMITH — NEW YORK
One of the year’s best-performing asset
classes is starting to draw heat from reg-
ulators. Over the past month, the boom-
ing $1.3tn market for leveraged loans —
or those extended to highly indebted
companies that are then packaged up
and sold to investors as bonds — has
faced a tide of criticism from central
bankers and financial watchdogs.
Former US Federal Reserve chair
Janet Yellen warned last week of the
“systemic risk” rising from the loans.
This echoed concern from current
Fed officials, central banks in the
UK and Australia, as well as the Bank
for International Settlements about a
market that has become a popular
source of funding for leveraged buyouts
and is now bigger than that for junk
bonds.
Official fears are being amplified by
the hollowing out of protections for
investors who ultimately end up owning
the loans but are attracted to them
because their floating rate component
offers protection against a Fed that is
raising interest rates.
“Investors are deathly afraid of rising
interest rates so the floating rate compo-
nent paired with the fact that these
loans have seniority over unsecured
bonds set up an easy elevator pitch to
buyers that may not be fully aware of
the risks,” said Douglas Peebles, the
chief investment officer for fixed
income at AllianceBernstein.
Issuance for US leveraged loans is
now on pace to outstrip last year’s
record high of $650bn, according to
LCD, a unit of S&P Global Market Intelli-
gence.
Any supply that has come to market
has been quickly snapped up and, by
EPFR Global’s calculations, investors
have ploughed about $1.2bn into lever-
aged loan funds in the past month,
bringing net inflows for the year to just
over $16bn.
Based on the three-month Libor rate,
which has rocketed this year to its high-
est level since 2008, leveraged loans
have returned 4.3 per cent to investors
since January, according to the S&P/
LSTA Leveraged Loan Index.
High-yield bonds, on the other
hand, have underperformed, posting a
total return of just 1.2 per cent over the
same time period, according to ICE
BofAML indices.
While more than half of leveraged
loans are snapped up by specialised
investment vehicles known as collater-
alised loan obligations, which package
corporate loans together and then
divide up slices based on their riskiness,
a growing proportion of mutual funds
and exchange traded funds have
sprouted up to catch some of the wind-
fall.
According to AllianceBernstein, the
number of these bank loan funds has
more than tripled since 2008.
The growth of the leveraged loan mar-
ket on its own does not inherently bring
risks, according to Beth McLean, a bank
loan portfolio manager at Pimco, who
reckons that economic and corporate
fundamentals are still robust enough to
be supportive.
Indeed, Joseph Otting, who since late
2017 has run the Comptroller of the
Currency, one of America’s biggest
financial regulators, stunned some
when he told a conference in February
that previously “it was like people were
afraid to jump over the line [on leverage
guidance] without feeling ‘The Wrath of
Khan’ from regulators”.
But with lending standards deterio-
rating and leverage increasing, Matthew
Mish of UBS sees a fair amount of “kin-
dling in the fireplace”.
To satisfy their voracious appetites
for higher yielding loans, investors have
grown increasingly willing to stomach
fewer protections for the same price and
leverage.
This goes well beyond companies
lacking maintenance covenants that set
terms for specific financial metrics,
which Oleg Melentyev of Bank of Amer-
ica Merrill Lynch believes were not so
necessary in the first place.
As US stock markets
remain on track for their
worst month since the
financial crisis, some
The US leveraged loan market believe that the big risk for investors is
that they have become too gloomy.
swells beyond $1tn Concerns about global economic
Value of outstanding US leveraged growth and a potential peak in US
loans ($bn) corporate earnings have been cited by
1,000 many as two of the forces behind
October’s bout of selling.
500 And the strength of the selling has
been severe, sending the market
0 capitalisation of the S&P 500 down by
2000 05 10 15 18 just over $2tn this month and costing
Leveraged loans out-return the broader US equities market $2.8tn,
high-yield counterparts according to Howard Silverblatt,
analyst at S&P Dow Jones Indices.
Leveraged loans High-yield bonds
Global markets have shed $5.5tn.
Analysts and economists at
2,950 1,300
Goldman Sachs certainly expect a
gradual deceleration in America’s
2,900 1,280 economic expansion, forecasting
growth of 1.6 per cent in the final
2,850 1,260 quarter of 2019, down from 3.5 per cent
in the quarter that just passed. The US
2,800 1,240 bank also expects corporate profit
Jan 2018 Oct growth to slow, predicting 7 per cent
Getting lofty growth in corporate profits in 2019,
Leverage for new issue US leveraged down from what is expected to be 19
loans creeps higher when add-backs per cent this year.
are removed However, David Kostin, the chief US
Total debt ex-add backs 8x equities strategist at Goldman, reckons
Total debt investors have become too dour in
1st lien ex-add backs
1st lien 6x their outlook. “The sell-off appears to
have overshot the fundamentals,” he
4x said.
His forecast suggests the S&P 500
2x will return this week to levels seen
1997 2005 10 15 18 earlier this month, although that will
Sources: S&P Global Market Intelligence’s LCD; still be 3 per cent off its record high
Bloomberg; S&P/LSTA Leveraged Loan
Index; ICE BofAML indices; UBS; Covenant achieved in late September.
Review; S&P LCD Jonathan Golub, chief US stock
strategist at Credit Suisse, has reached
a similar conclusion that pessimism is
Former US Instead, it is the erosion of “key cove- overdone.
Federal Reserve nants”, including those that restrict “The consensus narrative describes
chair Janet asset transfers or forbid borrowers earnings season as problematic,
Yellen is from selling collateral without paying particularly around corporate
the latest down their loans, that worry him more. guidance,” he noted. “However, this
high-profile “While these covenants are not appears out of sync with the facts.”
figure to speak changing the probability of default Indeed, Mr Kostin reckons that
out about the rates, they are drastically changing the “continued positive economic data and
leveraged loans probability of recovery rates,” said Mr prospective EPS growth . . . support an
market Melentyev. S&P 500 rebound to our year-end
Jonathan Ernst/Reuters
Moody’s projects that top-ranked target of 2,850”.
“first lien” loans will recover 61 cents on Another “tailwind” for US stocks will
the dollar when borrowers default. That come in the form of “the resumption of
is down from a historical average of 77 discretionary buybacks”, Goldman
cents. The drop-off is even larger for notes. Groups typically stop buying
subordinate “second-lien” loans, with shares during “blackout” periods,
recovery rates of just 14 cents on the dol- during which executives and directors
lar as opposed to the 43 cents historical possess inside information on
average. earnings. The coming days will provide
Given these weakening standards, a good test of whether investors agree
Moody’s rates 37 per cent of leveraged that pessimism has become too easy.
loans B3 or lower, the lowest rating
they say is typically acceptable to inves-
tors.
‘People For Guy Lebas, chief fixed-income
strategist at Janney Montgomery Scott,
were afraid these fundamental concerns, the rising
to jump share of “weak hands” holding supply
and the inherent illiquidity of the mar-
over the ket make leveraged loans at this point in FastFT
line without the interest rate cycle simply “not a Our global
good buy”.
feeling “The “When that many regulators con-
team gives you
market-moving
Wrath of nected to financial markets start to news and views
warn about something so universally, A Wall Street trader feels the
Khan” from it’s worth starting to worry about,” he
24 hours a day
ft.com/fastft pressure during the $2.8tn sell-off
regulators’ added.

Cross asset Equities

Brazilian shares rally to record after
Bolsonaro victory before falling back
JONATHAN WHEATLEY — LONDON
ANDRES SCHIPANI — SAO PAULO
Brazilian stocks hit an intraday record
within minutes of the market opening
yesterday but quickly fell back into
negative territory after Jair Bolsonaro,
the far-right candidate and market
favourite, won the country’s presiden-
tial election in a second-round run-off
on Sunday.
There was a similar pattern on currency
and bond markets as investors signalled
some nervousness over Mr Bolsonaro’s
ability to deliver on his promises.
“This shows there is caution in the
markets,” said Zeina Latif, chief econo-
mist at XP Investimentos, a São Paulo
brokerage. “This is not a blind rally, peo-
ple still have their feet on the ground.”
Optimism at the prospect of Mr Bol-
sonaro’s victory has helped Brazil’s
stocks, bonds and currency shrug off the
gloom afflicting other markets in recent
weeks and months.
Stocks rose 3 per cent in early trading
with bonds and the currency also rally-
ing sharply, even though the election
outcome was widely predicted and Mr
Bolsonaro won by a smaller margin than
expected. But the Bovespa stock index
was down 0.6 per cent on the day by
early afternoon in São Paulo and the real
down 1.4 per cent against the dollar. “I
remain euphoric for the outlook for Bra-
zilian assets,” said Bernd Berg, a strate-
gist at Woodman Asset Management in
Zug, Switzerland, before markets
opened. “Brazil is going to outperform
all other markets globally.”
Many investors are betting that Mr
Bolsonaro will push forward with fiscal
reforms to tackle Brazil’s gaping budget
deficit and help revive the economy, still
struggling to recover from a recession
that knocked 8 per cent off national out-
put in 2015 and 2016.
But others warn that the reforms are
far from guaranteed. “It is hard to say if
President-elect Jair Bolsonaro:
doubts remain over his reforms
Bolsonaro will succeed in approving the
reforms and how capable he will be in
working with Congress,” said Paulo
Leme, former head of Goldman Sachs in
Brazil and now at the University of
Miami Business School. “I would say the
distribution of outcomes is skewed
towards no results or bad results. ”
Mr Bolsonaro has promised a long list
of deep structural reforms, including
spending cuts, tax reform, privatisation,
pension reform and root-and-branch
changes to the constitution to end ear-
marked public spending.
Yet analysts note that a small part of
that agenda, particularly pension
reform, was a top priority for the outgo-
ing government of President Michel
Temer, installed two years ago after the
impeachment of Dilma Rousseff.
The Temer administration, too, was
welcomed with strong rallies on finan-
cial markets but delivered only a small
fraction of the reforms expected.
“In terms of a signal, [Mr Bolsonaro]
has a very strong message,” said Zaina
Latif, chief economist at XP Investimen-
tos, a São Paulo brokerage. “The mar-
kets are obviously giving him the bene-
fit of the doubt. With time, the market
will turn the page and want to see con-
crete results.”
See Editorial Comment and Lex
Seoul aims to lift mood by pumping
funds into ailing domestic stocks
BRYAN HARRIS — SEOUL
South Korea has established a multi-
million-dollar fund to prop up local
stocks, which have slumped in recent
weeks amid concerns about regional
geopolitical tensions and the outlook
for the global economy.
Seoul’s move follows similar attempts at
reassurance by Beijing, which this
month rolled out a series of stimulus
measures after a swingeing sell-off in its
key CSI 300 index.
South Korea’s benchmark Kospi Com-
posite index has fallen 14 per cent this
month and is on track for its worst
month since the 2008 financial crisis.
The dive mirrors a broad decline
across Asia where markets have been
buffeted by fears about the escalating
trade war between Washington and Bei-
jing, slowing economic growth in China
and the pace of interest rate rises in the
US.
Markets in Japan and Taiwan are also
on course for their worst month in a dec-
ade while Hong Kong is on pace for its
worst monthly performance in three
years.
The situation fuelled concern in
Seoul, where the heads of the country’s
major brokerages yesterday held an
emergency meeting to “assess recent
market situations and discuss ways to
better respond”, according to the Korea
Financial Investment Association, an
industry body.
“We are deeply concerned about the
current situation in which the market
has shown a relatively excessive reac-
tion compared with the country’s fun-
damentals,” said Kwon Yong-won,
chairman of the association. “Co-opera-
tion between government and industry
is desperately needed to protect inves-
tors.”
To stabilise the market, the Financial
‘Some of my clients could
sell that in a single day.
This is more about trying
to reassure investors’
Services Commission, a regulator, said
that it would raise $180m in funds to
invest in local stocks and would also
expand and then implement its Kosdaq
Scale-up Fund — investing $260m of
state and private funds to bolster shares
listed on the technology-rich secondary
index.
Analysts said that while the overall
amounts were small, the authorities’
aim was to bolster confidence in the
market. “Some of my clients could sell
that [amount] in a single day,” said Peter
Kim, an investment strategist at Mirae
Asset Daewoo in Seoul. “The number
itself is not impactful. But this is more
about trying to reassure investors. It is a
typical government attempt at trying to
talk its way out.”
The move by Seoul echoed a similar
effort by Beijing this month when heavy
selling prompted an unusual joint effort
at reassurance by Liu He, President Xi
Jinping’s top economic adviser, as well
as the heads of China’s central bank,
banking regulator and securities watch-
dog.
In his comments, Mr Liu dismissed
fears about the impact of China’s trade
war with the US, while the central bank
pledged to ensure adequate liquidity.
Kim Ye-eun, an analyst at IBK Securi-
ties, said: “The Kospi’s recent plunge is
attributable to external elements,
including concerns about a looming glo-
bal economic recession and the trade
war between China and the US.”
While the injection of funds could
have a short-term benefit, it “cannot
prevent the overall economic downturn
cycle nor the overall slowing economy”,
added Mr Kim.
Additional reporting by Kang Buseong and
Alice Woodhouse
 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
20 ★ Tuesday 30 October 2018

The day in the markets Beijing will avoid big

What you need to know
renminbi slump and
3 Wall Street’s early rally fades
play a long game
3 China car tax report lifts carmakers
Perceived risk of holding Italian sovereign debt declines
3 Italy avoids rating downgrade Spread between German and Italian 10-year yields
3 Merkel news has little impact 0.35

An opening rebound for US stocks

0.30
Diana Choyleva
following the steep losses incurred last
week began to fade as the session wore
on, despite big gains for carmakers after 0.25
Markets Insight
reports that China was considering
halving the tax on new vehicle purchases
0.20

A
and some reassuring news on Italy. n ugly start to the week for flight. Outflows have been curbed by large enough to allow China to support
Market participants remained Chinese stocks will leave tightening capital controls and reining the currency for at least a year, while
concerned that the outlook for US plenty of investors wonder- in overseas direct investment and bank boosting domestic demand and pressing
0.15
corporate profits remained challenging, ing how Beijing might activity. Previously acquisitive con- on with the economic and technological
particularly given the potential impact of respond both to the mar- glomerates have been among the high- transformation embodied by President
President Donald Trump’s protectionist 0.10 ket’s woes and a slowing economy. But profile victims of the clampdown. Xi’s “Made in China 2025” plan.
trade polices on the global economy. May 2018 Oct concern that China might resort to a big As for inflows, China has worked hard The stimulus Beijing has added has so
Sam Buckingham, analyst at Thomas one-off devaluation of the renminbi to to make it easier for foreign investors to far been measured. Importantly, policy-
Source: Refinitiv (formerly Thomson Reuters)
Miller Investment, highlighted that the boost growth should be dismissed. buy renminbi-denominated stocks and makers are not throwing money at the
recent equity sell-off had occurred during Such a provocative move would give bonds via Hong Kong without the need economy indiscriminately; rather they
a period where US companies were US president Donald Trump an excuse for an account on the country’s main- continue to build on their gradual rebal-
reporting annual earnings growth, on 2019 budget, which was rejected by the Christian Democratic Union. “[The news] to redouble his efforts to contain China’s land. A similar scheme, linking the ancing of recent years.
average, of more than 20 per cent. EU last week for breaking fiscal rules. has limited implications for the German economic rise. His opposite number, Xi Shanghai and London stock exchanges, The shares of investment and exports
“It seems to us these stellar earnings The gap between Italian and German economy since she will stay on as Jinping, will not take the bait. is in the works. The authorities have also within China’s GDP are less excessive
have intensified ‘end of the cycle’ fears as 10-year bond yields, watched as a gauge Chancellor for now and her likely Mr Trump must have been tempted thrown open China’s interbank bond than they used to be.
they have most probably peaked now as of the perceived risk of holding Rome’s successors broadly support her policies,” to order the US Treasury to recast its cri- market to foreign investors, made A one-off major devaluation or a
the tax cuts start to fade out as we move debt, fell below 300 basis points. said Jennifer McKeown at Capital teria so it could have named China a cur- sharp depreciation of the currency
rency manipulator, after it let the ren- within a short period of time would help
into 2019,” he said.
In Italy, there was relief that S&P Global
UK government bonds marginally
outperformed German Bunds after the
Economics. “But it may well slow
decision-making over Italy, adding to minbi depreciate roughly 10 per cent
Xi has underestimated China’s exporters but would plunge the
had kept the country’s credit rating two country’s debt office cut its issuance risks facing the eurozone as a whole.” against the dollar over the past six Trump and the aggressive world into deflationary disarray.
months as the US imposed tariffs on Mr Xi has underestimated Mr Trump
notches above “junk” status, although it
revised its outlook from stable to
forecast for the year.
There was a relatively muted market
Brazilian stocks hit a record high and
the real touched its strongest point Chinese imports.
change in American and the aggressive change in American
negative. impact from Angela Merkel’s against the dollar since May after far- In the event, the Treasury did no such attitudes towards China attitudes towards China. Despite his
The move came as markets awaited announcement that she would stand right candidate Jair Bolsonaro won the thing in its latest semi-annual report on hold on power, the Chinese president
further developments on Italy’s proposed down as leader of Germany’s ruling presidential election. Dave Shellock exchange rates, released earlier this cannot afford to enrage America and
month. Yet Steven Mnuchin, the Treas- onshore currency hedging easier and risk an overreaction. A second miscal-
ury secretary, gave Beijing a stern warn- relaxed restrictions on transferring the culation would go down badly at home.
Markets update ing not to engage in competitive devalu- proceeds of sales of renminbi-denomi- I expect the renminbi to trade in a
ation. Washington is evidently still itch- nated assets into dollars. range of 3 per cent to 5 per cent over the
ing for a fight with China on any number A suite of reforms has encouraged next couple of quarters, even if the US
of issues. investment in the domestic financial follows up on its threat to increase
US Eurozone Japan UK China Brazil For China, a major depreciation in the sector, especially fund management. import tariffs next year. It is more likely
Stocks S&P 500 Eurofirst 300 Nikkei 225 FTSE100 Shanghai Comp Bovespa coming period would be counter- Success in attracting actively man- to weaken further than to strengthen
Level 2679.09 1398.53 21149.80 7026.32 2542.10 85719.87 productive. It would shred Beijing’s aim aged capital has so far been patchy but but the chance of a significant 15-20 per
% change on day 0.77 0.86 -0.16 1.25 -2.18 1.95 to portray itself as a force for global Beijing has made significant headway in cent decline, as some forecast, is small.
Currency $ index (DXY) $ per € Yen per $ $ per £ Rmb per $ Real per $ economic stability and put paid to getting Chinese assets included in global Instead, Beijing is likely to wait and
Level 96.535 1.137 111.435 1.282 6.948 3.687 already stalled attempts to turn the ren- bond and equity benchmark indices. see if its strategy of harnessing flows of
% change on day 0.183 0.000 0.000 0.000 0.000 0.000 minbi into an international currency. The strategy seems to be working. passive global portfolio capital will cre-
Govt. bonds 10-year Treasury 10-year Bund 10-year JGB 10-year Gilt 10-year bond 10-year bond It would also doom China’s campaign The net errors and omissions item in the ate conditions more conducive to its
Yield 3.098 0.377 0.101 1.254 3.524 10.191 to attract foreign capital and keep balance of payments, a rough proxy for ambition of achieving economic and
Basis point change on day 1.890 2.700 -0.850 1.300 -1.600 -16.800 domestic funds dammed up at home. capital flight, has declined as a share of financial self-sufficiency.
World index, Commods FTSE All-World Oil - Brent Oil - WTI Gold Silver Metals (LMEX) Beijing has been following this strat- GDP this year despite the renminbi’s After all, if any country is used to
egy since a crash in the stock market in decline and the central bank has playing a long game, it is China.
Level 314.90 77.48 67.16 1233.85 14.69 2945.10
2015, accompanied by a bungled reform staunched the haemorrhaging of its for-
% change on day 0.40 -0.35 -0.80 0.25 -0.34 -0.54
Yesterday's close apart from: Currencies = 16:00 GMT; S&P, Bovespa, All World, Oil = 17:00 GMT; Gold, Silver = London pm fix. Bond data supplied by Tullett Prebon.
of the currency’s exchange rate mecha- eign exchange reserves. Diana Choyleva is chief economist at Enodo
nism that triggered massive capital At $3.1tn, the stockpile of reserves is Economics
Main equity markets
S&P 500 index Eurofirst 300 index FTSE 100 index
3040 1520 7680

2880 7360
1440
2720 7040

| | | | | | | | |
2560 | | | | | | | | | | | | | | | | | | | |
1360 | | | | | | | | | | | | | | | | | | | | 6720 | | | | | | | | | | |

Aug 2018 Oct Aug 2018 Oct Aug 2018 Oct

Biggest movers
% US Eurozone UK
Red Hat 45.70 Grifols 8.81 Gvc Holdings 6.53
Borgwarner 6.60 Infineon Tech 6.01 Melrose Industries 4.97
Ups

The Goodyear Tire & Rubber 5.31 Continental 5.47 Hsbc Holdings 4.76
Aptiv 5.18 Stmicroelectronics 5.16 Evraz 4.45
Macy's 5.16 A.p. Moller - Maersk B 5.00 Bt 3.77
%
Take-two Interactive Software -5.17 Thales -3.35 Rolls-royce Holdings -2.76
Harris -3.90 Dassault Systemes -3.06 British American Tobacco -1.93
Downs

L3 -3.78 Seadrill -2.57 Randgold Resources Ld -1.81

Dxc Technology -3.49 Raiffeisen Bank Internat -2.44 Bae Systems -1.80
Netflix -3.42 Safran -1.69 Fresnillo -1.60
Prices taken at 17:00 GMT Based on the constituents of the FTSE Eurofirst 300 Eurozone
All data provided by Morningstar unless otherwise noted.

Wall Street Eurozone London

China stimulus hopes and a landmark Altran Technologies, the French IT Bookmakers were among the day’s
technology deal were not enough to consultancy, was the Stoxx 600 index’s biggest gainers after the UK Budget set
deter US markets from paring gains as top performer after both Kepler out a less onerous than feared tax on
the session progressed. Cheuvreux and Société Générale advised offshore gambling.
Car parts makers including clients to buy. Treasury documents revealed that the
BorgWarner, Aptiv and Goodyear moved Better than expected third-quarter UK remote gaming duty would rise to 21
sharply higher on reports that China was results last week, which showed an per cent from October 2019 rather than
considering cutting in half a tax on small- improved performance for its problematic the 25 per cent rate some investors had
engine car purchases. China accounts for US acquisition Aricent, were “the first been predicting. Ladbrokes owner GVC
about a quarter of global car sales with step needed to improve Altran’s equity was the FTSE 100’s biggest gainer with
about 70 per cent of them falling into the story”, said SocGen. Paddy Power Betfair and William Hill
small-engine category, said analysts. Valeo and Continental were in demand also moving sharply higher.
Ford was top performer among the as motor stocks reacted to reports that HSBC underpinned the wider market
motor companies after being added to China may cut a purchase tax on small after its third-quarter results showed no
Goldman Sachs’ “buy” list. Next year cars. The talk of a stimulus programme adverse effects from trade tensions and
should mark the trough for Ford’s also helped semiconductor maker emerging market volatility.
earnings as the company starts to reap Infineon Technologies, which takes about GKN owner Melrose Industries rallied
the benefits from a refreshed product 45 per cent of group revenue from motor off a two-year low in tandem with global
range and cost cutting, it said. end markets. auto stocks, which were buoyed by
Red Hat led the S&P 500 gainers after Grifols of Spain climbed after the reports that China may reduce its small
IBM agreed to pay $34bn for the open- plasma-derived medicines specialist car purchase tax.
source software maker, a 63 per cent released promising headline results from Just Eat, the takeaway ordering
premium on Friday’s close. an Alzheimer’s disease trial. website, slipped after competition worries
Cerner, the healthcare IT specialist, Essity, the Stockholm-based tissue led Peel Hunt downgrade to “sell”. Uber
bounced back from poorly received paper and nappy manufacturer, slid after has a ready-made customer base for its
results on Friday after Leerink turned its third-quarter results showed that food delivery business and Deliveroo has
positive. Hospital consolidation should rising costs had taken a bigger than the deep pockets needed to disrupt Just
underpin Cerner’s steady growth as the expected bite out of profit margins. Eat’s marketplace model, it said.
predators tend to be customers, it said. TomTom advanced on a reheat of Aircraft maintenance group BBA
Payments processor First Data speculation that the Dutch satellite Aviation retreated after US joint venture
dropped after cutting full-year targets to navigation pioneer might be a takeover partner Gama Aviation warned of
reflect currency headwinds. Bryce Elder target. Bryce Elder subdued recent trading. Bryce Elder

Tuesday October 30 2018
Island defies
sceptics to
create wealth
from diversity
Image as oasis of political and economic stability
bolsters rise up the value chain, writes David Pilling
A
few years after Mauritius
became independent half a
century ago, the Trinidad-
born writer VS Naipaul vis-
ited the Indian Ocean
island 1,200 miles off the south-east
coast of Africa. He was not impressed.
In his 1972 essay The Overcrowded Bar-
racoon — a barracoon is an enclosure for
slaves — Naipaul saw a desperately poor
people and a potentially explosive eth-
nic mix of Indians, Africans, Chinese
and French. He envisaged little way out
of poverty for a monocrop economy in
which there was only “sugar cane and
sugar cane ending in the sea”.
Mauritius has proved him spectacu-
larly wrong. In the 50 years since inde-
pendence, the island has been trans-
formed. Sugar now makes up only a tiny
fraction of economic activity. It has been
a near textbook example of how to move
an economy up the value chain by con-
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
Mauritius at 50
tinually reinventing itself — first as tex-
tile manufacturer and luxury tourist
destination and latterly as a financial
services and back-office processing hub.
Now it wants to move further up again
by offering sophisticated legal and con-
sultancy services to the more than
20,000 companies registered on the
island: they will have to demonstrate
substantial activity as part of Mauri-
tius’s drive to ensure it is not categorised
as a tax haven. It wants to capitalise on
its role as a “gateway to Africa”, fuelling
investment to the continent.
The government has also induced sev-
eral universities, including Middlesex of
the UK and the African Leadership Uni-
versity, to set up campuses in order to
establish the island as a centre of learn-
ing and raise the skills of its population.
Mauritius presents itself as an oasis of
stability with continuity of policy, tech-
nical capacity, and a dependable legal
FT SPECIAL REPORT
www.ft.com/reports | @ftreports
system whose final court of appeal is the
Inside
Privy Council in London.
That image has occasionally come
under strain when countries — notably
India — have complained that Mauritius
is depriving them of taxes. India’s dou-
Relative stability
masks social divide
ble tax avoidance treaty with the island
is being phased out for that reason.
“Because the economic activities
don’t occur in Mauritius, it is a conduit
to take away taxable revenue from other
Reforms hint at concern
over uneven ethnic
representation
Page 2
countries,” says Alexander Ezenagu, an
expert in international tax law at McGill
University in Canada.
Although Mauritius shuns the secrecy
offered by other jurisdictions, it has
occasionally been exposed for lax over-
Life after sugar
Green energy and rum
offer cane producers
new markets for the
sight. In 2016, its Financial Services
Commission awarded an investment
banking licence to Alvaro Sobrinho, an
Angolan banker whose licence had ini-
tially been refused by the stricter Bank
future
Page 3
of Mauritius. Mr Sobrinho also hap-
pened to be the head of the Planet Earth
Institute, whose provision of a platinum
credit card to then president Ameenah
Gurib-Fakim — and her subsequent use
of it to go on a $24,000 shopping expedi-
Offshore troubles
tion — led to her resignation in March.
Officials argue Mauritius has strong Prized status as a
rule of law and question whether a
leader would resign over so paltry a sum financial hub runs into
in any other African country. “If Mauri- Angolan difficulties
tius is a haven for something, it is a Page 4
haven for stability,” says Joseph Cartier,
chairman of the island’s Economic
Development Board. It is these qualities
India’s main investor
and not low taxes, he says, that attract FDI has driven progress,
most offshore businesses — especially though ‘round tripping’
companies wishing to protect their remains a problem
investments in potentially unstable
Page 5
African jurisdictions.
Of the $26bn Mr Cartier estimates was
invested via the island into Africa in Tourism can look
2016, $10bn was with countries with
which Mauritius has no double-taxation
beyond the beaches
treaty, implying, he says, that reduced Experts say layers of
taxation was not a prime motivation. history remain an
Rama Sithanen, a former finance untapped resource
minister who is credited with helping
Page 6
Fireworks in March marked 50 years of independence — Vashish Sookrah/AFP/Getty Continued on page 2

2 ★
Eyes set on a
future of ‘shared
prosperity’
COMMENT
Pravind
Jugnauth
This year we celebrate the 50th
anniversary of the independence of
Mauritius — the taking of our destiny in
our own hands. In the past half century,
a people with roots in India, Africa,
Europe and China, as one nation and
living in harmony, have built a
strikingly strong democracy. With 37
years of uninterrupted economic
growth, Mauritius has taken its people
from a single commodity, colonial and
low income economy to a well-
diversified economy and an upper
middle income country.
It is an opportune time to reflect on
the way forward in a world buffeted by
global warming and the need to be
responsible to the environment; in a
world where Africa and Asia will be the
greater part of the world economy in the
not so far future, and in a world so much
driven by the digital economy.
Where must Mauritius go? My vision
is to build a modern and forward-
looking economy with shared
prosperity and greater wealth for the
people. Our focus is reducing
unemployment, creating better
opportunities for the young, working
towards eradicating poverty, protecting
our elders, and further opening our
country to foreign talents and
investment, while encouraging
innovation in all economic spheres.
I am clear that the road to this shared
prosperity will be built on strong
policies. They include reform of
education at primary and secondary
levels to build a balance between the
РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS
academic and technical streams, to
adapt education to new needs of the
economy and society and to ensure
inclusiveness.
Our ground breaking and first ever
national policy for sport and physical
activity will be one of the platforms
through which this government will
transform the health and wellbeing of
every Mauritian, as the notion of shared
prosperity goes far beyond simple
considerations of economic growth.
A “Marshall Plan” to combat poverty,
including the introduction of the
minimum wage and a significant boost
to pension benefits, is building on our
strong welfare state.
To further modernise the country,
some $5bn has been earmarked for
infrastructural projects over the next
five years. Our ambitious road
decongestion programme, for example,
aim at stimulating the growth of
business activities as we build roads,
highways, and bridges.
By September next year, we aim to
launch the Metro Express, an urban rail
system which will connect our capital,
Port Louis, with the main urban areas of
the island.
We have invested in the harbour of
Port Louis to make it one of the deepest
ports in the Indian Ocean and able to
receive the largest container ships in the
world. Further modernisation with
state of the art facilities aims to double
its capacity. We are also working on
expanding the international airport to
double its capacity to 8m passengers.
As I told the United Nations General
Assembly this year, I am concerned by
the challenges faced by the world’s small
island developing states. Buffeted by
climatic changes, Mauritius faces rising
sea levels and flash floods, to name but
two threats. We are channelling some
$60m dollars towards environmental
infrastructure improvements, while
FINANCIAL TIMES
Mauritius at 50
Jugnauth: ambitions to join the league of high income economies —AFP
putting clear policy direction on
sustainable development, which is also
guiding our tourism and agricultural
industries.
As a small island economy, we have
grown because we have always been
outward looking, with export-driven
growth strategies and openings to
foreign investors. We have made the
most of our connections and shared
history with Europe.
In addition to our very good
relationships with EU countries, we
have built on diversity by consolidating
economic and other ties with Africa,
India and China and countries in the
Middle East. We are members of the
Common Market for Eastern and
Southern Africa, the Southern African
Development Community and the
Indian Ocean Commission. We have
signed a free trade agreement with
‘We have grown because we
have always been outward
looking, with export-driven
growth strategies’
China and are finalising a
comprehensive economic partnership
agreement with India. With such
relationships, Mauritius will leverage its
strategic geographical position and
build its future. My government is
working towards the emergence of a
revamped and dynamic industrial base
focusing on high end, precision driven
and technology-enabled
manufacturing, building our links
between Africa and Asia with a range of
fiscal incentives and the creation of
special economic zones in Mauritius
and certain African countries. My
objective is to position Mauritius as a
vibrant, sophisticated and substance-
based international financial services
centre for investors willing to invest in
Africa.
We are working with international
experts to create the environment for
this, including the appropriate
regulatory framework. Our country
stands as a jurisdiction of excellence,
gaining worldwide recognition for
transparency, observance of best
practices and compliance with
international norms. We have the
required standard to attract liquidity
providers, international brokers,
investment banks and fund managers,
and have positioned Mauritius as a
reputed centre of international
arbitration.
Mauritius, with its dependencies,
comprises 2,200 sq km of land, while
our exclusive economic zone covers
1.9m sq km of not yet developed ocean
territory. We are investing to map and
chart out this territory, which will be for
us the economy of the future.
I hope that, with the above, our
remarkable rainbow nation will join the
league of high income economies.
The writer is prime minister of Mauritius.
Reforms hint at discontent over
uneven ethnic representation
Society
Activists claim informal
‘formula’ is used to entrench
ratios of seats in parliament,
writes Joseph Cotterill
With its densely packed buildings and
streets set against an unlovely industrial
backdrop, Roche Bois is no place for
tourists seeking the postcard Mauritius
of beaches and sunsets.
A stroll through this suburb of Port
Louis, the capital of the Indian Ocean
island nation, reveals a glimpse of the
political underbelly of Mauritius, one of
Africa’s most stable and multicultural
democracies.
That stability has a dark side. It is one
that Yael, a gas worker returning home
to Roche Bois, is hesitant to spell out,
even as it is increasingly being debated
in public. “It’s not exactly equal — it’s
always the same thing . . . it’s not Cre-
oles, it’s the Hindus” who dominate
society, he says, declining to give his real
name as he broaches a taboo topic.
The island’s Creole and Indian com-
munities — one descended from African
slaves and the other from indentured
labour — are just two of its ethnic
groups. But Creoles, a quarter of the
population, have historically faced deep
discrimination over education, jobs,
and housing — as the rundown alleys of
Roche Bois, which has many Creole resi-
dents, attest. Meanwhile, the political
elite is predominantly drawn from the
Indo-Mauritian majority — including all
but one of its post-independence prime
ministers.
In a recent report, the UN’s Commit-
tee for the Elimination of Racial Dis-
crimination concluded that “hierarchi-
cal structures along ethnic and caste
lines linger” in Mauritius, despite
Contributors
David Pilling
Africa editor
Pravind Jugnauth
Prime minister of Mauritius
Joseph Cotterill
Southern Africa correspondent
Island defies
sceptics to
create wealth
from diversity
Continued from page 1
the initial push into financial services,
says Mauritius will move up the value
chain in this industry just as it has in
others. In textiles, for example, many
businesses have kept going even as
wages have risen, largely through
increased automation. “We will deepen
and broaden the services we offer to
include financial technologies, deriva-
tive products and attract fund managers
to come and set up,” says Mr Sithanen.
Whatever the controversies over its
low-tax regime, no other African coun-
try has come closer to emulating the
Asian-style model of development. GDP
per capita has risen from about $200 at
independence to $10,000, catapulting
Mauritius close to high-income status,
according to the World Bank definition.
Until recently, the spoils of economic
growth were reasonably equitably dis-
tributed, although income disparities
have widened in recent years. To
address this, Mauritius has introduced a
5 per cent “solidarity levy” on income
for high earners on top of existing tax
rates, and an innovative “negative tax”
for low ones. The minimum wage has
recently been nearly doubled to
MR8,140 (about $230) a month.
Because of a British decision not to
dispossess the French of their land when
it took over the colony in 1810, the small
French population continues to have an
outsized economic grip.
Indo-Mauritians, who also boast a
number of successful business families
and who make up about two-thirds of
the population, are said to control poli-
tics, with every prime minister but one
since independence of Indian descent.
To a large extent, the black popula-
tion, the descendants of slaves grabbed
mainly from Mozambique and Mada-
gascar, continue to miss out on both eco-
nomic and political opportunity.
Still, says Azim Currimjee, managing
director of the beverage unit of the Cur-
rimjee conglomerate, Mauritius has
never had the overt social friction pre-
dicted by Naipaul. Economic success
has helped lift most boats, he says.
St Croix: a glimpse of a darker side
anti-prejudice laws. Creoles face “de
facto discrimination in all walks of life”,
it added, urging the government to drop
its opposition to gathering statistics bro-
ken down by ethnicity so the problem
can be measured.
Dhivesh Mahesh, an Indian garage
worker in St Croix, near Roche Bois, says
there is little incentive for politicians of
his community to provide for Creoles.
“They think they are the lower persons,
because of the places they live, and they
don’t have the education they need,” he
says. “They give education to people
who vote for them . . . the government
hasn’t helped anybody in Roche Bois.”
Critics say ethnic patronage for jobs,
especially in government, is wasting tal-
ent as the island strives to transform
itself over the next decade into a high-
income, services-driven economy. This
system allegedly has electoral roots and
Despite anti-prejudice laws,
‘hierarchical structures
along ethnic and caste lines
linger [in Mauritius]’
Adrienne Klasa
Development finance editor, fDi and The
Banker
Leyla Boulton and Peter Chapman
Commissioning editors
Steven Bird
Designer
Tuesday 30 October 2018
“We’ve never had a recession in 37
years,” he adds.
Since Naipaul was writing, the fertil-
ity rate has plummeted from six chil-
dren per woman to just 1.4, lower than
Japan’s and below the replacement
value of 2.1. With 1.3m people, Mauri-
tius is not overcrowded.
That said, complaints of traffic con-
gestion are common on an island with
more than 600,000 registered vehicles.
Mauritius has other traits associated
with advanced economies, too. It is one
of few African countries to have a
McDonald’s fast food outlet. Diabetes, a
disease of affluence, afflicts one in four
islanders.
Politically, the island’s reputation for
stability — it regularly comes top of the
Ibrahim Index of African Governance —
obscures the fact that power has oscil-
lated almost uninterruptedly between
two families, the Jugnauths and the
Ramgoolams.
Navin Ramgoolam, the former prime
minister, was arrested on suspicion of
conspiracy and money laundering in
2015 after MR220m ($6.4m) was found
in his private residence. The current
prime minister, Pravind Jugnauth —
known to the island’s taxi drivers as
“son of dad” because his father
bequeathed the premiership to him last
year — also faces allegations of conflict
of interest. After being convicted, Mr
Jugnauth won his appeal, but the case
will now be heard for a last time by the
UK’s Privy Council.
Mr Currimjee says despite these ruc-
tions, the basic story of the country’s
progress has been uninterrupted. He
notes that in 1961, Nobel Prize-winning
economist James Meade, wrote pessi-
mistically that, given Mauritian demo-
graphics, the country would struggle to
maintain even the lowly living stand-
ards of the early 1960s. The Indian
writer, Amitav Ghosh, wrote more posi-
tively in his 2008 novel, The Sea of Pop-
pies, about its multicultural history. “So
many people have written about Mauri-
tius,” says Mr Currimjee. “In the end,
we’ve kind of written our own story.”
comes down to the numbers 36, 16, 9,
and 1. For decades, says José Moirt, a
lawyer and founder of Affirmative
Action, a civil-rights group, party-politi-
cal leaders have informally arranged,
according to what he calls the “for-
mula”, that 36 of 70 seats in parliament
will be filled by Indo-Mauritian repre-
sentatives. Sixteen are assigned to Cre-
oles — known as the “general popula-
tion” — nine to Muslims and one to the
Sino-Mauritian community.
“They have created this majority arti-
ficially,” Mr Moirt says. He adds that this
has never been discussed openly until
recent veiled references in parliament.
“It has always been between the politi-
cal leaders, never the concern of the
population.”
As for Roche Bois and St Croix, and
though they have many Creole resi-
dents, Mr Moirt says they have not been
represented by a Creole MP in the 11
elections since Mauritian independ-
ence.
Debate has increased after govern-
ment proposals for electoral reforms
that it says would enable more minority
representation. The reforms would add
elements of proportional representa-
tion to the UK-style first-past-the-post
system. The government, meanwhile,
has said it would never agree to a census
based on communal affiliation because
“stability is the pillar of socio-economic
progress”. Mr Moirt says the reforms are
“just a big mise-en-scène” — or show.
Although his Affirmative Action was
formed only this year, it has held several
public and private meetings, mostly
attended by Creoles. But across all com-
munities, there are rumblings of dissat-
isfaction with perceived favouritism
and patronage. “Everyone is the same —
we all suffer, partout [everywhere],”
says Mr Mahesh in St Croix.
“It is definitely unsustainable,” Mr
Moirt argues. “Our political stability is
at stake.”
Fran Andreae
Picture editor
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Tuesday 30 October 2018
Sugar After 500 years, the industry must now find new markets for the crop that shaped and once defined the island nation, writes David Pilling
Green energy
and rum offer
next act for
cane output
I
n an old stone warehouse in Port
Louis, mountains of sacks filled
with sugar are piled high. Some are
from Thailand, some are from India
and others, containing the best
quality product, are from Mauritius
itself.
It might seem strange that Mauritius
— once known as a sugar plantation —
should be importing sugar at all. Yet in
the old days after independence, when
exports were booming and sugar was a
mainstay of the economy, almost all
sugar was exported at a guaranteed
price, leaving Mauritians to consume
the lower-quality imported variety.
Times have changed in the 50 years
since independence. Today, the sugar
industry is not what it was. The end of
the Lomé Convention in 2009 deprived
Mauritius of the preferential access to
European markets that its raw sugar
and that of other former African and
Caribbean colonies had enjoyed for
three decades. Last year, a residual
quota system was scrapped altogether
in accordance with World Trade Organi-
zation rules.
The abrupt change in the terms of
market access has come as a blow to an
industry already in decline. Businesses
have moved quickly into refining but
this has not proved enough to compete
with the cheaper — and far bigger — pro-
ducers of Brazil and India.
“Mauritius is challenging because the
cost base has gone up considerably
and the price has gone down quite
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Mauritius at 50
aggressively,” says Jean-Pierre Dalais,
group chief executive of Ciel, a local con-
glomerate that spans sugar to finance.
Today, sugar accounts for less than 2
per cent of Mauritian GDP, though it
remains a significant export and foreign
exchange earner. Sugarcane fields still
cover perhaps a third of the island,
though one investor, considering
whether to grow high-priced vanilla
instead, estimates there are 8,000 hec-
tares of abandoned sugarcane fields.
One problem, he says, is the custom —
stemming from the Napoleonic Code
left intact by the British — of “forced
heirship”. This system obliges owners to
divide at least two-thirds of their estate
between their children. That leaves slavery and Britain’s “great experiment” Sweet success: Mr Dalais says is an economically ucts in an era when sugar is acquiring a
younger owners, often with no interest of Indian indentured labour played an bagasse, the rational green energy solution to Mauri- reputation as a new tobacco.
in sugar production, in possession of indispensable — and grotesque — part. fibre left over tian sugar’s declining competitiveness “It would be great to see Mauritius as a
smaller and smaller plots. One investor sees the sugar industry when sugar cane as a foodstuff. supplier of organic sugar — less in yield
Much of the land once devoted to in a “seemingly inexorable downward is crushed, can “We need to be looking at all the but more in value,” he says.
sugar has been given over to other pur- spiral”. be burnt to value-added aspects, which we have not There are even rumours that Mauri-
poses, whether call centres, property But Azim Currimjee, a senior execu- produce done even though we’ve been planting ‘If Mauritius tian producers are working on a sugar
developments, university campuses or tive at the Currimjee Group, which has electricity sugar for 500 years,” says Joseph Cartier, can no that can be tolerated by diabetics — of
production of fruit and vegetables — of food, beverage and energy interests, chairman of Mauritius’ Economic whom there are many on the island.
which Mauritius is still a net importer. views it differently. “The challenge is Development Board. Sugar is used to longer In the struggle to adapt that has char-
Ciel has a project at Ferney, on the how do we keep it going,” he says. produce carbon for the soft drinks compete on acterised the Mauritian economy since
south-east of the island, growing organic One solution has been to turn sugar industry and vinasse, a bio-fertiliser. independence, there is yet another
tomatoes, strawberries and vanilla. into energy. Bagasse, the fibre left over Mr Currimjee says part of the answer price then option for sugar producers — grow the
Some of the land is being reforested. when sugar cane is crushed, can be lies in increasing output of specialist the island commodity abroad.
Some sugar estates have been turned burnt to produce electricity. Alteo, the sugars, including demerara and musco- Alteo, for example, has sugar planta-
into luxury hotels catering for tourists sugar subsidiary of Ciel, owns a dual vado. If Mauritius can no longer com- needs to tions in Kenya and Tanzania, where it is
seeking elegance and a piece of history. bagasse-coal plant, a hybrid pioneered pete on price, he says it needs to move move into producing sugar at the foot of Kiliman-
The Beau Plan Sugar Factory at Pample- in Mauritius, and sells electricity to the into niche markets, including high- jaro. If the sugar mountain is no longer
mousses is now a museum, L’Aventure country’s central electricity board. quality rum. niche profitable in Mauritius, therefore, one
du Sucre, which presents a somewhat About a fifth of the island’s power Producers, he adds, should put more markets’ solution may be to move the sugar to the
rose-tinted view of an industry in which is produced from bagasse in what focus on producing “healthier” prod- mountain.
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4 ★ FINANCIAL TIMES Tuesday 30 October 2018

Mauritius at 50

Angolan affairs stir reputational sensitivities

Offshore Island’s status Ebene House: alleged destination for
looted Angolan funds —Joseph Cotterill
as a financial centre is
entangled in a fight on
the other side of Africa, armed with the UK court ruling which
threw out a global $3bn freezing order
reports Joseph Cotterill requested by the Angolan fund.
JurisTax, the services firm which reg-

A
grey and squat building in
the Cyber City financial dis-
trict of Mauritius, Ebene
House does not look like a
key locale in the alleged
looting of an oil-rich state on the other
side of Africa.
Yet behind its walls is a crucial link in
an anti-corruption campaign by
Angola’s President Joao Lourenço
against his country’s former ruling fam-
ily. As a result, Mauritius’s reputation as
a financial centre has been caught in the
crossfire of a fight to control the $5bn
Angolan sovereign wealth fund.
Cyber City, a little to the south of the
capital, Port Louis, is the centre of Mau-
ritius’ financial offshore industry. Ebene
House is the brass plate address of seven
companies tied to Quantum Global, a
Zurich-based investment group with a
mandate to manage the Angolan fund’s
assets. The latter arrangement was bol-
stered by a friendship between Quan-
tum’s founder Jean Claude Bastos de
Morais and the Angolan fund’s then
chief executive José Filomeno dos San-
tos, who was appointed by his father,
José dos Santos, Angola’s leader before
Mr Lourenço.
Quantum Global says that it saw Mau-
ritius as an offshore “gateway to Africa”.
But this year, Mauritian authorities sus-
pended the licences of companies regis-
tered at Ebene House and froze related
bank accounts.
In Angola, Mr dos Santos junior has
been fired. Mr Bastos’ company is being
sued by the Angolan fund’s new man-
agement over such alleged practices as
overcharging of fees. Both men, who
deny wrongdoing, were taken into cus-
tody by Angolan authorities last month.
Angolan prosecutors said the men
were detained over allegations of cor-
ruption, fraud, money laundering and
embezzlement among other matters.
The men deny the claims. The Angolan
fund’s lawsuit against Quantum Global
was, meanwhile, the trigger of the
Mauritian freeze.
Yet the Mauritius side of the scandal
has prompted questions about how it
hosted Quantum Global in the first place
and whether its standing as a financial
centre might be tarnished. Mauritius
has a prized place on an OECD
“whitelist” of offshore jurisdictions seen
as most committed to transparency.
“Mauritius was, if not critical, then
the instrumental chink in the armour
that Bastos was able to use,” says Tom
Keatinge, an expert on financial crime
at Rusi, the UK think-tank. “The legal
services that he got in Mauritius were
sufficiently pliable to get to the results
he wanted.”
A Quantum Global spokesperson
denied that the firm chose Mauritius on
grounds of pliant legal structures. Mr
Bastos selected the country for its infra-
structure and solid legal framework, the
spokesperson said, pointing to an Eng-
lish court judgment this year which
found no evidence that the company’s
offshore activities were anything
beyond “normal and legitimate”.
Quantum Global’s spokesperson said
Mr Bastos had chosen Mauritius “due to
what we believed was the strong legal
foundation of Mauritius as an offshore
financial centre . . . unfortunately, the
arbitrary actions taken by the Mauri-
tian authorities against Quantum Glo-
bal call into question their commitment
to due process.” The company has gone
to Mauritian courts in an effort to over-
turn the freeze on the bank accounts,
Mauritius has a place on an
OECD ‘whitelist’ of offshore
jurisdictions seen as
committed to transparency
istered the Quantum Global businesses
at Ebene House, did not respond to a
request for comment. The Mauritian
office of Appleby, the law firm which
took on Mr Bastos as a client, was not
available for comment.
The scandal is not the most politically
sensitive involving Angola recently to
hit Mauritius. In March, the island’s first
woman president, Ammenah Gurib-
Fakim, resigned over claims of financial
impropriety linked to an NGO set up by
Alvaro Sobrinho, an Angolan banker.
Ms Gurib-Fakim has denied wrongdo-
ing and said she inadvertently paid for
personal expenses on travel abroad on a
credit card issued by the NGO, before
paying the money back.
Mr Sobrinho obtained an investment-
banking licence in Mauritius before the
revelations. He has denied wrongdoing.
A commission of inquiry into Ms Gurib-
Fakim’s conduct is investigating
whether authorities improperly
favoured Mr Sobrinho. “We do hope the
commission will be able to get all the
facts right,” says Lovania Pertab, chair
of Transparency Mauritius, an affiliate
of Berlin-based anti-corruption watch-
dog Transparency International. Mauri-
tian banks and offshore services groups
are generally “very aware” of know-
your-customer obligations, she adds.
In Angola, Mr Lourenço’s anti-corrup-
tion drive continues. It includes a grace
period for Angolans to return assets
improperly taken out of the country.
The Angolan central bank says $30bn is
being held abroad, legally or illegally.
After the deadline for voluntary repatri-
ation ends “the state will use all the
means available to bring back all the
looted resources,” the president says.
A Mauritius government spokesper-
son commented that Mauritius’ regula-
tory framework “is very stringent and
there is thorough due diligence”.
Additional reporting by David Pilling
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Tuesday 30 October 2018 ★ FINANCIAL TIMES 5

Mauritius at 50

Foreign investment Adrienne Klasa delves into FDI flows to India

statistical disparities to highlight round-tripping 2017/18 ($bn)

Mauritius Singapore
13.4 9.3

How a very Mauritius tops the

table of investors

small country in India

became India’s Netherlands

2.7
Japan
1.3
Germany Hong
1.1 Kong

main investor US
2.0
Cayman
Islands
1.1
UK
0.7
1.0

Others

O
nce a land of sugar planta-
tions and rum distillers,
Mauritius has evolved into
one of Africa’s most
advanced economies. The
catalyst has been foreign investment.
US and India are leading sources,
putting funds into property, IT and tour- 4.2
ism. In the past five years holiday com-
pany Club Med and US telecoms special- Switzerland 0.5
ist Verizon have made investments of Provisional figures. Includes FDI through SIA/FIPB and RBI routes only
over $100m in Mauritius, in line with Source: Reserve Bank of India

The remarkable metamorphosis from the government’s development strategy.

a commodity exporter to a middle
income financial hub has allowed Mau-
ritius to average GDP growth of 4 per
cent between 2001 and 2016.
Foreign direct investment (FDI) has
driven the economy’s transformation
since the 1960s from one based on agri-
culture to one that is “labour oriented,
particularly in textiles and tourism”,
says James Zhan, UN Conference for
Trade and Development (Unctad)
director for investment and enterprise.
While foreign investment has bene-
fited Mauritius, tax evasion through a
practice known as investment round-
tripping — where capital is channelled
through a low tax jurisdiction before
being reimported into the economy of
origin as FDI — remains a problem.
So far in 2018, the country has
attracted $285.6m in greenfield FDI —
namely investments in new projects or
expansions of existing ones — compared
with just $31m in 2017. Last year was the
slowest for investments into Mauritius
since 2003, according to FT sister com-
pany fDi Markets, because of slowing
flows from China.
Investors in France, South Africa, the
For its part, Mauritius has made the
transition to a “financial hub, high-
grade tourism and services economy”,
says Mr Zhan.
As foreign investment interest in
Africa has grown, Mauritius has pre-
sented itself as an investment hub for
the continent. It regularly tops rankings
for Africa measuring the ease of doing
business. In a continent often associated
with volatile politics the country enjoys
a stable multi-party democracy, says
US-based political research group Free-
dom House.
In the capital, Port Louis, the stock
exchange is set to launch a new index
designed to track African equities. “The
trend we are seeing is that a lot of new
issues and listings are Africa-centric,”
says chief executive Sunil Benimadhu.
While most African countries require
fellow Africans to wade through red
tape for visas and work permits, Mauri-
tius mostly eschews such restrictions.
“The number one thing for us was get-
ting work permits,” says Fred Swaniker,
a Ghanaian and founder of African
Leadership University, which opened its
campus in Mauritius in 2015. Within a
Transition: with month it was granted 40 permits and in
FDI the catalyst, two years had permits for 200 staff.
Port Louis While Mauritius’ low tax rates are
(above) is today attractive, Mr Swaniker argues that
the capital of an work permits and a lack of foreign
advanced exchange controls are what really make
African services the island stand out compared with
economy — Alamy other African destinations.
A glance at Mauritius’ outward
investment figures, however, indicates
there is more going on. While greenfield
investment into Mauritius between
2003 and 2018 totalled $4.7bn, equiva-
lent outward flows over the same period
were almost three times higher at
$13.5bn. The imbalance of outward
investment from a small economy like
Mauritius suggests that round-tripping
is happening at scale.
In 2017-18, Mauritius was the top
source of investment into India, with
$13.4bn or 36 per cent of the total (see
chart), according to Indian central bank
data. This is intriguing, given that
India’s economy is the world’s sixth larg-
est, while Mauritius’ is 124th in current
US dollar terms.
This disparity indicates that a large
portion of those investments were not
ultimately destined for Mauritius, says
Mr Zhan. “It was round tripping and
going elsewhere using Mauritius as a
springboard.”
Putting hard numbers on round-trip-
ping is next to impossible. “It has
become extremely difficult to distin-
guish between round-tripped capital
and genuine FDI globally,” says John
Christensen, director of UK-based
think-tank Tax Justice Network.
The use of letter box companies in
Mauritius as a means of avoiding the
taxman first became a problem in the
1990s, though this appears set to
change. In an effort to crack down, India
and Mauritius amended their double-
taxation treaty in 2016 and the changes
are being phased in this year and next.
Re-invoicing is the most common
technique used for round-tripping. An
Indian company exporting to Europe,
for example, will invoice products
through Mauritius. “Profit accrues to
the company in Mauritius, and that
company doesn’t pay any taxes,” Mr
Christensen explains. Capital that
accrues in the Mauritian shell company
is then imported back into India,
appearing as FDI in the capital account.
Local authorities are adamant that
the island is a “fully co-operative and
responsible” financial centre. “We don’t
want to be used as a base for [people] to
bypass their taxation duties to their
home countries,” says Mr Benimadhu.
Mauritius has joined the OECD’s Com-
mon Reporting Standard and the OECD-
G20 Base Erosion and Profit Shifting
(BEPS) initiative and was rated compli-
ant in 2017. With these new arrange-
ments and measures “round-tripping
will be reduced, not overnight, but these
efforts will have results,” Mr Zhan says.
Critics say most of the changes are
cosmetic. “They’ve opted out of large
‘We don’t and very important parts [of the BEPS
want to be treaty],” Mr Christensen says, and com-
panies adopt a “ticked box” approach
used as a that limits the scope of due diligence.
base for “The whole thing is a charade.” While
round-tripping out of India looks likely
[people] to to fall under the new treaty, the same
bypass their strictures might not apply to other Afri-
can nations. “We’ve been concerned for
taxation a decade”, says Mr Christensen, about
duties’ capital “out of east and southern Africa
coming through Mauritius”.

6 ★
Ancient and modern: while Mauritius focuses on marketing luxury resorts like Maradiva Villas (left), tourism experts suggest it could make more of such historical sites as Port Louis’ Jummah mosque (right) — Alamy
Cultural riches lie beyond idyllic beaches
Tourism Industry
insiders say the island’s
layers of history are an
untapped resource,
writes David Pilling
T
he Jummah mosque in the
Mauritian capital of Port
Louis was constructed in
the second half of the 19th
century by Tamil architects
who carved flamboyantly in stone in the
style of Hindu temples. By the side of the
main building, which blends Moorish
and Mughal influences, is another con-
structed in the Creole style. There is
even a pond full of Chinese koi carp.
It is hard to imagine a building that
better encapsulates the varied influ-
ences on Mauritius, whose history has
been shaped by successive waves of
colonialists from Europe, slaves from
Africa, indentured labourers from India
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and adventurers from the four corners
of the earth. The mosque is one stop on a
food and cultural tour organised by My
Moris, a small tourist outfit that special-
ises in delving deeper into the island’s
multi-layered culture.
The three-hour walking tour takes in
the Indian and Chinese quarters of Port
Louis, where generations of merchants
have imported spices and ingredients
and produced delicacies from curry-
filled rotis to “red bean” dumplings
made with more available black lentils.
Bernard Chu Fung Leung, whose little
bakery produces Hakka-style moon
cakes and piping hot sesame balls
known locally by the French-Creole
term gateau zinzli, is the grandson of a
Chinese man who came to Mauritius in
1936. Like roti maker Amina Mungar, a
woman of Indian descent who does not
know when her ancestors came to the
island, he speaks both French and Cre-
ole, the latter influenced by the African
languages brought by slaves from
Mozambique and elsewhere.
FINANCIAL TIMES
Mauritius at 50
“The tourism industry has focused on
nature and beaches, which is very nice,
but there’s also all this rich history and
culture, which no one really knows
about,” says Yianna Amodine, one of
My Moris’s guides. “The exclusive
resorts are in remote places where
there’s nothing to see — apart from the
resorts.”
Indeed, Mauritius has long been mar-
keted as a luxury beach resort. “That’s
what made Europeans travel 12 hours to
somewhere they’d never heard of,” says
Sanjiv Ramdanee, a businessman and
executive director of the upscale
Maradiva Villas Resort & Spa.
The use of Mauritius as a location for
both Bollywood and Hollywood films is
a further boost, says Mr Ramdanee, who
was encouraged by the recent filming of
Serenity, a big-budget thriller starring
Matthew McConaughey and Anne
Hathaway, particularly as the stars
stayed at his hotel.
Glamour may be enduring, but tour-
ism, which accounts for 8 per cent of the
country’s GDP according to the Mauri-
tius Tourism Promotion Authority,
faced a downturn after the global finan-
cial crisis of 2008. That suppressed the
spending power of Europeans, who still
make up the bulk of tourists.
“It was really bad for a while there and
that’s when we realised how fragile the
market could be and how fragile Europe
could be,” says Arvind Bundhun, direc-
tor of the MTPA. “That’s when we
diverted our attention to emerging mar-
kets where growth is good.”
There has been a big push to attract
visitors from India and China, where the
island markets itself as a place to
breathe, as well as the Middle East and
Africa. Tourist numbers from these
regions have risen though Chinese arriv-
als have dropped in the past two years.
There has also been a concerted effort
to market the island as a year-round
destination, with hotels offering steep
discounts from May to September, Mau-
ritius’ winter, when it is cooler and
humidity reduced.
But the main swing factor, say tourist
operators, has been an open-sky policy
that has seen more than 20 airlines fly to
an island difficult to reach any other
way. From Dubai alone, two big jets
arrive every day.
Yet even in paradise, there are risks.
Rising sea levels are already eroding
some beaches. In the north, the name of
Cap Malheureux — Cape Unfortunate —
is testimony to the island’s vulnerability
to tropical cyclones. These could
become worse with climate change,
according to observers, including
Ameenah Gurib-Fakim, the island’s
former president and a scientist.
Mr Bundhun at MTPA says Mauritius
is no more vulnerable than other places
to a “universal problem” and he empha-
sises the island’s safety from the threats
of crime or terrorism.
Visitor numbers suggest others share
his view. This year, tourist arrivals are
expected to reach 1.4m, against 935,000
in 2010, according to the MPTA. There
are now about 13,000 hotel rooms on
Tuesday 30 October 2018
the island, four-fifths of them four or
five star, with an additional 2,000 rooms
expected by 2021.
The industry employs 35,000 people
directly and a further 70,000 indirectly,
accounting for one in five jobs on the
island.
At the Lux Grand Gaube resort on the
north coast, bookings are strong since
reopening in December after a complete
renovation, says Elvis Follet, in charge
of public relations. One of the ways the
industry has stayed fresh is by renovat-
ing its properties at least once a decade,
which he says has led to a high rate of
return custom. The new Lux at Grand
Gaube includes seven restaurants and
several bars, including one that offers
100 types of gin.
Still, the future expansion of Mauri-
tian tourism probably lies in enticing
visitors away from idyllic resorts to
explore local culture and beauty.
If high-end tourism is about storytell-
ing, Mauritius has more stories to tell
than luxury, sand and sea.